Among the various types of non-tariff barriers to trade, standards and
technical regulations measure imposed by trading partners is one of
the determinants to Indonesia's export activities that often have been
neglected. Probiem in meeting the standards (the terms “standards”
and technical regulations” are used interchangeabiy throughout this
study) has always been on the top three of developed countries’
complaints to the agriculture-based imports from Indonesia. On the
other hand, stricter imposition of standards has now also being applied
by several importing countries, including the European Union (EU),
which have been the main importers of Indonesian agricultural
products.
This study covers Indonesia's export activities to four partner countries
in EU, on four selected agricultural commodity groups during the
periods of 1990-2005. Export activities were analyzed with a singie-
country Gravity Modei approach (Chevassus-Lozza, et ai., 2005) which
uses the constant elasticity of substitution (CES) utility function in
deriving an operationai gravity model. Standards are included as the
variabies of trade restrictiveness, parameterized by stocks of
standards developed both by the Indonesia as exporter, and EU
countries as importers. Estimation for the model was done through the
Seemingiy Unreiated Regression (SUR) for disaggregated pooied data.
The results of analysis shows that a single-country gravity model used
in this study is able to assess the impacts of standards measures on
Indonesias export activities in the selected commodity groups. An
increase of foreign specific standards imposition reduces Indonesias
exports by 0.07 per cent, thus, act as trade deterrence and lead to
competition disadvantage for Indonesia. On the other hand, an
increase of Nationai Standards of Indonesia imposition gives roie to
competitive advantage and increases Indonesias exports by 0.03 per
cent.
