Indonesia as a Target for EU Trade Remedy Measures – What Indonesian Exporting Producers Should Know
The European Union (EU) actively uses anti-dumping and anti-subsidy (or countervailing duty) investigations to protect the EU industry. Imports from Indonesia are a prime target for these investigations. Since 2003, imports from Indonesia were targeted in 15 anti-dumping and anti-subsidy investigations, and four of these investigations were initiated in the last three years.
As the Indonesian manufacturing industry continues to expand, Indonesian exporters and their EU importers should be aware of EU action in the anti‑dumping and anti-subsidy space, so that they can implement a compliance, prevention, and action strategy.
EU Actions Against Indonesian Imports
In anti-dumping investigations, the EU assesses whether Indonesian goods are sold on the EU market at a price that is lower than the “normal value” of the goods. In anti-subsidy investigations, the EU checks whether imports from Indonesia benefit from countervailable government subsidies, such as access to low-priced raw materials.
If the EU imposes anti-dumping or anti-subsidy duties, the duties apply for 12 years on average. The duties are set at individual (typically lower) levels for those exporters who cooperate fully in the investigation and at residual (typically higher) levels for exporters who do not cooperate. Duty levels are significant. For instance, the EU imposed duties of 9.3 to 20.2% on imports of cold-rolled stainless steel from Indonesia, and 15.2 to 46.4% on imports of fatty acids from Indonesia. The duties typically decimate or altogether halt EU imports of the products at issue.
Be Prepared for Anti‑dumping/Anti-subsidy Investigations
Anti-dumping and anti-subsidy investigations risk significantly upsetting export sales to the EU and supply chains, for considerable periods of time. The best way to mitigate the potential impact of anti-dumping or anti-subsidy duties is by getting prepared.
- Indonesian companies that routinely export products to the EU should monitor and, if need be adjust, their costs and pricing practices, both to domestic and EU customers. This will help obtain a better outcome in an investigation.
- Indonesian exporters should evaluate their sales structure for sales to the EU, and optimize the structure where needed to reduce exposure to anti-dumping and/or anti-subsidy duties.
- Further preparations include playbooks, trainings, and monitoring of macro-economic data.
Companies that are prepared get significantly better outcomes in anti-dumping and/or anti-subsidy investigations, primarily in the form of a lower duty rate. Obtaining a lower duty rate not only limits the cost of doing business, but can also serve as a competitive advantage compared to Indonesian competitors.
How Baker McKenzie Can Help
Baker McKenzie’s uniquely global international trade team, including HHP lawyers – as a member of Baker & McKenzie International – in Indonesia, is ideally placed to help Indonesian exporters prepare for EU anti-dumping and/or anti-subsidy investigations. Our team members in the EU and Indonesia would be pleased to discuss what your company needs to mitigate the risk of EU anti-dumping and/or anti-subsidy duties.
More generally, our team consists of professionals in all main jurisdictions for anti-dumping and anti-subsidy matters, including Argentina, Australia, Brazil, Canada, China, the EU, the Gulf, Indonesia, Japan, Kazakhstan, Malaysia, Mexico, Peru, South Africa, Taipei, Thailand, Turkey, Ukraine, the United Kingdom, the United States, Venezuela, and Vietnam, in addition to dedicated economists and a Geneva-based team focused on anti-dumping and anti-subsidy issues at the World Trade Organization.
Trade, trade remedies, trade defense instruments, anti-dumping, anti-subsidy, countervailing duties