The Ministry of Trade has received the final report for a Trade Remedy Impact Assessment Methodology and its Implementation Plan from ARISE+ Indonesia on 23 December 2020.
Trade remedy measures (such as anti-dumping or safeguards) aim to protect domestic industries from the harmful effects of unfair or unexpected surges in imports, which cause injury to domestic businesses. However, these measures themselves might have trade-distortive effects or be used in the disguise of trade protectionism.
The channels for those trade distortions include (i) destroying trade in a particular product (destruction effect); (ii) diverting trade to other countries (import substitution effect); (3) increasing exports to third countries by the affected exporter in order to compensate for the lost market share (deflection effect); (4) impacting on downstream or upstream industries; and (5) reduced trade to those countries which over use trade remedies, in order to avoid surprises with the complainant countries (deterrence effect).
Beyond trade distortions, they may also alter distributional revenue streams, affect access to resources, etc. In particular, from a socio-economic dimension, there may be effects on employment, and on different demographics and regions of Indonesia. While Indonesia does consider the economic implications, it seeks to also enrich its impact assessments to include general socio-economic impacts that can arise from the introduction of trade remedies.
ARISE+ Indonesia has prepared a report using best practice examples from the developed and developing world to provide advice on the approach and capacity building needs of the National Interest Advisory (NIA) Secretariat, and wider stakeholder team involved in investigations.