Indonesia Case StudyIndonesia Case Study

ROO and TBTROO and TBT

Indonesia TradeIndonesia Trade

ExportsExports– 2004 : US$ 71 bn2004 : US$ 71 bn– 2005 (Q1-Q3):62 bn2005 (Q1-Q3):62 bn– 70 percent of exports is non-oil and gas70 percent of exports is non-oil and gas

ImportsImports– 2004 : US$ 44 bn2004 : US$ 44 bn– 2005 (Q1-Q3):US$43 bn2005 (Q1-Q3):US$43 bn– Mainly raw materials and intermediate Mainly raw materials and intermediate

inputsinputs

Exports (quarterly)

0

5,000

10,000

15,000

20,000

25,000

Non Oil and Gas Oil and Gas Total Exports

Imports (quarterly)

-

4,000.0

8,000.0

12,000.0

16,000.0

20,000.0

Non Oil and Gas Oil and Gas Total Import

Indonesia's Import Growth (y-o-y)

(60.0)

(40.0)

(20.0)

-

20.0

40.0

60.0

80.0

100.0

120.0

140.0

1997

Q1

Q3 1998

Q1

Q3 1999

Q1

Q3 2000

Q1

Q3 2001

Q1

Q3 2002

Q1

Q3 2003

Q1

Q3 2004

Q1

Q3 2005

Q1

Q3

Non-oil/gas exports Oil and Gas exports Total Exports

Indonesia's Export Growth (y-o-y)

(60. 0)

(40. 0)

(20. 0)

-

20. 0

40. 0

60. 0

80. 0

100. 0

1997

Q1

Q3 1998

Q1

Q3 1999

Q1

Q3 2000

Q1

Q3 2001

Q1

Q3 2002

Q1

Q3 2003

Q1

Q3 2004

Q1

Q3 2005

Q1

Q3

Non-oil/gas exports Oil and Gas exports Total Exports

Trade Value ($ '000)2000 2001 2002 2003 2004value value value value value

27 Mineral fuels, oils & product of their distillation 15,683,916.37 14,273,206.27 13,914,408.96 15,712,977.38 11,462,273.17 -26.9285 Electrical mchy equip parts thereof: sound recorder, etc 6,464,044.14 5,914,459.14 6,061,650.43 6,120,597.77 6,572,506.10 1.6815 Animal/veg fats & oils & their cleavage product 1,763,577.01 1,451,684.10 2,653,135.36 3,003,361.33 4,421,203.14 150.7084 Nuclear reactors, boilers, mchy & mech appliance 3,839,200.81 2,725,404.67 3,050,385.41 2,785,477.42 3,853,029.58 0.3644 Wood and articles of wood; wood charcoal 3,637,449.37 3,353,568.00 3,278,137.34 3,180,499.56 3,271,420.59 -10.0640 Rubber and articles thereof. 1,349,974.07 1,236,038.40 1,587,673.34 2,126,626.11 2,998,633.71 122.1362 Art of apparel & clothing access, not knitted/chrocheted 3,005,892.02 2,783,399.68 2,496,103.94 2,614,320.50 2,814,051.52 -6.3848 Paper & paperboard; art of paper pulp 2,263,127.37 2,007,238.02 2,076,240.64 1,972,047.80 2,186,568.80 -3.3826 Ores, slag and ash. 1,677,139.27 1,830,254.34 1,887,823.10 1,935,173.06 1,935,682.47 15.4294 Furniture; bedding, mattress, matt support, cushions, etc 1,559,830.26 1,451,701.50 1,538,346.11 1,603,365.58 1,700,756.23 9.0329 Organic chemicals. 1,078,608.98 1,026,432.06 1,077,708.54 1,225,942.72 1,535,372.03 42.3561 Art of apparel & clothing access, knitted or crocheted 1,555,949.66 1,561,146.62 1,309,349.89 1,368,138.91 1,475,626.49 -5.1603 Fish & crustacean, mollusc & other 1,480,506.30 1,431,083.26 1,392,266.75 1,437,416.61 1,460,425.65 -1.3639 Plastics and articles thereof. 1,184,476.31 1,025,584.70 1,014,292.80 1,131,188.05 1,323,262.92 11.7264 Footwear, gaiters and the like; parts of such articles 1,672,109.79 1,505,580.03 1,148,051.97 1,182,185.02 1,320,477.98 -21.0355 Man-made staple fibres. 1,017,201.98 881,427.52 878,684.22 882,169.57 1,069,983.89 5.1954 Man-made filaments. 1,237,390.01 1,156,240.00 1,067,121.09 995,404.02 975,039.94 -21.2052 Cotton. 768,302.32 743,683.78 664,811.78 726,695.02 750,666.90 -2.30

