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Abstract

Indonesia actively promotes international trade liberalization through various free trade agreements (FTAs) with partner nations. This study focuses on the dispute settlement mechanisms (DSM) within Indonesia’s bilateral FTAs, given that most partners are members of the World Trade Organization (WTO), making this relevant comparison. The research is divided into three main parts: explaining international trade dispute settlement mechanisms, mapping DSMs in Indonesia’s FTAs, and a comparative analysis. It aims to answer how dispute settlement mechanisms are structured in Indonesia’s bilateral FTAs. Based on the mapping, it is found that the majority of Indonesia’s bilateral FTAs align with WTO dispute resolution methods, but it lacks appellate mechanisms. The DSM in bilateral FTAs can be an alternative to resolve trade disputes to obtain a more final and binding decision, considering that all FTAs only use first-level adjudication. This is significant, especially with the WTO Dispute Settlement Body (DSB) experiencing panel member vacancies, rendering the appeals process obsolete.

References

Journal Articles and Periodicals

Athukorala, Premachandra. “Free Trade Agreements in the World Trade System: Substance and Semantics.” Foreign Trade Review 55, no. 1 (2011): 13–20. https://doi.org/10.1177/0015732519886771.

Brinza, Daniel. “International Trade Dispute Settlement System”. Journal of International Economic Law 6, no. 3 (2023): 719-722.

Dewi, Luh Intan Purnama, I Made Yudana, and Dewa Gede Sudika Mangku. “Penyelesaian Sengketa Dagang Internasional Atas Kebijakan Report Palm Oil Oleh Uni Eropa Terhadap Indonesia Ditinjau Dari World Trade Organization [International Trade Disputes Settlement over the European Union’s Palm Oil Report Policy Against Indonesia].” Komunitas Yustisia 5, no. 2 (2022): 102-119.

Jackson, John H. “Process and Procedure in WTO Dispute Settlement,” Cornell International Law Journal 42, no. 2: 232-240.

Killian, Pantri Muthriana Erza. “Indonesia’s Trade Diplomacy Through FTA: Analysis on Actors, Processes, and Goals of Diplomacy.” Global 22, No. 2 (2020):163-190. DOI: 10.7454/global.v22i2.492

Nurcahyo, Marsanto Adi. “Analisis Dampak Kerjasama Indonesia Chile CEPA Terhadap Neraca Pedagangan [Analysis of the Impact of the Indonesia-Chile CEPA Cooperation on the Trade Balance],” Eqian 11, no. 3 (2022): 831–847.

Purwono, Rudi, Lilik Sugiharti, Rossanto D. Handoyo, and Miguel A. Esquivias. “Trade Liberalization and Comparative Advantage: Evidence from Indonesia and Asian Trade Partners.” Economies 10, no. 4 (2022): 80. https://doi.org/10.3390/economies10040080.

Ratnasari, Diah, and Ida Ayu Sukihana. “Mekanisme Penyelesaian Sengketa Perdagangan Internasional Melalui Dispute Settlement Body (DSB) World Trade Organization (WTO) (Tinjauan Terhadap Gugatan Indonesia Kepada Korea Selatan Dalam Pengenaan Bea Masuk Anti-Dumping Produk Kertas) [International Trade Dispute Settlement Mechanism Through the Dispute Settlement Body (DSB) of the World Trade Organization (WTO) (Review of Indonesia’s Lawsuit Against South Korea Regarding the Imposition of Anti-Dumping Import Duties on Paper Products)].” Jurnal Kerthanegara 2, no. 2 (2014): 1–5.

Supeno. “International Trade Dispute Settlement Through Dispute Settlement Body (DSB) and International Arbitration Body.” NURANI 20, no. 1 (2020): 147 - 162.

Wati, Annisa Eka, Indah Febriyanti Fatmah Puteri, Muhammad Rizqy Lazuardy, Mutiara Ainurrahman Maksum, and Valentine Yusrin Susanti Taryana. “Pengaruh Perjanjian Indonesia - Japan Economic Partnership Agreement (IJEPA) Terhadap Pangsa Pasar Produk Indonesia Di Jepang [The Impact of the Indonesia-Japan Economic Partnership Agreement (IJEPA) on the Market Share of Indonesian Products in Japan].” Jurnal Economina 2, no. 1 (2023): 218–29.

Wowor, Kevin Jonathan. “Penyelesaian Sengketa Dagang Internasional Dalam Sistem Pengaturan World Trade Organization [International Trade Dispute Settlement on WTO System].” Lex Privatum 9, no. 2 (2021): 140–150.


Books and Book Chapters

Bartels, Lorand, and Federico Ortino, eds. Regional Trade Agreements and the WTO Legal System. UK: Oxford University Press, 2006.

Chase, Claude, Alan Yanovich, Jo-Ann Crawford, and Pamela Ugaz. “Mapping of Dispute Settlement Mechanisms in Regional Trade Agreements – Innovative or Variations on a Theme?” In Regional Trade Agreements and the Multilateral Trading System, edited by Rohini Acharya, 608–702. UK: Cambridge University Press, 2016.

Hoyle, Mark S. W. The Law of International Trade. London: The Laureate Press, 1981.

Koul, Autar Krishen, Guide to the WTO and GATT: Economics, Law and Politics, Singapore: Springer Singapore, 2018.

Kusnowibowo, Ahmad Saleh. Penyelesaian Sengketa Dagang Antar Negara Dalam Free Trade Agreement (FTA) Dalam Kerangka WTO Dan ASEAN. Jakarta: Kencana, 2020.

Sood, Muhammad. Hukum Perdagangan Internasional. Jakarta: Rajawali Pers, 2012.

Sykes, Alan O. The Law and Economics of International Trade Agreements. US: Edward Elgar Publishing, Inc, 2023.

Legal Documents

Indonesia – Japan Economic Partnership Agreement (IJEPA) 2007

Indonesia – Pakistan Preferential Trade Agreement 2012

Indonesia – Chile Economic Partnership Agreement 2017

Indonesia – Palestine MoU on Trade Facilitation for Certain Products Originating from Palestinian Territories 2017

Indonesia – EFTA Comprehensive Economic Partnership Agreement (IE-CEPA) 2018

Indonesia – Australia Comprehensive Economic Partnership Agreement (IACEPA) 2019

Indonesia – Mozambique Preferential Trade Agreement 2019

Indonesia – Korea Comprehensive Economic Partnership (IK CEPA) 2023

Indonesia – United Arab Emirates Comprehensive Economic Partnership Agreement (IUAE-CEPA) 2022

Web Sources

ARIC. “Free Trade Agreements.” Accessed on 8 August 2025. https://aric.adb.org/fta-country, 

Cabinet Secretariat of the Republic of Indonesia. “Perkembangan Perjanjian Perdagangan Bilateral Antara Indonesia Dengan Negara Mitra [Development of Bilateral Trade Agreements Between Indonesia and Partner Countries].” Accessed 8 April 2023, https://setkab.go.id/perkembangan-perjanjian-perdagangan-bilateral-antara-indonesia-dengan-negara-mitra/.

WTO. “Dispute Settlement: The Disputes,” Accessed 8 April 2023, https://www.wto.org/english/tratop_e/dispu_e/find_dispu_cases_e.htm.

Other Sources

McDougall, Robert. Regional Trade Agreement Dispute Settlement Mechanisms: Modes, Challenges and Options for Effective Dispute Resolution. Swiss: International Centre for Trade and Sustainable Development (ICTSD), 2018.

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