Expanding-Indonesia’s-Exports-to-the-U.S.-through

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Expanding Indonesia’s Exports to
the U.S. through the GSP program
Marideth Sandler, Sandler Trade LLC
in collaboration with
The Office of Indonesia Commercial Attaché
Washington, D.C.
March 2012
Today’s presentation
• Indonesia’s exports to the United States,
including under the Generalized System
of Preferences (GSP)
• Qualifying your product to enter the U.S.
market
• How Indonesia’s exports to the U.S.
could increase by using GSP
2
Indonesia and the U.S.:
Important Trading Partners
• Indonesia’s exports into the U.S. market totaled
$19 billion - nearly 17% higher than in 2010
• U.S. is the third largest buyer of Indonesia’s
exports
• Only 10.3% of Indonesia’s exports entered the U.S.
market free of duty through the GSP program, but
Indonesia is the fourth largest user of GSP benefits
• Indonesia exported 652 types of products that
entered under GSP, totaling just under $2 billion in
trade in 2011
3
GSP Program
• Provides duty-free treatment for over 3,400 types
of exports from 129 countries, including Indonesia
• Gives enhanced access to the U.S. market for
developing countries’ products as well as expanded
choices for U.S. industries and consumers
• Major source of goods: $18.5 billion in eligible
products entered the U.S. market under GSP in
2011
Indonesia’s Exports to the U.S. Under
GSP in 2011
• 4th top user of GSP benefits: 5.9% increase between
2010 and 2011
• Under GSP: 10.3% of $19 billion total exports to the
U.S. (up from 16.7% in 2010)
• 652 of approx. 3400 GSP-eligible product types
claimed - more diverse than many countries but
plenty of opportunity to expand
• U.S. importers saved over $72.5 million in duties
(average duty foregone 3.7%)
5
Top GSP exports from Indonesia to the
U.S. (by value) in 2011
•
•
•
•
•
•
•
•
New rubber radial tires: $320.9 million (avoided a 4% duty)
Aluminum alloy sheets (in rectangles): $196.5 million (3% duty)
Plywood sheets: $104.8 million (8% duty)
Rubber gloves (not used for medical): $64.7 million (3% duty)
Insulated electric conductors: $40.6 million (2.6% duty)
Aluminum alloy (non-rectangular): $37.3 million (3% duty)
Motor vehicles parts & accessories: $36.8 million (2.5% duty)
Musical instruments (other than keyboards except accordions):
$36.6 million (5% duty)
• Silver articles or parts of jewelry: $33.9 million (5% duty)
• Gold jewelry: $30 million (5.5% duty)
6
GSP Claimed and Unclaimed from Indonesia for
Top Exports in 2011
Article and Tariff
Claimed
Rubber radial tires: 4%
$ 320.9m $ 96.7m
Aluminum alloy (rectangular) 3%
$ 196.5m $ .32m
0.2% $975,000
Plywood sheets: 8%
$ 104.8m $ 3.1m
2.9% $246,000
Rubber gloves (not medical): 3%
$ 64.7m
$ 5.6m
8.6% $166,700
Insulated elect. conductors 2.6%
Aluminum alloy (non-rectangular):
3%
Motor vehicle parts and accessories:
2.5%
Musical instruments (no key-boards
except accordions): 5%
$ 40.6m
$ 5.4m
13.4% $141,000
$ 37.3m
$
Silver jewelry & parts: 5.5%
Unclaimed Unclaimed% Money Lost
$3.9m
0.0%
$0!
2.6m
7.1%
$65,100
$ 36.6m
$ 2.5m
6.9%
$27,000
$ 33.9m
$ 30.2m
89.3%
$1.5m
$
36.8m $
-
30.1%
7
Top GSP exports by growth in trade between
2010 and 2011
• Cocoa Paste: $22.2 million (+$21.7 million)
– 4404% increase over 2010-2011; 0.2 cents/kg duty
• Aluminum alloy, profiles (o/than hollow profiles): $2.8
million (+$2.7 million)
– 2621% increase over 2010-2011; 5% duty
• Outer soles and heels for footwear, of rubber or plastics:
$730 thousand (+$684.6 thousand)
– 1615% increase over 2010-2011; 3% duty
• Parts of windshield wipers for motor vehicles or cycles: $7.3
million (+$6.1 million)
– 518% increase over 2010-2011; 3% duty
• Other:
– Calcium carbide (2% duty saved), turpentine oils (5%)
– Laboratory/chemical ceramic wares (6.4%), nickel (3%) 8
GSP-eligible products that Indonesia did not
export in 2011, but provide major opportunities












Garlics, fresh or chilled (0.43 cents/kg duty)
Cassava, fresh, chilled or dried (11% duty)
Fresh or chilled yams (6% duty)
Animal or vegetable fats and oils (8% duty)
Banana pulp (3.4% duty)
Photographic paper (3% duty)
Handles or knobs for furniture, of plastics (6.5% duty)
Ceramic table and kitchenware (10% duty)
Parts and accessories for fishing reels (5% duty)
Buttons of plastics (not covered with textile) – (5% duty)
New pneumatic tires of rubber (3% duty)
Retreaded radial pneumatic tires of rubber (4% duty)
9
What products are eligible for GSP dutyfree treatment?
