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The National Pork Producers Council (NPPC) submits the following comments to the Office of the U.S. Trade Representative in response to Federal Register Notice USTR-2014-0010, titled “WTO Dispute Settlement Proceeding Regarding Indonesia-Importation of Horticultural Products, Animals and Animal Products.”
NPPC is a national association representing a federation of 43 state producer organizations and the federal and global interests of 67,000 U.S. pork operations. The U.S. pork industry is a major value-added enterprise in the agricultural economy and a significant contributor to the overall U.S. economy.
Although Indonesia is a predominantly Muslim country, there is significant potential demand for pork products in the country’s Hotel Restaurant and Institutional (HRI) sector, as well as among minority populations within the country. Unfortunately, the Indonesian government imposes a variety of restrictions on pork imports that make it extremely difficult for the U.S. pork industry to export product to the Indonesian market.
Indonesian import requirements for pork are contained in two regulations: Regulation No. 46/M-DAG/PER/8/201, titled “Animal and Animal Product Import and Export Provision”; and Regulation No. 139/PD/410/12/2014, titled “Importation of Carcasses, Meat, And/Or Processed Meat Products.” Translated copies of both documents are attached to this submission.
Indonesia maintains an extremely complicated and burdensome process for obtaining meat import permits. As described in the regulations cited above, pork importers must obtain import permits from both the Ministry of Agriculture and the Ministry of Trade. These permits are issued on a quarterly basis and only days before the beginning of the new quarter. Any imports authorized under the permit system must arrive during the same quarter for which the permits were issued. Indonesia’s highly bureaucratic import permit approval process for pork, combined with the very limited period of time allowed for shipments under the import permit system, severely restrict market access.
Additionally, Indonesian regulations require that all importers utilize at least 80 percent of the permits authorized for a given quarter. Importers who fail to make use of 80 percent of their permits during the quarter are penalized through restrictions on the grant of future import permits. To avoid penalties for underuse of permits, Indonesian importers consistently apply for permit levels well below their anticipated import needs.
In our view, Indonesia’s import permit system for pork violates numerous provisions of the WTO Agreement on Import Licensing Procedures, including, but not necessarily limited to, Articles 1.2, 1.5, 1.6, 2.2, 3.2 and 3.3 of the Import Licensing Agreement. In addition, Indonesia’s import regime for pork is likely in violation of GATT Article XI.1, titled “General Elimination of Quantitative Restrictions,” as well as Article 4.2 of the WTO Agreement on Agriculture, requiring the removal of market access restrictions other than tariffs on agricultural products.
Indonesia currently allows imports of pork from only five U.S. slaughter and processing pork plants, severely limiting the supply of U.S. pork to the Indonesian market. According to the USDA Foreign Agricultural Service office in Jakarta, the Indonesian government is making “little effort” to approve additional plants. Indonesia’s refusal to grant approval to additional U.S. pork plants is particularly frustrating in light of the fact that, as late as 2007, Indonesia accepted the USDA plant inspection and approval system for pork, allowing imports from all USDA-approved plants.
Indonesia’s refusal to accept the USDA plant inspection and approval system as equivalent to its own is in conflict with the principle of “equivalence” contained in Article 4 of the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (“WTO SPS Agreement”). The Indonesian government’s apparent refusal to conduct the audits required to expand the list of U.S. pork plants approved for export to Indonesia may also violate various provisions of the WTO SPS Agreement, in particular Article 2.3.
Regulation No. 139/PD/410/ 2014, Appendix II, provides a list of pork products that are eligible for import into Indonesia. Pork offal (HTS 0206) is not included on the list. There is no science-based reason for excluding pork offal from import eligibility. Indonesia should take action to ensure that pork offal can be imported into the country.
Finally, Article 17 of Regulation 46/M-DAG/PER/8/2013 stipulates that imported product may only be used in “industry, hotel, restaurant, catering, and/or other specific requirements.” This list appears to exclude supermarkets or wet markets. There is no science- or food safety-based reason for excluding the sale of imported pork to supermarkets or wet markets. Indonesia should take action to ensure that pork can be marketed to all retail outlets.
In summary, NPPC commends the U.S. government, and the Office of the U.S. Trade Representative in particular, for pursuing a WTO dispute settlement case against Indonesia related to its import restrictions on agricultural products, including pork. We urge the U.S. government to use the WTO dispute settlement process to achieve full elimination of the Indonesian barriers to pork imports described in this submission.
Sincerely,
Ron Prestage
President
National Pork Producers Council
Source: NPPC