Press Release Seminar ‘Free Trade and Protectionism’
On 4thMarch 2019, Universitas Pelita Harapan Center for International Trade and Investment (UPH CITI) together with Universitas Pelita Harapan School of Law hosted a Panel Discussion on Free Trade and Protectionism. The Opening Remarks were delivered Mr. Mohamad Rosidi, the Director of ICT Strategy and Business of Huawei Indonesia.
Dr. Michelle Limenta, the Director of UPH CITI led the discussion as the moderator and the Panelists consisted of H.E. Ina Hagniningtyas Krisnamurthi, Mr. Rafaele Quarto, Professor Andrew Mitchell, Dr. Arie Afriansyah, and Mr. Simon Lacey. Ms. Limenta opened the discussion by addressing globalization and the vast growth of digital flows which has transformed international trade and business.
The first panelist, H.E Ina Hagningtyas Krisnamurthi discussed the potential and challenges of free trade and protectionism, in which the creation of FTA could; 1) improve export and investment as a key to economic growth; 2) Deepen and enhance non-traditional market; 3) maintain regional-bilateral economic performance and 4) maintain regional-bilateral economic performance.
Aside from potentials, there are some challenges in today’s world as a result of protectionist measures such as the uncertainty in Europe - reflected in the event of Brexit, and Trump Phenomena in which protectionism measures can lead to trade war. Another problem is the uncertainty of the future of multilateral trading system under the WTO. In the end of her presentation, H.E. Krisnamurthi highlighted that the increase of global trade agreement is in parallel with the increase of global trade value. Indonesia is currently in the process of negations of entering into a free trade agreement with the objective to manage the market. However, Indonesia still have a lot of homework to do including related to connectivity, public governance, and human resources.
The second panelist, Mr. Rafaele Quarto, shared the European experience in facing protectionism. He addressed an issue that was raised by H.E Krisnamurthi regarding whether WTO is still significant as a multilateral trading system. Mr, Quarto expressed that the EU is in favour of the WTO, without the multilateral trading system, developing and least-developed countries will have a hard time in facing larger trading partners. Although the WTO is needed to be reformed, especially the daily work of the negotiation and the rule book, the institution has a very important feature, namely the WTO dispute settlement mechanism. Mr. Quarto also noted that the EU continues to improve its trade policy, which cannot be done alone but must be carried out together with their trading partners.
The third panelist, Professor Andrew Mitchell, presented about the cross-border data flows and its relation to free trade and protectionism. Essentially, the control over cross-border data flows is necessary to protect data, consumer interests and national security. The liberalization of cross-border data flows will enable digital innovation, support economic growth and address social issues. However, the digital trade framework must be established based on digital trust, interoperability and regulatory transparency, as well as new regulatory approaches to achieve better digital trade regime for data flows.
The fourth panelist, Dr. Arie Afriansyah took the approach from the point of view of an observer, and shared that protectionism of a country is not “necessarily bad”, as it is the obligation of the state to protect its people and its economy. He took the example of the US’ situation under the Trump Administration. He commented that US’ protectionist measures may have been working relatively well, due to the fact that US has always been powerful essentially. However, in the case of Indonesia, there are still ideals and norms on international trade that Indonesia needs to follow and uphold.
The last speaker was Mr. Simon Lacey, who talked about the optimal trade investment conditions for the Global ICT Industry. He defined what digital economy is, which includes the economic activities of infrastructure, services, platforms & ecosystems, as well as devices. He laid down the characteristics of the Global ICT Industry, where it is not necessarily labor intensive, but it is a R&D intensive industry. It is also multi-faceted, which can become an investment for host countries. The optimal trade and investment regime, ideally, may increase market access, the equality of foreign and domestic investors, as well as partnership between business and private sectors.
The panelists’ presentation was followed by an interactive discussion and Q&A session among the panelists as well as the participants. Some questions raised by the participants to the Panelists included the taxation of data flows and how to build digital trust between government and private sector.
The seminar was attended by more than 60 participants from various backgrounds and institutions, such as from the Ministry of Trade, the Ministry of Foreign Affairs, law firms, private sector, research centers, universities, and students.