INDONESIA – IMPORTATION OF HORTICULTURAL PRODUCTS, ANIMALS AND ANIMAL PRODUCTS REPORT OF THE PANEL
Document: Addendum
Date: 22 December 2016
Document codes: WT/DS477/R/Add.1; WT/DS478/R/Add.1; WT/DS477/R; WT/DS478/R.
Complainant: New Zealand
Respondent: Indonesia
Third parties: Australia, Brazil, Canada, China, EU, India, Japan, Norway, Paraguay, Singapore, Taiwan, Argentina, South Korea, Thailand
Dispute stage: Appellate Body
Agreements cited: Art. XI:1  GATT 1994Art. 4.2  AgricultureArt. 3.2, 2.2(a)  Import LicensingArt. III:4  GATT 1994

INDONESIA – IMPORTATION OF HORTICULTURAL PRODUCTS,
ANIMALS AND ANIMAL PRODUCTS
REPORT OF THE PANEL
Addendum
This addendum contains Annexes A to E to the Report of the Panel to be found in documents
 and

 •

LIST OF ANNEXES
ANNEX A
PRELIMINARY RULING OF THE PANEL
Contents Page
Annex A-1 Preliminary Ruling of the Panel A-1

ANNEX B
WORKING PROCEDURES OF THE PANEL
Contents Page
Annex B-1 Working Procedures of the Panel B-1
ANNEX C
ARGUMENTS OF THE PARTIES
NEW ZEALAND
Contents Page
Annex C-1 First part of the executive summary of the arguments of New Zealand C-2
Annex C-2 Second part of the executive summary of the arguments of New Zealand C-14

UNITED STATES
Contents Page
Annex C-3 First part of the executive summary of the arguments of the United States C-27
Annex C-4 Second part of the executive summary of the arguments of the United States C-39

INDONESIA
Contents Page
Annex C-5 First part of the executive summary of the arguments of Indonesia C-51
Annex C-6 Second part of the executive summary of the arguments of Indonesia C-57

ANNEX D
ARGUMENTS OF THE THIRD PARTIES
Contents Page
Annex D-1 Executive summary of the arguments of Argentina D-2
Annex D-2 Executive summary of the arguments of Australia D-4
Annex D-3 Executive summary of the arguments of Brazil D-9
Annex D-4 Executive summary of the arguments of Canada D-12
Annex D-5 Executive summary of the arguments of the European Union D-14
Annex D-6 Executive summary of the arguments of Japan D-17
Annex D-7 Executive summary of the arguments of Korea D-21
Annex D-8 Executive summary of the arguments of Norway D-22
Annex D-9 Executive summary of the arguments of Paraguay D-25
Annex D-10 Executive summary of the arguments of Chinese Taipei D-26
 •

ANNEX E
IMPORT LICENSING PROCEDURES FOR HORTICULTURAL PRODUCTS AND FOR ANIMALS AND
ANIMAL PRODUCTS
Contents Page
Annex E-1 Flow chart concerning Indonesia's Import Licensing Procedures for Horticultural
Products
E-2
Annex E-2 Flow chart concerning Indonesia' s Import Licensing Procedures for Animals
and Animal Products
E-3
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ANNEX A-1
PRELIMINARY RULING OF THE PANEL
1 PROCEDURAL BACKGROUND
1.1. On 11 December 2015, Indonesia submitted to the Panel a request for a preliminary ruling
concerning the consistency of New Zealand's and the United States' panel requests and first
written submissions with the requirements of the Understanding on Rules and Procedures
Governing the Settlement of Disputes (DSU). 1 Specifically, Indonesia sought a ruling from the
Panel finding that:
a. the co -complainants' "apparent" claims under Article III:4 of the GATT 1994 and
Article 3.2 of the Agreement on Import Licensing Procedures (Import Licensing
Agreement) are outside the Panel's terms of reference; and
b. the co -complainants' failure in the ir panel requests as well as their first written
submissions to meet the requirements of Article 6.2 of the DSU has "clearly prejudiced,
and continues to prejudice " the preparation of Indonesia's defence, thereby violating
Indonesia's right to due process in these proceedings.2
1.2. In response to the Panel's invitation to provide their views on Indonesia's request, the
United States and New Zealand provided a joint communication on 21 December 2015. 3 The Panel
also provided third parties with an opportunity to comment on the preliminary ruling request prior
to the submission of Indonesia's first written submission and therefore before the date specified in
the Panel's timetable for third party submissions. Only Australia and Brazil took advantage of this
opportunity and submitted to the Panel on 6 January 2016 their comments on Indonesia's
preliminary ruling request.
1.3. Having carefully considered Indonesia's request, the written comments of the co -
complainants and of the above-mentioned third parties, and given Indonesia's request that we rule
on this matter before the first substantive meeting 4, the Panel decided to communicate its
conclusions on Indonesia's request on 27 January 2016 , which was prior to the first substantive
meeting. At that time, the Panel indic ated that, following prior practice 5 and in the interest of the
efficiency of proceedings, more detailed reasons in support of those conclusions would be provided
as soon as possible and, in any event, prior to the date of issuance of the Interim Report. 6 Our
ruling is set forth below and includes the conclusions issued to the parties on 27 January 2016.
2 MAIN ARGUMENTS OF THE PARTIES AND THE THIRD PARTIES
2.1 Main arguments of the parties
2.1.1 Indonesia
2.1. Indonesia requests the Panel to issue a preliminary ruling fi nding that the first written
submissions of the United States and New Zealand are inconsistent with the requirements of the
DSU.7 Specifically, Indonesia contends that the co -complainants' "potential claims" under
Article 3.2 of the Import Licensing Agreem ent and Article III:4 of the GATT 1994 were "not
properly identified " in their respective panel requests and , therefore, the Panel should "exclude

1 Indonesia's request for a preliminary ruling, para. 1.
2 Indonesia's request for a preliminary ruling, para. 28.
3 Co-complainants' joint comments on Indonesia's preliminary ruling request.
4 Indonesia's request for a preliminary ruling, para. 3.
5 See, for instance, Panel Reports, Canada –Renewable Energy/Canada –Feed in Tariff Program,
para. 7.8; and United States – Lamb, paras. 5.15-5.16.
6 Conclusions of the Preliminary Ruling by the Panel, 27 January 2016, para. 1.3. These conclusions will
form part of the Interim Report of the Panel.
7 Indonesia's request for a preliminary ruling, para. 1.
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these potential claims " from its terms of reference. 8 For Indonesia, the inconsistencies between
the panel requests and the first written submissions have prejudiced and continue to prejudice the
preparation of Indonesia's defen ce and compromise the due process objectives of the DSU, in
particular, of Article 6.2.9
2.2. Indonesia submits that under Article 7.1 of the DSU, for a party's claim to fall within the
Panel's terms of reference, the complainant must "sufficiently identify" the claim in the panel
request10, that is, it must refer to the specific measure(s) at issue and the legal basis of the
complaint. Indonesia finds support in the panel's findings in EC – Tube or Pipe fittings11 as well as
the Appellate Body's findings in EC and Certain Member States – Large Civil Aircraft and China –
Raw Materials , where, according to Indonesia, it was determined that failure t o list or refer to
specific measures or claims in the panel request would result in the claims being outside the
Panel's jurisdiction.12
2.3. Indonesia argues that the co -complainants' panel requests only "describe" claims under
Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture , but 13 their first
written submissions "raised new claims", namely, Article III:4 of the GATT 1994 in the case of New
Zealand, and Article 3.2 of the Import Licensing Agreement in the case of both New Zealand and
the United States.
2.4. Indonesia considers that the claims under Article III:4 of the GATT 1994 and Article 3.2 of
the Import Licensing Agreement were not properly identified because these provisions were only
mentioned in footnotes to the panel requests and , to the extent the co -complainants refer to
possible violations of these provisions by Indonesia, they do so in "conditional and ambiguous
language".14 In its view, this has resulted on Indonesia and third parties being "left to wonder "
whether the co -complainants "meant to include " claims under these provisions within their panel
requests or not. 15 Indonesia re lies on the following definition of "footnote" found in the Oxford
Advanced Learner's Dictionary: "(1) an extra piece of information that is printed at the bottom of a
page in a book or (2) (of an event or a person) that may be remembered but only as
something/somebody that is not important ".16 Indonesia observes that the identification of the
legal basis of claims in a panel request is "very important and not an extra piece of information."17
According to Indonesia, the Pan el should therefore find that these claims are outside its terms of
reference.18
2.5. Indonesia further argues that, should the Panel consider that "putting the legal basis of a
claim in th e footnotes is acceptable"19, it nevertheless contends that those claims are not
sufficiently identified . Indonesia reproduces footnotes 5, 7, 8, 12 and 14 of the panel requests,
noting that they "only repeat treaty provisions" and arguing that there is "no proper or sufficient
explanation" of how the measures at issue are inconsistent with Article III:4 of the GATT 1994 or
Article 3.2 of the Import Licensing Agreement. 20 Indonesia recalls that in China—Raw Materials ,
the Appellate Body determined that the cl aims were not sufficiently identified because the
complainants "merely 'challeng[ed] some (groups of) measures as inconsistent with some (groups)
of the listed WTO obligations'" and therefore the complainants did not "'provide the basis on which
the Panel and China could determine with sufficient clarity what 'problem' or 'problems' were
alleged to have been caused by which measures.'" 21 Indonesia asserts that the situation in the

8 Indonesia's request for a preliminary ruling, para. 1. Indonesia refers to "apparent claims" in
paras. 13-14 and 27-28.
9 Indonesia's request for a preliminary ruling, para. 2.
10 Indonesia's request for a preliminary ruling, para. 5.
11 Indonesia's request for a preliminary ruling, para. 6 (referring to Panel Report, EC – Tube or Pipe
Fittings, para. 7.14).
12 Indonesia's request for a preliminary ruling, para. 6 (referring to Appellate Body Report, EC and
certain member States – Large Civil Aircraft, para 640, and Appellate Body Report, China – Raw Materials,
para. 219).
13 Indonesia's request for a preliminary ruling, para. 7.
14 Indonesia's request for a preliminary ruling, para. 10.
15 Indonesia's request for a preliminary ruling, para. 10.
16 Indonesia's request for a preliminary ruling, para. 11. (emphasis original)
17 Indonesia's request for a preliminary ruling, para. 12. (underlining original)
18 Indonesia's request for a preliminary ruling, para. 13.
19 Indonesia's request for a preliminary ruling, para. 14.
20 Indonesia's request for a preliminary ruling, paras.14-20.
21 Indonesia's request for a preliminary ruling, para. 20.
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present dispute is "exactly the situation here" because the complainants only repeat the treaty
provisions in a footnote and do not explain how the measures at issue , which consist of various
laws and regulations, violate the said provisions.22
2.6. For Indonesia, the "confusion" resulting from this lack of clarity is compounded by the f act
that the panel requests are identical, but the first written submissions are different with respect to
the two relevant provisions. Indonesia explains that while the United States' first written
submission only "appeared to advance " a claim under Artic le 3.2 of the Import Licensing
Agreement, New Zealand's first written submission "attempted to invoke" both Article III:4 of the
GATT 1994 and Article 3.2 of the Import Licensing Agreement.23
2.7. Indonesia also argues that it has suffered prejudice because it "does not sufficiently
understand the new claims" 24 under Article III:4 of the GATT 1994 and Article 3.2 of the Import
Licensing Agreement that were raised by the co -complainants in their first written submissions.
Indonesia asserts that it is "critical" tha t a panel request provide the responding party "with
sufficient clarity of the case it has to answer" and that a party's submissions during panel
proceedings cannot cure a defect in a panel request. 25 In Indonesia's view, these "apparent"
claims were not su fficiently identified in the panel requests. Indonesia submits that the fact that
these claims were only mentioned in footnotes and that the footnotes only repeated the legal
provisions "without ever explaining why " the measures at issue violate these two provisions are
"acts of WTO inconsistency that clearly prejudice Indonesia's ability to defend itself " in this
dispute.26
2.1.2 New Zealand and United States (co-complainants)
2.8. In a joint communication, the co-complainants assert that Indonesia's arguments "lack merit"
and submit that the panel requests "on their face " satisfy the requirements of Article 6.2 of the
DSU with respect to the claims under Article 3.2 of the Import Licensing Agreement and
Article III:4 of the GATT 1994. The co -complainants request the Panel to find that the claims at
issue are properly within its terms of reference.27
2.9. Concerning Indonesia's argument that the relevant claims were not properly identified
because they were included in footnotes, the co -complainants submit that Indonesia of fers no
analysis as to why the use of footnotes in discussing the claims is, by itself, inconsistent with
Article 6.2 of the DSU. They observe that Indonesia does not explain why specifying a provision
alleged to be breached in a footnote "would itself render the identification of that provision
unclear"28 and note that Indonesia "simply suggests" that placement in a footnote renders the
language "not important" .29 The co -complainants point out that "[s]imply characterizing" a
footnote as "not important" runs contrary the "general usage of footnotes in treaties and
international agreements ", and they provide the example of footnote 1 to Article 4.2 of the
Agreement on Agriculture , which conveys key aspects of the legal obligation therein. 30 The co -
complainants further assert that in determining whether a panel request complies with Article 6.2
of the DSU, a panel must evaluate the request "as a whole " and "on the basis of the language
used".31 In the co-complainants' view, nothing in Article 6.2 indicates that a complainant's claims
would "somehow be limited by the format " in which those claims are presented. 32 In support of
their position, the co -complainants also refer to US – Products from China where the Appellate

22 Indonesia's request for a preliminary ruling, paras. 20-21.
23 Indonesia's request for a preliminary ruling, para. 22.
24 Indonesia's request for a preliminary ruling, para. 27.
25 Indonesia's request for a preliminary ruling, para. 25.
26 Indonesia's request for a preliminary ruling, para. 27.
27 Co-complainants' joint comments on Indonesia's preliminary ruling request, paras. 1-2.
28 Co-complainants' joint comments on Indonesia's preliminary ruling request, para. 10.
29 Co-complainants' joint comments on Indonesia's preliminary ruling request, para. 10.
30 Co-complainants' joint comments on Indonesia's preliminary ruling request, para. 10.
31 The co-complainants refer to Appellate Body Reports, China – HP-SSST, para. 5.13; EC – Fasteners,
para. 562; US – Carbon Steel, para. 127 (stating that compliance with Article 6.2 is determined "on the merits
of each case having considered the panel request as a whole, and in light of attendant circumstances"). Co-
complainants' joint comments on Indonesia's preliminary ruling request, para. 11.
32 Co-complainants' joint comments on Indonesia's preliminary ruling request, para. 11.
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Body observed that "footnotes are part of the t ext of a Panel request, and may be relevant to the
identification of the measure at issue or the presentation of the legal basis of the complaint".33
2.10. Concerning Indonesia's argument that the language setting out the claims under Articles 3.2
of the Import Licensing Agreement and III:4 of the GATT 1994 is "conditional and ambiguous", the
co-complainants submit that it lacks merit because Indonesia failed both to identify the allegedly
conditional and ambiguous language and to explain the reasons why the language does not meet
the requirements of Article 6.2 .34 While considering that the Panel may reject Indonesia's
argument on that basis alone, the co-complainants also argue that, to the extent that Indonesia is
arguing that the relevant claims are outside of t he Panel's terms of reference because they are
conditional claims, this argument lacks any legal basis and the Panel should reject it. 35 The co-
complainants contend that nothing in the DSU precludes a complainant from pursuing conditional
or alternative claims and they refer to the observation of the panel in Korea – Commercial Vessels
that raising complementary or alternative claims is very common in WTO dispute settlement . The
co-complainants affirm that, as with any claim, a claimant intending to pursue complementary or
alternative claims "simply must", by the terms of Article 6.2, refer to each of the relevant
provisions in the panel request.36
2.11. The co-complainants also find no merit in Indonesia's argument that the sufficiency of the
panel requests was und ermined because, despite identical panel requests, New Zealand pursu ed
its claim under Article III:4 of the GATT 1994 in its first written submission, while the United
States did not. The co-complainants consider that a complainant is not required to pursu e all the
claims referenced in its panel request, and they maintain that a decision not to pursue a claim is
not relevant in determining whether a claim falls within a panel's terms of reference.37
2.12. The co -complainants also reject Indonesia's argument that the panel requests did not
provide sufficient explanation of how the measures are inconsistent with the cited provisions.
According to the co -complainants, Indonesia misstates the requirements of Article 6.2 of the
DSU.38 Referring to the Appellate Body 's findings in China—HP–SSST, the co-complainants argue
that to comply with Article 6.2, one need only state the claim at issue ; argumentation "as to why
and precisely how" the measure breaches the relevant provision is not required .39 They maintain
that the pa nel requests properly identify the claims under Article 3.2 of the Import Licensing
Agreement and Article III:4 of the GATT 1994: they identify the measures imposed as relevant to
the claims, describe their operation, set forth the legal bases for the clai ms by listing and
summarizing the provisions of the covered agreements with which these measures are
inconsistent, and connect the aspects of the measures relevant to the claims to the relevant
provisions. As such, the requirements of Article 6.2 of the DSU are satisfied.40
2.13. The co-complainants further argue that Indonesia misunderstands the difference between
arguments and claims and they assert that the disputes referenced by Indonesia do not support
the conclusion that the panel requests do not meet the st andard of Article 6.2.41 The co -
complainants point out that in EC – Tube or Pipe Fittings , the panel found that the panel request
did not identify claims under Articles 6.9, 6.13, 9.3, and 12.1 of the Anti -Dumping Agreement
because it referred generally to Articles 6, 9, and 12, and those provisions contain multiple and
diverse obligations that relate to subject -matters different from the obligations in Articles 6.9,
6.13, 9.3 and 12.1. 42 The co-complainants contrast the panel requests in this dispute, observ ing

33 Co-complainants' joint comments on Indonesia's preliminary ruling request, para. 11.
34 Co-complainants' joint comments on Indonesia's preliminary ruling request, para. 13.
35 Co-complainants' joint comments on Indonesia's preliminary ruling request, para. 13.
36 The co-complainants refer to the Panel Report, Korea – Commercial Vessels, paras. 7.2.28-7.2.29.
Co-complainants' joint comments on Indonesia's preliminary ruling request, para. 14.
37 In support of this statement, the co-complainants quote the Panel Report, China – Raw Materials,
para. 7.23; and the Appellate Body Report, EC – Bananas III, para. 145. Co-complainants' joint comments on
Indonesia's preliminary ruling request, para. 15.
38 Co-complainants' joint comments on Indonesia's preliminary ruling request, para. 19.
39 Co-complainants' joint comments on Indonesia's preliminary ruling request, para. 19.
40Co-complainants' joint comments on Indonesia's preliminary ruling request, paras. 19-23.
41 Co-complainants' joint comments on Indonesia's preliminary ruling request, para. 24.
42 Co-complainants' joint comments on Indonesia's preliminary ruling request, para. 25 (referring to
Panel Report, EC – Tube or Pipe Fittings, para. 7.14).
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that they cite the specific provisions in question, summarize the relevant obligations, and describe
the aspects of the challenged measures relevant to the claim.43
2.14. The co-complainants contend that the facts in China – Raw Materials can be distinguishe d
from the present instance because, in that dispute, the panel request listed 37 legal instruments
followed by a wide-ranging list of obligations, such that the problems could not be discerned from
the panel request given the number of possible combinatio ns. The co-complainants argue that, in
contrast, the panel requests in these proceedings describe the challenged measures in detail,
including the problematic aspects of their operation, identify the legal instruments through which
each measure was imposed , set out the provisions with which the measures are inconsistent, and
summarize the relevant obligation.44
2.15. The co -complainants rely on Appellate Body reports in arguing that, where the provision
with which a challenged measure is alleged to be inconsistent consists of a single paragraph, "a
simple reference to that provision may be sufficient to meet the standard of Article 6.2"45 and that,
even where a provision contains multiple obligations, a reference to that provision, along with a
"brief narration of t he problem " caused by the challenged measure, is "sufficient" to meet the
standard of Article 6.2 of the DSU. 46 The co -complainants observe that, in this dispute, each
relevant provision consists of a single paragraph and the panel requests both identify th e relevant
provisions and summarize the relevant obligations , thus "more than" meeting the standard of
Article 6.2.47
2.16. Regarding Indonesia's arguments that the alleged failure by the co -complainants to
adequately identify their claims in their panel requests prejudiced Indonesia's ability to defend
itself in this dispute, the co-complainants respond that the panel requests "contain the information
necessary" to satisfy the legal standard in Article 6.2." 48 They contend that the evaluation of the
sufficiency of a panel request is "based on the face of the panel request itself " and, therefore, it
would "not also be necessary " to demonstrate that the responding party was prejudiced by the
inconsistency.49 The co-complainants also submit that, "aside from the fact t hat prejudice to the
respondent is not relevant to the inquiry", Indonesia has not been prejudiced because Indonesia
was made aware of the claims under Article 3.2 of Import Licensing Agreement and Article III:4 of
the GATT 1994 in the panel requests as we ll as in the requests for consultations. 50 In the co -
complainants' view, Indonesia has provided no details in support of its allegation of prejudice and
suggest that this situation is analogous to that in Korea – Dairy, where the Appellate Body rejected
Korea's claim that it had suffered prejudice on the basis that it had "assert[ed] that it had
sustained prejudice, but offered no supporting particulars in its appellant's submission nor at the
oral hearing."51
2.2 Main arguments of the third parties
2.17. Following the Panel's invitation to the third parties to comment on Indonesia's request for a
preliminary ruling, comments were received from Australia and Brazil. No comments were received
from Argentina, Canada, China, the European Union, India, Japan, Korea, Norway, Paraguay,
Singapore, Chinese Taipei, or Thailand. We summarise below the arguments presented by
Australia and Brazil.

43 Co-complainants' joint comments on Indonesia's preliminary ruling request, para 25.
44 Co-complainants' joint comments on Indonesia's preliminary ruling request, para 26.
45 Co-complainants' joint comments on Indonesia's preliminary ruling request, para. 27 (referring to
Appellate Body Report, US – Countervailing and Anti-Dumping Measures (China), para. 4.19; Appellate Body
Report, China – HP-SSST, para. 5.22; and Appellate Body Report, US – Products from China, para. 4.21.
46 Co-complainants' joint comments on Indonesia's preliminary ruling request, para. 27 (referring to
Appellate Body Report, US – Countervailing and Anti-Dumping Measures (China), para. 4.28; Appellate Body
47Co-complainants' joint comments on Indonesia's preliminary ruling request, para. 27.
48 Co-complainants' joint comments on Indonesia's preliminary ruling request, para. 28.
49 Co-complainants' joint comments on Indonesia's preliminary ruling request, para. 29 (referring to
Appellate Body Report, China – Raw Materials, para. 233).
50 Co-complainants' joint comments on Indonesia's preliminary ruling request, paras. 29-30.
51 Co-complainants' joint comments on Indonesia's preliminary ruling request, para. 31 (referring to
Appellate Body Report, Korea – Dairy, para. 131).
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2.2.1 Australia
2.18. Australia is of the view that the co -complainants' claims under Article III:4 of the
GATT 1994 and Article 3.2 of the Import L icensing Agreement were "sufficiently identified" in the
panel requests to fall within the Panel's terms of reference.52 Australia points out that it was aware
of and understood the claims under these provisions.53 For Australia, there is nothing in the text of
Article 6.2 of the DSU that suggests that footnotes are not part of a panel request , nor that this
provision imposes any formatting or structural requirements. 54 Referring to the Appellate Body
Report in US – Carbon Steel , Australia explains that compli ance with the requirements of
Article 6.2 "must be determined on the merits of each case, having considered the panel request
as a whole, and in the light of attendant circumstances. "55 Australia further submits that it
understood the claims under Article III:4 of the GATT 1994 and Article 3.2 of the Import Licensing
Agreement "to be complementary, alternative or additional claims to those contained in the body
of the text" and hence it was "reasonable for the Complainants to include these claims in footnotes
to their panel requests."56
2.19. Regarding Indonesia's argument that the claims under Article III:4 of the GATT 1994 and
Article 3.2 of the Import Licensing Agreement use "conditional and ambiguous language", Australia
observes that the language of the panel requests "reasonably reflects" that these claims can be
considered complementary, alternative or additional claims to those in the text. 57 Australia notes
that in Korea – Commercial Vessels, the panel indicated that if a party wishes to pursue claims
under multiple provisions , whether complementarily or alternatively, it is not only permitted by
Article 6.2 to refer to these claims in its panel request, but it is required to do so.58 According to
Australia, by notifying Indonesia of the complementary, alterna tive or additional claims under
Article III:4 of the GATT 1994 and Article 3.2 of the Import Licensing Agreement, the co -
complainants' panel requests "served to fully inform" Indonesia of the nature of their case.59
2.20. Australia disagrees with Indonesia's argu ment that the co -complainants' panel requests
merely challenged some groups of measures as inconsistent with some groups of the listed WTO
obligations and argues that the claims in each footnote disputed by Indonesia "clearly relate" to
the measures in the section containing that footnote. 60 Australia also disagrees with Indonesia's
position that the co -complainants have "only repeat[ed] treaty provisions " in the Panel request
with the result that these provisions fall outside the Panel's terms of reference.61 Australia argues
that complainants are not required to set out the arguments supporting their claims in their panel
requests and relies on the Appellate Body Report in EC – Bananas III referring to the distinction
between claims and arguments and noting that Article 6.2 of the DSU requires that the claims, but
not the arguments, be specified sufficiently in the panel request in order for the defending party
and the third parties to know the legal basis of the complaint .62 Australia also refers to the
Appellate Body Report in Korea – Dairy, which stated that the "mere listing" of provisions alleged
to have been breached "may be sufficient" to meet the req uirements of Article 6.2, depending on
whether the respondent's ability to defend itself was prejudiced. 63 Australia thus argues that the
panel requests "have clearly exceeded the minimum requirements" because the claims are "linked
to specific Indonesian measures, identify the specific articles that these measures violate, and also
provide a brief explanation of why the measures violate the relevant articles ."64 For Australia, the
information provided in the panel requests "clearly exceeds by a considerable margin" the
standard articulated in EC –Biotech Products that a party is not required to explain, in the panel

52 Australia's comments on Indonesia's preliminary ruling request of 11 December 2015, para. 3.
53 Australia's comments on Indonesia's preliminary ruling request of 11 December 2015, para. 5.
54 Australia's comments on Indonesia's preliminary ruling request of 11 December 2015, paras. 6-7.
55 Australia's comments on Indonesia's preliminary ruling request of 11 December 2015, para. 7
(referring to Appellate Body Report, US – Carbon Steel, para. 127).
56 Australia's comments on Indonesia's preliminary ruling request of 11 December 2015, para. 8.
57 Australia's comments on Indonesia's preliminary ruling request of 11 December 2015, para. 9.
58 Australia's comments on Indonesia's preliminary ruling request of 11 December 2015, para. 10
(referring to Panel Report, Korea — Commercial Vessels, para. 7.2).
59 Australia's comments on Indonesia's preliminary ruling request of 11 December 2015, para. 10.
60 Australia's comments on Indonesia's preliminary ruling request of 11 December 2015, para. 11.
61 Australia's comments on Indonesia's preliminary ruling request of 11 December 2015, para. 12.
62 Australia's comments on Indonesia's preliminary ruling request of 11 December 2015, paras. 12-13.
(referring to Appellate Body Report, EC – Bananas III, paras. 141-143).
63 Australia's comments on Indonesia's preliminary ruling request of 11 December 2015, para. 13
(referring to Appellate Body Report, Korea — Dairy, paras. 124 and 127).
64 Australia's comments on Indonesia's preliminary ruling request of 11 December 2015, para. 14.
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request, the reasons for identifying particular treaty provisions , or whether all of the provisions
listed are alleged to apply to the same aspec t of a particular measure, or whether some provisions
are alleged to apply to different aspects of the same measure.65
2.21. Regarding Indonesia's argument that it has suffered prejudice, Australia asserts that the co-
complainant's panel requests fulfilled the due process objective of notifying Indonesia of the nature
of the complaints and that Indonesia's ability to defend itself has not been prejudiced. 66 Australia
recalls that in assessing a claim of prejudice in Thailand – H-Beams, the Appellate Body observed
that "the fundamental issue in assessing claims of prejudice is whether a defending party was
made aware of the claims presented by the complaining party, sufficient to allow it to defend
itself."67According to Australia, Indonesia has not argued that it was unaware of the claims
regarding Article III:4 of the GATT 1994 and Article 3.2 of the Import Licensing Agreement in the
panel requests and it contends that the panel requests "fully notif[ied]" Indonesia of "all the
claims" that the co-complainants could raise in their first written submissions.68
2.2.2 Brazil
2.22. Brazil asserts that nothing in the text of Article 6.2 of the DSU imposes a specific format for
the presentation of claims in panel requests and, accordingly, the presentation of claims in
footnotes "does not, by itself" violate the obligation under Article 6.2 of the DSU, "as long as the
claim is clearly presented. "69 Brazil "fails to see " how the fact that the claims were presented in
footnotes "would affect their nature or their clarity ", and observes that there are several footnotes
in WTO Agreements "that are crucial for the definition of the set of rights and obligations of the
Members … and some of them are also essential for the interpretation of the extent of some
multilateral obligations. "70 Brazil ex plains that a footnote provides "a piece of additional
information" related to a specific issue such that a claim established in a footnote could be read as
"in addition" to those established in the text of the panel request itself." 71 In Brazil's view,
excluding a claim from the scope of a panel 's jurisdiction based only on the fact that it was
presented in a footnote would amount to endorsing "an overly formalistic approach that is contrary
to the main objective of the DSU, which is to secure a prompt and positive solution to a dispute."72
Thus for Brazil, the "fundamental question" before the Panel is whether the panel request, "be it in
a footnote or elsewhere, satisfies the objective of providing notice to the Respondent and to third
parties regarding the precise nature of the dispute."73
2.23. Brazil also argues that the fact that conditional language was used does not mean that the
problem was not presented clearly. For Brazil, as long as the challenged measure is "discernible" in
the panel request and "the legal basis of the complaint is clearly identified ", there would be "no
solid reason" to dismiss the panel request and "impede the procedure from taking its course with
regard to those claims." 74 Brazil considers that the challenged measure is discernible in t he panel
request and the legal basis of the complaint is clearly identified. 75 In Brazil's view, the task before
the Panel is to objectively assess whether the claims introduced by the co -complainants in the
panel requests fulfill the requirements of Articl e 6.2 of the DSU, "regardless of the fact that they
were presented in footnotes or in conditional language " which, according to Brazil, is "very
common in WTO dispute settlement proceedings."76
2.24. Brazil relies on the Appellate Body Reports in EC – Customs Matters and US – Continued
Zeroing in contending that, for the purposes of Article 6.2 of the DSU, it "suffices that the panel
request sets out the 'claims' with enough precision to allow the responding party to understand

65 Australia's comments on Indonesia's preliminary ruling request of 11 December 2015, para. 15.
66 Australia's comments on Indonesia's preliminary ruling request of 11 December 2015, para. 18.
67 Australia's comments on Indonesia's preliminary ruling request of 11 December 2015, para. 19
(referring to Appellate Body Report, Thailand – H-Beams, para. 95). (emphasis original)
68 Australia's comments on Indonesia's preliminary ruling request of 11 December 2015, para. 20
(referring to Appellate Body Report, Thailand – H-Beams, para. 95).
69 Brazil's comments on Indonesia's preliminary ruling request of 11 December 2015, para. 6.
70 Brazil's comments on Indonesia's preliminary ruling request of 11 December 2015, para. 7.
71 Brazil's comments on Indonesia's preliminary ruling request of 11 December 2015, para. 8.
72 Brazil's comments on Indonesia's preliminary ruling request of 11 December 2015, para. 9.
73 Brazil's comments on Indonesia's preliminary ruling request of 11 December 2015, para. 10.
74 Brazil's comments on Indonesia's preliminary ruling request of 11 December 2015, para. 13.
75 Brazil's comments on Indonesia's preliminary ruling request of 11 December 2015, para. 13.
76 Brazil's comments on Indonesia's preliminary ruling request of 11 December 2015, para. 14.
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with clarity " the alleged violations and, relying on EC—Bananas III , highlights that there is no
obligation to develop in the panel request the legal arguments that support the claims or to
provide a detailed explanation as to why and how the measures are inconsistent with the relevant
WTO provisions.77 Brazil considers that the requirements of Article 6.2 of the DSU were fulfilled in
the current dispute because the specific measures at issue with regard to Article 3.2 of Import
Licensing Agreement and Article III:4 of GATT 1994 "were duly ide ntified" and the relevant
provisions, including the specific obligations under each of the m, "were indicated."78 Furthermore,
Brazil considers that there is "no ambiguity or lack of clarity" in the language of the panel
requests, which is sufficient to "present the problem clearly ."79 In Brazil's view, "nothing in the
way the panel requests were drafted jeopardized Indonesia's ability to identify the measures and
claims" and to present its defence.80
3 EVALUATION BY THE PANEL
3.1 Introduction
3.1. The Panel is tasked wit h determining whether the co -complainants' claims pursuant to
Article III:4 of the GATT 1994 and Article 3.2 of the Import Licensing Agreement are within the
Panel's terms of reference. To do so, we need to examine whether the panel requests comply with
the requirements set out in Article 6.2 of the DSU, which reads as follows:
2. The request for the establishment of a panel shall be made in writing. It shall
indicate whether consultations were held, identify the specific measures at issue and
provide a b rief summary of the legal basis of the complaint sufficient to present the
problem clearly. In case the applicant requests the establishment of a panel with other
than standard terms of reference, the written request shall include the proposed text
of special terms of reference.
3.2. As recapped by the Appellate Body in China – Raw Materials, Article 6.2 of the DSU serves a
"pivotal function" in WTO dispute settlement and sets out two key requirements that a
complainant must satisfy in its panel request, namely, that it must (i) identify the specific
measures at issue and (ii) provide a brief summary of the legal basis of the complaint sufficient to
present the problem clearly.81 According to the Appellate Body, these two elements constitute the
"matter referred t o the DSB" , which forms the basis for a panel's terms of reference under
Article 7.1 of the DSU. 82 If either element is not "properly identified", the matter would not fall
within the panel's terms of reference. 83 Fulfilment of these requirements is "not a m ere
formality"84; on the contrary, as the Appellate Body has clarified , a panel request serves two
essential purposes: (i) to define the scope of the dispute and (ii) to serve the due process
objective of notifying the respondent and third parties of the nature of the complainant's case.85
3.3. Indonesia's objections refer to the adequacy of the panel requests in meeting the
requirements of Article 6.2 with respect to two claims, namely, those pursuant to Article III:4 of
the GATT 1994 and Article 3.2 of the Impo rt Licensing Agreement. Thus Indonesia's objections do

77 Brazil's comments on Indonesia's preliminary ruling request of 11 December 2015, paras. 15 -17 and
footnote 11 (referring to Appellate Body Report, EC – Selected Customs Matters , para. 130 , Appellate Body
Report, US – Continued Zeroing, para. 169, and Appellate Body Report, EC--Bananas III, para. 141).
78 Brazil's comments on Indonesia's preliminary ruling request of 11 December 2015, para. 18.
79 Brazil's comments on Indonesia's preliminary ruling request of 11 December 2015, para. 20.
80 Brazil's comments on Indonesia's preliminary ruling request of 11 December 2015, para. 21.
81 Appellate Body Report, China — Raw Materials, para. 219. Article 6.2 of the DSU also requires that
the request be made in writing and indicate whether consultations were held.
82 Appellate Body Report, EC and certain member States — Large Civil Aircraft, para. 639 (referring to
Appellate Body Report, Guatemala – Cement I, paras. 72 and 73; Appellate Body Report, US – Carbon Steel,
para. 125; Appellate Body Report, US – Continued Zeroing, para. 160; Appellate Body Report, US – Zeroing
(Japan) (Article 21.5 – Japan), para. 107; and Appellate Body Report, Australia – Apples, para. 416).
83Appellate Body Report, China — Raw Materials, para. 219 (referring to Appellate Body Report US –
Carbon Steel, para. 125).
84 Appellate Body Report, China — Raw Materials, para. 219 (referring to Appellate Body Report,
Australia – Apples, para. 416).
85 Appellate Body Report, EC and certain member States — Large Civil Aircraft, para. 639 (referring to
Appellate Body Report, US – Carbon Steel, para. 126, in turn, referring to Appellate Body Report, Brazil –
Desiccated Coconut, p. 22, DSR 1997:I, 167, at 186; Appellate Body Report, EC – Chicken Cuts, para. 155;
and Appellate Body Report, US – Zeroing (Japan) (Article 21.5 – Japan), para. 108).
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not raise issues under the first element; they concern only the second requirement of Article 6.2 of
the DSU, i.e. to provide a brief summary of the legal basis of the complaint sufficient to present
the problem clearly. We recall that, for the purposes of Article 6.2 of the DSU, a claim refers to an
allegation "that the respondent party has violated, or nullified or impaired the benefits arising
from, an identified provision of a particular agreement".86
3.4. The Appellate Body has underscored that, a t a minimum, a panel request must list the
article(s) of the covered agreement(s) claimed to have been violated. 87 Indeed, the
"[i]dentification of the treaty provisions claimed to have been violated by the respo ndent is always
necessary" if the legal basis of the complaint is to be "presented at all ."88 In addition, in order "to
present the problem clearly", a panel request must "plainly connect the challenged measure(s)
with the provision(s) of the covered agreements claimed to have been infringed".89
3.5. It is also well settled that, w hile a panel request must set out the claims, there is no
requirement in Article 6.2 that a complaining party include in its panel request arguments that
seek "to demonstrate that the responding party's measure does indeed infringe upon the identified
treaty provision".90 Hence a "brief summary" of the legal basis of the complaint "aims to explain
succinctly how or why the measure at issue is considered by the complaining Member to be
violating the WTO obligation in question"91 and is to be distinguished from arguments in support of
a particular claim." The Appellate Body has indicated that w hether such a brief summary is
"sufficient to present the problem clearly" is to be assessed on a ca se-by-case basis, keeping in
mind the nature of the measure(s) at issue, and the manner in which it is (or they are) described
in the panel request, as well as the nature and scope of the provision(s) of the covered
agreements alleged to have been violated.92
3.6. As we explained above, Indonesia argues, inter alia, that the way that the co -complainants
set out and later argued the two claims at issue prejudices its ability to defend itself in this
dispute.93 We agree with the Appellate Body that due process is a n essential feature of the
WTO dispute settlement system94 and that, in addition to constituting the basis for a panel's terms
of reference, a panel request serves the due process objective of notifying the respondent and
third parties of the nature of the complainant's case. 95 We are mindful of the Appellate Body's
clarification that due process "is not constitutive of, but rather follows from, the proper
establishment of a panel's jurisdiction".96

86 Appellate Body Report, US – Countervailing Measures (China), para. 4.8 (referring to Appellate Body
Report, Korea – Dairy, para. 139).
87 Appellate Body Reports, Korea – Dairy, paras. 123 and 124 (referring to Appellate Body Reports,
Brazil – Desiccated Coconut, p. 22, DSR 1997:I, p. 186; EC – Bananas III, paras. 145 and 147; and Indonesia
– Patents (US), paras. 89, 92, and 93); US – Carbon Steel, para. 130. See also Appellate Body Report, US –
Countervailing Measures (China), para. 4.8.
88 Appellate Body Report, US – Countervailing Measures (China), para. 4.8 (referring to Appellate Body
Report, Korea – Dairy, para. 124 (referring to Appellate Body Reports, Brazil – Desiccated Coconut, p. 22,
DSR 1997:I, p. 186; EC – Bananas III, paras. 145 and 147; and India – Patents (US), paras. 89, 92, and 93)).
89Appellate Body Report, China — Raw Materials, para. 220 (referring to Appellate Body Report, US – Oil
Country Tubular Goods Sunset Reviews, para. 162).
90 Appellate Body Report, US – Countervailing Measures (China), para. 4.8 (referring to Appellate Body
Report, Korea – Dairy, para. 139 (referring to Appellate Body Reports, EC – Bananas III, para. 141; India –
91 Appellate Body Report, US – Countervailing Measures (China), para. 4.9 (referring to Appellate Body
Report, EC – Selected Customs Matters, para. 130. (italics original; underlining added)). In EC – Selected
Customs Matters, the Appellate Body also stated that "Article 6.2 of the DSU requires that the claims – not the
arguments – be set out in a panel request in a way that is sufficient to present the problem clearly". (Ibid.,
Korea – Dairy, para. 139; and Dominican Republic – Import and Sale of Cigarettes, para. 121)).
92 Appellate Body Report, US – Countervailing Measures (China), para. 4.9.
93 Indonesia's request for a preliminary ruling, para. 27.
94 Indeed, "[d]ue process protection guarantees that the proceedings are conducted with fairness and
impartiality, and that one party is not unfairly disadvantaged with respect to other parties in a dispute".
Appellate Body Report, US – Continued Suspension, para. 433.
95 Appellate Body report, US – Countervailing Measures (China), para. 4.6.
96 Appellate Body Report, EC and certain member States – Large Civil Aircraft, para. 640. See also
Appellate Body Report, China – Raw Materials, para. 233. See also, Appellate Body Report, US – Countervailing
Measures (China), footnote 435.
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3.7. We shall therefore proceed to examine the panel requests to a scertain their conformity with
the second key requirement of Article 6.2 of the DSU with respect to the claims under Article III:4
of the GATT 1994 and Article 3.2 of the Import Licensing Agreement . T here is considerable
guidance in past panel and Appellat e Body reports on how we should proceed with such an
examination. Bearing this guidance in mind, we will carefully scrutinize the language used in the
panel requests97 and will be mindful that compliance with the requirements of Article 6.2 must be
demonstrated on the face of the panel requests and be determined on the merits of this particular
case, having considered the panel request s as a whole and in the light of attendant
circumstances.98 In doing so, we acknowledge that, although we may refer to the co-complainants'
submissions in order to confirm the meaning of the words used in the panel requests 99, parties'
submissions and statements during the panel proceedings cannot "cure" any defects in the panel
requests.100
3.8. In the light of the foregoing, we procee d first to address Indonesia's contention that the
claims pursuant to Article III:4 of the GATT 1994 and Article 3.2 of the Import Licensing
Agreement fail to meet the requirements of Article 6.2 of the DSU and therefore fall outside our
terms of reference . We will then approach Indonesia's contention that the fact that the
United States did not provide argumentation on Article III:4 of the GATT 1994 in its first written
submission is relevant under Article 6.2 of the DSU. Next, we will examine whether the manner in
which the co-complainants have formulated their claims pursuant to Article III:4 of the GATT 1994
and Article 3.2 of the Import Licensing Agreement in their panel requests prejudices Indonesia's
ability to defend itself and hence undermines its due process rights. Finally, we will address
Indonesia's contention that the co -complainant's first written submissions have also failed to
comply with Article 6.2 requirements.
3.2 Whether the claims pursuant to Article III:4 of the GATT 1994 and Article 3.2 of the
Import Licensing Agreement fall within our terms of reference
3.9. The first question that we will address is whether, as Indonesia argues, the claims pursuant
to Article III:4 of the GATT 1994 and Article 3.2 of the Import Licensing Agreement are not
sufficiently identified in the co-complainants' panel requests, thus failing to meet the requirements
of Article 6.2 of the DSU and falling outside our terms of reference. In particular, Indonesia argued
that the claims under Article III:4 of the GATT 1994 a nd Article 3.2 of the Import Licensing
Agreement were not "properly and sufficiently" 101 identified because these provisions were only
mentioned in footnotes to the panel requests and, to the extent the co -complainants refer to
possible violations of these p rovisions by Indonesia, they do so in "conditional and ambiguous
language".102 Indonesia further argued that, should we consider that "putting the legal basis of a
claim in the footnotes is acceptable"103, those claims are not sufficiently identified because
footnotes 5, 7, 8, 12 and 14 of the panel requests "only repeat treaty provisions" and thus contain
"no proper or sufficient explanation" of how the measures at issue are inconsistent with
Article III:4 of the GATT 1994 or Article 3.2 of the Import Licensing Agreement.104
3.10. The co -complainants responded that Indonesia offers no analysis as to why the use of
footnotes in discussing the claims is, by itself, inconsistent with Article 6.2 of the DSU and
contended that Indonesia's suggestion that placement in a foo tnote renders the language "not
important"105 goes against the general usage of footnotes in treaties and international agreements,
including in the WTO. 106 Regarding Indonesia's contention that the language in such footnotes is

97Appellate Body Report, China — Raw Materials, para. 220 (referring to Appellate Body Report, EC –
Fasteners (China), para. 562).
98Appellate Body Report, US —Carbon Steel, paras. 127 (referring to Appellate Body Report, Korea –
Dairy, paras. 124-127.
99 Appellate Body Report, China — Raw Materials, para. 220.
100 Appellate Body Report, EC and certain member States – Large Civil Aircraft, para. 787 (referring to
Appellate Body Reports, EC – Bananas III, para. 143; and US – Carbon Steel, para. 127). See also Appellate
Body Report, US – Countervailing and Anti-Dumping Measures (China), para. 4.9.
101 Indonesia's request for a preliminary ruling, paras. 10 and 14.
102 Indonesia's request for a preliminary ruling, para. 10.
103 Indonesia's request for a preliminary ruling, para. 14.
104 Indonesia's request for a preliminary ruling, paras. 14-20.
105 Co-complainants' joint comments on Indonesia's preliminary ruling request, paras. 9-10.
106 Co-complainants' joint comments on Indonesia's preliminary ruling request, para. 10.
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"conditional and ambiguous"107, the co-complainants responded by arguing that Indonesia did not
identify the specific language it found to be conditional and ambiguous or explained its reasons. 108
They submitted that raising complementary or alternative claims is "very common" in WTO dispute
settlement109 and that a party intending to pursue complementary or alternative claims must
simply refer to each of the relevant provisions in its panel request pursuant Article 6.2 of the
DSU.110 The co-complainants further submitted that, to comply with Ar ticle 6.2 of the DSU, one
need only provide the claim at issue and not detailed argumentation on the claim.111
3.11. We commence by examining whether the claims under Article III:4 of the GATT 1994 and
Article 3.2 of the Import Licensing Agreement were not suffic iently identified because they were
set out in footnotes to the panel requests. 112 In support of this contention, Indonesia relied on the
Oxford Advanced Learner's Dictionary. Indonesia thus argued that the meaning of "footnote" is
"(1) an extra piece of inf ormation that is printed at the bottom of a page in a book or (2) (of an
event or a person) that may be remembered but only as something/somebody that is not
important."113 For Indonesia, the identification of the legal basis of the claims in a panel request is
"very important " and not just an " extra piece of information "114 as "it determines the terms of
reference and jurisdiction"115 of a panel. Consequently, Indonesia requested the Panel to rule that
these claims are outside the Panel's terms of reference.116
3.12. The co -complainants responded that nothing in Article 6.2 of the DSU indicates that a
complainant's claims are limited by the format in which those claims are presented . The co -
complainants draw our attention to the Appellate Body's observation that "footnotes are part of the
text of a panel request, and may be relevant to the identification of the measure at issue or the
presentation of the legal basis of the complaint".117
3.13. We proceed to examine the wording of Article 6.2 of the DSU to ascertain whether there is
any requirement regarding how claims are to be presented in panel requests. As we explained in
Section 3.1 above, Article 6.2 of the DSU requires a complaining party to provide a brief summary
of the legal basis of the complaint sufficient to present t he problem clearly. We agree with the co-
complainants and the third parties 118 that, apart from the requirement that the panel request be
made in writing , Article 6.2 does not include a requirement that such summary be presented in
any particular form. In fact, as clarified by the Appellate Body, complying with this provision as far
as the presentation of the legal claims is concerned, is achieved by listing the article(s) of the
covered agreement(s) claimed to have been violated 119 with the necessary degree of precision
depending on the obligation(s) contained in the given provision(s), and plainly connecting the
challenged measure(s) with the provision(s) of the covered agreements claimed to have been
infringed.120 We thus find no support in the wording of Artic le 6.2 of the DSU for Indonesia's
interpretation that setting out the legal basis of a complaint in the footnotes of a panel request
signals that the matter is considered unimportant or ancillary. Nor do we find any basis to

