Impacts of the sensitive list import tariffs of processed shrimps on the Indonesian economy under the ASEAN-China free trade area

Iwan Hermawan (), Carunia Mulya Firdausy (), Reninta Dewi Nugraheni (), Zamroni Salim (), Sri Milawati Asshagab (), Hasni (), Nindya Lestari () and Ezra Putranda Setiawan ()
Additional contact information
Iwan Hermawan: Trade, and Services - National Research and Innovation Agency
Carunia Mulya Firdausy: The University of Tarumanagara
Reninta Dewi Nugraheni: Trade, and Services - National Research and Innovation Agency
Zamroni Salim: Research Centre for Macroeconomics and Finance - National Research and Innovation Agency
Sri Milawati Asshagab: Trade, and Services - National Research and Innovation Agency
Hasni: Republic of Indonesia
Nindya Lestari: University of Tanjungpura
Ezra Putranda Setiawan: Universitas negeri Jogyakarta

SN Business & Economics, 2025, vol. 5, issue 11, 1-31

Abstract: Abstract Processed shrimp, as it has export potential and centrality to Indonesia’s fisheries sector, is categorized as one of the Sensitive List (SL) products. The government of Indonesia protects this product from immediate exposure to foreign competition. This study aims to analyse the impacts of import tariffs of processed shrimps categorised as products in the sensitive lists on trade, income, and welfare under the Association of Southeast Asian Nations (ASEAN)-China Free Trade Area (ACFTA) agreement. The data were obtained from the UN Commission Trade (UN Comtrade) data (2002–2021). The data were analysed by applying the SMART partial equilibrium model. The results show that Indonesia’s higher tariffs under the SL reduce trade creation and divert trade flows, with limited gains in tariff revenue. Moreover, these protectionist measures lead to welfare losses, while further liberalisation, particularly through tariff reductions, produces more favourable economic effects. The benefits, however, are primarily concentrated in China rather than being shared evenly across ASEAN partners. The findings suggest that while the SL designation provides strategic protection, its long-term effectiveness depends on complementary domestic reforms to boost productivity, efficiency, and competitiveness in Indonesia’s shrimp processing industry. This study offers timely insights to inform policy reform and regional trade negotiations in fisheries.

Keywords: Processed shrimps; Sensitive list; SMART model; ACFTA; Indonesia (search for similar items in EconPapers)
JEL-codes: F13 F14 F53 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s43546-025-00928-2

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