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Indonesia to bring dispute with Pakistan to WTO

Publication Date : 01-05-2014


Indonesia plans to request a dispute settlement through the World Trade Organisation (WTO) in a trade case with Pakistan.

The government is preparing to challenge the prolonged anti-dumping and countervailing duty probes on its paper and paper products exports by Pakistan, Trade Ministry director general for foreign trade Bachrul Chairi said on Tuesday.

“We’ve given Pakistan a sign that we will go ahead with our plan to advance to the WTO,” Bachrul said in reference to a recent rejection of a public hearing by Pakistan, which is the initial step to launch a legal investigation into any trade case.

“We are in the process of seeking a WTO ruling in this case,” he added.

Bachrul declined to disclose the exact time frame for the move, but said that the request for the establishment of a dispute settlement panel would be filed “soon”.

Pakistan initiated an anti-dumping duty investigation into imports of writing and printing paper from Indonesia in November 2011 and soon after started another probe to find out whether Indonesian producers received inappropriate subsidies from the government.

Both investigations, affecting major Indonesian paper makers Asia Pulp and Paper (APP) and Riau Andalan Pulp and Paper (RAPP), were later suspended by Pakistani courts. However, the ruling by the Islamabad High Court to suspend the anti-dumping investigation has been appealed.

Indonesia had requested that Pakistan end the probes as the 18-month period for investigations under the rules of the global trade governing body had passed. It, however, received an unfavorable response from Pakistan.

At the end of February this year, the Indonesian government consulted its Pakistani counterpart through the WTO, a precondition before a formal challenge can be made under the mechanism of the global trade governing body.

The 60-day deadline for Pakistan to stop its probes as requested by Indonesia expired earlier this week and no conclusive result has emerged from the consultations.

APP commercial director Arvin Gupta strongly supported the government’s intention to step up the fight in the case, saying that the move was necessary as the probes had a significant impact on shipments to Pakistan.

“Due to the continuation of these investigations, Sinar Mas has lost sales in Pakistan due to the prevailing uncertainty in the market. Customers are cautious about placing orders with the paper mills because they do not know when the Pakistan government will decide upon the case,” he told The Jakarta Post in an emailed interview.

Arvin claimed that APP, a Sinar Mas subsidiary, suffered about US$1 million in losses each month due to the prolonged investigations. The figure could amount to $30 million as the investigations have been ongoing for 30 months.

Indonesia’s paper exports fetch more than $600 million a year. Being one of the world’s 10 largest pulp and paper producers in the world, Indonesia has been dealing with recurring dumping allegations on its paper exports as the local industry has a strong competitive edge thanks to abundant raw materials.

In another case with Pakistan in 2010, several Indonesian producers of coated and uncoated paper and paperboard were investigated by Pakistani National Tariff Commission following a dumping allegation. The authority later closed the case as the petitioner,

Pakistan paper producer Packages Limited, withdrew its request for a formal probe after the Lahore High Court decided that the tariff commission’s move was illegitimate.


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