107 Indonesia's request for a preliminary ruling, para. 10.
108 Co-complainants' joint comments on Indonesia's preliminary ruling request, para 13.
109 Co-complainants' joint comments on Indonesia's preliminary ruling request, para 14 (referring to
Panel Report, Korea – Commercial Vessels, para. 7.2.28).
110 Co-complainants' joint comments on Indonesia's preliminary ruling request, para 14. Panel Report,
Korea – Commercial Vessels, para. 7.2.29.
111 Co-complainants' joint comments on Indonesia's preliminary ruling request, para. 19 (referring to
the Appellate Body Report, China—HP–SSST, para. 5.14).
112 Indonesia's request for a preliminary ruling, para. 10.
113 Indonesia's request for a preliminary ruling, para. 11. (emphasis original)
114 Indonesia's request for a preliminary ruling, para. 12. (underlining original)
115 Indonesia's request for a preliminary ruling, para. 12. (underlining original)
116 Indonesia's request for a preliminary ruling, para. 13.
117 Co-complainants' joint comments on Indonesia's preliminary ruling request, para 11 (referring to
Appellate Body Report, US – Countervailing and Anti-Dumping Measures (China), para 4.39).
118 Co-complainants' joint comments on Indonesia's preliminary ruling request, para. 11; Australia's
comments on Indonesia's preliminary ruling request of 11 December 2015, paras. 6-7; Brazil's comments on
Indonesia's preliminary ruling request of 11 December 2015, para. 6.
119 Appellate Body Reports, Korea – Dairy, paras. 123 and 124 (referring to Appellate Body Reports,
Brazil – Desiccated Coconut, p. 22, DSR 1997:I, p. 186; EC – Bananas III, paras. 145 and 147; and Indonesia
– Patents (US), paras. 89, 92, and 93); US – Carbon Steel, para. 130. See also Appellate Body Report, US –
Countervailing and Anti-Dumping Measures (China), para. 4.8.
120Appellate Body Report, China — Raw Materials, para. 220 (referring to Appellate Body Report, US –
Oil Country Tubular Goods Sunset Reviews, para. 162).
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conclude that including claims in footnotes would result in such claims being "not properly and
sufficiently described" as required by Article 6.2 of the DSU . We find no reason, nor does
Indonesia offer one, to conclude that placing a claim in a footnote, as opposed to the body of the
request, in and of itself, affects the clarity of the claim.
3.14. Our interpretation is in line with the Appellate Body's view that "footnotes are part of the
text of a panel request, and may be relevant to the identification of the measure at issue or the
presentation of the legal basis of the complaint". 121 We also find support for our approach in the
general usage of footnotes in the covered agreements. As mentioned by the co -complainants122
and Brazil 123, footnotes are important in establishing the nature and scope of the rights and
obligations in the covered agreements. This is evident in footnote 1 to Article 4.2 of the Agreement
on Agriculture, a provision relevant to this dispute, which serves to clarify the types of measures
that fall under the scope of this pr ovision. A similar argument could be made regarding footnotes
found in other covered agreements, such as, for instance, footnotes 1 to 5124 to the Agreement on
the Application of Sanitary and Phytosanitary Measures (SPS Agreement) and footnotes 1 to 6 125
to the Agreement on Subsidies and Countervailing Measures (SCM Agreement).126
3.15. In sum, w e find that nothing in the wording of Article 6.2 of the DSU precludes a
complainant from setting out claims in footnotes to its panel request and t he fact that the co -
complainants have set out claims pursuant to Article III:4 of the GATT 1994 and Article 3.2 of the
Import Licensing Agreement in footnotes 5, 7, 8, 12 and 14 of their panel requests does not
render these requests inconsistent with the requirements of Article 6.2 of the DSU.
3.16. We now proceed to examine Indonesia's contentions pertaining to the language used in the
relevant footnotes. In particular, we need to determine whether the co-complainants have failed to
comply with Article 6.2 of the DSU because, as argued by Indonesia, footnotes 5, 7, 8, 12, and 14
contain conditional and ambiguous language and, by only repeating treaty provisions, provide no
proper or sufficient explanation of how the measures at issue are inconsistent with Article III:4 of
the GATT 1994 or Article 3.2 of the Import Licensing Agreement .127 We understand that Indonesia
considered that the panel requests do not meet the requirement in Article 6.2 of the DSU to
"provide a brief summary of the legal basis of the complaint sufficient to present the problem
clearly."128 As we explained in Section 3.1 above, the Appellate Body has clarified that a brief
summary of the legal basis of the complaint "aims to explain succinctly how or why the measure at

121 Appellate Body Report, US – Countervailing and Anti-Dumping Measures (China), para 4.39.
122 Co-complainants' joint comments on Indonesia's preliminary ruling request, para 10.
123 Brazil's comments on Indonesia's preliminary ruling request of 11 December 2015, fn. 7.
124 Footnote 1 of the SPS Agreement makes reference to Article XX(b), including also the chapeau of
that Article. Footnote 2 describes the circumstances when there is scientific justification for the purposes of
paragraph 3 of Article 3. Footnote 3 describes the circumstances when a measure is not more trade-restrictive
than required for purposes of paragraph 6 of Article 5. Footnote 4 defines the terms "animal", "plant", "wild
flora", "pests" and "contaminants". Footnote 5 sets out the scope of the sanitary and phytosanitary regulations
covered under paragraph 1 of Annex B.
125 Footnote 1 of the SCM Agreement describes measures that are not to be deemed a subsidy in
accordance with the provisions of Article XVI of GATT 1994 (Note to Article XVI) and the provisions of Annexes
I through III of the SCM Agreement. Footnote 2 defines the terms "objective criteria or conditions" as used in
Article 2. Footnote 3 sets out that, in considering other factors to assess whether a subsidy is specific,
information on the frequency with which applications for a subsidy are refused or approved and the reasons for
such decisions shall be considered. Footnote 4 sets out that a subsidy is contingent in fact when, without
having been made legally contingent upon export performance, it is in fact tied to actual or anticipated
exportation or export earnings. It also establishes that the mere fact that a subsidy is granted to enterprises
which export shall not for that reason alone be considered to be an export subsidy within the meaning of
Article 3 of the SCM Agreement. Footnote 5 set outs that measures referred to in Annex I of the SCM
Agreement as not constituting export subsidies shall not be prohibited under Article 3.1(a) or any other
provision of the SCM Agreement. Footnote 6 provides that any time periods mentioned in Article 4.4 may be
extended by mutual agreement.
126 Brazil's comments on Indonesia's preliminary ruling request of 11 December 2015, fn. 7.
127 Indonesia's request for a preliminary ruling, paras. 14-20.
128 See also Indonesia's request for a preliminary ruling, para. 2, referring to Article 6.2.
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issue is considered by the complaining Member to be vio lating the WTO obligation in question". 129
We also recall that, w hile a panel request must set out the claims, there is no requirement in
Article 6.2 that a complaining party include in its panel request arguments that seek
"to demonstrate that the respondin g party's measure does indeed infringe upon the identified
treaty provision".130
3.17. We observe that the co-complainants' panel requests, as set out in documents WT/DS477/9
and WT/DS478/9, are identical but for the references to each of the co -complainants' names. The
panel requests are divided into three main sections refer ring to challenges relating to
(i) horticultural products 131, (ii) animals and animal products 132, and (iii) the sufficiency of
domestic production.133 Sections I and II are in turn sub -divided into three subsections presenting
the challenges to (i) "Indonesia's Trade -Restrictive Import Licensing Regime" 134; (ii) the
"Prohibitions and Restrictions … Made Effective Through Indonesia's Import Licensing Regime" 135,
and (iii) the "Prohibitions and Restricti ons on Importation Relating to the Use, Sale, Offering for
Sale, Distribution, Storage, or Transportation … Made Effective Through Indonesia's Import
Licensing Regime". 136 The panel requests include Annexes I and II listing the legal instruments
through which Indonesia maintains the measures set out in the panel requests.
3.18. The co -complainants' claims under Article 3.2 of the Import Licensing Agreement are
presented in footnotes 5 and 8, contained in Sections I(a) and II(a) of the panel requests,
respectively. The co-complainants' claims under Article III:4 of the GATT 1994 are presented in
footnotes 7, 12 , and 14. Footnote 7 is contained in Section I(c), while footnotes 12 and 14 are
found in Sections II(b) and II(c), respectively. We now turn to scrutinize the wording of the
relevant footnotes to determine whether they meet the requirements of Article 6.2 of the DSU.
3.2.1 Footnotes 5 and 8
3.19. Footnote 5 provides as follows:
To the extent that Indonesia's import licensing regime for horticultural products falls
within the scope of the disciplines of Article 3 of the Import Licensing Agreement, [the
United States][New Zealand] considers that the import licensing requirements and
procedures, as described above and as set out in sections I(b) and I(c), would be
inconsistent with Article 3.2 of the Import Licensing Agreement because they have
trade-restrictive or trade distortive effects additional to those caused by imposition of
the restriction, do not correspond in scope and duration to any measure they could be
implementing, and are more administratively burdensome than absolutely necessary
to implement any such measure. To the extent that Indonesia's import licensing
regime falls within the scope of Article 2 of the Import Licensing Agreement, [the
United States][New Zealand] considers that Indonesia's import licensing requirements
and procedures, as described above and as set out in sections I(b) and I(c), would be
inconsistent with Article 2.2(a) of the Import Licensing Agreement because they are
administered in such a manner as to have restricting effects on imports.
3.20. As Indonesia's contention does not concern the claim pursuant to Article 2.2(a) of the
Import Licensing Agreement, we will focus our analysis on the wording pertaining to the claim
under Article 3.2 (that is, from the beginning of the footnote until "any such measure.").

129 Appellate Body Report, US – Countervailing Measures (China), para. 4.9 (referring to Appellate Body
Report, EC – Selected Customs Matters, para. 130. (italics original; underlining added)). In EC – Selected
Customs Matters, the Appellate Body also stated that "Article 6.2 of the DSU requires that the claims – not the
arguments – be set out in a panel request in a way that is sufficient to present the problem clearly". (Ibid.,
Korea – Dairy, para. 139; and Dominican Republic – Import and Sale of Cigarettes, para. 121))
130 Appellate Body Report, US – Countervailing Measures (China), para. 4.8 (referring to Appellate Body
Report, Korea – Dairy, para. 139 (referring to Appellate Body Reports, EC – Bananas III, para. 141; India –
131 Section I.
132 Section II.
133 Section III.
134 Sections I(a) and II(a).
135 Sections I(b) and II(b).
136 Sections I(c) and II(c).
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3.21. Footnote 5 begins with the phrase "[t]o the extent that Indonesia's import licensing regime
for horticultural products falls within the scope of the disciplines of Article 3 of the Import Licensing
Agreement". To us, the words "[t]o the extent that" signal that the co -complainants condition the
claim on Indonesia's import licensing regime for horticultural products fall ing under the scope of
Article 3 of the Import Licensing Agreement. In this respect, we note Indonesia's argument on the
use of conditional language 137 and we agree that the claim presented in footnote 5 relating to
Article 3.2 of the Import Licensing Agreement is expressed in conditional language. We
nonetheless observe that nothing in Article 6.2 of the DSU proscribes the use of conditional
language in the formulation of a claim. In fact, as the co -complainants138, Australia139 and Brazil140
argue, raising complementary or alternative claims is a common feature in WTO dispute
settlement. We thus find that the conditional nature of the claims does not render them outside
our jurisdiction. Continuing our analysis, we observe that this part of the footnote does not provide
the "how or why the measure at issue is considered by the complaining Member to be violating the
WTO obligation in question".141
3.22. The footnote then refers to the challenged measures themselves (" the import licensing
requirements and procedures, as described above and as set out in sections I(b) and I(c) "). We do
not find here, either, the "how or why the measure at issue is considered by the complaining
Member to be violating the WTO obligation in question ". Turning to t he last part of the relevant
wording ("because they have trade-restrictive or trade distortive effects additional to those caused
by imposition of the restriction, do not correspond in scope and duration to any measure they
could be implementing, and are more administratively burdensome than absolutely necessary to
implement any such measure "), the co -complainants provide their reasons for challenging the
measures in question, stating that they would be inconsistent with Article 3.2 because they (i)
"have trade-restrictive or trade distortive effects additional to those caused by imposition of the
restriction", (ii) "do not correspond in scope and duration to any measure they could be
implementing", and (iii) "are more administratively burdensome than absolutely necessary to
implement any such measure". In using the word "because", the co -complainants signal that what
follows are their reasons "why the measure at issue is considered by the complaining Member[s]
to be violating the WTO obligation in question".
3.23. As pointed out by the respondent, these reasons cited by the co-complainants closely follow
the language of Article 3.2 of the Import Licensing Agreement. 142 Indonesia takes issue with the
fact that the co -complainants "only repeat treaty provisions "143 and, as such, contend s that the
respective panel requests do not meet the requirements of Article 6.2 of the DSU. We do not
agree, for we do not consider that closely following the wording of the provision allegedly violated
is necessarily problematic. As we stated above, A rticle 6.2 requires a complainant to provide a
brief summary of the legal basis of the com plaint sufficient to present the problem clearly. It does
not specify any particular formula or language that must be followed to meet this criterion. Thus it
may be possible, depending upon the wording of the provision in question, to satisfy this
requirement simply by following closely the language of the provision in question. We are of the
view that, given the specific content of Article 3.2 of the Import Licensing Agreement , referring to
its different elements and stating that a measure does not meet them can suffice to provide a brief
summary of the legal basis of a complaint. Upon reading footnote 5, it is clear that the co -
complainants base their claims of violation on the fact that the measures in question have trade-
restrictive or trade distortive effects additional to those caused by imposition of the restriction, do
not correspond in scope and duration to any measure the y could be implementing, and are more

137 Indonesia's request for a preliminary ruling, para. 10.
138 Co-complainants' joint comments on Indonesia's preliminary ruling request, para. 14 (referring to
Panel Report, Korea – Commercial Vessels, paras. 7.2.28-7.2.29).
139 Australia's comments on Indonesia's preliminary ruling request of 11 December 2015, para. 10
(referring to Panel Report, Korea — Commercial Vessels, para. 7.2).
140 Brazil's comments on Indonesia's preliminary ruling request of 11 December 2015, para. 14.
141 Indonesia's request for a preliminary ruling, para. 10.
142 We also observe that footnote 5 does not contain any precise arguments as to why the measures at
issue are inconsistent with the alleged provision. As we discussed above, there is no requirement in Article 6.2
that a complaining party include in its panel request arguments that seek "to demonstrate that the responding
party's measure does indeed infringe upon the identified treaty provision". Appellate Body Report, US –
Countervailing Measures (China), para. 4.8 (referring to Appellate Body Report, Korea – Dairy, para. 139
(referring to Appellate Body Reports, EC – Bananas III, para. 141; India – Patents (US), para. 88; and EC –
Hormones, para. 156)).
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administratively burdensome than absolutely necessary to implement any such measure . As
explained above, there is no requirement in Article 6.2 for a complaining party to go further and
include in its panel request argumen ts that seek "to demonstrate that the responding party's
measure does indeed infringe upon the identified treaty provision". 144 Before concluding on this
argument, we wish to underscore our view that other WTO provisions may not provide sufficient
specificity or detail to lead to the same result as we have come to in this case. It may well be the
case that reciting a WTO provision will not suffice to "explain succinctly how or why the measure at
issue is considered by the complaining Member to be violating the WTO obligation in question". 145
This inquiry must be conducted on a case by case basis.
3.24. We finalize our analysis of footn ote 5 by assessing Indonesia's argument that the language
used to set out the claim under Article 3.2 of the Import Licensing Agreement is ambiguous. We
begin by noting that, as argued by co -complainants146, Indonesia did not identify the specific
language it found to be ambiguous. Nonetheless, bearing in mind the due process objective of
panel requests of notifying the respondent and third parties of the nature of the complainant's
case147, we proceed to examine whether Indonesia's contention has merit . For language to be
ambiguous, it must lead to uncertainty or confusion about its meaning. In the context of an
analysis under Article 6.2 of the DSU, the resulting uncertainties or confusion must have an effect
on the compliance with requirements set forth i n this provision. In the present case, we do not
observe any ambiguities in the text of footnote 5 that would prevent the co -complainants from
complying with Article 6.2 of the DSU. On the contrary, and as we have noted in the preceding
paragraphs, footnote 5 explains succinctly how or why the measure at issue is considered by the
co-complainants to be violating Article 3.2 of the Import Licensing Agreement. To us, the language
used in footnote 5 to set out the claim under Article 3.2 is not ambiguous.
3.25. We thus conclude that, with respect to the claim under Article 3.2 of the Import Licensing
Agreement set out in footnote 5 of the panel requests, the co -complainants provided a brief
summary of the legal basis of their complaint that presents the problem clear ly as required by
Article 6.2 of the DSU.
3.26. We now turn to Footnote 8, which reads:
To the extent that Indonesia's import licensing regime for animals and animal
products falls within the scope of the disciplines of Article 3 of the Import Licensing
Agreement, [the United States][New Zealand] considers that the import licensing
requirements and procedures, as described above and as set out in sections II(b) and
II(c), would be inconsistent with Article 3.2 of the Import Licensing Agreement
because they have t rade-restrictive or trade -distortive effects additional to those
caused by imposition of the restriction, do not correspond in scope and duration to
any measure they could be implementing, and are more administratively burdensome
than absolutely necessary to implement any such measure. To the extent that
Indonesia's import licensing regime falls within the scope of Article 2 of the Import
Licensing Agreement, the [the United States][New Zealand] considers that Indonesia's
import licensing requirements and p rocedures, as described above and as set out in
sections II(b) and II(c), would be inconsistent with Article 2.2(a) of the Import
Licensing Agreement because they are administered in such a manner as to have
restricting effects on imports.
3.27. We observe that footnote 8 closely resembles footnote 5, the only difference being that the
former addresses the import licensing regime for animals and animal products while the latter
addresses that for horticultural products . Accordingly, our conclusion above that the co-

144 Appellate Body Report, US – Countervailing Measures (China), para. 4.8 (referring to Appellate Body
Report, Korea – Dairy, para. 139 (referring to Appellate Body Reports, EC – Bananas III, para. 141; India –
145 Appellate Body Report, US – Countervailing Measures (China), para. 4.9 (referring to Appellate Body
Report, EC – Selected Customs Matters, para. 130. (italics original; underlining added)). In EC – Selected
Customs Matters, the Appellate Body also stated that "Article 6.2 of the DSU requires that the claims – not the
arguments – be set out in a panel request in a way that is sufficient to present the problem clearly". (Ibid.,
Korea – Dairy, para. 139; and Dominican Republic – Import and Sale of Cigarettes, para. 121))
146 Co-complainants' joint comments on Indonesia's preliminary ruling request, para 13.
147 Appellate Body report, US – Countervailing Measures (China), para. 4.6.
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complainants provided a brief summary of the legal basis of their complaint that presents the
problem clearly as required by Article 6.2 of the DSU also applies to the claims set out in
footnote 8.
3.2.2 Footnotes 7, 12 and 14
3.28. The first footnote setting out the claims pursuant to Article III:4 of the GATT 1994 is
footnote 7, which provides as follows:
To the extent that these measures are measures affecting the internal sale, offering
for sale, purchase, transportation, distribution or use of products, [the United
States][New Zealand] considers that they would be inconsistent with Article III:4 of
the GATT 1994 because Indonesia does not impose similar limitations on the internal
sale, offering for sale, purchase, transportation, storage, distribution and use of like
domestic products and, therefore, Indonesia's laws, regulations and requirements
accord less favorable treatment to imported products than like domestic products.
3.29. We observe that, similarly to footnotes 5 and 8, footnote 7 starts with a condition that
qualifies the claim by using the introductory words "[t]o the extent that ". We refer to paragraph
3.21 above where we concluded that the conditional nature of the claims does not render them
outside our jurisdiction. As we also found with footnotes 5 and 8, this first section of the footnote
does not provide the explanation of the legal basis for the claim required by Article 6.2 of the DSU.
Following our approach above, we look to the latter part of the footnote, following the word
"because", which states as follows: "Indonesia does not impose similar limitations on the internal
sale, offering for sale, purchase, transportation, storage, distribution and use of like domestic
products, and therefore Indonesia's [measures] accord less favorable treatment to imported
products than like domestic products". We note that the co-complainants have closely followed the
language of Article III:4 of the GATT 1994 to explain how and why the challenged measures are
inconsistent with this provision.148 Nevertheless, as we have stated above, doing so does not mean
necessarily that such formulation would result in a failure to provide a brief summary of the legal
basis of the complaint sufficient to present the problem clearly . An examination of the explanation
in question would be required. In our view, using the word "because" in footnote 7 signals that
what follows are the co -complainants' reasons why the measures at issue are considered to be in
violation of Article III:4 of the GATT 1994. Moreover, the language empl oyed by the co -
complainants in footnote 7 following the word "because" explains succinctly why the measures
referred to in Section I(C) are considered by New Zealand and the United States to be in violation
of this provision. It states what Indonesia allegedly fails to do (impose similar limitations regarding
domestic products) and identifies the perceived result of this alleged failure (accordance of less
favourable treatment to imported products than like domestic products). It contends that this
would result in a violation of Article III:4 of the GATT 1994. Reading this explanation, we are of
the view that the respondent can understand what the co -complainants are complaining about and
which violation is alleged to have occurred. As to their arguments in support, these do not need to
be set forth in a request for the establishment of a panel.
3.30. Similar to our conclusion in paragraph 3.24 above , we do not observe in the text of
footnote 7 any ambiguities, nor has Indonesia pointed to any, that would conflict with the
requirements of Article 6.2 of the DSU. On the contrary, and as we have noted in the preceding
paragraphs, footnote 7 explains succinctly how or why the measure at issue is considered by the
co-complainants to be violating Article III:4 of the GA TT 1994. To us, the language used in
footnote 7 to set out the claim under Article III:4 of the GATT 1994 is not ambiguous.
3.31. We thus conclude that, with respect to the claim under Article III:4 of the GATT 1994 set
out in footnote 7 of the panel requests, the co-complainants provided a brief summary of the legal
basis of their complaint that presents the problem clearly as required by Article 6.2 of the DSU.
3.32. Turning now to footnote 12, it provides as follows:
To the extent that the absorption requirement is a measure affecting the internal sale,
offering for sale, purchase, transportation, distribution or use of products, [the United

148 Concerning the absence in Article 6.2 of the DSU of a requirement to include arguments in support of
a claim, see paragraph 3.5 and 3.23 above.
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States][New Zealand] considers that it would be inconsistent with Article III:4 of the
GATT 1994 because it accords less favora ble treatment to imported products than to
like domestic products.
3.33. We observe that, although not identical, the language and structure of footnote 12 is similar
to that of footnote 7. It thus starts with a condition that qualifies the claim by using the
introductory words "[t]o the extent that ". We refer to paragraph 3.21 above where we concluded
that the conditional nature of the claims does not render them outside our jurisdiction. Once again,
the co -complainants closely followed the language of th e provision in question to explain the
reason why the challenged measure is inconsistent with it. For reasons similar to those set forth
above, we consider that the co -complainants explained succinctly why the measure in question is
considered by New Zealand and the United States to be in violation of Article III:4 of the
GATT 1994.149 As with previous footnotes, we do not observe in the text of footnote 12 any
ambiguities, nor has Indonesia pointed to any, that would conflict with the requirements of Article
6.2 of the DSU. On the contrary, and as we have noted in the preceding paragraphs, footnote 12
explains succinctly how or why the measure at issue is considered by the co -complainants to be
violating Article III:4 of the GATT 1994. To us, the language used in footnote 12 to set out the
claim under Article III:4 of the GATT 1994 is not ambiguous.
3.34. We thus conclude that, with respect to the claim under Article III:4 of the GATT 1994 set
out in footnote 12 of the panel requests, the co -complainants provided a brief summary of the
legal basis of their complaint that presents the problem clearly as required by Article 6.2 of the
DSU.
3.35. Finally, we examine footnote 14, which provides as follows:
To the extent that these measures are measures affecting the internal sale, offering
for sale, purchase, transportation, distribution or use of products, [the United
States][New Zealand] considers that they would be inconsistent with Article III:4 of
the GATT 1994 because Indonesia does not impose similar limitations on the intern al
sale, offering for sale, purchase, transportation, storage, distribution and use of like
domestic products and, therefore, Indonesia's laws, regulations and requirements
accord less favorable treatment to imported products than to like domestic products.
3.36. We observe that the wording of footnote 14 is identical to that of footnote 7. The only
difference is the paragraph of the panel requests where this footnote is placed , with the result that
footnote 14 refers to measures different from those to which footnote 7 applies. This difference
does not affect our reasoning regarding compliance with Article 6.2 of the DSU and hence we
reach the same conclusion with respect to footnote 14. We thus conclude that, with respect to the
claim under Article III:4 of the GATT 1994 set out in footnote 14 of the panel requests, the co -
complainants provided a brief summary of the legal basis of their complaint that presents the
problem clearly as required by Article 6.2 of the DSU.
3.37. Before concluding on this aspect of Indonesi a's request for a preliminary ruling, the Panel
wishes to address Indonesia's argument that the "situation" in the present dispute is "exactly the
situation" present in China – Raw Materials where the complainants' panel requests were found
wanting because, according to Indonesia, "the complainants merely 'challeng[ed] some (groups of)
measures as inconsistent with some (groups) of the listed WTO obligations…". 150 The co -
complainants respond ed that the facts in China – Raw Materials can be distinguished fro m the
present instance and that, on the contrary, the panel requests in these proceedings describe the
challenged measures in detail, including the problematic aspects of their operation, identify the
legal instruments through which each measure was impose d, set out the provisions with which the
measures are inconsistent, and su mmarize the relevant obligation. 151 We recall that in China –
Raw Materials, the panel request listed 37 legal instruments followed by a "wide array of dissimilar
obligations."152 The Appellate Body found that, given the number of possible combinations that

149 Concerning the absence in Article 6.2 of the DSU of a requirement to include arguments in support of
a claim, see paragraph 3.5 and 3.23 above.
150 Indonesia's request for a preliminary ruling, paras. 20-21.
151 Co-complainants' joint comments on Indonesia's preliminary ruling request, para 26.
152 Appellate Body Report, China – Raw Materials, para. 228 (referring to Appellate Body Report, Korea
– Dairy, para. 124).
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existed between the legal instruments listed and the multiple obligations challenged , it was not
possible to discern the problems alleged to have been caused. The situation in that case is not
comparable to that here. Contrary to the situation in China — Raw Materials, the panel requests do
not "raise[] multiple problems stemming from several different obligations arising under various
provisions".153 Rather, footnotes 5, 7, 8, 12 a nd 14 of the panel requests before us allege
violations only of Articles 2.2(a) (not relevant in this ruling) and 3.2 of the Import Licensing
Agreement, as well as Article III:4 of the GATT 1994. The measures alleged to be in violation of
these provisions were discussed in connection with each provision separately. Thus the difficulties
in discerning the problem found in China — Raw Materials do not arise in this case.
3.38. In the light of the foregoing, we reject Indonesia's contention that the manner in which the
co-complainants formulated their claims pursuant to Article 3.2 of the Import Licensing Agreement
and Article III:4 of the GATT 1994 in their panel requests did not sufficiently identify their claims
and thereby failed to comply with the requirements of Article 6.2 of the DSU.
3.2.3 Whether the fact that the United States did not provide argumentation on
Article III:4 of the GATT 1994 in its first written submission is relevant under Article 6.2
of the DSU
3.39. We proceed to examine Indonesia's contention that the "confusion"154 regarding the claims
under Article III:4 of the GATT 1994 and Article 3.2 of the Import Licensing Agreement "is
compounded by the fact that the Complainants' panel requests are identical, but their (first written
submissions) are different concerning these treaty provisions." Indonesia explained that while the
United States' first written submission "only appeared to advance" a claim under Article 3.2 of the
Import Licensing Agreement, New Zealand's first written submission "attempted to in voke" both
Article III:4 of the GATT and Article 3.2 of the Import Licensing Agreement.155
3.40. The co-complainants responded that this argument lacks merit because the consistency of a
panel request with the requirements of Article 6.2 of the DSU is based on t he text of that "request
… made in writing ".156 In their view, a complainant is not required to pursue all the claims
referenced in its panel request, and a decision not to pursue a claim "has no bearing on the
sufficiency of the text of the panel request under DSU Article 6.2."157
3.41. We recall that, as explained by the Appellate Body, "a complainant has the prerogative to
narrow or abandon its claims, and thereby reduce the scope of its disagreement and dispute, at
any stage of a proceeding". 158 Furthermore, "whether a complainant narrows or abandons its
claims is an issue different from an assessment of the consistency of a panel request with the
requirements under Article 6.2 of the DSU, which must be assessed in the light of the language
used in the panel request as it stood at the time it was filed".159
3.42. We thus conclude that the fact that the United States has not pursued a claim included in its
panel request, namely Article III:4 of the GATT 1994, within its first written submission is not
relevant for pur poses of assessing whether such a claim was adequately identified in the panel
request at issue pursuant to Article 6.2 of the DSU. We also find that the fact that New Zealand
chose a different strategy from its co -complainant and decided to pursue in its first written
submission claims under both Article III:4 of the GATT 1994 and Article 3.2 of the Import
Licensing Agreement does not undermine the adequacy of its panel request, for it simply followed
through with what it set forth in its panel request. Th erefore, we dismiss Indonesia's request that

153 Appellate Body Report, China – Raw Materials, para. 230.
154 Indonesia's request for a preliminary ruling, para. 22.
155 Indonesia's request for a preliminary ruling, para. 22.
156 Co-complainants' joint comments on Indonesia's preliminary ruling request, para. 15 (referring to
DSU Article 6.2).
157 Co-complainants' joint comments on Indonesia's preliminary ruling request, para. 15.
158 Appellate Body Report, US – Countervailing Measures (China), para. 4.19 (referring to Appellate
159 Appellate Body Report, US – Countervailing Measures (China), para. 4.19 (quoting US –
Countervailing and Anti-Dumping Measures (China) that "[s]ubsequently dropping claims does not add to, or
detract from, an independent assessment of whether the remaining claims are identified in a manner that is
sufficient to present the problem clearly, in accordance with Article 6.2 of the DSU." (Appellate Body Report,
US – Countervailing and Anti-Dumping Measures (China), para. 4.49).
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we find that the co-complainants' different approaches in their respective first written submissions
resulted in the claims being insufficiently identified in their panel requests.
3.3 Whether Indonesia's due process rights have been impaired
3.43. We turn now to address Indonesia's contention that it has suffered prejudice because the
"apparent claims"160 under Article III:4 of the GATT 1994 and Article 3.2 of the Import Licensing
Agreement were not sufficiently identifie d in the panel requests. Indonesia submitted that the fact
that these claims were only mentioned in footnotes and that the footnotes only repeated the legal
provisions without explaining why the measures at issue violate these two provisions are "acts of
WTO inconsistency"161 that clearly prejudice Indonesia's ability to defend itself in this dispute.162
3.44. The co-complainants responded that the evaluation of the sufficiency of a panel request is
"based on the face of the panel request itself " and therefore "it would not also be necessary to
demonstrate that the responding party was prejudiced by the inconsistency. "163 They also
reasoned that if a panel request meets the requirements of Article 6.2 of the DSU, "a responding
party cannot, objectively, be prejud iced by that request". 164 The co -complainants submit ted
further that, in any event, Indonesia has not been prejudiced because the co-complainants made
Indonesia aware of the claims under Article 3.2 of Import Licensing Agreement and Article III:4 of
the GATT 1994 both in the panel requests which are in accordance with Article 6.2, and in the co-
complainants' requests for consultations.165 In the co-complainants' view, Indonesia was therefore
"on notice from the commencement of this dispute" 166 of these clai ms. The co -complainants also
argued that Indonesia provided no details in support of its allegation of prejudice and consequently
its "unsubstantiated claim of prejudice" is analogous to that considered in Korea – Dairy, where
the Appellate Body rejected K orea's claim that it had suffered prejudice on the basis that it had
"assert[ed] that it had sustained prejudice, but offered no supporting particulars in its appellant's
submission nor at the oral hearing".167
3.45. We recall that a panel request serves the due process objective of notifying the respondent
and third parties of the nature of the complainant's case .168 Thus a panel request that is in
conformity with Article 6.2 of the DSU will identify the specific measures at issue and provide a
brief summary of the legal basis of the complaint sufficient to present the problem clearly, with the
result that the respondent will be made aware of the nature of the complainants' case. Indonesia's
contention that it has suffered prejudice is inextricably linked to and dependent upon its claim that
the co -complainants failed to sufficiently identify the claims in the panel requests, contrary to
Article 6.2 of the DSU.
3.46. Having rejected above Indonesia's contention that the manner in which the co-complainants
formulated their claims pursuant to Article 3.2 of the Import Licensing Agreement and Article III:4
of the GATT 1994 in their panel requests did not sufficiently identify their claims and thereby failed
to comply with the requirements of Article 6.2 of the DSU, we also reject Indonesia's contention
that it suffered prejudice as a result of the formulation of those claims. In our view, Indonesia
would have been on notice that the co -complainants were pursuing claims under Article 3.2 of the
Import Licensing Agreement and Article III:4 of the GATT 1994 and hence Indonesia's due process
rights were not affected by virtue of the content of the panel requests.

160 Indonesia's request for a preliminary ruling, paras. 13, 14, 24, 27 and 28.
161 Indonesia's request for a preliminary ruling, para. 27.
162 Indonesia's request for a preliminary ruling, para. 27.
163 Co-complainants' joint comments on Indonesia's preliminary ruling request, para. 29 (referring to
Appellate Body Report, China – Raw Materials, para. 233).
164 Co-complainants' joint comments on Indonesia's preliminary ruling request, para. 29 (referring to
Appellate Body Report, China – Raw Materials, para. 233).
165 Co-complainants' joint comments on Indonesia's preliminary ruling request, paras. 29-30.
166 Co -complainants' joint comments on Indonesia's preliminary ruling request, para. 30.
167 Co-complainants' joint comments on Indonesia's preliminary ruling request, para. 31 (referring to
Appellate Body Report, Korea – Dairy, para. 131).
168 Appellate Body report, US – Countervailing Measures (China), para. 4.6.
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3.4 Whether the co -complainants' first written submissions have failed to comply with
Article 6.2 requirements
3.47. At the outset of its request, Indonesia requests the Panel to find, by means of a preliminary
ruling, that the first written submissions of the United States and New Zealand are inconsistent
with the requirements of the DSU.169 In its closing section, Indonesia submits that it is seeking the
following ruling from the Panel:
(a) The Complainants' apparent claims under Article III:4 of the GATT and
Article 3.2 of the [Import Licensing Agreement] in their [first written
submissions] are outside the Panel's terms of reference; and
(b) The Complainants' failure in their panel requests as well as their [first written
submissions] to meet the requirements of Article 6.2 of the DSU has clearly
prejudiced, and continues to prejudice, the preparation of Indonesia['s]
defence, violating Indonesia's right to due process in these proceedings.
3.48. We understand the claim set forth in paragraph (b) to mean that Indonesia is requesting us
to evaluate the consistency with Article 6.2 of the DSU not only of the co -complainants' panel
requests, but also of their first written submissions. Indonesia's request is inapposite. Article 6.2170
regulates the requirements for panel requests but does not speak to the requirements of first
written submissions. Hence, the Panel declines to make such an evaluation.
4 CONCLUSION
4.1. With respect to Indonesia's contention that the claims pursuant to Article III:4 of the
GATT 1994 and Article 3.2 of the Import Licensing Agreement are not sufficiently identified in the
co-complainants' panel requests, thus faili ng to meet the requirements of Article 6.2 of the DSU ,
we find that:
a. Nothing in the wording of Article 6.2 of the DSU precludes a complainant from setting
out claims in the footnotes to its panel request. Footnotes form part of the text of a
panel request and may be relevant to the presentation of the legal basis of the
complaint. The fact that the co -complainants have set out claims pursuant to Article 3.2
of the Import Licensing Agreement and Article III:4 of the GATT 1994 within footnotes 5,
7, 8, 12 and 14 of their panel requests does not render these requests inconsistent with
the requirements of Article 6.2 of the DSU;
b. Indonesia has failed to demonstrate that the co -complainants have not sufficiently
identified their claims pursuant to Article 3.2 of t he Import Licensing Agreement and
Article III:4 of the GATT 1994 because the language employed in footnotes 5, 7, 8, 12
and 14 of their panel requests is "conditional and ambiguous";
c. Indonesia has failed to demonstrate that the co -complainants have not su fficiently
identified their claims pursuant to Article 3.2 of the Import Licensing Agreement and
Article III:4 of the GATT 1994, by referring to the wording of these provisions when
formulating the relevant claims in footnotes 5, 7, 8, 12 and 14 of the pan el requests and
by not providing a proper or sufficient explanation of how the measures at issue are
inconsistent with Article III:4 of the GATT 1994 or Article 3.2 of the Import Licensing
Agreement.
4.2. We therefore reject Indonesia's contention that the man ner in which the co -complainants
formulated their claims pursuant to Article 3.2 of the Import Licensing Agreement and Article III:4
of the GATT 1994 in their panel requests did not sufficiently identify their claims and thereby failed
to comply with the requirements of Article 6.2 of the DSU.
4.3. We further find that t he fact that a co -complainant, in this case the United States, has not
argued a claim included in its panel request, in this case Article III:4 of the GATT 1994, within its

169 Indonesia's request for a preliminary ruling, para. 1.
170 See paragraph 3.1 above.
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first written submission is not relevant for the purpose of assessing whether such a claim has been
adequately identified in a panel request pursuant to Article 6.2 of the DSU.
4.4. In the light of our finding in paragraph 4.2 above, we reject Indonesia's contention that it
suffered prejudice as a result of the formulation of those claims. In our view, Indonesia would
have been on notice that the co-complainants were pursuing claims under Article 3.2 of the Import
Licensing Agreement and Article III:4 of the GATT 1994 and hence Indonesia's due process rights
were not affected by virtue of the content of the panel requests.
4.5. Concerning Indonesia's request that we evaluate the consistency with Article 6.2 of the DSU
of their first written submissions , the Panel declines to make such an evaluation because
Article 6.2 regulates the requirements that panel requests must satisfy but does not speak to the
requirements of first written submissions.
4.6. Finally, we note that this preliminary ruling will become an integral part of our Final Report ,
subject to any changes that may be necessary in the light of comments received from the parties
during the interim review.

WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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ANNEX B-1
WORKING PROCEDURES OF THE PANEL
Adopted on 28 October 2015
1.1. In its proceedings, the Panel shall fol low the relevant provisions of the Understanding on
Rules and Procedures Governing the Settlement of Disputes (DSU). In addition, the following
Working Procedures shall apply.
General

1.2. The deliberations of the Panel and the documents submitted to it shall be kept confidential.
Nothing in the DSU or in these Working Procedures shall preclude a party to the dispute (hereafter
"party") from disclosing statements of its own positions to the public. Members shall treat as
confidential information submitted to th e Panel by another Member which the submitting Member
has designated as confidential. Where a party submits a confidential version of its written
submissions to the Panel, it shall also, upon request of a Member, provide a non -confidential
summary of the information contained in its submissions that could be disclosed to the public.
1.3. Upon indication from any party, at the latest on the first substantive meeting, that it shall
provide information that requires protection additional to that provided for under these Working
Procedures, the Panel shall, after consultation with the parties, decide whether to adopt
appropriate additional procedures. Exceptions to this procedure shall be granted upon a showing of
good cause.
1.4. The Panel shall meet in closed session. The parties, and Members having notified their
interest in the dispute to the Dispute Settlement Body in accordance with Article 10 of the DSU
(hereafter "third parties"), shall be present at the meetings only when invited by the Panel to
appear before it.
1.5. Each party and third party has the right to determine the composition of its own delegation
when meeting with the Panel. Each party and third party shall have the responsibility for all
members of its own delegation and shall ensure that each member of s uch delegation acts in
accordance with the DSU and these Working Procedures, particularly with regard to the
confidentiality of the proceedings.
Submissions

1.6. Before the first substantive meeting of the Panel with the parties, each party shall submit a
written submission in which its presents the facts of the case and its arguments, in accordance
with the timetable adopted by the Panel. Each party shall also submit to the Panel, prior to the
second substantive meeting of the Panel, a written rebuttal, in ac cordance with the timetable
adopted by the Panel.
1.7. A party shall submit any request for a preliminary ruling at the earliest possible opportunity
and in any event no later than in its first written submission to the Panel. If the complainants
request such a ruling, Indonesia shall submit its response to the request in its first written
submission. If Indonesia requests such a ruling, the complainants shall submit its response to the
request prior to the first substantive meeting of the Panel, at a time to b e determined by the Panel
in light of the request. Exceptions to this procedure shall be granted upon a showing of good
cause.
1.8. Each party shall submit all factual evidence to the Panel no later than during the first
substantive meeting, except with respect to evidence necessary for purposes of rebuttal, answers
to questions or comments on answers provided by the other party. Exceptions to this procedure
shall be granted upon a showing of good cause. Where such exception has been granted, the Panel
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shall accord the other parties a period of time for comment, as appropriate, on any new factual
evidence submitted after the first substantive meeting.
1.9. Where the original language of exhibits is not a WTO working language, the submitting party
or third party shall submit a translation into the WTO working language of the submission at the
same time. The Panel may grant reasonable extensions of time for the translation of such exhibits
upon a showing of good cause. Any objection as to the accuracy of a translation s hould be raised
promptly in writing, no later than the next filing or meeting (whichever occurs earlier) following
the submission which contains the translation in question. In exceptional circumstances, the Panel
may grant an extension to this deadline up on good cause shown. Any objection shall be
accompanied by a detailed explanation of the grounds of objection and an alternative translation.
1.10. In order to facilitate the work of the Panel, each party and third party is invited to make its
submissions in ac cordance with the WTO Editorial Guide for Panel Submissions attached as
Annex 1, to the extent that it is practical to do so.
1.11. To facilitate the maintenance of the record of the dispute and maximize the clarity of
submissions, each party and third party sh all sequentially number its exhibits throughout the
course of the dispute. For example, exhibits submitted by the parties could be numbered,
respectively, NZL -1, NZL -2, etc., USA -1, USA -2, etc. or IDN -1, IDN -2 If the last exhibit in
connection with the fir st submission was numbered, for example, NZL -5, the first exhibit of the
next submission thus would be numbered NZL-6. Any joint exhibits submitted by the complainants
shall be numbered JE-1, JE-2, etc.
Questions

1.12. The Panel may at any time pose questions t o the parties and third parties, orally or in
writing, including prior to each substantive meeting.
Substantive meetings

1.13. Each party shall provide to the Panel the list of members of its delegation in advance of
each meeting with the Panel and no later than 5.00 p.m. the previous working day.
1.14. The first substantive meeting of the Panel with the parties shall be conducted as follows:
a. The Panel shall invite New Zealand followed by the United States to present their
opening statements first. Subsequently, th e Panel shall invite Indonesia to present its
point of view. Before each party takes the floor, it shall provide the Panel and other
participants at the meeting with a provisional written version of its statement. In the
event that interpretation is needed , each party shall provide additional copies for the
interpreters, through the Panel Secretary. Each party shall make available to the Panel
and the other parties the final version of its opening statement as well as its closing
statement, if any, preferab ly at the end of the meeting, and in any event no later than
5.00 p.m. on the first working day following the meeting.
b. After the conclusion of the statements, the Panel shall give each party the opportunity to
ask each other questions or make comments, thr ough the Panel. Each party shall then
have an opportunity to answer these questions orally. Each party shall send in writing,
within a timeframe to be determined by the Panel, any questions to the other parties to
which it wishes to receive a response in writing. Each party shall be invited to respond in
writing to the other party's written questions within a deadline to be determined by the
Panel.
c. The Panel may subsequently pose questions to the parties. Each party shall then have an
opportunity to answer these questions orally. The Panel shall send in writing, within a
timeframe to be determined by it, any questions to the parties to which it wishes to
receive a response in writing. Each party shall be invited to respond in writing to such
questions within a deadline to be determined by the Panel.
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d. Once the questioning has concluded, the Panel shall afford each party an opportunity to
present a brief closing statement, with the complainants presenting its statement first.
1.15. The second substantive meeting of the Panel with the parties shall be conducted as follows:
a. The Panel shall ask Indonesia if it wishes to avail itself of the right to present its case
first. If so, the Panel shall invite Indonesia to present its opening statement, followed by
the complainants. If Indonesia chooses not to avail itself of that right, the Panel shall
invite New Zealand followed by the United States to present their opening statements
first. Before each party takes the floor, it shall provide the Panel and other participants
at the meeting with a provisional written version of its statement. In the event that
interpretation is needed, each party shall provide additional copies for the interpreters,
through the Panel Secretary. Each party shall make available to the Panel and the other
parties the final version of its opening statement as well as its closing statement, if any,
preferably at the end of the meeting, and in any event no later than 5.00 p.m. of the
first working day following the meeting.
b. After the conclusion of the statements, the Panel shall give each party the opportunity to
ask each other questions or make comments, through the Panel. Each party shall then
have an opportunity to answer these questions orally. Each party shall send in writing,
within a timeframe to b e determined by the Panel, any questions to the other parties to
which it wishes to receive a response in writing. Each party shall be invited to respond in
writing to the other parties' written questions within a deadline to be determined by the
Panel.
c. The Panel may subsequently pose questions to the parties. Each party shall then have an
opportunity to answer these questions orally. The Panel shall send in writing, within a
timeframe to be determined by it, any questions to the parties to which it wishes to
receive a response in writing. Each party shall be invited to respond in writing to such
questions within a deadline to be determined by the Panel.
d. Once the questioning has concluded, the Panel shall afford each party an opportunity to
present a brief c losing statement, with the party that presented its opening statement
first, presenting its closing statement first.
Third parties

1.16. The Panel shall invite each third party to transmit to the Panel a written submission prior to
the first substantive meetin g of the Panel with the parties, in accordance with the timetable
adopted by the Panel.
1.17. Each third party shall also be invited to present its views orally during a session of this first
substantive meeting, set aside for that purpose. Each third party sha ll provide to the Panel the list
of members of its delegation in advance of this session and no later than 5.00 p.m. the previous
working day.
1.18. The third-party session shall be conducted as follows:
a. All third parties may be present during the entirety of this session.
b. The Panel shall first hear the arguments of the third parties in alphabetical order. Third
parties present at the third -party session and intending to present their views orally at
that session, shall provide the Panel, the parties and other third-parties with provisional
written versions of their statements before they take the floor. Third parties shall make
available to the Panel, the parties and other third parties the final versions of their
statements, preferably at the end of the sessio n, and in any event no later than
5.00 p.m. of the first working day following the session.
c. After the third parties have made their statements, the parties may be given the
opportunity, through the Panel, to ask the third parties questions for clarificati on on any
matter raised in the third parties' submissions or statements. Each party shall send in
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writing, within a timeframe to be determined by the Panel, any questions to a third party
to which it wishes to receive a response in writing.
d. The Panel may subsequently pose questions to the third parties. Each third party shall
then have an opportunity to answer these questions orally. The Panel shall send in
writing, within a timeframe to be determined by it, any questions to the third parties to
which it w ishes to receive a response in writing. Each third party shall be invited to
respond in writing to such questions within a deadline to be determined by the Panel.
Descriptive part

1.19. The description of the arguments of the parties and third parties in the de scriptive part of
the Panel report shall consist of executive summaries provided by the parties and third parties,
which shall be annexed as addenda to the report. These executive summaries shall not in any way
serve as a substitute for the submissions of the parties and third parties in the Panel's examination
of the case.
1.20. Each party shall submit executive summaries of the facts and arguments as presented to
the Panel in its written submissions and oral statements, in accordance with the timetable adopted
by the Panel. These summaries may also include a summary of responses to questions. Each such
executive summary shall not exceed 15 pages. The Panel will not summarize in the descriptive
part of its report, or annex to its report, the parties' responses to questions.
1.21. Each third party shall submit an executive summary of its arguments as presented in its
written submission and statement in accordance with the timetable adopted by the Panel. This
summary may also include a summary of responses to questions, where relevant. The executive
summary to be provided by each third party shall not exceed 6 pages.
Interim review

1.22. Following issuance of the interim report, each party may submit a written request to review
precise aspects of the interim report and reques t a further meeting with the Panel, in accordance
with the timetable adopted by the Panel. The right to request such a meeting shall be exercised no
later than at the time the written request for review is submitted.
1.23. In the event that no further meeting w ith the Panel is requested, each party may submit
written comments on the other party's written request for review, in accordance with the timetable
adopted by the Panel. Such comments shall be limited to commenting on the other parties' written
request for review.
1.24. The interim report, as well as the final report prior to its official circulation, shall be kept
strictly confidential and shall not be disclosed.
Service of documents

1.25. The following procedures regarding service of documents shall apply:
a. Each party and third party shall submit all documents to the Panel by filing them with
the DS Registry (office No. 2047).
b. Each party and third party shall file three paper copies of all documents it submits to the
Panel. Exhibits may be filed in four copies pref erably in a USB key (CD-ROM or DVD also
possible) and three paper copies. The DS Registrar shall stamp the documents with the
date and time of the filing. The paper version shall constitute the official version for the
purposes of the record of the dispute.
c. Each party and third party shall also provide an electronic copy of all documents it
submits to the Panel at the same time as the paper versions, preferably in Microsoft
Word format, either on a USB key, a CD -ROM, a DVD or as an e -mail attachment. If the
electronic copy is provided by e -mail, it should be addressed to DSRegistry@wto.org,
with a copy to ****.****@wto.org, ****.****@wto.org, ****.****@wto.org, and
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****.****@wto.org. If a USB key, CD-ROM or DVD is provided, it shall be filed with the
DS Registry.
d. Each party shall serve any document submitted to the Panel directly on the other party.
Each party shall, in addition, serve on all third parties its written submissions in advance
of the first substantive meeting with the Panel. Each third party sh all serve any
document submitted to the Panel directly on the parties and all other third parties. Each
party and third party shall confirm, in writing, that copies have been served as required
at the time it provides each document to the Panel.
e. Each party and third party shall file its documents with the DS Registry and serve copies
on the other parties (and third parties where appropriate) by 5.00 p.m. (Geneva time)
on the due dates established by the Panel. A party or third party may submit its
documents to another party or third party in electronic format only, subject to the
recipient party or third party's prior written approval and provided that the Panel
Secretary is notified.
f. The Panel shall provide the parties with an electronic version of the desc riptive part, the
interim report and the final report, as well as of other documents as appropriate. When
the Panel transmits to the parties or third parties both paper and electronic versions of a
document, the paper version shall constitute the official version for the purposes of the
record of the dispute.
1.26. The Panel reserves the right to modify these procedures as necessary, after consultation
with the parties.

