WTO ruling helps U.S. ag exports to Indonesia

Dec 23, 2016 Issues: Agriculture

Capital Press: WTO ruling helps U.S. ag exports to Indonesia 

By Dan Wheat 

Exports of many U.S. agricultural products, including Washington apples, may increase soon because of a recent ruling by the World Trade Organization.

The Office of the U.S. Trade Representative issued a news release Dec. 22 stating a WTO panel found in favor of the U.S. and New Zealand in 18 out of 18 claims that Indonesia has been applying import restrictions and prohibitions that are inconsistent with WTO rules.

The restrictions cost about $115 million in U.S. agricultural exports to Indonesia in 2015, including $28 million worth of apples and more than $29 million worth of grapes, the USTR stated.

“This took a long time, was frustrating, not simple and (USTR) Ambassador (Michael) Froman and his team, to their credit, took it on and did exemplary work,” said Mark Powers, executive vice president of the Northwest Horticultural Council in Yakima.

Indonesia could appeal but if it does the WTO will rule on that within 90 days.

Prior to restrictions begun in 2012, Indonesia was a 2.7-million-box per year Washington apple market, Powers said. Since then, it’s 1 million boxes lower but could grow that back and expand in the future with restrictions lifted, he said.

One million, 40-pound boxes of apples are worth roughly $20 million.

“We think it has incredible potential. It has a large population. They enjoy Red Delicious and other varieties, like higher-value products and don’t have their own supply,” Powers said.

China, New Zealand, Chile and other apple exporters have also been hindered by the same restrictions but will be out from under them, making the market competitive, he said.

Todd Fryhover, president of the Washington Apple Commission in Wenatchee, said Indonesia was a 4-million-box market in 1996 and should easily reach 2.5 to 3 million without restrictions. Indonesians like smaller apples, which helps Washington exports but opportunity will be determined by Washington’s varietal mix, he said.

Beside apples and grapes, U.S. oranges, potatoes, onions, shallots, dried fruits and vegetables, flowers, juices, cattle, beef, poultry and other animal products have been harmed, USTR said.

“This major victory is the fourth WTO win announced by USTR this year,” Froman said in the news release. He noted the Obama administration has won every one of its trade enforcement challenges decided to date and that Indonesia is the fourth most populous country in the world.

U.S. Agriculture Secretary Tom Vilsack called it a slam dunk and said Indonesia has maintained an untenable import licensing program harming the U.S. since 2012. He said the findings will discourage Indonesia from substituting new trade distorting approaches.

“Today’s announcement is a win for Washington’s apple industry and agriculture community,” said U.S. Rep. Dave Reichert, R-Wash. Rep. Rick Larsen, D-Wash., also issued a laudatory statement.