U.S. takes Indonesia to the WTO over ag trade

In what seems part of an obvious campaign to convince Congress to support trade promotion authority and the Trans-Pacific Partnership agreement, the Obama administration today asked the World Trade Organization to establish a dispute settlement panel to examine Indonesia’s wide-ranging import restrictions on agricultural products.

Trade Representative Michael Froman made the announcement flanked by Agriculture Secretary Tom Vilsack, New Zealand Trade Minister Tim Groser and four members of the House.

“I’m proud to take this action today standing up on behalf of farmers and ranchers across the United States who have been shouldering unfair export barriers to the fourth largest country in the world, Indonesia,” Froman said.

But he added, “This announcement comes at a time when the Obama administration is fighting to unlock other economic opportunities for American agricultural exporters across the Asia-Pacific region through the Trans-Pacific Partnership.”

Vilsack said Indonesia is “a very important partner to the United States,” but U.S. agricultural exports have gone down in a number of areas since 2012, when Indonesia imposed a variety of licensing requirements that have the effect of limiting the quantity of imports into Indonesia.

Indonesia also bans U.S. poultry, Vilsack noted.

The Agriculture secretary also said that President Barack Obama, like other presidents before him, should have trade promotion authority.

Groser said it was “a coincidence” that he could participate in the news conference because he is in town “to talk to people” in the administration and Congress about TPP. He called Indonesia “ a great country,” but said New Zealand would also take a case to the WTO, which he described as the right place to solve the dispute because it is “absolutely fair.”

Groser is a former New Zealand ambassador to the WTO.

Four Democratic House members were present for the announcement, and had comments:

-Rep. Rick Larsen, D-Wash., said Washington state apple exports to Indonesia have dropped 30 percent.

-Rep. Dave Reichert, R-Wash., noted he is co-chair of the Friends of TPP and said he is concerned about the market for pears as well as apples.

-Rep. Kurt Schrader, D-Ore., said trade has to be “fair” and that Indonesia’s restrictions are “bogus nontariff barriers.”

-Rep. Brad Ashford, D-Neb., said people in his state “stand behind the TPP process” and that there is a large potential for increasing beef exports to Indonesia if the restrictions are removed.

Senate Finance Committee ranking member Ron Wyden, D-Ore., who has come under intense pressure in his state not to support TPA, praised the action in a news release.

“Strong enforcement of trade agreements is critical to ensuring that other countries play by the rules and that American workers, farmers and ranchers are given a fair shake at capturing new export opportunities overseas,” Wyden said.

“Indonesia’s elaborate restrictions on imports have left American farm products, including Oregon fruits and vegetables, tied up in red tape at the border,” Wyden said. “I am pleased that USTR is taking this step to fight for American farmers and ranchers and cut through the continually shifting schemes that have been holding up our products and creating needless market uncertainty.”

Vilsack and USTR officials said that the United States has engaged in two sets of consultations with Indonesia and that the country did change its procedures, although they did not result in any increased imports from the United States.

“USTR and USDA have worked over the past two years to hold Indonesia to its trade commitments. America’s farmers and ranchers are among the most productive in the world, but they need a level playing field,” Vilsack said. “When our trading partners don’t play by the rules it costs American jobs, so it is critical we hold them accountable.”

USTR said the importing licensing regimes affected nearly $200 million in U.S. products in 2014. USTR also released a copy of the case it has filed with the WTO.

–Hagstrom Report