Non Tarrif Barriers and Indonesian Crude Palm Oil Competitiveness in the International Market

Abstract

Indonesia is the world's largest producer of CPO. Currently, Indonesian CPO exports face both tariff and non-tariff barriers. Free trade agreements can only eliminate tariff barriers, and each country still seeks to protect local products with non-tariff barriers. These non-tariff barriers take the form of subsidies or support for domestic soybean oil and sunflower oil production.  The purpose of this study is to determine the difference in the competitiveness of Indonesian CPO before and after the implementation of non-tariff barriers. The methods used in this study are revealed comparative advantage (RCA), export competitiveness index (ECI), export product dynamics, X model potential export product, and paired t-test. The data used was obtained from UN Comtrade and the Central Statistics Agency (BPS) from 2006 to 2023. The results show that non-tariff barriers, the competitiveness of Indonesian CPO commodities in the international market remains competitive .Non-tariff barriers has a significant effect on the competitiveness and export value of Indonesian CPO commodities in the international market.  Indonesian CPO commodities still have a potential market at the international level. The conclusion is that despite non-tariff barriers, Indonesian CPO commodities are still able to compete in the international market.