Hostname: page-component-78c5997874-j824f Total loading time: 0 Render date: 2024-11-13T07:52:45.357Z Has data issue: false hasContentIssue false
  • English
  • Français

Indonesia–Chicken: Tensions between International Trade and Domestic Food Policies?

Published online by Cambridge University Press:  05 April 2019

BORIS RIGOD  and
PATRICIA TOVAR
BORIS RIGOD*
Affiliation:
Hausfeld
PATRICIA TOVAR*
Affiliation:
Pontificia Universidad Católica del Perú
*
*Email: Boris.Rigod@hausfeld.com
**Email: ptovar@pucp.pe
Get access Rights & Permissions [Opens in a new window]

Abstract

This paper analyzes the dispute Indonesia – Measures Concerning the Importation of Chicken Meat and Chicken Products from a legal-economic perspective. We evaluate alternative explanations for the motive behind Indonesia's import restrictions and conclude that they can be linked to protectionist political-economic motives and are most likely due to a self-sufficiency objective and the legal requirements attached to it. Economically, the import restrictions on chicken and other food products have led to substantial price volatility, and they impose costs on Indonesian consumers and small farmers who are net buyers of food, firms that import certain raw materials, as well as foreign exporters. Therefore, by making food more expensive and less accessible, they could reduce food security. We also argue that an additional issue with the goal of self-sufficiency in Indonesia is lack of comparative advantage in some food items, including chicken meat and chicken products. Legally, although the Panel highlighted that self-sufficiency is a legitimate policy objective that as such does not lead to a violation of WTO law, the Indonesia–Chicken case leads to the question of whether, in practice, it is feasible to implement a self-sufficiency target resorting only to WTO-compliant policies. Finally, we discuss potential alternative economic policies and examine whether Indonesia could have attained its food self-sufficiency objective in a WTO-consistent manner.

Type
Original Articles
Information
World Trade Review , Volume 18 , Issue 2 , April 2019 , pp. 219 - 243
Copyright
Copyright © Boris Rigod and Patricia Tovar 2019 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

We thank Juan Martín Mesía for excellent research assistance, and Robert Howse and participants at the WTO Case Law of 2017 Conference for comments.

