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Home News WTO faults Indonesia in farm trade row

WTO faults Indonesia in farm trade row

Published on 22/12/2016

A World Trade Organization panel ruled Thursday in favour of US and New Zealand in disputes with Indonesia over a wide range of its import rules for agricultural products.

Washington and Wellington have accused Indonesia of breaking international trade rules with its wide-ranging import restrictions on farm products like fruits, vegetables, beef and poultry.

WTO’s dispute settlement board ruled that all of the 18 Indonesian import restrictions that the United States and New Zealand had complained about were “inconsistent” with the 1994 General Agreement on Tariffs and Trade (Gatt).

The WTO, which polices global trade accords to offer its 164 members a level playing field, urged Indonesia “to bring its measures into conformity with its obligations under the GATT 1994.”

Among the measures Indonesia, the world’s fourth most populous country, has taken since 2012 is a ban on importations of certain cuts of beef and on chicken parts, and restrictions on where they could be sold inside Indonesia, according to Washington’s complaint.

For example, imported beef could only be sold in restaurants and hotels, but not in traditional markets or supermarkets.

And importers of fruits and vegetables were required to own — not rent or lease — sufficient storage space to store their products on site, according to the complaint.

US trade representative Michael Froman hailed the ruling as a “major victory”.

“The Obama Administration has again prevailed on behalf of US farmers, ranchers and businesses,” he said in a statement.

“Today’s panel report will help eliminate unjustified trade restrictions on American agricultural products, allowing US farmers and ranchers to sell their high-quality products to customers in Indonesia,” he added.

US Agriculture Secretary Tom Vilsack agreed, describing the win as “a slam dunk for American agriculture.”

He said the Indonesian measures had been “harming the ability of US producers to sell a wide range of American-grown products in the Indonesian market, from potatoes to beef to grapes to oranges to poultry.”

“Importantly, the WTO panel findings will discourage Indonesia from simply substituting new trade-distorting approaches for the measures repealed, restoring American farmers’ and ranchers’ ability to compete,” he said.

All the parties have 60 days to appeal Thursday’s ruling.

The WTO’s disputes settlement body — made up of independent trade and legal experts — has the power to authorise retaliatory trade measures against a country found at fault.

Cases often take several years to resolve.