Indonesia WTO case may delay Australian FTA

March 20, 2018: Indonesia has initiated a WTO dispute alleging that Australia’s anti-dumping tariffs on Indonesian A4 copy paper break WTO rules, which allow anti-dumping measures if exports are priced below their real costs of production.

Australia’s Anti-Dumping Commission found that Indonesian paper was priced below its real cost because of Indonesian government subsidies, and Australia imposed tariffs of 13 per cent to 33 per cent on five Indonesian paper producers last week. Indonesia is challenging the method of calculating costs used by the Anti-Dumping Commission.

Ironically, the Indonesian dispute was lodged on March 16, on the same day that Prime Minister Turnbull met Indonesian Prime Minister Joko Widodo at the Sydney ASEAN summit and announced they hoped to conclude a free trade agreement soon.

The Australian Financial Review reported that the paper tariffs caused “extreme frustration in Jakarta”, and that Indonesian Trade Minister Thomas Lembong made a more cautious statement saying that the FTA might be concluded “by the end of this year.”  The AFR also quoted trade law expert Brett Williams’ claim that the case could have implications for Australia’s current anti-dumping tariffs on Chinese steel, which used the same method to calculate the tariffs.