Thursday, March 28, 2024

Indonesia misses meat deadline

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The Government is weighing its options after Indonesia again failed to meet a deadline to comply with a ruling by the World Trade Organisation in its billion-dollar beef dispute with New Zealand.
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NZ and the United States in 2016 successfully challenged rules blocking beef and horticultural imports into Indonesia.

The decision was appealed to the WTO’s appellate court but the Indonesians lost again and were given till the middle of last year to implement the court’s ruling.

While regulations blocking beef imports were scrapped the domestic legislation enabling them remained in place.

Indonesia was then given till June 22 to get rid of the enabling legislation but it has again failed to do so.

A spokesman for Trade Minister David Parker said NZ officials have since raised the matter with their Indonesian counterparts in Jakarta and at the WTO’s headquarters in Geneva.

“While Indonesia has made progress towards bringing its regulatory measures into conformity with the WTO decision, including removing the ban on secondary beef cuts, there is more that needs to be done.

“Officials are currently reviewing the options open to NZ.”

Those options include going back to the WTO either for a judgment on whether Indonesia has done enough to comply or to request it to enter into negotiations for compensation for its failure to do so.

Meat Industry Association trade and economic manager Sirma Karapeeva urged the Government not to back down and to continue to push for full compliance with the WTO ruling.

“The enabling legislation remains as is so there is the possibility that some time in the future it might get triggered again and with that some other type of barrier that would impact on our exports.”

Faced with that uncertainty beef exporters have downgraded Indonesia from their third largest market in 2010 to eighth largest today.

“They are still exporting but they are doing it with slightly more caution than in the past,” Karapeeva said.

Chapman Tripp trade law consultant Tracey Epps said if negotiations for compensation are unsuccessful the Government can seek WTO permission to suspend tariff concessions NZ had granted to Indonesian imports.

Tariff concessions can be withdrawn only equal to the amount of damage that had been done to NZ’s exports to Indonesia.

In August the Americans requested permission to impose US$350m of retaliatory tariffs against the Indonesians for their failure to comply with the WTO ruling.

However, Epps does not expect NZ will follow the Americans by requesting permission to retaliate even though the costs to the meat industry of Indonesia’s import restrictions have previously been estimated to be as high as a billion dollars in lost sales.

“For a small country like NZ there is a question of what we could actually do that would impact enough on a country like Indonesia to force them into compliance.

“It is hard to imagine that we would want to go down this route unless absolutely necessary.

“There is nothing to stop NZ continuing to talk at a diplomatic level to try to resolve matters.”

Karapeeva has seen no indication NZ will use tariffs to retaliate against Indonesia.

“We are just wanting to keep dialogue open with the Government to make sure they understand we are still interested and supportive of their work to bring Indonesia into compliance and to start talking about what are the options and what are the risks with each of those options.”

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