Indonesia Mulls Shifting from EU to Australia for Dairy Imports
Jakarta. Indonesia is mulling cutting down on its dairy imports from Europe as the over-controlling European Union (EU) retaliates against Jakarta’s appeal over a nickel lawsuit at the World Trade Organization (WTO).
The Southeast Asian country is also eyeing close neighbor Australia to replace the European dairy, according to Chief Investment Minister Luhut Binsar Pandjaitan.
The EU not long ago launched a consultation over what it called the Enforcement Regulation after Indonesia appealed a WTO ruling on nickel that was in Europe’s favor. The EU will ask for inputs from private stakeholders affected by Indonesia’s nickel ore export ban. Depending on the results of the consultation, the EU may propose countermeasures such as duties or quantitative restrictions on imports/exports.
"Developing countries have a right to enjoy the added value of their natural resources," Luhut told B Universe reporters shortly after attending the Investor Daily Roundtable in Jakarta on Monday evening.
“If the EU retaliates, we will shift our dairy imports to Australia. Be it milk, cheese and even wine. Why do we have to import from Europe alone? We have the right to survive. So don’t dictate us,” Luhut said.
Luhut even called the EU unfair for opposing Indonesia’s nickel ore restrictions.
“The European Parliament recently came to me. So I asked them ‘why do you retaliate against us?',” Luhut said, while adding that the EU only represents 1 percent of Indonesia’s nickel ore export markets.
“It is a matter of survival for us,” Luhut said.
Indonesia banned the export of unprocessed nickel ores in 2020. The nickel-rich country intends to refine the mineral domestically for greater added value. The EU filed a lawsuit against Indonesia amidst concerns that the ban could take a toll on Europe’s stainless steel production. The WTO, however, backed the EU, although Indonesia immediately appealed the ruling. As a counterattack, the EU held consultations on the enforcement of regulation.
“This step [or the consultation] was taken after Indonesia appealed the WTO Panel Report on the matter –which was favorable to the EU– to a non-functional Appellate Body, thus effectively blocking the final and binding resolution of the dispute through the WTO,” an article posted on the European Commission's official website reads.
The European Commission data shows that the EU exported 5,343 tons of butter to Indonesia last year. Indonesia shipped in around 42,926 tons of skim milk powder from Europe. According to a Dairy Australia report, Indonesia became the destination for almost 54,000 tons of Australian dairy products worth almost $192 million (in 2021/22).