Product NameProduct

Average Growth(

2000-2004)

Leading Exports (value and growth Leading Exports (value and growth p.a. 2000-2004)p.a. 2000-2004)

2000 2001 2002 2003 2004 Average growth (2000-2004)value value value value value

270900 Petroleum oils and oils obtained from bituminous minerals,crude6,090,055.24 5,714,697.73 5,227,594.24 5,621,004.05 4,678,730.71 -0.24270112 Coal, whether or not pulverised, but not agglomerated:-bituminous coal1,218,542.53 1,547,461.38 1,703,252.10 1,894,687.66 2,367,842.22 0.68151190 Other palm oil and its fraction 610,840.10 674,497.41 1,200,405.25 1,392,410.59 1,997,354.17 1.47400122 Natural rubber in other forms :-- Technically specified natural rubber848,780.85 750,203.26 970,357.95 1,407,527.26 1,979,100.76 1.02260300 Copper ores and concentrates.1,620,980.46 1,704,279.81 1,755,484.80 1,854,722.17 1,802,388.49 0.11271111 Liquefied :-- Natural gas 6,235,554.21 5,382,626.30 5,277,842.43 6,145,599.70 1,753,125.08 -0.73151110 Crude oil 476,438.24 406,409.02 891,998.66 1,062,214.88 1,444,421.81 1.57441213 Plywood consisting solely of sheets1,501,021.46 1,330,285.57 1,289,258.24 1,235,127.43 1,178,467.83 -0.25847330 Parts and accessories of the machines of heading No. 84.71991,498.33 892,743.04 929,099.58 883,491.97 997,679.89 0.01847160 Input or output units, whether or not containing storage units in same housing1,031,198.08 548,208.77 565,987.46 404,636.15 914,357.32 0.13030613 Frozen :-- Shrimps and prawns 931,017.58 879,318.14 784,392.06 785,856.26 770,317.24 -0.18640319 Sports footwear :-- Other 794,120.55 772,624.26 623,033.66 621,334.99 690,035.92 -0.11940360 Other wooden furniture 577,909.67 572,689.34 630,474.05 654,228.11 677,818.45 0.17470329 Semi-bleached or bleached :-- Non-coniferous706,910.62 561,062.59 705,383.81 789,079.86 585,659.16 -0.14480252 Other paper and paperboard, not containing fibers obtain by mechanical process or of which not more than 10% by weight of the total fibre content consist of such fibres:- weighting 40g/m2 or more but not more563,849.41 462,427.42 461,595.01 440,415.93 549,215.73 -0.02

Trade Value ($ '000)

Product Product Name

Leading Export Commodities (value Leading Export Commodities (value and growth)and growth)

Exports to ASEANExports to ASEAN

-

20,000,000.00

40,000,000.00

60,000,000.00

80,000,000.00

2000 57,8 10,6 8,17 6,48 5,02 1,57 3,73 1,49 662, 1,14

2003 54,9 11,4 8,88 8,18 5,69 1,71 4,62 1,97 1,09 1,14

2004 49,5 11,8 8,62 8,06 5,86 4,38 2,61 1,46 1,31 1,20

Machinery and transport equipmentMineral fuels,lubricants and relateManufactured goods classified chiefChemicals and related products,n.e.Miscellaneous manufactured articlesCommodities and transactions not elFood and live animalsCrude materials,inedible,except fueAnimal and vegetable oils,fats and Beverages and tobacco

7 3 6 5 8 9 0 2 4 1

NTMs in Export MarketNTMs in Export Market

EU MarketEU Market 2%14%

5%

41%

38%

TBT SPS Quantitative restrictions Trade remedies Custom and administrative procedures

