JAKARTA, KOMPAS — Indonesia’s biodiesel exports to the United States has declined and are threatened to stop altogether. This occurred after the US Department of Commerce (USDOC) decided to impose an countervailing duty of 34.45 percent - 64.73 percent on Indonesian biodiesel.
The government considers the US Department of Commerce’s decision to be overprotective and has asked the US to review it.
In a press release on Sunday (19/11), the Trade Ministry noted that 2016 biodiesel exports to the US was US$255.56 million and contributed to 89.19 percent of total biodiesel exports. However, Indonesia’s biodiesel exports to the US have stopped completely in 2017 because of this subsidy allegation.
Trade Minister Enggartiasto Lukita said the USDOC’s decision of was single-handed. The government is committed to defend itself from the subsidy allegation. Indonesia had asked the US to review its decision and respect the cordial relations of the two countries under the spirit of free and fair trade.
“We will challenge it through the US Supreme Court and the dispute settlement body of the World Trade Organization,” he said.
The US International Trade Commission (USITC) was assessing the alleged losses incurred by US industries due to biodiesel imports from Indonesia and Argentina. If the loss was confirmed, the USDOC would instruct US Customs and Border Protection to impose an import tax. If there was no loss, the investigation would be closed. The USITC’s final decision will be issued on Dec. 21, 2017.
“If the US’s final decision and method of calculation is not consistent with the WTO agreement on subsidies and subsidy countervailing measures, we will consider evaluating all imports to Indonesia from the US,” Enggartiasto said.
On Nov. 9, 2017, the USDOC decided to impose a countervailing duty of 34.45 percent-64.73 percent on Indonesian biodiesel. The USDOC also imposed the same duty of 71.45 percent-72.28 percent on Argentinian biodiesel.
Indonesian Biofuel Producers Association (Aprobi) chairman Paulus Tjakrawan said the US had imposed two types of import duties on Indonesian biodiesel, one related to the subsidy allegation and the other related to dumping allegation.
Domestic consumption
At the moment, Indonesia’s installed biodiesel capacity is around 12 million kiloliters per year. OF that volume, around 3 million kiloliters, or 25 percent, is for domestic consumption. “We need to export. Otherwise, the industry performance will be low and will affect efficiency, price and manpower,” he said.
Indonesian Oil Palm Association (GAPKI) executive director Fadhil Hasan said the US import duty was too high. It would make Indonesia less competitive compared to other biodiesel producers of sunflower and soybean oils.
Meanwhile, the growth of salmon consumption in Indonesia has increased the growth of Indonesia-Norway trade. In 2016, Norway’s export value to Indonesia was $223 million, an annual increase of 39 percent, while Indonesian exports to Norway increased 10 percent to $174 million.
“The Indonesian people’s high interest in seafood, particularly salmon, and in Japanese food, has raised demand for salmon in the past few years,” Indonesia Norway Business Council chairman Per Fredick Ecker said during last week’s Seafood Extravaganza event in Jakarta.
(HEN/ARN)
