Market Access

The Reduction of Import Duty through

Generalized System Of Preferences (GSP).
Nursal Baharuddin
nursal_bn@yahoo.com
Faisal H. Batubara
feibatoebara@gmail.com

Lecturers For the Corporate Leadership Academy

Abstract
In the framework of the World Trade Organization ( WTO ) , developed countries like the United
States ( U.S. ), providing import duty remission for certain goods that are exported by developing
countries (under developing countires) including qualified Indonesian products in the form of
concessions tariff reduction or exemption of import duties which is called Generalized System of
Preferences (GSP).
GSP program is a program of trading facilities provided by the Government of the United States
to developing countries and LDCs by giving duty free ( zero percent rate ) to about 5.000 kinds of
products .
This facility is given because of developing countries are considered not able to produce
efficient product. Granting GSP scheme by developed countries ( the U.S. ) to developing countries
have many purposes in addition to improve the economy of the GSP beneficiary countries through its
foreign trade as well in order to diversify the supplier countries, so that with the increasing number of
countries that become suppliers, the price of exports to developed countries GSP giver will vary
greatly and with the increasing number of sources, the scarcity of imported goods will be smaller.
Ease access to market development through the provision of GSP facilities is one of the
important key in developing the Indonesian market in the USA . Without GSP, Indonesia will find it
difficult to compete with other countries in the U.S. market. GSP is a program from the U.S.
government congress as stipulated in the Trade Act of 1974 to provide duty-free entry to the 3,400
types of products from 129 countries, including Indonesia. Indonesia has been utilizing the GSP of 2.2
billion U.S. dollars or equivalent of 12.2 percent of Indonesia's total exports to the U.S. in 2012
Keywords : WTO, UNCTAD, the General System of Preferences ( GSP ), Import duties, Exports

Abstraksi
1

Dalam rangka World Trade Organization (WTO), negara-negara maju seperti Amerika Serikat
(AS) , memberikan keringanan

bea masuk untuk barang-barang

tertentu yang di-ekspor oleh

negara-negara berkembang (under developing countires) termasuk Indonesia yang memenuhi syarat
ekspor dalam bentuk pemberian konsesi penurunan atau pembebasan tariff bea masuk yang disebut
Generalized Sysatem of Preferences (GSP).
Program General System of Preferences (GSP) merupakan program fasilitas perdagangan
yang diberikan oleh Pemerintah AS kepada negara berkembang dan LDCs dengan memberikan duty
free (tarif nol persen) untuk sekitar 5000 jenis produk.
Fasilitas ini diberikan karena negara berkembang yang dianggap belum mampu menghasilkan
produksi yang efisien. Pemberian skema GSP oleh negara maju (AS) kepada negara berkembang
mempunyai banyak tujuan disamping untuk meningkatkan perekonomian negara penerima GSP
melalui perdagangan luar negerinya juga dalam rangka diversifikasi negara-negara pemasok,
sehingga dengan makin banyaknya negara yang menjadi pemasok, maka harga ekspor ke negara
maju pemberi GSP akan sangat bervariasi dan dengan makin banyaknya sumber, maka kelangkaan
barang-barang impor akan semakin kecil.
Kemudahan akses pengembangan pasar melalui pemberian fasilitas GSP dan merupakan
salah satu kunci penting dalam mengembangkan pasar Indonesia di AS. Tanpa GSP, Indonesia akan
kesulitan untuk berkompetisi dengan negara lain di pasar AS. GSP

adalah program kongres

pemerintah AS yang tertuang dalam UndangUndang Perdagangan tahun 1974 untuk menyediakan
bebas bea masuk terhadap 3.400 jenis produk dari 129 negara, termasuk Indonesia. Indonesia telah
memanfaatkan GSP sebesar 2,2

