Indonesia – Importation of Horticultural Products, Animals, and Animal Products

130 Pages·2015·1.27 MB·English

Indonesia – Importation of Horticultural Products,
Animals, and Animal Products
(DS477 / DS478)

First Written Submission of
the United States of America

November 13, 2015
TABLE OF CONTENTS
Table of Acronyms ......................................................................................................................... v
Table of Reports ............................................................................................................................. vi
Table of Joint Exhibits ................................................................................................................... ix
Table of U.S. Exhibits ................................................................................................................... xii
I. INTRODUCTION .................................................................................................................... 1
II. PROCEDURAL BACKGROUND ............................................................................................... 4
III. FACTUAL BACKGROUND ...................................................................................................... 4
A. Indonesia’s Laws and Regulations Governing the Importation of Horticultural
Products............................................................................................................................... 5
1. The Original Import Licensing Regulations ................................................................. 8
2. The April 2013 Import Licensing Regulations ........................................................... 10
3. The Current Import Licensing Regulations ................................................................ 12
B. Indonesia’s Laws and Regulations Governing the Importation of Animals and
Animal Products................................................................................................................ 24
1. The Original Import Licensing Regulations ............................................................... 26
2. The May 2013 Import Licensing Regulations ............................................................ 28
3. The Current Import Licensing Regulations ................................................................ 29
IV. LEGAL DISCUSSION ............................................................................................................ 43
A. Relevant Legal Standards ................................................................................................. 44
1. Article XI:1 of the GATT 1994 .................................................................................. 44
2. Article 4.2 of the Agreement on Agriculture .............................................................. 47
B. Indonesia’s Import Licensing Regime for Horticultural Products Is Inconsistent
with Indonesia’s Obligations Under Article XI:1 of the GATT 1994 .............................. 49
1. The Application Windows and Validity Periods Constitute Restrictions
Inconsistent with Article XI:1 ..................................................................................... 50
2. Restricting Imports of Horticultural Products During a Semester to Those of
the Type, Quantity, Country of Origin, and Port of Entry Listed on the
Original Import Documents for That Period Is Inconsistent with Article XI:1 .......... 52
3. The Realization Requirement Is Inconsistent with Article XI:1 ................................. 54
4. The Restriction on the Importation of Horticultural Products Based on the
Indonesian Harvest Period Is Inconsistent with Article XI:1 ..................................... 57
Indonesia – Importation of Horticultural Products, U.S. First Written Submission
Animals, and Animal Products (DS477/DS478) November 13, 2015 – Page ii

