Traditional Cross-Border Trade in Forest Products Between Indonesia and Malaysia: An Analytical Study of a Border Trade Agreement

Abstract

This research aims to analyze the traditional cross-border trade that has been established between Indonesian and Malaysian citizens around the border area before and after the introduction of the Border Trade Agreement (BTA), including reviewing some of the rules related to the BTA of Indonesia and Malaysia in 1970. This is deductive-qualitative research by data collecting done by library research through literature review from scientific articles. This research focuses on trade in forest products at Indonesia-Malaysia's border areas and the sea border region's outer islands. The study results showed that although traditional trade has grown quite rapidly, both trade value and the type of goods traded, the border area is faced with many obstacles in developing its economic potential through trade activities to improve the welfare of the population. BTA and traditional trade can be combined as a form of cross-border trade between Indonesia and Malaysia with regulatory strengthening and a BTA review in 1970 to avoid dualism in trade in border areas and outer islands.