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EFFECT OF TARIFFS AND NON TARIFF MEASURES ON THE POSITION OF INDONESIAN COFFE IN JAPAN
Sevi Oktafiana Fortunika (a) Harianto (b) Suharno (c)

Institut Pertanian Bogor


Abstract

Indonesia is the largest coffee producer in the world after Brazil, Vietnam and Colombia. One of the mayor markets for Indonesian coffee is Japan. This paper, therefore, analyzed the position of Indonesian coffee, either green bean or roasted coffee in Japan. The linear Approximate Almost Ideal Demand System (LA/AIDS) model was used to estimate a system of expenditure share equations for Indonesian coffee and its competitors. Time series data from 1996 to 2017 were obtained for the analysis. Empirical results indicated that most of the slope coefficients were statistically significant and in accordance with microeconomic theory. The significant independent variables of green bean were the price of vietnamese coffee, gross domestic product of Japan, and exchange rates of Japan to Indonesia. Then, the significant independent variables of roasted coffee were exchange rates of Japan to Indonesia, import tariffs and Sanitary and Phytosanitaryas as non tariff measures variable. It was known that tariffs and non tariffs measures effected the Indonesian coffee demand only on roasted coffee. The position of Indonesian coffee was determined by its demand elasticity (price elasticity, cross price elasticity, and expenditure elasticity). Indonesian green bean was found to be inelastic in Japanese market, but Indonesian roasted coffee was found to be elastic in Japanese market. Indonesian coffee substituted for Brazilian coffee and Colombian coffee, and complemented to Vietnamese coffee.

Keywords: Green bean, LA/AIDS, Non Tariff Measures, Roasted coffee, Tariffs

Topic: Trade policies strategic Responses

Link: https://ifory.id/abstract/GD8F9AbMWBuC

Conference: The 3rd International Conference on Trade (ICOT 2019)

Plain Format | Corresponding Author (Sevi Oktafiana Fortunika)

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