5. The Restriction on the Importation of Horticultural Products Based on Storage
Capacity Is Inconsistent with Article XI:1.................................................................. 59
6. The Restriction on the Importation of Horticultural Products Other Than for
Certain Limited Purposes Is Inconsistent with Article XI:1 ....................................... 60
7. The Reference Price Requirement Is Inconsistent with Article XI:1 ......................... 62
8. The Restriction on the Importation of Horticultural Products Harvested More
than Six Months Previously Is Inconsistent with Article XI:1 ................................... 63
9. Indonesia’s Import Licensing Regime for Horticultural Products, As a Whole,
Is Inconsistent with Article XI:1 ................................................................................. 64
C. Indonesia’s Import Licensing Regime for Horticultural Products Is Inconsistent
with Indonesia’s Obligations Under Article 4.2 of the Agreement on Agriculture .......... 66
1. The Application Windows and Validity Periods Constitute a Quantitative
Import Restriction or Similar Border Measure Inconsistent with Article 4.2 ............. 67
2. Restricting Imports of Horticultural Products During a Semester to Those of
the Type, Quantity, Country of Origin and Port of Entry Listed on the Original
Import Documents for That Period Constitutes a Quantitative Import
Restriction or Similar Border Measure Inconsistent with Article 4.2 ........................ 68
3. The Realization Requirement Constitutes a Quantitative Import Restriction or
a Similar Border Measure Inconsistent with Article 4.2 ............................................. 69
4. The Restriction on the Importation of Horticultural Products Based on the
Indonesian Harvest Period Constitutes a Quantitative Import Restriction or a
Similar Border Measure Inconsistent with Article 4.2 ............................................... 70
5. The Restriction on the Importation of Horticultural Products Based on Storage
Capacity Constitutes a Quantitative Import Restriction or a Similar Border
Measure Inconsistent with Article 4.2 ........................................................................ 71
6. The Restriction on the Importation of Horticultural Products Other Than for
Certain Limited Purposes Constitutes a Quantitative Import Restriction or a
Similar Border Measure Inconsistent with Article 4.2 ............................................... 72
7. The Reference Price Requirement Constitutes a Minimum Import Price or
Similar Border Measure Inconsistent with Article 4.2 ............................................... 72
8. The Restriction on the Importation of Horticultural Products Harvested More
than Six Months Previously Constitutes a Quantitative Import Restriction or
Similar Border Measure Inconsistent with Article 4.2 ............................................... 73
9. Indonesia’s Import Licensing Regime for Horticultural Products, As a Whole,
Constitutes a Quantitative Import Restriction or Similar Border Measure
Inconsistent with Article 4.2 ....................................................................................... 74
D. Indonesia’s Import Licensing Regime for Animals and Animal Products Is
Inconsistent with Indonesia’s Obligations under Article XI:1 of the GATT 1994........... 75
Indonesia – Importation of Horticultural Products, U.S. First Written Submission
Animals, and Animal Products (DS477/DS478) November 13, 2015 – Page iii

1. The Prohibition on the Importation of Animals and Animal Products Not
Listed in Indonesia’s Regulations Is Inconsistent with Article XI:1 .......................... 76
2. The Application Windows and Validity Periods Constitute Restrictions
Inconsistent with Article XI:1 ..................................................................................... 78
3. Restricting Imports of Animals and Animal Products During a Validity Period
to Those of the Quantity, Type, Country of Origin, and Port of Entry Listed on
the Original Import Documents for that Period Is Inconsistent with Article
XI:1 ............................................................................................................................. 81
4. The Realization Requirement Is Inconsistent with Article XI:1 ................................. 84
5. The Restriction on the Importation of Animals and Animal Products Other
Than for Certain Limited Purposes Is Inconsistent with Article XI:1 ........................ 86
6. The Domestic Purchase Requirement Is Inconsistent with Article XI:1 .................... 88
7. The Reference Price Requirement Is Inconsistent with Article XI:1 ......................... 91
8. Indonesia’s Import Licensing Regime for Animals and Animal Products, As a
Whole, Is Inconsistent with Article XI:1 .................................................................... 92
E. Indonesia’s Import Licensing Regime for Animals and Animal Products Is
Inconsistent with Indonesia’s Obligations Under Article 4.2 of the Agreement on
Agriculture ........................................................................................................................ 95
1. The Prohibition on the Importation of Animals and Animal Products Not
Listed in Indonesia’ Regulations Constitutes a Quantitative Import Restriction
or Similar Border Measure Inconsistent with Article 4.2 ........................................... 96
2. The Application Windows and Validity Periods Constitute a Quantitative
Import Restriction or Similar Border Measure Inconsistent with Article 4.2 ............. 97
3. Restricting Imports of Animals and Animal Products During a Validity Period
to Those of the Type, Quantity, Country of Origin, and Port of Entry Listed on
the Original Import Documents for That Period Constitutes a Quantitative
Import Restriction or Similar Border Measure Inconsistent with Article 4.2 ............. 99
4. The Realization Requirement Constitutes a Quantitative Import Restriction or
a Similar Border Measure Inconsistent with Article 4.2 ........................................... 100
5. The Restriction on the Importation of Animals and Animal Products Other
Than for Certain Limited Purposes Constitutes a Quantitative Import
Restriction or a Similar Border Measure Inconsistent with Article 4.2 .................... 101
6. The Domestic Purchase Requirement Constitutes a Quantitative Import
Restriction or a Similar Border Measure Inconsistent with Article 4.2 .................... 102
7. The Reference Price Requirement Constitutes a Minimum Import Price or
Similar Border Measure Inconsistent with Article 4.2 ............................................. 103
8. Indonesia’s Import Licensing Regime for Animals and Animal Products, As a
Whole, Constitutes a Quantitative Import Restriction or Similar Border
Measure Inconsistent with Article 4.2 ...................................................................... 103
Indonesia – Importation of Horticultural Products, U.S. First Written Submission
Animals, and Animal Products (DS477/DS478) November 13, 2015 – Page iv