NTM in Export MarketNTM in Export Market Japan marketJapan market

15331533Grand Total

44Technical regulations n.e.s.8190

6565Testing, inspection etc. req. to protect plant health8153

5454Testing, inspection etc. req. to protect human health8151

279279Product characteristics requirements to protect human health8111

1111Sole importing agency7120

2626Quotas to ensure national security6278

44Quotas to ensure human safety6277

1313Quotas to control drug abuse6276

4949Quotas to protect human health6271

3434Global quota6210

110110Authorization for wildlife protection6175

220220Authorization6160

347347Variable charges n.e.s.3390

99Seasonal tariff rates1500

308308Tariff quota1400

Grand Total2001MeasureNameNTMCode

15331533Grand Total

44Technical regulations n.e.s.8190

6565Testing, inspection etc. req. to protect plant health8153

5454Testing, inspection etc. req. to protect human health8151

279279Product characteristics requirements to protect human health8111

1111Sole importing agency7120

2626Quotas to ensure national security6278

44Quotas to ensure human safety6277

1313Quotas to control drug abuse6276

4949Quotas to protect human health6271

3434Global quota6210

110110Authorization for wildlife protection6175

220220Authorization6160

347347Variable charges n.e.s.3390

99Seasonal tariff rates1500

308308Tariff quota1400

Grand Total2001MeasureNameNTMCode

NTMCode MeasureName 1990 1999 Category3420 Antidumping duty 9 Core

6120 Licence for selected purchasers 49 Core

6276 Quota to control 69 Core

6371 Prohibition to protect human health 6 Core

6377 Prohibition to ensure human safety 2 Core

1400 Tariff quota 134 Non-core

6171 Authorization to protect human life 27 Non-core

6172 Authorization to protect animal health 98 Non-core

6173 Authorization to protect plant health 584 Non-core

6175 Authorization to protect w ildlife 171 Non-core

6177 Authorization to ensure human safety 23 Non-core

6178 Authorization to ensure national security 53 Non-core

8111 Product characteristics requirements for human health protec 989 Non-core

8113 Product characteristics requirements plant health protection 28 Non-core

8114 Product characteristics requirements to protect environment 102 Non-core

8116 Product characteristics requirements to control drug abuse 69 Non-core

8117 Product characteristics requirements to ensure human safety 857 Non-core

8119 Product characteristics requirements n.e.s 104 Non-core

8120 Marking requirements 59 Non-core

8121 Marking requirements to protect human health 27 Non-core

8130 Labelling requirements 776 Non-core

8131 Labelling requirements to protect human health 49 Non-core

8134 Labelling requirements to protect environment 35 Non-core

8137 Labelling requirements to ensure human safety 19 Non-core

8151 Testing, inspection or quarantine requirements to protect hu 993 Non-core

8152 Testing, inspection or quarantine requirements to protect an 98 Non-core

8153 Testing, inspection or quarantine requirements to protect pl 35 Non-core

8157 Inspection to ensure human safety 111 Non-core

United States

ChinaChinaNTMCodeNTMCode Measure NameMeasure Name 20012001

14001400 Tariff quotaTariff quota 308308

15001500 Seasonal tariff ratesSeasonal tariff rates 99

33903390 Variable charges n.e.s.Variable charges n.e.s. 347347

61606160 AuthorizationAuthorization 220220

61756175 Authorization for wildlife protectionAuthorization for wildlife protection 110110

62106210 Global quotaGlobal quota 3434

62716271 Quotas to protect human healthQuotas to protect human health 4949

62766276 Quotas to control drug abuseQuotas to control drug abuse 1313

62776277 Quotas to ensure human safetyQuotas to ensure human safety 44

62786278 Quotas to ensure national securityQuotas to ensure national security 2626

71207120 Sole importing agencySole importing agency 1111

81118111 Product characteristics requirements to protect human healthProduct characteristics requirements to protect human health 279279

