The Impact of the ASEAN-China Free Trade Area (ACFTA) on Indonesia’s Coal Exports : Boost or Burden?

Indonesia has taken an active role in regional economic integration, notably by joining the ASEAN-China Free Trade Area (ACFTA). This study investigates whether ACFTA has acted as a catalyst or constraint on Indonesia’s coal export performance to its five main trading partners within the agreement. Using panel data spanning from 1990 to 2020, the analysis draws upon secondary data sourced from the World Bank, UN Comtrade, and the International Trade Center. The empirical findings reveal that Indonesia’s coal export value to these key partner countries increased following the implementation of ACFTA. The results show that the GDP per capita of trading partners and economic distance had a significant positive effect on export values, while the real exchange rate exerted a negative influence. Additionally, the ACFTA dummy variable showed a statistically significant positive impact, suggesting that the agreement contributed to enhancing trade intensity, albeit not drastically. These findings underscore the dual nature of ACFTA's impact—while it provides a boost to trade flows, the overall effect remains moderate. Hence, to maximize its potential, further refinement in trade policy frameworks among member countries is necessary