TEMPO.CO, Jakarta - Economist from the University of Indonesia Fithra Faisal Hastiadi said that the government should have prepared an early anticipation measure after applying its 18 non-tariff restrictions on animal and horticulture imports, which caused Indonesia to lose a dispute with the United States at the World Trade Organization (WTO).
“The existing argument had always been about protecting local products,” said Fithra on Tuesday, August 8. However, he regrets that the protectionist policy was not followed with a clear duration on the policy’s validity period.
As previous reports suggest, the US and New Zealand took issue with these 18 restrictions especially in the rules in the trade sector under Trade Minister’s Decree No. 16/2013 on horticulture imports and Trade Minister’s Decree No. 46/2013 on imports and exports of animal products.
The United States and New Zealand asked the World Trade Organisation to let it impose sanctions on Indonesia, and as of December 23, 2016, which Indonesia lost and the appeal that followed.
Fithra said that Indonesia should have started to reduce its imports from both countries since the issuance of the 18 policies. He views that Indonesia is still dependent towards two of the aforementioned countries for horticulture and animal products since the government failed to massively improve its working mechanism in the two trade sectors.
He deemed Indonesia was too confident at the WTO ruling while experiencing a trade surplus with the United States, which had already tried to reduce the amount exports despite in small numbers, “They hit everything hard,” said Fithra.