miliar dollar AS atau sepadan

12,2 persen dari total ekspor

Indonesia ke AS Tahun 2012

Kata kunci: WTO, UNCTAD, General System of Preferences (GSP), Bea masuk, Ekspor

Preface
The US is a major force in the world, both in terms of political, military, and economic and very
influential in International Trade. The US economic conditions is the most influential in the world. The
US total trade in goods with the rest of World amounted to US $ 1,240.09 billion (January-April 2013).
Its strategic position, the US as a developed country is referred to as a superpower with a per capita
income of the population amounted to 48.100 US dollars making it the largest economic power in the
world. The US also is a developed country with an economy that is leading or dubbed as a super
power, so with these conditions, the US plays an important role in the world economy. The US
economy is highly developed both in manufacturing and service sectors. The country is a federal state
which includes 50 (fifty) state area with total of territory 3.79 million square miles (9.83 million km2)
and population of 315 million people, the country is one of the most diverse in multi-ethnic and multicultural in the world.
In market access, the GSP is a program of trading facilities provided by the US government since
1974 to 127 developing countries and LDCs to provide duty free (zero percent rate) for approximately
5,000 types of products. The definition of the notion of GSP is a preference system in the form of
reduction or exemption of tariffs by developed countries to certain products originating from
developing countries which is eligible by the develop countries. This GSP came into force in 1970,
since 1976 Indonesia began utilizing GSP-US. GSP is given unilateral (nonreciprocal) by preference
receiving countries. Developed countries as a giver of preference is not demanding in return for tariff
concessions which are given to developing countries and is not negotiable. Although in nature it is
non-reciprocal, but in its development the country granting GSP tend to give it to certain conditions.
The US linking the provision of GSP with other problems, such as Intellectual Properety Right,
International Worker Right, and Market Access consideration. The US is the greatest country
compared to other countries in granting GSP. This country GSP program is providing 4,282 types (8digit HS category). GSP products include 6,831 items in 10 categories tariff Harmonized System
(HTS).
GSP-USA is one of the important key in developing markets. Market access development through the
provision of GSP facility is one of the important key in developing the Indonesian market in the US.
Commodities from Indonesia can obtain the GSP by complying with the four requirements, (1), which
is included in the list of products that meet the requirements of GSP. (2), must be directly exported
from Indonesia or through bills using referral documents to the address in the US. (3) the product
must be made in Indonesia or, if using imported raw materials, must have a local content of at least
35% of the total price paid by the US importer. (4) US importer must request exemption from import
duty for the product in question (tariff code) in the form of US custom.
One of the benefits of the application of this principle which is felt directly by Indonesia, with the
implementation of the GSP is the success of Indonesia to increase its exports, particularly in non-oil

exports. Another benefit is perceived directly by granting GSP against Indonesia can increase the
value of Indonesia's exports abroad.

GSP goal is to help the development of developing countries, among others, is to increase foreign
exchange earnings through exports and accelerate industrialization. The goods criteria for GSP,
namely:

Products that do not contain import content of unknown origin (wholly Obtained goods) which
means that the status of the origin of the goods is not problematic.

Products containing the import content of unknown origin (goods with an import content /
unknown origin).

GSP is a scheme that covers industrial and agricultural products from developing countries which are
granted an access, especially for entry into developed countries markets. Granting GSP schemes by
developed countries to developing countries have many goals besides to improve the economy of the
recipient country GSP through foreign trade also in order to diversify the supplier countries, so that
with the increasing number of countries that become suppliers, then the price of exports to developed
countries who give GSP would varied and with the increasing number of sources, the scarcity of
imported goods will be smaller.

Rules of granting the GSP by developed countries, between one country to another is very different,
but in principle the provision of this facility is always based on the provisions concerning the granting
of preferences contained in international trade agreements of GATT and WTO. The US government
(congress) aimed in giving GSP facility is to helped developing countries to increase exports to the
US, and intends to assist the development of developing countries, including through an increase in
foreign exchange earnings and accelerate industrialization.

Since its establishment 39 years ago, the program never been stopped, even though the program is
not a permanent program. In the US regulation, the period of validity of GSP is temporary but can be
renewed at regular intervals over time as long as it gets a mandate of extension by Congress
From the data in 2012, the US imported products worth 20 billion dollars under the GSP program. Top
5 GSP beneficiary countries were India (4.5 billion dollars), Thailand (3.7 billion dollars), Brazil (2.3

