Indonesia Hit by US Anti-Subsidy Duties & Loses WTO Appeal
In a final ruling, released overnight (09/11), the US Commerce Department set anti-subsidy rates in the range of 34.45 - 64.73 percent for palm oil-based biodiesel imports that originate from Indonesia. This final ruling was slightly lighter than the preliminary 41.06 - 68.28 percent range that was set in August 2017.
The issue started when US biodiesel producers complained about - what is in their eyes - the dumping of biodiesel on the US market by Indonesian and Argentinean biodiesel exporters. These exporters, allegedly, even sell their biodiesel products below the market value.
Indonesian exporters are able to sell cheap palm oil-based biodiesel on the US market because the Indonesian government subsidizes the production of biodiesel through its B10, B15, and B20 biodiesel programs. Through these government subsidized programs, diesel is blended with a mandatory amount of fatty acid methyl ester (derived from palm oil). These program aim at limiting imports of fuel into Indonesia.
However, the Trade Ministry of Indonesia had earlier emphasized that the biodiesel subsidy program is only meant for biodiesel that is sold on the domestic market of Indonesia, not on overseas markets.
Meanwhile, the final duties for soy-based biodiesel from Argentina were set in the range of 71.45 - 72.28 percent, higher than the preliminary countervailing rates that were set in August 2017. Although most stakeholders had expected these tough rates, it still managed to push soy oil futures to a two-month high. The government of Argentina said it may take the dispute to the World Trade Organization (WTO).
On the same day (09/11) Indonesia lost an appeal ruling at the WTO in a dispute with, again, the USA and New Zealand over restrictions on imports of food and animal products.
Indonesia had been setting import barriers on various food and animal products (such as meat and poultry) from both New Zealand and the USA due to health concerns, halal food standards, and to deal with a temporary surplus on the domestic market.
New Zealand and the USA brought the case to the WTO panel claiming Indonesia's move was a violation of their trade agreements. In December 2016, a panel of adjudicators faulted Indonesia, which made Indonesia appeal.