Recently, trade liberalization issue particularly in agriculture sector has become the
main issue in Doha Development Agenda-WTO. Trade liberalization in agriculture
sector affected trade flow of primary agriculture products in global market particularly
from developing countries to developed countries. This study analyzes the impact
of trade liberalization in agriculture sector on macro and economic sectors of
Indonesia, using general equilibrium economic model approach by employing GTAP
model. It uses the data from the GTAP Version7. The main results show that trade
liberalization in agriculture sector benefited developed countries such as the United
States of America, Rusia, and European Union. On the other hand, some developing
countries such as Pakistan, Bangladesh, and Indonesia were negatively affected.
Furthermore, trade liberalization in agriculture sector reduced output of agriculture
sector in Indonesia. Nevertheless, the output of manufacturing sector increased
because of reallocation of input factor from agriculture to manufacturing.
Key words: Trade liberalization, general equilibrium, agriculture sector.
Buletin Ilmiah Perdagangan, Vol. 5 No 2, Desember 2011