WTO Ruling an Important Win for U.S. Beef Exports to Indonesia

The World Trade Organization (WTO) has ruled in favor of the United States in a dispute over Indonesia’s complex import requirements for a number of agricultural products, including U.S. beef. The ruling is expected to open up significant new export opportunities for U.S. beef in the Indonesian market.

Thad Lively, U.S. Meat Export Federation (USMEF) senior vice president for trade access, explains that Indonesia’s import restrictions were originally aimed at achieving self-sufficiency in beef production but actually resulted in tight beef supplies and high prices for consumers. He notes that the ruling gives both U.S. exporters and Indonesian importers confidence that the market will remain open to U.S. beef, paving the way for significant growth.

Last year U.S. beef and beef variety meat exports to Indonesia were 10,783 metric tons (mt) valued at $39.4 million, making it the ninth-largest export market for U.S. beef by volume and 15th-largest by value. Through September of this year, exports to Indonesia already nearly matched last year’s totals, reaching 9,934 mt valued at $36.6 million. Indonesia is currently the third-largest export market for U.S. beef hearts, following Mexico and Hong Kong.

TRANSCRIPT:

Joe Schuele: The United States scored an important win at the World Trade Organization when it successfully challenged Indonesian import restrictions on a number of agricultural products, including U.S. beef. U.S. Meat Export Federation Senior Vice President Thad Lively has more details in this USMEF report.

Thad Lively: This is an important win for the U.S. It’s one of those cases that was really well suited to take to the WTO because Indonesia has in place a number of import restrictions that are pretty clearly inconsistent with what the rules of the WTO say. A lot of this has been driven by the fact that at times they’ve had a policy of becoming self-sufficient in beef, trying to import a lot of live cattle and build up a beef industry of their own. That’s going to be very difficult for them to do, and I think increasingly that’s become apparent. So I think this WTO ruling comes at a good time, while Indonesia is reconsidering its policy on beef consumption and the production and self-sufficiency.

Joe Schuele: One important benefit of the ruling is that it gives exporters and importers confidence that the market will remain open to U.S. beef.

Thad Lively: It should open up opportunities in Indonesia like we’ve never seen. Indonesia, of course, is the fourth largest country in the world by population, but if you look at their per capita beef consumption, it’s actually quite small. To us that says there’s huge potential for the United States beef industry. Today, of course, Indonesia is a market for low value muscle cuts and variety meats, but that will change over time as incomes grow and the middle class grows, so I have no doubt this is a market where the U.S. industry can do very well, can be quite competitive and where we can carve out an identity for high-quality U.S. beef, just as we have in so many countries around the world.

Joe Schuele: For more information, please visit USMEF.org. For the U.S. Meat Export Federation, I’m Joe Schuele.