F. Indonesia’s Restriction on Imports Based on the “Insufficiency” of Domestic
Production Is Inconsistent with Indonesia’s Obligations under Article XI:1 of the
GATT 1994 and Article 4.2 of the Agreement on Agriculture....................................... 105
1. Inconsistency with Article XI:1 of the GATT 1994 ................................................. 105
2. Inconsistency with Article 4.2 of the Agreement on Agriculture ............................. 108
G. Indonesia’s Limited Application Windows and Validity Periods Are Inconsistent
with Indonesia’s Obligations under the Import Licensing Agreement ........................... 109
1. The Limited Application Windows and Validity Periods Are Non-Automatic
Licensing Procedures ................................................................................................ 110
2. The Limited Application Windows and Validity Periods Are Inconsistent with
Article 3.2 of the Agreement on Import Licensing ................................................... 111
V. CONCLUSION .................................................................................................................... 113
Indonesia – Importation of Horticultural Products, U.S. First Written Submission
Animals, and Animal Products (DS477/DS478) November 13, 2015 – Page v

TABLE OF ACRONYMS
Acronym Full Name
API-P Producer Importer Identification Number
API-U Registered Importer Identification Number
BULOG Indonesian Bureau of Logistics
DGLAHS Directorate General of Livestock and Animal Health Services
DSU Dispute Settlement Understanding
GATT 1994 General Agreement on Tariffs and Trade 1994
HS Code Harmonized System Code
MOA Indonesian Ministry of Agriculture
MOT Indonesian Ministry of Trade
PI Producer Importer
RI Registered Importer
RIPH Horticultural Product Import Recommendation
UPP Trade Services Unit of the Ministry of Trade
WTO World Trade Organization
Indonesia – Importation of Horticultural Products, U.S. First Written Submission
Animals, and Animal Products (DS477/DS478) November 13, 2015 – Page vi

TABLE OF REPORTS
Short title Full Citation
Argentina – Hides and Panel Report, Argentina – Measures Affecting the Export of
Leather Bovine Hides and Import of Finished Leather,
WT/DS155/R and Corr.1, adopted 16 February 2001
Argentina – Import Appellate Body Reports, Argentina – Measures Affecting the
Measures (AB) Importation of Goods, WT/DS438/AB/R / WT/DS444/AB/R
/ WT/DS445/AB/R, adopted 26 January 2015
Argentina – Import Panel Reports, Argentina – Measures Affecting the
Measures (Panel) Importation of Goods, WT/DS438/R and Add.1 /
WT/DS444/R and Add.1 / WT/DS445/R and Add.1, adopted
26 January 2015, as modified (WT/DS438/R) and upheld
(WT/DS444/R / WT/DS445/R) by Appellate Body Reports
WT/DS438/AB/R / WT/DS444/AB/R / WT/DS445/AB/R
Brazil – Retreaded Tyres Panel Report, Brazil – Measures Affecting Imports of
(Panel) Retreaded Tyres, WT/DS332/R, adopted 17 December
2007, as modified by Appellate Body Report
WT/DS332/AB/R,
Canada – Provincial Liquor GATT Panel Report, Canada – Import, Distribution and
Boards (EEC) Sale of Certain Alcoholic Drinks by Canadian Provincial
Marketing Agencies, L/6304, adopted 22 March 1988
Canada – Periodicals Panel Report, Canada – Certain Measures Concerning
(Panel) Periodicals, WT/DS31/R and Corr.1, adopted 30 July 1997,
as modified by Appellate Body Report WT/DS31/AB/R
Chile – Price Band System Appellate Body Report, Chile – Price Band System and
(AB) Safeguard Measures Relating to Certain Agricultural
Products, WT/DS207/AB/R, adopted 23 October 2002
Chile – Price Band System Appellate Body Report, Chile – Price Band System and
(Article 21.5 – Safeguard Measures Relating to Certain Agricultural
Argentina)(AB) Products – Recourse to Article 21.5 of the DSU by
Argentina, WT/DS207/AB/RW, adopted 22 May 2007
China – Raw Materials (AB) Appellate Body Reports, China – Measures Related to the
Exportation of Various Raw Materials, WT/DS394/AB/R /
WT/DS395/AB/R / WT/DS398/AB/R, adopted 22 February
2012
Indonesia – Importation of Horticultural Products, U.S. First Written Submission
Animals, and Animal Products (DS477/DS478) November 13, 2015 – Page vii