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ANNEX C
ARGUMENTS OF THE PARTIES
NEW ZEALAND
Contents Page
Annex C-1 First part of the executive summary of the arguments of New Zealand C-2
Annex C-2 Second part of the executive summary of the arguments of New Zealand C-14

UNITED STATES
Contents Page
Annex C-3 First part of the executive summary of the arguments of the United States C-27
Annex C-4 Second part of the executive summary of the arguments of the United States C-39

INDONESIA
Contents Page
Annex C-5 First part of the executive summary of the arguments of Indonesia C-51
Annex C-6 Second part of the executive summary of the arguments of Indonesia C-57
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ANNEX C-1
FIRST PART OF THE EXECUTIVE SUMMARY OF THE ARGUMENTS OF NEW ZEALAND
INTRODUCTION
1. This dispute arises from Indonesia's prohibitions and restrictions on imports of animals,
animal products and horti cultural products. Indonesia's measures are imposed through complex
import licensing regimes that underpin a publicised government strategy to reduce imports to
encourage domestic agricultural production in the hope of achieving self-sufficiency in food.
I. FACTUAL BACKGROUND
2. Indonesia has enacted an overarching framework of laws that constitute import restrictions
in their own right and provide the legislative basis for its import licensing regimes for animals,
animal products and horticultural products.
3. Both regimes share similar features, including overarching framework legislation limiting
agricultural imports to situations where domestic food production is deemed insufficient to fulfil
domestic demand and laws and regulations that prohibit and re strict imports through a series of
discrete requirements and as a whole.
A. FRAMEWORK LEGISLATION
4. At the core of Indonesia's import regime is legislation which expressly prohibits importation
of animals, animal products, horticultural products and food in circumstances where domestic
production is deemed sufficient to meet domestic demand. This is reflected, for example, through
Article 36B(1) of the Animal Law Amendment which provides that "Importation of Livestock and
Animal Product from overseas into the Territory of the Republic of Indonesia can be perform if
domestic production and supply of Livestock and Animal Product has not fulfil public consumption",
and Article 36(1) of the Food Law which provides that importation of food is only permissible "i f
the domestic Food Production is insufficient and/or cannot be produced domestically".
B. IMPORT LICENSING REGIMES
5. The framework legislative provisions which limit imports of agricultural products based on
sufficiency of domestic production provide the framework for two separate but similar import
licensing regimes for animals and animal products (on the one hand) and horticultural products
(on the other hand).
(A) Animals and animal products

6. In order to import animals and animal products into Indonesia, regulations require importers
to obtain an MOA Recommendation from the Ministry of Agriculture and an Import Approval from
the Ministry of Trade. In addition, importers of bovine animals and animal products are required to
obtain an Importer Designation from the Ministry of Trade.
(B) Horticultural products

7. Similarly, in order to import certain listed horticultural products into Indonesia, importers of
horticultural products must also obtain an Importer Designation, a Horticultural Product Impo rt
Recommendation (RIPH) from the Ministry of Agriculture and an Import Approval from the Ministry
of Trade.
8. It is through the process of issuing these documents, and the requirements which must be
satisfied by importers in order to obtain them, that In donesia restricts imports of animals and
animal products and horticultural products. The specific prohibitions and restrictions made
effective through these import licensing regimes are detailed below.
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C. PROHIBITIONS AND RES TRICTIONS IMPOSED TH ROUGH INDON ESIA'S IMPORT
LICENSING REGIME FOR ANIMALS AND ANIMAL PRODUCTS
9. Importer Designations, MOA Recommendations and Import Approvals are the mechanism
through which Indonesia imposes a number of prohibitions and restrictions on the importation of
animals and animal products.

a. Prohibitions of certain animal and animal product imports: Indonesia prohibits the
importation of certain animals and animal products that are not listed in the Appendices to
MOT 46/2013 or MOA 139/2014. In particular, bovine meat and offal products that are not
listed in Appendix I, MOA 139/2014 and Appendix I, MOT 46/2013 are prohibited from
importation. This includes all bovine offal products (except some cuts of tongue and tail),
certain forms of manufacturing meat and, except in c ertain exceptional circumstances, all
bovine secondary cuts and carcass;

b. Limited application windows and validity periods: MOA Recommendations and Import
Approvals are valid for limited time periods, and may only be applied for during limited
application windows;

c. Fixed Licence Terms: MOA Recommendations and Import Approvals together specify the
type, quantity, country of origin, and port of entry for products that an importer may
import during the validity period. This prevents importers from impor ting, during a
Quarter, products of a different type, in a greater quantity, from another country, or
through a different port than those specified in their MOA Recommendations and Import
Approvals;

d. 80% realisation requirement: Importers are required t o import, on an annual basis, 80%
of the quantity of each type of product specified in their Import Approvals or face severe
sanctions;

e. Restrictions on use, sale and distribution of imported bovine meat and offal: Bovine meat,
carcass and offal is only permitted to be imported for use in hotels, restaurants, catering
and industry and for a very limited range of other "special needs". Such products are
therefore prohibited from being imported for certain uses and for sale or distribution
through certain channels (including sale directly to consumers at modern and traditional
markets, which are the primary consumer retail channels for bovine products in
Indonesia);

f. Domestic Purchase Requirement : Importation of bovine meat is only permitted on the
condition that importing entities have purchased ("absorbed") designated quantities of
beef raised and slaughtered in Indonesia; and

g. Beef reference price: Importation of bovine animals and animal products is prohibited
when the domestic market price of bee f secondary cuts falls below a specified reference
price.

10. These components of Indonesia's import licensing regime, both when viewed as distinct
individual measures and as elements of a single overarching measure, are inconsistent with
Indonesia's WTO obligations.

D. PROHIBITIONS AND RES TRICTIONS IMPOSED TH ROUGH INDONESIA'S IM PORT
LICENSING REGIME FOR HORTICULTURAL PRODUCTS

11. Importer Designations, RIPH and Import Approvals are the mechanism through which
Indonesia imposes a number of prohibitions a nd restrictions on the importation of horticultural
products.
a. Limited application windows and validity periods : RIPH and Import Approvals may only be
applied for during limited application windows and are valid for limited time periods;

b. Fixed Licen ce Terms : RIPH and Import Approvals together specify the type, quantity,
country of origin, and port of entry for products that an importer may import during the
validity period. This prevents importers from importing products of a different type, in a
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greater quantity, from another country, or through a different port than those specified in
their RIPH and Import Approvals;

c. 80% Realisation Requirement: Importers are required to import 80 percent of the quantity
of each product specified in their Import Approvals for the applicable six month period or
face severe sanctions;

d. Restrictions based on the Indonesian harvest period : Indonesia prohibits or restricts
imports of certain horticultural products during Indonesian harvest periods;

e. Restrictions on storage ownership and capacity : Importers are required to own storage
facilities of appropriate capacity and may only import volumes commensurate with that
storage capacity;

f. Restrictions on use, sale and distribution : Importers are restricted in th e use, sale and
distribution of listed horticultural products. Registered Importers (RI) are prohibited from
trading and/or transferring imported products directly to consumers or retailers. Producer
Importers (PI) may only use imported products for proces sing and are prohibited from
trading and/or transferring such products;

g. Reference prices for chili and shallots : Importation of chili and shallots is prohibited when
the domestic market price of the product falls below a specified reference price; and

h. Six month harvesting requirement : Indonesia prohibits the importation of listed fresh
horticultural products harvested more than 6 months previously.

12. These measures are inconsistent with Indonesia's WTO obligations, both when viewed as
individual measures and when considered as part of a single overarching measure.

II. LEGAL DISCUSSION
A. ARTICLE XI:1 OF THE GATT 1994 AND ARTICL E 4.2 OF THE AGREEME NT ON
AGRICULTURE
1. Obligation under Article XI:1 of the GATT 1994

13. WTO panels have repeatedly emphasised the broad scope of Article XI:1.1 Article XI:1
prohibits WTO Members from instituting or maintaining prohibitions or restrictions other than
duties, taxes, or other charges, on the importation, exportation, or sale for export of any product
destined for another WTO Member. 2 The scope of Article XI:1 includes measures through which a
prohibition or restriction is produced or becomes operative.3

14. The Appellate Body has confirmed that a "restriction" is a thing which "restricts someone or
something, a limitation on action, a limiting condition or regulation" and as generally something
that has a limiting effect.4 A measure can have a "limiting effect" on importation for a wide variety
of reasons. For example, the panel in Argentina - Import Mea sures applied a framework for
assessing consistency with Article XI:1 which was based on restrictions that had been found by
past panels to be covered by Article XI:1.5 It came to the conclusion that measures have a limiting
effect on imports and constitut e an import restriction when they: (a) restrict market access;
(b) create uncertainty as to an applicant's ability to import; (c) do not allow companies to import
as much as they desire or need without regard to their export performance; and (d) impose a

1 Panel Reports, Argentina - Import Measures, para. 6.251; Colombia - Ports of Entry, para. 7.233;
India - Quantitative Restrictions, para. 5.128; India - Autos, para. 7.264; and Dominican Republic - Cigarettes,
para. 7.248.
2 Appellate Body Report, Argentina - Import Measures, para. 5.216.
3 Appellate Body Report, Argentina - Import Measures, para. 5.218.
4 Appellate Body Reports, China - Raw Materials, para. 319; Argentina - Import Measures, para. 5.217.
5 Panel Report, Argentina - Import Measures, para. 6.454.
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significant burden on importers that is unrelated to their normal importing activity. 6 The panel's
framework in that case was not questioned by the Appellate Body.7
15. It is also clear that, for a measure to constitute a quantitative restriction, it is not necessary
for the measure to have an adverse impact on trade flows. This was confirmed by the Appellate
Body in Argentina – Import Measures, which stated that the limiting effect of a measure "need not
be demonstrated by quantifying the effects of the mea sure at issue" but rather can be
"demonstrated through the design, architecture, and revealing structure of the measure at issue
considered in its relevant context". 8 Although the Complainants have demonstrated that the trade
impact of Indonesia's regime i s severe, an adverse impact on trade flows is not a necessary
component of the legal test for a quantitative restriction.
2. Obligation under Article 4.2 of the Agreement on Agriculture

16. Article 4.2 of the Agreement on Agriculture prohibits WTO Member s from maintaining,
reverting to, or resorting to measures of the kind which have been required to be converted into
ordinary customs duties. The list of measures identified in the footnote to Article 4.2 is illustrative.
It includes quantitative import re strictions and minimum import prices. It also includes "similar"
border measures other than ordinary customs duties.

17. The Appellate Body in Chile - Price Band System viewed Article 4 of the Agreement on
Agriculture "as the legal vehicle for requiring the conversion into ordinary customs duties of certain
market access barriers affecting imports of agricultural products". 9 Further, the Appellate Body
stated that "Article 4.2 prevents WTO Members from circumventing their commitments on
'ordinary customs duties' by prohibiting them from 'maintaining, reverting to, or resorting to'
measures other than 'ordinary customs duties'".10

18. While a measure that is inconsistent with Article XI:1 of the GATT 1994 would, to the extent
it applies to agricultural products, be inconsistent with Article 4.2 of the Agreement on Agriculture,
the reverse is not necessarily the case. As the Appellate Body indicated in Chile - Price Band
System, the scope of measures prohibited by Article 4.2 extends beyond the "restrictions other
than taxes, duties and charges" that are prohibited by Article XI:1 of the GATT 1994.11
3. Indonesia's import licensing regime for animals and animal products is
inconsistent with Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement
on Agriculture

19. New Zealand submits that each of individual components of Indonesia's import licensing
regime for animals and animal products, and the regime viewed "as a whole" constitute
"prohibitions" or "restrictions" that are inconsistent with Article XI :1 of the GATT 1994 and are a
"quantitative import restriction" or "similar border measure" prohibited under Article 4.2 of the
Agreement on Agriculture. The beef reference price measure is also inconsistent with Article 4.2 of
the Agreement on Agriculture by virtue of constituting a "minimum import price", "quantitative
import restriction" or "similar border measure".

(a) The prohibition on imports of certain animal products is inconsistent with
Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture

20. Indonesia uses a "positive list" system to prohibit the importation of certain forms of meat,
offal and carcass. In particular, any bovine meat, offal or carcass products that are not listed in
both Appendix I of MOA 139/2014 and App endix I of MOT 46/2013 are ineligible to obtain an
MOA Recommendation (and therefore an Import Approval, which requires an
MOA Recommendation as a prerequisite). As a consequence of being unable to obtain
MOA Recommendations and Import Approvals, importers are prohibited from importing these

6 Panel Report, Argentina - Import Measures, para. 6.474.
7 Appellate Body Report, Argentina - Import Measures, paras. 5.287-5.288.
8 Appellate Body Report, Argentina – Import Measures, para. 5.217.
9 Appellate Body Report, Chile - Price Band System, para. 201.
10 Ibid. para. 187.
11 Appellate Body Report, Chile - Price Band System, para. 256.
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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products contrary to Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on
Agriculture.

21. Indonesia claims that products not listed in MOT Regulation 46/2013 are able to be imported
freely without being s ubject to any import requirements. 12 However, this is directly contradicted
by Article 59(1) of the Animal Amendment Law which provides that all importers of animal
products must obtain an import licence from the Ministry of Trade after receiving a
recommendation from the Minister for fresh animal products. It is also at odds with Indonesian
regulations, reported statements by Indonesian officials, statements by exporters, media
coverage, statements by other WTO Members and trade statistics.

22. Although importers are unable to apply for and obtain MOA Recommendations and Import
Approvals for bovine carcass and beef secondary cuts, a limited exception applies that enables the
Indonesian Government, acting through two Ministers, to direct Indonesian State -Owned
Enterprises to conduct importation of these products where certain emergency circumstances are
deemed to exist. These conditions are designed in a way which permits importation only in
circumstances where there are shortages in domestic supply of these products, as evidenced
through a lack of "food availability", high domestic prices for such products, disease outbreaks or
natural disasters which affect levels of supply within Indonesia. This is consistent with Indonesia's
overarching objective of preve nting imports in circumstances where domestic supply is deemed
sufficient to satisfy domestic demand.

(b) Limited application windows and validity periods are inconsistent with Article XI:1
of the GATT 1994 and Article 4.2 of the Agreement on Agriculture

23. Indonesia limits the ability of importers to obtain MOA Recommendations and Import
Approvals by prohibiting importers from applying for these documents outside four one -month
periods, and specifying that Import Approvals are valid for only the three m onth duration of each
Quarter.

24. Import orders are unable to be finalised and shipped until after an Import Approval is
issued, as the health certificate issued by the exporting country is required to specify the number
and date of issue of the Import A pproval. As exporters need time to prepare, package and ship
product, this restricts imports at the start of each Quarter. The limited validity period also means
that imports are restricted at the end of each Quarter as product arriving after this date wil l be
refused entry into Indonesia and re-exported.

25. These limited application windows and validity periods for MOA Recommendations and
Import Approvals restrict imports by limiting the time periods during which exporters are able to
access the Indonesi an market and accordingly have a limiting effect on importation that is
inconsistent with Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture.

(c) Fixed Licence Terms are inconsistent with Article XI:1 of the GATT 1994 and
Article 4.2 of the Agreement on Agriculture

26. MOA Recommendations and Import Approvals collectively specify the type, quantity, country
of origin and port of entry of animals and animal products permitted per Quarter. These Fixed
Licence Terms restrict import s by imposing quarterly quantitative limits on bovine animals and
animal products that may be imported into Indonesia and "lock in" the terms of the licence at the
commencement of the relevant Quarter.

27. The inherent difficulty that exists in determini ng these variables prior to the commencement
of a Quarter (when importers must finalise their applications for MOA Recommendations and
Import Approvals) creates uncertainty for importers and affects their ability to plan and respond to
market fluctuations during the course of each Quarter. These restrictions eliminate importers'
flexibility to respond to changes in external factors that occur during a Quarter, and therefore limit
an importer's ability to alter its import quantities during that period, in vi olation of Article XI:1 of
the GATT 1994 and Article 4.2 of the Agreement on Agriculture.

12 Indonesia's first written submission, paras. 34, 96-98.
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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28. Indonesia concedes that these terms are "static for the length of one validity period". 13 As a
result, these requirements impose a quota on imports during that 3-month period. Indonesia seeks
to distance itself from these measures by arguing that the terms are self -selected by private
actors.14 However, it is precisely because importers are required to "lock in" each term per period,
while at the same time mandating that non-complying products will be re-exported, that Indonesia
eliminates importer flexibility and restricts trade. This loss of flexibility is not a result of
autonomous decisions by importers, but rather a direct consequence of the design, architecture
and revealing structure of Indonesia's regulations.

(d) 80% realisation requirement

29. Upon being granted an Import Approval for bovine animals or animal products, an importer
must import no less than 80% (and no more than 100%) of the quantity of eac h of the products
specified in the Import Approval. This has the effect of inducing importers to reduce the quantities
that they request in their quarterly MOA Recommendations and Import Approvals.

30. The limiting effect of the 80% realisation requireme nt is magnified when combined with the
Fixed Licence Terms. The constraints imposed by the Fixed Licence Terms limits the flexibility
available to importers to satisfy the 80% realisation requirement (for example by importing
different meat cuts, from different countries, or into different ports), and therefore further induces
importers to reduce the quantities they request in Import Approvals contrary to Article XI:1 of the
GATT 1994 and Article 4.2 of the Agreement on Agriculture.

(e) Prohibitions and restrictions on the use, sale and distribution of imported animals
and animal products

31. Indonesia prohibits the importation of animals and animal products for particular uses, and
for sale and distribution through certain outlets. Specifically, bovine m eat, permitted offal
(i.e. tongue and tail) and carcass may only be imported into Indonesia for use by "industry, hotels,
restaurant, catering, and/or other special needs", and may only be distributed or sold through
these same channels. Accordingly, these products are prohibited from being imported for sale
through both modern and traditional retail channels.

32. The effect of these measures is that bovine carcass, meat and offal are not permitted to be
imported into Indonesia for any form of domestic use , or sold or distributed through consumer
retail outlets. Importantly, it precludes imported beef from being sold at modern markets such as
supermarkets and hypermarkets as well as traditional retail outlets such as wet markets, small
stalls or shops and s treet carts. This substantially reduces the opportunities for imported products
to reach Indonesian consumers who buy their household food products at these locations, and
effectively precludes importation of bovine products for domestic consumption. Impor ts of other
meat products are not restricted to the same extent, and sales of such products are expressly
permitted for sale through modern markets, such as supermarkets or hypermarkets (but also
excluding traditional markets).

33. Thus, Indonesia's restr ictions on use, sale and distribution are designed in a way which
directly restricts the importation of bovine meat and offal and therefore constitute a "restriction"
on importation maintained in violation of Article XI:1 of the GATT 1994 and a "quantitati ve import
restriction"or "similar border measure" maintained contrary to Article 4.2 of the Agreement on
Agriculture.

(f) Domestic purchase requirement

34. In order to import beef for retail purposes, at least three percent of an importer's total beef
purchases must be derived from Indonesian cows. This requirement forces importers to substitute
imported beef with domestically -produced beef, and therefore directly limits the quantity of beef
that importers could otherwise import.

35. Indonesia's Domesti c Purchase Requirement is structurally akin to the local content
requirement considered by the panel in Argentina - Import Measures and found, as part of a suite

13 Indonesia’s first written submission, para. 105.
14 Indonesia’s first written submission, paras. 104-106.
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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of trade related requirements, to be inconsistent with Article XI:1 of the GATT 1994. All beef
importers are required to demonstrate that they have purchased a specified quantity of
domestically produced beef in order to import any beef and therefore requires importers to
substitute imported beef with beef that is domestically produced. This has a limiting effect on
imports into Indonesia in breach of Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement
on Agriculture.

(g) Reference price for beef

36. Indonesia imposes a reference price system for bovine animals and animal products.
MOT 46/2013 provides that imports of bovine animals and animal products are suspended if the
market price of beef secondary cuts in Indonesia falls below a specified "reference price". This
measure has the effect of limiting imports by prohibiting the import ation of bovine animals and
animal products when the domestic market price of these products falls below a stipulated
reference price, thereby constituting a prohibition or restriction on imports in breach of
Article XI:1.

37. The beef reference price is functionally similar to a traditional "minimum import price", as
both a minimum import price and the beef reference price have the effect of establishing a
minimum price below which imported beef cannot enter the market. This is consistent with the use
of the term "minimum import price" in Chile - Price Band System, which was said by the Appellate
Body to "refer generally to the lowest price at which imports of a certain product may enter a
Member's domestic market".15

38. Further, because it imposes a tot al prohibition on importation of bovine animals and animal
products in circumstances where domestic prices fall below a specified level, the beef reference
price is also a "quantitative import restriction" within the meaning of footnote 1 to Article 4.2.

39. Accordingly, the beef reference price constitutes both a "quantitative import restriction" or
"similar border measure" and a "minimum import price" or "similar border measure" for the
purposes of Article 4.2 of the Agreement on Agriculture.

4. Indonesia's import licensing regime for horticultural products is inconsistent with
Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture

40. Indonesia's import licensing regime for horticultural products is similar in many respects to
that for animals and animal products. New Zealand submits that each of individual components of
Indonesia's import licensing regime for horticultural products, and the regime viewed "as a whole",
constitute "prohibitions" or "restrictions" that are inconsis tent with Article XI:1 of the GATT 1994.
They are also measures of the kind which have been required to be converted into ordinary
customs duties and maintained contrary to Article 4.2 of the Agreement on Agriculture.

(a) Limited application windows and validity periods are inconsistent with Article XI:1
of the GATT 1994 and Article 4.2 of the Agreement on Agriculture

41. Importers of horticultural products may only submit applications for RIPHs and Import
Approvals during limited windows and the RIPHs an d Import Approval are only valid for limited
periods. These requirements are structured in such a way that imports are severely restricted at
the start and at the end of the validity period due to the delay between Import Approvals being
issued and product being processed and shipped to Indonesia.

(b) Fixed licence terms are inconsistent with Article XI:1 of the GATT 1994 and
Article 4.2 of the Agreement on Agriculture

42. As is the case with the importation of animals and animal products, Importer Design ations,
RIPHs and Import Approvals set out the fixed terms for the importation of horticultural products
into Indonesia. By determining the import terms at the start of a validity period, and not allowing
those terms to be amended during the validity perio d of the import licences, Indonesia's
restrictions remove the ability of importers to respond to market forces and external factors that
occur during a validity period.

15 Appellate Body Report, Chile - Price Band System, para. 236.
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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(c) 80% realisation requirement is inconsistent with Article XI:1 of the GATT 1994
and Article 4.2 of the Agreement on Agriculture

43. Importers must "realise" 80% of the quantity of each type of horticultural product specified
in the Import Approval or face severe sanctions. This produces a direct incentive for importers to
conservatively estimate the quantities that they request in their Import Approval and accordingly
has a limiting effect on imports. Accordingly, the measure is a quantitative restriction prohibited by
Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture.

(d) Restrictions based on Indonesian harvest periods are inconsistent with
Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture

44. Indonesia prohibits or restricts the importation of certain horticultural products acc ording to
Indonesian domestic harvest seasons. The measure protects domestic Indonesian horticultural
products by eliminating imported competition at certain times of the year. As a prohibition or
restriction on the import of horticultural products, the re striction based on the Indonesian harvest
period is a quantitative restriction prohibited by Article XI:1 of the GATT 1994 and Article 4.2 of
the Agreement on Agriculture.

(e) The storage ownership and capacity requirement is inconsistent with Article XI: 1
of the GATT 1994 and Article 4.2 of the Agreement on Agriculture

45. Indonesia requires that horticultural importers own appropriate storage facilities for
horticultural products and limits total imports during a six -month validity period to an importer 's
certified storage capacity. This assumes that importers have zero turnover of product over the six -
month validity period. This has a significant limiting effect on the quantity of imports that
importers are able to apply for in their Import Approvals as it is the storage capacity which
dictates the quantity of product imported, not market conditions. The measure is therefore a
quantitative restriction that is inconsistent with Article XI:1 of the GATT 1994 and Article 4.2 of the
Agreement on Agriculture.

(f) Restrictions on use, sale and distribution of imported horticultural products are
inconsistent with Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement
on Agriculture

46. Indonesia's import licence regime places restrictions on the use, s ale and distribution of
imported horticultural products which cannot be imported for direct sale to consumers and
retailers. This constrains the ability of importers to market imported product, reduces the
opportunity for imported products to reach Indones ian householders and adds a distribution layer.
Accordingly the measure has a limiting effect on imports contrary to Article XI:1 of the GATT 1994
and Article 4.2 of the Agreement on Agriculture.

(g) Reference prices for chili and shallots are inconsisten t with Article XI:1 of the
GATT 1994 and Article 4.2 of the Agreement on Agriculture

47. The reference price for chili and shallots operates in a similar manner to the reference price
for beef. If the price of chili or shallots in the domestic market is b elow a stipulated reference
price, the importation of chili and shallots is "postponed" (i.e. prohibited) until the domestic price
exceeds the reference price. As a result imports of fresh chili into Indonesia have essentially been
non-existent since the e nd of 2012. The measure is designed to operate as a ceiling below which
imports of chili and shallots cannot enter the domestic market and therefore falls within the
meaning of "minimum import price" or a similar border measure contrary to Article 4.2 of t he
Agreement on Agriculture. As by its nature it has a limiting or restricting effect on trade, it is also
a quantitative restriction prohibited by Article XI:1 of the GATT 1994.

(h) The six month harvesting requirement is inconsistent with Article XI:1 o f the
GATT 1994 and Article 4.2 of the Agreement on Agriculture

48. Indonesia prohibits the importation of horticultural products that have been harvested more
than six months previously. If an importer violates this requirement, it will not be granted an RIPH
for one year. The six month harvesting requirement operates as an absolute prohibition on imports
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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of horticultural products contrary to Article XI:1 of the GATT 1994 and Article 4.2 of the
Agreement on Agriculture.
5. Indonesia's import restrictions based on sufficiency of domestic production are
quantitative import restrictions or similar measures inconsistent with Article XI:1
of the GATT 1994 and Article 4.2 of the Agreement on Agriculture

49. Indonesia's domestic insufficiency condition is set ou t in the Animal Law , Animal Law
Amendment, Horticulture Law , Food Law and Farmers Law . These laws, both separately and
collectively, restrict imports of certain animals, animal products and horticultural products by
prohibiting importation of products in c ircumstances where domestic production is deemed
sufficient to meet domestic demand.

50. The domestic insufficiency condition independently limits importation, as imported products
are only given market access on the condition, and to the extent that, do mestic supply is deemed
insufficient to satisfy Indonesian needs. These measures constitute prohibitions or restrictions on
importation under Article XI:1 of the GATT 1994, and quantitative import restrictions within the
meaning of footnote 1 to Article 4.2 of the Agreement on Agriculture, because they have a limiting
effect on importation. This limiting effect is generated by (a) prohibiting importation in
circumstances where domestic production is deemed sufficient to meet domestic demand; and (b)
creating uncertainty for importers as to if, or when, imports of certain products will be permitted.

51. The domestic insufficiency condition also provides the basis for more specific measures that
operate to restrict imports , including Indonesia's import licens ing regime for animals and animal
products, and for horticultural products. As described above, Indonesia's import licensing regimes
are designed to restrict imports with a view to Indonesia achieving self -sufficiency in food. Just as
the specific requirements of these import regimes have a limiting effect on imports, the legislative
provisions based on sufficiency of domestic production that guide and enable the import licensing
regimes, also have a limiting effect on imports.

52. Accordingly, Indonesia's import restrictions based on sufficiency of domestic production are
inconsistent with Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture.

B. ARTICLE III:4 OF THE GATT 1994
53. New Zealand considers that the Domestic Purchase Re quirement for beef, and the
restrictions on use, sale and distribution of animal products and horticultural products, constitute
conditions on importation of these products that are applied at the border and are therefore
contrary to Article XI:1 of the GA TT 1994 and Article 4.2 of the Agreement on Agriculture.
However, insofar as these measures affect the "internal sale, offering for sale, purchase,
transportation, distribution or use" of these products, New Zealand submits that they are also
inconsistent with Article III:4 of the GATT 1994.

(a) The Domestic Purchase Requirement for beef is inconsistent with Article III:4 of
the GATT 1994

54. The Domestic Purchase Requirement for beef "modifies the conditions of competition in the
relevant market to the d etriment of imported products" by according an advantage to the
purchase of like domestically -produced products that is not accorded to imported product. The
only characteristic differentiating domestic from imported beef for the purposes of the Domestic
Purchase Requirement is the origin of the product, and accordingly, such products are "like" for the
purposes of Article III:4 of the GATT 1994.

(b) Limiting the use, sale and distribution of imported bovine meat and offal is
inconsistent with Article III:4 of the GATT 1994

55. The Indonesian regulations formally treat imported bovine meat and offal differently from
their like domestic equivalents. Domestic bovine meat and offal are not restricted in the use to
which they may be put in the Indonesian domestic market or to certain points of sale. By contrast,
imported like products may only be used in industry, hotel, restaurant, catering or other special
needs and may not be sold in modern or traditional markets.
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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56. This formally different treatment for l ike imported and domestic bovine meat and offal
products therefore modifies the conditions of competition to the detriment of imported products
and accords treatment that is "less favourable" to imported bovine meat and offal products.
Accordingly, the measure is inconsistent with Article III:4 of the GATT 1994.

(c) Limiting the use, sale and distribution of imported horticultural products is
inconsistent with Article III:4 of the GATT 1994

57. The Indonesian regulations formally treat imported horticultu ral products differently from
their domestic equivalents. Domestic horticultural products are not restricted in the use to which
they may be put, or the distribution channels that they must go through in the Indonesian
domestic market. In contrast, importe d like products may only be used in industrial production
processes or else sold to distributors. This formally different treatment for like imported and
domestic horticultural products affects the conditions of competition to the detriment of imported
products and accords treatment that is "less favourable" to imported horticultural products.
Accordingly, the measure is inconsistent with Article III:4 of the GATT 1994.

C. AGREEMENT ON IMPORT LICENSING PROCEDURES
58. New Zealand submits that the limited ap plication windows and validity periods for
MOA Recommendations and Import Approvals for animals and animal products and RIPH and
Import Approvals for horticultural products are inconsistent with Article XI:1 of the GATT 1994.
Furthermore, to the extent tha t the Panel finds that the limited application windows and validity
periods for animals, animal products and horticultural products are non -automatic licensing
procedures, New Zealand submits that they are inconsistent with Article 3.2 of the Agreement on
Import Licensing Procedures.

59. The limited application windows and validity periods are "non -automatic import licensing
procedures" within the meaning of Article 3.1 of the Agreement on Import Licensing Procedures.
Applications for MOA Recommendations, RIPHs and Import Approvals may only be applied for and
granted during limited time periods, and thus are not able to "be submitted on any working day
prior to customs clearance" within the meaning of Article 2.1 of the Agreement on Import
Licensing Procedures.

60. In addition, the limited application windows and validity periods for MOA Recommendations
and Import Approvals create trade -restrictive and trade-distortive effects contrary to Article 3.2 of
the Agreement on Import Licensing Procedures.

III. SPECIFIC ISSUES RAISED IN INDONESIA'S FIRST WRITTEN SUBMISSION
1. The measures challenged in this dispute are maintained by the Indonesian
government, not private actors

61. Indonesia has sought to characterise the measures at issue as resulting purely fro m the
"decisions of private actors". 16 However, simply because private actors have the ability to make
limited decisions about their import needs, does not immunise Indonesia's measures from
challenge. Private actors can only operate within the confines of Indonesia's laws and regulations
and, as the Complainants have demonstrated, Indonesia's laws and regulations constrain the
actions of private actors which necessarily has a limiting effect on imports. The measures
challenged in this dispute are not the co mmercial decisions of private actors. Rather, the
challenged measures are those reflected in Indonesia's laws and regulations. Those measures
prevent importers from making ordinary commercial decisions and serve to limit imports.

62. The Complainants' pos ition is supported by the jurisprudence. Panels have confirmed that
measures which required importers to voluntarily accept certain conditions in order to import
goods constituted governmental measures falling within the scope of Article XI:1. 17 Here, the
limiting effect of Indonesia's measures derives not from autonomous decisions of private actors,
but from the trade-restrictive framework within which Indonesia requires importers to operate.

16 See Indonesia's first written submission, paras. 52, 67, 69, 74, 101, 102, 104, 119, 138.
17 Panel Reports, Argentina – Import Measures, para. 6.177; and India – Autos, paras 7.252 – 7.253.
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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2. Indonesia's import licensing regimes are not "automatic"

63. Indonesia has argued that its import licensing regimes are "automatic import licensing
procedures" because every application is granted and therefore, "by definition", the regime is
excluded from the scope of Article 4.2 of the Agreement on Agriculture. 18 However, import
licensing regimes, whether automatic or non -automatic, fall under the disciplines of Article XI:1 of
the GATT 1994 and Article 4.2 of the Agreement on Agriculture. Further, the measures at issue
have all been identified by the Complainants as trade -restricting and as quantitative import
restrictions, which clearly fall within the scope of the footnote of Article 4.2.
3. Indonesia has not made a prima facie case that its measures are justified under
Article XX of the GATT 1994

64. Indonesia's first written submission raises several arguments, expressed "in the alternative"
to Indonesia's primary defences, that its measures are within one or more of the general
exceptions in Articles XX(a), (b) or (d) of the GATT 1994. Indonesia has the burden of proving that
its measures are necessary to achieve those objectives, and must do so in accordance with the
two-tier test that is well established in WTO jurisprudence.

(a) Indonesia's defences under Article XX(a) – "necessary to protect public morals"

65. In relation to animals and animal products, Indonesia argues that its prohibitions on sale in
traditional open -air markets are necessary to "prevent consumer deception regarding whether
certain food products are Halal". The risk of this occurring is perceived to arise because there is no
widely-used product labelling system in place in those markets. However, all relevant meat and
offal products exported from New Zealand to Indonesia are certified in New Zealand as satisfying
halal requirements, in accordance with Indonesian law.19 This risk, therefore, does not arise.

66. In relation to horticultural products, Indonesia argues that its restrictions on use, sale and
distribution are justified in order to prevent consumer deception regarding the hala l status of such
products. Yet to New Zealand's knowledge, Indonesia has no halal certification requirements for
imported horticultural products and distributors are not, in fact, restricted from selling imported
horticultural products in traditional markets.

67. Accordingly, Indonesia has not made a prima facie case that any of its measures are
necessary to protect public morals in terms of Article XX(a).

(b) Indonesia's defences under Article XX(b) – "necessary to protect human, animal
or plant life or health"

68. Indonesia claims that several of its measures relating to animals and animal products and
horticultural products can be justified under Article XX(b). However it has provided little
elaboration of such justification.

69. One concern of Indo nesia relates to what it describes as the "extremely high risk of unsafe
food handling that would result" if New Zealand animals and animal products were permitted to be
sold in traditional Indonesian markets. However, an arbitrary ban on the sale of impor ted meat in
traditional markets is not justified by such a concern. New Zealand meat is no less safe than
Indonesian meat sold at such markets. Indeed, it is likely to be safer, as New Zealand meat
processing and preparation processes up to export follow t he highest sanitary standards in
accordance with the CODEX Code of Hygienic Practice for Meat, and good operating practice.20

70. With respect to horticultural products, New Zealand also has a stringent food safety control
system which meets Indonesia's r equirements. In response to Indonesia's specific food safety
concerns about storage of products with long shelf lives, such as apples and onions, New Zealand
already has highly-regarded storage practices for long-life products.

18 Indonesia's first written submission, para. 51.
19 See Animal Products (Overseas Market Access Requirements for Halal Assurances) Notice (No. 3)
2015, cls 6(1), 6(8) (Exhibit NZL-81); Indonesia, Meat and Meat Products Overseas Market Access
Requirements, Part 2 (Exhibit NZL-82); Food Law, Article 97(3)(e) (Exhibit JE-2); MOT 46/2013,
Article 19(2)(e), (Exhibit JE-21).
20 CODEX Code of Hygienic Practice for Meat, CAC/RCP 58-2005.
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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71. The lack of detail prov ided by Indonesia underpinning these Article XX(b) defences means
that Indonesia has failed to make a prima facie case.

(c) Indonesia's defences under Article XX(d) – necessary to secure compliance with
laws or regulations…including those relating to customs enforcement

72. Indonesia claims that several of its measures can be justified under Article XX(d). The
overall theme in Indonesia's first written submission in relation to its defence is that its restrictions
are necessary for "customs enforcement".

73. In Korea – Various Measures on Beef , the Appellate Body held that, in order to establish
provisional justification under Article XX(d), a Member has the burden of demonstrating two
elements: "First, the measure must be one designed to 'secure complia nce' with laws or
regulations that are not themselves inconsistent with some provision of the GATT 1994. Second,
the measure must be 'necessary' to secure such compliance".

74. Indonesia has failed to identify the specific customs enforcement laws or regu lations it
claims its restrictions are designed to secure compliance with. Furthermore, Indonesia has
provided no information that would allow the Panel to assess whether such laws or regulations are
themselves consistent with the GATT 1994, or to what ext ent the restrictions are "necessary" to
secure compliance with such laws or regulations.

75. For all these reasons, New Zealand considers that Indonesia's Article XX(d) defences do not
meet the legal standard necessary to establish a prima facie case.
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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ANNEX C-2
SECOND PART OF THE EXECUTIVE SUMMARY OF THE ARGUMENTS OF NEW ZEALAND
INTRODUCTION
1. The measures at issue in this dispute all stem from Indonesia's objective to restrict certain
agricultural imports when domestic product is deemed sufficient to f ulfil domestic demand.
New Zealand has demonstrated that they are all quantitative restrictions contrary to Article XI:1 of
the GATT 1994 and Article 4.2 of the Agreement on Agriculture. The reference prices for beef, chili
and shallots also constitute "mi nimum import prices … or similar border measures" within the
meaning of footnote 1 to Article 4.2 of the Agreement on Agriculture.

2. In response, Indonesia has challenged the existence or trade -restrictiveness of the
measures at issue. It has pointed to Article XX of the GATT 1994 in an attempt to provide legal
justification for the import restrictions. It has also emphasised recent changes to its regulations,
which it contends have been made to address the concerns of the Complainants. 1 However
Indonesia's new regulations have not materially changed Indonesia's import regime, as the core
trade-restrictive measures at issue in this dispute remain in place.
I. ALL OF THE MEASURES AT ISSUE ARE INCONSISTENT WITH ARTICLE XI:1 OF
THE GATT 1994 AND ARTICLE 4.2 OF THE AGREEMENT ON AGRICULTURE
1 The obligations under Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement
on Agriculture
(a) Trade effects need not be demonstrated in order for a measure to be
inconsistent with Article XI:1 or Article 4.2
3. The Appellate Body has confirmed that the test for whether a measure constitutes a
quantitative restriction is whether it has a "limiting effect" on importation.2 The Appellate Body has
also made clear that, in determining whether a measure has a "limiting e ffect" on importation, it is
not necessary to show an adverse impact on trade flows.3

4. Indonesia's repeated assertions that, in order to demonstrate a breach of Article XI:1, a
measure must impose an "absolute limit" on imports and that "a complainant i s [not] excused
from demonstrating that the measure has some effect on trade", 4 mischaracterise the relevant
legal tests. A complainant need not quantify the effects of the measures at issue to make out a
claim under Article XI:1. WTO jurisprudence is clea r that the limiting effect of a measure can be
demonstrated through its design, architecture and structure.5

5. The Complainants have demonstrated that Indonesia's regime is designed and structured in
a manner which limits imports. While not a necessary part of the legal test, the Complainants have
also provided evidence of the actual trade effects of these measures to illustrate the practical
commercial importance of this dispute to its agricultural exporters. This is demonstrated, for
example, by the 84 percent decline in New Zealand beef exports to Indonesia following the
introduction of the measures of concern.6

1 Indonesia's second written submission, paras. 7 and 8.
2 Appellate Body Reports, China – Raw Materials, para. 319; and Argentina – Import Measures,
para. 5.217.
3 Appellate Body Report, Argentina – Import Measures, para. 5.217.
4 For example, Indonesia's second written submission, para. 24; and Indonesia's first written
submission, paras. 54, 55, and 110.
5 Appellate Body Report, Argentina – Import Measures, para. 5.217.
6 New Zealand's first written submission, para. 4.
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(b) The characterisation of a measure as "automatic" or "non -automatic"
licensing is not relevant to the Panel's inquiry under Article XI:1 or
Article 4.2
6. Indonesia has asserted that its import licensing regimes "as a whole" constitute "automatic"
import licensing procedures within the scope of the Agreement on Import Licensing Procedures
(ILA). On the basis of this assertion, Indonesia then s ubmits that all the measures of concern are
"excluded from the scope of Article 4.2 of the Agreement on Agriculture and Article XI:1 of the
GATT 1994".7

7. However, with the exception of limited application windows and validity periods which are a
quantitative restriction as well as a prohibited non-automatic licensing procedure, all of the other
measures at issue in this dispute are not "administrative procedures used for the operation of
import licensing regimes" within the scope of the ILA.

8. In this regard, WTO jurisprudence is clear that the ILA distinguishes between import
licensing procedures, which are the administrative procedures used to implement an import
licensing regime, and the underlying substantive rules that may be administered through i mport
licensing procedures. 8 As New Zealand has argued, the measures at issue in this dispute are
underlying substantive rules which are inconsistent with Article XI:1 of the GATT 1994 and
Article 4.2 of the Agreement on Agriculture because they are "prohi bitions or restrictions … made
effective through … import … licences or other measures".9

9. Further, regardless of whether any of the measures at issue in this dispute constitute import
licensing procedures, a measure is either consistent or not with Ar ticle XI:1 of the GATT 1994 and
Article 4.2 of the Agreement on Agriculture according to the relevant legal standard under those
provisions. Such an analysis cannot be conducted simply by assessing whether the licensing
procedures used to implement the und erlying restrictions are characterised as "automatic" or
"non-automatic". It is the nature of the measure that is determinative, not the particular label a
respondent has attached to it.

