Indonesia challenges EU over duties at WTO

Reuters News
Posted: Jul 30, 2012 11:58 AM
Indonesia challenges EU over duties at WTO

By Tom Miles

GENEVA (Reuters) - Indonesia went to the World Trade Organization on Monday to overturn anti-dumping duties imposed by the European Union in its first such complaint against the bloc since winning a WTO court challenge against the United States.

Indonesia wants to overturn EU anti-dumping duties on imports of Indonesian fatty alcohols, which are used in the chemicals industry, the WTO said. Such duties are imposed when a country thinks imports are priced at an unfair discount.

By demanding "consultations" with the EU, Indonesia has triggered the first stage in a trade dispute, which may escalate into an adjudication battle if not resolved within 60 days.

The case is the latest in a series of challenges in which big developing economies are hitting back at assertions that their exports are unfairly priced or subsidized. India, China and Brazil have all initiated disputes in the past four months.

Indonesia's last involvement in litigation ended in April when it won an appeal against a U.S. ban on the sale of clove-flavored cigarettes, most of which come from Indonesia, as well as other flavors such as cherry and cinnamon.

The U.S. law, which was intended to stop children smoking, was found to be discriminatory because it did not also target menthol cigarettes.

Indonesia has not been on the receiving end of trade litigation since 1996, the year after the WTO was created. But its own trade practices have come increasingly under fire, with the United States blaming it this year for putting up barriers to imports and Japan angry at its curbs on metals exports.

Both those countries, and the EU, have also raised questions in WTO committee meetings about Indonesia's "local content" rules for investments in telecoms and the energy sector, which they say unfairly discriminate against foreign firms.

Such questions sometimes escalate into trade disputes if not resolved by the answers raised in committee sessions, and if the complainants feel the WTO litigation system gives them a good chance of winning the dispute.

(Reporting by Tom Miles; Editing by Michael Roddy)