File photo of a farmer works in a paddy field in Subang, Indonesia's West Java province. —Photo (File) Reuters
File photo of a farmer working in a paddy field in Subang, Indonesia's West Java province. —Photo (File) Reuters

JAKARTA: Indonesia will scrap import quantity limits on horticultural products, the trade ministry said on Friday, as it looks to head off a World Trade Organisation trade spat with the United States.

The United States said in March it had asked the WTO to strike down import restrictions imposed by Indonesia on horticultural and animal products.  The request for a dispute settlement panel was the next step in a case the United States first raised in January, and came after talks in February failed to resolve the issue.

“There will be revisions on trade ministry regulations and agriculture ministry regulations on horticulture importation,” Trade Minister Gita Wirjawan said. “We will not impose quantity restriction on import anymore.”

The United States says regulations approved by Indonesia over the past two years unfairly restrict imports of fruits, vegetables, flowers, juices and other horticultural products.

Washington is also challenging long-standing import quotas for beef and other animal products that it says Indonesia drastically cut in December.

Southeast Asia's largest economy, which relies on agriculture for about 15 per cent of its GDP, is struggling to balance the interests of domestic farmers and consumers.

The government has put in place strict import controls and often uses import tariffs or quotas to protect domestic farmers. Indonesia's bid to become self-sufficient in beef by slashing import quotas drove up prices in Java, and led to an ongoing corruption investigation into an import scam.

Indonesia has previously said imports of beef will fall 6 per cent to 80,000 tonnes in 2013, and although Wirjawan reiterated this figure, he said there was scope for flexibility.

“We will keep imposing a quota system but the quantity will be flexible,” Wirjawan said. “If the domestic market still needs imported beef, the government will issue extra import permits.”

The government has also banned the import of poultry and poultry products from China, added Bachrul Chairi, an official at the trade ministry, after an escalation of the H7N9 bird flu outbreak in eastern China.

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