Indonesia will clarify its position with the World Trade Organization after the United States asked the multilateral body to allow it to impose sanctions on Southeast Asia’s biggest economy after winning a trade dispute that it claims had cost US business up to $350 million in 2017.
Indonesia lost its appeal against a WTO ruling in favor of the United States and New Zealand last year over its trade policies that limit imports of food, plants and animal products, including apples, grapes, potatoes, onions, flowers, juice, dried fruit, cattle, chicken and beef.
The United States claims that Indonesia has yet to abide by the ruling.
“In accordance with the agreement between Indonesia, the United States and New Zealand, we agreed that a reasonable period to revise our import regulations and policies was eight months from the date of approval of the appellate body, which was on Nov. 22, 2017,” Hasan Kleib, Indonesia’s ambassador to Geneva and the country’s permanent representative to the United Nations, WTO and other international organizations, said in a statement on Wednesday (08/08).
“Indonesia will certainly explain the changes that have been made since the final ruling of the WTO panel and the appellate body,” he said.
According to the ruling, Indonesia was required to make the first phase of adjustments by July 22 this year at the latest, and the second phase before June 2 next year. Although Indonesia has taken steps to adjust its import regulations after consulting with the relevant parties in Geneva on July 27, the United States said this had not done enough.
This assessment is based on information the US representative to the WTO received, showing that US producers still face obstacles when exporting horticultural products to Indonesia.
“In the letter released yesterday, they [the United States] said they were not satisfied [with the rule changes]. But in Washington, their ambassador was already quite satisfied,” Coordinating Economic Affairs Minister Darmin Nasution said on Wednesday.
Trade Ministry officials visited Washington last week as part of an Indonesian delegation consisting of business lobby groups and representatives of fiscal and banking authorities to seek alternatives that would avoid a full-blown trade war between the two countries.
Indonesia fell out of President Donald Trump’s favor over a surplus it has been enjoying in bilateral trade between the two countries since 2013. The United States also threatened to revoke its trade incentive, known as the Generalized System of Preferences, which has benefited Indonesia for more than three decades.
The latest rift with the United States stems from Indonesia’s old policies on agricultural imports. One of the policies only allows US producers to export apples to Indonesia outside the apple harvesting season in the archipelago.
“We have already changed the rules at the Ministry of Agriculture and the Ministry of Trade, which they objected to … but they say the changes are not in accordance with their wishes,” Darmin said.
He said the delegation that visited Washington has asked for time until the end of next year or 2020 to change the applicable laws and government regulations, to which they agreed, as “they know it will take time.”
Darmin added that the government will send a team to the United States to discuss these objections.