Indonesia seeks suspension of concessions to the EU at the WTO over palm oil

Jakarta (ANTARA) - The Indonesian government has submitted a request for the suspension of concessions or other obligations directed at the European Union to the World Trade Organization’s Dispute Settlement Body (DSB) following the EU’s failure to meet its obligations regarding palm oil.

Trade Minister Budi Santoso said the move was taken after the EU did not meet the deadline to adjust its policy or fully comply with the ruling and recommendations of the WTO Panel on Palm Oil Dispute (DS593: EU-Palm Oil).

‘The suspension of concessions will be focused on the goods sector, but open to other sectors. We will ensure losses are calculated carefully and the case is handled effectively in parallel while preserving bilateral relations with the EU,’ said Budi in a statement in Jakarta on Saturday.

He said the concession suspension step is necessary and in line with Article 22.2 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU WTO), after the EU failed to meet its obligations to adjust its palm oil policy based on the ruling and recommendations of the Palm Oil Dispute Panel.

Additionally, the EU could not provide proportionate compensation to Indonesia for not fulfilling the WTO obligation.

‘Indonesia can apply for the DSB’s authority to suspend concessions with the aim of protecting Indonesia’s rights in the future should the EU fail to comply with the WTO Panel’s ruling,’ Budi said.

He added that the government’s move has been coordinated across government ministries and received support from business actors, including the Indonesian Palm Oil Entrepreneurs Association (GAPKI) and the Indonesian Biofuel Producers Association (APROBI).

According to him, the losses calculated are very large for business players annually due to the loss of potential export value.