International Journal of Science and Research (IJSR) ISSN (Online): 2319-7064 Index Copernicus Value (2013): 6.14 | Impact Factor (2015): 6.391 Volume 5 Issue 10, October 2016 www.ijsr.net Licensed Under Creative Commons Attribution CC BY The Analysis of Affecting Factors to the Export of Rattan Furniture Indonesia in the International Market Achmad Subchiandi Maulana 1 , Rita Nurmalina Suharno 1 Bogor Agricultural University, Magister Science of Agribusiness, Dramaga, Bogor, 16680, Indonesia Abstract: Rattan is among the leading commodities to Indonesia for almost 80% of the world's rattan filled by Indonesia. Furniture discussed here are the type of HS 940151 (Seat Of Rattan) and HS 940381 (Furniture Of Rattan). Applicability of government policy in 2011 by decree of the Minister of commerce 35 / M-DAG / PER / 11/2011, which contains about banning the export of raw rattan is expected to grow back the furniture industry had dimmed in the years before the enactment of the policy, so it is necessary analysis related which factors that give effect at rattan furniture trade. This research use approach of Gravity model and ratio of potential trade to know which countries can be expand for export. Factors that affect the export for HS 940151 are GDP per capita importer, GDP per capita Indonesia, economic distance, real exchange rate, price, and government policy. And then factors that affect the export for HS 940381 are GDP per capita importer, GDP per capita Indonesia, economic distance, and price. The potential countries to expand trade HS 940151 are Japan, Netherland, and Belgium. And for HS 940381 the potential countries are all countries in this research. Keyword: Export, Rattan Furniture, Gravity Model, Potential Trade 1. Introduction Indonesia is a country that producing rattan commodity for the world. Almost every year about 80% of raw rattan canes absorbed by the industry in many parts of the world come from Indonesia. Rattan is an industrial raw material classified as environmentally friendly, so that the industrial products directly processed rattan is also an environmentally friendly product. Indonesia has a comparative advantage in the supply of raw material for the rattan industry, because production of raw rattan in the world is dominating by Indonesia, but the change of policy make the situation for rattan industry unstable. Domestic rattan industry is expected to contribute foreign exchange as a period in 1988 when the rattan industry was victorious, because the current situation in 1988 is equal to the current situation that the government conducts a policy of protection by banning the export of raw rattan. Then setback rattan industry going back to the issuance of export of raw rattan faucet opening in 1996 by lowering the export tax of 10 percent, the policy relating to the Letter of Intent agreed between the Indonesian governments with IMF which one of the points deal is remove the export ban except for health and safety reasons. Circumstances worsened by the financial crisis in 1997-1998 which made Indonesia should revoke the export of rattan mats trough Minister of Trade Decree No.33 / MPP / Kep / 1998. In mid-2005 upstream industries are demanding the government to regulate the export of rattan that contains policies raw rattan export ban, the policy contained in the Minister of Trade Decree No.12 / M-DAG / PER / 6/2005.In the policy of rattan which can be exported are mixed rattan with a diameter of 4-16 mm and semi-finished rattan from any rattan species. Opened the faucet exports in 2005 making state competitors Indonesian rattan furniture industry experienced a heyday for feedstock easily obtained by them. These countries include China importing raw rattan Indonesia in large numbers. Chinese are buying raw rattan Indonesia controlled nearly 20.72% market share and rattan furniture world, while Indonesia, which is the producer of the raw material world only controlled 7.68% of world market share. China is able to produce better goods at a cheaper price and market their products to Indonesia's export destination countries such as America, Japan, Germany, and others [7]. Post-enactment of the opening of the tap export of raw rattan in 2005 that led Indonesian rattan industry to deteriorated state, the government again issued a policy through a decree of the Minister of Trade No.36 / M-DAG / PER / 8/ 2009 on rattan export restrictions for certain types of diameter. These regulations prohibit the export of mixed rattan from any rattan species. Then in 2011 the government confirmed the ban on export of raw rattan contained in Minister of Trade Decree No.35 / M-DAG / PER / 11/2011. Which raised the question underlying this study, are as follows: what are the factors that affect the export value of Indonesian rattan furniture? Then how is the trade potential of Indonesian rattan furniture? 2. Literature Survey International trade limitations based on their differences and differences in the availability of resources possessed by each country. Such conditions led each country to export and import. In practice, political constraints and policies of each country is different. Protectionism is a deliberate policy as an attempt to establish trade barriers, such as tariffs and quotas in order to protect domestic industry from foreign competition. Another problem is the currency exchange rate, these problems arise from each country has its own national currency, so that Paper ID: 23101603 DOI: 10.21275/23101603 1514