WTO panel rules against Indonesia’s export limitations on raw materials

(Credit: Unsplash)

This article is brought to you in association with the European Commission.


The EU welcomes the World Trade Organization’s (WTO) clear ruling confirming that Indonesia’s export ban and domestic processing requirement on nickel ore violates WTO rules. The WTO panel report was made public today.

The WTO panel upheld all EU claims against Indonesia. First of all, it found that Indonesia’s export ban and domestic processing requirement on nickel ore, which is used in the production of stainless steel, are inconsistent with the WTO’s prohibition of export prohibitions and restrictions contained in Article XI:1 of the GATT 1994.

Moreover, the panel confirmed that the Indonesian measures do not fall under the exemption for prohibitions or restrictions temporarily applied to prevent or relieve critical shortages of products essential to Indonesia, as contained in Article XI:2(a) of the GATT 1994. The panel also found that the measures are not justified by the exception for measures necessary to secure compliance with relevant laws and regulations in Article XX(d) of the GATT 1994.

Background

Indonesia has had long-standing and varying restrictions affecting nickel ore exports. A full ban on the exports of nickel ore has been in place since January 2020, while domestic processing requirements on nickel ore have obliged businesses to process or purify the raw materials in Indonesia prior to export.

These measures unduly and illegally restrict EU access to raw materials needed for stainless steel production and distort world market prices of ores.

The EU reached out to Indonesia to try to resolve the dispute before requesting consultations at the WTO in November 2019. After these did not lead to a resolution, the EU requested the establishment of a Panel in January 2021.

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