US trade officials said the US had repeatedly raised concerns with Indonesia regarding its “complex and discretionary” import licensing regime, but these concerns had not been addressed. As a result, the US has requested consultation with Indonesia, which is the first step of the dispute process with the WTO.
United States trade representative Ron Kirk said: “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.
“The Obama Administration is committed to protecting the rights of our growers, farmers, ranchers and processors to compete on a level playing field. We will continue to make clear to our trading partners that we will fight to support each job here at home affected by unfair restrictions abroad.”
Non-automatic import licensing
In particular, the US is objecting to Indonesia’s strict non-automatic import licensing and quota regime for beef and other animal product imports, which require an importer to complete multiple complex steps before importing an animal or animal product into the country.
Under this system, importers must receive an Import Approval Recommendation ‘RPP’ from Indonesia’s Ministry of Agriculture, with the ministry setting quotas twice a year and specifying how much product each importer can import. After receiving the RPP, the importer must also apply for an import licence.
“These licencing regimes have significant trade-restrictive effects on imports and are used to implement what appear to be WTO-inconsistent measures. The multi-step licensing process is more administratively burdensome than absolutely necessary to administer the measure,” said the US consultation request.
“The issuance of RIPH and RPP recommendations, a critical part of the licensing process, appears to be delayed or refused by the Indonesian authorities on non-transparent grounds. The Indonesian licensing measures do not inform traders of the basis for granting licences. The licensing regimes do not appear to be administered in a uniform, impartial and reasonable manner, because the measures are applied inconsistently and unpredictably.”
Additionally, Indonesia only allows the importation of product if domestic production and supply do not “meet demand for public consumption at a reasonable price”. The country recently announced a dramatic reduction in quotas for beef and other animal products, which the US said was “restricting access” to the Indonesian market and breaking Indonesia’s commitments to free trade under the WTO.