Market Access Strategy : Improving Market Access in Indonesia for EU Companies.
The European Union (EU) and Indonesia conduct frequent exchanges in order to direct and enhance our mutual trade relation, in Jakarta, Brussels and elsewhere, both in bilateral and multilateral fora. Bi-annual EU-Indonesia Working Group on Trade and Investment is the main forum for discussing all issues of trade and investment, supported by regular contacts and dialogues on particular topics of mutual interest.
Additionally, EU works closely together with industry. EU-Indonesia Business Dialogue (EIBD) is a forum driven by the business community, which has the objective to enhance ties between our industries, to concretely increase business opportunities, and to give inputs to policymakers on both sides.
Trade and investment is one of the priority areas for EU cooperation programmes with Indonesia, with funds amounting to € 30 million prepared for 2010-2013. The main targets of these programmes are: 1) to improve the compliance of Indonesian exports with EU and other international standards in sectors of strategic importance for Indonesia 2) to support a sustainable economic development in Indonesia, targeting in several areas of Government priority (e.g. renewable energy, science and technology, intellectual property rights, formulation of trade policy, investment procedures etc). A considerable amount will directed to improve the capacity of civil society organisations.
Preferential Access to the EU Market
In order to support developing countries' exports, the EU grants preferential access to its markets in the form of lower tariffs. These tariff preferences allow exports originating from developing countries to enter the EU at zero or reduced customs duties, thus making them more competitive and providing an incentive to traders to import from these countries.
The EU's Generalised System of Preferences (GSP) grants products imported from GSP beneficiary countries either duty-free access or a tariff reduction. From the total EU imports from Indonesia of € 14 billion in 2010, around 45% were eligible to the preferential treatment under the GSP facility. In order to be eligible for the tariff preferences under the GSP, products exported from Indonesia must fulfilrules of origin. In general this means that goods must either: 1) be manufactured from raw materials or components which have been grown or produced in the beneficiary country, or 2) at least undergo a certain amount of working or processing in the beneficiary country.
Generally, all working and processing for origin purposes must have been carried out in the beneficiary country of export. However, “regional cumulation” applies for ASEAN countries, which means that, where a product has been manufactured in two or more ASEAN countries, inputs from other ASEAN countries are treated as if they originate in the exporting beneficiary country.
Demand for Indonesian products is high in the EU, as many Indonesian products have a competitive advantage in the EU market – from fish products to textiles and clothing to furniture and handicrafts, including electronic products and components, yarn, automotive parts, copper and alloys, cocoa and more. The EU is aware that exporting industries, and particularly SMEs, need to be able to find information easily about the procedures to export to the EU and the means to meet its quality standards. For this purpose, the EU has an on-line Export Helpdesk for developing countries to help them develop their sales to the EU and to be better aware of the opportunities available. A userguide in Bahasa Indonesia is also available.
Improving Market Access in Indonesia for EU Companies
The EU has designed a Market Access strategy in order to better serve EU exporters through practical operational measures, to keep a comprehensive and interactive public record in order to scrutinise obstacles to trade in goods and services, to eliminate trade barriers and to ensure that our partners comply with their international commitments. This is also an integral part of the recent Global Europe Communication .
An interactive Market Access Database is a key instrument to reach these objectives. It provides basic information to businesses on market conditions in third country markets including Indonesia, it ensures systematic follow-up of complaints received from businesses concerning barriers to trade in third countries, it facilitates the monitoring of our trading partners’ compliance with their international commitments and it contributes to the identification of trade policy priorities.
Through a continuous three-way exchange of information between the EU institutions, Member States and European business, the EU pursues a pro-active dialogue with all its major trading partners in the appropriate bilateral and multilateral fora in order to reduce obstacles facing European exporters of goods and services.
When trade barriers are brought to the attention of the European Commission (EC), their elimination may be pursued through the most appropriate means. The preferred means is through an amicable solution with the country in question. In this respect, the EC headquarters in Brussels and the EU Delegations around the world can assist EU companies.
Another means to eliminate trade obstacles is the Trade Barriers Regulation, which aims among others at addressing restrictions on sales in the EU companies’ export markets, discriminatory taxes when selling the goods abroad, difficulties in acquiring patent rights in foreign countries etc.