US challenges Indonesia import restrictions at the WTO

By Sarah Gonzalez

© Copyright Agri-Pulse Communications, Inc.



WASHINGTON, March 18, 2015-U.S. Trade Representative Michael Froman said the United States is challenging Indonesia's import restrictions on several classes of agricultural products before the World Trade Organization. 

Froman said he has asked WTO to establish a dispute settlement panel to examine Indonesia's import restrictions on products including fruits, vegetables, beef and poultry. New Zealand's Minister of Trade Tim Groser, who joined Froman at today's news conference, said his country has requested a similar investigation.

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The disputed restrictions include a ban on poultry that has been in place for several years, as well as a variety of import licensing requirements for horticultural products, animals and animal products that Indonesia imposed in 2011. 

“I'm proud to take this action today, standing up on behalf of farmers and ranchers across the United States who have been shouldering unfair export barriers,” Froman said. He noted that the announcement comes at a time when the Obama administration is attempting to finalize a trade agreement with several countries in the Asia-Pacific region through the Trans-Pacific Partnership.

Indonesia, the fourth most populous country in the world, imported $200 million of U.S. agricultural products in 2014, but Froman said that figure would be much higher without the disputed restrictions.

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Agriculture Secretary Tom Vilsack, who also participated in the news conference, said the removal of Indonesia's import barriers would mean a 10 percent to20 percent increase in U.S. fresh fruit exports to the nation, as well as beef exports more than doubling, from $27 million to $60 million. And if Indonesia lifted its poultry ban, it could open up a $100 million market for U.S. products, he said.

The United States consulted with Indonesia in January 2013 and, working together with New Zealand, consulted again in August 2013 and in May 2014 to address Indonesia's import licensing restrictions. The request for a dispute settlement panel is the next stage in the WTO dispute settlement procedure.

U.S. agricultural products affected by Indonesia's import restrictions include fruits, such as apples, grapes and oranges; vegetables, including potatoes, onions and shallots; dried fruits and vegetables; flowers; juices; cattle; beef, including a ban on secondary cuts; poultry, including a ban on chicken parts; and other animal products. 

In 2014, U.S. exports of horticultural products to Indonesia exceeded $122 million - including $50 million of apples and over $37 million of grapes. U.S. exports of animals and animal products totaled $63.2 million in 2014.

“In the absence of Indonesia's trade-restrictive import licensing regime, however, we would expect U.S. farmers to be able to compete more effectively for sales to Indonesian consumers,” the USTR's office said. In 2014, exports of horticultural products to Malaysia, a similar market, totaled $128.5 million, $6 million more than exports to Indonesia, despite the fact that Indonesia's population is over eight times larger than Malaysia's.

According to USTR, Indonesia's import measures appear to breach certain aspects of the General Agreement on Tariffs and Trade 1994 or GATT, and the Agreement on Agriculture, which prohibit restrictions on the importation of goods, including those made effective through import licenses.   

 

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