U.S., New Zealand launch challenge to Indonesian import barriers

The United States and New Zealand on Wednesday challenged Indonesia's import restrictions on food and other farm products, saying barriers to goods ranging from potatoes to poultry breached international trade obligations.

Their request for a World Trade Organization dispute settlement panel to look at the import barriers kicks off a process that could lead to sanctions.

"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(by population), Indonesia," U.S. Trade Representative Michael Froman said at the announcement, flanked by New Zealand Trade Minister Tim Groser and U.S. lawmakers.

Groser said agricultural market access was critical for New Zealand. The country's agricultural exports totaled NZ$31.9 billion in 2014 ($23.84 billion) -- equivalent to 15 percent of U.S. agricultural exports, although its economy is only just over 1 percent the size of the U.S. economy.

"Agricultural exports are the lifeblood of our economy," Groser said.

The import restrictions cover products such as apples, grapes, potatoes, onions, flowers, juice, dried fruit, cattle, chicken and beef, the U.S. trade office said.

A U.S. official said licensing requirements had the effect of limiting the amount of imports through restrictions on the time when certain products can be imported, their pricing and quantity. U.S. exports to Indonesia fell when the measures were introduced in 2011, and had remained at lower levels since.

Nearly $200 million worth of U.S. exports to Indonesia were affected by import licensing regimes in 2014, including $122 million of fruit and vegetables, and other horticultural products. Exports of similar produce to Malaysia were worth $6 million more, although Indonesia's population is more than eight times bigger than Malaysia's, the trade office said.

It is the fifth WTO case the United States has brought against Indonesia, and New Zealand's second. Indonesia also has two cases against the United States.