Key Topic – WTO Ruling on Indonesia Beef Access

The United States requested that the WTO establish a dispute settlement panel to examine Indonesia’s import restrictions on a range of U.S. agricultural products, including U.S. beef. Trade officials from New Zealand filed a similar request with the WTO. The U.S. first requested consultations on these matters in January 2013, and working together with New Zealand consulted again in August 2013 and May 2014. During this time Indonesia announced various changes to its import policies, but its uneven regulatory environment continues to impede trade.

UPDATE: On Dec. 22, 2016, the WTO Dispute Settlement Panel issued a report regarding Indonesia’s import restrictions on a variety of agricultural products, including beef. The panel’s findings were overwhelmingly in favor of the U.S. and New Zealand. More details are available online. Indonesia has appealed the ruling.

At its 2011 peak, Indonesia was a top 10 destination for U.S. beef/beef variety meat, with exports totaling 17,847 mt valued at $28.2 million. But with the Indonesian government putting very tight restrictions on beef imports in an effort to build up its domestic industry, followed by BSE-related restrictions on U.S. beef in April 2012, exports to Indonesia declined by 91 percent in volume and 70 percent in value in 2012, before rebounding somewhat in 2013. In 2014, exports to Indonesia totaled 6,559 mt (+30 percent from 2013) valued at $26.8 million (+60 percent). But the business climate in Indonesia continued to be uncertain, due in part to its volatile import policies. In 2015, U.S. exports to Indonesia totaled just 1,495 mt (-77 percent) valued at $11.8 million.

In 2016, first-half exports of U.S. beef to Indonesia increased significantly but product restrictions, Indonesia’s complex import permit system and a limited number of approved U.S. plants still made the market difficult to serve. In late July 2016, the Indonesian Ministry of Agriculture issued a new import regulation expanding market access for meat products, allowing imports of all beef cuts and a range of variety meat items including livers, hearts, lungs, tails, tongues and feet. Importers are also no longer required to meet domestic beef purchasing thresholds before being issued import permits, and the reference price system is no longer part of the import process. These are encouraging developments which, along with the WTO ruling outlined above, could provide a boost for U.S. exports to Indonesia, especially beef variety meat. In 2016, exports to Indonesia were up more than 600 percent year-over-year to 10,783 mt and up 231 percent in value to $39.4 million – a new single-year value record. First-quarter 2017 exports to Indonesia were very slow, but exports rebounded in April to move 8 percent ahead of last year’s pace at 1,720 metric tons.