The Impact of ASEAN-China Free Trade Area (ACFTA) on Indonesias Bilateral Trade

This study aims to analyze the effect of ASEAN-China Free Trade Area (ACFTA) on Indonesia’s bilateral trade by using panel data set from 2001-2014 with General Method of Moments technique. Explanatory variables used in this study are: gross domestic product, gross domestic product per capita, income gap, geographical distance, and dummy variable of ACFTA. The result of this study indicates gross domestic product and gross domestic product per capita have positive and significant effect on Indonesia’s bilateral trade. Income gap, geographical distance, and dummy variable of ACFTA all have negative and significant effect on Indonesia’s bilateral trade.