• Eligible:
– many manufactured items and inputs
– jewelry
– many carpets
– certain agricultural products
– chemicals, marble, and minerals
– plastic and rubber items
Products NOT eligible for GSP
•
•
•
•
•
•
•
Most non-silk blend textile and apparel articles
Most watches
Most footwear, handbags, and luggage
Flat goods (non-silk kitchen and bed linens)
Work gloves
Most apparel of leather
Import-sensitive electronic, steel, and semimanufactured and manufactured glass products
11
How can Indonesia’s Exports Qualify for DutyFree Treatment under GSP?
Four Requirements:
1.
2.
3.
4.
Must be a GSP-eligible product
Must be exported into the U.S. directly from
Indonesia or pass through another country on a
“through bill of landing” (addressed to a U.S.
location)
Must be a product of Indonesia, or, if it uses
imported input, local content and processing must
equal at least 35% of overall price to U.S. importer
U.S. importer must request duty-free treatment for
the product by writing an “A” before tariff number
on U.S. Customs Entry Form (Form 7501)
Is my product eligible for duty-free
treatment under GSP?
• The easiest way to find out is to go to:
http://dataweb.usitc.gov/scripts/tariff_current.asp
• Fill in the blank with:
– Any part of a product description. For example, “cocoa”
OR
– The tariff number (four, six, or eight numbers). For
example, 2007, 200799, or 20079925
• Then click on “List Items”
• If there is an “A” or “A*” in the row entitled “GSP
(Generalized System of Preferences)”, then the
product is eligible for duty-free treatment.
Claiming GSP Duty-Free Treatment
• U.S. importer MUST REQUEST duty-free treatment
for the import
• How? Importer writes an “A” before the tariff
number on Customs entry form 7501
• If importer forgets: can apply to U.S. Customs for
refund
• Claims in 2012 for items not claimed in 2011 (when
GSP was not yet renewed) must be submitted to U.S.
Customs before April 18th, 2012
Make sure
importer
marks an “A”
before the
tariff
number on
the Customs
entry form!
15
Phyto-sanitary and Sanitary Requirements
• U.S. Food and Drug Administration (FDA) regulates
processed food (except most beef and poultry), cosmetics,
biologics, drugs & some electronics.
• Product requirements: pure and wholesome; safe to eat;
produced under sanitary conditions; informative and
truthful labels in English.
• Importer files notice and pays a bond to Customs, which
contacts FDA: a test may be needed.
• Bioterrorism Act: for food exports, producer required to
register with the U.S. the food production and processing
facilities where the food is produced.
• http://www.fda.gov/Food/InternationalActivities/Imports/d
efault.htm
Fresh fruits and vegetables approved for
export to the U.S.
 The U.S. Animal and Plant Inspection Service (APHIS) must
approve any fresh products for export from Indonesia to the
United States
 http://www.aphis.usda.gov/favir/info.shtml
 https://epermits.aphis.usda.gov/manual/index.cfm?action=
countrySummCommPI&REGION_ID=196&dspNavBar=1
 Inspection at the port of entry and other requirements apply
(click on “OPEN→” before name of product)
 Approved fresh exports include: aloe, cannonball fruit,
Chinese water chestnut, coconut, corn smut galls, cyperus
corm, garlic, ginger, lily, maguey, matsutake, mushroom, palm
heart (peeled), pomegranate, shingara nut, St. John’s bread,
tamarind, water chestnut.
 Mangosteens?
17
Cumulation within ASEAN
• Two or more ASEAN countries (such as Indonesia
and Thailand or Indonesia and Vietnam) can work
together to produce an export to meet the 35%
rule-of-origin.
