US Wins Dispute on Indonesia’s Agricultural Restrictions - Global Trade Magazine
  November 23rd, 2017 | Written by

US Wins Dispute on Indonesia’s Agricultural Restrictions

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  • In 2016, Indonesia was the ninth-largest US agricultural export destination by value.
  • The US exported over $2.6 billion in agricultural products to Indonesia in 2016.
  • In 2016, US exports of ag products affected by Indonesia import licensing totaled $170 million.

US Trade Representative Robert Lighthizer has announced that the World Trade Organization (WTO) confirmed that Indonesia’s import licensing regimes for horticultural products and animals and animal products are inconsistent with WTO rules. He described this as “a resounding victory for the United States” that should result in increased US export opportunities.

Indonesia maintains import licensing requirements that restrict or prohibit imports of horticultural products and animal products from the United States. These restrictions cost US farmers and ranchers millions of dollars per year in lost export opportunities in Indonesia.

In its report, the WTO upheld the original panel findings in the dispute that all 18 Indonesian measures challenged by the United States are inconsistent with Indonesia’s WTO obligations and are not justified as legitimate public policy measures. This is a complete victory for the United States and its co-complainant New Zealand.

“This is a significant win for US farmers and ranchers,” said US Trade Representative Robert Lighthizer. “Given Indonesia’s market size and US competitiveness, we should be selling many more agricultural products to Indonesian consumers.”

Since 2012, Indonesia has maintained trade-restrictive licensing regimes for the importation of horticultural products and animals and animal products. The US products affected by these regimes include fruits, vegetables, flowers, dried fruits and vegetables, juices, cattle, beef, poultry, and other animal products. At the request of USTR, the WTO established a panel to examine the US complaint in 2015.

In a report publicly released in December 2016, the panel in this dispute found that each of the 18 challenged measures was inconsistent with Article XI:1 of the GATT 1994 because they restrict or prohibit importation of horticultural products or animals and animal products. The panel also found that Indonesia failed to demonstrate that any of the challenged measures is justified under Articles XX of the GATT 1994.

In February 2017, Indonesia appealed a number of the panel’s findings. The WTO report confirms the panel’s findings that each of the challenged measures is WTO-inconsistent.

Indonesia is the fourth most populous country in the world and an increasingly important export market for many US agricultural products. In 2016, Indonesia was the ninth-largest US agricultural export destination by value, and Indonesia was the eighth-largest US agricultural import source by value. The United States exported over $2.6 billion in agricultural products to Indonesia and imported over $2.8 billion in agricultural products from Indonesia. In 2016, exports of the horticultural products and animal products affected by Indonesia’s import licensing regimes totaled $170 million.


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