<p>Positive impacts should be obtained by the Indonesian horticulture sub-sector on the implementation of the ASEAN-China Free Trade Agreement (ACFTA). However, this sub-sector has not provided significant performance when horticultural imports increased through the ACFTA tariff reduction scheme. This study uses descriptive analysis to examine the performance of Indonesia's horticultural trade, while the impact of ACFTA on trade creation and diversion of Indonesia's horticultural trade was analyzed using panel data regression with the gravity model approach. The results of the study demonstrate that horticultural imports increased significantly beyond the value exported after the ACFTA was enacted. The implementation of the ACFTA has created the effect of creating horticultural trade by increasing intra-regional trade in member countries, however it does not lead to the diversion of trade with non-member countries. Therefore, a policy step is needed to improve the competitiveness of horticulture through improvements in managerial and technological components as markets in the region open for Indonesian MSMEs. <strong></strong></p><p><strong> </strong></p><p><strong>Keywords: </strong>ACFTA, economic integration, gravity model, panel data</p>