• The item is partially manufactured in one country,
then sent to the second country for finishing and
export.
• For example, in ASEAN, many types of auto parts
are produced and exported duty-free.
18
How to continue increasing exports
under GSP
•
Ensure U.S. Customs entry form is marked by
importer to avoid paying duties on what
Indonesia is now exporting
Focus on exporting GSP-eligible items:
•
–
–
–
–
–
–
that have found a strong niche in U.S. market
for which other countries may have lost GSP
for which the duty savings are large
that the Animal and Plant Health Service has approved
that are eligible textiles and apparel
that made by micro and small businesses
19
Ensure GSP-eligible products get GSP
duty-free treatment
• $4.1 billion of GSP-eligible exports
entered the United States from
Indonesia in 2011
• 48% of these exports were claimed and
entered duty-free under GSP (2011)
• This leaves great opportunities for
additional duty savings ($2.1 billion)
20
Duties paid on…
• 884 types of GSP-eligible exports not claimed as GSP-eligible
(up to $35.4 million in duties paid unnecessarily)
• $169 million in insulated ignition wiring sets and other wiring
sets of a kind used in vehicles, aircraft or ships
(5% tariff = $8.5 million in duties paid)
• $69.6 million in polyethylene terephthalate in primary forms
(4.5% tariff = $4.5 million in duties paid)
• $96.7 million in new pneumatic radial tires, of rubber
(4% tariff = $3.9 million in duties paid)
• $30 million in silver articles of jewelry and parts
(5% tariff = $1.5 million in duties paid)
21
Other eligible exports that were not
exported by Indonesia to the U.S.
•
Items with 5% duty or higher:
papaya pulp (14%), iron or steel wood screws
(12.5%), artificial flowers/leaves/fruit of manmade fibers (9%), plastic clothing (5%), fishing
casts (5.6%), hats and headgear of wool (7.9%)
•
Products with less than 5% duty:
fish hooks (4.8%), iron or steel chain (3.9%),
vegetable oils (3.2%), dried papayas (1.8%),
dried lentils (.015 cents/kg), ground ginger (1
cent/kg)
22
Many of Indonesia’s major exports are
eligible for GSP into the U.S. Market
• Cocoa products
• Cocoa paste, wholly or partly defatted (avoids 0.2
cents/kg duty)
• Cocoa powder, without sweetener (avoids 0.52
cents/kg duty)
• Chocolate, not for retail sale (avoids 6% duty)
• Shrimp products
• Shrimp and prawn products containing fish meat as
prepared meals (avoids 5% duty)
• Rubber products
• Articles of vulcanized synthetic rubber other than
hard rubber (avoids 2.5% duty)
• Hard rubber, including waste and scrap (avoids 2.7%
duty)
Export products for which other countries
may have lost GSP eligibility
• Cereal flours, mixed together (12.8% duty)
• Prepared or preserved mackerel, not minced
(3% duty)
• Lychees and longans (7% duty)
• Sacks and bags (including cones) for the
conveyance or packing of goods, of polymers
of ethylene (3% duty)
• Dried guavas, mangoes, and mangosteens (1.5
cents/kg duty)
24
Focus on exporting eligible items for which the
duty savings are large (creating a strong
competitive edge)
• 9-9.8% duty: Ceramic household kitchen and tableware
(individually and in sets); pulp and other edible parts of fruit;
fruit and nut flour, meal and powder; hair nets; artificial
flowers/foliage/fruit; line fishing tackle; duck “decoys;” cereal
flour
• 8-8.5% duty: Preparations of concentrates, extracts, essences;
plastic artificial flowers/foliage/fruit; china or porcelain; jewelry
of base metal; household/tableware; fruits/nuts preserved by
sugar
• 6-7% duty: National flags; silk-blend women’s/girls dresses;
prepared/dyed foliage and branches; glass jewelry; electrical
transformers; guavas/mangos; rattan baskets
r25
Untapped Textile and Apparel
Opportunities under GSP
• These textile and apparel items offer U.S.
importers duty savings of up to 14.6% under
GSP:
– hats, silk blend headbands, headgear, national
flags, wall hangings, sports gloves
– silk and silk blend apparel: handmade fabrics,
shawls, men’s and women’s apparel,
handkerchiefs, kitchen linen
– carpets; apparel and accessories of plastic
26
Seafood Products Eligible for GSP
• Crab products containing fish meat; prepared meals of
crab (avoids 5% duty)
• Crabmeat, prepared or preserved, other than in airtight
containers (avoids 5% duty)
• Boiled clams in immediate airtight containers (avoids
1% duty)
• Tunas and skipjack, not in airtight containers (avoids 6%
duty)
• Sardines, prepared or preserved, not minced (avoids
3.1% duty)
USDA and FDA have strict regulations regarding food imports and
will physically examine samples to ensure food safety. Exporters
need to pay attention to product content (contaminants like
mercury, and bacteria like Salmonella) and import alerts.