10. Accordingly, Indonesia's argument that its measures are all import licensing procedures, and
therefore exempt from the disciplines of Article XI:1 and Article 4.2, ignores the critical distinctions
in the Complainants' claims and WTO jurisprudence.
2 The measures at issue are inconsistent with Article XI:1 and Article 4.2
11. As elaborated in New Zealand's submissions,10 Indonesia has failed to provide any credible
evidence or argumentation to rebut the case established by New Zealand that the measures at
issue are inconsistent with Article XI:1 of the GATT 1994 and Art icle 4.2 of the Agreement on
Agriculture. New Zealand does not repeat these arguments in this summary.
II. THE MEASURES AT ISSUE ARE NOT JUSTIFIED UNDER ARTICLE XX OF THE
GATT 1994
1 The obligation under Article XX of the GATT 1994
(a) Indonesia has the burden of proving that its measures are justified under
Article XX
12. Indonesia contends that its measures fall within one or more of the general exceptions in
Articles XX(a), (b) or (d) of the GATT 1994. Jurisprudence is clear that Indonesia has the burden
of proving its Article XX defences.11

13. In order to satisfy that burden, Indonesia must first demonstrate that a measure was
adopted or enforced to protect or secure compliance with an objective identified in paragraphs (a),
(b) or (d) of Article XX. T he measure must "address the particular interest specified in that

7 Indonesia's second written submission, para. 67.
8 Appellate Body Report, EC – Bananas III, para. 197; Panel Report, Korea – Various Measures on Beef,
9 Article XI:1 of the GATT 1994.
10 See for example, New Zealand's first written submission, Sections IV.A and IV.B and Sections III:A
and III:B of New Zealand's second written submission.
11 See for example Appellate Body Report, EC – Seal Products, para 5.169.
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paragraph" and there must be "a sufficient nexus between the measure and the interest
protected".12

14. Indonesia must then demonstrate that the measure is necessary for the achievement of the
particular objective. The standard of "necessity" is a high one, "located significantly closer to the
pole of 'indispensable' than to the opposite pole of simply 'making a contribution to'". 13 To be
"necessary", there must be "a genuine relationship o f ends and means between the objective
pursued and the measure at issue".14

15. Appraisal under the chapeau to Article XX is also required. The burden again rests with the
party invoking the exception to demonstrate that such a measure complies with the chapeau.15
(b) The relationship between Article XX of the GATT 1994 and Article 4.2 of
the Agreement on Agriculture
16. Indonesia raises a novel, but flawed, argument regarding the burden of proof under
Article XX of the GATT 1994. Indonesia accepts that Article XX is an exception to Article XI:1 of the
GATT 1994, and that ordinarily the burden is on the respondent to demonstrate that the exception
applies. However, Indonesia contends that in the case of a claim of violation of Article 4.2 of the
Agreement on Agriculture, the Article XX burden of proof is reversed and falls on the Complainants
to demonstrate the absence of such a defence.16 Indonesia seeks to turn the usual burden of proof
in relation to Article XX on its head, contrary to the well -established principle that the burden of
identifying and establishing affirmative defences under Article XX rests on the party asserting that
defence.17 However, there is no justification for shifting the normal burden of proof in this way. It
would be contradictory if the same provision were an exception to Article XI:1 and not an
exception to the obligation under Article 4.2 of the Agreement on Agriculture. The character of the
Article XX defences is as an exception and such character should be maintained. In any c ase, it is
not necessary for the Panel to consider this argument if it commences its analysis of the measures
at issue with Article XI:1 of the GATT 1994.
2 Indonesia has failed to meet its burden under Article XX
(a) Import licensing regime for animals and animal products
(i) "Positive list" prohibition of certain imports
17. Indonesia initially did not raise a defence under Article XX of the GATT 1994 in respect of
the underlying prohibition of certain beef and offal imports implemented through its "posi tive list",
which it initially denied existed. 18 Instead, it only argued a defence under Article XX(b) in respect
of the aspect of this measure that permits Ministers to exceptionally permit importation of bovine
carcass and beef secondary cuts by state -owned enterprises (and only to the extent that certain
emergency circumstances are deemed to exist). Indonesia claims this allows it to respond to a
direct threat to the population caused by food scarcity.19

18. However, even this limited Article XX(b) def ence does not make sense when considered in
light of Indonesia's underlying import ban on all unlisted products. By prohibiting all imports of
unlisted animals and animal products under ordinary circumstances, Indonesia itself has created
the risk of food scarcity that this aspect of the measure is allegedly designed to address. If the
underlying WTO -inconsistent positive list prohibition did not exist, then the emergency
circumstances exception would not be required. Article XX(b) cannot therefore be invok ed to
justify the measure.

12 Ibid.
13 Appellate Body Report, Korea – Various Measures on Beef, paras. 161-162 and 164.
14 Appellate Body Report, EC – Seal Products, para. 5.180, citing Appellate Body Report, Brazil –
Retreaded Tyres, paras. 145-147,
15 Appellate Body Report, US – Gasoline, pp. 22-23.
16 Indonesia's second written submission, para. 38.
17 Appellate Body Report, US – Wool Shirts and Blouses, p. 16.
18 Indonesia's first written submission, paras. 96-99; Indonesia's first opening statement, para. 26.
19 Indonesia's first written submission, para. 168.
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19. Subsequently, Indonesia conceded that certain beef and offal products are prohibited from
importation, but argued that this was justified under Article XX(b). 20 Indonesia offered very little
elaboration of its Article XX(b) positive-list defence, however, apart from a few passing references
to concerns about hormone-treated beef.21

20. In response, New Zealand has emphasised that its bovine meat and offal products are safe.
They are exported widely around the world to deve loped and developing countries, and are
consumed domestically in New Zealand. 22 No health issues have arisen warranting Indonesia's
trade ban. Indonesia has presented no relevant evidence to the contrary and its exhibits do not
support its reliance on Article XX(b).23

21. In particular, new Exhibits IDN -58, IDN-83, and IDN-84 do not explain why Indonesia bans
the import of bovine offal and secondary cuts through the "positive list". 24 Rather, those exhibits
are, respectively, a blog expressing concerns abo ut hormones in milk and meat, a partisan
summary of the EC –Hormones dispute, and a promotional article from the Organic Consumers
Association encouraging its members to purchase organic beef.25

22. Furthermore, Indonesia's prohibition of certain beef and offal imports bears no rational
relationship to the alleged concerns about hormone -treated beef. This is clear from the fact that
imports of some beef products are permitted. 26 Yet there is again no reference to limits of imports
of these products when th e beef has been treated with hormones. Surely if Indonesia intended to
protect its population from purported risks arising from hormones, it would impose measures that
applied universally to all hormone -treated beef products, rather than just certain bovin e offal and
secondary cuts in certain circumstances. Finally, the positive list bans all unlisted products – not
just hormone-treated beef. That is why New Zealand beef and offal is prohibited, even if it is not
treated with hormones. Furthermore, none of the evidence publicising this measure made any
reference to hormones. 27 For all these reasons, Indonesia's positive list restriction cannot be
justified under Article XX(b).
(ii) Limited application windows and validity periods for MOA
Recommendations and Import Approvals
23. Indonesia argues that Article XX(d) justifies its limited application windows and validity
periods for MOA Recommendations and Import Approvals on the basis that these are a necessary
element of its customs regime.28

24. Indonesia cla ims that its limited application windows and validity periods measures are
"mandated because the products at issue are products that spoil easily. As such, data would be
more accurate if it is closer to the import date". 29 However, the measures at issue re quire
importers to provide information up to six months in advance of importation. If limited application
windows and validity periods were removed, as New Zealand suggests should occur, Indonesia
would be better placed to obtain more accurate data because it would be obtained closer to the
time of importation.

25. Indonesia also acknowledges in its second written submission that its limited application
windows apply only to certain animal products and only certain fresh horticultural products. 30
Indonesia's inconsistent application of this measure suggests that avoiding food spoilage or data
collection is not its true objective.

20 Indonesia's second written submission, Section III.D.2(e), para. 206. Indonesia's responses to the
Panel's questions after the second substantive meeting, Question 102, para 38.
21 Indonesia's second written submission, paras. 110, 236.
22 See, for example, "New Zealand Export Statistics to Indonesia 2010 - 2015" Global Trade Atlas
(Exhibit NZL-5) and Meat Industry Association Statement (Exhibit NZL-12).
23 Huffington Post "Hormonal Milk and Meat: A Dangerous Public Health Risk" (Exhibit IDN-58);
"Hormones in Meat" (Exhibit IDN-83); "Growth Hormones Fed to Beef Cattle Damage Human Health"
(Exhibit IDN-84).
24 See New Zealand's first written submission, paras. 40-43.
25 Indonesia's second written submission, paras. 110, 236.
26 See New Zealand's first written submission, para. 43.
27 See the exhibits listed at footnote 66 of New Zealand's first written submission.
28 Indonesia's second written submission, paras. 241-242.
29 Indonesia's second written submission, para. 242.
30 Indonesia's second written submission, paras. 57 and 58.
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26. Indeed, Indonesia has failed to demonstrate that customs enforcement is, in fact, the
objective of its measure. Indonesia d oes not identify which specific parts of its customs
enforcement laws and regulations are relevant. As the panel found in Colombia – Ports of Entry ,
general references to laws and regulations relating to customs enforcement would not satisfy the
legal standard required in Article XX(d).31

27. WTO jurisprudence confirms that the Panel is not bound by Indonesia's assertion of the
objective of its measures. Rather, a panel should look at all relevant evidence, including the text,
structure and legislative history of the measure at issue.32 Mere assertions concerning the purpose
of a challenged measure are not sufficient to establish that it is designed to promote an objective
in Article XX. In this instance, nothing in the sources referred to by Indonesia sugg ests the
requisite connection between this measure and customs enforcement.33
(iii) Fixed Licence Terms
28. Indonesia argues that Article XX(d) applies in respect of the Fixed Licence Terms, however it
has again failed to adequately demonstrate that custom s enforcement is the objective of that
measure. Indonesia has done nothing more than list a few titles of laws and regulations relating to
customs, quarantine and food safety. Thus, Indonesia has failed to identify the specific customs
enforcement laws and regulations it claims its restrictions are designed to secure compliance with.

29. Indonesia contends that the purpose of the Fixed Licence Terms is to "oblige importers to
include information such as port of entry, volume, etc. in order for the customs officials to assess
customs classification and import eligibility" and to "gather information for statistical purposes". 34
However, Indonesia has failed to show that the measure is "necessary" to achieve that objective.
Indeed, Indonesia could readily obta in better information from other sources, providing data on
what importers actually import, rather than just what they apply to import. As New Zealand has
previously explained, there are existing processes used for information gathering purposes.
(iv) 80% realisation requirement
30. Indonesia's defence in respect of the 80% realisation requirement is based on Articles XX(b)
and XX(d).35

31. With respect to Article XX(d), Indonesia asserts its realisation requirement is necessary for
customs enforcement as it serves as a "safeguard against importers grossly overstating their
anticipated imports".36 However, Indonesia has failed to identify the specific provisions of the "laws
or regulations" with which the 80% realisation requirement is "necessary to secure compliance" or
that customs enforcement is the objective of the measure.

32. Further, even if Indonesia were correct that importers would "overestimate" anticipated
imports in the absence of the 80% realisation requirement, Indonesia ignores the fact tha t any
such overestimation would only occur as a consequence of other restrictive and WTO -inconsistent
aspects of Indonesia's import licensing regime – namely limited application windows and validity
periods and Fixed Licence Terms.

33. Furthermore, Indone sia has not demonstrated that the measure is necessary for the
fulfilment of that objective. The trade -restrictiveness of the measure, inducing importers to limit
the quantities they import rather than breach the 80% realisation requirement, outweighs any
contribution it makes towards the objective in Article XX(d).

31 Panel Report, Colombia Ports of Entry, paras. 7.516-7.525.
32 Appellate Body Report, EC – Seal Products, para. 5.144.
33 See for example New Zealand's second written submission, Section III.A(b)(iii); and New Zealand's
second opening statement, paras. 62 - 63.
34 Indonesia's second written submission, para. 243.
35 Indonesia's first written submission, para. 107, referring to paras. 78-81; Indonesia's responses to
the Panel's questions after the first substantive meeting, Question 16, para. 12.
36 Indonesia's first written submission, para. 79.
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34. Indonesia also appears to contend, in vague terms, that the 80% realisation requirement is
justified under Article XX(b).37 Again, however, Indonesia has failed to show that the measure
makes any contribution to its stated objective of protecting human life or health. Specifically,
Indonesia has not provided any evidence demonstrating that "overstatement" of imports was
occurring in the absence of the 80% realisation requirement. Nor has Ind onesia presented any
evidence, or explained in any detail, why even if overstatement of imports did occur, that this
would present a risk to human health.
(v) Prohibitions and restrictions on the use, sale and distribution of imported
animals and animal products
35. Indonesia's defence in respect of the use, sale and distribution restrictions is based on
Articles XX(a) and (b). Indonesia's arguments do not meet the standard required for a defence
under either of these paragraphs.

36. Indonesia's defence ba sed on Article XX(a) is that the measure is necessary to protect
public morals because it prevents consumers from "mistakenly purchasing animals or animal
products that do not conform to Halal requirements".38

37. However, New Zealand has demonstrated that all relevant animal products that are exported
from New Zealand to Indonesia are certified as halal. This requirement is reflected in both
Indonesian and New Zealand law. Indonesia has formally recognised that New Zealand's slaughter
and meat processing practices comply with Indonesia's halal requirements. Accordingly, the
measures at issue do not contribute to the objective cited by Indonesia, as other mechanisms
already ensure this objective is satisfied.

38. This means that the trade -restrictiveness o f the measure easily outweighs the purpose
Indonesia claims for it and cannot be regarded as "necessary" to protect public morals.

39. Indonesia also claims, in respect of Article XX(b) , that imported animals and animal
products are not permitted to be so ld in traditional Indonesian markets because of the dangers
that arise from freezing and thawing meats.39

40. However, Indonesia has produced no relevant evidence that protecting human health was
the reason for Indonesia's restrictions on sales of importe d meat in traditional markets, or that
imported meat sold in traditional markets poses a greater risk to human heal th than
locally-slaughtered meat. Indeed, Indonesia's own Exhibit IDN -79 shows that frozen meat is safe
provided it was safe when frozen. When thawed, microbes will become active and multiply, but at
the same rate as in fresh meat.40

41. Furthermore, Exhibit IDN -57 produced in support of Indonesia's defence of its measure,
titled "The effect of Freezing and Thawing on Technological Properties of Meat" relates to food
quality not food safety. 41 Indonesia's repeated arguments based on "meat quality and texture" 42
are not only unsubstantiated but also irrelevant to an Article XX(b) defence.

42. Finally, Indonesia has not provided any evidence tha t it prevents domestically produced
frozen meat from being sold in traditional markets. In fact, there is evidence before the Panel that
Indonesian state -owned purchasing company BULOG has itself distributed frozen meat to
traditional markets in Jakarta in an effort to lower the price of beef.

37 Indonesia's responses to the Panel's questions after the first substantive meeting, Question 16,
para. 11-12.
38 Indonesia's first written submission, para. 166.
39 Indonesia's second written submission, para. 110.
40 "Rules of Thawing and Refreezing Meat" (Exhibit IDN-79).
41 Corina Gambuteanu, Daniela Borda and Petru Alexe, "The Effect of Freezing and Thawing on
Technological Properties of Meat: Review" (Exhibit IDN-57).
42 Indonesia's second written submission, paras. 109 ("establish quality… requirements"), 110, 193
and 225.
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(vi) Domestic Purchase Requirement
43. Indonesia has made little effort to demonstrate that its Domestic Purchase Requirement was
adopted to protect the objectives identified in Article XX(b). There is nothing in the design or
structure of the measure indicating that was the measure's purpose. Rather, the measure itself
seems to have been designed as an additional form of protection for domestic beef producers from
competition from imported beef.

44. This objective do es not correspond with the protection of human life or health in terms of
Article XX(b). If it did, Members could simply prohibit imports on the basis that doing so was
necessary to stimulate local production.
(vii) Beef reference price
45. Indonesia has a lso failed to produce any credible evidence showing its reference price
requirements contribute to the protection of human, animal or plant life or health under
Article XX(b). The design and structure of this measure does not indicate that it is necessary to
protect Indonesian citizens from public health threats.43

46. Indonesia has produced neither any evidence of any oversupply of these products, nor of
any prospect of "immediate crisis" or "immediate threats to the Indonesia food supply", 44 including
in the exhibit Indonesia produced on its "food security plan". 45 To the contrary, Indonesia's
answers to questions from the Panel, and its exhibits, point to chronic undersupply of food, with
persistent threats of food insecurity and under -nutrition in Indon esia's poorer communities, as
demonstrated by chronic malnutrition. 46 The evidence shows instead that Indonesia needs
additional safe, high-quality, protein, as explained by the strong growth in New Zealand beef and
beef offal exports to Indonesia in the f irst decade of this millennium before the measures at issue
were introduced.47
(b) Import licensing regime for horticultural products
47. Indonesia's argumentation under Article XX in respect of limited application windows and
validity periods, Fixed Licen ce Terms, the 80% realisation requirement and reference prices is
substantially the same for both animals and animal products, and horticultural products.
New Zealand has addressed each of these arguments in detail in its second written submission,
and sho wn that Indonesia has not demonstrated that these measures are justified under
Article XX.48 This section therefore focusses on the measures that are specific to horticultural
products, namely: prohibitions and restrictions based on Indonesian harvest peri ods, storage
ownership and capacity requirements, prohibitions and restrictions on use, sale and distribution of
imported products and the six-month harvesting requirement.
(i) Prohibitions and restrictions based on Indonesian harvest periods
48. Indonesia claims that its prohibitions and restrictions based on harvest periods are justified
under Article XX(b) on the basis that oversupply of horticultural products during harvest periods
could constitute a public health threat.

49. However, Indonesia has not demonstrated that public health is the objective of its measure.
Nothing about the design or structure of the measure indicates that it was adopted or enforced to
protect human health. Indonesia has produced no evidence that "stockpiles of rotting horticu ltural

43 Compare Indonesia's second written submission, para. 240.
44 Indonesia's responses to the Panel's questions after the first substantive meeting, Question 18,
para. 20.
45 Ministry of Agriculture, "Agency for Food Security, 'at a Glance'" (Exhibit IDN-25). And see also
Indonesia's responses to the Panel's questions after the first substantive meeting, Questions 17, 18, 27.
46 Indonesia's responses to the Panel's questions after the first substantive meeting, Question 18,
para. 19. See also "Indonesia Retail Report Update 2013 by Global Agricultural Information" (Exhibit IDN-78);
"The Indonesian Consumer Behaviour, Attitudes and Perceptions Toward Food" (Exhibit IDN-51) at p. 14;
"Rural Poverty in Indonesia", Rural Poverty Portal (Exhibit IDN-4).
47 See e.g. Meat Industry Association (New Zealand), Statement in relation to Indonesia's beef import
restrictions, 11 November 2015 (Exhibit NZL-12).
48 See for example New Zealand's second written submission, Sections III.B(a)(iii), III.B(b)(iii) and
III.B(c)(iii). See also, the summary of these measures in the context of animals and animal products in
Sections I.2(a)(i) - I.2(a) (iii) of this Second Executive Summary.
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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products" have resulted, or would result, from imports during domestic harvest seasons or that
this was the reason for the measure's introduction. Rather, the evidence presented by
New Zealand suggests that the real reason for the measure is to prot ect domestic farmers from
import competition.

50. Indonesia has also failed to demonstrate that the measure is "necessary" to protect human
health. Indonesia has not established that the measure contributes to that objective at all, let
alone that it make s a material contribution to that objective as is required when a measure
produces restrictive effects on international trade as severe as those resulting from an import ban.
(ii) Storage ownership and capacity requirement
51. Indonesia contends that its storage ownership and capacity requirement is justified under
Articles XX(a), (b) and (d).

52. In relation to Article XX(a), New Zealand's challenge to Indonesia's storage ownership and
capacity requirement is confined to horticultural products (which are inherently halal). Thus,
Indonesia's public morals arguments under Article XX(a) is without substance and should be
rejected.

53. In relation to Article XX(d) and Article XX(b) , Indonesia's attempts to justify its
ownership and storage capacity requireme nts for horticultural products do not address the claims
made by New Zealand. Specifically, New Zealand's challenge relates exclusively to the
requirements that importers own storage facilities with capacity equalling the quantity of product
imported over a six-month period in a one-to-one ratio.

54. None of Indonesia's evidence or argumentation supports the need for a requirement that
importers own their storage. There is no reason why "ownership" as opposed to leasing of storage
facilities shows a greate r "commitment" to provide food that is safe for consumption or would
facilitate customs enforcement. Nor is it clear why there is no allowance for product turnover
during a validity period. Keeping storage facilities empty for several months after the prod ucts in
them have been sold, but before the next validity period, makes no contribution to the objectives
in Articles XX(b) and XX(d).
(iii) Prohibitions and restrictions on use, sale and distribution of imported
horticultural products
55. Indonesia's defe nce to its measure restricting the use, sale and distribution of imported
horticultural products is based on Articles XX(a), (b) and (d).

56. In relation to Article XX(a) , Indonesia argues that this measure is necessary to protect
public morals by aiming to ensure that non -halal foods are kept out of traditional Indonesian
markets.49 However, there is no reference to halal in the relevant legal instruments through which
the measure is implemented and Indonesia has produced no evidence of halal certificatio n
requirements for imported horticultural products. Indonesia has not explained why the measures
are "necessary to protect public morals" or demonstrated that the objective of the measure is to
protect public morals or the religious beliefs of the Indonesian people.

57. In relation to Article XX(d), Indonesia has not demonstrated that the restrictions on use,
sale and distribution have the objective of ensuring compliance with food safety requirements.
Indonesia has not provided any specificity either on the laws and regulations with which this
measure is designed to ensure compliance, or on the specific provisions of those laws and
regulations.

58. Indonesia has also failed to demonstrate that the restrictions have the objective of
protecting human heal th under Article XX(b) . There is no evidence from the text of the
regulations or their operation that the restrictions have the objective of protecting human health.
Nor is there evidence that the requirements would reduce the spread of pathogens into the food
supply of the general public and thereby contribute to the objective of human health. The
requirements add an extra distribution layer for fresh horticultural products imported for
consumption. This would seem to add to the difficulties of tracking pathogens in the food supply.

49 Indonesia's first written submission, para. 187.
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(iv) Six month since harvesting requirement
59. Indonesia claims, based on Article XX(b) of the GATT 1994, that the purpose of its six month
harvesting requirement for fresh horticultural products is to ensure that horticultural products are
fresh, nutritious, chemical and preservative -free, safe and of good quality. 50 However, this
measure cannot be "necessary" for the achievement of that objective as it makes no distinction
based on factors such as the storage life of particula r horticultural products, many of which have a
storage life greater than six months. For example, as acknowledged by Indonesia in its first
written submission,51 apples and pears can be stored for longer than six months under controlled
atmosphere conditio ns that use low oxygen and high carbon dioxide levels to slow down
respiration.52 Onions too have a storage life greater than six months. 53 Moreover, New Zealand
does not accept that the purpose of the six month harvesting requirements is to protect agains t
"hazardous chemicals" as these are regulated separately by way of Indonesian regulations that are
not at issue in this dispute.54
(c) Import licensing regimes as a whole
60. Indonesia has also sought to justify its import licensing regime for animals and animal
products "as a whole" and its import licensing regime for horticultural products "as a whole" under
Articles XX(a), (b) and (d) of the GATT 1994.

61. In relation to Article XX(a), Indonesia states, in very general terms, that each of its import
licensing regimes as a whole "fall under the scope of public morals".

62. In seeking to justify its regime Indonesia has merely referred to five overarching laws and
then concluded, without any further elaboration, that its import licensing regime as a whol e is
required to protect public morals. However, it is not enough for Indonesia to argue that some
aspects of the overarching laws pursuant to which its regulations are implemented may touch on
matters concerning public morals. To sustain an Article XX(a) defence, Indonesia must show that
each specific measure identified by the Complainants has an underlying public morals objective as
evidenced by its design, architecture and revealing structure. It has not done so.

63. Furthermore, New Zealand has described the comprehensive arrangements that are in place
to ensure that all relevant animal product exports to Indonesia are halal. 55 These arrangements
remove the risk of Indonesians mistakenly purchasing non -halal animal products. Further,
Article XX(a) does not justify Indonesia's restrictions on imports of horticultural products.
Indonesia's own submissions, exhibits and laws imply that horticultural products are inherently
halal. Thus, Indonesia's measures at issue do not contribute to the objective of public morals.

64. In respect of Article XX(b), Indonesia refers to the Food Law and by implication concludes
that its entire import licensing regime "falls within the range [of] policies designed to protect
human, animal or plant life [or] health".56

65. However, just because one of the objectives set out in the Food Law relates to food safety
does not demonstrate that each specific measure at issue in this dispute has a food safety
objective. As the Appellate Body stated in EC – Seal Products , there must al so be "a sufficient
nexus between the measure and the interest protected". Indonesia must therefore prove that an
objective of each discrete trade restriction at issue in this dispute is the protection of life or health.
A mere reference to the Food Law does not establish this nexus at a sufficient level of granularity.

66. Indonesia also frequently conflates the concepts of food safety and "food security". 57 It is
questionable whether the objective of "food security", as used by Indonesia, would fall unde r the

50 Indonesia's second written submission, para. 110.
51 Indonesia's first written submission, para. 150.
52 Dianne M. Barrett, "Maximizing the Nutritional Value of Fruits & Vegetables
<http://www.fruitandvegetable.ucdavis.edu/files/197179.pdf, p. 40-41 (Exhibit IDN-54).
53 Kitinoja, Lisa, and Adel Kader, "Section 7: Storage of Horticultural Crops" FAO Corporate Document
Repository, Agriculture and Consumer Protection (Exhibit IDN-73).
54 New Zealand's second opening statement, para. 84.
55 New Zealand's second written submission, paras, 115-117; New Zealand's first opening statement,
paras. 45-51.
56 Indonesia's second written submission, paras. 105-124.
57 See, e.g. Indonesia's second written submission, paras. 123, 207(b), section III.D.2
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Article XX(b) exception. For Indonesia, "food security" appears to equate to protecting local
producers rather than ensuring people have safe food.

67. Furthermore, Indonesia has not explained how the measures at issue contribute to the
objectives o f food security, even if it was relevant. To the contrary, Indonesia's import -limiting
measures appear to have had the effect of exacerbating food shortages, driving up prices and
causing flow-on effects on nutrition.

68. In respect of Article XX(d), Indonesia argues its import licensing regimes as a whole are
designed to secure compliance with customs laws and regulations.

69. Indonesia's lack of specificity in its Article XX(d) defence is problematic. Indonesia has
provided a list of titles of laws rela ting to customs, quarantine and food safety that it said are
included among "[t]he WTO -consistent laws and regulations" providing the justification for its
various measures.58 However, it has not provided most of those legal instruments as exhibits or
identified which specific provisions of them are relevant. This lack of specificity makes it
challenging for the Complainants to respond to Indonesia's vague Article XX(d) defence.

70. For instance, Indonesia has noted that some of its agriculture and trade r egulations contain
references to the Customs Law . However, this alone is insufficient to demonstrate that each
specific trade -restrictive measure before this Panel is designed to secure compliance with the
Customs Law. Even if they were aimed at this objec tive, there are far less trade -restrictive ways
by which Indonesia could gather data relating to imports for statistical purposes. Many of these
mechanisms already exist independently in Indonesia. Thus, Indonesia has provided no credible
reason why its measures, that have a limiting effect on importation, are necessary.
(d) Import restrictions based on "sufficiency" of domestic production
71. Indonesia asserts that restrictions based on "sufficiency" of domestic production are justified
under Article XX(b) .59 However, Indonesia has provided no argumentation or evidence to
demonstrate that the protection of human, animal or plant life or health is an objective pursued by
the measure, nor has it demonstrated that the measure is "necessary" for the achievement of that
objective. Indeed, New Zealand has shown that the true objective of the domestic insufficiency
condition is to limit imports when domestic production is deemed sufficient to meet domestic
demand.
3 Indonesia has not demonstrated that any of its me asures comply with the chapeau to
Article XX
72. As Indonesia has failed to provisionally justify its measures in terms of the paragraphs of
Article XX, the Article XX chapeau is not reached. In any event, Indonesia has also failed to show
that its measures are applied consistently with the chapeau.

73. In its second written submission, Indonesia argues, based on the first element of the
chapeau, that its measures are not applied in a manner which would constitute a means of
arbitrary or unjustifiable discrimination between countries where the same conditions prevail.60

74. This argument should be rejected. The Appellate Body has confirmed that one of the most
important factors in the assessment of arbitrary or unjustifiable discrimination is whether the
discrimination can be reconciled with, or is rationally related to, the policy objective with which the
measure has been provisionally justified under the paragraphs of Article XX. Indonesia has failed
to show that any of its measures can be reconciled wit h or is rationally connected to the policy
objectives in Article XX.

75. Indonesia also argues that, because its measures are not hidden but are "publicly
announced", they are not disguised restrictions on trade. 61 This argument, based on the second
element of the chapeau to Article XX, should also be dismissed. The Appellate Body has held that a
"concealed or unannounced restriction or discrimination in international trade does not exhaust the
meaning of 'disguised restriction'" under the chapeau. Rather, in US – Gasoline the Appellate Body

58 Indonesia's additional responses to the Panel's questions after the first substantive meeting, para. 46.
59 Indonesia's first written submission, para. 161.
60 Indonesia's second written submission, paras. 148.
61 Indonesia's second written submission, paras. 157 and 250.
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confirmed that "'disguised restriction', whatever else it covers, may properly be read as embracing
restrictions… taken under the guise of a measure formally within the terms of an exception listed
in Article XX". 62 This broader reading of "disguised restriction" is consistent with the purpose of
"avoiding abuse or illegitimate use of the exceptions to substantive rules available in Article XX".
Accordingly, as New Zealand has demonstrated, Indonesia's measures are "disguised restrictions".
III. THE MEASURES AT ISSUE ARE NOT JUSTIFIED UNDER ARTICLE XI:2(C) OF THE
GATT 1994
76. In its second written submission, Indonesia raised an entirely new defence under
Article XI:2(c)(ii) of the GATT 1994 in respect of its reference p rice restrictions for beef, chili and
shallots, and the domestic harvest season restrictions for horticultural products.63

77. However, the availability of Article XI:2(c)(ii) as a defence to Article XI:1 of the GATT 1994
has been removed with respect to agricultural products following the entry into force of the
Agreement on Agriculture. Footnote 1 to Article 4.2 of the Agreement on Agriculture sets out an
illustrative list of measures that have been required to be converted into ordinary customs duties,
except for measures maintained "under other general, non -agriculture-specific provisions of the
GATT 1994". Article XI:2(c) is an exception for certain "import restrictions on any agricultural or
fisheries product". Therefore in respect of agricultural pro ducts, Article XI:2(c) is not a "general,
non-agriculture-specific provision" of the GATT 1994. Thus it cannot be an exception to measures
which have been required to be converted to ordinary customs duties under Article 4.2, including
quantitative restrictions.

78. In any case, even if it were available as a defence, Indonesia has failed to satisfy its burden
of establishing that the measures meet the legal requirements of Article XI:2(c)(ii).
IV. LIMITED APPLICATION WINDOWS AND VALIDITY PERIODS ARE INCON SISTENT
WITH THE AGREEMENT ON IMPORT LICENSING PROCEDURES
79. Limited application windows and validity periods are the only measures which New Zealand
has argued are inconsistent with the ILA, as they are the only measures that constitute
"administrative procedures" within the scope of that Agreement. To the extent that the Panel finds
that such measures fall within the scope of the disciplines of Article 3 of the ILA, they are
inconsistent with Article 3.2 of that Agreement.

80. New Zealand has demonstrated that limited application windows and validity periods do not
constitute "automatic" licensing procedures under Article 2.1 of the ILA. This is because, inter alia,
they do not allow for applications to be "submitted on any working day prior to customs c learance"
as required by Article 2.2(a)(ii) of the ILA. Accordingly, the measures constitute non -automatic
licensing procedures under Article 3.1 of the ILA.

81. New Zealand has demonstrated that limited application windows and validity periods are
inconsistent with Article 3.2 of the ILA, because they have unnecessary trade -restrictive effects on
imports. In particular, limited application windows and validity periods cause declines in imports at
the start of each quarter due to the delay between import l icences being issued and imports being
certified and shipped to Indonesia and at the end of each quarter due to the risk of re-export.64

82. Indonesia contends that limited application windows and validity periods cannot be
prohibited by Article 3.2 of th e ILA and argues that in order to give effect to Article 1.6,
Article 2.2(a)(ii) of the ILA must be read in a way whereby "applications for licenses [need not] be
submitted on any working day". 65 However, Indonesia's novel interpretation of Article 2.2(a)( ii)
takes Article 1.6 out of context and is not supported by the words in Article 2.2. Indeed it would,
in fact, rob all meaning from that provision.

62 Appellate Body Report, US – Gasoline, p. 25.
63 Indonesia's second written submission, Section III.E.
64 See for example, New Zealand's first oral statement, Figure 8.
65 Indonesia's second written submission, para. 65.
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V. CERTAIN MEASURES AT ISSUE ARE INCONSISTENT WITH ARTICLE III:4 OF THE
GATT 1994
83. New Zealand has demo nstrated that three measures: use, sale and distribution restrictions
on bovine meat, carcass and offal; use, sale and distribution restrictions on horticultural products;
and the Domestic Purchase Requirement for beef; are inconsistent with Article III:4 of the
GATT 1994.
(a) Use, sale and distribution restrictions for bovine meat, carcass and offal
84. Indonesia has not rebutted the case made by New Zealand that the prohibitions on the use,
sale and distribution of imported bovine meat, carcass and offal are inconsistent with Article III:4
of the GATT 1994.

85. Indonesia asserts that its "end use limitations for animal products – specifically, the
restriction on sales of imported meat products in traditional Indonesian markets – applies
uniformly to impor ts and domestic products". 66 However, Indonesia's assertion is unsupported by
evidence, and is factually incorrect. Furthermore, Indonesia fails to address the prohibition on
imports of bovine meat and offal products for sale in "modern markets" (such as supermarkets).

86. Accordingly, by prohibiting the sale of imported beef, carcass and offal in modern and
traditional markets, in circumstances where no comparable restrictions are applied to
domestically-produced beef, carcass and offal, Indonesia's meas ure is inconsistent with
Article III:4 of the GATT 1994. Furthermore, Indonesia has failed to discharge its burden of
proving that an Article XX exception applies to the measure.
(b) Use, sale and distribution restrictions for horticultural products
87. Indonesia does not appear to contest that the restrictions on the use, sale and distribution of
imported horticultural products fall within the scope of Article III:4 of the GATT 1994. 67 Rather it
seeks to rely on defences under Articles XX(a) and XX(b). How ever, Indonesia has not
demonstrated that the use, sale and distribution restrictions have the objective either of protecting
public morals or religious beliefs, or of protecting human health, let alone are "necessary" to
achieve these objectives.
(c) Domestic purchase requirement
88. Indonesia claims that the Domestic Purchase Requirement is not inconsistent with
Article III:4 of the GATT 1994 because it "has never been used to prevent the issuance of an
import license". Irrespective of whether the Domesti c Purchase Requirement has been explicitly
referred to as the basis to reject a request for an import licence, it accords less favourable
treatment to imports over domestic products. Indeed, a measure that is in force but has not yet
been enforced may still be challenged as being inconsistent with a Member's obligations.
CONCLUSION
89. Throughout its submissions, Indonesia has argued that its regime does not "restrict or limit"
imports and that importers "can import as much as they like". 68 However, as the Complainants
have demonstrated, Indonesia does prevent importers from importing as much as they like. In
reality, imports are restricted because, among other things:
a. importers are prohibited from importing certain products (such as bovine offal and
secondary cuts);
b. for permitted products, importers cannot import more than the quantity specified in their
Import Approval per validity period;
c. importers are prohibited from importing different products, into different ports or from
different countries of origin per validity period;
d. importers must be conservative in estimating the quantity of products that they request
per validity period, or risk having their ability to import revoked;

