Vision Group Report: Invigorating the Indonesia-EU Partnership

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54 1. MAIN PRODUCTS TRADED I INDONESIA – EU TRADE RELATIONS This background note is to support the Vision Group and its discussions. It does not express official government views. This applies to all following Background Notes. Trade flows between Indonesia and the EU complement each other. Indonesia’s exports to the EU largely consist of agricultural products, fuel & minerals, textile & clothing; and (semi) manufactured goods. EU exports to Indonesia mainly consist of high-tech machinery, transport equipment, manufacturing goods, chemicals, and processed foods. EU products are important for the development of the Indonesian infrastructure and upstream industry and for consumer demand. Indonesian exports to EU - 2010 % of total 1 Animal or vegetable fats and oils 14.7% 2 Machinery, electronics, & electrical 14.51% 3 Textiles and textile articles 10.9% 4 Mineral Products 9.2% 5 Footwear and headgear 6.7% 6 Miscellaneous manufactured articles 5.8% 7 Plastics; rubber 8.9% 8 Prepared foodstuffs; beverages, tobacco 3.6% 9 Products of the chemical 6.6% 10 Wood and articles of wood 4.0% Trade complementarities between Indonesia and the EU are reflected in the list of top ten products traded between Indonesia and the EU. Out of ten groups, five are highly complementary. For Indonesia these are: animal/vegetable fats & oil, mineral products, footwear & headgear, miscellaneous manufactured goods, and wood & wood products. The five groups of the EU are: transport equipment, metals, paper, optical products, and animal products. The other five groups are similar at aggregated level but complementary when taking at a more disaggregated level. In machinery, electronics, and electrical products, Indonesia largely exports office equipment and household electronics, while the EU exports industrial machinery and high-tech components for the downstream industry. EU exports to Indonesia - 2010 % of total 1 Machinery, electronics, & electrical 42.9% 2 Chemical products 16.3% 3 Transport equipment, aircraft, ship 10.6% 4 Base metals and articles of base metal 7.6% 5 Paper or paperboard 6.9% 6 Plastics; rubber 4.4% 7 Live animals; animal products 3.5% 8 Optical, photo cine precision instruments 2.6% 9 Prepared foodstuffs; beverages, tobacco 2.6% 10 Textiles and textile articles 2.8%
2. DEVELOPMENTS Even though the trade value between Indonesia and the EU is growing in absolute terms, in relative terms it is reducing as Indonesia increasingly imports from China, India and Japan. The EU is Indonesia’s second largest export destination (13% share) and the fourth largest source of imports. For the EU, Indonesia is the 19th largest import source (1% share) and the 35th largest export destination (0.5% share) for the EU. The share of the EU as an Indonesian export destination increased from 15% in 2006 to 18% in 2010 and the share of the EU as a source for Indonesian imports dropped from 14% in 2006 to 8% in 2010. In absolute terms, trade between the EU and Indonesia increased over the period 2005 - 2010 – with a positive trade balance for Indonesia. 19000 17000 15000 13000 11000 9000 7000 5000 3000 The development of Indonesia - EU Trade Relation (in US$ million) 10062.2 5811 4251.2 11818.8 13124.5 7650 5815.8 6003 5474.5 Source: BPS (The Indonesian Central Bureau of Statistics) 15049.8 10529.5 EU’s trade with Asia (2010, Eurostat) 13533.4 Rank Country M EUR % of total 2 China 394966 13.9% 6 Japan 108558 3.8% 8 India 67778 2.4% 9 South Korea 66563 2.3% 12 Singapore 42591 1.5% 14 Taiwan 38850 1.4% 16 Hong Kong 37877 1.3% 17 Australia 36590 1.3% 22 Malaysia 31926 1.1% 24 Thailand 27168 1.0% 31 Kazakhstan 20107 0.7% 32 Indonesia 20043 0.7% 36 Vietnam 14068 0.5% 42 Philippines 9107 0.3% 45 Bangladesh 8200 0.3% 48 Pakistan 7456 0.3% 4520.3 8649.2 4884.2 2005 2006 2007 2006 2009 2010 Indonesian Export to EU Indonesian Import from EU Trade Balance ASEAN 146693 5.2% 17069.8 9767.2 7302.6 55
Page 1 and 2:
Invigorating The Indonesia-EU Partn
Page 3:
Abbreviations ACP Africa, Caribbean
Page 6 and 7: SUMMARY OF THE TERMS OF REFERENCE F
Page 9 and 10: CONCLUSIONS AND RECOMMENDATIONS 7
Page 11 and 12: often be accentuated by the combina
Page 13: 20. Furthermore, in order to increa
Page 16 and 17: Relations between Indonesia and the
Page 18 and 19: eaching almost 7% in the last quart
Page 20 and 21: The existing EU and Indonesia allia
Page 22 and 23: Architecture of the CEPA 20 4 The V
Page 24 and 25: Market Access in Goods 22 5
Page 26 and 27: 24 Members have an effective opport
Page 28 and 29: Services are of increasing importan
Page 30 and 31: manufacturing and services (banking
Page 32 and 33: trade will bring to bear considerab
Page 34 and 35: poor management 5 . As a result the
Page 36 and 37: Competition policy is a necessary m
Page 38 and 39: increasingly demanding “environme
Page 40 and 41: 38 14 Communication strategy
Page 43 and 44: PRODUCT SECTORS OF SPECIAL IMPORTAN
Page 45 and 46: are concerns in Indonesia over poss
Page 47 and 48: nature of complex and fairly aggreg
Page 49 and 50: to exploit potentially beneficial c
Page 51 and 52: In the political cooperation area,
Page 55: BACKGROUND NOTES 53
Page 59 and 60: 1. to complete its ambitious negoti
Page 61 and 62: Data collected from an investment s
Page 63 and 64: direct recourse to international ar
Page 65 and 66: 2.2. EU Member States EU Member Sta
Page 67 and 68: - Component 2 (implemented by UNICE
Page 69 and 70: 7. Indonesia to improve the investm
Page 71 and 72: Indonesia is the largest timber exp
Page 73 and 74: 3. TECHNICAL COOPERATION The REACH
Page 75 and 76: The implementation of National Indo
Page 77 and 78: Cooperation and coordination betwee
Page 79 and 80: The proposal also puts forward a ne
Page 81 and 82: The EU’s objectives are to secure
Page 84 and 85: 82 1. INTRODUCTION Indonesia and th
Page 86 and 87: In the last decade, the expansion o
Page 88 and 89: Indonesia’s automotives industry
Page 90 and 91: 88 Rapidly expanding services secto
Page 92 and 93: There is remarkable scope for coope
Page 94 and 95: In Indonesia the processed foods in
Page 96 and 97: Electronics is Indonesia’s larges
Page 98 and 99: One of the fastest growing segments
Page 100 and 101: The textile, clothing and footwear
Page 102 and 103: 100
Page 104: Delegation of the European Union In
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Vision Group Report: Invigorating the Indonesia-EU Partnership

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