China – Raw Materials Panel Reports, China – Measures Related to the Exportation
(Panel) of Various Raw Materials, WT/DS394/R, Add.1 and Corr.1
/ WT/DS395/R, Add.1 and Corr.1 / WT/DS398/R, Add.1
and Corr.1, adopted 22 February 2012, as modified by
Appellate Body Reports WT/DS394/AB/R /
WT/DS395/AB/R / WT/DS398/AB/R
Colombia – Ports of Entry Panel Report, Colombia – Indicative Prices and Restrictions
on Ports of Entry, WT/DS366/R and Corr.1, adopted 20 May
2009
Dominican Republic – Panel Report, Dominican Republic – Measures Affecting the
Import and Sale of Importation and Internal Sale of Cigarettes, WT/DS302/R,
Cigarettes (Panel) adopted 19 May 2005, as modified by Appellate Body
Report WT/DS302/AB/R
EC – Bananas III (AB) Appellate Body Report, European Communities – Regime
for the Importation, Sale and Distribution of Bananas,
WT/DS27/AB/R, adopted 25 September 1997
EC – Chicken Cuts (AB) Appellate Body Report, European Communities – Customs
Classification of Frozen Boneless Chicken Cuts,
WT/DS269/AB/R, WT/DS286/AB/R, adopted 27
September 2005, and Corr.1
EC – Poultry (AB) Appellate Body Report, European Communities – Measures
Affecting the Importation of Certain Poultry Products,
WT/DS69/AB/R, adopted 23 July 1998
EC – Seal Products (Panel) Panel Reports, European Communities – Measures
Prohibiting the Importation and Marketing of Seal
Products, WT/DS400/R / WT/DS401/R / and Add. 1,
adopted 18 June 2014, as modified by Appellate Body
Reports, WT/DS400/AB/R / WT/DS401/AB/R
EEC – Minimum Import GATT Panel Report, EEC – Programme of Minimum
Prices (GATT Panel Report) Import Prices, Licenses, and Surety Deposits for Certain
Processed Fruits and Vegetables, BISD 25S/68, adopted 18
October 1978
EEC – Oilseeds I (GATT GATT Panel Report, European Economic Community –
Panel Report) Payments and Subsidies Paid to Processors and Producers
of Oilseeds and Related Animal-Feed Proteins, L/6627,
adopted 25 January 1990
Indonesia – Importation of Horticultural Products, U.S. First Written Submission
Animals, and Animal Products (DS477/DS478) November 13, 2015 – Page viii

