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U.S. Prevails in WTO Case Against Indonesia’s Restrictions on Agricultural Products

Tuesday, December 27, 2016
Sandler, Travis & Rosenberg Trade Report

USTR indicated in a Dec. 22 press release that the U.S. has prevailed in a WTO dispute settlement case involving wide-ranging restrictions and prohibitions imposed by Indonesia on U.S. horticultural products, animals, and animal products. The WTO panel agreed with the U.S. and co-complainant New Zealand on 18 out of 18 claims that Indonesia is applying import restrictions and prohibitions that are inconsistent with WTO rules. According to USTR, the panel report not only provides a clear win in this complaint but would also resolve the two U.S. complaints filed on previous versions of Indonesia’s import regime for agricultural products.

According to USTR, Indonesia (a) imposes trade-restrictive import licensing regimes and related requirements on imports of horticultural products and animals and animal products, (b) imposes prohibitions and restrictions on imports of such products, and (c) prohibits and restricts the importation of such products when domestic production is deemed sufficient to fulfill domestic demand. Affected products include fruits such as apples, grapes and oranges; vegetables such as potatoes, onions and shallots; dried fruits and vegetables; flowers; juices; cattle; beef, including secondary cuts; poultry, including chicken parts; and other animal products.

USTR notes that exports of affected horticultural products to Indonesia exceeded $87 million in 2015, including $28 million worth of apples and over $29 million worth of grapes. U.S. exports of affected animals and animal products, meanwhile, totaled $26 million in 2015. However, as with horticultural products, USTR would expect U.S. exports of animals and animal products to compete more effectively in the Indonesian market in the absence of the challenged trade restrictions.

Under WTO rules either party may request adoption of the panel report by the WTO within 60 days of the release of the report, and the report would be adopted unless an appeal is pursued. If the report is appealed, WTO rules require the Appellate Body to issue its report within 90 days of the filing of the appeal.

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