billion dollars), Indonesia 2.2 billion dollars or equivalent to 12% of Indonesia's total exports to the US
and South Africa 1.3 billion dollars.
As described previously, preference is a facility provided by one or a group of countries to certain
products that qualify comes from a country in the form of reduction or exemption of tariffs which are
base on multilateral, regional, bilateral agreements
Indonesia gets GSP for as many as 2,144 kinds of products. From those amount of products,
Indonesia exported to 2.2 billion US dollars, equivalent to 12.2 percent of the total Indonesian exports
to the US (2012). The US government gave exemption of import duty rates to as much as 129
developing countries, including 42 least developed countries, including Indonesia.
Indonesia still needs GSP facility in increasing its exports to the US as one of the market access
policies that continue to be fought. With the GSP facility, Indonesia could enjoy and have a secure
market for Indonesian products, especially for SMEs that need to be pushed through the GSP
exports. The GSP program (General System of Preferences) is still an important key in developing the
Indonesian market in the US.
In accordance with the mandate of the US Congress, the GSP program ends on July 31, 2013.
Indonesia as one of the countries included in the Alliance GSP (A-GSP) will continue to fight for the
extension of GSP.
In the absence of renewal of the GSP, which ended on July 31, 2013, the Indonesian products may be
subject to import duties which would reduce the competitiveness of Indonesian products in the US
market.
Without GSP, Indonesia will find it difficult to compete with other countries in the US market. To that
end, the Government of Indonesia hopes that the US government may reconsider granting GSP for
some Indonesian products. Although Indonesia the Priority Watch List and considered not to serious
in solving IPR problems (Intellectual Property Rights).
The products of Indonesia under the GSP program, among others are : tires, plywood, cocoa paste,
rubber gloves and jewelry of gold, silver, precious stones. Indonesia ranked as the fourth who utilize
the US GSP program, in addition to Indonesia is already quite active in the market.

Problems
Based on the mandate of the US Congress, the Indonesia GSP program has ended on July 31, 2013.
As a result of not having consensus from the members of Senate, the resolution of "the Bill, 3113" can
not be brought to Congress for approval of the extension. The GSP program can not be extended
because Sen. Tom Coburn (R-OK) have a reservation, so the extension of the resolution can not be
brought to the House Representative to obtain the extension decision. It is regrettable of many people

not only from the GSP recipient countries but also US companies that import products from GSP
recipient countries.
Indonesia has only utilized as many as 652 types, or about 20%, thus, there are many kinds of
products which have not been utilized through its GSP facilities from 3,400 types of products offered
by the US. Moreover, this activity has not been followed by Indonesian businessman. It should be
noted that the GSP is a facility provided by the US Department of Commerce to a number of countries
to reduce and eliminate import taxes for countries that are considered to have a healthy trade with the
US.
GSP status can be withdrawn if the US Department of Commerce felt that the state whose been given
GSP facility failed to protect patents and copyrights of US products. These requirements are often
violated by Indonesia, consequently it threatened to be revoked its GSP facility by the US
Government.
Problems faced by Indonesia in utilizing the GSP, as has been mentioned above, the attitude of the
International Intellectual Property Alliance (IIPA), which says Indonesia is not serious in dealing with
intellectual property rights, especially for the products made in the US. IIPA In its official website writes
that the market in Indonesia is dominated by pirated products which are distributed online or in the
physical market.
The utilization of GSP facilities was not maximal due to lack of knowledge of Indonesian
entrepreneurs regarding the use of GSP benefits and its procedures. In terms of the GSP is an
appropriate strategy in sustaining the growth of exports to the US in the wake of the crisis that has
engulfed the superpower.
The weak protection of Intellectual Property Rights, the International Intellectual Property Alliance
(IIPA), issued a petition that threatens Indonesia who has failed to meet the eligibility criteria of the
appropriate in the GSP program, namely the protection and management of intellectual property
issues. Of course, this will lead to Indonesia's to lose its position in the world free trade map. If the
petition is granted by the US International Trade Commission, Indonesia will lose the advantage of
tax-free goods for export to the US market. Though recently Indonesia through the GSP program has
been successfully exporting to the US duty free goods valued at US $ 1.9 billion in the year 2012
2010 and $ 2.2 US dollars.
The implementation of regulations on Intellectual Property Rights (IPR) is still weak in Indonesia.
Although Indonesia has had a wide range of IPR laws, but there are still alot of violations on
intellectual property rights and law enforcement of these issue is uneffective. (Study of Bilateral
Cooperation Indonesia - United States in the Field of Economics and Finance "2012, p vii).

