PENGARUH ASEAN- CHINA FREE TRADE AREA (ACFTA) PADA PERDAGANGAN INDONESIA

The ASEAN- China Free Trade Area (ACFTA) signed on November 4th, 2004 aimed at creating free trade area between ASEAN countries and China where it was achieved by eliminating or reducing trade barriers either toward tariff or nontariff goods in order to improve ASEAN and China society welfare. Principally, free trade among countries should give benefits to them, it means after signing free trade agreement, ASEAN countries and China should get more benefits than before, such as increasing efficiency and effectiveness of production in order to compete with others, one of tools to measure the benefits is “trade creation” as the positive impact and “trade diversion” as the impact of loses which is preferential among these countries. To analyze “trade creation” and “trade diversion” used modified of gravity model. It finds the empirical that ACFTA has given rise to trade creation as a whole country members but had no impact on Indonesia's trade, on the other side that ACFTA has reduced “exports trade diversion” and improving “import trade diversion”. Keywords : ACFTA, Trade Creation, Trade Diversion, Gravity Model.