66 Indonesia's first written submission, para. 188.
67 Indonesia's first written submission, para. 187.
68 See Indonesia's second written submission, paras. 29, 180, 186, 190, 238.
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e. importers are prevented from importing certain products during the domestic harvest
season, or when the domestic price is above a certain level, or when harvested earlier
than a certain period before importation;
f. importers cannot import certain products for the purpose of sale to consumers through
modern or traditional markets;
g. horticultural importers cannot import more than their owned storage capacity in any
six-month period; and
h. importers must satisfy a domestic purchase requirement in order to import beef.
90. For all of these reasons, and those set out i n the Complainants' submissions, Indonesia's
measures are inconsistent with its WTO obligations.
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ANNEX C-3
FIRST PART OF THE EXECUTIVE SUMMARY OF THE ARGUMENTS OF THE UNITED STATES
EXECUTIVE SUMMARY OF U.S. FIRST WRITTEN SUBMISSION
1. Indonesia imposes n umerous prohibitions and restrictions on imports through laws and
regulations governing the importation of horticultural products and of animals and animal
products, and, in particular, through its import licensing regimes for those products. In addition,
Indonesia prohibits the importation of all horticultural products and animals and animal products
when the government deems domestic production of such products sufficient to satisfy domestic
demand. These prohibitions and restrictions are flatly contrary to WTO rules, and the resulting
trade distortions not only affect foreign suppliers and Indonesian importers, but raise costs and
reduce choices for Indonesian consumers.
I. FACTUAL BACKGROUND
2. Indonesia pursues a policy of "self -sufficiency" in food. The goal of this policy is to increase
reliance on domestic producers by "gradually reduc[ing]" and ultimately halting imports of
agricultural products. To further this goal, Indonesia has deliberately and systematically restricted
imports of agricultural pr oducts in order to protect domestic producers. Indonesia has done so by
imposing regimes of complicated, burdensome, and non -market-oriented import licensing
requirements on horticultural products and animals and animal products.
A. Indonesia's Laws and R egulations Governing the Importation of Horticultural
Products
3. In 2010, Indonesia passed Law 13 Concerning Horticulture, which established the framework
for Indonesia's policy to protect domestic producers from competition from imported products.
Indonesia reinforces this policy through Law 18/2012 Concerning Food ("Food Law") and Law
19/2013 Concerning the Protection and Empowerment of Farmers ("Farmers' Law"). Indonesia
implements this policy through its import licensing regulations. Under the current regime,
importers of the thirty -nine covered horticultural products must receive the following approvals:
(1) designation either as a RI or PI from the Ministry of Trade; (2) an RIPH from the Ministry of
Agriculture; and (3) for RIs, an Import Approval from the Ministry of Trade.
4. Application Windows and Validity Periods of Required Import Documents . Importation of
horticultural products is divided into two semesters – January to June and July to December. For
the first semester, RIs must obtain RIPHs in November and Import Approvals in December; for the
second, RIs must obtain the RIPHs in May and Import Approvals in June. Import Approvals are
issued "at the beginning of the semester" and are valid only for that semester. Products imported
during a semester cannot be shipped from their country of origin until after the Import Approvals
are issued, and they must arrive in Indonesia and clear customs before the semester's end.
Indonesia will destroy or re -export horticultural products if they fail to clear customs before their
Import Approval expires. The application windows, validity periods, and requirement that products
be shipped and clear customs within a semester, effectively preclude imports of horticultural
products during the beginning and end each of semester.
5. Fixed License Terms . When applying for an RIPH, an importer must indicate the type,
country of origin, and the port of entry of the products it seeks to import. Once issued, the
importers cannot amend the RIPH within the import period, and they are prohibited from importing
products other than those specified on their RIPHs. RIs must also obtain an Import Approval. The
validity periods of Import Approvals correspond to those of RIPHs. The Ministry of Trade issues
Import Approvals twice a year, and RIs can apply for Import Approvals only during the month prior
to the start of a period. Once Import Approvals are issued, RIs may not amend them or apply for
another Import Approval until the next period. Thus, upon issuance, Import Approvals loc k in the
type, quantity, country of origin, and port of entry of the horticultural products allowed to be
imported during the next semester.
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6. Import Realization Requirement . For each semester, RIs are required to import at least
80 percent of the quantit y specified for each type of horticultural product listed on their Import
Approval. RIs must report its realized imports during the semester by submitting an Import
Realization Control Card every month to the Ministry of Trade. The Ministry of Trade sanctions RIs
that fail to meet the 80 percent realization requirement or fail to file the Import Realization Control
Card. The realization requirement compels RIs to lower the quantities they request in their Import
Approval applications in order to avoid situa tions in which they either must import products at a
loss to reach 80 percent or have their RI designation suspended.
7. Harvest Period Restrictions. Indonesia limits the importation of horticultural products based
on the domestic harvest season. MOA 86/2013 provides that horticultural products "are imported
outside of the pre -harvest, harvest, and post -harvest periods" and grants the Minister of
Agriculture the authority to decree the time period when importation is permitted. The Ministry
implements this limitation through the RIPH process. RIs must submit a plan as to when and
where they will distribute imports for the semester. The Ministry checks this against Indonesia's
harvest seasons for the same products, and it bans or limits importation of hortic ultural products
during the harvest season of those products through the RIPH approval process.
8. Storage Capacity Requirement . Indonesia limits the quantity of imported horticultural
products by requiring RIs to prove that they own storage facilities wit h sufficient capacity to hold
the quantity requested on their Import Approval application. Specifically, the Ministry of Trade
limits the quantity specified on an RI's Import Approval to the total cold storage capacity of the
RI's facility at the ratio of one to one. This means the quantity specified on the Import Approval
does not account for inventory turnover during the six-month semester.
9. Use, Sale, and Transfer Requirements . Indonesia limits importation of covered horticultural
products based on their use, sale, and transfer. MOT 16/2013 stipulates that an RI can only "trade
and/or transfer imported Horticultural Products to a Distributor" and not "directly to consumers or
retailers." Similarly, PIs can only "import Horticultural Products as raw mat erials or as
supplementary materials for the needs of its industrial production process." They are prohibited
from "trading and/or transferring these Horticultural Products."
10. Reference Price Requirement for Chilies and Shallots . Indonesia prohibits the importation of
chilies and fresh shallots when their market prices fall below the "Reference Prices" set by the
Ministry of Trade. MOT 16/2013 stipulates that importation of chilies and fresh shallots must
"observe" the Reference Prices for those products . If the market prices of chilies or fresh shallots
fall below their respective Reference Prices, the regulation requires that their importation be
"postponed until the market price again reaches the Reference Price."
11. Six Month Requirement . Indonesia prohibits the importation of fresh horticultural products
harvested more than six month previously. To obtain the RIPH, MOA 86/2013 requires RIs to
submit a statement that they will not import any products that were harvested more than six
months previously . If the applying RI fails to include such statement as part of its RIPH
application, the Ministry of Agriculture will declare the application incomplete and reject it.
B. Indonesia's Laws and Regulations Governing the Importation of Animals and
Animal Products
12. In 2009, Indonesia enacted Law Number 18 on Animal Husbandry and Animal Health,
establishing that "[i]mport of animals or cattle and animal products . . . shall be done if local
production. . . is not sufficient to fulfill consumption needs." The Food Law and the Farmer's Law
reinforce this policy. Indonesia has pursued this goal through its regime for the importation of
these products. Under this regime, importers of the bovine products listed in Appendix I of MOT
46/2013 and MOA 139/2014 must ob tain (1) designation as a registered importer ("RI") from the
Ministry of Trade, (2) a Recommendation from the Ministry of Agriculture, and (3) an Import
Approval from the Minister of Trade. Importers of the non -bovine products listed in Appendix II
must obtain: (1) a Recommendation, and (2) an Import Approval.
13. Positive List. Indonesia allows the importation of only the animals and animal products listed
in the appendices to the relevant regulations. Unlisted animals and animal products are banned.
Article 2 of MOT 46/2013 states explicitly that "the types of Animals and Animal Products that can
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be imported are included in Appendix I and Appendix II." The titles of MOT 46/2013 Appendix I
and Appendix II confirm this rule. Similarly, Article 8 of MOA 139/ 2014 states that the bovine
meats and the non -bovine carcasses, meats, and processed products "that can be imported" are
listed in Appendices I and II. Further, because both a Recommendation and an Import Approval
are required for importation, for products falling within the scope of MOA 139/2014, the product
must be listed in the appendices of both regulations for importation of that product to be
permitted.
14. Application Windows and Validity Periods . Import Approvals are valid for one three month
period, and they are issued on a date "at the beginning" of each period. Imports must be shipped,
arrive, and clear customs during the period for which the Import Approval is valid. Specifically,
each Import Approval specifies that the "number and date" of the importer's Import Approval must
be written on the Certificate of Health issued by the product's country of origin. This means that
the Certificate of Health cannot be issued, and thus the goods cannot ship, until after the Import
Approvals for that period have been issued. And imports must clear customs in Jakarta before the
end of the period for which the Import Approval is valid or they will be re -exported. As a result,
during each validity period, exporters cannot start shipping until after a validity pe riod begins and
must stop shipping long enough before the period's end for their goods to arrive in Indonesia and
clear customs by the last day.
15. Fixed License Terms . During each validity period, importers are not permitted to import
animal products ot her than those specified on their Recommendations and Import Approvals.
Under MOA 139/2014, as amended, importers are "prohibited from importing types/categories of
carcasses, meat, and/or their processed products other than what is included in their
Recommendation." They are also prohibited from requesting changes to the elements specified on
their Recommendations. Under Article 30 of MOT 46/2013, imports "whose quantity, type,
business unit, and/or country or origin is not in accordance with their Import Approval . . . will be
re-exported," with the cost being borne by the importer. Importers who do not comply with MOT
46/2013 are subject to sanction. Consequently, importers are required to predict in advance
precisely the products that they will want to i mport during the subsequent three -month import
period, and they are unable to make any adjustments once the period begins.
16. Realization Requirement . Under MOT 46/2013, RI designees (i.e., importers of cattle and
bovine products) are required to import " at least 80%" of the products covered by their Import
Approvals for each year. To implement this requirement, RI designees are required to submit
monthly "Import and Export Realization Reports." An RI designee that does not fulfill the 80%
realization requ irement, or does not file the import realization report three times, has its RI
designation suspended. If an importer does not fulfill the realization obligation twice, its RI
designation is revoked, and it cannot reapply for at least two years. This requi rement gives
importers a powerful incentive to ensure that they do not apply for import approvals for greater
quantities of products than they are certain they can actually import.
17. End-Use Requirements. MOT 46/2013 states that importation of Appendix I products (cattle
and bovine products) is permitted only "for the use and distribution of manufacturing, hotels,
restaurants, catering, and/or other special needs." Importation for sale to consumers (in modern
grocery stores or traditional markets) is pro hibited. MOA 139/2014 establishes the same
requirement for Appendix I products and also restricts the purposes for which Appendix II products
(non-bovine animal products) may be imported, providing that they may be imported for the same
purposes as Appendix I products and, additionally, for sale in "modern markets" (i.e. supermarkets
or convenience stores). However, importation for sale in traditional markets, where the majority of
Indonesian consumers do their food shopping, is still not permitted.
18. Domestic Purchase Requirement . Under MOA 139/2014, importers of import beef meat are
required to "absorb" (i.e., purchase) a certain amount of beef from local slaughterhouses in order
to import beef into Indonesia. Specifically, beef importers must purchase b eef from local
slaughterhouses equivalent to three percent (by volume) of the beef that they import. Local beef
purchases are limited to specific abattoirs and only male cattle qualify toward the requirement,
which has made it difficult for importers to fi nd and purchase Indonesian beef equivalent to three
percent of the quantity that they would otherwise import.
19. Reference Price Requirement . MOT 46/2013, states that if the market price of secondary
cuts of beef is below a certain "Reference Price," im ports of Appendix I products are "postponed"
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until the market price again reaches the Reference Price. MOT 46/2013 sets the Reference Price at
Rp 76,000.00/kg, but this can be revised at any time by a Beef Price Monitoring Team. Thus, if the
Indonesian market price of secondary cuts of beef falls below that figure, importation of all cattle,
beef meat (primary as well as secondary cuts), and beef offals will not be allowed until the price of
secondary cuts rises about Rp 76,000.00 per kg.
II. LEGAL DISCUSSION
A. Indonesia's Import Licensing Regime for Horticultural Products Is Inconsistent
with Article XI:1 of the GATT 1994
1. The Application Windows and Validity Periods Are Inconsistent with Article XI:1
20. Indonesia's application window and validity perio d requirements are "restrictions" within the
meaning of Article XI:1 because the structure of these requirements causes a period of several
weeks each semester when products cannot be exported to Indonesia. Shipping of horticultural
products for a semester cannot begin until after Import Approvals are issued because exporters
must have a valid Import Approval in order to have their products inspected and verified in the
country of origin. Further, the products must arrive in Indonesia and clear customs befo re the end
of the semester, when Import Approvals expire. Because it takes four to six weeks to ship
products from the United States to Indonesia, exporters must stop shipping well before a
semester's end to ensure their products can arrive and clear custo ms by the last day.
Consequently, at the end of each semester, there is a period of several weeks when exporters
cannot ship for the current period because the goods cannot arrive in time but cannot start
shipping for the next semester because Import Approvals have not been issued.
21. Thus the application windows and validity periods of RIPHs and Import Approvals impose
limiting conditions on importation and have direct limiting effects on imports. First, they
necessarily reduce the total time and opportun ity available for an RI to import horticultural
products during a year. Second, they create additional uncertainty and impose additional costs on
the RIs in Indonesia and their exporter partners, who bear the risk of having their horticultural
products re-exported or destroyed if their shipments are delayed and arrive in Indonesia after the
expiration of the RIPH and Import Approval. Therefore, the application windows and validity
periods of RIPHs and Import Approvals are a restrictions under Article XI:1.
2. The Fixed License Terms Are Inconsistent with Article XI:1
22. A measure is a "restriction" if it imposes "a limitation on importation, a limiting condition on
importation, or has a limiting effect on importation." Where a measure allows only certain imports,
that measure is a restriction. During a semester, the only horticultural products permitted to be
imported are those that conform to the products listed on importers' RIPHs and Import Approvals.
Therefore, (1) imports of certain products are effect ively banned until the next period; (2) only a
specified quantity of each type of product can be imported; (3) products from other WTO Members
are restricted to the amounts originally requested by importers (and may be set at zero for the
period); and, (4) if the original port of entry is no longer available or commercially feasible for use,
the products cannot enter through a different port of entry.
23. Previous panels have similarly found that measures imposing limits of this kind are
restrictions under Article XI:1. For example, in India – Autos, the panel considered a measure that
imposed a trade balancing requirement that companies' exports be at least equivalent in value to
their imports. The panel found that the measure was a restriction contrary to Article XI:1 because
"an importer [was] not free to import as many restricted kits or components as he otherwise might
so long as there is a finite limit to the amount of possible exports." Thus, although the measure
"[did] not set an absolute numerical li mit on the amount of imports," imports were restricted in
reality because there was a limit to the amount of products that companies would have the "desire
and ability to export," and this would limit the quantity of products that they would be permitted to
import.
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3. The Realization Requirement Is Inconsistent with Article XI:1
24. Indonesia's 80 percent import realization requirement is a "restriction" under Article XI:1
because it is a limitation or limiting condition on importation, or has a limiting e ffect on
importation. First, importers are subjected to the requirement as a condition for being allowed to
import, and failure to meet the requirement may result in ineligibility to import in the future.
Further, the requirement creates a powerful inducem ent to importers to lower the amounts for
which they seek permission to import. Because an RI will lose its designation if it fails to meet the
realization figure by the end of a semester, the RI must select an import amount for its Import
Approval applica tion that would avoid a situation in which it must continue importing products,
even at a loss, to reach 80 percent. To mitigate this risk, each RI must lower the quantity it
requests in its Import Approval application to less than the amount it would request otherwise.
25. Previous panels have found that measures imposing limits of this kind are restrictions under
Article XI. The India – Autos panel found that India's requirement that importers balance the value
of imported auto kits and components with th e value of their exports from India "induced [an
importer] . . . to limit its imports of the relevant products" in relation to the importers' "concern[]
about its ability to export profitably." This was an import restriction because "a manufacturer is in
no instance free to import, without commercial constraint, as many kits and components as it
wishes without regard to its export opportunities and obligations." Similarly, the realization
requirement causes importers to limit the amount that apply to import, which, in turn, restricts the
quantity of products they are allowed to import.
4. The Restriction on the Importation of Horticultural Products Based on the
Indonesian Harvest Period Is Inconsistent with Article XI:1
26. The harvest season requirement is inconsistent with Article XI:1 because it imposes
limitations or limiting conditions on importation, or has a limiting effect on importation. Under MOA
86/2013, the Ministry of Agriculture establishes periods of time during which it restricts or
prohibits the importation of certain horticultural products to protect domestic products during their
harvest periods. Because importers must obtain RIPHs to import horticultural products, restrictions
through the RIPHs issued for certain fruits during Indonesia's harvest period directly limits the
types and quantities of imported products entering Indonesia during the entire six -month period.
Indeed, Indonesia's import data for the relevant horticultural products points to the real world
impact of Indonesia's restrictions based on harvest periods.
27. The panel in Turkey – Rice examined, in the context of Article 4.2 of the Agreement on
Agriculture, Turkey's suspension of issuing import permits during local harvest periods to ensure
the absorption of local rice pro duction. It found that such measure "restricted the importation of
rice for periods of time" and was thus a quantitative import restriction. Similarly, Indonesia's
requirement based on the Indonesian harvest periods imposes a limitation on imported
horticultural products, and has a limiting effect on the quantity allowed into Indonesia.
5. The Storage Capacity Restriction Is Inconsistent with Article XI:1
28. Indonesia's requirement that an importer own its storage facility and that the quantity
specified in the Import Approval cannot exceed the capacity of its storage facility is a "restriction"
within the meaning of Article XI:1. First, this requirement limits the quantity of imported products
because it operates as an artificial ceiling on the quantity an RI can import during each semester.
Fresh fruits and vegetables inventory can undergo multiple turnovers during a six month semester.
Without such a restriction, an importer might be able to fill its facility multiple times during a
semester. And without the ownership requirement, the importer might be able to fill many such
facilities multiple times over each semester. Second, the ownership requirement also adversely
affects the competitive opportunities of imported products by creating burdensome and eve n
prohibitive storage costs. This requirement precludes RIs importing horticultural products from
seeking alternative, more economical storage arrangements, including leasing or renting capacity.
6. The Use, Sale, and Transfer Restrictions Are Inconsistent with Article XI:1
29. Indonesia's restrictions impose direct limitations and limiting conditions on importers and
their use of imported horticultural products and thereby increase the costs associated with
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importation. The restriction on RIs means that re tailers cannot import horticultural products
themselves and cannot buy directly from RIs. The requirement adds a level in the supply chain by
forcing importers to rely on distributors and thus increases the costs associated with imported
products. For PIs, the restriction on their sale and transfer of imported horticultural products
creates waste and increases unnecessarily the cost of using imported products. If a PI does not
use all of its imported horticultural products during its production, it is force d either to destroy the
excess products or incur the cost of storing them. PIs are thus required to predict precisely the
quantity of imported products that they will use in their production for each period.
30. Previous panels have found that measures imp osing limits of this kind are restrictions under
Article XI:1. The panel in India – Quantitative Restrictions considered an import regime that
included a use restriction, namely that goods could be imported only by the "actual user." The
panel found this r equirement to be "a restriction on imports because it precludes imports of
products for resale by intermediaries, i.e. distribution to consumers who are unable to import
directly for their own immediate use is restricted." Indonesia's use, sale, and transf er restrictions
operate in a similar manner. Thus, these restrictions on importers and their sale, transfer or use of
the products they import are a "restriction" within the meaning of Article XI:1 of the GATT 1994,
and Indonesia breaches Article XI:1 by instituting or maintaining these requirements.
7. The Reference Price Requirement Is Inconsistent with Article XI:1
31. Indonesia's Reference Price requirement for chilies and fresh shallots is a restriction under
Article XI:1 because it limits importation of these products to periods when market prices remain
above a government -determined level and is a prohibition for those periods when market prices
fall below those levels. The Reference Price requirement is similar to a minimum import price
requirement, which previous panels have found to be restriction under Article XI:1. As the panel in
China – Raw Materials recognized, the "applicability of Article XI:1 to minimum price
requirements" was addressed by two GATT panels, both of which concluded that such
requirements were "restrictions" under Article XI:1. The Reference Price requirement is even more
categorical than the minimum import or export prices found to be restrictions by those previous
panels because it prohibits any imports of chilies and shallots once the Reference Price has been
reached, not only imports sold at prices below that Reference Price. Accordingly, the Reference
Price requirement is limitation or limiting condition on importation, or has limiting effects, and
Indonesia breaches Article XI:1 by instituting or maintaining this requirement.
8. The Restriction on the Importation of Horticultural Products Harvested More than
Six Months Previously Is Inconsistent with Article XI:1
32. The requirement that importers not import products that have been harvested more than six
months previously is a limitation or limiting condition on importation, or has a limiting effect on
importation. Certain horticultural products are stored in controlled atmosphere conditions after
harvest where they remain fresh for more than six months; consequently, they can be shipped
year-round to global markets. Under the six -month harvest requirement, however, RIs are
effectively prohibited from importing apples from the United States into Indonesia from April to
October (October being the most common month of harvest in North America). The importer may
not import products according to commercial considerations, but only those products meeting the
requirement. And failure to satisfy the requirement may further lead to t he importer losing the
right to import horticultural products for one year.
33. The panel in Turkey – Rice found, in the context of Article 4.2 of the Agreement on
Agriculture, that limiting the issuance of import permits based on specified harvest period s
restricted importation and is a quantitative import restriction. Similarly, Indonesia's requirement
imposes a limitation based on the time certain imported horticultural products were harvested, and
has a limiting effect on the quantity allowed into Indonesia, and Indonesia breaches Article XI:1 by
instituting or maintaining this requirement.
9. Indonesia's Import Licensing Regime for Horticultural Products, As a Whole, Is
Inconsistent with Article XI:1
34. Indonesia imposes numerous restrictions and pro hibitions on importation of horticultural
products through its import licensing regime. An importer must comply with all aspects of the
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regime to import, and importation is not undertaken according to commercial considerations but in
relation to the requir ements and conditions imposed by the regime that distort or frustrate those
commercial considerations. These various requirements, when operating in combination, have the
effect of both directly limiting imports and creating disincentives for importers to import the type
and amount of horticultural products they otherwise would if acting according to their commercial
considerations. The design and structure of these requirements ultimately aims to achieve the
policy goals set forth in the statutory framewor k: to "provide protection for national horticultural
farmers, business players, and consumers" and to prohibit importation "when the availability of
domestic Agricultural Commodities is sufficient." Thus, when Indonesia's import licensing regime
for horticultural products is considered as a whole, the regime constitutes a restriction inconsistent
with Article XI:1.
B. Indonesia's Import Licensing Regime for Horticultural Products Is Inconsistent
with Indonesia's Obligations Under Article 4.2 of the Agreement on Agriculture
35. Indonesia's import licensing regime for horticultural products and its constituent prohibitions
or restrictions are "measures of the kind which have been required to be converted into ordinary
customs duties" within the meaning of Arti cle 4.2 of the Agreement on Agriculture. Footnote 1 to
Article 4.2 provides that such measures include, inter alia, "quantitative restrictions," "minimum
import prices," and "similar border measures" other than ordinary customs duties. Where a
measure of the type listed in footnote 1 constitutes a "prohibition or restriction" (other than duties,
taxes or other charges) in breach of Article XI, that measure also would run afoul of the prohibition
in Article 4.2. The United States considers that Indonesia's import licensing regime for horticultural
products – as a whole and in its constituent parts – breaches Article 4.2 for the same reasons that
it breaches Article XI:1 of the GATT 1994.
C. Indonesia's Import Licensing Regime for Animals and Animal Products Is
Inconsistent with Indonesia's Obligations under Article XI:1 of the GATT 1994
1. The Prohibition on the Importation of Animals and Animal Products Not Listed in
Indonesia's Regulations Is Inconsistent with Article XI:1
36. Indonesia's positive list for the animals and animal products that can be imported is a
prohibition within the meaning of Article XI:1. Numerous types of animals and animal products are
not listed in the appendices to the regulations, including chicken cuts and parts and secondary cuts
of beef. Applications for Import Approvals to import these products will not be granted, and
importers are prohibited from importing products not specified on a valid Import Approval. Trade
data for products that were removed from the list of permitted pr oducts with the issuance of MOA
139/2014 illustrate the limiting effect of the ban on importation of unlisted products.
37. Panels in previous disputes have found that measures that operate as bans on the
importation of particular products are inconsistent with Article XI:1. The panel in US – Poultry
(China) based its conclusion that the challenged measure was a prohibition inconsistent with
Article XI:1 on the fact that the measure prohibited the administering agency from "us[ing]
appropriated funds to ‘establish' or ‘implement' a rule allowing the importation of poultry products
from China," which "had the effect of prohibiting the importation of poultry products from China."
Similarly, the panel in Brazil – Retreaded Tyres found that the challenged measur e "operate[d] so
as to prohibit the importation of retreaded tyres" and, therefore, fell within the scope of Article
XI:1. Indonesia's positive list of animals and animal products and consequent ban on importation
of unlisted products thus constitutes a "prohibition" under Article XI:1.
2. The Application Windows and Validity Periods Are Inconsistent with Article XI:1
38. As discussed above in the context the analogous restriction on horticultural products, these
requirements impose a limitation on importation or have a limiting effect on imports, and therefore
constitute a "restriction" under Article XI:1. For animal product imports to be accepted into
Indonesia, the Import Approval number must be written on the Certificate of Health issued in the
products' country of origin. Importers thus cannot place orders for any period until after Import
Approvals have been issued. Moreover, all animal products imported during a validity period must
arrive in Indonesia and clear customs prior to the end of the period. This means that exporters in
the United States must stop shipping to Indonesia four to six weeks before the end of the period.
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Consequently, there is at least one month at the end of each period when Indonesian importers
seeking to import animal products a re precluded from choosing U.S. products due to the structure
of the application window and validity period requirements.
39. Previous panels have found that measures imposing similar restrictions are inconsistent with
Article XI:1. The Colombia – Ports of Entry panel found that a measure restricting imports to two
Colombian ports had a limiting effect" on imports because "uncertainties . . . and the likely
increased costs that would arise for importers operating under the constraints of the port
restrictions, limit competitive opportunities for imports." Indonesia's application window and
validity periods are far more restrictive in that they wholly exclude U.S. animals and animal
products from entering Indonesia for four to six weeks each quarter.
3. The Fixed License Terms Are Inconsistent with Article XI:1
40. During each three -month period, Indonesia limits the imports of animals and animal
products to products of the type, quantity, country of origin, and port of entry listed on the
Recommendations and Import Approvals for that period. Once an import period begins, importers
cannot apply for new permits to import different or additional products, and imports are strictly
limited to the products specified on outstanding permits. As described above in di scussing the
analogous restriction on horticultural products, previous panels have found that measures with
similar restrictive effects were restrictions under Article XI:1.
4. The Realization Requirement Is Inconsistent with Article XI:1
41. Indonesia re quires that importers who are licensed to import Appendix I products must
import at least 80 percent of the products listed on their Import Approval(s). This requirement is a
restriction within the meaning of Article XI:1 because it is a condition on impor tation that induces
importers to reduce the quantity of products that they request permission to import and may
render the importer ineligible to import products if that condition is not met. As discussed above,
previous panels have confirmed that measures imposing limits of this kind are "restrictions" under
Article XI:1.
5. The Restriction on the Importation of Animals and Animal Products Other Than
for Certain Limited Purposes Is Inconsistent with Article XI:1
42. Indonesia's use requirements for importe d animal products ar e a "restriction" under
Article XI:1 of the GATT 1994 because they are a condition on importation that limits the
opportunities of imported products, and thus limits the quantity of imports. For beef products, the
permitted purposes do not include any retail sale, either in modern markets or in traditional
markets. For non -beef products, the permitted purposes exclude sale in traditional markets.
Indonesian consumers still do at least half of their food shopping at traditional retail out lets. Thus,
the use restrictions for Appendix II products bar imports from competing for a significant portion of
the sales in the Indonesian market, while the restrictions for Appendix I products exclude imports
from the retail market altogether. The requirements also render the importer ineligible to import in
the future if the condition is not met. As described above, previous panels have found that
measures imposing limits of this kind are restrictions under Article XI:1.
6. The Domestic Purchase Requirement Is Inconsistent with Article XI:1
43. Indonesia's domestic purchase requirement for beef imports is a "restri ction" under
Article XI:1 because it is a condition on importation that may render the importer ineligible to
import if it is not met and tha t has a limiting effect on imports. First, the domestic purchase
requirement is designed to substitute imports with domestic products. It compels importers to
purchase locally produced goods before they can import foreign products, such that at least a
portion of the products that otherwise would have been imported are replaced with domestically -
produced goods. Second, the requirement ties the permissible quantity of beef imports to the
supply of local beef that is available for purchase towards the require ment. Consequently,
importers are forced to reduce their planned imports and request lower quantities in their
Recommendations and Import Approvals applications than they would in the absence of the
requirement. Third, the domestic purchase requirement add s unnecessarily to the costs of
importation by requiring importers to purchase local beef without any business purpose.
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44. Previous panels have found that measures imposing limits of this kind are restrictions under
Article XI:1. The panel in Argentina – Import Measures considered a similar measure and found:
"The required increase of local content . . . has a direct limiting effect on imports, because the
measure is designed to force the substitution of imports." The panel also found that the measure
had a restrictive effect because it "may result in costs unrelated to the business activity of the
particular operator." The panel in India – Autos made a similar finding concerning a trade
balancing requirement. Thus the domestic purchase requirement is a mea sure that is a limitation
or limiting condition on importation or has a limiting effect on importation and is, therefore, a
"restriction" within the meaning of Article XI:1.
7. The Reference Price Requirement Is Inconsistent with Article XI:1
45. As descri bed in the context of the analogous restriction for horticultural products, this
requirement is similar to a minimum import price requirement, which previous panels have
considered under Article XI:1, although it is even broader than the measures previousl y found to
be "restrictions." Further, it also has a limiting effect on imports at other times because the threat
of such a broad restriction reduces the incentives for importation of these products overall.
Because the Reference Price requirement restrict s importation of Appendix I products to periods
when the market price is above the government-set level, and prohibits importation during periods
when it is not, the Reference Price requirement is a limitation or limiting condition on importation,
or has a limiting effect on importation. Additionally, the requirement is a prohibition, within the
meaning of Article XI:1, during certain periods.
8. Indonesia's Import Licensing Regime for Animals and Animal Products, As a
Whole, Is Inconsistent with Article XI:1
46. Indonesia's import licensing regime imposes numerous limitations and limiting conditions on
importation and has various limiting effects on the importation of animals and animal products.
First, all these restrictions working together lead importer s to reduce, sometimes dramatically, the
quantities of imports they request to import at the start of each validity period. And, of course,
once an import period starts, imports are limited to the types and quantities specified on
outstanding Recommendations and Import Approvals. Second, Indonesia's import licensing regime
further limits importation by imposing additional, non-business costs on imports. Thus, Indonesia's
import licensing regime serves as a limitation or limiting condition on importation, or has a limiting
effect on importation. And due to the way the requirements of the regime interact with and
reinforce each other, the limitations or limiting effect of the regime as a whole is greater than the
sum of its individual components.
D. Indonesia's Import Licensing Regime for Animals and Animal Products Is
Inconsistent with Indonesia's Obligations Under Article 4.2 of the Agreement on
Agriculture
47. Indonesia's import licensing regime for animals and animal products and its constituent
prohibitions or restrictions are "measures of the kind which have been required to be converted
into ordinary customs duties" within the meaning of Article 4.2 of the Agriculture Agreement.
Indonesia's import licensing regime for animals and animal products – as a w hole and in its
constituent parts – breaches Article 4.2 for the same reasons that it breaches Article XI:1.
E. Indonesia's Restriction on Imports Based on the "Insufficiency" of Domestic
Production Is Inconsistent with Indonesia's Obligations under Articl e XI:1 of the
GATT 1994 and Article 4.2 of the Agreement on Agriculture
48. Indonesia's domestic insufficiency requirement is a limitation or limiting condition on
importation, or has a limiting effect on importation, and thus is a "restriction" within the meaning
of Article XI:1. First, the domestic sufficiency requirement places a limiting condition on
importation in that imports are allowed only on the condition that domestic production is deemed
by the government not "sufficient" to fulfill domestic dem and. If importation is permitted, the
requirement still places a limitation on importation, as it is allowed only to the extent of the
"domestic shortfall" that the Indonesian government identified. Second, the lack of transparency
and predictability in th e implementation of the domestic insufficiency requirement itself has a
limiting effect on imports. The Government does not announce how or when the sufficiency of
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domestic production to satisfy Indonesian consumers' needs will be determined or how the deg ree
of the shortfall (if any) will be calculated. As a result, importers are unable to anticipate whether
and when imports of a particular product will be prohibited, or what level of imports will be
permitted to make up for a shortfall in domestic production.
49. Previous panels have confirmed that measures that limit the market access and competitive
opportunities of imported products are "restrictions" under Article XI:1. Because the domestic
insufficiency condition limits market access directly by placi ng a limiting condition on importation
and limiting import volumes, and has further limiting effects by creating uncertainty as to whether,
and at what levels, imports will be permitted at any given time, the requirement is a "restriction"
within the meaning of Article XI:1. For similar reasons, these provisions are also inconsistent with
Article 4.2 of the Agreement on Agriculture because they operate as a "quantitative import
restriction" within the meaning of footnote 1 to Article 4.2.
V. CONCLUSION
50. The United States respectfully requests the Panel to find that the prohibitions and
restrictions imposed by Indonesia's import licensing regimes, operating individually and as whole
regimes, and the provisions of Indonesia's laws conditioning importation on the insufficiency of
domestic demand, are inconsistent with Article XI:1 of the GATT 1994 and Article 4.2 of the
Agreement on Agriculture.
EXECUTIVE SUMMARY OF U.S. OPENING ORAL ST ATEMENT AT THE FIRST SUBSTANTIVE
MEETING OF THE PANEL
51. Indonesia has imposed numerous restrictions on the importation of horticultural products
and animals and animal products. With one exception, Indonesia does not contest the existence of
the measures described by the co -complainants. Instead, Indonesia attacks the compl ainants'
claims based on arguments that either misinterpret the obligations and exceptions of GATT 1994
and the Agreement on Agriculture or mischaracterize the way the measures at issue operate.
I. Order of Analysis
52. Indonesia asserts that the Panel mus t begin with Article 4.2 because the Agriculture
Agreement is, per se, more specific with respect to agricultural products than the GATT 1994. The
complainants' claims each relate to prohibitions or restrictions imposed by Indonesia on the
importation of horticultural products and animals and animal products. Prohibitions and restrictions
on importation are addressed specifically under Article XI:1 of the GATT 1994. Therefore, the
measures and claims at issue in this dispute are dealt with specifically unde r Article XI:1 and not
dealt with more specifically under the Agreement on Agriculture.
53. Furthermore, Indonesia has defended the challenged prohibitions and restrictions under
Article XX of the GATT 1994. Indonesia raises this defense regardin g the cla ims under both
Article XI:1 and Article 4.2. In doing so, Indonesia's own argument establishes that the Agreement
on Agriculture is not more specific to the claims at issue in this dispute. That is, the applicability of
Article 4.2 in this dispute would tu rn on whether each measure is justified under the GATT 1994.
Thus, under Indonesia's own logic, the GATT 1994 is the agreement that deals more specifically,
and in detail, with the matter raised.
II. INDONESIA'S ARGUMENTS UNDER ARTICLE XI:1 OF THE GATT 1994 AND ARTICLE
4.2 OF THE AGREEMENT ON AGRICULTURE ARE B ASED ON FLAWED
INTERPRETATIONS
A. Trade Effects Are Not Required To Demonstrate a Breach Under Article XI:1 of the
GATT 1994 or Article 4.2 of the Agreement on Agriculture
54. Indonesia responds to ma ny of the co -complainants' claims by asserting that the
co-complainants had not established a prima facie case because they have not proven that the
challenged measure has an "impact on trade flows." This argument is untenable. Complainants are
not obligated to quantify the trade effects of a challenged measure in order to make a prima facie
case under Article XI:1. The ordinary meaning of "restriction" is "[a] thing which restricts someone
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or something, a limitation on action, a limiting condition or regul ation." The term "restrictions"
under Article XI:1 thus refers to measures "that are limiting, that is, those that limit the
importation or exportation of products." The text of Article XI:1 does not suggest that a
complaining Member must prove, in quantified terms, the effects of a measure on trade flows.
55. The Appellate Body confirmed this interpretation in Argentina – Import Measures , finding
that a challenged measure's "limitation" on importation "need not be demonstrated by quantifying
the effects of the measure at issue; rather, such limiting effects can be demonstrated through the
design, architecture, and revealing structure of the measure at issue considered in its relevant
context." Previous panels have found that Article XI:1 protects competitiv e opportunities of
imports and that, therefore, proving trade effects is not necessary to establish that a challenged
measure is inconsistent with Article XI:1. As the co -complainants demonstrated in their first
written submissions, the limiting effect on importation of the challenged measures is evident from
their design, architecture, and revealing structure. Further, although doing so is not required, the
co-complainants have, in fact, presented evidence demonstrating the challenged measures'
negative effects on trade flows.
B. Indonesia's Measures Also Breach to the Extent They Force Market Actors To
Make Choices that Restrict Imports, and Indonesia Misstates the Content of Its
Measures
56. Indonesia also argues that certain measures cannot be challenge d because they are the
result of choices by private actors. This argument rests on an incorrect interpretation of
Article XI:1 and Article 4.2 that previous panels have rejected. The panels in India – Autos found
that the challenged measure was a "restrict ion" under Article XI:1 because it "induced [an
importer] . . . to limit its imports of the relevant products" in relation to its "concern[] about its
ability to export profitably." The panel in Argentina – Import Measures also found that a measure
had a negative effect on importation because it meant that private actors "[could] not count on a
stable environment in which to import and…accordingly reduce their expectations as well as their
planned imports." To the extent that Indonesia's measures operate by influencing private choices,
they force importers to self-restrict in the same way as the measures considered in these previous
disputes. Further, Indonesia overstates the extent to which the challenged measures operate
through the choices of private actors, rather than as direct restrictions on importation.
III. INDONESIA HAS NOT ES TABLISHED THAT ANY O F THE CHALLENGED MEA SURES
ARE JUSTIFIED UNDER ARTICLE XX OF THE GATT 1994
57. Indonesia asserts a defense under Article XX(d) with respect to most of the claims advanced
by the co-complainants. In order to make out an Article XX(d) defense, Indonesia must establish:
(1) that the challenged measure is " designed to ‘secure compliance' with laws or regulations that
are not themselves inconsistent with some provision of the GATT 1994"; and, (2) that the measure
is "necessary to secure such compliance." Indonesia has not done either. First, Indonesia has not
identified any "laws and regulations" with which the challenged measures are designed to secure
compliance, as required by Article XX(d). Because Indonesia has not satisfied the first element, it
is not possible to begin the analysis of whether the measure is "necessary to secure compliance"
with another WTO-consistent law or regulation.
58. Indonesia also seeks to justify many of the measures at issue under Article XX(b) by arguing
that they are necessary to protect human health. To succeed in such a defense, Indonesia must
show: (1) that the challenged measure's objective is "to protect human, animal or plant life or
health"; and (2) that the measure is "necessary" to the achievement of its objective. Indonesia
has not met this standard with respect to any of the challenged measures.
59. For example, Indonesia claims that the storage capacity requirement is ne cessary because
of its "equatorial climate" and its "limited capacity to store fresh horticultural products." It is
unclear how this restriction would contribute to Indonesia's stated objective of keeping
horticultural products fresh. An importer's ownership of storage facilities has little relationship with
the sufficiency of storage capacity. A readily available, less trade -restrictive measure would be to
allow importers to lease storage capacity or simply allow importers to transfer the products
directly to the distributor's warehouse. Thus, Indonesia has not even attempted to explain how the
requirement to own storage capacity is necessary to protect human health.
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60. Indonesia also asserts that "[a]nimals and animal products are not permitted to be sold in
traditional Indonesian markets because of the extremely high risk of unsafe food handling."
However, Indonesia does not explain why the challenged measure would make a contribution to
that objective, let alone meet the "necessary" standard. Indonesia has offered no evidence that
imported frozen or thawed meat in traditional markets poses any greater risks to human health
than those associated with freshly slaughtered local meat under the same conditions. Indeed, the
Indonesian government has demonstrate d that frozen beef poses no particular food safety
problem, as Bulog relieves domestic shortages by selling imported frozen beef in traditional
markets. Further, Indonesia's explanation relating to traditional markets has no relevance to the
prohibition on importation for all retail sale (including in modern markets) of beef products.
61. Finally, Indonesia asserts that the restrictions on the importation of horticultural products
and animal products to certain limited purposes is "necessary to protect publ ic morals" under
Article XX(a) , specifically Islamic law concerning permissible ("halal") foods. To make out a
successful defense Indonesia must show (1) "that it has adopted or enforced [the] measure ‘to
protect public morals"; and, (2) "that the measure is ‘necessary' to protect such public morals."
62. With respect to horticultural products, given that the instruments through which Indonesia
imposes these restrictions do not refer to halal standards, and that Indonesia has not identified
any halal standa rd, it is difficult to see how the measure might be adopted to protect the
population from non -halal foods. Even were the panel able to discern that the measures at issue
are directed at and contribute to the stated objective, it is not clear how any contr ibution to the
same would warrant the requirements' high degree of trade -restrictiveness. Indonesia prohibits
importers of fresh horticultural products from selling directly to consumers or retailers. In
defending these measures, Indonesia claims that cons umers assume that all products sold in
traditional markets comply with halal standards, and that implementing a labelling system to warn
consumers about non -halal products would be impossible. However, the measure at issue limits
the persons to whom import ed horticultural products can be sold, not the products' ultimate
destination. Imported fresh horticultural products can, and presumably are, sold in traditional and
other markets. Indonesia has justified the wrong requirement.
63. With respect to animal p roducts, Indonesia asserts that its end -use restrictions on
importation are "necessary to protect public morals . . . because it prevents consumers from
mistakenly purchasing animals or animal products that do not conform to Halal requirements." But
this argument ignores the fact that, with the exception of pork, all the animal products imported
into Indonesia must conform to Indonesia's Halal standards and must be labeled as such. Thus,
Indonesia's end-use restrictions are not "necessary" to protect public morals in the form of Halal
standards because, with the exception of pork, all imports of animal products into Indonesia
already meet Indonesia's Halal standards. Further, to the extent that Indonesia seeks to justify the
entire challenged measure, its st atements concerning traditional markets would not address the
prohibition on all retail sale with respect to Appendix I (beef) products.
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ANNEX C-4
SECOND PART OF THE EXECUTIVE SUMMARY OF THE ARGUMENTS OF UNITED STATES
EXECUTIVE SUMMARY OF U.S. SECOND WRITTEN SUBMISSION
1. The United States challenged fifteen prohibitions and restrictions imposed through
Indonesia's licensing regimes governing the importation of horticultural products and animals and
animal products, as well as the regimes as a whole and a related restriction. These measures are
manifestly inconsistent with Indonesia's WTO obligations. With one exception, Indonesia does not
contest that any of the measures exist or operate in the way the co -complainants describe.
Instead, Indonesia advances flawed legal arguments in an attempt to show that the measures are,
nevertheless, not inconsistent with the covered agreements. Indonesia has failed to rebut the
prima facie case established by the co-complainants, and also has failed to show that any of t hese
measures is justified under Article XX of the GATT 1994.
I. INDONESIA'S IMPORT LICENSING REGIMES ARE INCONSISTENT WITH ARTICLE XI:1 OF THE
GATT 1994
A. Indonesia's Argument That Co -Complainants Have Not Established a
Prima Facie Case Because They Have Not Proven Actual Trade Effects Is
Incorrect
2. Indonesia's argument that co -complainants have not made a prima facie case because they
did not prove that import volumes decreased due to the challenged measures is incorrect.
1. Article XI:1 Does Not Req uire Demonstration of Actual Trade
Effects
3. Article XI:1 refers to "restrictions . . . on the importation" of products. The ordinary meaning
of "restriction" is "[a] thing which restricts someone or something, a limitation on action, a limiting
condition or regulation." The Appellate Body in China – Raw Materials and Argentina – Import
Measures found that the term thus refers to measures "that are limiting, that is, those that limit
the importation or exportation of products." The text of Article XI:1 th erefore does not suggest
that a Member must prove, in quantified terms, a challenged measure's actual effect on trade
flows to demonstrate that such measure is a "restriction" under Article XI:1.
4. The Appellate Body affirmed this interpretation in Argentina – Import Measures, finding that
a measure's limiting effect "need not be demonstrated by quantifying the effects of the measure at
issue; rather, such limiting effect can be demonstrated through the design, architecture, and
revealing structure of the measure considered in its relevant context." Thus complainants can
demonstrate a measure's inconsistency with Article XI:1 by showing that its design, structure, and
operation impose limitations on importation (actual or potential).
2. The United States Ha s Established That the Challenged Measures
Are Restrictions on Importation under Article XI:1
5. Under the correct legal standard described above, the United States has demonstrated that
each of the challenged measures, is a restriction on importation under Article XI:1.
6. Application Windows and Validity Periods . Products cannot be shipped until after Import
Approvals are issued at the start of each import and must clear customs before the last day of the
period. Therefore, there is a period of five to si x weeks during each period when U.S. exporters
cannot ship to Indonesia. Thus, based on their design, structure and operation, the Indonesian
measures restrict the importation of products in breach of Article XI:1. In addition, the United
States submitted evidence demonstrating the effect of this no-shipment period on imports.
7. Realization Requirements . By requiring importers to import at least 80 percent of the
products listed on their permits, on penalty of becoming ineligible to import, the realization
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requirements give importers an incentive to ensure they do not obtain permits for more products
than they are certain they can profitably import. This compels them to apply for lower quantities
than they would if the 80 percent requirement did not exist, which limits overall quantities of
imports. Based on the design, structure and operation of the Indonesian regulation, therefore, the
realization requirement has a limiting effect on importation in breach of Article XI:1. The
co-complainants also presented evidence demonstrating that the realization requirements have
had an adverse impact on imports. This evidence is not "anecdotal conjecture" but reflects the
experience of actors who operate in Indonesia's import licensing regime, who know how the
realization requirement works, and who can attest to its limiting effect on imports.
8. Seasonal Restrictions on Horticultural Products . Under MOA 86/2013, the Ministry of
Agriculture establishes periods of time within each six -month semester (or covering the enti re
semester) during which it restricts or prohibits the importation of certain horticultural products, to
protect domestic producers of those products during the products' harvest periods. The Ministry of
Agriculture has imposed seasonal bans or restrictio ns on bananas, durian, melons, papaya, and
pineapples, inter alia, including for the entire year. Thus, contrary to Indonesia's assertions, the
restrictive effect of this measure is clear from its text, structure and operation.
9. Storage Capacity Requirements for Horticultural Products. Indonesia limits the total quantity
of products that an importer can receive permission to import during a semester to the storage
capacity owned by that importer. This requirement limits the quantity of products that can b e
imported because it does not take into account that horticultural product inventory typically
undergoes multiple turnovers in a semester. It also means that importers cannot rent or lease
storage capacity, which limits imports and increases the cost of importation. The United States has
also introduced evidence demonstrating that, in practice, the storage capacity restrictions
adversely affect import volumes. Also, contrary to Indonesia's arguments, the claim against the
storage capacity requirement is in no way "at odds with the Complainants' claim" against the
80 percent realization requirement. Both requirements force importers to restrict their Import
Approval applications and thereby limit horticultural product imports into Indonesia.
10. Use, Sale, a nd Transfer Restrictions for Horticultural Products . Horticultural products
imported for consumption must be sold through distributors, and horticultural products imported
for production cannot be sold or transferred to another entity. The first restrictio n mandates an
unnecessary level in the supply chain and therefore additional costs. The second creates waste and
unnecessarily increases the cost of imports because PIs must predict precisely the quantity of
products that they will use in their production process for each period. It is a basic rule of
economics that if the costs of an input product increase, supply of that product will decrease. A
recent report published by the World Economic Forum confirmed that if supply chain barriers such
as these were eliminated, trade would increase dramatically. Thus, these restrictions have a
limiting effect on imports of horticultural products.
11. Reference Price Requirements for Chilies and Shallots . The Reference Price requirements
impose an absolute prohibition on importation of chilies and shallots if the Indonesian market
prices of these products fall below their Reference Prices. The restrictive effect of such a
prohibition is obvious. The Reference Price also has a restrictive effect at all times because the
threat of the prohibition reduces the incentives for importation. Indonesia attempts to argue
against this by presenting a chart showing that imports of chilies and fresh shallots into Indonesia
were below the level of Import Approvals issued in 2013 and 2 014. But Indonesia's logic is
inverted. If the Reference Price prohibition were triggered, imports of chilies and shallots would be
stopped cold; consequently, imports for that period would be below the quantity of products listed
on Import Approvals. Thus , even if accurate, Indonesia's data provides no support for the claim
that the Reference Price requirements do not restrict imports.
12. Six-Month Harvest Requirement for Horticultural Products . Indonesia prohibits the
importation of horticultural product s that do not meet the six -month harvest requirement and
penalizes importers that fail to comply with it. It is uncontested that certain fresh horticultural
products – apples are one example – can be safely stored and remain fresh for consumption for
more than six months. These products, although harvested over a period of a few months, can be
shipped year round. Under the six-month requirement, imports into Indonesia are restricted in the
second half of the crop year. Thus, the United States has demonstrat ed that the six -month
requirement has a limiting effect on importation and, additionally, on import volumes.
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13. End-Use Restrictions for Animal Products. It is uncontested that the animal products listed in
Appendix II to MOT 46/2013 and MOA 139/2014 (non -beef meats and edible offals) cannot be
imported for sale in traditional markets and that the animal products listed in Appendix I to
MOT 46/2013 and MOA 139/2014 (beef meat, and edible beef offals) cannot be imported for any
retail sale. The co-complainants have provided evidence demonstrating that Indonesian consumers
still do at least half their food shopping at traditional retail outlets. This number is even higher for
animal products. Thus, imported animal products are completely denied access to at l east half and
as much as 70 percent of the Indonesian consumer market, and the restrictions on Appendix I
products are even more extensive. The restrictive effect on importation is clear.
14. Domestic Purchase Requirement for Beef Products. Indonesia requires importers to purchase
local beef equal to three percent of their beef imports. Based on the text of the measure and other
sources, co-complainants have shown that this requirement limits the permissible quantity of beef
imports based on the supply of l ocal beef that can count towards the requirement that is available
for purchase. Co-complainants also demonstrated the practical effect of the requirement, showing
that compliance is burdensome because domestic beef is in short supply in Indonesia and
importers have difficulty finding and purchasing local beef amounting to three percent of the
quantity of beef they wish import. Importers are, therefore, forced to reduce the quantity of
products they apply to import. Additionally, the requirement further red uces imports by adding a
significant and unnecessary cost to the importation of beef products.
15. Import Licensing Regimes as a Whole . Due to the combined operation and interaction of the
different requirements, the regimes, as a whole, are more restrictive than their components, taken
singly. In particular, the regimes include requirements that cause importers to reduce the products
they apply to import, while the fixed license terms requirement then strictly limits imports in any
period to the products l isted on importers' permits for that period. The fixed license terms and
application window and validity period requirements further restrict imports by preventing
importers from responding to market forces by importing different products, or on a differen t time
schedule, than they had foreseen. And, contrary to Indonesia's assertions, the co -complainants
have also submitted copious evidence demonstrating that the regimes "operate[] to restrict the
quantity of imports" of the covered products, although this is not necessary to show a breach of
Article XI:1.
16. Sufficiency of Domestic Supply Requirement . The legal provisions establishing this
requirement explicitly make all importation conditional on the government determining that
domestic production is ins ufficient to satisfy domestic demand. The limiting effect of this
requirement is clear on its face. Additionally, the co -complainants have submitted evidence
demonstrating the domestic sufficiency requirement's limiting effect on imports.
3. Trade Data Confirms Restrictive Effect of the Challenged Measures
17. Although evidence of actual trade effects is not required to establish a breach of Article XI:1,
the available trade data confirms that the challenged measures have a limiting effect on
Indonesian imp orts of the covered products. The challenged measures concerning horticultural
products went into effect in 2012 and 2013. In those years, imports of every one of the twenty -
one fresh horticultural products subject to the import licensing regime – with the single exception
of lemons – declined sharply, and remained below peak levels in 2014 and 2015. Trade data on
Indonesian imports of most of the fifteen processed horticultural products subject to the
challenged measures exhibit a similar pattern. The data on animal products also confirm the
limiting effect of the challenged measures. Indonesian imports of unlisted products ( e.g., poultry
cuts and edible offal) have been essentially zero since the original import licensing regulations
became effective in 20 11. Imports of listed animals dropped steeply in 2011 and 2012, when the
import licensing regimes became effective, and remaining below peak levels for 2013-2015.
B. Indonesia's Argument that Certain Measures Are Not "Maintained" by
Indonesia Is Based on a n Incorrect Legal Premise and Is Factually
Incorrect
18. Indonesia asserts that many of the co -complainants' claims fall outside the scope of
Article XI:1 because the measures are "self -imposed" by private actors and are not "instituted or
maintained" by Indonesia. The legal premise of this argument is incorrect. The Appellate Body in
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Korea – Beef considered this argument under Article III:4 of the GATT 1994 and found that "the
intervention of some element of private choice does not relieve [a Member] of re sponsibility under
the GATT 1994 for the resulting establishment of competitive conditions less favourable for the
imported product." Previous panels have found that this principle applies to Article XI:1. Further,
Indonesia's assertion that the measures are "decisions of private actors" is inaccurate.
19. Regarding the application windows and validity periods , Indonesia is wrong that importers
decide not to ship their products after a certain date. Under Indonesia's regulations, imported
products that arrive after the end of the period for which their import approval is valid will not be
accepted. Thus, exporters must stop shipping far enough in advance of the end of the period for
their goods to clear customs by the last day. Importers do not "choose" to s top importing at the
end of one validity period and the beginning of another, or to reduce their imports accordingly.
That choice is forced on them by Indonesia's regulatory requirements.
20. With respect to the fixed license terms, Indonesia's assertion t hat permit terms "are at the
complete discretion of the importers" is incorrect. The restrictions imposed by Indonesia's import
licensing regime severely curtail the ability of importers to determine the terms included in their
permit applications. Further , the co -complainants are challenging not the specific terms of any
importer's license but the inability of importers, once a validity period has begun, to respond to
market conditions by importing products different than those specified on their import pe rmits.
This inability is the result of the requirements maintained in Indonesia's regulations.
21. Indonesia is also wrong that the realization requirement is "a function of importers' own
estimates." Importers must import 80 percent of the products on th eir Import Approval or lose
eligibility to import. The threat of ineligibility for future permits incentivizes importers to be
conservative in the quantities of products that they apply to import, which reduces total imports
during any import period, compa red to normal market conditions. Thus, importers' decision to
reduce the quantities they apply for is a forced response to the realization requirement.
22. Indonesia's claim that any limitation caused by the storage capacity requirement "is
self-imposed" also fails. Importers seeking to import horticultural products for sale are allowed to
apply to import only up to the capacity of the storage facilities that they own, on a 1:1 ratio. This
means that they are required to own enough storage to hold, at one t ime, all of the products that
they will import for the entire semester. Under market conditions, fruit and vegetable inventories
turn over many times during a semester, such that importers would fill, empty, and refill their
facilities multiple times. Thus , Importers do not choose to limit the products they apply to import
to their owned storage capacity; their decision is a compelled by Indonesia's measure.
II. INDONESIA'S IMPORT LICENSING REGIMES ARE INCONSISTENT WITH INDONESIA'S OBLIGATIONS
UNDER ARTICLE 4.2 OF THE AGREEMENT ON AGRICULTURE
23. The United States has demonstrated that all of the challenged measures are inconsistent
with Indonesia's obligations under Article 4.2 of the Agreement on Agriculture. Indonesia's
arguments in response are legally and factually incorrect.
24. First, Indonesia's argument that its import licensing regimes are "automatic" and, as such,
are outside the scope of Article 4.2 is based on an incorrect legal premise. Article 4.2 covers "any
measures of the kind which have been required to be converted into ordinary customs duties." The
only measures that are excluded from Article 4.2 are "ordinary customs duties"; all other types of
measures are potentially covered. The Appellate Body confirmed the broad scope of Article 4.2 in
Chile – Price Band System, stating that Article 4.2 was the "legal vehicle" for the conversion of all
"market access barriers" into ordinary customs duties. Further, the text of Article XI:1 of the
GATT 1994 is explicit that "import or export licenses" can impose restrictions on importation within
the meaning of Article XI:1.
25. Additionally, as a factual matter, Indonesia's import licensing regimes are not "automatic."
Indonesia's argument is based on an incorrect definition of "automatic" that, if acc epted, would
mean Members could impose, through import licensing, any substantive restriction on importation,
as long as import licensing agents could not exercise discretion in issuing licenses and licenses
eventually were granted after all legal requirem ents were met. This definition of "automatic" has
no support in the text of any of the covered agreements. Further, the suggestion that licensing
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regimes such as Indonesia's are immune from scrutiny would undermine the prohibitions of
Articles XI:1 and 4.2 , because it would allow Members to impose substantive restrictions on
importation under the guise of legitimate licensing procedures.
26. Second, Indonesia's argument that the Reference Price requirements are not "minimum
import price[s]" is incorrect. Th e requirements clearly fall within the definition of a "minimum
import price" because they prohibit all importation when prices are below a set level. Moreover,
Indonesia's Reference Price requirements also are inconsistent with Article 4.2 because they ar e
"quantitative import restrictions" or "similar border measures." Thus, Indonesia has not rebutted
the prima facie case that the Reference Price requirements are inconsistent with Article 4.2.
27. Indonesia's other arguments under Article 4.2 are essentia lly the same as its arguments
under Article XI:1 of the GATT 1994 and, therefore, fail for the same reasons.
III. INDONESIA HAS FAILED TO ESTABLISH A DEFENSE UNDER ARTICLE XX OF THE GATT 1994 WITH
RESPECT TO ANY OF THE CHALLENGED MEASURES
A. None of the C hallenged Measures Is "Necessary To Secure Compliance
with" Any GATT-Consistent Indonesian Law or Regulation
28. To establish that one of the challenged measures is justified under Article XX(d), Indonesia
must show that the measure is " designed to 'secure compliance' with laws or regulations" that are
not themselves GATT-inconsistent and is "necessary to secure such compliance." Indonesia asserts
that the application windows and validity periods, fixed license terms, realization requirements,
and storage capacity restrictions are "necessary" for "customs enforcement" and the use, sale, and
transfer restrictions on horticultural products are "necessary" to secure compliance with food
safety requirements. All of Indonesia's defenses fail.
29. First, Indonesia has not identified a GATT-consistent law or regulation with which any of the
challenged measures is necessary to secure compliance. Indonesia named three legal instruments,
as well as ten "other relevant regulations" as being among the "WTO -consistent law s and
regulations" with which the measures are "designed to secure compliance." But Indonesia did not
submit the relevant laws or regulations for the record, did not specify what aspects of these laws
were relevant to the Panel's analysis, and provided no explanation as to why any of the challenged
measures were necessary to secure compliance with these laws.
30. Appellate Body reports show this is insufficient. In Thailand – Cigarettes (Philippines), the
Appellate Body found that Thailand's Article XX(d) defense failed because Thailand did not "identify
precisely the 'laws or regulations' with which the measure . . . purportedly secures compliance.
"Thailand had referred to its value -added tax law, "Chapter 4" of its Revenue Code," and
"reporting requirements of its VAT and other tax laws." The Appellate Body found these references
were insufficient to identify a WTO -consistent rule under Article XX(d), noting that they
"encompass a myriad of provisions . . . addressing various matters." Indonesia's references are
even less precise and thus fail to meet the Article XX(d) standard.
31. However, even if Indonesia identified a law or regulation on customs enforcement, its
defenses would still fail because none of the measures is "to secure compliance" with such a rule.
None of the regulations establishing the restrictions mentions customs enforcement as one of its
purposes. Further, the import licensing regimes are administered by the Ministries of Trade and
Agriculture and are distinct from Indonesia's customs regime, which is administered by the Finance
Ministry. Additionally, as the co-complainants have shown, it is clear from the text, structure, and
history of the import licensing regulations and their framework legislation that their actual purpose
is to protect domestic producers from competition from imports.
32. But even if the Panel found that a challenged measure is "to secure compliance" with some
WTO-consistent law or regulation, the "necessary" standard still would not be met.
33. With respect to the application windows and validity periods , Indonesia asserts that they
"contribute to Indonesia's ability to allocate resources effectively" among its ports. But it is not
clear that the measure would make any contribution at all in this regard. Importers d o not tie their
imports to a particular port. Therefore, Indonesian officials would know at the beginning of the
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period only the maximum permitted imports for that period and the ports where such imports
could possibly be brought in. It is unclear how reso urces could be allocated based on this
information. Further, a less trade -restrictive way to achieve the objective of "providing advance
notice of expected import volumes" would be a truly automatic import licensing regime where
importers could apply on an y day prior to the customs clearance of goods and receive permission
to import goods of the type and quantity requested through the port specified. Such a regime
could be administered in the same way as the current regime, and would, therefore, be
"reasonably available." It would provide more accurately and timely notice of planned imports,
and, as such, would better assist Indonesia in allocating resources.
34. Indonesia asserts that the fixed license terms also allow customs authorities "to allocate
their limited resources," but it is difficult to see how this could be the case. The requirement does
not provide a schedule of what products will be imported when and where; it merely places overall
restrictions on the products that can be imported in a period . Any minimal contribution the
measure could make to customs enforcement is not in proportion to its high level of trade -
restrictiveness. Further, if Indonesia wanted information about import volumes and locations, a
reasonably available alternative measur e would be a truly automatic licensing system. Allowing
importers to apply to import products of whatever type, quantity, and country of origin they
choose and to amend or update this information would provide timely, accurate information based
on which resources could be allocated.
35. Indonesia's claim that the realization requirement is necessary for customs enforcement
because it serves as a "safeguard against importers grossly overstating their anticipated imports"
similarly fails. First, Indonesia has not provided any evidence that a problem with importers
overstating their anticipated imports exists or explained how, if it did exist, it would impose a
burden on customs officials. Second, Indonesia's argument concerning "misallocation of limited
resources" is based on the assumption that the import licensing requirements provide customs
officials with relevant information about planned imports. But this is not the case. Importers are
not required to provide details on when and where products will be imp orted. Third, Indonesia's
argument ignores the fact that any over -estimation problem would not exist without the
application windows and validity periods and the fixed license term requirements. Further, any
marginal contribution the realization requiremen t could make to saving customs resources would
be outweighed by the severe trade-restrictiveness of the measure.
36. Indonesia asserts that the storage capacity restriction is also necessary for customs
enforcement due to Indonesia's limited resources. But Indonesia has not explained how importers'
ownership of storage capacity is relevant to enforcement of its customs laws. Even assuming that
problems relating to inadequate storage could arise, they would presumably do so after the
products had cleared customs in Indonesia. Further, Indonesia provides no justification for the two
most trade-restrictive aspects of the requirement, the ownership requirement and the one -to-one
ratio of owned storage capacity and total imports allowed entry during a semester.
37. In defense of its use, sale, and transfer restrictions , Indonesia asserts that this measure is
necessary "to secure compliance with Indonesia's food safety requirements." Indonesia does not
identify any WTO -consistent law or regulation with the restrict ions are necessary to secure
compliance, nor does it present any evidence that the challenged measure is designed to secure
compliance with such a law or regulation. Even if Indonesia had done so, the measure would not
meet the "necessary" standard, as Ind onesia did not explain how the distributor requirement for
products imported for consumption would allow importers to better track bacteria in the food
supply. And Indonesia advanced no explanation at all for the prohibition on PIs transferring or
selling products not used in their own production process. Indonesia also ignores the fact that it
also has health and sanitary and phytosanitary requirements that apply to horticultural products.
Because the use, sale, and transfer requirements make no demonstrat ed contribution to food
safety, a less trade -restrictive alternative would be to eliminate the requirements and continue to
rely instead on these other requirements, which relate specifically to the objective of food safety.
38. With respect to its defens e of the regimes "as a whole," Indonesia provides no further
explanation. We assume that Indonesia's defense of the regime is derivative of its defenses of the
regime's individual components. Thus, Indonesia's defense must fail for the same reasons as its
defenses of the individual measures. Moreover, any small contribution that the regimes might
make to one of these objectives would have to be "necessary" even in light of the extremely trade-
restrictive effect of the regimes as a whole, which Indonesia has not shown. Elimination of the
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underlying restrictions, imposition of an automatic import licensing regime and continued reliance
on other more relevant measures related to food safety would provide reasonably available
alternative measures Indonesia could take to remediate the inconsistencies with Articles XI:1
and 4.2.
B. None of the Challenged Measures Is "Necessary" To Protect Human Health
39. To establish that one of the challenged measure is preliminarily justified under Article XX(b),
Indonesia must establish that: (1) "the objective pursued by" the measure is "to protect human,
animal or plant life or health"; and, (2) the measure is "necessary" to the achievement of its
objective. Indonesia has not met either element with respect to any of its defenses.
40. With respect to the seasonal restrictions on importation of horticultural products, Indonesia's
argument that they are necessary to protect human health because oversupply of such products
could have disastrous consequences" lacks merit. First, Indonesia has not shown that protection of
human health is an "objective pursued by" the measure. Indonesia asserted that the measure's
objective is protecting human health, but introduced no evidence supporting the assertion.
Further, co-complainants have demonstrated that the actual purpose of the measure is protecting
domestic producers from competition. Indonesia also has not met the "necessary" standard, as it
has not presented any evidence that oversupply occurs or poses risks to human health. Thus it i s
not clear that the measure would make any "contribution" to its purported objective. And even if
the measure made some contribution, several less trade -restrictive alternative measures are
available, including confining harvest period restrictions to tho se regions in which the harvest was
occurring. Another alternative would be to eliminate the seasonal restrictions and allow market
forces to resolve any oversupply problem.
41. Indonesia's argument that the storage capacity restrictions for horticultural products are
justified because Indonesia's limited capacity to store such products and its "equatorial climate,"
create a "heightened risk of spoilage" also lacks merit. Indonesia presented no evidence that the
measure's objective is the protection of huma n health, while the co -complainants' evidence
suggests that the objective of Indonesia's import licensing regime is protecting domestic producers
from competition. Further, even if the measure pursued human health, it does not meet the
"necessary" standard . An importer's ownership of storage facilities has no relationship with the
sufficiency of storage capacity, as importers commonly lease storage. Further, importers generally
empty and refill storage space several times during a semester, so requiring imp orters to own
enough storage to hold all the horticultural products that they would import for the entire
semester is not necessary to ensure refrigeration of an importer's products. A significantly less
trade-restrictive way to achieve that objective woul d be to remove the ownership and one -to-one
ratio requirements and to allow importers to lease storage capacity as is needed at any time.
42. Indonesia's claim that the use, sale, and transfer restrictions on horticultural products
satisfy Article XX(b) be cause they limit "distribution channels" so that "Indonesian officials are
better able to track the origin of products that contain pathogenic bacteria" also fails. Again,
Indonesia did not point to any evidence that "the objective pursued by" the measure is the
protection of human health. And even if the measure did pursue that objective, no contribution to
it has been shown, and certainly not one that meets the "necessary" standard. The measure limits
the persons to whom imported horticultural products ca n be sold, not the products' final
destination. Imports can be sold in open air markets, provided they are first sold to a distributor.
The requirement simply lengthens the supply chain (likely making tracking more difficult). Also,
Indonesia advanced no justification of the prohibition on PIs transferring products not used in their
production. Thus, because the measure makes no contribution to the objective, a less
trade-restrictive alternative would be for Indonesia to eliminate the requirement and contin ue to
rely on its health and SPS requirements for preventing the spread of pathogenic bacteria.
43. Indonesia's argument that six-month restriction on fresh horticultural products is "necessary
for the protection of human, plant, or animal life or health" also lacks merit. The first element of
Article XX(b) is not met because, as with the other challenged measures, Indonesia has presented
no evidence to suggest that this measure pursues the objective of food safety. The second element
is not satisfied because Indonesia has not shown how the measure would make any contribution to
food safety. Indeed, Indonesia has not even asserted that the requirement is "necessary" to food
safety, merely stating that authorities would "prefer" products to be stored locally. Finally,
Indonesia ignores the fact that it has health and SPS requirements for horticultural products,
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including the requirement that all imports be accompanied by health and SPS certificates. Since all
horticultural product imports are certified as meet ing Indonesia's health and SPS standards prior
to their being shipped, a less trade -restrictive alternative measure would be to continue to rely on
these requirements and not impose the six -month requirement, which is highly trade -restrictive
and makes no contribution to food safety.
44. Similarly, with the Reference Price requirements, Indonesia has not referred to anything
suggesting that the "objective pursued" is the protection of human health. The one exhibit
Indonesia presented on its food security pl an makes no mention of the Reference Price, any over -
supply problem, or Indonesia's import licensing regimes. Even if human health were the objective
of the measures, Indonesia has presented no evidence that the Reference Price requirements
make any contri bution to that objective. Indeed, Indonesia presents no evidence that an
oversupply problem exists and even acknowledges that food scarcity and under -nutrition are
persistent problems. Further, even if the requirement did make a contribution to human healt h,
such contribution would not outweigh the significant trade-restrictiveness of the measure.
45. With respect to Indonesia's end-use restrictions on animal products, Indonesia presented no
evidence that food safety is the objective for which the restricti ons were imposed. Indonesia also
does not explain how the end-use restrictions are "necessary" to protect human health. Indonesia,
presented no evidence suggesting that imported frozen or thawed meat sold in traditional markets
poses any greater risks to human health than freshly slaughtered local meat sold in those markets.
Finally, to the extent that Indonesia is asserting a defense of the whole measure, the explanation
relating to traditional markets has no relevance to the prohibition on importation for all retail sale
(including in modern markets) of beef products.
46. Indonesia's assertion that the domestic purchase requirement for Appendix I products is
"an integral part of Indonesia's food safety and security plan" is the entirety of Indonesia's
Article XX(b) defense of this requirement. Indonesia presented no evidence to support its assertion
and no evidence suggesting that the requirement makes any contribution to food safety. Indeed, it
is not clear what the connection there could be between the r equirement and food safety. Further,
even if a small contribution could be demonstrated, it would have to be weighed against the trade -
restrictiveness of the measure, which is significant.
47. Indonesia asserts that its import licensing regimes, as a whole , fall within the scope of
Article XX(b). Indonesia does not explain or present evidence in support of these defenses.
Assuming that Indonesia's defenses of the regimes as a whole derive from its defenses of the
individual measures, they must fail for the same reasons. Moreover, any small contribution the
regimes might make to the protection of human health would have to be weighed against the
trade-restrictiveness of the regimes as a whole. The contribution would have to be significant in
order to outweigh this level of restrictiveness, and Indonesia has not made such a showing.
48. Finally, Indonesia's Article XX(b) defense of the domestic sufficiency requirement should also
fail. Beyond a bare assertion, Indonesia provides no further evidence or argumenta tion in support
of its defense under Article XX(b). Indonesia has put forward no evidence that the objective
pursued by the laws setting out the domestic sufficiency requirement is "to protect human . . .
health" or that the measure makes any contribution to that objective. Further, the
co-complainants have shown that the explicit goal of the laws establishing the domestic sufficiency
requirement is to protect farmers from foreign competition and reduce (and eventually cease)
imports. Indonesia has not rebutted this showing.
C. None of the Challenges Measures Is "Necessary to Protect Public Morals"
49. To establish that a measure is preliminarily justified under Article XX(a), Indonesia must
demonstrate that "it has adopted or enforced the measure to 'prote ct public morals' and that the
measure is 'necessary' to protect such public morals." Indonesia has not met either element with
respect to any of its Article XX(a) defenses.
50. Indonesia asserts that the use, sale, and transfer restrictions on horticultur al products are
necessary to protect consumers from purchasing non -Halal horticultural products at traditional
markets. While the United States agrees that upholding the Halal food requirements in Indonesia is
a "public moral" under Article XX(a), Indonesi a has not demonstrated that restrictions relate to
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this objective. The texts of the legal instruments setting forth the restrictions contain no reference
to Halal requirements at all. Moreover, Indonesia fails to provide any other evidence showing
connection between the restrictions and any Indonesian Halal requirements.
51. Even if Indonesia could show that the protection of Halal requirements is an objective of the
use, sale, and transfer restrictions, the restrictions are not necessary to this objective. The
restrictions limit the person to whom the imported horticultural products may be sold upon entry,
not the products' ultimate point of sale. Restricting the initial sale to distributors does not relate to
consumers' ability to distinguish Halal product s in the markets. Indonesia's argument that its
measures operate by limiting imported horticultural products to "uses that naturally require some
degree of labelling" is also inapposite, since no evidence suggests that distributors are subject to a
stricter Halal labeling requirements. Because these restrictions bear minimal, if any, connection to
the protection of Halal requirements and make no contribution to achieving that objective, a
reasonably available alternative would be to remove the requirements.
52. Indonesia contends that the end-use restrictions on animal products are necessary to
protect public morals because they "prevent[] consumers from mistakenly purchasing animals and
animal products that do not conform to Halal requirements." However, other than this assertion,
Indonesia has not presented any evidence to show that the objective of the end -use restrictions is
to protect Halal. An e ven if protecting Halal requirements were an objective of the measure, the
restriction fails the "necessary" s tandard. It is not necessary to restrict the outlets in which
imported animal products can be sold, because all imported animal products, with the exception of
pork, must conform to Indonesia's Halal standards and be so labeled. Thus, Indonesia's end -use
restrictions are not "necessary" to protect Halal because, with the exception of pork, all imports of
animal products into Indonesia already meet Indonesia's Halal standards and labelling
requirements. Further, to the extent that Indonesia seeks to justify the entire measure, its
statements concerning traditional markets do not address the prohibition on all retail sale
(including in modern markets) with respect to Appendix I products.
53. Indonesia asserts that its import licensing regimes as a whole fall within the scope of Article
XX(a). As with the Article XX(b) and XX(d) defenses of the regimes as a whole, Indonesia has
failed to explain or present any evidence in support of its assertion of defense. Although the United
States accepts that protection of Halal standards may constitute a public moral, Indonesia has not
established that it has adopted or enforced the import license regimes to "protect public morals" or
that the regimes are "necessary" to doing so.
D. The Challenged Measures Are Inconsistent with the Article XX Chapeau
54. The challenged measures are not consistent with the Article XX chapeau because they
arbitrarily or unjustifiably discriminate by imposing restrictions on imports that bear no relation to
the policy objectives with respect to which Indonesia seeks to justify the measures.
55. With respect to Article XX(a), the end -use and use, sale and transfer restrictions result in
arbitrary and unjustifiable discrimination. The restrictions are not rationally related to the objective
of protecting consumers from non-Halal food, and, without the underlying justification, they serve
only to impose burdens on importation that do not exist for domestic products.
56. This is also the case with respect to Indonesia's assertions regarding Article XX(b).
Indonesia's restrictions based on the domestic harvest period, importers' storage capacity, the
use, sale and transfer of imported products, and the time since products were harvested, as well
as the Reference Price and domestic purchase requirement s, constitute arbitrary and unjustifiable
discrimination. Each of these restrictions bears little, if any, relationship to the objective of
protecting human, animal, and plant life or health. Because they lack any rational connection to
the objective, the result of these restrictions is only to impose burdensome costs and limitations
on the importation of horticultural and animal products.
57. Finally, with respect to Article XX(d), Indonesia has shown no connection between the
application windows and valid ity periods, fixed license terms, realization requirements, storage
capacity requirements, and use, sale, and transfer restrictions and the objective of securing
compliance with customs laws. Because none of these restrictions relate to achieving their
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purported objective, these restrictions exist solely to restrict imports and protect the domestic
industry and, therefore, result in arbitrary and unjustifiable discrimination.
IV. CONCLUSION
58. The United States respectfully requests that the Panel find tha t the prohibitions and
restrictions imposed by Indonesia's import licensing regimes, operating individually and as whole
regimes, and the provisions of Indonesia's laws conditioning importation on the insufficiency of
domestic production to satisfy domesti c demand, are inconsistent with Article XI:1 of the
GATT 1994 and Article 4.2 of the Agreement on Agriculture.
EXECUTIVE SUMMARY OF U.S. OPENING STATEMENT AT THE SECOND SUBSTANTIVE MEETING OF THE PANEL
59. Indonesia imposes numerous prohibitions and restri ctions on the importation of certain
horticultural products and of animals and animal products that are, on their face, inconsistent with
Indonesia's WTO obligations. For the most part, Indonesia does not contest the existence of the
measures, as described by the co-complainants. Instead, Indonesia asserts that its measures are
insulated from review by the Panel and, in the alternative, that the evidence submitted by the
co-complainants is insufficient to meet the co-complainants' burden of proof.
I. EACH OF THE CHALLENGED MEASURES IS INCONSISTENT WITH ARTICLES XI:1 AND 4.2
A. Indonesia's Argument That Its Import Licensing Measures Are
"Automatic" and, as Such, Are Outside the Scope of Article XI:1 and
Article 4.2, Is in Error
60. Indonesia's assertion that "automatic" import licensing procedures are outside the scope of
Article XI:1 of the GATT 1994 and 4.2 of the Agreement on Agriculture is refuted by the text of
both provisions. The text of the Agreement on Import Licensing Procedures ("ILA") also contradicts
this argument. Article 2(a) does not "expressly permit" automatic import licensing; it merely states
that automatic licensing that has "restricting effects on imports" is not permitted. Other provisions
of the ILA confirm that import licensing procedur es, including automatic procedures, are not
excluded from Members' obligations under the covered agreements.
61. Further, Indonesia's argument assumes that all of its import licensing measures are "import
licensing procedures" under the ILA; they are not. The ILA distinguishes between "procedures"
used to operate import licensing regimes, which the ILA covers, and the substantive rules, as the
Appellate Body confirmed in EC – Bananas III . Indonesia's import licensing regimes include
procedures for administe ring the regimes but the challenged measures are much broader. Thus,
Indonesia is wrong that its substantive import licensing measures fall within the scope of the ILA
at all. Finally, Indonesia's import licensing regimes are, in any event, not "automatic. " They
impose numerous substantive restrictions on importation.
B. Indonesia's Argument that the Co -Complainants Have Not Established a
Prima Facie Case under Article XI:1 Rests on an Incorrect Interpretation
of that Provision
62. In its second written sub mission, Indonesia asserts that that the co -complainants have not
made a prima facie case because they "failed to present sufficient pre - and post-implementation
import data" to support their Article XI:1 claims. Indonesia's argument is incorrect. First,
Article XI:1 does not require a demonstration of trade effects. The co -complainants have met the
standard of Article XI:1 with respect to the challenged measures, demonstrating that each imposes
a "limiting condition" or "limitation on action" with respect to importation and thus has a "limiting
effect" on importation. Further, although not legally required, the co -complainants also have
presented extensive evidence demonstrating the quantitative effect of Indonesia's import licensing
measures on imports of the covered products.
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II. INDONESIA HAS NOT ESTABLISHED THAT ANY OF THE CHALLENGED MEASURES IS JUSTIFIED UNDER
ARTICLE XI:2 OF THE GATT 1994
63. In its second written submission, Indonesia asserts that the Reference Price and domestic
harvest period restr ictions are justified under Article XI:2(c)(ii) of the GATT 1994. However,
Indonesia has not provided any evidence to show that its restrictions conform to all the elements
of Article XI:2(c)(ii). Moreover, Indonesia cannot avail itself of Article XI:2(c)( ii) because the
obligations of the GATT 1994 apply "subject to" the obligations of the Agreement on Agriculture.
Thus, the exclusion of certain measures from the obligation in Article XI:1 could not create an
implicit limitation on the scope of a provision of the Agreement on Agriculture covering similar
matters. These obligations would apply cumulatively. Therefore, Indonesia cannot seek to justify
restrictions not consistent with Article 4.2 under Article XI:2(c)(ii).
III. INDONESIA HAS NOT ESTABLISHED THAT ANY OF THE CHALLENGED MEASURES IS JUSTIFIED
UNDER ARTICLE XX OF THE GATT 1994
64. One fatal flaw pervading Indonesia's defenses is that its claims that the challenged
measures meet the first element of the subparagraphs consist almost entirely of unsup ported
assertions. Indonesia submits no evidence suggesting that the challenged measures were adopted
in pursuit of the covered objectives. The Appellate Body made clear in EC – Seal Products that
mere assertion does not satisfy the first element of the Ar ticle XX subparagraphs. And Indonesia
does not address the evidence submitted by the co -complainants demonstrating that the objective
of Indonesia's import licensing measures is to protect domestic producers from competition.
Another critical failing is th at, without exception, the exhibits Indonesia has submitted to show
each measure's contribution to its purported objectives do not support the points for which they
are cited. Indeed, they often serve to confirm the evidence and argumentation submitted by the
co-complainants that the challenged measures do not meet the standard of Article XX.
65. Indonesia asserts that several of its import licensing measures are justified under
Article XX(a). But, with respect to horticultural products, Indonesia has not e ven identified any
relevant halal standards that the import licensing measures could protect. Further, nothing in the
text, structure, or history of the instruments establishing the horticultural products measures even
mentions halal, let alone suggests th at the objective of the regime is to uphold halal standards.
And other than unsupported and vague assertions, Indonesia has not explained how any of its
measures contribute to the protection of halal requirement, much less shown that their
contribution is approaching "indispensable" on the continuum of assessing necessity.
66. With respect to its Article XX(b) defenses, Indonesia similarly does not demonstrate that any
of the measures pursues the objective of food safety. Indonesia asserts that the fact tha t the
import licensing regulations refer to the Food Law shows that the challenged measures are food
safety measures, but this is incorrect. The Food Law is broad statute that covers a variety of
topics. Chapter IV, Part 5 covers "Import of Food" and its t itle, text, and structure, as well as the
operation of Indonesia's import licensing regimes and statements by Indonesian officials, all show
that this is the section relevant to Indonesia's import licensing regimes. Food safety is covered in
Chapter VII, and no evidence ties the import licensing regimes to that part of the law.
67. Further, none of the evidence put forward by Indonesia suggests that the challenged
measures could meet the "necessary" standard. Indonesia asserts that its regimes, as a whole, will
ensure imports "are stored properly" but presents no evidence or argument as to how this would
be the case. With respect to the six-month restriction, Indonesia's new evidence confirms that the
measure is not "necessary" for food safety because it sho ws that some horticultural products can
be safely stored for more than six months. Concerning the use restrictions on animal products ,
Indonesia's defense continues to reflect a mischaracterization of the measure, and none of its
evidence suggests that fro zen meat poses any greater health risk than fresh meat under the
conditions in a traditional market. Finally, with respect to the positive list, neither of Indonesia's
exhibit distinguishes between the prohibited and listed beef products or discusses non -beef
products at all, and Indonesia provides no more explanation or support for this defense.
68. Indonesia's Article XX(d) defenses also fail. Indonesia has not adequately identified the
WTO-consistent laws and regulations purportedly enforced by the impor t licensing measures.
Indonesia identified 13 legal instruments whose compliance is allegedly secured by its import
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licensing regimes, but the mere listing of legal instruments and cursory references to general
provisions fall short of identifying the rele vant rule under Article XX(d). Indonesia put forward
almost no evidence that any of the challenged measures were taken "to secure compliance" with
the Customs Law or any other listed legal instrument. With respect to the necessity element,
Indonesia did not explain how its import licensing measures contribute to securing compliance with
any requirement of a customs or food safety law or regulation. Merely asserting that the import
licensing regimes "contributed to the monitoring of the flow of goods" is not sufficient.
69. Additionally, Indonesia cannot show that its measures meet the requirements of the
chapeau of Article XX. Regarding Article XX(a), the challenged measures at issue are restrictions
on imported products only. Indonesia offered no arguments to address the arbitrary and
unjustifiable nature of these restrictions. Regarding Article XX(b), Indonesia asserts that its
"distinctions . . . between imported and domestic products are not in any way more onerous than
necessary" but provides no evidence or explanation of what distinctions exist or how these
distinctions apply to the measures it seeks to justify. Finally, with respect to Article XX(d),
Indonesia has not addressed at all the fact that Indonesia's regimes do result in discrimination
against imported products vis-à-vis domestic products. Finally, Indonesia has not put forward any
explanation of how the discrimination arising from the measures it seeks to justify is rationally
related to the purported objectives of the measures.
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ANNEX C-5
FIRST PART OF THE EXECUTIVE SUMMARY OF THE ARGUMENTS OF INDONESIA
I. INTRODUCTION
1. New Zealand and the United States ("Complainants") have challenged Indonesia's import
licensing regime for certain horticultural products, animals, and animal products. The
Complainants allege that Indonesia has put in place a labyrinth of rules and regulations whose
main, if not sole, purpose is to protect domestic producers from import competition. The
Complainants allege that these measures effectively restrict or limit imp orts originating in their
territories.
2. Indonesia has the right to safeguard the health and safety of its food supply chain. The
responsibility to achieve these goals falls heavily upon the Government . The challenged measures
do so in a manner that take s into account the unique circumstances faced by Indonesia: (i) a
developing country, (ii) thousands of miles from most of the major agricultural production centers
and exporters of the world, (iii) located on or near the equator, (iv) whose population is
predominantly Muslim. Rather than restrict or limit imports, the challenged measures seek to
ensure a safe, reliable, and in some cases Halal -consistent supply of horticultural, animal s, and
animal products from the Complainants and other WTO Members.
II. FACTUAL BACKGROUND
3. This dispute touches upon one of the most sensitive issues faced by any WTO Member,
which is food safety and security. Indonesia has a population of over 250 million people with most
living in rural areas spread across a vast archipel ago. Adequate knowledge among consumers
about food ingredients, food labels, and food storage are often lacking in Indonesia. As the largest
Muslim country, Indonesia faces another challenge because most of its citizens consume only food
that is certified as Halal.
4. As explained in our first written submission, Indonesia's import licensing regime can be
understood in terms of requirements for horticultural products and requirements for animals and
animal products.1 The requirements for horticultural prod ucts are slightly different with respect to
fresh horticultural products, chilies and fresh shallots, and processed horticultural products. The
requirements for animals and animal products are different with respect to products listed in the
relevant regulation and those that are not listed. Although each set of requirements has distinct
features, they are clearly published and very straightforward. Indonesia's online application portal
streamlines the process, making it easy for importers to meet all admin istrative requirements to
obtain the appropriate import license for their products.
5. Importation of horticultural products is regulated under Law Number 13 of 2010 Concerning
Horticulture ("Law 13/2010"), which implements various provisions of Indonesia' s 1945
Constitution, particularly Articles 20, 20(1), 21, and 33. Pursuant to Law 13/2010, Indonesia's
Ministries of Agriculture ("MOA") and Trade ("MOT") have adopted two sets of regulations: MOA
Regulation No. 86/2013 ("MOA 86/2013"), which describes the requirements for obtaining a
recommendation to import horticulture products from the MOA ("RIPH"), and second,
MOT Regulation No. 71/2015 ("MOT 71/2015"), which describes the requirements for obtaining an
"Import Approval" from the MOT.
6. Importation of animals and animal products is regulated under Law Number 18 of 2009
concerning Animal Husbandry and Animal Health ("Law 18/2009"), as amended by Law Number 41
of 2014 ("Law 41/2014"). Pursuant to Law 18/2009 , Indonesia's MOA and MOT have adopted two
sets of regulations: MOA Regulation No. 139/2014 ("MOA 139/2014"), which describes the
requirements for obtaining a recommendation from the MOA, and MOT Regulation No. 46/2013
("MOT 46/2013"), which describes the requirements for obtaining an "Import Approval" and
designation as a Registered Importer ("RI") of Animals and Animal Products from the MOT.

