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U.S. Wins WTO Dispute on Indonesia’s Agricultural Restrictions

Indonesia’s Appeal Rejected, Confirming Original Findings that Its Import Restrictions Are Against WTO Rules

Washington, D.C. – U.S. Trade Representative Robert Lighthizer today announced that the World Trade Organization (WTO) confirmed that Indonesia’s import licensing regimes for horticultural products and animals and animal products are inconsistent with WTO rules.  This is a resounding victory for the United States that should result in increased export opportunities for U.S. farmers and ranchers, as well as Indonesian consumer access to high-quality U.S. agricultural products.

Indonesia maintains a complex web of import licensing requirements that restrict or prohibit imports of horticultural products and animal products from the United States.  These restrictions cost U.S. farmers and ranchers millions of dollars per year in lost export opportunities in Indonesia. 

In a report issued today, the WTO upheld the original panel findings in the dispute that all 18 Indonesian measures challenged by the United States are inconsistent with Indonesia’s WTO obligations and are not justified as legitimate public policy measures.  This is a complete victory for the United States and its co-complainant New Zealand.

“This is a significant win for U.S. farmers and ranchers,” said U.S. Trade Representative Robert Lighthizer.  “Given Indonesia’s market size and U.S. competitiveness, we should be selling many more agricultural products to Indonesian consumers.  The Trump Administration will continue to use all our tools, including WTO dispute settlement and other mechanisms, to ensure that world-class U.S. agricultural products get fair access to markets around the world.”

Background

Since 2012, Indonesia has maintained unjustified and trade-restrictive licensing regimes for the importation of horticultural products and animals and animal products.  The U.S. products affected by these regimes include fruits, vegetables, flowers, dried fruits and vegetables, juices, cattle, beef, poultry, and other animal products.  At the request of USTR, the WTO established a panel to examine the U.S. complaint in 2015.

In a report publicly released in December 2016, the panel in this dispute found that each of the 18 challenged measures was inconsistent with Article XI:1 of the GATT 1994 because they restrict or prohibit importation of horticultural products or animals and animal products.  The panel also found that Indonesia failed to demonstrate that any of the challenged measures is justified under Articles XX of the GATT 1994. 

In February 2017, Indonesia appealed a number of the panel’s findings. The report issued today confirms the panel’s findings that each of the challenged measures is WTO-inconsistent.

Indonesia is the fourth most populous country in the world and an increasingly important export market for many U.S. agricultural products.  In 2016, Indonesia was the ninth-largest U.S. agricultural export destination by value, and Indonesia was the eighth-largest U.S. agricultural import source by value.  The United States exported over $2.6 billion in agricultural products to Indonesia and imported over $2.8 billion in agricultural products from Indonesia.  In 2016, exports of the horticultural products and animal products affected by Indonesia’s import licensing regimes totaled $170 million.

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