Key Outcomes
- Professor Lina delivered a lecture on international trade policy, focusing on tariffs, non-tariff barriers, and their application to Indonesia's fisheries sector. 1
- The session established that trade policy involves balancing producer interests and total welfare, with no simple "good or bad" answer for protectionism. 23
- Students were encouraged to use the lecture content as a basis for their collaboration project with Universitas Brawijaya students. 4
Trade Policy Fundamentals
- Open Economy: Defined as being connected to the rest of the world through trade, capital, technology, and investment. 3
- Motives for Protection: Governments protect domestic industries to support young firms, safeguard jobs, ensure food security, respond to unfair trade, reduce import dependence, or collect tax revenue. 5
Tariffs vs. Quotas:
- Tariffs: Taxes on imported goods that raise domestic prices, stimulate local output, reduce consumption, and generate government revenue. 5
- Quotas: Quantity limits on imports that can also raise domestic prices, but the resulting "quota rent" goes to whoever holds the import rights. 6
- Non-Tariff Measures: Include sanitary and phytosanitary (SPS) standards, technical standards (TBT), import permits, administrative procedures, trade remedies, prohibitions, and subsidies. 7
Economic Analysis Framework
- Consumer Surplus: The difference between what buyers are willing to pay and what they actually pay; it expands when prices fall. 8
- Producer Surplus: The difference between the price sellers receive and the minimum price they are willing to supply; it shrinks when prices fall. 9
- Small Country Assumption: A small country is a price taker in the world market and cannot influence the international price through its buying or selling decisions. 1011
- Gains from Trade: When the world price is lower than the domestic no-trade price, imports increase, consumption rises, and aggregate national welfare increases, though producers may lose. 1213
- Deadweight Loss: Tariffs create efficiency losses because some consumers stop buying units with positive net value, and local firms produce extra units at a higher cost than world suppliers. 1415
Indonesia's Fisheries Sector Application
- Key Commodities: Shrimp, tuna, crabs, and seaweed are highlighted as economically and socially significant for Indonesia. 4
- National Initiatives: The Blue Economy Roadmap and INA Trade are mentioned as relevant national frameworks. 4
- Export Regulations: Seafood exports often require documentary and technical compliance, including HACCP and health certificates/traceability. 4
- Policy Instruments: Indonesia uses tariffs, input-related import arrangements, and SPS measures, with rates and requirements varying by product and partner country. 416
Open Questions
Student Question: Which matters more in trade policy: producer interest or total welfare?
- Answer: Both matter; a good analysis separates the distribution effect from total efficiency. 3
Conceptual Question: What does the point "B" represent in the import market panel of the provided graphs?
- Status: Professor Lina posed this as a question for students to answer but did not provide the answer during the session. 17
Action Items
- Students: Review the lecture slides and graphs, and contact Professor Lina via WhatsApp or email for additional explanations. 18
- Students: Use the discussed fisheries commodities and policy frameworks as ideas for the collaboration project with UB students. 4
