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Q5. What all trade barriers have been considered in this country? Why?

A5. In recent years, Indonesia has liberalized its trade Regime and taken a number of 

important steps to reduce protection. Since 1996, the Indonesian Government has issued

deregulation packages that have reduced overall tariff levels, simplified the tariff structure,

removed restrictions, replaced non-tariff barriers with more transparent tariffs, andencouraged foreign and domestic private investment. The GOI issued a deregulation package

in July 1997, which introduced additional tariff reductions. In conjunction with its

stabilization program agreement with the International Monetary Fund, the government has

issued a steady stream of reform measures which reduced taxes, tariffs, and quantitativerestrictions on exports and imports.

Trade barriersThe measurement of barriers to trade in services and the gains associated with removing such

barriers has been the focus of the literature for the past several decades. This is due in

particular to the on-going negotiations carried on at WTO. While the “invisible” barriers to

trade in goods are gradually disappearing across countries, the role of the services trade has

gained due importance in multilateral, regional and bilateral free trade agreements. In

general, barriers to trade in services are not like tariffs. They are typically regulatory barriers,

rather than explicit taxes. The underlying economic rationale for these policy reforms is that

the removal of barriers to trade in services is likely to result in lower prices, improved quality

and higher competitiveness. Services trade barriers to entry continue to exist in many sectors,

although the GOI has loosened restrictions significantly in the financial sector. Foreign law

firms, accounting firms, and consulting engineers must operate through technical assistance

or joint venture arrangements with local firms. Indonesia's Law on Education Legal Entities

does not allow foreign investment in higher education in the form of a limited liability

company, in conflict with provisions of the existing Investment Law. In addition, in order forforeign nationals to provide educational services they must be authorized by the Ministry of 

Education and the Ministry of Manpower. Authorization is granted on a case-by-case basis

and only when there are no Indonesian instructors capable of filling the position.

Education:Indonesia Law on Education Legal Entities does not allow foreign investment in higher

education in the form of a limited liability company, in conflict with provisions of the

existing Investment Law. In addition, in order for foreign nationals to provide educational

services they must be authorized by the Ministry of Education and the Ministry of 

Manpower. Authorization is granted on a case-by-case basis and only when there are noIndonesian instructors capable of filling the position. Foreign Institutions are compelled to do

business with local Institutions and to services locally. An on-going process of 

decentralization, which is intended to reduce burdensome bureaucratic procedures by moving

investment-related decisions to provincial and district level governments, has led to some

improvements but has also resulted in new restrictive measures that conflict with national

laws.

Indonesia Proposal on higher education in the country

1.  Common definitions to include middle and lower level professionals

2.  Clear criteria for Economic Needs Test or quantitative restrictions to be set out in a

reference paper.

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3.  A visa for the broad range of personnel covered by horizontal and sectorial

commitments under ordinary immigration rules should also be modified (within two

to four weeks).

4.  Recognition of qualified and licensing requirements through Mutual Recognition

Agreements and development of minimalist accreditation standards to overcome

national requirements.5.  Waiver in payment of social security taxes without corresponding benefits.

Barriers to trade in higher education services

Mode Barrier Barrier

types

Cross-border

supply

1. Restrictions on import of electronically produced Invisible

educational material

2. Restrictions on electronic transmission of course Material

3. Non-recognition of degrees obtained through distance learning

Invisible

Consumption

abroad

1.Restrictions on travel abroad based on discipline Invisible

or area of study

2. Foreign exchange controls (limitations)

3. Mutual recognition of degree

Invisible 

Commercial

presence

1.Insistence on a local partner Invisible

2. Insistence that the provider be accredited in the home country

3.Insistence on partner/collaborator being from the formal academic

stream

4. Insistence on equal academic participation by

foreign and local partner

5.Disapproval of franchise operations

6. Difficulty in approval of joint ventures

Invisible

Presence of 

natural

Persons

1.Visa and entry restrictions

2. Restriction on basis of quota for countries an disciplines

3. Nationality or residence requirements, language

4. Restriction on repatriation of earnings

Invisible

Document requirements

The government requires the following documents:

1. pro-forma invoice commercial invoice

2. Certificate of origin bill of lading3. Insurance certificate special certificates

According to the Indonesian Customs Law that came into effect in April 1997, importers are

now required to notify the Customs Office in the first stage by submitting the import

documents on a standard form computer diskette. Customs Inspections of imported goods

may be made after they are imported in the importer's warehouse. Typically, the Indonesian

importer takes care of this process.

References:

- http://www.ustr.gov/sites/default/files/Indonesia_0.pdf  

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- http://unctad.org/en/docs/itcdtab29_en.pdf  

- http://www.fao.org/docrep/005/Y4632E/y4632e0l.htm 

http://www.unescap.org/tid/artnet/mtg/consult3_s3ajitava.pdf  

http://www.unescap.org/tid/publication/aptir2470_ajitava_prabir.pdf