References

Ahn, D. and Gnutzmann-Mkrtchyan, A. (2019), ‘Indonesia – Import Licensing Regimes: GATT Rules for Agricultural Trade?’, World Trade Review, forthcoming.Google Scholar
APEC Business Advisory Council (2016), ‘Non-Tariff Barriers in Agriculture and Food Trade in APEC: Business Perspectives on Impacts and Solutions’, University of Southern California, www.ncapec.org/docs/ABAC%20Documents/2016%20ABAC%20USC%20Marshall%20School%20-%20Non-Tariff%20Barriers%20in%20Agriculture%20and%20Food%20Trade.pdf.Google Scholar
Clapp, J. (2014), ‘Trade Liberalization and Food Security: Examining the Linkages’, Geneva: Quaker United Nations Office.Google Scholar
Clapp, J. (2017), ‘Food Self-Sufficiency: Making Sense of It, and When It Makes Sense’, Food Policy, 66: 88–96.Google Scholar
Coxhead, I. (2010), ‘Consequences of a Food Security Strategy for Economic Welfare, Income Distribution and Land Degradation: The Philippine Case’, Department of Agricultural and Applied Economics, University of Wisconsin-Madison, mimeo.Google Scholar
De Schutter, O. (2011), ‘The World Trade Organization and the Post-Global Food Crisis Agenda: Putting Food Security First in the International Trade System’, Activity Report of the UN Special Rapporteur on the Right to Food.Google Scholar
Evenett, S. (2014), The Global Trade Disorder: The 16th GTA Report, London: CEPR Press.Google Scholar
FAO (1996), ‘Implications of Economic Policy for Food Security: A Training Manual’, FAO Corporate Document Repository.Google Scholar
FAO (2006), ‘Food Security’, FAO Policy Brief Issue 2, June 2006.Google Scholar
FAO (2015–2016), ‘Food Self-sufficiency and International Trade: A False Dichotomy?’, The State of Agricultural Commodity Markets IN DEPTH, December.Google Scholar
FAO (2017), ‘Livestock Primary: Meat, Chicken’, FAOSTAT, www.fao.org/faostat/en/#data/QL (accessed April 2018).Google Scholar
FAO (2018), ‘Meat Consumption – Poultry Meat’, OECD Data, https://data.oecd.org/agroutput/meat-consumption.htm (accessed April 2018).Google Scholar
Feichtner, I. (2009), ‘The Waiver Power of the WTO: Opening the WTO for Political Debate on the Reconciliation of Competing Interests’, European Journal of International Law, 20: 615–645.Google Scholar
Galero, S., So, S., and Tiongco, M. (2014), ‘Food Security versus Rice Self-Sufficiency: Policy Lessons from the Philippines’, De la Salle University, mimeo.Google Scholar
GATT (1990), GATT Panel Report, US – Sugar Waiver, BISD 37S/228, adopted 7 November 1990.Google Scholar
Handley, K. and Limão, N. (2015), ‘Trade and Investment under Policy Uncertainty: Theory and Firm Evidence’, American Economic Journal: Economic Policy, 7(4): 189–222.Google Scholar
Hoering, U. (2013), ‘Alternatives to Food Import Dependency’, FDCL Policy Paper, May, FDCL-Verlag, Berlin.Google Scholar
Limenta, M. E. and Chandra, S. (2017), ‘Indonesian Food Security Policy’, Indonesian Law Review, 2: 245–265.Google Scholar
Ministry of Agriculture and Forests in Bhutan (2010), ‘Food Security and Food Self-Sufficiency in Bhutan’, IFPRI, August.Google Scholar
Nunzio, J. (2013), ‘Hungry Neighbours? Indonesia's Food Strategy and Water Security Future’, Future Directions International, November.Google Scholar
OECD (2012), ‘OECD Review of Agricultural Policies: Indonesia 2012’, OECD Publishing. http://dx.doi.org/10.1787/9789264179011-en.Google Scholar
OECD (2016), ‘OECD Agriculture Policy Monitoring and Evaluation’, http://www.oecd.org/tad/agricultural-policies/agriculture-policy-monitoring-flyer-2016.pdf.Google Scholar
Orissa International (2017), ‘Poultry Sector in South East Asia’, mimeo.Google Scholar
Organization for Communication and Social Projects (OCSP) (2016), ‘Brazil's Poultry Industry’, Monitor, 2.Google Scholar
Pratt, Naomi (2016), ‘Environmental Impacts of Food: Transport’, The Ecotarian, 8 May, http://the-ecotarian.com/stories/2016/2/26/environmental-impacts-of-food-2-transport.Google Scholar
Roberts, T. (2017), ‘The Local Food Movement as a Catalyst for Community’, Permaculture Research Institute, 22 August, https://permaculturenews.org/2017/08/22/local-food-movement-catalyst-community/.Google Scholar
Rosenthal, E. (2008), ‘Environmental Cost of Shipping Groceries Around the World’, New York Times, 26 April.Google Scholar
Staiger, R. and Sykes, A. O. (2011), ‘International Trade, National Treatment and Domestic Regulation’, Journal of Legal Studies, 40: 149–203.Google Scholar
USAID (2013), ‘Indonesia's Poultry Value Chain: Costs, Margins, Prices and other Issues’, mimeo.Google Scholar
USDA Foreign Agricultural Service (2017), ‘Voluntary Poultry Report’, Global Agricultural Information Network, Report No. 1701, January.Google Scholar
Valdes, C., Hallahan, C., and Harvey, D. (2015), ‘Brazil's Broiler Industry: Increasing Efficiency and Trade’, International Food and Agribusiness Management Review, 18: 263–275.Google Scholar
Warr, P. (2011), ‘Food Security vs. Food Self-Sufficiency: The Indonesian Case’, Working Papers in Trade and Development, No. 2011/04, The Australian National University.Google Scholar
World Bank (2016), ‘October 2016 Indonesia Economic Quarterly: Pressures Easing’, www.worldbank.org/en/country/indonesia/publication/indonesia-economic-quarterly-october-2016.Google Scholar
World Bank (2018), ‘The World Bank in Indonesia’, www.worldbank.org/en/country/indonesia/overview (accessed April 2018).Google Scholar
WTO (1997), Appellate Body Report, EC – Bananas III, WT/DS27/AB/R, adopted 25 September 1997.Google Scholar
WTO (2016), Indonesia – Measures Concerning the Importation of Bovine Meat, WT/DS506.Google Scholar
WTO (2017a), Panel Report, Indonesia – Measures Concerning the Importation of Chicken Meat and Chicken Products, WT/DS484/R, adopted 22 November 2017.Google Scholar
WTO (2017b), Appellate Body Report, Indonesia – Importation of Horticultural Products, Animals and Animal Products, WT/DS477, 478/AB/R, adopted 22 November 2017.Google Scholar
WTO (2018), Panel Report, European Union – Anti-Dumping Measures on Biodiesel from Indonesia, WT/DS480/R, adopted 28 February 2018.Google Scholar
Yan, L., de Cordova, S. F., and Cadot, O. (2016), Non-Tariff Measures in ASEAN, Indonesia: Economic Research Institute for ASEAN and East Asia and the United Nationals Conference on Trade and Development.Google Scholar