Winning At WTO, Indonesia Urges EU To Remove Biodiesel Imports

Biodiesel (Photo: Unsplash)

JAKARTA - Indonesia won in a biodiesel dispute against the European Union (EU) in the World Trade Organization (WTO). The decision opens up opportunities to urge the EU to remove fees or countervaliding duties for biodiesel products from Indonesia.

For your information, on Friday, August 22, WTO announced that the EU had acted inconsistently against the provisions of the WTO Agreement on Subsidies and Countervailing Measures (WTO ASCM) or the WTO Subsidy and Anti-Subsidy Agreement on a number of key aspects.

With the WTO decision, the Indonesian Minister of Trade Budi Santoso urged the EU Government to immediately revoke the import duty on Indonesian biodiesel products.

Furthermore, Budi also revealed, WTO also stated that the policy of imposition of rewards by the EU Commission violated the WTO Subsidy and Anti-Subsidy Agreement.

"This victory proves that the Government of Indonesia consistently adheres to international trade rules without imposing a distorted trade policy for international trade, as alleged by the EU. We urge the EU to immediately revoke the import duty that is not in accordance with WTO rules," Budi said in an official statement, written Tuesday, August 26.

Budi also said that this victory was the result of close cooperation between the government, the private sector, and international law experts in Indonesia. He considered, this proves that Indonesia is able to compete fairly in the global market and is ready to defend its national interests through the WTO mechanism.

Kemenangan ini juga merupakan bukti bahwa WTO masih relevan sebagai forum penyelesaian perairan perdagangan. Pemerintah Indonesia mengharapkan penguatan Badan Pengketa WTO dan meminta seluruh Anggota WTO mengajak kepada sistem perdagangan multilateral yang berbasis (rule-based) di tengah ketidakpastian global, ujar Budi.

For your information, the WTO panel for trade disputes against the European Union (EU) related to the application of customs or countervaliding duties on imports of biodiesel products from Indonesia, or known as Dispute DS618 consists of representatives from South Africa, Mexico, and Belgium.

Budi detailed a number of key aspects of Indonesia's victory in DS618. First, the WTO Panel rejected EU arguments claiming the Indonesian government directed business actors to sell palm oil to biodiesel producers at low prices.

The EU Commission argued, continued Budi, that subsidies were in the form of direction and orders from the Indonesian Government to business actors in the palm oil sector aimed at providing raw materials at prices that benefit Indonesian biodiesel producers.

Second, the WTO Panel assessed that the Government of Indonesia's policy regarding export duties and export levies for palm oil could not be categorized as a form of subsidy.

Third, the WTO Panel stated that the EU Commission failed to prove the threat of material losses experienced by biodiesel producers in Europe due to Indonesia's biodiesel exports. Moreover, the European Commission is considered to ignore other factors that also affect the dynamics of the biodiesel market in the region.

"Thus, the WTO Panel considers that the import duty imposed by the EU on Indonesian biodiesel products is not based on objective evidence," said Budi.

Meanwhile, the Secretary General of the Indonesian Ministry of Trade, Isy Karim, emphasized that the Indonesian government is committed to continuing to cooperate with all parties to ensure fair and balanced trade.

"We hope that the EU can respect the WTO decision and immediately take the necessary steps to adjust its policies, so that Indonesia can restore the export performance of biodiesel products to the EU," said Isy.

Isy said the Ministry of Trade would use all available diplomatic and legal instruments to ensure that victory at the WTO level was implemented in real terms by the EU.

"We are committed to continuing to support the national biodiesel industry and ensuring fair market access for Indonesian products at the global level," concluded Isy.