The U.S. and New Zealand have requested a World Trade Organization (WTO) dispute settlement panel over Indonesian import restrictions, saying barriers on agricultural goods, ranging from potatoes to poultry breached international trade obligations. Their request kicks off a process that could lead to sanctions.
Announcing the request, U.S. trade representative, Michael Froman, asserted that Indonesia is banning the import of a variety of U.S. agricultural products and imposes several other import
restrictions on everything from potatoes to beef, and apples to grapes, and poultry. Froman added that such restrictions "run afoul of Indonesia’s obligations under the WTO and infringe U.S.
Froman noted that the U.S. has been working together with New Zealand on this issue, which is also pursuing the establishment of a WTO panel to examine Indonesia’s import restrictions.
Prohibitive policies act as a brake on trade
According to U.S. estimates, nearly US$200 million worth of U.S. exports to Indonesia either transported by air or ship were affected by import licensing regimes in 2014, including $122 million of fruit and vegetables, and other temperature sensitive horticultural products. “If it weren’t for Indonesia’s prohibitive policies, we would expect to have sold far more than that," Mr Froman stated.
The request to involve the WTO in this case, comes at a time when the U.S. endeavors’ to unlock economic opportunities for U.S. agricultural exporters across the Asia-Pacific region through the Trans-Pacific Partnership. TPP is a trade agreement that will grant Americans access to the rapidly growing economies of that part of the world.
"Apart from access to those markets, the TPP also aims to lift labour, environmental protections and strengthen intellectual property rights, and other standards in the region to levels that are appropriate for the 21st century," Mr Froman stated.
Indonesia is an important trading partner for the U.S., it is a top-ten market for U.S. agricultural products and within the top 30 overall markets for U.S. exports.
It is the fifth WTO case the U.S. has brought against Indonesia, and New Zealand's second. Indonesia also has two cases against the United States.
Nol van Fenema