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Indonesia Revises Unfair Regulation, Reducing Trade Barrier for US Dairy

Sep 05, 2018

Indonesia has revised language on its regulation that caused an unfair trade barrier for U.S. dairy exporters, according to a new U.S. Department of Agriculture GAIN report.

The report states that Indonesia’s “Ministry of Agriculture (MOA) recently further revised a regulation that had required local dairy processors and dairy product importers to form partnerships with local dairy producers. This most recent revision eliminates all language making the partnerships compulsory, deletes previously required reporting requirements, and removes all remaining sanctions associated with non-compliance.”

The move is expected to help ease dairy trade to the country, where U.S. exporters shipped $133 million worth of dairy products last year.

Indonesia’s regulation previously mandated that U.S. dairy companies buy local milk or invest in local on-farm dairy production activities. As a condition for obtaining approval to import dairy products, the regulation required local milk processors to procure local milk and required dairy product importers to fund activities to promote milk consumption. The language of the regulation was vague and the penalty for failing to comply included withholding import recommendations.

Although the revised language removes mandatory requirements, the MOA has publicly stated that it will “encourage” these partnerships with local dairy producers. IDFA members should engage with their importers on this issue to avoid trade disruptions.

Members with questions may contact Beth Hughes, IDFA senior director of international affairs, at bhughes@idfa.org.

 
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