The World Trade Organization (WTO) this week approved the establishment of a dispute settlement panel to hear the U.S. allegations that Indonesia applies certain trade-restrictive measures to horticultural products, animals, and animal products, including poultry. In its WTO filing, the United States said Indonesia has a complex web of import licensing requirements that, along with import quotas, have the effect of unfairly restricting U.S. exports and protecting Indonesia’s domestic agriculture industry. The Office of the U.S. Trade Representative (USTR) characterized Indonesian rules as “opaque and complex.”
The formation of the WTO panel occurred two days after Indonesia’s trade ministry replaced its previous rules on imports of horticultural products. Eighteen products have been removed from regulation, including garlic, garlic powder, chili powder, cabbage, chrysanthemum flowers, heliconia flowers, orchid flowers, and several processed products, bringing the total of covered goods down to 39. The new rules also prescribe a simplified procedure to apply for and receive import permits. However, Indonesia made no changes with respect to importing poultry.
The United States first raised the issue of Indonesia’s very restrictive import practices with the WTO in January this year, citing Indonesia’s “broad use of import licensing measures that restrict imports” on a range of agricultural products. USTR criticized the licensing system, which came into force last year, saying it was inconsistent with Indonesia’s WTO obligations and was having an impact on U.S. export to the country. Last month Indonesia rejected a U.S. request for the creation of a WTO dispute settlement panel to address the complaint. USTR responded with a second, follow-up request for a panel, which, under WTO rules, Indonesia could no longer object and, therefore, stymie the formation of a panel.
