Aus Govt ‘examining’ WTO challenge on Indonesia

James Nason, 15/01/2013

The Australian Government says it is ‘considering the implications’ of a World Trade Organisation challenge by the United States against Indonesia over restrictions applied to agricultural imports, but has not stated whether it is also considering similar action.

The United States says it believes import requirements imposed by Indonesia on a range of agricultural products, including beef, are not consistent with the country's obligations under WTO rules and unfairly restricts US exports to the market.

In particular the US complaint focuses on Indonesia’s import quota system and non-automatic licensing regime, which requires importers to complete multiple steps prior to being granted a licence.

The US says the system is more administratively burdensome than necessary, does not inform traders of the basis for granting licenses, and is not administered in a uniform, impartial and reasonable manner, because the measures are applied inconsistently and unpredictably.

WTO rules generally prohibit restrictions on the imports of goods, including those made effective through quotas or import licenses, and the use of non-tariff measures, such as discretionary import licensing on agricultural products.

Australia is the largest supplier of boxed beef into Indonesia, accounting for 52pc of total imports. New Zealand supplies 44pc and the US 4pc.

In recent times Australian cattle and beef exporters have been subjected to new hurdles in their dealings with Indonesia, including dramatic cutbacks in live cattle and beef import quotas, the imposition of a retrospective 5pc tariff on live cattle imports and new requirements for imported commercial female cattle to be accompanied by pedigree information.

Several Australian beef exporters also suffered significant losses last year when dozens of containers of frozen beef were left stranded on a Jakarta wharf due to disagreements over licensing between different Indonesian Government departments.

The exporters involved held import permits signed by Indonesia's trade minister however were forced to fight to re-export the beef at major cost due to the long-running bureacratic stalemate. 

It is understood that an estimated 80 containers from the original 118 remain stranded at Jakarta's main wharf.

Asked yesterday if Australia was considering similar action to the US in Indonesia, Federal Trade Minister Craig Emerson was non-committal.

“We are aware of the US request in the WTO for consultations with Indonesia on the legality of its import requirements for horticultural products, animals and animal products,” Mr Emerson said in a statement to Beef Central.

“We are examining the request and considering its implications for Australia.

“We have raised these issues with the Indonesian Government at a bilateral level.”


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