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The Jakarta Post
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Shrimp exporters prepare US explanation

  • Linda Yulisman and Bagus BT Saragih

    The Jakarta Post

Jakarta | Tue, January 15 2013 | 12:19 pm

Indonesian shrimp exporters will give an explanation on Tuesday to the United States International Trade Commission (ITC) following the commission’s preliminary investigation into an alleged government subsidy case.

Indonesian Fisheries Product Processing and Marketing Association chairman Thomas Darmawan said that 13 local firms would provide comprehensive information as required by the commission.

“We will give relevant data as requested, including our export figures and annual minimum wage. We are trying to cooperate by complying with all the procedures,” he said in Jakarta on Monday.

The US Department of Commerce recently launched a fact gathering mission as part of a preliminary anti-subsidy investigation following a petition filed by the Coalition of Gulf Shrimp Industries on Dec. 28 last year, alleging that frozen warm water shrimp processors from Indonesia received unfair government subsidies to boost their competitiveness in overseas markets.

The accusation also targeted six other countries: China, Ecuador, India, Malaysia, Thailand and Vietnam in addition to Indonesia.

The US industry has urged its government to impose punitive duties on the seven shrimp producers to offset the losses it had suffered. The ministry is slated to commence the probe into the case on Jan. 17. Prior to its initiation, Indonesian representatives are scheduled to take part in consultative talks with US government officials in Washington DC.

The Trade Ministry’s acting director general for foreign trade, Bachrul Chairi, said he hoped the US would not impose an anti-subsidy duty as it would disrupt shipments of shrimp to the US, currently Indonesia’s largest shrimp export destination.

“The Indonesian government will go through all the investigative procedures and coordinate with all the relevant stakeholders,” he said in a statement to The Jakarta Post.

Indonesia’s shrimp exports to the US surged by an average of 4.2 percent from 2007 to US$559.4 million in 2011, making up 48.2 percent of the country’s total global shrimp exports. Between January and October last year, shipments of shrimp totaled $484 million, up 4.8 percent from the same period in 2011, accounting for 47.3 percent of total exports.

The Trade Ministry’s trade safeguard director, Ernawati, said that potential subsidy margins proposed by the US would range between 0.75 percent and 18.5 percent, and could erode the competitiveness of local shrimp.

“Indonesian shrimp producers have benefited largely by new techniques of shrimp farming in recent years, which eventually generated higher yields,” she said

The allegation of shrimp subsidies is just one of a series of cases that Indonesia has faced from the US recently.

A year ago, the US was notified that palm oil, of which Indonesia is the world’s top producer, would not be eligible as an alternative energy source under its renewable fuel standard program.

Last week, the US also lodged a complaint with the World Trade Organization (WTO), claiming that Indonesia had put trade-restrictive measures on imported horticultural produce, animal and animal products through a “complex web of import licensing requirements” that unfairly restricted its exports.

Trade Minister Gita Wirjawan said on Monday that Indonesia would not respond to the US’ complaint at the world trade governing body in a “confrontational” manner and would attempt to apply soft measures before proceeding with formal dispute resolution at the WTO, if necessary.

“There is no need to confront [the US]. We will respond rationally,” he said, adding that his ministry had prepared a team to provide legal assistance should the dispute remain unsettled during the initial consultation phase, which would last for a few weeks.


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