27
Industrial Products Eligible for GSP
• Iron or steel screws and bolts, depending on the
diameter of the threads (6.2 - 8.6% duty)
• Polyvinyl chloride plastic (6.5% duty)
• DC motors of an output exceeding 74.6 W (4%
duty)
• Flexible plastic tubes, pipes and hoses (3.1%
duty)
• Parts of electrical ignition used for spark- or
compression-ignition internal-combustion
engines (3% duty)
28
Export GSP-eligible items made by small
businesses and farmers
• Cassava, fresh, chilled or dried (11% duty)
• Cucumbers, including gherkins (7.7-9.6% duty)
• Hats - plaited or made of strips of vegetable fibers or
unspun vegetable materials (6% duty)
• Wood ornaments, frames, & statuettes (3.2-3.9% duty)
• Plastic statues and other ornamental items (5% duty)
• Brooms and brushes of twigs or vegetable materials
bound together (10% duty)
• Baskets of vegetable materials (2.3% duty)
• Jewelry (5%-11% duty)
29
Questions?
• Contact the Indonesian Embassy in Washington, D.C.
– Ms. Ni Made Ayu Marthini
Commercial Attaché
Embassy of the Republic of Indonesia to the United States
2020 Massachusetts Avenue, NW, Washington DC 20036
Phone: +1-202-775-5200; Cell: +1-202-413-5872
www.embassyofindonesia.org
• Contact the Indonesian Chamber of Commerce and Industry
(KADIN):
– Menara Kadin Indonesia Lt. 29
Jalan HR Rasuna Said X-5 kav 2-3, Jakarta 12950 - Indonesia
Telepon : +62-21-5274484 (hunting)
[email protected]; [email protected]
• Contact the U.S. Embassy in Jakarta:
– Melissa Brown
Trade and Investment Unit Chief
Jl. Medan Merdeka Selatan No. 3 – 5, Jakarta 10110
TEL: +62-21-3435-9000
30
For Additional Information
Office of the U.S. Trade Representative Website
•
•
GSP guidebook, GSP-eligible & ineligible products, notices
http://www.ustr.gov/trade-topics/trade-development/preferenceprograms/generalized-system-preference-gsp
Agricultural Requirements (APHIS and FDA)
• Sanitary and Phytosanitary Management
http://www.aphis.usda.gov/import_export/sanitary_phytosanitary.shtml
• USDA Port of Entry procedures
http://www.fsis.usda.gov/regulations_&_policies/port_of_entry_procedure
s/index.asp
• Fruits and Vegetables Import Requirements (FAVIR)
https://epermits.aphis.usda.gov/manual/index.cfm?ACTION=pubHome
• Procedures and Requirements for Importing Food Products
http://www.fda.gov/Food/InternationalActivities/Imports/default.htm
31
For Additional Information
Agricultural Concerns
• http://www.aphis.usda.gov/import_export/plants/manu
als/ports/downloads/miscellane
Lacey Act http://www.aphis.usda.gov/plant_health/lacey_act/ous.pdf
Consumer Product Safety Act (CPSIA) – lead, flammability
• http://www.cpsc.gov/about/cpsia/cpsia.html
• http://www.cpsc.gov/businfo/smbus.html
Import Alerts
• http://www.accessdata.fda.gov/cms_ia/importalert
C-TPAT
• http://www.cbp.gov/xp/cgov/trade/cargo_security/ctpat/
32
For Additional Information
U.S. Tariff Schedule
– http://www.usitc.gov/tata/hts
Department of Homeland Security: Customs & Border
Protection http://www.customs.gov/xp/cgov/import/
• Customs Entry Form 7501:
https://forms.customs.gov/customsrf/getformharness
.asp?formName=cf-7501-form.xft
• http://www.customs.treas.gov/xp/cgov/toolbox/
publications/
Sandler Trade LLC:
–
http://sandlertrade.com and [email protected]
33
Terima kasih!
Thank you!
34
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