IMPACT OF REDUCED TARIFF RATE UNDER FTA SCHEME ON IMPORT QUALITY UPGRADING

The good quality of imported goods as input production is needed to produce goods. This paper examines the impact reduced tariffs under FTA scheme on inputs in Indonesian Automotive Industry 2015-2019. Quality measured by unit value approach. Using data from Customs declaration documents, this captures products using Difference-in-Difference (DiD) method. result shows that reduction does not have a significant improving products. Most Indonesia's automotive exports are dominated less developed countries. Thus, producers do take advantage improve adapt purchasing power export market. They focus more productivity cheaper so become competitive market terms price.