1 Indonesia's First Written Submission paras. 16 – 38.
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7. None of the laws and regulations mentioned above, are intended to limit or prohibit the
importation of horticultural products, animals and animal products into Indonesia. On the contrary,
Indonesia seeks to encourage the importation of food and related items through a transparent and
automatic licensing system.
III. LEGAL CLAIMS
A. Order Of Analysis
8. This Panel should begin its examination with an analysis of t he World Trade Organization
("WTO") Agreement on Agriculture ("Agriculture Agreement") before moving on to the GATT 1994,
because a panel should start its examination with the claims arising under the agreement that
"deals specifically, and in detail" with the matter at issue.2 Moreover, in Chile – Price Band System,
the Appellate Body noted that "if we were to find first that Chile's price band system is inconsistent
with Article 4.2 of the Agreement on Agriculture, we would not need to make a separate fin ding"
with respect to whether the measure is inconsistent with the GATT 1994. 3 Indeed, the panel in
Chile – Price Band System observed that the scope of Article 4.2 of the Agriculture Agreement is
necessarily broader than the scope of restrictions included in GATT Article XI:1.4
9. The Panel should therefore begin its analysis in this case with an examination of the
Complainants' claims arising under Article 4.2 of the Agriculture Agreement, as it is more specific
to the products at issue than the GATT 199 4 and this order of analysis offers the greatest
opportunity to exercise judicial economy.
B. The Challenged Measured Are Not Inconsistent With Article 4.2 Of The
Agreement On Agriculture
10. Footnote 1 to Article 4.2 of the Agriculture Agreement provides a list of measures that have
been required to be converted to ordinary customs duties in accordance with the GATT 1994. This
provision largely mirrors the language of GATT Article XI:1, which prohibits quantitative
restrictions on imports "other than dutie s, taxes or other charges". In order to succeed on a claim
under Article 4.2, the Complainants must demonstrate that (i) the challenged measures are
maintained, resorted to, or reverted to by Indonesia; and (ii) the challenged measures are "of the
kind whi ch have been required to be converted into ordinary customs duties", such as the
measures mentioned in footnote 1 to Article 4.2, or are "similar border measures".
11. As a preliminary matter, automatic import licensing procedures are by definition exclud ed
from the scope of Article 4.2 of the Agriculture Agreement. Indonesia's import licensing regime is
automatic (i.e. not discretionary), therefore it falls outside the scope of Article 4.2 of the
Agriculture Agreement. The Complainants have not advanced any evidence that persons or entities
that fulfill all the legal requirements to import products are denied import licenses under
Indonesia's current import licensing regime. Further, a plain reading of the relevant statutes and
regulations reveals that Indonesia does not permit its agents to exercise discretion in the issuance
of import licenses at any stage in the administrative process.
12. To the extent that the Panel finds that the challenged measures constitute a non -automatic
import licensing regime a nd fall within the scope of Article 4.2 of the Agriculture Agreement, the
Complainants have failed to establish that these measures constitute "quantitative restrictions",
"minimum import prices", or "similar border measures" as a matter of law . The following analysis
of the design, structure, and implementation of the challenged measures underscores the
Complainants' failure to discharge their burden of proof in the first instance.
13. First, with respect to the application windows and validity periods. Th e application windows
are typically one month long, are announced in advance, and, because of Indonesia's online
system, submitting applications is quick and easy. The validity periods for import licenses cover

2 Appellate Body Report, EC – Bananas III, para. 204. See also Panel Report, Chile – Price Band System,
para. 7.12 (citing the same); Appellate Body Report, Chile – Price Band System, para. 184 (citing the same).
3 Appellate Body Report, Chile – Price Band System, para. 190.
4 Panel Report, Chile – Price Band System, para. 7.30 ("The 'restrictions other than' referred to in Article
XI:1 of GATT 1994 constitute a narrower category than the 'similar border measures other than' in footnote 1
to the Agreement on Agriculture".).
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the entire calendar year, and there is no per iod of time during which imports are restricted as a
function of the lapse in validity periods. Further, a temporary "slowdown" of imports for a limited
amount of time is not enough to establish that a measure constitutes a quantitative restriction on
imports. The Complainants have not placed on the record any evidence that net import volumes
have decreased as a result of the application windows or validity periods for import licenses. In
fact, it appears that imports for several key products have increased as a percentage of the total
market in recent years5, which shows a growing market for imported food products in Indonesia.
14. Second, concerning the self -selected terms of import licenses, Indonesia notes that, first,
importers are free to alter their t erms of importation from one license application to the next. This
means that the "terms" are only static for one validity period at a time. Having to project trade
volumes a few months out is hardly the equivalent of a quantitative restriction or similar border
measure, and incorrect estimates can be easily corrected before the start of a validity period with
another application or in subsequent license applications for the next validity period. Second,
Indonesia does not place any limitations on the terms identified by importers other than the 80
percent realization requirement, which was removed with the adoption of MOT 71/2015.
15. Third, the realization requirement served as a safeguard against importers grossly
overstating their anticipated imports. I ndonesia is a developing country with limited resources to
devote to import administration. It is therefore important for Indonesia to have a rough idea of
expected trade volumes for each validity period. Indonesia recognizes the need for flexibility in
these estimates to account for exigencies in the global supply chain. That is why the realization
requirement only asked importers to achieve 80 percent of their anticipated imports for the
relevant validity period. 6 However, as noted above, this WTO -consistent requirement has now
been removed.
16. Fourth, concerning the storage capacity requirement, the Complainants argue that importers
are unable to import as much as they like, while at the same time they say they are struggling to
import 80 percent of their anticipated import volumes. In fact, Indonesia does not place a limit on
the amount of storage capacity an importer may acquire, just as it does not limit the amount of
goods and importer may import during a particular validity period. Any limitations p laced on an
importer's ability to import are self -imposed. Indonesia's requirement that importers obtain
adequate refrigerated storage capacity for products that require cold storage is merely a food -
safety measure, and does not limit trade.
17. Fifth, con cerning the requirement that imports of fresh horticultural products not be
harvested more than six months from the date of importation, this is necessary to ensure food
safety.
18. Sixth, with respect to Indonesia's reference price system for chilies and fresh shallot, this is
an integral part of Indonesia’s food safety and security plan, which is determined by Indonesia's
Food Security Council. These goals and objectives are implemented through a multi -agency
taskforce that includes the Ministry of Agric ulture's Agency for Food Security and the Ministry of
Trade. The reference price system for chillies and shallots is one tool that Indonesia uses to
protect against (i) harmful oversupply of perishable food items in equatorial heat; and (ii) the
consequences of extreme price volatility on the availability of a continuous supply of fresh chillies
and shallots in Indonesia's food supply. Indonesia also notes that the reference price system is not
continuously in effect. When the reference price system is acti vated, it is always on a temporary
basis in response to an immediate crisis. It is not a measure designed to restrict imports or
insulate the domestic market from world market price fluctuations in a form of "minimum import
price".

5 With respect to horticulturan products: the market share of US-origin imports of oranges increased
from 11 percent in 2012, to 15 percent in 2013, and to 19 percent in 2014. Similarly, the market share of
US-origin lemons increased from 10 percent in 2012, to 13 percent in 2013, and to 22 percent in 2014. With
respsect to processed horticultural products, the market share for US-origin frozen sliced potatoes increased
from 33 percent in 2012, to 48 percent in 2013, and to 48 percent in 2014. Remarkably, market share for
US-origin grapefruit juice increased from 11 percent in 2012, to 56 percent in 2013, to an astonishing
85 percent in 2014.
6 Which gives proper balance between incentivizing importers to provide realistic estimates of
anticipated imports on the one hand, and allowing for a reasonable margin of error before penalties were
applied, on the other hand.
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19. Seventh, concerning the alleged "positive list" with respect to animals and animal products,
the importation of all animals and animal products not appearing in Appendix I or Appendix II of
MOT 46/2013 and MOA Appendix I and II 139/2014 are not necessarily prohibited. Animal s and
animal products not listed in Appendix I and II are simply exempted from the requirements of that
regulation and generally permitted to be imported into Indonesia unless expressly prohibited by
another instrument or agency determination. Therefore Ap pendix I and Appendix II of MOT
46/2013 are not "positive lists" of all animals and animal products, as alleged by Complainants
20. Eighth, concerning end-use limitations, Indonesia limits the end uses of certain products to
certain retail uses7 and in the production of other products. Certain products are not permitted to
be sold in traditional Indonesian markets because: (i) of the extremely high risk of unsafe food
handling; (ii) the lack of resources to monitor food safety practices in these markets an d
(iii) religious constraints on food consumption that impacts the vast majority of Indonesians. This
measure does not place an absolute limit on the amount of animals and animal products that can
be imported for permitted end uses, and thus it is not a "q uantitative restriction" on imports or
"similar border measure[]" within the meaning of Article 4.2.
C. The Challenged Measures Are Not Inconsistent With Article XI:1 Of The
GATT 1994
21. Article XI:1 of the GATT 1994 covers those prohibitions and restric tions that have a
limiting effect on the quantity or amount of a product being imported or exported. In order to
succeed on a claim under Article 4.2, the Complainants must demonstrate that (i) the challenged
measures are not duties, taxes, other measures; (ii) a prohibition or restriction on imports is made
effective through the challenged measures; and (iii) the prohibition or restriction on imports made
effective by the challenged measures are instituted or maintained by Indonesia. The Complainants
have failed to establish that Indonesia's import regime for horticultural products, animals, or
animal products violates Article XI:1 of the GATT 1994 for the same reasons that they have failed
to make a prima facie claim of violation under Article 4.2 of the A griculture Agreement, therefore
their claim under this provision should fail.
D. The Challenged Measures Are Excepted Under Article XX Of The GATT
1994
22. For the foregoing reasons, Indonesia argues that the challenged measures are (i) outside
the scope o f Article 4.2 of the Agriculture Agreement and Article XI:1 of the GATT 1994 because
they constitute an automatic import licensing regime; and (ii) in the alternative, if they are within
the scope of Articles 4.2 and XI:1, that the Complainants have failed to present a prima facie case
of inconsistency with those provisions. As a second alternative argument, Indonesia asserts that
the challenged measures are, in fact, excepted under Article XX of the GATT 1994. Specifically,
Indonesia asserts that its measu res fall within the exceptions included in subparagraphs (a), (b),
and (d) of Article XX.
23. Under Article XX(a) Members are granted broad discretion to determine their own public
morals and to implement measures necessary for the protection of those pub lic morals. Under
Article XX(b), a Member may adopt a nonconforming measure that is "necessary to protect
human, animal or plant life or health". Thus, where considerations of food safety and security, and
animal and plant life and health are concerned, su bparagraph (b) guarantees Members the ability
to address these concerns in a nondiscriminatory manner that is not a disguised restriction on
trade. Finally, the necessity contemplated under subparagraph (d) may arise from the logistical,
economic, or admin istrative constraints that make customs enforcement nearly, if not actually,
impossible without certain limitations that would otherwise be prohibited by the GATT 1994.
24. With respect to the application windows and validity periods, the self -selected import license
terms, and the prior 80 percent realization requirement – these measures are or were a necessary
component of Indonesia's customs regime and, therefore, are covered under subparagraph (d) of
Article XX. As a developing country, Indonesia has li mited resources to devote to the control of its
borders and the processing of food imports across its borders.

7 For example, hotels, restaurants, and supermarkets.
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25. With respect to the requirement that imports of fresh horticultural products not be harvested
more than six months from the date of importat ion and the storage capacity requirement, these
measures are necessary for the protection of human, plant, or animal life or health in accordance
with Article XX(b) of the GATT 1994. In Indonesia's equatorial climate, proper food handling and
storage is of utmost importance to ensure the safety of Indonesia's food supply.
26. With respect to the domestic harvest period limitations, Indonesia asserts that this measure
is also necessary to protect human, animal, or plant life or health in accordance with subparagraph
(b) of Article XX of the GATT 1994. Oversupply of fresh horticultural products could have
disastrous consequences. Indonesia's equatorial climate accelerates the rate at which fresh
horticultural products deteriorate, and the spread of certain pat hogenic bacteria from rotten
produce is a serious health concern for Indonesia. In the absence of Indonesia's coordination of
imports with domestic harvest times, stockpiles of rotting fresh horticultural products are likely to
result in serious public hea lth threats. Indonesia is taking a proactive approach to protecting its
population from disease with this measure.
27. With respect to Indonesia's end -use limitations, this measure is necessary for several
reasons: (i) to protect public morals; (ii) to pro tect human, animal, or plant life or health; and (iii)
to secure compliance with laws and regulations not inconsistent with the GATT 1994. This measure
is necessary to protect public morals as it protects the people of Indonesia from horticultural
products that do not conform to the religious beliefs of the vast majority of its population, i.e., the
Halal requirements. While most Halal requirements pertain to the production and consumption of
animal products, there are also strict requirements for storage a nd transportation that apply to all
food products. This measure is also necessary to protect human, animal, and plant life or health,
and to secure compliance with Indonesia's food safety requirements. By limiting the distribution
channels available to cer tain imports, Indonesian customs and health officials with limited
resources are better able to track the origin of products that contain potentially pathogenic
bacteria and therefore reduce the spread of such bacteria into the food supply of the general
public.
28. As the above examples illustrate, to the extent that any of the challenged measures are
inconsistent with Indonesia's obligations under the WTO agreements, which we submit they are
not, are nonetheless justified under the general exceptions inc luded in Article XX of the
GATT 1994.
E. The Challenged Measures Are Not Inconsistent With Article 3.2 Of The
Agreement On Import Licensing Procedures
29. As an initial matter, Indonesia’s import licensing regime is not inconsistent with Article 3.2 of
the Agreement on Import Licensing Procedures because: (i) the challenged measures are outside
the scope of Article 3.2 and (ii) they are not trade-restrictive.
30. An automatic import licensing system cannot be inconsistent with Article 3.2 of the Import
Licensing Agreement because such measures are outside the scope of Article 3.2. Indonesia's
import licensing regime is automatic (i.e. not "discretionary") and is, therefore, outside the scope
of Article 3 of the Import Licensing Agreement. The Complainants ha ve failed to demonstrate that
any importer that has met all of the legal requirements of Indonesia's import licensing regime has
ever been denied an import license. Any importer that meets the clearly -defined legal
requirements is automatically granted an import license by Indonesian authorities. MOT 71/2015
and MOA 86/2013 are the controlling regulations for Indonesia's import licensing regime for
horticulture products. There is no discretion granted to the agency under either regulation to reject
an application has met all the published legal requirements.8
31. Further, because Indonesia's import licensing regime is applied in a manner that does not
produce trade -restrictive effects, it is expressly permitted by Article 2.2 of the Agreement on

8 In 2013-2015, no applications that fulfilled all legal requirements were rejected by the regulating
authority. For example, in 2015 there were 271 applications for RIPHs, and MOA issued RIPHs for all 271
applications. In the same year, there were 161 applications to MOT for Import Approvals for horticulture
products, and MOT issued161 Import Approvals. With respect to animals, in 2015 there were 239 applications
for Import Approvals, and MOT issued 239 Import Approvals. Also in 2015 there were 1,126 applications for
Import Approvals related to animal products, and all 1,126 applicants were granted Import Approvals.
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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Import Licen sing procedures. In the present case there is no causal link between the
implementation of the import licensing regime and a declinein market share complained about by
the Complainants, as would be expected in the case of a trade -restrictive measure. In fa ct, the
market share of the Complainants with respect to certain food products has increased, as
mentioned previously.
32. The second sentence of Article 3.2 of Import Licensing Agreement provides that non -
automatic licensing procedures shall correspond i n scope and duration to the measure they are
used to implement, and shall be no more administratively burdensome than absolutely necessary
to administer the measure. Again, Indonesia's import licensing regime for horticultural products,
animals, and animal products has a slightly different scope and duration depending on whether the
importers used the imported products for raw materials or if the importers are traders. For
horticulture products, there are different provisions for importing fresh horticultur e products,
processed horticulture products, or chilies and shallot. Similarly, for animals and animal products
there are different categories with different provisions. The duration of validity for each import
license can be different depending upon the p roducts. Therefore, Indonesia's import licensing
procedures correspond in scope and duration to the measure used to implement.
33. For the foregoing reasons, the Complainants' claims arising under Article 3.2 of the Import
Licensing Agreement must fail.
F. The Challenged Measures Are Not Inconsistent With Article III:4 of the
GATT 1994
34. In order to establish a prima facie case of inconsistency with Article III:4, the complainant
must demonstrate that (i) the imported and domestic products are "like"; (ii ) the challenged
measures are "laws, regulations, or requirements" of a Member; (iii) the challenged measures
affect the internal sale, offering for sale, transportation, distribution, or use of imported like
products; and (iv) imported products are accord ed "less favorable" treatment than like domestic
products. In this case, New Zealand has failed to establish a prima facie case that Indonesia’s
import licensing procedure are inconsistent with Article III:4 of the GATT 1994 because first, the
domestic purchase requirement for animal products has never been used to prevent the issuance
of an import license. Additionally, this requirement falls within the general exceptions included in
Article XX of the GATT 1994 because it is an integral component of Indone sia's food safety and
security plan.
35. Second, the end use limitation for imported fresh horticultural products is necessary for the
protection of human, plant, or animal life or health within the meaning of Article XX(b) and for the
protection of public morals under Article XX(a) of the GATT 1994.
36. Third, Indonesia's end use limitations for animal products – specifically, the restriction on
sales of imported meat products in traditional Indonesian markets, applies uniformly to imports
and domestic pr oducts. The measure does not, therefore, accord "less favorable treatment" to
imports than to like domestic products within the meaning of Article III:4. Moreover, the measure
is necessary for the protection of human, plant, or animal life or health within the meaning of
Article XX(b) and for the protection of public morals under Article XX(a) of the GATT 1994.
IV. CONCLUSION
37. For the foregoing reasons, Indonesia respectfully requests this Panel to reject the
Complainants' claims in their entirety.
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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ANNEX C-6
SECOND PART OF THE EXECUTIVE SUMMARY OF THE ARGUMENTS OF INDONESIA
I. INTRODUCTION
1. Indonesia's import licensing regime, including the measures challenged by the
Complainants, is designed to address special circumstances that are unique to Indone sia.
Indonesia is home to the largest Muslim population in the world, is spread across over 17,500
islands, and is a developing country Member with many health and public safety concerns related
to its food supply. Indonesia is challenged to provide a safe and adequate food supply for its
population for several reasons. First, Indonesia's majority Muslim population requires a reliable
supply of Halal food, even when point-of-sale food labelling to direct consumers to Halal food is not
available. Second, ens uring food safety is problematic in Indonesia give inadequate knowledge
among consumers about proper food safety and food storage practices, especially among
Indonesians living below the poverty line.
2. Indonesia has adopted an import licensing regime that balances its responsibility to maintain
a safe and adequate food supply with upholding its WTO obligations. Indonesia notes that the
Complainants have failed to present a prima facie case that Indonesia's import licensing regime for
horticultural products, animals, and animal products is inconsistent with Articles III:4 and XI:1 of
the General Agreement on Tariffs and Trade ("GATT") 1994, Article 4.2 of the Agreement on
Agriculture, or Article 3.2 of the Agreement on Import Licensing Procedures.
II. FACTUAL INFORMATION FOR P URPOSES OF REBUTTAL, ANSWERS TO
QUESTIONS, AND COMMENTS ON ANSWERS PROVIDED BY COMPLAINANTS
3. Indonesia's import licensing regime can be understood in terms of requirements for
horticultural products and requirements for animals and a nimal products.1 The requirements for
horticultural products are slightly different with respect to fresh horticultural products, chillies and
fresh shallots, and processed horticultural products. The requirements for animals and animal
products are different with respect to products listed in the relevant regulation and those that are
not listed. Regardless, they are clearly published and very straightforward. Indonesia's online
application portal streamlines the process, making it easy for importers to me et all administrative
requirements to obtain the appropriate import license for their products.
4. As part of Indonesia's deregulation and de -bureaucratization initiatives, the Registered
Importer ("RI") and Producer Importer ("PI") designations 2 and the 8 0% realization requirement
have been eliminated. 3 The first of these initiatives was implemented in January 2015, and
Indonesia's Ministry of Trade ("MOT") has issued numerous MOT Regulations which are relevant to
this case.4 The new MOT Regulations for horticultural products, animals, and animal products are
aimed at liberalizing the import -licensing regime. 5 In 2016 MOT enacted a new regulation
(MOT 5/2016) to further liberalize the import licensing regime for the products at issue in this
dispute. This o ngoing effort demonstrates Indonesia's commitment to its trading partners and to
achieving greater trade liberalization.6