IIPA has filed a petition requesting that the US to consider and limiting the provision of GSP for
Indonesia for failing to carry out protection and enforcement of intellectual property.

Piracy in

Indonesia is a culture of the people who have been taught to consume something for free (Sumardiobserver marketing 2012)). This free culture has been around since the early age, so free is not
something that is considered taboo or violated the prohibition or regulation. In addition, Indonesian
entrepreneurs are less pro-active to work on the US market with the GSP program. These conditions
made the most out of trade preferences are not exploited by the Indonesian exporters, this suggests
that the chances of the US market as a target of Indonesian exports are not significant untapped and
consequently less domestic manufacturing industry can be flourish, so that the perceived exports
slowed and automaticly the national economy.
Protection of Intellectual Property Rights (IPR) in a country is very important to stimulate innovation
and investment activities. Investors, both domestic and foreign, will be attracted by the high standards
of IPR protection. In Indonesia, the legal regulation of the Intellectual Property Rights at least can be
found in Act No. 19 of 2002 on Copyright, Act No. 14 of 2001 on Patents, Act No. 15 of 2001 on
Marks, Act No. 29 of 2000 on Plant Variety, Act No. 30 of 2000 on Trade Secrets, Act No. 31 of 2000
on Industrial Designs, and Act No. 32 Year 2000 on Layout Designs of Integrated Circuits. However,
although the scope of IPR law in Indonesia is relatively wide, in the implementation of IPR there are
alot of infringement. In the Indonesian case, piracy remains a serious problem and has not been dealt
in accordance with existing regulations. (("Study of Bilateral Cooperation between Indonesia - United
States in the Field of Economics and Finance" 2012, p 16)
Based on the information from the Ministry of Commerce (2012), the credit facility of the US
government, were still not widely used by businesses in Indonesia due to, among others:
1. Ignorance of the Indonesian Employers;
There is still a lack of entrepreneurs who do not take the advantage of this facility, most likely
because this facility is not widely known by the Indonesian businessmen. Alternatively, there
could be entrepreneurs are still having trouble adjusting to a number of provisions in getting the
facility.
2. Having difficulty eligible for GSP facility. To increase it, first with the educational system and the
Ministry of Commerce could actively helping them to open another facility about the rules they
do not understand;
3. Indonesian Employers who do not have a market in the US, it is necessary to follow the trade
fairs in the US, this activity has not been widely followed by Indonesian businessmen. In
addition to get the GSP facilities such activities can expand the Indonesian market in the US.
4. Expand the Indonesian market in the US by way of : (a) help to resolve cases of trafficking by
providing complete information related to trade policy as well as helping to find other markets
when Indonesian entrepreneurs do not succeed through it; (b) What is important according to
the Ministry of Commerce is an increase cooperation with the US government, also with
Indonesian businessmen themselves and helping entrepreneurs with export business online
and help-desk.

5. All the products that exceed US $ 150 million, meaning its already graduate. Therefore,
Indonesia is not happy at-graduate.

In this case, there are two things that the government need to do, the employers who already have to
the US market, the government will help employers achieve other facilities. For entrepreneurs who do
not have in the US market, the government will direct them to follow the trade fairs. There are a great
many trade shows in the US that has not been followed by the Indonesian business people. The
Indonesian government continues to work closely with the US government to create better
networking. While the business world in Indonesia government also continues to cooperate to resolve
the problem by merchandise and help entrepreneurs to export.

Alternatively, it is predicted that many Indonesian businessmen whose export activities to ease the US
has gotten zero percent import duty up to five percent without using GSP facility. It is not monitored as
part of the policy ease the GSP program. It could also happen that the export goes through Nusantara
Bonded Zone (KBN) which are estimated not to use the GSP facility. This condition indicates that the
data and the value of Indonesia's overall GSP acquisition can be said by the statistics is
reperensentatif or less represented the maximum acquisition value of exports through the GSP.
Behind it, with the extension of GSP would result in two things for Indonesian exporters, first export
market in the US will be safe for the next few years during the implementation of the GSP and
second with a secure market, businesmen obtain business certainty that will attract buyers to put their
capital in Indonesia.

