Vision Group Report: Invigorating the Indonesia-EU Partnership

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Electronics is Indonesia’s largest contributor of foreign exchange earnings from manufactured exports. It accounts for nearly one-fifth of total manufacturing exports, with consumer electronics leading industrial electronics by a two-toone ratio. The industry contributes around 6 percent to Indonesia’s gross domestic product. Development of the industry dates back to the 1970s when the Japanese established joint ventures with Indonesian firms to access the domestic market in the period of import-substitution policies. When Indonesia adopted an exportoriented industrialization strategy in the 1980s, foreign electronics companies used the country as one of their export bases, benefitting from low production costs in Indonesia. 94 Strengths of Indonesia’s electronics industry include: • Well functioning supply chains governed by international companies. • Competitive cost structure relative to EU producers. • Flexible production systems. XXI ELECTRONICS • Availability of several laboratories with increasing capabilities. The EU market offers good opportunities for Indonesia’s electronics as EU consumer demand for electronic products is strong and growing in all sub-sectors and there are relatively low market access requirements for third country products. The European Union is a net importer of electronic components, with imports volume of US$240 billion in 2010. The European Union is Indonesia’s largest export market for consumer electronic products, followed by the US and ASEAN. Indonesia’s exports of consumer electronics are concentrated on a few basic types of products. About 70 percent of exports are in the form of sound-recording and video-recording apparatus. Television and radios account for around 10 percent of exports each. There is a small amount of refrigerators and heating units exported. Other minor exports are electric shavers and dishwashers. Indonesia’s share of the EU consumer electronics market has been stable in recent years, and there is considerable scope for increasing Indonesia’s market share. Recently, the industry’s output has begun to surge again as multinational electronics enterprises relocate their production from China due to rising labour costs. Chinese products dominate the EU market of consumer electronics. Almost 60 percent of all non-EU imports originate from China. Although Indonesia is the seventh largest non-EU supplier of consumer electronics in the EU, its market share is relatively small. Indonesia primarily supplies video recording equipment (25% of total EU imports), radio and television transmitters (18%), and radio and television parts (11%).
1,400 1,200 1,000 800 600 400 200 0 Source: Eurostat. Electronics 2001 2003 2005 2007 2009 Indonesia's export to the EU, mln USD Indonesia's import from the EU, mln USD Indonesia's share in the EU imports, % Indonesia's electronics exports to the EU 32% 5% 5% 6% 20% 8% 9% 15% Video recording apparatus Radios, cameras Electrical transformers Parts of radios and cameras Electric accumulators Electrical circuits apparatus Electronic integrated circuits Other 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 95
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Invigorating The Indonesia-EU Partn
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Abbreviations ACP Africa, Caribbean
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SUMMARY OF THE TERMS OF REFERENCE F
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CONCLUSIONS AND RECOMMENDATIONS 7
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often be accentuated by the combina
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20. Furthermore, in order to increa
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Relations between Indonesia and the
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eaching almost 7% in the last quart
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The existing EU and Indonesia allia
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Architecture of the CEPA 20 4 The V
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Market Access in Goods 22 5
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24 Members have an effective opport
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Services are of increasing importan
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manufacturing and services (banking
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trade will bring to bear considerab
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poor management 5 . As a result the
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Competition policy is a necessary m
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increasingly demanding “environme
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38 14 Communication strategy
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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 and 56: BACKGROUND NOTES 53
Page 57 and 58: 2. DEVELOPMENTS Even though the tra
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 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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