NON-TARIFF TRADE REGULATIONS IN INDONESIA : NOMINAL AND

EFFECTIVE RATES OF PROTECTION

- Anti-dumping is one of the non-tariff trade regulation that is implemented in
Indonesia. Anti-dumping duty is imposed by a country for imported product
that believes are priced below the fair market value.
- NRP – nominal rates of protection (percentage tariff imposed on a product
once it enters a country)
- NTM – non tariff measures
- There will be no price difference if there is an absence of barriers to trade.
But, the barrier to trade also include transportation cost.
- NTM quantitative restrictions on import. Percentage changes in quantity
traded will influence the price.
- NTM Procedural burdens for importers and exporters, the regulation
imposes procedural cost on importers and exporters. For example, pre
shipment inspection in the country of origin, restriction on the ports,
requirements for the importers to get the shipment permission months in
advance and requirements that require importers to sell the imported products
to the distributors instead of directly to the customers. It is so costly, because
it is not only talking about monetary cost, but also time costs.
- MRP (marginal rate of protection) – highest applicable import tariff rate,
includes anti-dumping, safe guard duties, and procedural NTM.
- ERP – effective rates of protection
- Price comparison is used to estimate the NRP associated with NTM, for example, compare
the price of goods between two countries, Indonesia and Singapore. Same products that are
both Indonesia and Singapore subject zero imports duties on it are cheaper in Indonesia,
therefore, price different persists when there is barrier to trade as well as transportation
cost, labor cost, land cost, and any other factors.