. /.   WORLD TRADE  
ORGANIZATION  G/LIC/Q/IDN/7 
16 June 2006 
 
 (06-2929) 
Committee on Import Licensing Original:   English 
  
 
NOTIFICATION UNDER ARTICLE 5 OF THE AGREEMENT ON IMPORT  
LICENSING PROCEDURES FROM INDONESIA
1 
 
Questions from the UNITED STATES to INDONESIA2 
 
 
 The following communication, dated 14 June 2006,  is being circulated at the request of the 
delegation of the United States.  
_______________ 
 
 
Question from the United States to Indonesi a Concerning Import Licensing Restrictions 
 
on Textiles  
 
1. The United States is deeply concerned by the fact that for almost three years we have 
requested information on Indonesia’s import licensi ng requirements on certain textile products and 
have not received any substantive response.  We are transmitting comments and questions in advance 
of the meeting of the Import Licensing Committee of 21 June 2006, in order for the Indonesian authorities to be prepared to respond fully at that meeting.   
2. At the October 2003 and May 2 004 meetings of the Committee on Import Licensing, the 
United States requested that Indonesia submit in formation concerning import licensing requirements 
for certain textile products under Decree No. 732/2002.  Questions were also ci rculated in documents 
G/LIC/Q/IDN/1 and G/LIC/Q/IDN/3. 
3. The United States appreciates Indonesia’s responses in G/LIC/Q/IDN/2 and G/LIC/Q/IDN/5.  
However, from these responses, and its responses to Australia’s similar questions, in G/LIC/Q/IDN/6 
and 6/Add.1, it appears that the principal purpose of the restrictions is protection of domestic 
production.  The United States remains concerned that the use of non-automatic import licensing 
procedures to restrict imports and protect domestic  production is not consistent with Indonesia’s WTO 
commitments, and that the import licensing requirements established by the decree are restricting and distorting trade.  Specific U.S. concerns include: 
 Restricting the use of a wide range  of imported fabric, as well as  who can import such fabric.  
According to our information, only approved local  garment or textile producers are authorized 
to import such fabric and such imported fabric  may only be used as inputs in the production 
of other products, and may not be so ld or otherwise transferred.   
 
 Requiring that authorized importers seek approval  from the Ministries of Industry and Trade 
for both the quantity and timing of its imports.  Such approval is apparently not automatically 
granted. 
                                                     
 
1 G/LIC/N/2/IDN/1. 
2 See Understanding on Procedures for th e Review of Notifications (G/LIC/4). G/LIC/Q/IDN/7 
Page 2  
 
   
 Requiring that importers submit to the Ministries of Industry and Trade a monthly report that 
tracks each importation of fabrics by date, destin ation, quantity, price, duty, and country of 
origin.  We understand that failure to submit such a report results in the suspension of 
approval of import licenses for that importer.   The United States questions whether this 
requirement is necessary, and whether the penalty for non-compliance is greater than 
necessary.  
 4. At the June 2005 and September 2005 meetings  of the Committee on Import Licensing, the 
United States requested that the Government of In donesia either eliminate or modify its existing 
licensing regime.   
5. According to the minutes of the June 2005 mee ting, the representative of Indonesia said that 
his delegation was still studying Decree No. 732/2 002 and associated U.S. questions and that he 
would request his capital to obtain the information as soon as possible from the Ministry of Industry and the Ministry of Trade in order to forward it to the United States (G/LIC/M/21). 
6. According to the minutes of the September 2005 meeting, the representative of Indonesia said 
that his delegation had not received any mandate from its capital and that he believed that his 
authorities were still studying the matter (G/LIC/M/22). 
7. This issue has also been raised a number of times in the past years in bilateral discussions 
without much success.  This issue was raised mo st recently at the April 2006 Trade and Investment 
Framework Agreement discussions.   
8. We again request the Government of Indonesia to either eliminate or modify its existing 
licensing regime under Decree No. 732/2002 to remove pr ovisions that restrict or distort trade and to 
bring its import licensing regime into conformity with WTO requirements.  We also look forward to 
the results of the Government of Indonesia’s studies on this issue.   
__________