THE INDONESIA-MALAYSIA BORDER TRADE AGREEMET (BTA) IN 1970, AND ITS IMPACTS ON CROSS BORDER TRADE IN ENTIKONG-TEBEDU, SARAWAK

The social and economic relations between Indonesian and Malaysian citizen who live in the border part of their state have been existing far before they know the idea of a nation-state. The Indonesia citizens who live along the border area, especially in Entikong, were used to conduct cross border trade with Malaysia citizens. The Indonesian citizens in Entikong sell their agricultural commodities to Malaysia and buy their daily needs such as sugar, gasoline or fuel, clothes, soft drink, salt, meat, cooking oil and some other goods that could not supplied traders from Pontianak. Both Indonesia and Malaysia governments considered that they need to make an agreement to regulate and control the trade activity along the border area. Therefore, on 24 August 1970, the Indonesia and Malaysia governments signed an agreement called Border Trade Agreement. The agreement regulates about the goods from Indonesia that are allowed to be sold to Malaysia and the goods that are allowed to be bought from Malaysia by Indonesia citizens along the border area. It also regulates the value of goods that are allowed to be bought from Malaysia and the goods that are allowed to be sold to Malaysia. Those who own the Cross Border Identity Card (Kartu Identitas Lintas Batas, KILB) will not imposed a custom duty as they conducted cross border trade activity, but the value of goods is limited to RM 600. As the Legal Entry Point was constructed in Entikong, the economic activities were increasing in that area. The Indonesia citizens who live in the Entikong asked the Indonesia governments to revise the Border Trade Agreement by raising the cross border transaction value from RM 600 /month to US$ 1.500/month. They argue that the BTA 1970 was not appropriate to support the economic activity and fulfill their daily need in that area. However, the Fiscal Policy Committee as the policy maker has not agreed yet to raise the cross border transaction value. This thesis will discuss about the impacts of Border Trade Agreement on the cross border trade in Entikong. The writer will discuss the interest of group of people who require the Indonesia government to revise the Border Trade Agreement 1970. The factors that influence the Border Trade Agreement 1970 remains unchanged also would be discussed in this thesis