Winarno Zain (Jakarta Post Office)
PREMIUM
Jakarta ●
Fri, February 11, 2022
The Indonesian government’s position on free trade has always been skeptical and hostile. He still sees free trade as a threat to the national economy. Its trade policy has been largely shaped by trade protection and restrictions through tariff and non-tariff barriers.
The basic argument of this view is that competition – the central framework of free trade – will work against Indonesian companies which are generally considered weak, not yet ready to compete. Therefore, they still need state protection to develop.
The concept of free trade is part of neoclassical economics, which is based on David Ricardo’s theory of comparative advantage that free trade between two countries is always mutually beneficial because it allows for the greatest total consumption.
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