The Standard GSP targets developing countries that are classified by the World Bank as lower or lower-middle income countries and which do not have equal preferential access to the EU market through any other arrangement. Standard GSP beneficiary countries can benefit from duty suspension for non-sensitive products as well as duty reductions for sensitive products across approximately 66% of all EU tariff lines.
Indonesia has the world's 4th largest population and managed to cut its poverty rate in half in the past 20 years, which reached an all-time low of 9.2 percent in September 2019.
Indonesia's most important export products are coal and palm oil, followed by rubber, lignite, and gold.
China accounts for the largest share of trade with almost 24% and is both the most important source of imports and the most important export destinations. Japan and the US rank second and third and together account for about 18% of Indonesia's total trade.
Services (45%) and industry (40%) contribute the largest shares to Indonesia's GDP. Both the mining sector, coal, copper, gold, and tin, and the textiles and footwear industries are important pillars of the Indonesian economy. About one third of the labour force is employed in the agricultural sector, which supplies rubber, coffee, cocoa, and palm oil to the world market.
Thanks to consistent growth rates in the last decade, Indonesia is now the world's 16th largest economy and is headed towards a ranking in the top 10.
Total trade with the EU summed up to 23,796 in 2019. With a share of 7.2% of Indonesia's total trade, the EU is the fourth most important trading partner.
More than half of Indonesia's export to the European market are eligible for reduced tariffs granted under the GSP.
With a preference utilisation rate of 81%, Indonesia currently makes considerable use of GSP preferences.
Indonesia maintains a high level of ratification, despite the preferential market access granted by the Standard GSP is not bound to the ratification of international conventions. Indonesia has ratified 14 out of 15 core international conventions on human rights and labour standards. In addition, Indonesia has ratified 8 international conventions on environmental protection and 4 conventions on good governance.
Despite Indonesia has graduated from bilateral assistance with the EU, the partnership and cooperation continue based on issues of mutual interest. In the past, the EU and Indonesia have successfully cooperated to induce inclusive economic development, strengthen good governance and civil society, protect the environment and address climate change.