NZ renews efforts to restore beef, farm commodity volumes in Indonesia with WTO complaint
By Jonathan Underhill
May 14 (BusinessDesk) – New Zealand has made its second complaint in as many years to the World Trade Organisation about
import restrictions and red tape in Indonesia that led to an 80 percent slump in exports of beef and horticultural
products.
New Zealand and the US originally teamed up to initiate legal proceedings against Indonesia via the WTO in August last
year. That complaint didn’t proceed beyond the consultation stage because Indonesia subsequently changed some of its
measures, which under WTO rules meant a new application had to be made.
In the new complaint, lodged on May 8, New Zealand and the US cite Indonesia’s “unjustified and trade-restrictive”
licensing requirements on imports, “unreasonable and discriminatory” pre-shipment rules and insufficient published
details of how the restrictions work.
“Indonesia does not appear to administer these quotas and restrictions in a uniform, impartial or reasonable manner as
they are applied inconsistently and unpredictably,” New Zealand says in its ‘request for consultations’ with Indonesia,
the first step in a complaint to the WTO.
Indonesia is New Zealand’s ninth-largest market and overall merchandise exports to Indonesia rose 17 percent to $961
million in the 12 months ended March 31. But for beef in particular, trade slumped after the Southeast Asian nation
imposed volume-based quotas in 2011 with the intention of becoming self-sufficient. Instead, as New Zealand and
Australian supplies dried up, beef prices soared.
New Zealand exports of beef and beef offal tumbled to 10,355 tonnes in 2011, from 48,405 tonnes in 2010 as a result of
the restrictions. Volumes began to pick up again last year after Indonesia eased the restrictions but are still well
below levels before the initial quotas were imposed.
“The meat industry fully supported the original NZ/US request for consultations with Indonesia through the WTO, given
the material damage done to our industry by the quotas,” said Philip Houlding, trade and economic manager at the Meat
Industry Association.
“The new Indonesian regulations have allowed trade to pick up again, but there are still some major concerns,” he said.
Those concerns include a ‘reference price’ in the market below which no imports are allowed, and “stringent
restrictions” on importers that make it difficult to expand the market.
Under WTO rules, the parties have 60 days to agree on a solution, after which New Zealand and the US can request a WTO
panel be established to hear the dispute.
New Zealand “remains concerned about a number of issues in the Indonesian laws and regulations which remain opaque and
overly burdensome,” a spokeswoman for the Ministry of Foreign Affairs and Trade said in an emailed statement. “Our
exporters require certainty in regards to the trading environment, so that they can plan their business and investment
decisions confident of how Indonesia’s laws and policies will be implemented.”
(BusinessDesk)