Agricultural Trade Reform and Industry Adjustment in Indonesia

This paper presents a component of a project on industry adjustment to agricultural trade reform in selected developing countries. The aim of the project is to examine the issues affecting the development of industry adjustment policies to manage the impact of trade reform. It will evaluate specific developing country examples of industries that are likely to face significant adjustment pressures from trade policy reform. The study is focused on industry specific policy responses for two reasons. First, many LDC's are concerned about the consequences of future WTO reforms for adjustment in 'sensitive' industries. Governments in developing countries have received advice and assistance on how to comply with the requirements of their WTO commitments from the Uruguay Round of trade negotiations. However, very little attention has been devoted to the domestic effects of trade reform. Second, the implementation of international trade commitments is likely to lead to industry requests for assistance. Adjustment policies used by developed countries may not be directly applicable to LDC situations. Differences in structural characteristics, institutional arrangements and the level of industry development require an investigation of the issues affecting adjustment in developing countries.