The Utilization of ASEAN Framework Agreement on Services on Indonesias Retail Services to ASEAN Market
Arie Mardiansyah, Kerub Henpra Gokniel*, Jane Marisi Rapmeriah
Trade Analysis and Development Agency
kerubgokniel[at]gmail.com
Abstract
The utilization of retail market access in ASEAN as the result of the ASEAN Framework Agreement on Services (AFAS) negotiations is still considered low. Even though Indonesias retail services have potential to expand its business to ASEAN market which its economic growth and population continue to increase. This study used Hoekman Index analysis to see the level of openness of foreign retail services investment in ASEAN countries and SWOT analysis to find the strategies to utilize AFAS in order to increase Indonesias investment on retail industries in ASEAN market. The results of the analysis concluded that the level of investment openness of ASEAN member countries for foreign retail services is relatively open. However, Indonesia is less open than other ASEAN countries. Furthermore, based on EFAS / IFAS Analysis, Indonesias retail service sector has Opportunities and Strength as capital to develop its business in the ASEAN market with a strategy Progressive. As for other alternatives penetration strategies (entry mode) can be done, among others through full investment with foreign ownership of 100% to countries that have been fully open, joint venture, or sell Indonesian retail business master franchise to ASEAN countries, which is the easiest and least risky way.
Keywords: AFAS, SWOT, Hoekman Index
Topic: Trade policies strategic Responses