NZ fighting Indonesia trade curbs

NZ has a free-trade agreement with Indonesia through its combined FTA with Australia and the Association of Southeast Asian Nations, which came into force in 2010. Photo / Richard Robinson

New Zealand is prepared to fight for "the principles of trade" in its beef battle with Indonesia, says our ambassador to the Southeast Asian nation.

This year, NZ and the US requested that a World Trade Organisation dispute settlement panel assess the import restrictions that led to a collapse in Kiwi beef exports to the world's most populous Muslim nation.

Indonesia, which was previously New Zealand's second-biggest beef export market, introduced the restrictions in 2011 as part of a programme aimed at becoming self-sufficient in a number of agricultural products.

The non-tariff barrier saw the value of New Zealand beef and offal exports slump to $48.8 million in 2012 from $185 million in 2010.

Exports recovered last year following relaxation of the import quotas, but a subsequent resumption of restrictions resulted in New Zealand beef exports tumbling to only 28 tonnes in January this year compared with 2269 tonnes in the same month a year earlier, according to Meat Industry Association figures.

"We're prepared to fight for what we think are the principles of trade," said ambassador to Indonesia Trevor Matheson. "These are not just principles that we have chosen out of the sky - these are principles that Indonesia accepted by becoming a member of the WTO."

NZ has a free-trade agreement with Indonesia through its combined FTA with Australia and the Association of Southeast Asian Nations, which came into force in 2010.

The import restrictions have hit the wallets of Indonesian consumers.

"The price of beef here is double the world price," Matheson said. "We've made those representations to Indonesian ministers and officials that it's hard to understand how such policies benefit their own people."

Indonesian Trade Minister Rachmat Gobel lost the portfolio this month after outrage over the price spike. His successor, Thomas Lembong, has indicated beef imports could rise, but only "if necessary".

New Zealand's Trade Commissioner in Jakarta, Tim Anderson, said previously strong exports of beef offal products to Indonesia had been a "game-changer" for Kiwi exporters. However, the import restrictions had made companies wary of the country, he said. New Zealand exports to Indonesia were worth $886 million in 2013.

• Christopher Adams is being hosted in Indonesia by the Asia New Zealand Foundation.