Non-Tariff Measures of The Trading Partner Countries

Sanitary and Phytosanitary and Technical Barriers to Trade are part of the technical measures. Both policies are intended as an act of protection for humans, animals, and plants, and includes a variety of technical regulations and conformity assessment procedures. The use of specific SPS much effect on the agricultural sector and products of animal origin. Cadot et al.

(2012) describe the Sanitary and Phytosanitary as a policy that is applied to protect human life or animals from other substances, contaminants, toxins or disease-causing organisms in food; to protect human life from congenital diseases of both animals and plants; to prevent or limit damage to the country from pests and to protect biodiversity.

2012 2013 2014 2015

Technical Barriers to Trade applied more widely in the various sectors. According to UNCTAD (2013), Technical Barriers is the action that refers to the technical regulations, and conformity assessment procedures with technical regulations and standards, including the measures in the SPS agreement. Technical regulation is a document that establishes the product characteristics or associated with the production process and administrative provisions. It also includes symbols, packaging, or labeling as used in the product, process, or production method.

Whereas the conformity assessment procedure is a procedure used either directly or indirectly to determine that the requirements been relevant or implement standards in technical regulations.

2.2.1. Cocoa

Based on Figure 2.2, total Non-Tariff Measures imposed on export destinations for cocoa in 2016 are as many as 2,351 instruments which are dominated by the Sanitary and Phytosanitary Measures (1476 instruments), Technical Barriers to Trade (448 instruments), Export Related Measures (307 instruments) and others (120 instruments). The phenomenon of an increase in the implementation of the number of Non-Tariff Measures represents the characteristics of a modern economy which consumers are demanding more variety of products and focusing attention on the level of product safety. Consumers are naturally inclined to switch to products with higher quality and more secure when their income increases.

Implementation of the increasingly massive Non-Tariff Measures does not only reflect the shift in consumer preferences also shows that regulators want to minimize the risks related to safety and the environment on products traded. The effect of trade liberalization has resulted in more variety of imported products related to the heterogeneity of product quality also are expected to increase.

Figure 2.2. Total Number of NTM on Cocoa in Export Destination Countries, 2016

Source: WITS - UNCTAD and WTO NTM Database

Meanwhile, at country level, it can be identified that the United States is a country that implements most of the Non-Tariff Measures for cocoa commodities compared to other countries with 926 instruments, followed by Australia (740 instruments), Japan (196 instruments) and the EU (459 instruments), and China (30 instruments). Dominance Sanitary and Phytosanitary is the instrument most widely implemented on imported cocoa products all over the country, followed by the Technical Barriers to Trade.

Europe became the largest market in the world with about 325 million consumers. In the single market, the European Economic Community (EEC or EU) applies a new approach to achieve harmonization and standardization. The new approach is to serve as a legal basis for setting European standards. Producers must observe and implement the safety requirements in each of the goods it produces. Each European country has national standards and technical regulations on their own. Cocoa exporters, including Indonesia if you want to access the European market should pay attention to the various requirements of EU governments. These requirements include quality standards usually associated with the environment, health, safety, labor, and ethics in business (PARLIAMENT, 2002).

Australia China European

Union Japan United

States

Others 96 0 0 11 13

Export-related Measures 228 0 0 26 53

TBT 160 15 105 58 110

2.2.2. Crude Palm Oil (CPO)

As shown in Figure 2.3, total NTM imposed on export destinations for commodities Crude Palm Oil that can be identified are as many as 570 instruments which are dominated by the Sanitary and Phytosanitary Measures (320 instruments), Technical Barriers to Trade (132 instruments), Export Related Measures (90 instrument) and others (28 instruments). The EU is the country with the greatest incidence of Crude Palm Oil Non-Tariff Measures. Some policies inhibit the entry of Crude Palm Oil to the EU with 184 instruments when compared with Australia (176 instruments), US (100 instruments), China (64 instruments), and Japan (46 instruments). Starting in 2021, the European Union is planning to ban the use of palm oil as a biofuel feedstock.

Figure 2.3. Total Number of NTM on CPO in Export Destination Countries, 2016

Source: WITS - UNCTAD and WTO NTM Database

Several other obstacles found to be associated with the policy of Non-Tariff Measures for Crude Palm Oil products are non-automatic licensing and technical requirements in fumigation procedure by Malaysia, the General Administration of Quality Supervision, Inspection and Quarantine to be free from viruses zika by the Chinese state, as well as food safety law set by the EU. In addition, the dispute between Indonesia and the European Union are still happening in the WTO's Dispute Settlement mechanism Biodiesel Products. Indonesian palm oil companies

Australia China European Japan United States

affected by the dumping margins ranging from 8.8% to 20.5%. Basic lawsuit Indonesia as the complainant is:

• EU uses cost adjustment in the calculation of the dumping margin for Indonesia

• EU to apply the amount of profit that is considered high

• Europe concludes biodiesel product from Indonesia has cheaper rates when compared to nutmeg in 2016 that can be identified are as many as 1,345 instruments which are dominated by the Sanitary and Phytosanitary Measures (908 instruments), Technical Barriers to Trade (182 instruments), Export Related Measures (185 instruments) and others (70 instruments).

