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United States Challenges Indonesia’s Import Restrictions on Horticultural Products, Animals and Animal Products

01/10/2013

Washington, D.C. – United States Trade Representative Ron Kirk announced today that the United States is requesting consultations with Indonesia under the dispute settlement provisions of the World Trade Organization (WTO) concerning trade-restrictive measures applied to horticultural products, animals, and animal products. Indonesia has created a complex web of import licensing requirements that have the effect of unfairly restricting U.S. exports. These measures appear to be designed to protect Indonesia’s domestic agriculture industry.

“Indonesia’s opaque and complex import licensing system affects a wide range of American agricultural exports. It has become a serious impediment to U.S. agricultural exports entering Indonesia, reducing Indonesian consumers’ access to high-quality U.S. products. The Obama Administration is committed to protecting the rights of our growers, farmers, ranchers and processors to compete on a level playing field. We will continue to make clear to our trading partners that we will fight to support each job here at home affected by unfair restrictions abroad,” said Ambassador Kirk.

Through its measures establishing and administering these non-automatic import licensing requirements, Indonesia appears to have acted inconsistently with several of its WTO obligations, including under the General Agreement on Tariffs and Trade 1994 (GATT 1994), Agreement on Import Licensing Procedures, and the Agreement on Agriculture.

The Obama Administration insists that all of our trading partners play by the rules and uphold their WTO obligations so that American workers receive the benefits negotiated in our agreements. The Interagency Trade Enforcement Center (ITEC), created by this Administration to enhance U.S. trade enforcement capabilities, provided key support to USTR’s monitoring and enforcement unit in the development and initiation of this dispute.

Background:

In late 2011, Indonesia passed regulations establishing strict non-automatic import licensing requirements for horticultural products. Those regulations were revised in September 2012 to include even more onerous requirements for horticultural imports. The affected products include, but are not limited to, fruits, vegetables, flowers, dried fruits and vegetables and juices.

Indonesia has long maintained a similar non-automatic import licensing and quota regime for beef and other animal product imports. Indonesia recently announced drastic reductions in quotas for beef and other animal product imports, further restricting access to the Indonesian market.

Through these measures, Indonesia appears to have acted inconsistently with its WTO obligations. In particular, the measures appear to breach Article XI:1 of the General Agreement on Tariffs and Trade 1994 (GATT 1994), which generally prohibits restrictions on imports of goods, including those made effective through quotas or import licenses; Article 4.2 of the Agreement on Agriculture, which generally provides that Members shall not maintain certain non-tariff measures, including “discretionary import licensing,” on agricultural products; various provisions of the Agreement on Import Licensing Procedures, which contains requirements related to the administrative procedures used to implement import licensing regimes; and Article X:3 of the GATT 1994, which establishes certain transparency and procedural requirements.

Consultations are the first step in the WTO dispute settlement process. Under WTO rules, if the matter is not resolved through consultations within 60 days, the United States may request the establishment of a WTO dispute settlement panel.

See a copy of the consultations request here and a fact sheet here.