US requests WTO dispute settlement against Indonesia

Ban on poultry and meat products and Indonesia's import restrictions on certain fruits and vegetables challenged.

Indonesia’s wide-ranging import restrictions on agricultural products such as beef and poultry as well as apples, grapes and potatoes will get a close examination as the United States has requested the World Trade Organization (WTO) establish a dispute settlement panel to examine Indonesia’s practices.

Being challenged is a ban on poultry and certain meat products and Indonesia’s trade-restrictive import licensing regimes for horticultural products and animals and animal products. In conjunction with its import licensing regimes, Indonesia prohibits the importation of certain products at certain times and restricts the sale of imported products within Indonesia.

Indonesia’s prohibitions and restrictions have unfairly limited opportunities for U.S. farmers and ranchers to export their world-class products to Indonesia’s large and growing market, the U.S. Trade Representative said in a statement.

The United States has been working closely with New Zealand in this dispute, and New Zealand is also requesting the establishment of a WTO panel to examine Indonesia’s import restrictions.

U.S. Trade Representative Michael Froman said that farmers and ranchers have been “shouldering unfair export barriers to the fourth largest country in the world, Indonesia.”

Ag secretary Tom Vilsack said that USTR and USDA have worked over the past two years to hold Indonesia to its trade commitments. “When our trading partners don’t play by the rules it costs American jobs, so it is critical we hold them accountable,” he added.

Indonesia is an increasingly important export market for many U.S. agricultural products, with exports of agricultural products affected by Indonesia’s import licensing regimes totaling nearly $200 million in 2014.

In 2014, U.S. exports of affected horticultural products to Indonesia exceeded $122 million – including $50 million of apples and over $37 million of grapes. In the absence of Indonesia’s trade-restrictive import licensing regime, however, USTR said it would expect U.S. farmers to be able to compete more effectively for sales to Indonesian consumers. 

In 2014, exports of affected 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.

U.S. exports of affected animals and animal products totaled $63.2 million in 2014. As with exports of horticultural products, however, USTR said it would expect U.S. producers to compete more effectively in the Indonesian market in the absence of Indonesia’s trade restrictions.

For example, U.S. exports of affected animals and animal products to the Philippines, another similar market, totaled $248.3 million in 2014, notwithstanding the fact that the population of the Indonesia is 2.5 times larger than that of the Philippines.

Many congressional members voiced support for the USTR’s action to hold trading partners accountable.

Rep. Kurt Schrader (D., Ore.) said,  “It is imperative to my constituents and I that we see strong enforcement of U.S. trade agreements to give us confidence that these provisions will protect American workers and businesses.”

“Nebraska is one of the top exporters of agricultural products – especially beef – and access to foreign markets is a critical component of the economy,” said Rep. Brad Ashford (D-Neb). “Increasing open access to these foreign markets for U.S. goods means more jobs at home, and allows our producers to be more competitive in the global marketplace.”

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