Meanwhile, if the analysis of inventory Non-Tarif Measures performed, can be identified that the United States is a country that implements most of the non-tariff measures to nutmeg be compared with other States with 496 instruments, followed by Australia (426 instruments), Japan (203 instruments) and the EU ( 132 instruments), and China (88 instruments). Sanitary and Phytosanitary Dominance is an instrument of the most widely implemented in products imported nutmeg whole country followed by the Technical Barriers to Trade.

Figure 2.4. Total Number of NTM on Nutmeg in Export Destination Countries, 2016

Source: WITS - UNCTAD and WTO NTM Database

Australia China European

Union Japan United

States

SPS 150 66 108 193 391

TBT 81 12 24 10 55

Export-related Measures 150 10 0 0 25

Others 45 0 0 0 25

2.2.4 Mango and Mangosteen

In Figure. 2.5, total non-tariff measures imposed on export destinations for mango and mangosteen in 2016 are as many as 2,083 instruments which are dominated by the Sanitary and Phytosanitary Measures (1,971 instruments), Technical Barriers to Trade (48 instruments), Export-related Measures (47 instruments) and others (17 instruments). Meanwhile, it can be identified that the United States is a country that implements most of the non-tariff measures for commodities mango and mangosteen be compared other countries with 1696 instruments, followed by Japan (194 instruments), Australia (96 instruments), China (71 instruments), and the EU (26 instruments). Sanitary and Phytosanitary Dominance is an instrument of the most widely implemented in products imported mango and mangosteen whole country followed by the Technical Barriers to Trade.

Figure 2.5. Total Number of NTM on Mango and Mangosteen in Export Destination Countries, 2016

Source: WITS - UNCTAD and WTO NTM Database

Australia China European

Union Japan United

States

SPS 30 56 22 189 1674

TBT 24 6 4 3 11

Export-related Measures 32 9 0 1 5

Others 10 0 0 1 6

In May 2013, China suspended the import of mangosteen from Indonesia because the Indonesian mangosteen fruit does not meet health requirements. Chinese quarantine agency The General Administration of Quality Supervision, Inspection, and Quarantine (AQSIQ) suggested that the Indonesian mangosteen fruit found any intruder organism of plants (OPT) and heavy metal content that does not comply with the provisions in China. The refusal threatened areas that became the center of the mangosteen fruit producer in Indonesia, such as Tasikmalaya District, Sawahlunto / Sijunjung, Tapanuli, and Agam City.

Indonesian mangosteen exports cannot directly to China, but can be exported via Thailand, Vietnam, and Malaysia. The Government of Indonesia and China have discussed the regulations and import requirements mangosteen for a long time. However, the Chinese side has always postponed the agreement deal because there are still some rules that need to be revised by the Chinese government. In late October 2016, Indonesia has finally taken legal action against China to the World Trade Organization (WTO) since the signing of the protocol has been stalling the import of mangosteen. Indonesian government to enter into the case Specific Trade Concern (STCs). This case is related to the specific regulations or procedures applied by import countries that are inhibited the tariff, as a rule, SPS, and technical barriers to trade.

2.2.5. Premium Rice

Based on Figure 2.6, total Non-Tariff Measures imposed on export destinations for commodities of premium rice in 2016 that can be identified are as many as 801 instruments which are dominated by the Sanitary and Phytosanitary Measures (581 instruments), Technical Barriers to Trade (117 instruments), Export Related Measures (49 instruments) and the others (54 instruments). Meanwhile, if the Non-Tariff Measures inventory analysis performed at the State level, it can be identified that the EU is a country that implements most of the Non-Tariff Measures for premium rice commodity be compared other countries with 576 instruments, followed by Australia (89 instruments), the US (58 instruments), China (50 instruments), and Japan (28 instruments). Sanitary and Phytosanitary (SPS) Dominance is the instrument most widely implemented on premium rice imported products all over the country, followed by the Technical Barriers to Trade.

Figure 2.6. Number of NTM in Premium Rice in Export Destination Countries, 2016

Source: WITS - UNCTAD and WTO NTM Database

Non-Tariff Measures coverage includes all instruments other than tariffs, ranging from labeling requirements to macro coverage that can affect trade policy. It has grown and developed as a fairly massive tariff reduction effort and sometimes eliminated through several comprehensive and preferential trade agreements, such as WTO and earlier, and regional trade agreements (RTA). Within the scope of Non-Tariff Measures, specifically for SPS and TBT have been proliferated/developed. These actions have similarities regarding standard actions, which can affect the costs and potential of demand by attempting to overcome market imperfections and external influences (Beghin, 2013).

Australia China European

union Japan United

States

SPS 30 34 464 19 34

TBT 15 4 80 5 13

Export-Related Measures 35 6 0 2 6

Others 9 6 32 2 5