The Role of Sustainable Policy from ASEAN+6 Region on Indonesian Cocoa Butter Product Trade

Abstract

The Free Trade Agreements (FTAs) have expanded across regions, particularly ASEAN countries. Externally, there are six ongoing FTAs in ASEAN, involving the 10 ASEAN member states and five strategic partner countries as ASEAN+6. Cocoa was one of the strategic tropical agricultural commodities. Cocoa butter holds the largest market share potential in ASEAN+6 trade. This trade not only influences trade creation and diversion but also underscores the importance of sustainability, as it impacts on resource management and environmental responsibility. This study aims to analyze types of ASEAN+6 agreements and policies as well as trade effects within the ASEAN+6 region. The analysis employs descriptive qualitative methods and panel data regression using the Poisson Pseudo Maximum Likelihood (PPML) estimator to evaluate trade effects. Findings indicate the existing ASEAN+6 trade agreements are AFTA, ACFTA, AIFTA, AKFTA, AANZFTA, and AJCEP. The FTAs govern tariff and non-tariff policies, focusing on sustainability issues in politics, economics, and environment. The estimated determinants of Indonesia’s cocoa butter trade in ASEAN+6 reveal trade creation effects on export and import flows. Based on this conditions, a comprehensive review of the ASEAN+6 region is necessary to harmonize member economies and enchance trade contributions to sustainable economies.