US in trade dispute with Indonesia

15/01/2013 12:00 - 417 Views

The US launched a trade dispute against Indonesia over import restrictions on a wide range of agricultural products – including fruits, vegetables, plants and meats – arguing that the measures by the Southeast Asian nation were damaging US exporters.

Ron Kirk, the US trade representative, said on Thursday that the US was requesting “consultations” with Indonesia at the World Trade Organisation – the first step in a formal legal battle to be handled by the global trade body.

“Indonesia’s opaque and complex import licensing system affects a wide range of American agricultural exports. It has become a serious impediment to US agricultural exports entering Indonesia, reducing Indonesian consumers’ access to high-quality US products,” Mr Kirk said in a statement.

The US is targeting steps taken starting at the end of 2011 and revised further last year by Indonesia to establish strict import licensing requirements on plant-based products, including flowers, dried fruits and juices. In addition, the US is challenging reductions in import quotas for beef and animal products.

According to US officials, concerns about these measures had been raised with Indonesia, but not addressed, leading to the WTO complaint. US officials alleged that as well as hurting US exporters, the measures were also damaging Indonesian consumers, leading prices of some of the goods to “skyrocket”.

The Indonesian embassy in Washington did not reply to a request for comment and the Indonesian mission to the WTO in Geneva could not be reached.

From the US to Thailand and Australia, many food exporting nations are unhappy with Indonesia’s growing raft of restrictions on imports, which are designed to protect domestic agriculture.

International diplomats and economists in Jakarta have warned that resurgent protectionism in Indonesia, which has hit a wide range of industries from mining to electronic goods, may scare off investors. But Indonesian officials insist that restrictions on imports are vital if the country is to maintain health and safety standards and help local industries to compete with better financed international rivals.

The US and Indonesia have occasionally locked horns at the WTO, but this would be the first case brought by the Obama administration against the southeast Asian nation. The only other time the US has brought a trade case against Indonesia was in 1996 when Bill Clinton’s administration challenged Indonesia’s support for its car industry. Indonesia has brought two cases against the US, first in December 2000 on US antidumping laws, and most recently in April 2010 challenging US restrictions on clove cigarettes.

The Obama administration has ramped up US trade enforcement efforts since taking office, particularly with regard to China. During President Barack Obama’s re-election campaign, he frequently touted a series of cases he brought against China, occasionally timed to campaign stops in industrial swing states in the Midwest.

January 10, 2013 10:31 pm

By James Politi in Washington and Ben Bland in Jakarta

Source: ft.com