How to keep trade policy open: The case of Indonesia

Abstract

We explore the ups and downs of trade protectionism in Indonesia since the Asian financial crisis of 1997-98. The key constraints to unilateral trade reform include exchange rate factors, the political economy of consumer-producer behaviour, institutional complexity and global pressures. We conclude that trade reform is likely to face difficulties, with protectionism on the rise again, but that, during the temporary halt in the World Trade Organization's Doha Round of trade negotiations, Indonesia may be able to use regional and international engagement to counterbalance rising protectionism.