Government welcomes World Trade Organisation ruling against Indonesian agricultural trade barriers
Minister for Trade and Export Growth, David Parker, today welcomed the World Trade Organisation (WTO) decision to uphold New Zealand’s case against agricultural trade barriers imposed by Indonesia.
On 9 November, the WTO's Appellate Body confirmed that a number of Indonesian agricultural trade barriers are inconsistent with global trade rules. The decision upholds key findings of a WTO dispute settlement Panel, which in December last year ruled in New Zealand's favour and was subsequently appealed by Indonesia.
New Zealand and the US initiated the case in 2013 in response to a range of next-generation agricultural “non-tariff” barriers applied by Indonesia to imports since 2011. They include import prohibitions, behind-the-border use and sale restrictions on imports, restrictive import licensing, and a domestic purchase condition.
This WTO case illustrates the value that New Zealand, as a small country, gains from international trade rules. Mike Moore, when Director-General of the WTO, described its dispute settlement system as “the jewel in its crown”. The last WTO case that New Zealand brought to the WTO challenged an Australian ban on our apples, which we initiated in 2007.
“These barriers affect opportunities for many New Zealand agricultural exporters, including producers of onions, apples and beef,” Mr Parker says.
“The restrictions are commercially significant for those exporters, and are estimated to have now cost the New Zealand beef sector close to a billion dollars of lost exports into an important market.”
“This decision from the WTO's highest dispute settlement body is an important result for our agricultural exporters and should pave the way to grow New Zealand exports to the Indonesian market.”
In 2010, prior to the introduction of the challenged restrictions, Indonesia was New Zealand's second-largest beef export market by volume, worth $180 million a year. That trade subsequently plummeted by 85 percent. This case aims to secure more open and predictable access into Indonesia for a range of our exports.
"New Zealand has a strong and mutually beneficial relationship with Indonesia, and this trade disagreement is only a small part of that broader bilateral relationship.
“Indonesia’s approach to these WTO hearings has been exemplary. The tone has been collegial and constructive. In the proceedings Indonesia also underlined the longstanding and mutually respectful relationship that Indonesia enjoys with New Zealand and a desire to strengthen this important relationship.
“I look forward to working with my Indonesian counterpart over the coming months to finalise resolution of this long-standing trade issue,” says Mr Parker.
Further information about the dispute can be found at https://www.mfat.govt.nz/en/trade/trade-law-and-dispute-settlement/current-disputes/