In the Amelia article about GSP, Indonesia as a developing country experiencing constraints on the
implementation of the principle of preference for developing countries. Constraints faced by Indonesia
is an obstacle in the implementation of the GSP. Utilization of GSP facilities provided by the
developed countries is not exploited to the fullest by Indonesian exporters. First, this can occur
because not all products are given GSP is Indonesia's non-oil exports. Both because ignorance of
Indonesian exporters of GSP facilities due to lack of information from the government or indeed the
reluctance of Indonesian exporters to enter the markets of developed countries giving GSP because
of fears of competition, despite the GSP facility of our exporter willing to enter their product into the
market in the country alone.

In addition, there are deadline (period) granting GSP. If the term of this GSP has ended, then to
extend the GSP agreement need to takes a long time to conduct negotiations with GSP donor
countries. For example, with the expiration of the GSP by the US administration to Indonesia.
Indonesian Embassy in Washington said it takes 10 months for lobbying the US government itself.

Granting GSP is not solely devoted to economic development alone. However, a more nuanced
politics as a way to pressure developing countries in order to keep up with the policy of developed
countries. Given that, the GSP can be revoked if the GSP beneficiary countries do not act in the
interests of developed countries (GSP donor), as a violation of Human Rights (HAM), does not
support the social democracy, ignoring to the environment (not pro-environment), and so on . In the
process, the procedures for granting GSP by developed countries to recipient countries GSP always
changing according to the needs, often found that these changes tends to reduce the scope of the
preferences that have been enjoyed by entrepreneurs users of the GSP or even abolished the
preferences. Since the GSP is essentially giving preference from one country to another, most of the
changes in the procedures and the GSP scheme is given not to negotiate for a change. General
system of preferences granted unilaterally by developed countries can be withdrawn at any time so
that the position of developing countries is very weak.

Discussion
In connection with the implementation of the GSP or preferential duty (lower), Indonesia is one of the
recipient (beneficiary country) from the US
International trade is one part of the economic activities or business activities which lately has
developed very rapidly.

The Attention from the business world to international business also

increased, as seen from the growing flow of circulation of goods, services, capital and labor between
countries.
International Trade Policy (WTO and UNCTAD) are in line with the policy of the developed countries,
like the US who gives preference or facilities for the export of certain commodities from developing
countries (under developing countries), including Indonesia and the less developed countries ((leastDeveloped Countries LDCs) with export facility in the form of import duty relief through the GSP
program. The policies of the WTO, that the developed countries provide relief or exemption of import
duties for certain goods exported by developing countries, including Indonesia, who qualified in the
form of concession granting tariff reduction or exemption of import duty called the GSP. The purpose
of this program is directed to assist the developing countries expand their economies by allowing
certain goods to be imported into the US to get duty-free facility.
The theory of this preference system is that countries should be allowed to deviate from the
obligations of the Most Favoured Nation (MFN) to allow them to reduce tariffs on imported goods
when the goods are coming from developing countries. This will give developing countries a
competitive advantage in industrial societies export target. These rights are given as an attempt to
facilitate a condition because it is only for a time, or as an effort in order for transitions that are subject
to the principle of multilevel (graduation). Indonesia is a developing country members of the WTO and
the application of the principle of preferences for developing countries is also obtained by Indonesia.

