Washington and Wellington have been formally consulting with Indonesia about their concerns since last May (2014). But these talks have not satisfied the US and New Zealand and now they want a formal ruling. If they win and Indonesia does not loosen its controls, then the two meat exporters can impose retaliatory sanctions such as punishing import duties on Indonesian traders.
Announcing the move, US Trade Representative (USTR) Michael Froman said: “America’s farmers and ranchers are among the most productive in the world, but they need a level playing field” in trade access. Democratic Representative Brad Ashford added, regarding his US state: “Nebraska is one of the top exporters of agricultural products, especially beef, and access to foreign markets is a critical component of the economy.” New Zealand trade minister Tim Groser said: “Agricultural exports are the lifeblood of our economy,” stressing their annual NZ$31.9 billion (US$24.3 billion) value in 2014.
A USTR office document stressed American discontent over Indonesia’s import ban on all bovine offal products (except some cuts of tongue and tail); all secondary beef cuts, including beef blade, knuckles, chuck, inside round and outside round; all bovine whole carcases, and poultry parts. For some other meat and poultry products, imports are only allowed if purchasers also buy meat from Indonesian slaughterhouses. There are also some tight quantitative and minimum price limits on meat and poultry product imports.
Import administration for livestock and meat products is tough, according to the USTR office, with two separate permissions required from the trade ministry and one from the agriculture ministry. These last just three months and can only be applied for during restricted periods of time, said the USTR. New Zealand’s complaints are almost identical.
Both countries consider that these controls break Indonesia’s obligations under the WTO’s General Agreement on Tariffs and Trade (GATT) and its agreements on agriculture, import licensing and pre-shipment inspection.