81518151 Testing, inspection etc. req. to protect human healthTesting, inspection etc. req. to protect human health 5454

81538153 Testing, inspection etc. req. to protect plant healthTesting, inspection etc. req. to protect plant health 6565

81908190 Technical regulations n.e.s.Technical regulations n.e.s. 44

Grand TotalGrand Total    15331533

Industrial Survey says…Industrial Survey says…

The most affected The most affected commodities/sectorscommodities/sectors– Agriculture,food products, fishery and Agriculture,food products, fishery and

forestry (including wood products) (SPS forestry (including wood products) (SPS mainly)mainly)

The most constraining NTMs in The most constraining NTMs in – EUEU

Leather and Footwear in JapanLeather and Footwear in Japan

– Introduced the tariff quota system for leather Introduced the tariff quota system for leather footwear in 1986. footwear in 1986.

– The quantity of quota is automatically The quantity of quota is automatically calculated under the publicized formula. Those calculated under the publicized formula. Those who import leather and leather shoes less than who import leather and leather shoes less than actual allocation are penalized in calculating actual allocation are penalized in calculating the quantity. the quantity.

– The quota allocation is also based on a The quota allocation is also based on a company’s past experience in leather imports. company’s past experience in leather imports. As the result, trading firms that have long been As the result, trading firms that have long been in the business are given preferential in the business are given preferential treatment over the new entrants. treatment over the new entrants.

Textile and Apparels: JapanTextile and Apparels: Japan

AuthorizationAuthorization Sole importing agencySole importing agency Tariff quotaTariff quota Technical regulations: such as Technical regulations: such as

labeling and rule of origin. labeling and rule of origin. Variable chargesVariable charges Never applied quota since 1995Never applied quota since 1995

Harmonization of StandarsHarmonization of Standars

The survey says…The survey says…– Standards differ across countriesStandards differ across countries

EU, US and Japan are the highestEU, US and Japan are the highest Within ASEAN also varies, with Singapore considered the Within ASEAN also varies, with Singapore considered the

highest standardshighest standards Countries seems to use standards to block importsCountries seems to use standards to block imports Indonesia does not apply compulsory standards in many Indonesia does not apply compulsory standards in many

casescases– Firms considered that Indonesia standard authorities do not Firms considered that Indonesia standard authorities do not

have adequate capacities to implement the standardshave adequate capacities to implement the standards– De facto, Indonesian standards is easier to fulfil by De facto, Indonesian standards is easier to fulfil by

companiescompanies– Indonesia is considered non transparent (rule and Indonesia is considered non transparent (rule and

regulation)regulation)– Irregular payments take place for accelerate process to get Irregular payments take place for accelerate process to get

certificatecertificate

Labeling procedure on all textile products governed under the Household Goods Quality Labeling Law includes the fiber composition and the maker's name.In addition, labeling on the shrinkage potential, fire incombustibility, washing and other care instructions, size and moisture resistance of the product is also required on manufactured textile products.Japan also applied Rule of Origin measures for textile and textile products.

Labeling and Commodity Standard:Labeling and Commodity Standard: Special Electrical Appliances for 112 Special Electrical Appliances for 112

item of electrical appliances and item of electrical appliances and material which are harmful, with two material which are harmful, with two testing: testing: – prepare and store testing record (article prepare and store testing record (article

8) 8) – Labeling requirement (article 10). Labeling requirement (article 10).

Quota to ensure national securityQuota to ensure national security

Machinery and mechanical appliances andelectrical equipment,

ROOROO

Indonesia ROOIndonesia ROO

– Generalized System of Preferences Generalized System of Preferences (GSP); (GSP);

– Global System of Trade Preferences Global System of Trade Preferences (GSTP); . (GSTP); .

