WTO Issues Panel Report on Indonesia’s Import Restrictions

This week the World Trade Organization (WTO) Dispute Settlement Panel issued its report regarding Indonesia’s import restrictions on a variety of agricultural products, including beef. The report is in response to a complaint originally filed by the United States and New Zealand in 2013. A summary of the panel’s findings and conclusions and other documents from this proceeding are available from the WTO website.

The panel’s findings were overwhelmingly in favor of the U.S. and New Zealand, as detailed in this USTR news release. Among the findings specific to beef, the panel ruled that Indonesia had failed to justify the following:

• Restrictions on the use, sale, and distribution of imported products, including a requirement that imported beef could only be sold in restaurants and hotels – not at retail.
• Requirement to purchase certain amounts of domestic beef before importation of beef from other countries is permitted.
• Restriction on the importation of certain products when their market prices fall below the government-determined “reference prices.”
• Restricting imports when Indonesia determines that its domestic supplies are sufficient to satisfy domestic demand.
• Requiring an importer to utilize at least 80 percent of the quantity for each product specified on the importer’s license.

Indonesia was once a top 10 volume destination for U.S. beef and the market has excellent potential. But numerous trade obstacles made it very difficult to conduct business in Indonesia, frustrating U.S. exporters’ efforts to serve the market. USMEF appreciates the action taken by the U.S. government and the findings of the WTO panel, which clearly indicate that Indonesia’s import restrictions were unjustified and inconsistent with its obligations as a WTO member.

Through October, U.S. beef/beef variety meat exports to Indonesia increased significantly over the low totals of 2015 – reaching 7,039 metric tons valued at $27 million. But the business climate in Indonesia remains rather uncertain due to its volatile regulatory environment, and this WTO ruling could help address the situation.