India – Autos (Panel) Panel Report, India – Measures Affecting the Automotive
Sector, WT/DS146/R, WT/DS175/R, and Corr.1, adopted
5 April 2002
India – Quantitative Panel Report, India – Quantitative Restrictions on Imports
Restrictions (Panel) of Agricultural, Textile and Industrial Products,
WT/DS90/R, adopted 22 September 1999, upheld by
Appellate Body Report WT/DS90/AB/R
Japan - Leather II (US) GATT Panel Report, Panel on Japanese Measures on
(GATT Panel Report) Imports of Leather, L/5623, adopted 15 May 1984, BISD
31S/94
Japan – Semi-Conductors GATT Panel Report, Japan - Trade in Semi-Conductors,
(GATT Panel Report) L/6309- 35S/116, adopted 4 May 1988
Korea – Various Measures Panel Report, Korea – Measures Affecting Imports of Fresh,
on Beef (Panel) Chilled and Frozen Beef, WT/DS161/R, WT/DS169/R,
adopted 10 January 2001, as modified by Appellate Body
Report WT/DS161/AB/R, WT/DS169/AB/R
Peru – Agricultural Appellate Body Report, Peru – Additional Duty on Imports
Products (AB) of Certain Agricultural Products, WT/DS457/AB/R and
Add.1, adopted 31 July 2015
Turkey – Rice Panel Report, Turkey – Measures Affecting the Importation
of Rice, WT/DS334/R, adopted 22 October 2007
US – Gasoline (AB) Appellate Body Report, United States – Standards for
Reformulated and Conventional Gasoline, WT/DS2/AB/R,
adopted 20 May 1996
US – Poultry (China) Panel Report, United States – Certain Measures Affecting
Imports of Poultry from China, WT/DS392/R, adopted
25 October 2010
US – Shrimp (Panel) Panel Report, United States – Import Prohibition of Certain
Shrimp and Shrimp Products, WT/DS58/R and Corr.1,
adopted 6 November 1998, as modified by Appellate Body
Report WT/DS58/AB/R
Indonesia – Importation of Horticultural Products, U.S. First Written Submission
Animals, and Animal Products (DS477/DS478) November 13, 2015 – Page ix

TABLE OF JOINT EXHIBITS
JE
Description Short Title
No.
JE-1 Law of the Republic of Indonesia Number 13 of 2010 Concerning Horticulture
Horticulture Law
JE-2 Law of the Republic of Indonesia Number 18 of 2012 Concerning Food Law
Food
JE-3 Law of the Republic of Indonesia Number 19 of 2013 Concerning Farmers Law
Protection and Empowerment of Farmers
JE-4 Law of the Republic of Indonesia Number 18 of 2009 on Animal Animal Law
Husbandry and Animal Health
JE-5 Law of the Republic of Indonesia Number 41 of 2014 Concerning Animal Law
Amendment of Law Number 18 of 2009 Concerning Husbandry and Amendment
Animal Health,
JE-6 Regulation of the Minister of Trade Number 30/M-DAG/PER/5/2012 MOT 30/2012
Concerning Provisions on the Import of Horticultural Products, May
7, 2012
JE-7 Regulation of the Minister of Trade Number 60/M- MOT 60/2012
DAG/PER/9/2012, Concerning Second Amendment of Regulation of
the Minister of Trade Number 30/M-DAG/PER/5/2012, Sept. 21,
2012
JE-8 Regulation of the Minister of Trade Number 16/M-DAG/PER/4/2013 MOT 16/2013
Concerning Provisions on the Import of Horticultural Products, Apr.
22, 2013
JE-9 Regulation of the Minister of Trade Number 47/M-DAG/PER/8/2013 MOT 47/2013
Concerning Amendment of Regulation of the Minister of Trade
Number 16/M-DAG/PER/4/2013, Aug. 30, 2013
JE-10 Regulation of the Minister of Trade Number 16/M-DAG/PER/4/2013 MOT 16/2013
Concerning Provisions on the Import of Horticulture Products, as as amended
amended by Regulation of the Minister of Trade Number 47/M- by MOT
DAG/PER/8/2013 Concerning Amendment of Regulation of the 47/2013
Minister of Trade Number 16/M-DAG/PER/4/2013
JE-11 Regulation of the Minister of Trade Number 40/M-DAG/PER/6/2015 MOT 40/2015
Concerning Second Amendment to Regulation of the Minister of
Trade Number 16/M-DAG/PER/4/2013, June 10, 2015