– Common Effective Preferential Tariff-Common Effective Preferential Tariff-ASEAN Free Trade Area (CEPT-AF TA); ASEAN Free Trade Area (CEPT-AF TA);

– ASEAN - China Free Trade Area (ACFTA); ASEAN - China Free Trade Area (ACFTA); dan dan

– Preferensi kerajinan tangan (handicraft)Preferensi kerajinan tangan (handicraft)

THE ASEAN CEPT ROOTHE ASEAN CEPT ROO Designated authorities to grant COODesignated authorities to grant COO

– Dinas (Local office of Ministry of Trade Dinas (Local office of Ministry of Trade (Province, Municipals/City))(Province, Municipals/City))

– PT. (Persero) Kawasan Berikat Nusantara dan PT. (Persero) Kawasan Berikat Nusantara dan Unit Usaha di Jakarta; Unit Usaha di Jakarta;

– Badan Pengusahaan Kawasan Perdagangan Badan Pengusahaan Kawasan Perdagangan Bebas dan Pelabuhan Bebas Sabang (BPKS); Bebas dan Pelabuhan Bebas Sabang (BPKS);

– Otorita Pengembangan Daerah Industri (OPDI) Otorita Pengembangan Daerah Industri (OPDI) Pulau Batam; Pulau Batam;

– Lembaga Tembakau Cabang Surakarta dan Lembaga Tembakau Cabang Surakarta dan Medan, Balai Pengujian dan Sertifikasi Mutu Medan, Balai Pengujian dan Sertifikasi Mutu Barang (BPSMB) dan Lembaga Tembakau Barang (BPSMB) dan Lembaga Tembakau Surabaya dan Jember. Surabaya dan Jember.

ASEAN ROOASEAN ROO

Indonesia: CEPT vs MFNIndonesia: CEPT vs MFN

THE ASEAN CEPT ROOTHE ASEAN CEPT ROO Utilization Rate of CEPT = less than 2 percent of total exports Utilization Rate of CEPT = less than 2 percent of total exports

(case of Jakarta’s exports)(case of Jakarta’s exports)

Utilization Rate of Certificate of Origin in Jakarta (Indonesia)

Volume (ton) Nilai ( US$ ) Volume (ton) Nilai ( US$ ) Volume (ton) Nilai ( US$ )1 Form A 50,127 1,392,993,121 50,241 1,397,402,366 60,945 1,487,305,608.002 Form B 36,998 1,311,111,201 37,546 1,472,427,772 75,317 2,016,914,853.003 Form D 9,289 264,952,724 9,658 301,137,090 28,674 417,097,511.004 Form VISA 38,549 879,214,212 36,226 889,485,610 103,695 1,095,812,500.005 Form TP 38,255 720,896,465 40,489 744,912,966 85,339 749,355,949.006 Form E/L 24,985 398,665,747 25,604 441,762,176 1,229,362,458.007 Form Mexico 1,285 24,833,467 1,572 28,996,076 4,562 24,103,203.008 Form K 4,813 49,095,155 5,011 52,661,079 5,229,671.009 Form E/L Turki 189 638,999 201 658,733 882 7,642,957.0010 Form GSTP 1,537 717,316.0011 Form GBF 489.226,67 754.288,51 228.535,86

204,490 5,042,401,091 206,548 5,329,443,868 360,951 7,033,542,026.00

Sumber : BPS, Diolah Dinas Perindag DKI Jakarta

19,959,600,000 20,454,400,000 24,501,200,000 Total Exports

2004

Jumlah

No Jenis SKA2002 2003

The Industrial Survey saysThe Industrial Survey says Many companies do not source its inputs from ASEAN -> so many Many companies do not source its inputs from ASEAN -> so many

are not eligible for ASEAN CEPT for importsare not eligible for ASEAN CEPT for imports

The ones which do source from ASEAN always ask the exporters to The ones which do source from ASEAN always ask the exporters to use CEPT FORM D use CEPT FORM D

The one which export to ASEAN face no difficulties in filling FORM The one which export to ASEAN face no difficulties in filling FORM D as they have been doing it for several yearsD as they have been doing it for several years– However, some face the problems in the beginningHowever, some face the problems in the beginning

Small Enterprise: Small Enterprise: – Main export commodities are furniture, leather goods,handicrafts and Main export commodities are furniture, leather goods,handicrafts and

garments (embroidery).garments (embroidery).– usually pull their products to one exporterusually pull their products to one exporter– also face no problems in exporting using Form D (as most of the input also face no problems in exporting using Form D (as most of the input

is local).is local).– Home industries exports, most of the time, not using Form D as it is Home industries exports, most of the time, not using Form D as it is

exported as hand-carry items exported as hand-carry items