One of the benefits of this principle is felt directly by Indonesia is the successful implementation of the
GSP in Indonesia to increase its exports, especially non-oil exports.
The objective to grant the provision of GSP is to improve the income, accelerate industrialization and
the growth of developing countries, by providing the opportunities to access the goods to the market
that they produced, so that these items can compete in the market of developed countries. The
Principle of preferences for developing countries is a positive impact to the Indonesian economy and
can increase the value of Indonesia's exports abroad. In boost Indonesia's exports to the US market
through preference programs (form A), the Indonesian government issued Minister of Trade
Regulation No. 59 / M-DAG / PER /I 2/2010 concerning provisions Issuance of Certificate of Origin.
(SKA) or Certificate of Origin (COO) for Indonesian exports, article 2, paragraph (2)) stated:
Preferences as contemplated in subsection (1) shall be issued to acquire facility tariff reduction or
exemption of import duties granted by a state or group of state of the Indonesian export goods that
qualify in accordance with the provisions of the International agreement or unilateral determination.
For that, we can conclude GSP benefits for Indonesia, namely:
National incomes and accelerate the process of industrialization
Unique attraction especially for the relocation of firms from developed countries
Increased exports of Indonesia in order to compete in international markets. .
Increase the economy of the GSP recipient country's through trade in order to diversify its foreign
supplier countries
In principle, the GSP is a scheme that covers industrial and agricultural products from developing
countries which given special access to get into the markets of developed countries. Granting GSP
schemes by developed countries to developing countries have many goals in addition to improve the
economy of the recipient country GSP through foreign trade also in order to diversify the supplier
countries, so that with the increasing number of countries are becoming a supplier, then the price of
exports to developed countries would very varied and with the increasing number of sources, the
scarcity of imported goods will be smaller.
Traditionally, the US is an Indonesian fourth export market potential after Japan, Europe and
Singapore. US as developed countries that have a policy in the current GSP program is still one of the
important key in developing the Indonesian market in the US. Many Indonesian SMEs products that
can perform their market access to the US market. Small Industry and Medium Enterprises (SMEs)
have a considerable contribution in increasing the volume of Indonesian exports. It is that the populist
economic development sector plays an important and strategic roles in developing Small and Medium
Enterprises (SMEs).
According to the Indonesian Trade Attache in Washington DC, USA, access will be more flexible for
businesses to the US market, especially for products from developing countries. Access is also open
to more options of various types of industrial and US consumers. Sources large influx of imported
commodities, valued at 19.1 billion US dollars in through the GSP in 2011. If 10 percent of (the value

10

of Indonesia's exports to the US) 19.1 billion, the value and volume of Indonesian exports increased
from that obtained now. GSP potential as Indonesia and the United States are equally important
trading partner. Indonesia's exports to the US market reached 19.1 billion US dollars, up nearly 17
percent in 2010. The US is the third largest Indonesian product shopper.
GSP for Indonesia in addition to earn national income and accelerate the process of industrialization
and economic growth in Indonesia, and to attract investors into the country, it will be the main
attraction, especially for the relocation of firms from developed countries. The increased of exports of
Indonesia still need immediately to find a way for the development of industry and trade in order to
compete in the international market. Indonesia should be able to create their own competitiveness
(Competitive Advantage) products without having to rely on discounts given a developed country with
a reduction in import tariffs.
Until now Indonesia received GSP facility for about 2,249 types of products from 3,400 kinds of
products. Of these Indonesia exported to 1.8 billion US dollars, or about 12.2 percent of the total
Indonesian exports to the US. While the total non-oil exports contribution to reach 20-25% annually.
2,249 products from Indonesia who get GSP facility, approximately 6,52 new products that take
advantage of the GSP facility, or approximately 25% (based on data from the US International Trade
Commission web-USITC).
With the GSP facility that intended to be a safe means of Indonesian products in the US market for
the next few years for the implementation of the GSP and to secure markets, businesses obtain
business certainty that will attract buyers to put their capital in Indonesia. In order to be able to
maintain market condition, Indonesia must comply with all the agreements in the WTO, in particular
intellectual property rights (Intellectual Property Righ -IPR) as disputed by the International Intellectual
Property Alliance (IIPA). Thus, Indonesia should still think about the national interest but not to violate
the rules of WTO.
According to "Warnita Amelia", to give special treatment for developing countries is called the principle
of preference. Principles regarding preferences for developing countries is a principle which requires
that a concessions on certain legal rules for developing countries. This means that these countries
should receive special treatment when developed countries associated with them. To improve their
development encourages industrialized countries to help the economic growth of developing
countries.
The aims to give special treatment are to overcome development gaps between the two countries.
Special treatment is intended to provide access to markets - rich countries with relatively low tariffs
and obtain certain exemptions from the provisions of the WTO agreements. Nevertheless, the
expected progress and prosperity is not always easy to achieve.

