USA, New Zealand to Take Indonesia to WTO on Import Restrictions

March 27, 2015 Posted by ASEAN Briefing Reading Time: 4 minutes

The US and New Zealand have joined forces in asking the World Trade Organization (WTO) for a dispute settlement panel examining Indonesia’s wide-ranging restrictions on horticulture and animal imports.

Indonesia, home to 250 million people, has put in place a set of measures including import registrations, special import permits, and a tightening scrutiny of imported goods. Its import barriers effect fresh and dried fruits (such as apples, grapes and oranges) and vegetables (including potatoes, onions and shallots), flowers, juices, cattle, beef (including a ban on secondary cuts), poultry (including a ban on chicken parts), and other animal products.

The US has consulted with Indonesia several times over disagreements with the Southeast Asian nation’s import barriers. The US government bodies have worked on this over the past two years with the hope of holding the country to its trading commitments. It consulted with Indonesia in January of 2013, and together with New Zealand consulted again on August 2013 and May 2014. Indonesia has been accused of breaking its obligations under the WTO’s General Agreement on Tariffs and Trade (GATT) and its agreements on agriculture, import licensing and pre-shipment inspection.

According to the US Trade Representative office, Indonesia appears to be in breach of Article XI:1 of GATT 1994 and Article 4.2 of the Agreement on agriculture, which prohibits restrictions on goods importation. Indonesia’s restrictive import licensing regime has allegedly constrained agriculture exports to the nation in 2014. In that year, Indonesia imported a total of US$122 million horticultural products – including US$50 million of apples and over US$37 of grapes, and US$63 million of animals and animal products. Exports of horticultural products to Malaysia totaled US$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.

US Agriculture Secretary Tom Vilsack estimated that the removal of Indonesia’s import barriers would lead to a 10 or even 20 percent increase in US fresh fruit exports to the nation, as well as beef exports more than doubling – from US$27 million to US$60 million. He projected that a US$100 million market could potentially be opened up to US products if Indonesia lifted its poultry ban.

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