1 Indonesia's first written submission paras. 16 – 38.
2 Indonesia's responses to Panel questions, paras. 1 and 21.
3 Indonesia's responses to Panel questions, para. 10.
4 MOT Regulation 70/2015 on Importer Identification Number/Angka Pengenal Impor ("API"), MOT
Regulation 71/2015 on Import Provisions on Horticultural Products, and MOT Regulation 5/2016 concerning
Export and Import Provisions on Animals and Animal Products, See Exhibit IDN-39.
5 See Exhibit IDN-35.
6 Indonesia's second written submission, para. 4.
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5. The first package was implemented in January 2015, and the MOT has issued numerous
MOT Regulations which are relevant to this case. 7 The new MOT Regulations for horticultural
products, animals, and animal products are aimed at liberalizing the import-licensing regime.8
6. Indonesia wishes to reiterate that it has not, as alleged by the Complainants, "simply
replaced trade -restrictive measures with equally (if not more) trade -restrictive measures in an
attempt to stay "one step ahead of the law"". 9 Indonesia has tried to address the concerns of the
Complainants by revoking or amending measures that were alleged to be WTO inconsistent an d
replaced them with measures that are fully consistent with Indonesia's legitimate interest in halal
compliance, food safety and security, as well as for customs and import administration.10
III. LEGAL ISSUES AND CLAIMS
A. Proper interpretation of the ter ms "prohibitions or restrictions" under
Article XI:1 of the GATT 1994 and Article 4.2 of the Agriculture Agreement
7. Complainants have repeatedly argued that various aspects of Indonesia's import licensing
regime for horticultural products, animals, and a nimal products are "prohibitions" or "restrictions"
on imports within the meaning of Article XI:1 of the GATT 1994.11
8. In essence, the Complainants argue that Article XI:1 and, by extension, Article 4.2, prohibits
every conceivable "restriction" on impor ts – including any measure impacting trade that is not a
duty, tax, or other charge. In their submissions to this Panel, the Complainants relied heavily on
the Appellate Body report in Argentina – Import Measures to support their interpretation. In that
dispute the Appellate Body stated that the "limiting effect" of a "restriction" under Article XI:1
"need not be demonstrated by quantifying the effects of the measure at issue".12 After trying to
saddle Indonesia with precisely the opposite position, Complai nants leap to the conclusion that
they do not have to show any effect on trade at all. However, a complainant must demonstrate
that a measure has a limiting effect on the quantity or amount of importation itself. Just because
Article XI:1 and Article 4.2 do not require precise quantification of the trade effects of a challenged
measure does not mean a complainant is excused from demonstrating that the measure has some
effect on trade. These provisions are, after all, concerned with quantitative restrictions and
prohibitions.13
9. Indonesia supports the position as stated in EU's third party submission, in which the EU
urged this Panel to use caution when drawing the "line between those measures which have a
limiting effect on the quantity or amount of importation itself, and those measures which just have
a negative impact on imports in any way".14 As the EU correctly explained, "the word 'quantitative'
in the title of Article XI informs the meaning of 'prohibition' and 'restriction'". It "suggests that this
Article refers only to those prohibitions and restrictions 'that limit the quantity or amount of a
product being imported or exported'". 15 This is consistent with the Appellate Body's explanation in
Argentina – Import Measures that "not every condition or burden placed on importation or
exportation will be inconsistent with Article XI, but only those that are limiting, that is, those that
limit the importation or exportation of products".16

7 MOT Regulation 70/2015 on Importer Identification Number/Angka Pengenal Impor ("API"),
MOT Regulation 71/2015 on Import Provisions on Horticultural Products, and MOT Regulation 5/2016
concerning Export and Import Provisions on Animals and Animal Products, See Exhibit IDN-39.
8 See Exhibit IDN-35.
9 See, e.g. United States' first written submission, para. 6.
10 Indonesia's second written submission, para. 8.
11 See, e.g. United States' first written submission, paras. 151-216, 255-326; New Zealand's first
written submission, paras. 129-298; United States' opening statement, paras. 11-15; New Zealand's opening
statement, paras. 36-39.
12 Appellate Body Report, Argentina – Import Measures, para. 5.217.
13 Indonesia's second written submission, paras. 7-8.
16 Appellate Body Report, Argentina – Import Measures, para. 5.217.
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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B. The relevance of Article XX to Article 4.2 of the Agriculture Agreement
10. As largely agreed by the Complainants, measures consistent with Article XX may "remedy"
or "justify" a violation of Article XI:1 or Article III:4 of the GATT 1994, and that measures
consistent with Article XX are excluded from the scope of Art icle 4.2 of the Agreement on
Agriculture. And as Norway correctly noted in its third party submission, "such measures would
therefore not constitute a violation of Article 4.2".17
C. The Complainants have failed to discharge their burden of proof
11. It is a settled principle of WTO jurisprudence that the "burden of proof rests upon the party,
whether complaining or defending, who asserts the affirmative of a particular claim or defense".
The complaining party in any given case should establish a prima facie case of inconsistency of a
measure with a provision of the WTO covered agreements, before the burden of showing
consistency with that provision or defending it under an exception is to be undertaken by the
defending party. 18 Thus, the Complainants must e stablish that the challenged measures are
inconsistent with Indonesia's WTO obligations as a matter of law before the burden of proof shifts
to Indonesia to refute their claims. In the context of a GATT Article XI:1 claim, the burden of proof
rests upon th e Complainants to establish a prima facie case that Indonesia's import licensing
regime is inconsistent with that provision because it is an impermissible "restriction or prohibition"
on trade – in a quantitative manner.
12. In the context of a claim under Article 4.2 of the Agriculture Agreement, the exact scope of
the Complainants' burden of proof is less apparent. The question before the Panel is whether it is
possible to present a prima facie case that Article 4.2 has been violated by a Member without
offering any evidence or argumentation that the challenged measure is not justified under Article
XX of the GATT 1994. The Complainants could not possibly make a prima facie case showing that
Indonesia has violated Article 4.2 without presenting at least some evidence or argumentation that
the challenged measures are not justified under Article XX of the GATT 1994. And without such
evidence or argumentation, the Panel cannot – as a matter of law – rule in Complainants' favour
under Article 4.2 of the Agreement on Agriculture.
D. Order of Analysis
13. This Panel should begin its examination with an analysis of the Agriculture Agreement before
moving on to the GATT 1994, the restrictions imposed by Article 4.2 of the Agreement on
Agriculture are broader than th e restrictions imposed by Article XI:1 of the GATT 1994 and this
order analysis offers the greatest opportunity to exercise judicial economy.19
E. Indonesia's import licensing regime for horticulture products and for
animals and animal products as a whole is automatic and therefore does
not violate Article XI:1 of the GATT 1994, Article 4.2 of the Agreement on
Agriculture or Article 3.2 Import Licensing Agreement
14. Under the ILA, there are only two types of import licensing: automatic import licensing and
non-automatic import licensing. The definition of automatic import licensing is provided in ILA
Article 2, while the definition of non -automatic import licensing is provided in ILA Article 3.
Indonesia submits that its import licensing regime for certain horticulture products and for certain
animals and animal products meets all criteria of automatic import licensing as provided in
Article 2 of the ILA.
15. As provided in Indonesia's second written submission, Indonesia's import licensing for
certain horti culture products and for certain animals and animal products implemented through
RIPH/MOA-R and IAs have been granted in all cases pursuant to Article 2.1 of ILA. 20 The
Complainants have failed to submit any evidence indicating that an application of RIPH/ MOA-R or
IA was rejected when all legal requirements are fulfilled. The only argument put forward by the

17 Norway's third party submission, para. 6.
18 Panel Report, Argentina – Import Measures, para. 6.27 (citing Appellate Body Report, US – Wool
Shirts and Blouses, para. 14).
19 Indonesia's second written submission, paras. 39 and 41.
20 Indonesia's second written submission, para. 48.
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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Complainants to demonstrate that Indonesia's import licensing is not automatic is that applications
cannot be submitted on any working day prior to the customs clearance of the goods.21
16. In relation to the application window, according to the Complainant's broad interpretation of
Article 2.2(a)(ii) of the ILA, an import license application must be accepted on any working day
prior to customs clearance, with indefinite time. We strongly believe that this broad interpretation
is incorrect. Article 1.6 of the ILA clearly acknowledges that an application window for import
licensing application procedures is allowed under the ILA. Indonesia allows 15 workin g days
(21 calendar days) for the application window to apply for RIPH for horticultural products, a 1
month application window to apply for MOA -R for animal products, and a 1 month application
window for IA applications. All applications for RIPH, MOA -R o r IAs can be submitted online at
INATRADE22 (Trade Licensing Services Using Electronic and Online System) and Rekomendasi
Ekspor Produk Pertanian Tertentu (Export Import Recommendation for Certain Agricultural
Products) ("REIPPT"), 23 as parts of Indonesia National Single Window ("INSW"). This system –
including the published application windows – is consistent with Article 1.6 of the ILA.24
F. Indonesia's import licensing regime for horticulture products and for
animals and animal products is not a "quantit ative restriction" and
therefore does not violate Article XI:1 of the GATT 1994 and Article 4.2 of
the Agreement on Agriculture
17. Indonesia's import licensing regime for horticultural products, animals, and animal products
is completely automatic. The re levant agencies have no discretion to reject import applications
that fulfil the legal requirements, which are publicly available and broadly communicated well
before they are implemented. All applications can be submitted online and are processed within
less than 10 working days. In fact, all complete applications submitted in the period of 2013 –
2015, both for MOA-R and import approval from MOT were granted.25 Automatic import licensing is
expressly permitted under Article 2.2(a) of ILA and therefore, it is excluded from the scope of
Article 4.2 of the Agreement on Agriculture and Article XI:1 of GATT 1994.26
18. Even if this Panel determines that Indonesia's import licensing regime for horticulture
products and for animals and animal products falls within the scope of Article 4.2 of the Agreement
on Agriculture or Article XI:1 of GATT 1994, the design, architecture, and revealing structure of
Indonesia's import licensing regime as a whole supports the conclusion that it is not a "quantitative
restriction".
G. Indonesia's import licensing regime for horticulture products and for
animals and animal products is not similar to a border measure and
therefore does not violate Article XI:1 of the GATT 1994 or Article 4.2 of
the Agreement on Agriculture
19. A determination that Indonesia's import licensing regime for horticultural products, animals,
and animal products has similarity with one of the specific categories of measure listed in footnote
1 cannot be made in the abstract. It necessarily involves a compara tive analysis and must be
approached on an empirical basis. 27 That analysis can be undertaken by comparing the measures
at issue with at least one of the listed measures which, by definition, have characteristics different
from the characteristics of an ordinary customs duty.28
20. Indonesia disagrees with the Complainants' argument that it can be at the same time a
"similar border measure" within the meaning of footnote 1. The Complainants have failed to
discharge their burden of proof to demonstrate that Indonesia's import licensing regime even
remotely shares the common "object and effect" of restricting volumes of imports or distorting

21 Indonesia's second written submission, para. 51.
22 http://inatrade.kemendag.go.id.
23 http://reippt.pertanian.go.id.
24 Indonesia's second written submission, para. 65.
25 In 2013 there was 1 IA out of 555 IA applications for horticultural products and 8 IA out of 1440 IAs
applications for animals and animal products that were rejected. These applications were rejected because the
importers submitted incomplete and/or incorrect information in their applications.
26 Indonesia's second written submission, para. 67.
27 Appellate Body Report, Chile — Price Brand System, para.163.
28 Appellate Body Report, Chile — Price Brand System, para.167.
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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prices shared by the border measures listed in footnote 1 and also have failed to satisfy their
burden of proof to expla in how an import licensing regime generally, and automatic import
licensing specifically, can be at same time classified as import licensing and a "similar border
measure" to those listed in footnote 1.
H. Assuming arguendo that Indonesia's import licensin g regime for
horticulture products and for animals and animal products violates XI:1 of
the GATT 1994 and Article 4.2 of the Agreement on Agriculture, it is
justified under Article XX (a), (b) and/or (d) of the GATT 1994
21. Under Article XX(a) Members are granted broad discretion to determine their own public
morals and to implement measures necessary for the protection of those public morals. Under
Article XX(b), a Member may adopt a nonconforming measure that is "necessary to protect
human, animal or plant life or health". Thus, where considerations of food safety and security, and
animal and plant life and health are concerned, subparagraph (b) guarantees Members the ability
to address these concerns in a nondiscriminatory manner that is not a disguised restriction on
trade. Finally, the necessity contemplated under subparagraph (d) may arise from the logistical,
economic, or administrative constraints that make customs enforcement nearly, if not actually,
impossible without certain limitations that would otherwise be prohibited by the GATT 1994.
22. To the extent that any of the challenged measures are inconsistent with Indonesia's
obligations under the WTO agreements, which Indonesia submits they are not, such measures are
nonetheless justified under the general exceptions included in Article XX of the GATT 1994.
23. The chapeau of Article XX by its express terms addresses the manner in which a particular
measure is applied.29 The chapeau has been considered to embody the recognition on the part of
WTO Members of the need to maintain a balance of rights and obligations between the rights of a
Member to invoke an exception of Article XX with the substantive rights of the other Members
under GATT 1994. 30 In the present case, Indonesia's import licensing regi me complies with the
requirements of the chapeau of Article XX since it does not constitute arbitrary or unjustifiable
discrimination, nor does it amount to a disguised restriction of international trade.
24. Indonesia submits that its import licensing reg ime does not result in discrimination, as the
same legal, technical and administrative requirements are applied on all trading partners importing
into Indonesia. However, the fact that customs enforcement measures understandably do not
apply to domestic pr oducts as they are, by definition, border measures. However, for halal
assurance as well as for food safety concerns, Indonesia applies these requirements on a
non-discriminatory basis. Indonesia has also fulfilled the third element in proving that it is n ot a
disguised restriction as Indonesia implements its regulations in a transparent manner. There is no
lack of transparency as Indonesia publishes all the requirements and all responses to applications.
25. The specific measures challenged by the Complain ants are justified under one or more
subparagraphs to GATT Article XX, to wit:
 The application windows and validity periods for import licenses are justified under
Article XX, subparagraphs (b) and (d);
 The importers' self-selected license terms (including port of entry and type of product) are
justified under Article XX, subparagraphs (b) and (d);
 The 80 per cent realization requirement (which is no longer in effect) is justified under
Article XX, subparagraphs (b) and (d);
 The Indonesian harvest period limitations are justified under Article XX, subparagraphs (b)
and (d);
 The storage ownership and capacity requirements are justified under Article XX,
subparagraphs (a), (b), and (d);

29 Appellate Body Report, US – Gasoline, p. 22.
30 Appellate Body Report, US – Shrimp, para. 156.
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 The reference price systems for chilli and fresh shallots for consumption and for beef are
justified under Article XX, subparagraph (b);
 The six-month from harvest time requirement is justified by Article XX, subparagraph (b);
 The prohibition of certain beef and offal products, except in emergency circumstances, is
justified under Article XX, subparagraphs (a), (b), and (d);
 The use, sale, and distribution limitations on imported bovine meat and offal are justified
under Article XX, subparagraphs (a), (b), and (d);
 The domestic purchase requirement for beef is justified under Article XX, subparagraphs
(a) and (d);
 The goal of sufficiency of domestic production to fulfil domestic demand included in
Indonesia's legislation is justified under Article XX, subparagraph (b); and
 Indonesia's import licensing regim es for horticultural products and for animals and animal
products, as a whole, are justified under Article XX, subparagraphs (a), (b), and (d).
I. The Reference Price System and Specified Time Period Requirements are
Justified Under Article XI:2 of the GATT
26. Indonesia maintains a reference price system for the importation of chillies, shallots and
beef as a tool to protect against harmful oversupply of these highly -perishable food items to
prevent spoilage.
27. Similarly, concerning the domestic harvest period limitation, the intention is to prevent
oversupply of only certain fresh horticultural products that could have disastrous consequences. As
Indonesia is largely an agricultural country, in certain periods of time, a particular agricultural
product is abundant in Indonesia.
28. On the reference price system and domestic harvest period limitations, Indonesia notes that
this system is not continuously in effect and is not automatically activated. When this system is
indeed activated, it is always on a t emporary basis in response to an immediate crisis. Moreover,
the reference price system for beef has in fact never been activated. Thus, Indonesia submits that
these requirements are also justified under Article XI:2(c)(ii) because they are necessary to
remove a temporary surplus of certain horticultural products, animals and animal products in
Indonesia's domestic market.
J. Article 3.2 of the Agreement on Import Licensing Procedures
29. Indonesia argues that its import licensing system is automatic, and t hus falls outside the
scope of Article 3 of the ILA, as it only applies to non -automatic licenses. In this vein, the
Complainants have failed to demonstrate that any importer that has met all of the legal
requirements of Indonesia's import licensing regime has ever been denied an import license.
30. In the case that the Panel concludes that the regime is non -automatic, its implementation is
in compliance with Article 3.2 of the ILA. The provision calls that the licensing procedures be no
more administrative ly burdensome than absolutely necessary to administer the measure.
Complainants have not demonstrated that any administrative inconveniences rise to the level of
being "trade restrictive" or creating "distortive effects".
K. Article III:4 of the GATT
31. New Zealand claims that several measure are inconsistent with Article III:4 of the GATT, as
it concerns "like" products, is a law, regulation or requirement affecting the internal sale, purchase
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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or use of bovine meat and offal, 31 and it accords less favoura ble treatment to imported products
than to the like domestic products.32
32. The first claim is in regards to domestic purchase requirement for beef. However, the
Complainant has failed to establish a prima facie case given that the requirement has never b een
used to reject an import license application. Secondly, in regards to end -use limitations for animal
products, the measure does not accord "less favourable treatment" to imports than to like
domestic products within the meaning of Article III:4 as it a pplies uniformly to imports and
domestic products. Thirdly, the end -use limitation for horticultural products falls under the scope
and is necessary within the meaning of Article XX(a) and Article XX(b) of the GATT. As a result,
there is no inconsistency with Article III:4 of the GATT.
IV. CONCLUSION
33. For the foregoing reasons, Indonesia respectfully requests this Panel to reject the
Complainants' claims in their entirety.

WT/DS477/R/Add.1 • WT/DS478/R/Add.1

- D-1 -

ANNEX D
ARGUMENTS OF THE THIRD PARTIES
Contents Page
Annex D-1 Executive summary of the arguments of Argentina D-2
Annex D-2 Executive summary of the arguments of Australia D-4
Annex D-3 Executive summary of the arguments of Brazil D-9
Annex D-4 Executive summary of the arguments of Canada D-12
Annex D-5 Executive summary of the arguments of the European Union D-14
Annex D-6 Executive summary of the arguments of Japan D-17
Annex D-7 Executive summary of the arguments of Korea D-21
Annex D-8 Executive summary of the arguments of Norway D-22
Annex D-9 Executive summary of the arguments of Paraguay D-25
Annex D-10 Executive summary of the arguments of Chinese Taipei D-26
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

-D-2 -

ANNEX D-1
EXECUTIVE SUMMARY OF THE ARGUMENTS OF ARGENTINA
INTRODUCCIÓN

comercialización de productos hortícolas que Argentina exporta a Indonesia, especialmente,
productos frutales, lácteos, plantas y productos de floricultura y subraya la importancia de la
1994.

importaciones de productos agropecuarios [...]"1 y sostiene que los derechos de aduana
propiamente dichos deben ser la única forma de protección en frontera.

DEL ACUERDO SOBRE AGRICULTURA.

limitan la importación de esqueletos bovinos y cortes secundarios de carne, al constituir
restricciones cuantitativas o medidas similares de frontera, podrían resultar incompatibles con las
dado que los importadores ven limitados el tipo y cantidad de producto a importar y complejizado
su acceso al mercado.

5. En segundo lugar, Argentina entiende que u na medida que dispone de ventanas de
aplicación y periodos de validez para la importación de productos hortícolas, al establecer periodos
puede afectar particularm ente importaciones de Miembros cuyos productos necesitan de largos
tiempos de embarque para arribar a puerto importador.

mercadería al periodo de cosecha local puede ser si milar a una restricción cuantitativa de
pueden ser importados en el curso ordinario de las operaciones comerciales. Argentina advierte

producto a importar en un determinado período. En ese mismo sentido, la facultad de vedar toda
efecto de impedir el incremento de la cantidad de producto a importar.

 Original Spanish.
1 Informe del Órgano de Apelación, Chile - Sistema de bandas de precios, párrafos 200 y 201.
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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considerada una restricción cuantitativa o medida si milar de frontera al tener un efecto
condicionante y restrictivo que puede incidir no sólo en la cantidad de producto a importar, sino
incluso en la decisión de hacerlo.

cantidad de producto a importar.

fines específicos determinados podría conformar una restricción cuantitativa o medi da similar de
Agricultura.

a c omprar carne y productos cárnicos en el mercado doméstico limitando, en consecuencia, la

productos hortícolas acarrearía las mismas inconsistencias.

puede constituir una restricción cuantitativa o similar medida de frontera y podría no ser
logística comercial, al imponer costos innecesarios a los importadores.

mercado local.

derecho de aduana, impuesto u otra carga que prohíba o restrinja la importación de productos, o
incluso tenga un efecto limitativo que afecte a la importación de productos propiamente d icha en
función de los períodos de cosecha doméstica de determinados productos, podría configurar

encuadrarse como restricciones cuantitativas o como precios mínimos de importación, podrían, en
Grupo Especial considere que alguna de l as medidas cuestionadas comparte un número suficiente
de "medidas similares aplicadas en la frontera".
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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ANNEX D-2
EXECUTIVE SUMMARY OF THE ARGUMENTS OF AUSTRALIA
I. AUSTRALIAN INTERESTS IN THIS DISPUTE
1. Australia has both systemic and commercial concerns about Indonesia's trade restrictions on
imports of horticultural products, animals and animal products. Agricultural products made up over
48 per cent of Australian goods and services exports to Indonesia in 2014. Indonesia is Australia's
largest export market for cattle, and cattle and bovine meat products wer e Australia's second and
fourth largest goods exports to Indonesia in 2014 respectively. Indonesia is also an important
market for Australian horticultural exports. Bilateral trade in these products is important to
Australian businesses, and to Indonesian businesses and consumers. Removing limitations on this
trade would be of benefit to both countries.

2. Given our substantial trade interests in this dispute, Australia, Brazil, Canada and the
European Union requested that the Panel exercise its discretio n to grant enhanced third party
rights under Article 12.1 of the Understanding on Rules and Procedures Governing the Settlement
of Disputes. Australia considers the Panel would have been justified in granting the additional third
party rights that were requested, particularly given their limited and passive nature.

II. APPLICATION OF IMPORT LICENSING REGIME TO CATTLE
3. Australia has been particularly affected by Indonesia's import licensing regime for animals
and animal products as it is applied to cattl e. Under Indonesia's "positive list" of permissible
animal and animal product imports, "Feeder cattle" with a m aximum weight of 350 kilograms are
the only type of live bovine animal permitted for importation. Imports of "Ready to Slaughter
cattle" are currently prohibited.1

4. As is the case for other animals and animal products, importers of feeder cattle are subject
to fixed licence terms, and are only permitted to import the quantity of cattle specified in their
import approval. The Indonesian Government has regularly acknowledged that these fixed licence
terms enforce an import quota – a maximum permissible volume of imports – on feeder cattle. For
the first quarter of 2016, for example, the Indonesian Government has announced an import quota
of 200,000 head of cattle.2

5. Quotas on feeder cattle imports are evidenced by a large number of media articles and
public statements by Indonesian officials. 3 In addition to imposing fixed limits on the number of
feeder cattle that can be imported, quarterly import quotas have imposed considerable uncertainty

1 "Feeder cattle" are the only type of live bovine animal listed as permitted for import in Appendix 1 of
the version of Regulation of the Minister of Trade Number 46/M-DAG/PER/8/2013 Concerning Provisions on the
Import and Export of Animals and Animal Products (MOT 46/2013) provided by Indonesia. (Appendix 1,
MOT 46/2013 (Exhibit IDN-14).) While ready to slaughter cattle are listed as permitted for import in the
complainants' version of MOT 46/2013 (Exhibit JE-18), the Law of the Republic of Indonesia Number 41 of
2014 Concerning Amendment of Law Number 18 of 2009 Concerning Husbandry and Animal Health (Animal
Law Amendment) also requires that imported livestock "must be in the form of feeder". (Article 1(11), Animal
Law Amendment (Exhibit JE-5).) In addition, in September 2015, Indonesia issued Regulation of the Minister of
Agriculture Number 48/Permentan/ PK.440/8/2015 Regarding Importation of Feeder Cattle and Production
Heifer into the Territory of the Republic of Indonesia (MOA 48/2015), which states that "importation of ready-
to-slaughter cattle is no longer applicable", and does not include ready to slaughter cattle in the list of
permissible imports in its Appendix. (Preamble, para. b, Appendix, MOA 48/2015 (Exhibit AUS-2).)
2 Y. Winosa and D. Bisara, "Govt Relying on Rice, Sugar, Soybean, Cattle Imports to Plug Q1 Shortage",
Jakarta Globe, 1 January 2016, http://jakartaglobe.beritasatu.com/business/govt-relying-rice-sugar-soybean-
cattle-imports-plug-q1-shortage/, accessed 4 January 2016 (Exhibit AUS-9).
3 For example, New Zealand's first written submission, para. 132; "Achieving self-sufficiency,
government keep importing live cattle", Lensa Indonesia, 31 March 2015,
http://www.lensaindonesia.com/2015/03/31/swasembada-daging-pemerintah-terus-impor-sapi-bakalan.html,
accessed 16 September 2015 (Exhibit NZL-23); Reuters, ‘Indonesia may raise Q3 cattle import quota after
evaluating supplies", Investing.com, 15 July 2015, http://m.au.investing.com/news/commodities-
news/indonesia-may-raise-q3-cattle-import-quota-after-evaluating-supplies-1261, accessed 30 November
2015 (Exhibit AUS-7).
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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and economic costs on importers and exporters. Australian exporters have had to find alternative
markets for cattle at short notice when quotas have been significantly lower than expected, and
incur additional costs when quotas are not set until after the start of the quarter.4 Quarterly import
quotas on feeder cattle have also led to reductions in supply and higher prices for Indonesian
consumers.5

III. INCONSISTENCY OF MEASURES WITH WTO OBLIGATIONS
A. GATT 1994 ARTICLE XI:1
6. Australia considers that each of the challenged measures that form part of Indonesia's
import licensing regimes for horticultural products, and for animals and animal products, is clearly
inconsistent with Article XI:1 of the Genera l Agreement on Tariffs and Trade 1994 (GATT 1994),
which forbids "prohibitions or restrictions other than duties, taxes or other charges" on imports,
whether through "quotas, import … licences or other measures".

7. Indonesia's import licensing regimes in clude outright prohibitions on imports of certain
products, including ready to slaughter cattle and certain types of bovine offal and secondary cuts,
through Indonesia's positive list of permissible imports of animals and animal products. They also
include prohibitions on imports of fresh horticultural products harvested more than six months
previously, and on animal products that have been stored for more than three or six months
between slaughter and arrival in Indonesia. These bans on imports of particul ar products are
clearly "prohibitions" on the import of a product within the meaning of Article XI:1, defined as a
"legal ban on the trade or importation of a specified commodity".6

8. Indonesia's import licensing regimes also include prohibitions on imports of certain products
in certain circumstances. These include prohibitions on imports of:
(a) food and agricultural products when domestic production is deemed sufficient;
(b) certain bovine secondary cuts and carcasses except by State Owned Enterpris es and
Regional State Enterprises in the event of beef shortages due to a disease outbreak or
natural disaster, or to control prices and prevent inflation;
(c) bovine animals and animal products, and chilies and shallots, when the market price for
these products falls below a set reference price; and
(d) horticultural products based on Indonesian harvest periods.

9. These measures are clearly "prohibitions" on imports when the relevant circumstances are
deemed to apply for each product. Furthermore, these measures are also "restrictions" on imports,
which have been defined by the Appellate Body as measures that act as a "limiting condition" 7 or
have "a limiting effect" 8 on imports. Indonesia's prohibitions on imports in certain circumstances
also create considerable uncertainty for importers and exporters as they do not know when the
Indonesian Government will declare the relevant circumstances to exist, and therefore are unable
to make business plans with any confidence. The panel in Argentina – Import Measures confirmed
that "uncertainties can constitute ‘restrictions' under Article XI:1 of the GATT 1994", 9 as
uncertainty "negatively impacts business plans of economic operators who cannot count on a

4 New Zealand's first written submission, para. 47; United States' first written submission, para. 114; T.
Allard, "Indonesia increases cattle permits amid soaring beef prices", The Sydney Morning Herald, 11 August
2015, http://www.smh.com.au/national/indonesia-prepares-to-increase-cattle-permits-amid-soaring-beef-
prices-20150810-giw1xp.html (Exhibit US-61); J. Nason, "Indo permit debacle: Exporters diverting cattle to
other markets", Beef Central, 9 July 2015, http://www.beefcentral.com/live-export/indo-permit-debacle-
exporters-diverting-cattle-to-other-markets/, accessed 14 January 2016 (Exhibit AUS-8).
5 New Zealand's first written submission, paras. 24-25, Figure 1 and Figure 2; United States' first
written submission, para. 304.
6 Appellate Body Reports, China –Raw Materials, para. 319 and Argentina – Import Measures,
para. 5.217.
7 Appellate Body Reports, China – Raw Materials, para. 319 and Argentina – Import Measures,
para. 5.217.
8 Appellate Body Reports, China – Raw Materials, para. 319 and Argentina – Import Measures,
para. 5.217.
9 Panel Reports, Argentina – Import Measures, para. 6.260.
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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stable environment in which to import and who according ly reduce their expectations as well as
their planned imports".10

10. In addition, Indonesia's import licensing regimes include the imposition of numerical limits
on imports . Import licences with fixed terms specify the quantity of each product that can b e
imported in a given import period, and additional permits cannot be sought during that period.
This effectively establishes a fixed numerical limit, or quota, for that import period and prevents
importers from responding to any changes in the importing o r exporting market during an import
period. Explicit quotas are set for imports of feeder cattle, which are then enforced by assigning
fixed quantities to each importer under the import approval system. An annual quota system has
been introduced for hortic ultural imports, which are also limited in each import period to the
storage capacity owned by an importer. These numerical limits clearly act as limiting conditions on
imports and are "restrictions" contrary to Article XI:1.

11. Furthermore, Indonesia's import licensing regimes include measures which affect the
"competitive situation" 11 of importers . Limited licence validity periods and application windows
effectively prevent imports at the beginning and end of each import period, prevent long term
planning and contractual arrangements, and impose additional costs on importing when the
issuance of licences is delayed. Eighty per cent realisation requirements have encouraged
importers to limit the quantities in their import licence applications. Rules preventing the sale of
imported meat products in modern and traditional markets, and importers from selling
horticultural products directly to consumers and retailers, reduce the commercial opportunities for
imported goods and impose additional distribution costs on imports.

12. In addition to acting as a minimum import price, reference price rules also limit the ability of
imports of bovine animals and animal products, and chilies and shallots, to compete with like
domestic products on price. Laws requiring op erators of markets to prioritise the sale of local
horticultural products further affect the competitive position of imports. Requirements for
importers of bovine meat to purchase local beef require importers to substitute imports with
domestic products, limit imports according to the availability of local beef and increase the costs of
importing. The requirement for imported cattle to be fed for four months in Indonesia not only
effectively prohibits the importation of ready to slaughter cattle (in conjunc tion with Indonesia's
positive list licensing regime), but also places a restriction on the use of imported feeder cattle
that affects their competitive position against local cattle. These measures are clearly "restrictions"
on imports which "create uncer tainties and affect investment plans, restrict market access for
imports or make importation prohibitively costly", 12 which the panel in Colombia – Ports of Entry
held would have "implications on the competitive situation of an importer" 13 contrary to the
requirements of Article XI:1.

13. Panels have consistently held there is no requirement for complainants to demonstrate "a
causal link between the measure and its effects on trade volumes". 14 The limiting effects of
Indonesia's measures are evident in th eir design, structure and operation. Furthermore,
Indonesia's measures are part of a broader policy to restrict agricultural imports and promote food
self-sufficiency, and should be considered in that context.

14. Australia considers that all of these me asures operate individually as "quotas, import …
licences or other measures" to prohibit or restrict imports contrary to Article XI:1. Furthermore,
Indonesia's import licensing regimes as a whole impose an even greater restriction on imports
than their individual components. We therefore agree that the Panel should also consider the effect
of these import licensing regimes as a whole, in which the various prohibitions and restrictions
reinforce and amplify one another, and "contribute in different combinati ons and degrees …
towards the realization of common policy objectives"15 of food self-sufficiency and the promotion of
domestic production, similar to the situation in Argentina – Import Measures.16

10 Panel Reports, Argentina – Import Measures, para. 6.260.
11 Panel Report, Colombia – Ports of Entry, para. 7.240.
12 Panel Report, Colombia – Ports of Entry, para. 7.240.
13 Panel Report, Colombia – Ports of Entry, para. 7.240.
14 Panel Report, Colombia – Ports of Entry, para. 7.252; see also Panel Report, Korea – Various
Measures on Beef, para. 627.
15 Panel Reports, Argentina – Import Measures, para. 6.228.
16 Panel Reports, Argentina – Import Measures, para. 6.228.
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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B. AGREEMENT ON AGRICULTURE ARTICLE 4.2
15. Indonesia's measures, and its import licensing regimes as a whole, are "measures of the
kind which have been required to be converted into ordinary customs duties" that are prohibited
under Article 4.2 of the Agreement on Agriculture. These individual measures and the regimes as a
whole are also "quantitative import restrictions … minimum import prices … and similar border
measures" as identified in footnote 1 to Article 4.2 as specifically prohibited under Article 4.2.
These measures are contrary to Article 4.2 as a result of the same limiting effects on imports that
render them inconsistent with Article XI:1 of GATT 1994.

16. Australia considers that a measure on agricultural imports that breaches Article XI:1 of the
GATT 1994 will also breach Article 4.2, to the e xtent it is among those measures listed in footnote
1.17 As all of Indonesia's measures have been challenged by the complainants as quantitative
restrictions under both Article XI:1 and Article 4.2, it is appropriate to consider the consistency of
Indonesia's measures with Article XI:1 of the GATT 1994, as the more specific provision on
quantitative restrictions, before considering their consistency with the broader provision in Article
4.2.

17. While Indonesia's reference price requirements do not impose additional duties, Indonesia's
approach is actually more trade -restrictive than other minimum import price systems, by
completely banning imports when the market price falls below a set threshold. These requirements
should therefore be considered minimum i mport prices or similar measures under Article 4.2, as
well as quantitative import restrictions.

C. GATT 1994 ARTICLE III:4
18. Australia agrees with New Zealand that Indonesia's requirement for importers of bovine
animal products to purchase domestic be ef, and restrictions on the sale and distribution of
imported animal and horticultural products, are also inconsistent with Article III:4 of the
GATT 1994, which provides that imported products "shall be accorded treatment no less
favourable than that acco rded to like products of national origin in respect of all laws, regulations
and requirements affecting their internal sale, offering for sale, purchase, transportation,
distribution or use".

D. AGREEMENT ON IMPORT LICENSING PROCEDURES ARTICLE 3.2
19. As Indonesia's import licensing procedures limit the time periods in which applications can
be submitted and import licences are issued, they do not satisfy the definition of automatic import
licensing procedures in Articles 2.1 and 2.2(a) of the Agreement on Import Licensing Procedures.18
20. To the extent the Panel considers that Indonesia's limited application windows and validity
periods are non -automatic licensing procedures, they are also inconsistent with Article 3.2 of the
Agreement on Import Licensing Procedures. As there is no underlying permissible restriction
implemented by these licensing procedures, their trade -restrictive effects, including on long -term
business planning and the flow of goods at the beginning and end of each import period, must b e
considered "additional" and "more administratively burdensome than absolutely necessary".

IV. AMENDMENTS TO INDONESIA'S IMPORT LICENSING REGIMES
21. Since the Panel's establishment, Indonesia's Minister of Agriculture has issued a new
regulation governing the importation of animal products. 19 Indonesia's Minister of Trade has also

17 See Panel Reports, Korea – Various Measures on Beef, para. 762 and India – Quantitative
Restrictions, paras. 5.238-5.242.
18 To qualify as automatic licensing under the Agreement on Import Licensing Procedures,
Article 2.2(a)(ii) requires that applications "may be submitted on any working day prior to the customs
clearance of the goods", and Article 2.2(a)(iii) requires that applications be approved "within a maximum of 10
working days".
19 Regulation of the Minister of Agriculture Number 58/Permentan/PK210/11/2015 Regarding
Importation of Carcass, Meat, and/or its Derivatives into the Territory of the Republic of Indonesia, 7
December 2015 (unofficial English translation) (MOA 58/2015) (Exhibit AUS-1).
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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issued a new regulation on the importation of horticultural products. 20 However, these new
regulations do not alter the essential requirements of Indonesia's import licensing r egimes, which
remain inconsistent with Indonesia's WTO obligations, and actually impose additional restrictions
on imports.21

22. Indonesia's regular amendments to its import licensing regimes should not enable it to avoid
its WTO obligations. Indonesia's frequent amendments to its regulations over many years, often
without notification and with no or limited opportunity for consultation with trading partners, have
not reduced their WTO-inconsistencies. These amendments have instead served to further increase
uncertainty for Indonesian importers and consumers and overseas exporters, limiting the
development of long-term trading relationships and deterring investment.

V. ARTICLE XX OF THE GATT 1994
23. Australia does not agree with Indonesia's claims that several of its measures can be justified
under the exceptions in Articles XX(a), (b) and (d) of the GATT 1994, which allow for measures
"necessary to protect public morals", "necessary to protect human, animal or plant life or health"
or "necessary to sec ure compliance with laws or regulations which are not inconsistent with the
provisions of this Agreement, including those relating to customs enforcement…". Indonesia
provides no evidence to support its claims that these measures are designed or "necessary " to
achieve these objectives or that it has considered less trade -restrictive alternatives. Nor has
Indonesia demonstrated it has equivalent measures in place to address any similar alleged risks
posed by like domestic products. The Panel should therefore conclude that these measures do not
meet the criteria in the Article XX exceptions, and also amount to "an arbitrary or unjustifiable
discrimination between countries where the same conditions prevail, or a disguised restriction on
international trade", contrary to the chapeau of Article XX.

20 Regulation of the Minister of Trade Number 71/M-DAG/PER/9/2015 Regarding Horticultural Product
Import Provision, 28 September 2015 (MOT 71/2015) (Exhibit JE-12).
21 For example, MOT 71/2015 adds further restrictions on horticultural imports, including a formal
annual quota setting process. (Article 3, MOT 71/2015 (Exhibit JE-12).)
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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ANNEX D-3
EXECUTIVE SUMMARY OF THE ARGUMENTS OF BRAZIL
1. Brazil welcomes the opportunity to present its views on some of the fundamental issues that
were raised in these panel proceedings. In its Executive Summary Br azil will address four topics of
systemic relevance referred to in this case.
(i) The order of analysis of claims under Article XI:1 of the GATT 1994 and Article 4.2 of
the Agreement on Agriculture

2. Brazil does not take a position in this dispute regard ing which order of analysis the Panel
should necessarily follow. Brazil would like to emphasize, however, two specific points related to
this discussion. First, Brazil would like to recall that the existence of similarities between the two
provisions – Article XI:1 of GATT 1994 and Article 4.2 of the Agreement on Agriculture – should
not prevent the Panel from carrying out a separate analysis for each claim. Although both
provisions deal with a general prohibition of resorting to unduly restrictions to trad e, there is a
difference in scope between them that may require a different assessment by a Panel.
3. In Chile – Price Band System, the Panel has already stressed this difference in scope when it
ruled that "the 'restrictions other than' referred to in Art icle XI:1 of the GATT 1994 constitute a
narrower category than the 'similar border measures other than' in footnote 1 to [Article 4.2 of]
the Agreement on Agriculture" 1. Being broader in scope, the measures listed in footnote 1 to
Article 4.2 should not a priori be considered as strictly equivalent to those within the meaning of
Article XI:1.
4. Second, in Brazil's view the Panel should be very cautious when considering the parties'
suggestions to exercise judicial economy. In the current situation, the ex ercise of judicial economy
could lead to a partial solution of the matter, which, in turn, may affect the ability of the DSB "to
make sufficiently precise recommendations and rulings so to allow for prompt compliance by a
Member"2.
(ii) The standard for assessing an overarching measure

5. Brazil considers important to reinforce that the combined interaction of different individual
measures may constitute, on its own, a violation of the Covered agreements regardless of the
specific impact of each constitu tive element of that overarching measure. In this context, such a
measure is to be viewed as a single, self -standing "measure at issue" in the sense of Article 6.2 of
the DSU, and the claims of inconsistency with WTO obligations should be scrutinized by th e Panel
independently of, and in addition to, the analysis of claims regarding individual measures.
6. In Brazil's view, the rulings on the claims regarding the individual measures do not
necessarily resolve a priori the matter under dispute, as the combi ned effect of the individual
elements could still result in restrictive policies inconsistent with WTO obligations, regardless of the
specific impact of each individual measure. Brazil does not dispute that in order to determine the
existence and functioni ng of an overarching measure, understood as a single, self -standing
measure, it is important to scrutinize its constitutive elements and the interaction between them.
Yet, this can only be assessed as "part of a holistic analysis" to be undertaken by the P anel, as the
Appellate Body has confirmed.3
7. The jurisprudence of Argentina – Import Measures appears to be relevant to the current
dispute. In that case, the Appellate Body upheld the Panel’s decision that, since the different
measures at issue were fra med for the fulfillment of an official trade policy objective extensively

1 Panel Report, Chile – Price Band System, para. 7.30.
2 Idem.
3 Appellate Body Report, Argentina – Import Measures, para. 5.126.
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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announced by public statements of high -ranking Argentine government officials, 4 their combined
operation could be considered an overarching measure.
(iii) Import licensing regimes under Article XI:1 of the GATT 1994 and Article 4.2 of the
Agreement on Agriculture

8. In Brazil's view, one of the key issues under discussion in the present dispute is precisely
whether and how Article XI:1 of the GATT 1994 and Article 4.2 should inform t he analysis of a
Member's import licensing regime. Both provisions are broad in scope and encompass
"prohibitions" or "restrictions", which should not be maintained or resorted to by WTO Members. In
Brazil – Retreaded Tyres, the Panel concluded that the te rm "prohibitions" in Article XI:1 means
that "Members shall not forbid the importation of any product of any other Member into their
markets."5 Thus, if any type of licensing procedure adopted by a Member impedes or bans the
importation of any product from another Member, then a prohibition in the sense of Article XI:1 is
at hand.
9. The term "restrictions" in Article XI:1 has also been interpreted in a broad manner. The
Panel in India – Quantitative Restrictions considered that there is a restriction if a measure
imposes a "limiting condition" or a "limitation on action" in relation to imports 6 and the Appellate
Body in China – Raw Materials found that "restriction" refers to "something that has a limiting
effect".7 As a consequence of the restriction, the importation will be "more onerous than if the
condition had not existed, thus generating a disincentive to import."8
10. For Brazil, it is clear from both the wording and purposes of this provision that import
licensing regimes, automatic and non-automatic alike, may fall under the purview of Article XI:1 of
the GATT 1994, as long as they are applied in a manner that result in a prohibition or restriction
on the importation of products. As the Panel in China – Raw Materials indicated, it does not matter
whether the import licensing regime qualify as "automatic" or "non -automatic", but rather whether
this regime, by its design and structure, has a "‘limiting’ or ‘restrictive’ effect."9

11. For Brazil, any "prohibition" or "restriction" on the importation may be a violation of
Article XI:1 of the GATT 1994, as long as it may have "limiting effects on the importation." 10 Thus,
if the importation of the product is only allowed under certain conditions or even only to certain
uses the relevant measure may fall under the purview of Article XI:1.
12. In light of the broad scope of Article XI:1, the fact that a specific measure does not totally
prevent the imports from entering the market or does not encompass the application of prohibited
additional duties11 does not mean per se that there is no violation of that provision. Likewise, a
violation of Article XI:1 may occur even when there is no specific threshold established limiting
imports or exports.
13. In Brazil's view, the specific features of Indonesia's import licensing regime, as described by
the Complainants in the present dispute, undoubtedly seem to impose, by "its design and
structure", a legal ban or a limiting condition in relation to imports. Furthermore, many of the
requirements in Indonesia's import li censing regime mentioned in the present dispute, such as
limited application windows and validity periods, fixed license terms, realization requirements,
domestic purchase requirements, and reference prices, seem to fall exactly in the category of
WTO-inconsistent measures, constituting an excessive burden for the importers and consequently
a disincentive to import. According to the panel in China – Raw Materials, the potential to limit
trade is sufficient to constitute a "restriction" within the meaning of Article XI:1 of the GATT.12
14. As regards Article 4.2 of the Agreement on Agriculture, the Appellate Body in Chile – Price
Band System has stated that an "inconsistency with Article 4.2 can be established when it is

4 Appellate Body Report, Argentina – Import Measures, para. 5.131.
5 Panel Report, Brazil – Retreaded Tyres, para. 7.11.
6 Panel Report, India – Quantitative Restrictions, para. 5.128.
7 Appellate Body Report, China – Raw Materials, para. 319.
9 Panel Reports, China - Raw Materials, para. 7.915.
10 Appellate Body Reports, Argentina – Import Measures, para. 6.363.
11 Indonesia's first written submission, para. 154.
12 Panel Reports, China – Raw Materials, para. 7.1081.
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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shown that a measure is a border measu re similar to one of the measures explicitly identified in
footnote 1."13 As previously indicated, Brazil believes that many of the measures challenged by the
Complainants in the current dispute – related to Indonesia's import licensing regime – limit the
access of the products at issue into the country's market and, as such, are covered by Article 4.2.
They can actually be considered similar to the measures identified in footnote 1, constituting, as
such, a violation of Article 4.2 of the Agreement on Agriculture.
(iv) The requirements of Article XX of the GATT 1994

15. For Brazil it is undisputable that WTO rules do not prevent its Members from adopting the
measures necessary to protect human, animal or plant life, nor from protecting other legitimate
policies objectives, as long as "such measures are not applied in a manner which would constitute
a means of arbitrary or unjustifiable discrimination […] or a disguised restriction on international
trade".14 This kind of balance can also be found in Articles 2.1 and 2.3 of the SPS Agreement, in
Articles 2.1 and 2.2 of the TBT Agreement and in Article 3 of the TRIMs Agreement, among others.
16. Given the central role of Article XX in ensuring the proper balance between WTO rights and
obligations, it is also we ll established, from the very beginning, that in order to resort to the
general exceptions established therein, the party invoking the provision has the burden of proving
that it has fulfilled the conditions necessary for invoking the exception 15, which are: first, whether
the domestic measure in question is justified within at least one of the paragraphs of Article XX
(paragraphs (a) to (j)); and second, whether the application of these domestic measures meets
the requirements of the provision's chapeau.16
17. As the Appellate Body has indicated, these exceptions "are not positive rules establishing
obligations in themselves. They are in the nature of affirmative defenses. It is only reasonable that
the burden of establishing such a defense should rest on the party asserting it."17

18. Therefore, in the current dispute, it would be for Indonesia to present the necessary
evidence to prove its arguments of defense under Article XX and demonstrate that: (i) its policy, in
respect of the measures for which the provision was invoked, fell within the range of policies
designed to protect human, animal or plant life or health; (ii) the inconsistent measures for which
the exception was being invoked were necessary to fulfil the policy objective; and (iii) the
measures were applied in conformity with the requirements of the introductory clause of
Article XX.18
19. Brazil appreciates the opportunity to comment on the issues at stake in this proceeding and
expects that the elements introduced above may assist the Panel in examining the matter before
it.

