Analysis of Korea's Export Competitiveness with Indonesia and the Utilization of the Korea-Indonesia CEPA

Purpose: This study analyzes the export competitiveness of Korean products in the Indonesian market. It suggests ways to use the Korea-Indonesia CEPA. Research design, data, and methodology: Export statistics on the main products in auto parts and the steel and petrochemical industries are extracted in terms of HS 4 units from the International Trade Centre Trade Map. The Trade Specialization Index (TSI) is calculated for Korea and Indonesia, and the Market Comparative Advantage (MCA) index is calculated for Korea and ASEAN countries in the Indonesian market. Results: From analyzing the TSI, Korea is dominant in the Indonesian market. Under the MCA index, compared to ASEAN countries, Korea had an absolute advantage in steel products. However, the petrochemical sector is competitive, and the auto parts industry is inferior. Conclusions: The automotive parts industry and the steel products industry are predicted to increase their competitiveness, but the analysis showed it will not be easy. In addition, the petrochemical sector should be more aggressive in marketing Korean companies by using the KI-CEPA, because local companies in Indonesia are increasingly competitive.