German body seeks end to import duty on RI electronics

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)