US seeks US$350m annual sanctions in Indonesia trade row

Geneva

THE United States has asked the World Trade Organization (WTO) to let it impose sanctions on Indonesia after winning a trade dispute that it said cost US business up to US$350 million in 2017, a US filing published by the WTO showed on Monday.

The United States and New Zealand both won WTO rulings last year against Indonesian import restrictions on food, plants and animal products, including apples, grapes, potatoes, onions, flowers, juice, dried fruit, cattle, chicken and beef.

Indonesia also lost an appeal.

The latest US filing said Indonesia had not complied with the ruling, so Washington was seeking annual sanctions to compensate for the damage done to US interests.

"Based on a preliminary analysis of available data for certain products, this level is provisionally estimated at up to approximately US$350 million for 2017," it said. "The United States will update this figure annually, as Indonesia's economy continues to expand."

Indonesia is still studying the US move to seek sanctions, said Oke Nurwan, trade ministry's director general of foreign trade, adding that the authorities believe Jakarta had complied with the WTO panel decision. He said rules on Indonesian food imports had already been revised.

The process of seeking compensation often takes years, and Indonesia is likely to contest the size of any potential sanctions.

There was no immediate sign of a similar sanctions request from New Zealand, which said last year that Indonesia's restrictions were estimated to have cost New Zealand beef sector up to NZ$1 billion (S$918 million).

Indonesia has been lobbying senior US officials to keep the South-east Asian nation on a list of countries that receive special trade terms under the Generalized System of Preferences, a facility that gives reduced tariffs to about US$2 billion of Indonesian exports.

The US Trade Representative's Office in April said it was reviewing Indonesia's eligibility for GSP in the light of Jakarta's imposition of a wide array of trade and investment barriers that create serious negative effects on US commerce.

Indonesia's trade minister Enggartiasto Lukita in July said he will advise Washington that Indonesia will remove trade barriers for US apples following a WTO ruling as part of lobbying for GSP.

Indonesia scrapped a quota system for beef imports in 2016. REUTERS