13 Appellate Body Report, Chile – Price Band System, para. 171.
14 Article XX of the GATT 1994. For example, this balance can be found in Articles 2.1 and 2.3 of the
SPS Agreement, in Articles 2.1 and 2.2 of the TBT Agreement, and in Article 3 of the TRIMs Agreement, among
others.
15 Panel Report, US – Underwear, para. 7.16. Brazil is aware that as a general rule of law, when
initiating a dispute at the WTO, the Complaining Member has the burden to establish a prima facie case by
presenting sufficient evidence to raise a presumption in favour of its claim. The amount of evidence required to
establish the prima facie case may vary and shall be determined by the Panel on a case-by-case basis. Once
the Panel is convinced the prima facie case was established, then it is for both Parties to provide sufficient
evidence/proof supporting their respective claims. Since Indonesia is invoking Article XX of the GATT 1994, it
must adduce the necessary evidence to support its defense.
16 Appellate Body Report, US-Gasoline, para. 22.
17 Appellate Body Report, US – Wool Shirts and Blouses, page 16.
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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ANNEX D-4
EXECUTIVE SUMMARY OF THE ARGUMENTS OF CANADA
I. INTRODUCTION
1. Canada is concerned about the issues in this dispute as a major exporter of animals, animal
products and horticultural products, and on a system ic basis with respect to the interpretation of
Articles XI:1 and XX of the GATT 1994 and Article 4.2 of the Agreement on Agriculture.
2. Indonesia's measures, such as the domestic insufficiency condition for imports, strict
application windows and short validity periods for import licences and end -use requirement can be
assessed for consistency under both Article XI:1 of the GATT 1994 and Article 4.2 of the
Agreement on Agriculture.
II. PROHIBITIONS AND RESTRICTIONS UNDER GATT ARTICLE XI:1
A. Other Measures
3. Under Article XI:1 of the GATT 1994, Members are obliged not to impose prohibitions or
restrictions other than customs duties, taxes or other charges. This obligation applies to
prohibitions or restrictions made effective through, among other things, import licences or other
measures.
4. The term "other measures" has been interpreted as a broad residual category of measures
that encompasses measures other than those that take the form of duties, taxes or other charges.
Indonesia's measures, in particular the domestic insufficiency condition, strict application windows
and short validity periods and end -use requirements are "other measures" within the meaning of
Article XI:1.
B. Prohibition or Restriction on Imports from another Member
5. The meaning of the term "restriction" in Article XI:1 includes not only a measure that results
in actual adverse effects on imports, but also a measure that, based on its design and structure,
negatively affects the competitive opportunities for imported in market of the importing Member.
6. Therefore, measures that restrict market access, create uncertainties and affect investment
plans or increase transaction costs to an extent that creates a disincentive to import, constitute
restrictions within the meaning of GATT Article XI:1.
7. If Indonesia's measures have these types of effects on import quantities or competitive
opportunities in the Indonesian market, those measures will constitute prohibited restrictions
under Article XI:1.
III. THE NECESSITY TEXT UNDER GATT ARTICLE XX IS A TWO-STEP TEST
8. The necessity test, which is a common element in GATT Article XX(a), (b), and (d) is a two -
step test.
9. First a panel must make a preliminary determination of necessity by weighing and balancing
relevant factors such as: the relative importance of the common interests or values that the
measure aims to protect; the extent to which the measure contributes to the realization of the
policy objective; and the trade-restrictiveness of the measure.
10. Generally, the more important or vital the interests or values; the greater the contribution of
the measure to the objective; and the less trade restrictive the measure is, the more likely it is
that the measure will be found to be necessary.
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11. If this weighing and balancing results in a preliminary determination of "necessity", then this
determination must be confirmed by comparing the measure in issue with a less trade restrictive
alternative measure.
12. In an assessment of Indonesia's measures under Article XX(a), (b) or ( d), the Panel should
first make a preliminary determination of necessity by weighing and balancing the relative
importance of the common interests or values that the measure aims to protect, the extent to
which the measure contributes to the achievement of the policy objective; and the degree of
trade-restrictiveness of the measure. Only if a preliminary determination of necessity has been
made, should the Panel then check that determination by assessing the measure against a less
trade-restrictive alternative measure. The measure should only be found necessary if a preliminary
assessment of necessity has been made and there is no less trade -restrictive alternative measure
that would make an equivalent contribution to the achievement of the objective.
IV. ARTICLE 4.2 OF THE AGR EEMENT ON AGRICULTUR E: QUANTITATIVE IMPO RT
RESTRICTION, DISCRETIONARY IMPORT LICENSING, OR SIMILAR BORDER MEASURES
13. Under Article 4.2 of the Agreement on Agriculture , WTO Members are obliged not to
maintain, resort to, or revert to a ny measures of the kind which have been required to be
converted into ordinary customs duties.
14. Footnote 1 to Article 4.2 provides examples of prohibited non -tariff measures, such as
quantitative import restrictions and discretionary import licensing, as well as a residual category of
similar border measures other than ordinary customs duties. If a Member adopts or maintains a
non-tariff measure listed in footnote 1 that Member is in violation of Article 4.2.
15. Following the approach in Turkey – Rice, Indonesia's domestic insufficiency condition should
be assessed to determine if it constitutes a quantitative import restriction by prohibiting or
restricting imports of specific products if the domestic insufficiency condition is not met.
16. The domestic insufficiency condition can also be assessed to determine if it constitutes an
impermissible discretionary import licence by not providing any criteria for determining domestic
insufficiency.
17. If the domestic insufficiency condition is not determine d to be a quantitative import
restriction or discretionary import licence, it can be assessed to determine if it is a "similar"
measure by having a sufficient likeness or resemblance to a quantitative import restriction or
discretionary import licence.
18. Similarly, the strict application windows and short validity periods, and end -use
requirements can be assessed to determine if they are quantitative import restrictions or "similar"
measures by having a limiting effect on the quantity of imports.
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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ANNEX D-5
EXECUTIVE SUMMARY OF THE ARGUMENTS OF EUROPEAN UNION
I. ARTICLE XI:1 OF THE GATT 1994
1. Article XI:1 of the GATT 1994 contains one of the fundamental principles of the GATT/WTO
legal system,1 the general prohibition of quantitative restrictions.
2. Article XI:1 foresees the elimination of import and export restrictions or prohibitions other
than duties, taxes or other charges.
3. The Appellate Body has relied on a definition of the term "prohibition" as a "legal ban on the
trade or importation of a specified commodity".2
4. In the same disputes, the Appellate Body referred to the term "restriction" as "'[a] thing
which restricts someone or something, a limitation on action, a limiting condition or regulation'
and, thus, generally, as something that has a limiting effect".3
5. The use of the word "quantitative" in the title of Article XI suggests that this Article refers
only to those prohibitions and restrictions "that limit the quantity or amount of a product being
imported or exported".4 "This provision […] does not cover simply any restriction or prohibition".5
So the word "quantitative" in the title of Article XI informs the meaning of "prohibition" and
"restriction". The Appellate Body underlines that it must be a prohibition or restriction "on th e
importation … or on the exportation or sale for export". In the view of the Appellate Body, " not
every condition or burden placed on importation or exportation will be inconsistent with Article XI,
but only those that are limiting, that is, those that li mit the importation or exportation of
products".6 The European Union shares the Appellate Body's understanding that the impact of a
restriction "need not be demonstrated by quantifying the effects of the measure at issue". Rather,
the "design, architecture , and revealing structure … considered in its relevant context" 7 should in
the view of the European Union reveal a discernible quantitative dimension, in the form of a
limiting effect on the quantity or value of a product being imported/exported.
6. In assessing whether the measure at issue is consistent with Article XI:1, a substance over
form approach should be taken. 8 This implies that such a restriction can be imposed de jure or de
facto.9
7. In the view of the European Union, Indonesia operates a set o f measures which – in
different forms - are inconsistent with Article XI:1 of the GATT 1994. Some of the measures
constitute outright prohibitions. Some other measures by Indonesia prohibit imports of certain
products under certain circumstances. Some of t he Indonesian measures impose numerical limits
on imports. In the view of the European Union, all these three types of measures clearly are
"prohibitions" or, respectively, "restrictions" for the purposes of Article XI:1. Yet another type of
measures affec ts the competitive situation of importers. These are also inconsistent with
Article XI:1 to the extent that they have a discernible quantitative dimension , in the form of a
limiting effect on the quantity or value of a product being imported/exported.

2 Appellate Body Reports, Argentina – Import Measures, para. 5.217, referring to Appellate Body
Reports, China – Raw Materials, para. 319 (quoting Shorter Oxford English Dictionary, 6th edn, W.R. Trumble,
A. Stevenson (eds.) (Oxford University Press, 2007), Vol. 2, p. 2363).
3 Appellate Body Reports, Argentina – Import Measures, para. 5.217, referring to Appellate Body
Reports, China – Raw Materials, para. 319 (quoting Shorter Oxford English Dictionary, 6th edn, W.R. Trumble,
A. Stevenson (eds.) (Oxford University Press, 2007), Vol. 2, p. 2553).
4 Appellate Body Reports, Argentina – Import Measures, para. 5.217, referring to Appellate Body
5 Appellate Body Reports, Argentina – Import Measures, para. 5.217.
6 Appellate Body Reports, Argentina – Import Measures, para. 5.217.
7 Appellate Body Reports, Argentina – Import Measures, para. 5.217.
9 Panel Report, Argentina – Hides and Leather, para. 11.17.
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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II. ARTICLE 4.2 OF THE AGREEMENT ON AGRICULTURE
8. To the extent that a measure is one of a kind listed in footnote 1 to Article 4.2 of the
Agreement on Agriculture, a border measure which imposes prohibitions or restrictions
inconsistent with Article XI:1 of the GATT 1994 results also in a breach of Article 4.2. 10 This
parallelism between Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture,
however, seems only adequate if Article XI:1 of the GATT 1994 is not being interpreted excessively
broad, i.e. if Article XI:1 is understood in a way so that not just any condition on importation is
capable of falling under Article XI:1.
9. If that is so and parallel considerations apply, then measures that are covered by Article 4.2
may be distingu ished from those that are not by considering similar arguments as discussed
above, with respect to Article XI:1 of the GATT 1994.
III. IMPORT REGIME AS A WHOLE
10. In order to determine whether five trade -related requirements operate in a manner such
that they constitute a single measure, the Panel in Argentina – Import Measures took into account
three factors: (a) the manner in which the complainants have presented their claims in respect of
the concerned measures; (b) the respondent's position; and (c) th e manner in which these
requirements operate and are related to each other, in order to determine whether they can be
considered to be autonomous or independent. 11 The Panel found that those requirements at issue
constitute a single measure. The Panel's fi nding that these requirements are related to each other
was primarily based on two considerations. The first of these considerations was that "in many
cases for which there is evidence", the WTO Member has imposed a combination of requirements
on economic operators.12 This, in the view of the Panel, was an indication for "a single global
measure".13 Such an indication is in the view of the Panel not contradicted by the fact that the
requirements can be imposed separately. 14 The second key aspect for the Pan el was that "it
appears that the requirements constitute different elements that contribute in different
combinations and degrees – as part of a single measure – towards the realization of common
policy objectives that guide [that WTO Member's trade policy ]. A separate consideration of each of
the [restrictions] would therefore go against the nature of the measure, drawing an artificial
segmentation that would not reflect accurately the way in which the measure operates in practice.
Moreover, an individual consideration of the requirements would not capture some of the main
features of the […] measure, namely, its flexibility and versatility."15
11. Having considered the evidence submitted by the complainants and the respondent, the
European Union notes that the proclaimed objectives of Indonesia are those of food self-sufficiency
and the promotion of domestic production. Each individual component of the Indonesian import
licensing regime is permeated by this objective. The European Union agrees with the
complainants16 and Australia as a Third Party 17 that these import licensing regimes as a whole
impose an even greater restriction on imports of animals and animal products on the one side, and
on horticultural products on the other side, than their individual components. Drawing an artificial
segmentation between the different elements applied to imports would not reflect accurately the
way in which the import licensing regime operates in practice with respect to animals and animal
products on the one side, and with respect to horticultural products on the other side. In the view
of the European Union, in addition to the individual requirements that form part of the regime, the
Panel should also consider the effect of Indonesia's import licensing regime on impor ts of animals
and animal products as a whole, and it should also consider the effect of Indonesia's import
licensing regime on horticultural products as a whole.

10 E.g. Panel Report, Korea – Various Measures on Beef, para. 762.
11 Panel Reports, Argentina – Import Measures, para. 6.222.
12 Panel Reports, Argentina – Import Measures, para. 6.225.
13 Panel Reports, Argentina – Import Measures, para. 6.227.
14 Panel Reports, Argentina – Import Measures, para. 6.227.
15 Panel Reports, Argentina – Import Measures, para. 6.228.
16 New Zealand FWS, paras. 198-202; 271-277: US FWS, paras. 210-216; 250-254; 317-326; 359-364.
17 Australia, Third Party Written Submission, para. 60.
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IV. TRADE EFFECTS
12. In paragraph 71 of its First Written Submission, Indonesia notes that th e "Complainants
have not placed on the record any evidence that total import volumes have decreased as a result
of the application windows or validity periods for import licences" (emphasis original). Indonesia
makes similar such statements throughout its Submission. The European Union agrees with the
Panels in Colombia – Ports of Entry and Argentina – Import Measures that "to the extent that a
complainant is able to demonstrate a violation of Article XI:1 based on the measure's design,
structure, and archi tecture, 'it would not be necessary to consider trade volumes or a causal link
between the measure and its effects on trade volumes'". 18 In the view of the European Union, the
limiting effect of the Indonesian measures follows from the design of these meas ures. There was
just no need for the complainants to provide evidence of the effect on trade volumes. This
notwithstanding, the complainants have actually submitted substantial quantitative evidence.
V. ARTICLE XX OF THE GATT 1994
13. Indonesia relies on three exceptions under Article XX of the GATT 1994, lit. (a), (b), and (d),
in order to justify its measures.
14. First, the "public morals" exception. Indonesia claims that in order "to prevent consumer
deception regarding whether certain food products are Halal"19, it limits "imported horticultural
products to uses that naturally require some degree of labelling" 20. The EU understands that the
system works in the way that importers must transfer horticultural imports to a distributor,
whereas distributors are allowed to sell them in traditional markets. If that is so, then Indonesia
has not explained why these restrictions which apply specifically to importers should be justified.
When it comes to imported animal products, the EU understands that Indonesia requires imported
animal products to be Halal (with the exception of products from swine slaughter houses). 21 On
this basis, the EU wonders in what respect consumers should be deceived if those products are
being sold in traditional markets.
15. Second, In donesia claims that some of its measures are "necessary to protect human,
animal or plant life or health", Article XX(b) of the GATT 1994. There is neither evidence that the
Indonesian measures are "necessary", nor does Indonesia seem to have considered le ss
trade-restrictive alternatives. Indonesia's references to Article XX(b) should be dismissed.
16. Third, Indonesia relies on Article XX(d) for some of its measures. The European Union fails
to see which particular law or regulation Indonesia claims that its measures are designed to secure
compliance with. The European Union also considers that Indonesia's evidence and consideration
of "necessity" and "reasonably available alternatives" is lacking.
17. With regard to all three alleged grounds of justificat ions (lit. (a), (b), and (d)), it must also
be noted that they fail the chapeau of Article XX because, in the view of the EU, the measures
constitute part and parcel of the proclaimed food self -sufficiency policy, and are hence a disguised
restriction on international trade.

18 Panel Reports, Argentina – Import Measures, para. 6.264, quoting Panel Report, Colombia – Ports of
Entry, para. 7.252.
19 Indonesia, FWS, para. 159.
20 Indonesia, FWS, para. 159.
21 Australia, Third Party Written Submission, para. 93.
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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ANNEX D-6
EXECUTIVE SUMMARY OF THE ARGUMENTS OF JAPAN
I. Measures with Limiting Effects Under Article XI:1 of the GATT 1994

1. Japan considers that Article XI:1 of the GATT 1994 does not impose a high threshold with
respect to the li miting effects that a measure must have in order to constitute a "restriction ".
Rather, a measure may be found to have limiting effects when it limits competitive opportunities
for imported products1 by limiting the opportunities for importation2.
2. This understanding is consistent with previous cases that have found limiting effects deriving
from a wide range of perspectives and features of the measure at issue. Such features are not
limited to explicit numerical limits on imports, but also include uncert ainties as to whether the
imports are permitted, not allowing importers to import as much as they desire or need, etc.3
3. The following three considerations also support a broad understanding of the concept of
"limiting effects " and accordingly of the te rm "restriction " in Article XI:1 of the GATT 1994, as
argued above. First, it is a fundamental principle of the GATT 1994 that tariffs, to be reduced
through reciprocal concessions and applied on MFN basis, are the sole preferred and acceptable
means of bo rder protection, whereas the other types of trade -restrictive measures are prohibited
unless expressly excluded under Article XI:2 or justified by the explicit exceptions in Article XX of
the GATT 1994.4
4. Second, the measures that are excluded from the p rohibition under Article XI:1 are
specifically stipulated in Article XI:1 itself ("duties, taxes or other charges ") and in Article XI:2.
These express exclusions suggest that all other measures with limiting effects were intended to be
prohibited under Article XI:1.
5. Third, application of a high threshold for the limiting effects could result in circumvention of
GATT disciplines by allowing measures that limit the competitive opportunities for the imported
products through limitations for importation, but that have no justifiable underlying policy
objectives. On the contrary, an import measure (including procedures or formalities to import) that
has the effect of limiting opportunities for importation but serves legitimate public policy purposes
(such as v erifying health/environmental risks of certain import products) could be justified under
the general exceptions provided in Article XX of the GATT, as long as the other specific
requirements under that provision (such as the chapeau or the necessity/relati on requirements
under each subparagraph) have been met. Thus, import restrictions which serve justifiable policy
objectives could be properly addressed under the GATT disciplines, and it is not the case that
legitimate trade-restrictions are unreasonably p rohibited by a broad understanding of the concept
of limiting effects.
6. With regard to the Complainants’ argument that import licensing procedures used to
implement an underlying restriction and that have an additional limiting or restrictive effect may
be inconsistent with Article XI:1 of the GATT 1994 and Article 3.2 of Agreement on Import
Licensing Procedures 5, Japan understands that such import licensing procedures, which are
inconsistent with Article XI:1 of the GATT 1994, could be justified under Ar ticle XX (d) of the

1 Panel Report, Argentina – Hides and Leather, WT/DS155/R, February 16, 2001, para. 11.20 (emphasis
added), citing Appellate Body Report, Japan- Alcoholic Beverages II, WT/DS8/10/11/AB/R, October 4, 1996,
p.16 and Appellate Body Report, Korea-Alcoholic Beverages, WT/DS75/84/AB/R, January 18, 1999, paras. 119-
120 and 127. This finding is referred to in Panel Report, Colombia – Ports of Entry, WT/DS366/R, April 27,
2009, para. 7.236.
2 Panel Report, Dominican Republic – Import and Sale of Cigarettes, WT/DS/302/R, November 26,
2004, para. 7.261.
3 Panel Report, Colombia – Ports of Entry, para. 7.240, Panel Report, Argentina – Import Measures,
WT/DS438/444/445/R, June 26, 2014, para. 6.474 (not reversed by the Appellate Body).
4 See, Appellate Body Report, India – Additional Duties, WT/DS360/AB/R, June 26, 2014, para. 159,
noting also Panel Report, Turkey – Textiles, WT/DS34/R, May 31, 1999, para. 9.63.
5 United States' first written submission, paras. 381-384 and New Zealand's first written submission,
para. 420 (citing Panel Report, China- Raw Materials, paras. 7.955 and 7.957.).
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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GATT 1994, so long as their underlying measure is not inconsistent with the GATT, and to the
extent the licensing procedures fulfill all the other requirements under the chapeau and
subparagraph (d) of Article XX of the GATT 1994. The a vailability of Article XX(d) in these
circumstances also supports a broad understanding of the concept of "limiting effects " and
therefore of the scope of measures prohibited as "restrictions" under Article XI:1.
7. Japan would also like to make comments o n two specific arguments regarding the limiting
effect by Indonesia. First, Indonesia seems to emphasize that the limiting effect should be
"quantitative"6 to the extent that it argues that the effects need to be quantified. 7 Indonesia also
seems to argue that demonstration of an actual trade effect is required to establish the limiting
effect when it asserts that "the Complainants have not presented any evidence that the realization
requirement has had an adverse impact on trade flows ".8 However, the Appel late Body clarified
that "this limitation need not be demonstrated by quantifying the effects of the measure at issue;
rather, such limiting effects can be demonstrated through the design, architecture, and revealing
structure of the measure at issue consi dered in its relevant context ".9 Therefore, the need to
establish trade effects under Article XI:1 has been clearly rejected. Furthermore, Japan
understands that it is enough for the measure to have effects on the opportunities for importation,
and also en ough for the limitation on the quantity or amount to be demonstrated qualitatively
through an examination of the measure’s structure.
8. Second, Indonesia also argues that measures need to be "the direct result of government
action, and not dictated by the actions of private parties ".10 Japan observes, however, that
measures with limiting effects constitute "restrictions " even when there are some actions of
private parties, provided that the private actors are induced to take certain actions in response to
the limitation on the opportunities for importation, given the measure’s design, architecture and
structure. In this case, the measures identified by the complainants are undoubtedly attributable
to Indonesian government, and the actions of private parties alleged by Indonesia are the
inevitable result caused because of the design, architecture, and revealing structure of these
measures.
II. Indonesia’s Invocation of Article XX of the GATT 1994

9. A respondent’ s burden of demonstrating that the challenged m easure meets all of the
requirements of Article XX11 includes not only the burden of invoking the provision, but also of
substantiating its defense with argumentation and evidence sufficient to make a prima facie
case.12 Japan wonders whether what Indonesia presents in its first written submission regarding
Article XX is sufficient to establish a prima facie case, and to overcome Indonesia’s ultimate
burden under Article XX. Indonesia effectively makes only passing references to Article XX, without
providing specific argumentation on the elements that it must establish under that provision.
10. Indonesia’s invocation of subparagraphs (a), (b) and (d) lacks specificity. For example,
Indonesia does not identify the GATT -consistent laws or regulations with which the challenged
measures allegedly seek to secure compliance in accordance with subparagraph (d).

6 Indonesia's first written submission, para. 116.
7 Indonesia's first written submission, paras. 135, 152, 156 and 165.
9 Appellate Body Report, Argentina – Import Measures, para. 5.217.
10 Indonesia's First Written Submission, para.119.
11 See e.g., Appellate Body Report, US – Gasoline, pp. 22-23; Appellate Body Reports, US – Shrimp
(Thailand) /US – Customs Bond Directive, para. 300.
12 Appellate Body Report, US – Gambling, para. 323; Appellate Body Reports, US – Shrimp (Thailand)
/US – Customs Bond Directive, para. 300; Appellate Body Report, Thailand – Cigarettes (Philippines),
para. 180.
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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Therefore, Japan has doubts whether the measure is "necessary " for the stated objective to
prevent consumers’ misunderstanding on whether or not the food is Halal-consistent.
13. Considering that the purpose of Article XX is not on ly to protect the right of a Member to
pursue certain non -trade objectives, but also to balance this right with the duty of that same
Member to respect the treaty rights of the other Members, 15 Japan believes it is of fundamental
importance that a Member in voking Article XX identifies the policy objective with sufficient
specificity, and that it provides sufficient evidence and argumentation to confirm that the measure
is necessary to achieve the specifically identified objectives by weighing and balancing t he above-
mentioned factors, and does not constitute a means of arbitrary or unjustifiable discrimination or a
disguised restriction on international trade.
III. Indonesia’s Arguments based on the developing country status or its
limited resources

14. Indonesia refers several times to its status as a developing country and its limited
resources, particularly in the context of its invocation of Article XX for the purpose of the
justification of its measures. 16 However, there is no basis to apply Article XX mo re flexibly or to
relax the burden of proof because of the limited resources or a developing country status of a
Member who invokes the defense. Rather, the Appellate Body has recognized that, in the context
of the assessment of "necessity ", a Member’s cap acity may be relevant in considering whether an
alternative measure is reasonably available.17 Thus, in the context of Article XX of the GATT 1994,
a developing country status and its limited resources could be properly addressed and taken into
account in weighing and balancing the relevant factors and the burden to prove the satisfaction of
the requirements of Article XX should not be lowered by a mere invocation of a developing country
status.
15. Japan also notes that Indonesia puts particular stress on its limited financial, human, and
other resources. 18 In this respect, Japan agrees with Australia that "[Indonesia’s] explanation
would suggest that these measures are designed to serve a resource allocation purpose ", and
"WTO-consistent measures of enforce ment do not involve [an] onerous shifting of enforcement
costs [to imported goods and retailers of imported goods] which ordinarily are borne by the
Member’s public purse."19

13 Appellate Body Report, Korea –Various Measures on Beef, paras. 162-165; Appellate Body Report,
Brazil – Retreated Tyres, para. 178.
14 Indonesia's first written submission, paras. 158-159 and 166.
15 Appellate Body Report, US–Shrimp, paras. 156 and 159.
16 Indonesia's first written submission, paras. 4, 9, 136, 140, and 142.
17 Appellate Body Report, Brazil – Retreaded Tyres, para. 171.
18 Indonesia's first written submission, paras. 4, 136, 140 and 142.
19 Australia's third party's submission, paras.88-89 (citing Appellate Body Report, Korea – Various
Measures on Beef, para. 181).
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IV. The Issue of "Moving Target"

16. Japan shares the United States’ concern fo r a so -called "moving target " issue. As
"Indonesia, again and again , has made changes to import licensing regimes "20, the United States
recalled the goal of the WTO dispute settlement system, that is to say, "to secure a positive
solution to a dispute ", and stressed that "Indonesia may not avoid scrutiny under the DSU of its
import licensing regimes and constituent prohibitions and restrictions by continually amending or
replacing its regulations."21
17. The Appellate Body observed, in Chile – Price Band System, that legal instruments which are
amended or replaced during panel proceedings could be subject to findings by a panel, to the
extent that the measure remains essentially the same.22 There may be other circumstances which
may justify allowing panels to m ake findings on post-establishment measures. This kind of flexible
approach is useful in avoiding circumvention and contributes "to secur[ing] a positive solution " to
the dispute "23 and a "prompt settlement " of the matter. 24 Thus, Japan considers that if the
regulations which underlie the import licensing regimes at issue are amended or replaced by the
respondent during this panel proceeding and such import licensing regimes remain essentially the
same, the panel could properly address the measures.

20 United States' first written submission, para. 5. (emphasis added)
21 United States' first written submission, para. 6. (emphasis added)
22 Appellate Body Report, Chile – Price Band System, WT/DS207/AB/R, September 23, 2002, para. 139.
23 Article 3.7 of the DSU. (emphasis added)
24 Article 3.3 of the DSU.
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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ANNEX D-7
EXECUTIVE SUMMARY OF THE ARGUMENTS OF KOREA
1. Korea believes that WTO Members have the right to pursue legitimate domestic regulatory and
public policy objectives including public health. This right to regulate should be protected as a
sovereign right of all Members, and is sufficiently reflected in the GATT 1994, as well as the
Agreement on Agriculture.
2. At the same time, Korea is mindful of the other pillar of the WTO trading system, which is to
ensure that "trade flows as smoothly, predictably, a nd freely as possible." Striking the right
balance between pursuing public health objectives, on the one hand, and securing free trade, on
the other, is important to resolving this dispute.
3. Indonesia employs what it says is a transparent and automatic import licensing regime that is
consistent with Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture .
However, Korea notes that under Indonesia’s regulations, applications for import approvals can
only be submitted when certain strict restrictions are met. Such restrictions include ownership of
storage capacity and transportation equipment, and a six month window from the time of harvest
to import fresh horticultural products. We ask the Panel to consider, when reviewing Indonesia’ s
claim that its import licensing regime is transparent , automatic and WTO -consistent, the
practicality and feasibility for applicants to meet these requirements.
4. Indonesia states that the reference price for chi llies and shallots , which prohibits the
importation of these products when the market price in Indonesia falls below the threshold price,
has little or no impact on the issuance of Horticulture Product Import Recommendations (HPIRs),
and accordingly falls outside the scope of Article 4.2 of the Agreement on Agriculture. In this
regard, the Panel needs to once again make a factual determination on what effect the reference
price has in determining the import quantity of chi llies and shallots into Indonesia. Korea’s
assessment is that the referenc e price requirement acts not only as an outright import ban when
prices are low, but also as a trade deterrent and source of uncertainty for importers when prices
are above the threshold.
5. Additionally, Indonesia states that the requirement it imposes on importers to indicate the port
of entry is hardly onerous – and thus falls outside the ambit of Article 4.2 of the Agriculture
Agreement. Indonesia argues that importers are free to choose among multiple designated ports.
However, our experience is that the relevant measure, the Ordinance of the Ministry of Agriculture
(No.42/Permatan/OT.140/6/2012) issued on September 2012 , has significantly reduced the
number of available ports of entry – from the previous eight to the current three, in addition to
one airport. The Ordinance has also resulted in strengthened inspections and the adoption of a
quota system at these ports of entry.
6. We agree with the European Union that Article XI:1 of the GATT 1994 does not bar any and
every condition that burdens or negatively impacts imports. At the same time, previous findings of
the Appellate Body have stated that a measure may be in violation of Article XI:1 of the GATT
even absent numerical limits on imports, such as when competitive opportunities for imported
products have been adversely impacted. In this case, Korea believes that the detrimental effects of
Indonesia’s measures on imports leave little room for ambiguity or doubt as to whether any
threshold set by Article XI:1 of the GATT has been met.
7. In sum, we consider that the cumulative effects of Indonesia’s measures at issue – the limited
time windows within which importers can apply for import permits, the restriction of port of entry
options for importers, the requirement to own storage capacity, the reference price system – rise
to the level of placing what are effectively quantitative restrictions on imports. This, we believe,
violates Article XI:1 of the GATT 1994 and, in turn, Article 4.2 o f the Agreement on Agriculture .
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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ANNEX D-8
EXECUTIVE SUMMARY OF THE ARGUMENTS OF NORWAY
I. THE GATT 1994 ARTICLE XI:1 AND FIXED LICENCE TERMS
1. There is apparently no disagreement between the Parties to the dispute that the term
"restriction" in the GATT 1994 Article XI:1 must be interpreted as something that has a "limiting
effect", which has also been confirmed by numerous panels. 1 Furthermore, the Parties seem to
agree that the only measures excluded from the scope of the provision are those that take the
form of "duties, taxes, or other charges".2
2. Indonesia states in its first written submission that "[m]easures are 'instituted or
maintained' by a Member when they are the direct result of government action, and not dictated
by the actions of private parties".3 Indonesia appears to perceive that the Complainants argue that
importers may not identify their own terms of importation in their import licence in line with the
GATT 1994 Article XI:1.4 According to Indonesia, such "self-imposed terms of importation" are not
measures "instituted or maintained" by Indo nesia, which is one of the requirements for something
to qualify as a restriction within the meaning of Article XI:1.5 Indonesia’s argument appears to rely
on the fact that the regime provides that importers initially define the terms by setting out in the ir
import licence applications the specific type of products to be imported, the country of origin of the
products, and the port of entry through which the products will enter Indonesia. In Norway’s view,
this appears to be a misconstruction of the Complai nants’ arguments, and not pointing to the
measure at issue.
3. As Norway reads the first written submissions of New Zealand and the United States
respectively, their argument is that the fact that the licence terms, as set out in the Horticultural
Product Import Recommendations (RIPHs) and Import Approvals, are fixed, and may not be
altered during a semester that constitutes the restriction as any derogation from these terms is
prohibited.6 In this regard, it is important to bear in mind that both the RIPH s and Import
Approvals are issued with a validity period of six months. As stressed by the Complainants,
previous panels have found that measures imposing the same kind of limits as those found in
Indonesia’s import regime violate GATT 1994 Article XI:1. 7 E.g., the panel in Colombia - Ports of
Entry concluded that restrictions limiting imports from Panama to two ports of entry in Colombia
limit "competitive opportunities", and consequently had a limiting effect on imports arriving from
Panama contrary to Ar ticle XI:1.8 Furthermore, in India – Autos, the panel found that a measure
which in reality has the consequence that an importer would not be "free to import [as much] as
he otherwise might" constituted a restriction. 9 Hence, Norway agrees with the Complai nants that
the fact that the importers are prevented from responding to market fluctuations and other factors
that normally affect importation during the validity periods, as well as taking into consideration
factors related to importation that they did no t predict at the start of the validity period, will have
a limiting effect on trade. The measure challenged is therefore not " private parties determining
import the terms of import licences , as put by Indonesia, 10 but rather the measure limiting what
importers may import.
4. The importers being "free to alter their terms of importation from one license application to
the next"11 does not change the fact that this limitation has a limiting effect in a set semester of

1 See, e.g. Appellate Body Reports, China - Raw Materials, para. 319; Argentina - Import Measures,
para. 5.217.
2 New Zealand's First Written Submission, para. 207; United States' First Written Submission,
para. 142; Indonesia's First Written Submission, paras. 118-120.
3 Indonesia's First Written Submisson, para. 119.
4 Indonesia's First Written Submission, para. 137.
5 Indonesia's First Written Submission, para. 138.
6 New Zealand's First Written Submission, para. 221; United States' First Written Submission, para. 161.
7 New Zealand's First Written Submission, para. 227; United States' First Written Submission,
paras. 165-166.
8 Panel Report, Colombia - Ports of Entry, para. 7.274.
10 Indonesia's First Written Submission, para. 138.
11 Indonesia's First Written Submission, para. 139.
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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six months. Moreover, one must also bear in mind that import opportunities as regards availability
of products etc. may change from semester to another. It not given that what a company has the
"desire and ability to export" 12 at one point in time would also be desired and available many
months l ater. In any event, this will be a restriction on trade contrary to Article XI:1 of the
GATT 1994.
II. THE AVAILABILITY OF THE GATT 1994 TO ART ICLE 4.2 OF THE AGRE EMENT ON
AGRICULTURE
5. From the outset, the chapeau of the GATT 1994 Article XX explicitly refers back to the GATT
itself, by underlining that "nothing in this Agreement shall be construed to prevent the adoption or
enforcement" of the specific measures listed in the provision. However, the Appellate Body has
held that Article XX could be invoked as a defence in relation to non-GATT provisions as well.13
6. Certain covered agreements contain a cross -reference t o Article XX, such as the
TRIMS Agreement, which explicitly incorporates the right to in voke all exceptions of the
GATT 1994. In this reg ard, Norway notes that the panel in Raw Materials stated that "the legal
basis for applying Article XX exceptions to TRIMs obligations is the text of the incorporation of the
TRIMs Agreement, not the text of Article XX of the GATT 1994". 14 Other covered ag reements
include their own exceptions or provide for their own flexibilities, such as the GATS, TRIPS, the
TBT Agreement and the SPS Agreement.
7. In its first written submission, Indonesia invokes Article XX of the GATT 1994 as an
exception to the Agreement on Agriculture Article 4.2.15 According to Indonesia, this interpretation
was confirmed by the panel in Chile – Price Band Systems.
8. WTO case law provides limited guidance as regards the relationship between Article XX of
the GATT 1994 and the Agreem ent on Agriculture, and Norway would welcome clarifications from
the Panel on this issue. It is also a matter of importance as both Article XI of the GATT and
Article 4.2 of the Agreement on Agriculture deal with quantitative restrictions.
9. We note that the Agreement on Agriculture contains neither general exceptions clauses nor
a cross -reference to the GATT 1994 exceptions as in the TRIMS Agreement. We agree with
Indonesia that footnote 1 to Article 4.2 provides guidance on the scope of the article. How ever, we
do not necessarily read the footnote as providing for Article XX being a legal basis for an exception
that a WTO Member may invoke as such to justify violations of Article 4.2. In Chile – Price Bands,
the panel referred to footnote 1 of Article 4. 2 as "excluding from the scope of Article 4.2 those
measures which Members are allowed to maintain in accordance with the provisions in GATT 1994
laying down exceptions to the general obligations of GATT 1994" 16. In light of this, it is in our view
possible to interpret footnote 1 to clarify the flexibilities that exist in Article 4.2 itself. As measures
covered by the exceptions provisions of the GATT 1994 are excluded from the scope of Article 4.2,
Article 4.2 does not impose an obligation for Members not to resort to such measures. In other
words, such measures would therefore not constitute a violation of Article 4.2.
III. THE PRINCIPLE OF JUDICIAL ECONOMY
10. Indonesia requests that the Panel should exercise judicial economy with respect to claims
under Article XI:1 of the GATT 1994 if it finds no violation of Article 4.2 of the Agreement on
Agriculture.17 The Appellate Body has noted that the principles of judicial economy "allows a panel
to refrain from making multiple findings that the same measure is inconsistent with various
provisions when a single, or a certain number of findings of inconsistency, would suffice to resolve
the dispute".18 From a systemic perspective, we acknowledge that exercising judicial economy can

13 See, e.g., Appellate Body Report, China – Publications and Audiovisual Products, WT/DS363/AB/R,
para 233.
15 Indonesia's First Written Submission, paras. 61-62.
16 Panel Report, Chile – Price Band Systems, para. 7.71.
17 Indonesia's First Written Submission, paras. 45-46.
18 Appellate Body Report, Canada – Wheat Exports and Grain Exports, para. 133.
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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also be a useful tool in addres sing challenges related to the comprehensive delays and heavy
workload that the WTO dispute settlement system is facing.
11. However, as stated by the Appellate Body, "[t]he principle of judicial economy has to be
applied keeping in mind the aim of the di spute settlement system. This aim is to resolve the
matter at issue and ‘to secure a positive solution to a dispute’". 19 Hence, the doctrine of judicial
economy does not permit a panel to refrain from addressing claims when this would lead to only a
partial resolution of the matter. Such failure would constitute false exercise of judicial economy
and an error of law. 20 Like Brazil in its third party submission, 21 Norway points out that the
difference in scope between Article XI of the GATT 1994 and Article 4.2 of the Agreement on
Agriculture may require different assessments by a Panel of the two provisions.

19 Appellate Body Report, Australia – Salmon, para. 223.
20 Appellate Body Report, Australia – Salmon, para. 223; Appellate Body Report, Canada – Wheat
21 Brazil's Third Party Submission, para. 6.
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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ANNEX D-9
EXECUTIVE SUMMARY OF THE ARGUMENTS OF PARAGUAY*
presente controversia.
2. La decisión de participar en calidad de tercera parte resulta principalmente del interés
Paraguay, nos referiremos, en primer lugar, al Artículo XI del GATT. En segundo lugar,
derechos de los terceros.
cuanto al uso de restricciones cuantitativas, debido a los efectos negativos que tienen este tipo de
grupo especial encargado de examinar la presente disputa.
Australia, Brasil, Canadá y Unión Europea, tanto en su calidad de productor y exportador de bienes
en acceso a los mercados y la aplicación de medidas en confor midad a las obligaciones resultantes
de los acuerdos OMC.
miras a permitir procedimientos de solución de diferencias más eficientes, sin incurrir en cargas
manifestamos nuestro interés de participar como tercera parte en la disputa DS 484: Indonesia —
Medidas relativas a la importación de carne de pollo y productos de pollo, y estamos evaluando

* Original Spanish. Paraguay's oral statement is being considered as its executive summary.
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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ANNEX D-10
EXECUTIVE SUMMARY OF THE ARGUMENTS OF CHINESE TAIPEI
1. The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, taking into account
the restrictive nature of Indonesia’ import measures for certain fresh horticultural products and in
support of the relevant claims made by the Complainants in the ir first written submissions ,
considers Indonesia’s import licensing measures to be inconsistent with (1) Article 4.2 of the
Agriculture Agreement, (2) Article XI:1 of the GATT 1994 , (3) Article III:4 of the GATT 1994 , and
(4) Article 3.2 of the Import Licensing Agreement.
ARTICLE 4.2 OF THE AGREEMENT ON AGRICULTURE
2. Article 4.2 of the Agreement on Agriculture prohibits Members from maintaining, resorting
to, or reverting to any measures of the kind that have been required to be converted into ordinary
customs duties. This obligation, as the Appellate Body Chile – Price Band System 1 explained,
means that any measures that were required to be converted from the date of entry into force of
the WTO Agreement but were not, would be in violation of Article 4.2.
3. Thus, we are of the view that, as long as Indonesia’s restrictive import licensing measures
for fresh horticultural products have not been included in its Tariff Schedules Section I -B of Part I,
they should be considered in violation of Article 4.2 of the Agriculture Agreement.
ARTICLE XI:1 OF THE GATT 1994
4. Article XI:1 of GATT 1994 prohibits "prohibitions or restrictions" made effective through
quotas, import or export licenses or other measures. In the present case, we consider Indonesia’s
relevant import licensing measures applying to certain fresh horticultural products to be
inconsistent with GATT 1994 Article XI:1 for the following reasons:
5. First, the import licensing measures constitute trade "restrictions" as they add unreasonable
burdens to the importers and effectively limit importation of the products. Previous case law
reinforcing this observation demonstrate s that the wording of Article XI:1 is comprehensive and
the scope of measures referred to in Article XI:1 is very broad.2
6. Second, it has been established by WTO precedents3 that, even if a discretionary import
licensing measure does not contain any specific restrictive wordings on import volume or value,
such a measure may still constitute a de facto restriction. In this case, Indonesia permits imports
of certain fresh horticultural products only when, and to the extent that, domestic supply of those
products is deemed insufficient to meet the demand. Otherwise, the imports are prohibited.4 Thus,
Indonesia’s measure clearly const itutes a restriction on imported products, even without explicit
restrictive wordings.
7. Finally, Indonesia, through the import licensing measures, imposes restrictions, inter alia, on
the port of entry through which the products can be imported. In addit ion, Indonesia limits the
import licenses ’ application windows and the length of their effective periods. All of these
measures have significantly increased the importers’ cost of operation, as well as negatively

1 Appellate Body Report, Chile — Price Band System, paras 201, 206, 207.
2 Panel Report, India – Quantitative Restrictions, para. 5.128; Panel Report, India – Autos,
paras. 7.269-70; Panel Report, Dominican Republic – Import and Sale of Cigarettes, para. 7.261; see also
Appellate Body Reports, Argentina – Import Measures, para. 5.217; Panel Reports, Argentina – Import
Measures, para. 6.455.
3 Panel Report, India – Quantitative Restrictions, paras. 5.130-5.131. (emphasis added); Panel Report,
Argentina – Hides and Leather, para. 11.17; GATT Panel Report, EEC–Import Restrictions, para. 31; GATT
Panel Report, Japan –Semi-conductors, para. 118.
4 Article 36B(1) of the Law of the Republic of Indonesia Number 18 of 2009 on Animal Husbandry and
Animal Health Law (Animal Law) (Exhibit JE-4); Articles 14, 36(1), 36(2) and 36(3) of the Law of the Republic
of Indonesia Number 18 of 2012 Concerning Food (Food Law) (Exhibit JE-2); Articles 30 and 101 of the Law of
the Republic of Indonesia Number 19 of 2013 Concerning Protection and Empowerment of Farmers (Farmers
Law) (Exhibit JE-3).
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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impacting their competitive ness. The same c onclusion was reached by the panel in Colombia –
Ports of Entry.5
ARTICLE III:4 OF THE GATT 1994.
8. Next, we consider Indonesia to be maintaining an import regime that accords less favorable
treatment to imported fresh horticultural products than to domes tic like products. For one,
importers are required to own storage facilities of appropriate capacity , and may only import
volumes commensurate with that storage capacity .6 Furthermore, importers also have to comply
with restrictions on the use, sale and di stribution of the imported products. 7 There are no similar
restrictive measures on domestic like products.
9. The precedents show that requirements that imported and domestic like products be treated
differently, such as a dual retail system for imports an d exports or a requirement for imported
products to be distributed through in-state wholesalers, result in "treatment ... less favorable than
that accorded to like products" from domestic producers, which is inconsistent with Article III:4. 8
Therefore, we are of the view that these measures create unfair conditions for imports, and are
therefore inconsistent with Article III:4 of the GATT 1994.
ARTICLE 3.2 OF THE AGREEMENT ON IMPORT LICENSING PROCEDURES
10. In its first written submission, 9 Indonesia argue d that the import licensing regime is an
automatic one because any importer that meets the clearly defined legal requirements would be
automatically granted an import license, which makes the measures at issue fall outside the scope
of Article 3.2 of the A greement on Import Licensing Procedures. However, under these measures,
certain substantial requirements and restrictions are imposed on the importers as pre-conditions to
apply for Ministry of Agriculture ("MOA") Recommendations and Import Approval. For e xample,
importers are required to demonstrate storage and transportation capacit ies. They are also
required to comply with certain requirements such as restrictions on the use, sale and distribution
of the imported products . Importers not meeting the se requirements will not be able to apply for
MOA Recommendations and Import Approval. Further more, the granting of MOA
Recommendations and Import Approval is dependent on the Indonesian authorities ’ determination
on whether all of these requirements are satisfi ed. Based on the above, w e consider all of these
prerequisite requirements as constituting a "non-automatic" import licensing procedure , resulting
in the prohibition of and restrictions on imports.
11. Moreover, to establish a violation of Article 3.2, the EC – Poultry10 confirms that there must
be a causal link between trade distorting effect and the licensing procedures and requirements,
and in this case we can see that fresh horticultural trade distortive effects are clearly attributable
to Indonesia’s import licensing procedures.
12. Lastly, Article 3.2 requires that a n on-automatic licensing shall be no more administratively
burdensome than "absolutely necessary" to administer the measure. Since the subject import
licensing procedures are for quantitat ive restriction purposes, as the panel noted in EEC – Import
Restrictions,11 we believe that Indonesia ’s import licensing procedures are not consistent with the
requirement of "absolutely necessary", as provided under Article 3.2 of the Agreement on Import
Licensing Procedures.
CONCLUSION
13. In conclusion, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu
supports New Zealand and the United States in their claims against Indonesia’s import regime, and

5 Panel Report, Colombia – Ports of Entry, paras. 7.273-75.
6 Article 8(e) of MOT 16/2013 (Exhibit JE-8), Article 8(2)(c) of MOA 86/2013 (Exhibit JE-15),
Article 13(4) of MOT 40/2015(Exhibit JE-11).
7 Articles 7 and 15 of MOT 16/2013 (Exhibit JE-8).
8 GATT Panel Report, United States —Malt Beverages, para 5.32; See also Appellate Body Report, Korea
– Beef (US), para 186(e).
9 Indonesia's first written submission, paras. 175-176.
10 Appellate Body Report, EC - Poultry, para 121.
11 Panel Report, EC —Tariff Preferences, para 7.211.
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

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submits that its licensing measures for fresh horticultural products are inconsistent with Article 4.2
of the Agreement on Agriculture, Article XI:1 of the GATT 1994, Article III:4 of the GATT 1994 and
Article 3.2 of the Agreement on Import Licensing Procedures.12

WT/DS477/R/Add.1 • WT/DS478/R/Add.1

- E-1 -

ANNEX E
IMPORT LICENSING PROCEDURES FOR HORTICULTURAL PRODUCTS AND FOR ANIMALS AND
ANIMAL PRODUCTS
Contents Page
Annex E-1 Flow chart concerning Indonesia's Import Licensing Procedures for Horticultural
Products
E-2
Annex E-2 Flow chart concerning Indonesia's Import Licensing Procedures for Animals and
Animal Products
E-3
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

- E-2 -

ANNEX E-1
WT/DS477/R/Add.1 • WT/DS478/R/Add.1

- E-3 -

ANNEX E-2