Vision Group Report: Invigorating the Indonesia-EU Partnership

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One of the fastest growing segments of the global cosmetic market is products with natural ingredients. Recent data suggests that EU and US consumption of cosmetics that use natural ingredients is growing by 8 percent a year, compared with a growth of 5 percent for all types of cosmetics. Indonesia has one of the most biodiverse environments in the world, with access to a large variety of natural cosmetic ingredients. The county has a long tradition of producing natural cosmetics using its vast plant resources. Approximately 700 companies produce a wide variety of cosmetics. Exports of the industry in Indonesia are concentrated in the ASEAN region, and are mainly in the form of essential oils and beauty makeup preparations. In the area of end-use products, Indonesia exports beauty make-up preparations in the form of perfumes and toilet waters, and hair products. In the area of ingredients used in the production of natural cosmetics, Indonesia mainly exports essential oils of geranium, which accounts for over 70 percent of essential oils, resinoids and terpenic by-products, and essential oils of vetiver, which accounts for most of the remaining exports in this category. Indonesia only exports 10 percent of its natural cosmetic products and ingredients to the European Union, even though the European Union is the world’s largest market. The cosmetic market of the European Union is nearly as large as the combined markets of the United States and Japan. Common growth patterns are occurring throughout the European Union in sun care products to protect against rising concerns about skin cancer. In addition, the aging population of Europe is generating growing demand for anti-aging creams and anti-cellulite skin care products. There is also growing demand for natural and organic products across all age groups. 96 200 150 100 50 0 Source: Eurostat. Cosmetics 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, % XXII COSMETICS 4.0% 3.0% 2.0% 1.0% 0.0% Indonesia's cosmetics exports to the EU 9% 5% Because of strong and rising consumption of cosmetic products in the European Union, imports have grown rapidly in the last ten years, averaging nearly 10 percent a year. The largest product categories are make-up and skin care products. The European Union imports nearly US$7 billion worth of cosmetics annually, three-fourths of which come from China, Switzerland and the United States. A mere 0.8 percent comes from Indonesia. Nonetheless, the growing concern of end-users about the presence of possible harmful ‘synthetic’ ingredients offers Indonesia a considerable opportunity to improve its presence in the EU market and elsewhere. For Indonesian exporters shipping cosmetic products to the EU markets, the following are the specific market access requirements: 86% Essential oils Make-up and skin care preparations Other
1. Tariffs: For cosmetics, an average MFN rate of 2.5, and an average preferential tariff rate of 0.2 percent apply to Indonesia. 2. Specific requirements on technical standards applicable to cosmetic products cover (a) health and marketing conditions for cosmetic products; (b) marketing requirements for dangerous chemicals, pesticides and biocides (when intended to be used in plant protection products and/or biocides), and prohibition of products containing fluorinated greenhouse gases (when used with aerosols for entertainment and decorative purposes containing hydrofluorocarbons); and (c) rules of origin. 97
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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
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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 96 and 97: Electronics is Indonesia’s larges
Page 100 and 101: The textile, clothing and footwear
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Page 104: Delegation of the European Union In
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Vision Group Report: Invigorating the Indonesia-EU Partnership

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