German body seeks end to import duty on RI electronics

JAKARTA (JP): The German Association for Entertainment and Communications Electronic (GFU) is working to persuade the European Union to abolish the import duty on Indonesian electronic goods, an association executive says.

Paul-Albert Ruhr, the association's managing director, said Wednesday he was optimistic imports of Indonesian electronic goods in Germany would be exempt from the duty before 2000.

Ruhr said abolishing the duty would benefit both sides.

Indonesian electronics exporters would no longer face tariff barriers while the German government would cut administrative costs, he said.

"Right now, Indonesian electronic goods receive a 3.5 percent import tax, which is considerably low," he said following a presentation on the upcoming International Funkausstellung electronic products affair to be held in Berlin.

"My association is asking the government to abolish this tax immediately because it costs more to administer those taxes," he said.

The proposed cut, which would further lower prices of Indonesian electronics goods in Germany, would pose no problem to local electronics producers, Ruhr said.

"Of course, products from Asia, which are cheaper than European products because of their lower production costs, hurt our companies," he said.

"But that only means that we have to find ways to produce our products at lower costs, too."

Many German companies have now started to manufacture their products in Eastern European countries like Poland, Chechnya or Russia, where production costs are lower, he added.

Meanwhile, Iwansantoso, the deputy chairman of the Indonesian Association of Electronic and Electrical Home Appliance Industries, said Wednesday an end to the duty would reduce the prices of Indonesian electronic products in Germany.

This would help the consumer electronic industry in the country in facing tight competition, said Iwan, who is also the president of telecommunication appliances company PT Centronix.

"The current profit margin of the industry is not very high because of the competition," he said, adding that the companies had to tighten their spending budget.

Indonesia's total export value of consumer electronic products to Germany declined to US$137.28 million last year from US$147.30 million in 1995. These included video and audio electronic goods.

The import value of the German electronic goods to Indonesia, mostly telecommunication products, grew by 44 percent to US$564.05 million last year from US$391.93 million in 1995.

The biennial International Funkausstellung of electronic goods to be held Aug. 30 to Sept. 7. More than 800 companies are expected to display their products in the 130,000 square meter exhibit arena.

Ruhr said the event was expected to draw more than 500,000 visitors and generate over DM1 billion in contract value.

He said global expenditure on traditional consumer electronic products such as video and audio electronics totaled around DM250 billion last year.

This amount increased to DM300 billion if expenditure on privately used computer and telecommunications equipment were counted.

A five percent increase in expenditure is expected this year, he added. (das)