Trade Minister Todd McClay has welcomed the World Trade Organization’s (WTO) decision upholding New Zealand’s challenge to 18 agricultural non-tariff barriers imposed by Indonesia.
New Zealand and the United States jointly brought the case against Indonesia in 2013 over a range of barriers imposed on agricultural imports since 2011. These included import prohibitions, use and sale restrictions, restrictive licence terms and a domestic purchase requirement.
The barriers are estimated to have cumulatively cost the New Zealand beef sector alone between half a billion and a billion dollars. As recently as 2010, Indonesia was New Zealand’s second-largest beef export market by volume, worth $180 million a year.
“This is an important result for New Zealand’s agricultural exporters – and for trade fairness,” says Mr McClay.
“It is an example of the Government’s proactive exercising of its rights under trade agreements to resolve non-tariff barriers on behalf of New Zealand industry.
“We are committed to pursuing a range of options for addressing trade barriers that affect New Zealand exporters, including WTO dispute settlement as a last resort.
“As a result of this process, we have already seen some improvements to Indonesia’s regulations and gains for New Zealand exporters to Indonesia. These will only improve following implementation of the WTO decision.”
He says New Zealand continues to have a very strong relationship with Indonesia.
“The highly professional and constructive manner in which all parties conducted themselves throughout this case is testament to the resilience of the relationship. We enjoy regular high level political engagement.
“I visited Indonesia twice this year and have held a further meeting with my counterpart Minister Lukita.
“We enjoy close cooperation in a range of areas of mutual interest and we see no reason why the WTO decision would diminish the strength of our ties.
“Even close friends have occasional disagreements and the WTO helps insulate trade policy differences from wider bilateral relations,” says Mr McClay.
While the Panel has found firmly in New Zealand’s favour, Indonesia can appeal the decision to the WTO’s Appellate Body.