Conclusion
11

1. The GSP Program is a program of trade facilities provided by the US government since 1974 to
127 developing countries and LDCs to provide duty free (zero percent rate) for approximately
5,000 types of products. Since the 39 years ago, the program has never been stopped,
although the program is not a permanent program. In the US regulation, the GSP validity period
is temporary but can be renewed at regular intervals over time as long as it gets the mandate of
extension by Congress. From the data in 2012, the US imported products worth 20 billion
dollars under the GSP program. Top 5 GSP beneficiary countries were India (4.5 billion dollars),
Thailand (3.7 billion dollars), Brazil (2.3 billion dollars), Indonesia 2.2 billion USDollar or equal
to 12% of the total Indonesian exports to the US and South Africa 1.3 billion USDollar.
2. Indonesia ranked as the fourth countries that utilize GSP from the US, Indonesia is already
active in this matter. However, judging from the 3,400 types of products offered by the US and
Indonesia have only utilized many as 652 types, or about 20%, then there are many kinds of
products which have not been utilized its GSP facility, "Not maximal utilization of GSP facilities
due to lack of knowledge about the benefits of Indonesian businessmen GSP and the
procedures used. "The utilization of the GSP is an appropriate strategy to sustain the growth of
exports to the US. The US remains the largest market in the world, so that Indonesia should
maintain or even increase Indonesia's exports to that country, "As the fourth ranked utilizing
GSP from the US, Indonesia is already quite active. However, judging from the 3,400 types of
products offered by the US and Indonesia have utilized as many as 652 types, or about 20
percent, there are many kinds of products which have not been utilized its GSP facility, "
3. Expanding the Indonesian market in the US by way of: (a) help to resolve cases of trafficking,
providing complete information related to trade policy as well as helping to find other markets
when Indonesian businessmen unsuccessfully penetrate. (b) an increase in cooperation with
the US government, also with Indonesian businessmen themselves and help businesses do
business online and help-desk for export. (c) is maintaining as a "market access" Indonesia has
entered the US market. (d) using the GSP as a marketing tool (export). (e) Pro-actively to
disseminate information to all stakeholders, especially to businesses and universities to build
better understanding of the benefits of the GSP. The government must provide an explanation
on every change of GSP (resolution "the Bill 3113"). (f) following and multiply training seminar
on GSP, active participation Trade Shows in the US market. (g) develop international
cooperation in the trade that national entrepreneurs can develop competitiveness abroad, (h)
The Government shall provide an explanation on every change of the GSP, (i) utilizing the
Indonesian trade representatives abroad as trade attach and ITPC. (j) to build a strong
simboisis between PT to review the activities of the export facility (k) intense lobbying and
negotiating with the United States government (USTR)
4. Uncertainty in the extension of the GSP facility cause companies in the US switched to a nonGSP that impact millions of workers in the GSP beneficiary countries, including Indonesia. The
GSP program should continue to be utilized by the Indonesian exporters, especially small and
medium scale enterprises to improve competitiveness and establish partnerships with US
importers when it has been competitive, it can graduate without requiring the GSP program.

12

5. The GSP program in order to be retained as a "market access" for Indonesia to entered the US
market in increasing non-oil exports. Therefore, socialization and promotional activities proactively should be increased in volume. In addition, training reproduced on GSP, the
government must provide an explanation on every change of GSP, GSP multiply and deepen
the problem by means of simulation and counseling GSP with all the various agencies and the
builder of apparatus in exports regulation, intensifying socialization through media and Internet /
website, social media, post a banner on each site / WEB especially in the website of the
Ministry of Trade and dissemination to exporters and related agencies are structured, organized
seminars / workshops, preparing handbooks, create a website about GSP
6. Using the GSP as a marketing tool, identifying the GSP eligible products for export and
consider products with advantages of GSP. In addition, identify the shape and development of
potential US buyers with less means to understand the US market. While other programs are
no less important: (a) improve access to the US market, (b) expanded the options for US
industry and consumers, (c) utilizing the free provision of up to 5,000 products from 128
countries;
7. GSP facility for Indonesia will end in 2015. This will make the situation difficult for Indonesian
exports mainly textiles to the US, because the US is the main market for Indonesias textile
products. The problem is, if GSP facility ended then Indonesia should seek other arrangements
for Indonesian export market for example through the trans-Pacific partnership

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