Name : Nur Setya Ningsih/043839791

Prodi : Manajemen

TT2 Bahasa Inggris Niaga

Quastion :

Please choose one of the topics below. Then, write an essay consisting of 3 paragraph. Elaborate
your own opinion with the references related to the topic that you choose.

1. Indonesia has signed some Free trade agreement with some countries in Asia. Do you think
that this decision is beneficial for Indonesia economic? Explain your reason!

2. Inflation is a measure of the rate of rising prices of goods and services in an economy.
Although it can have a negative impact on society it also can give benefit to some people. Who
are they? Why?

Answer :

I chooce the first topic.

The Asean Free Trade Area (AFTA) is a form of trade and economic cooperation agreed
by countries in the ASEAN region. AFTA was established on January 28, 1992 in Singapore, at
the fourth ASEAN Summit. ASEAN members hope that the establishment of AFTA will create a
free trade environment that can benefit all member countries. Initially, AFTA only consisted of
six ASEAN member countries, namely Brunei Darussalam, Indonesia, Malaysia, the Philippines,
Singapore, and Thailand. Over time, other countries such as Vietnam, Laos, Myanmar and
Cambodia joined the treaty. AFTA is a form of cooperation in the economic field agreed upon by
ASEAN countries.

There are several factors behind the formation of AFTA or a free trade area, including the
following:

1. The emergence of economic problems after the political and military challenges faced by
ASEAN ended during the cold war at that time.
 2. The rapid progress of Singapore which does not have natural resources (SDA), but has a
reliable trade sector as a main source of livelihood.

3. Desire to bring in foreign investors.

4. AFTA was formed as a step to pursue the benefits of regional cooperation in other regions,
such as in Europe and America.

Indonesia's choice to become part of AFTA is a very right decision. This is because
AFTA is very beneficial for the Indonesian economy. AFTA has provided greater benefits in the
form of trade creation for the early AFTA member countries, including Indonesia. In terms of
FDI (Foreign Direct Investment), Verico's research (2015) concludes that AFTA has a positive
impact on FDI flows to Indonesia. So it can be concluded that AFTA provides benefits to the
Indonesian economy through increased trade and FDI, such as being an opportunity for small
and medium-sized entrepreneurs to export their production goods so as to be able to open up
opportunities for them to gain foreign markets, provide opportunities for Indonesia in export
activities, create Indonesia can produce competitive commodities in the ASEAN market such as
agriculture, palm oil, rubber, cocoa, and coffee which are materials that are in great demand by
ASEAN countries and abroad, and increase competitiveness to encourage economic
development. In addition, AFTA also has the following objectives:

1. Improving economic competitiveness among ASEAN countries by making ASEAN a

destination for the world market.
2. Attract foreign investors to ASEAN to increase trade among ASEAN members.
3. Eliminating export and import tax fees for countries belonging to ASEAN members.