WTO backs U.S. against Indonesia agricultural import licensing

The World Trade Organization (WTO) on Thursday ruled in favor of the United States when it reaffirmed that Indonesia’s import licensing regimes for horticultural and animal products are inconsistent with the global trade body’s rules.    The World Trade Organization on Thursday ruled in favor of the United States when it reaffirmed that Indonesia’s import licensing regimes for horticultural and animal products are inconsistent with the global trade body’s rules.
   “This is a significant win for U.S. farmers and ranchers,” said U.S. Trade Representative Robert Lighthizer in a statement. “Given Indonesia’s market size and U.S. competitiveness, we should be selling many more agricultural products to Indonesian consumers.”
   Since 2012, Indonesia has maintained a complex system of import licensing requirements that the United States says have restricted or prohibited imports of U.S. horticultural products and animal products, costing American farmers and ranchers millions of dollars per year in lost export opportunities to the Southeast Asian country. 
   U.S. products affected by Indonesia’s import restrictions include fruits, vegetables, flowers, dried fruits and vegetables, juices, cattle, beef, poultry, and other animal products.
   In 2016, Indonesia was the ninth-largest U.S. agricultural export destination by value, and the country 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, according to the Office of the U.S. Trade Representative.
   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 WTO 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. It 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 WTO’s latest report upheld the original panel’s 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. New Zealand has remained a co-complainant in this dispute.
   “The WTO ruling is confirmation of USTR’s decision to bring the case and supports the need for a strong and transparent dispute settlement system in the WTO,” said Philip Seng, CEO of the U.S. Meat Export Federation. 
  “Today’s WTO report sets the stage for expansion of Indonesia’s beef market,” Seng added. “We are excited about the opportunity to play a big part in its development by introducing U.S. beef to a much wider group of Indonesian customers.”