The Indonesian government claims that the European Union’s anti-dumping duties on certain Indonesian stainless steel products have had a serious impact on its exports, Reuters reported yesterdayshortly after Jakarta filed its complaint with the World Trade Organization (WTO).
In a brief statement last week, the world trade body Announced that Indonesia had requested dispute consultations with the EU “regarding EU anti-dumping and countervailing duties imposed on imports of stainless steel cold rolled flat products from Indonesia”.
Last year, the European bloc imposed a 21% countervailing duty on imports of Indonesian stainless steel cold-rolled flat products, on top of the anti-dumping duties imposed in November 2021, which ranged from 10.2% and 20.2%.
In an interview with the Reuters news agency, Djatmiko Bris Witjaksono, a senior official at Indonesia’s Ministry of Commerce, offered some context for Indonesia’s complaint to the WTO, alleging that the combined impact of the tariffs had affected Indonesia’s steel exports to the EU. He said these had dropped from around $500 million before the implementation of the antidumping duties to around $40 million in January-November last year.
Echoing Indonesia’s complaint to the WTO, he said the introduction of these anti-dumping duties was “not in line with WTO rules” and had “reduced the competitiveness of Indonesian products”.
The dispute is not the only trade-related, or steel-related, dispute between the two nations. In late 2019, the EU filed a complaint with the WTO over Indonesia’s ban on exporting raw nickel. claiming that restrictions on the export of raw materials were unfairly hurting its own stainless steel industry.
Indonesia, formerly the world’s largest exporter of nickel ore, announced the ban in a few months, in addition to other restrictions, in order to encourage downstream investment in nickel and steel processing. This ban apparently led the EU to introduce its countervailing duties on steel imports from Indonesia.
In addition to steel, there are other points of tension in the commercial relationship. Indonesian officials have been particularly affected by a recently passed EU law that could strictly regulate the sale of palm oil, one of the country’s main agro-industrial exports. The regulation, approved in December, “will ensure that a set of key goods placed on the EU market no longer contribute to deforestation and forest degradation in the EU and in other parts of the world.” Indonesia was so concerned about the new law that joined forces with Malaysia to lobby against the proposed regulatory changes.
This came after Indonesia filed a complaint with the WTO in 2019 for the EU Renewable Energy Directive IIapproved the previous year, which states that biofuel produced from palm oil will not count as green fuel and will therefore be phased out under the bloc’s new renewable energy targets.
While the EU claims that the disputes involve the proper implementation of the neutral rules of the global trading system, the Indonesian government sees the issue of trade in more outwardly historical and political terms. In December, when President Joko Widodo announced that Indonesia would appeal the WTO ruling on Indonesia’s nickel export ban, framing it as a case of Western hypocrisy and his own nation’s struggle for economic self-determination. “If we are afraid of being sued and we step back, we will not be a developed country,” Jokowi said.
Needless to say, these various trade frictions have slowed to a stop in the negotiations on a free trade agreement between the EU and Indonesia. As William Yuen Yee noted in The Diplomat In November, since official negotiations on the free trade pact began in July 2016, 11 rounds of talks have taken place, but, like the last WTO trade round, it has run aground on the banks of arena of conflicting national and regional interests.
In principle, none of these disputes is irresolvable. However, given the number of flash points and the extent to which they reflect deeper historical divergences between the post-colonial world and the advanced economies of the West, it is hard to see Brussels and Jakarta concluding a free trade agreement at any point. early.