Indonesia plans to again challenge the European Union's anti-dumping measure on fatty alcohol at the World Trade Organisation (WTO) after one-year bilateral talks did not achieve consensus.
The government would soon request the establishment of a new panel at the WTO's Dispute Settlement Body (DSB) to decide on the case as the negotiations on price undertaking failed, the Trade Ministry's trade defence director Oke Nurwan said Tuesday.
"Apart from the price undertaking, the EU has also demanded other requirements that are impossible for us to meet and restrictions that we are not willing to make. That's why we will advance to the WTO again," he told The Jakarta Post on the sidelines of a press conference on foreign trade.
The DSB already set up a panel to settle the case on June 25 last year based on Indonesia's request.
The request was made as one of the affected exporters, PT Musim Mas, claimed that the 28-member bloc applied an unfair anti-dumping duty on the grounds of the firm's price undercutting.
In its ruling in November 2011, the European Commission, which is the EU's executive body, charged the Medan-based palm oil supplier with punitive tariffs totaling ¤45.63 (US$59.85) per ton based on its conclusion that the firm sold fatty alcohol at a price lower than that in its domestic market.
However, the panel did not progress to the next level of dispute settlement as Indonesia agreed to hold bilateral discussions with the grouping to solve the issue.
Oke further explained that Indonesia had a strong case because the EU had ignored the arguments it conveyed.
"It missed one procedure in this case and we proposed our defence on the issue, but it did not pay attention to what we suggested," he said without providing further details.
Based on the record of the case at the global trade governing body, Indonesia protested the EU's move to treat two local fatty-alcohol exporters under investigation differently although the relevant circumstances of the two exporters were identical.
Earlier, the European Commission imposed an ¤80.34 anti-dumping duty on another Indonesian firm, PT Ecogreen Oleochemicals, and later discounted the tariff.
Fatty alcohols, materials used in a wide range of personal care products, such as cosmetics, soaps and shampoos, are made from palm kernel oil, of which Indonesia is the world's largest producer.
Indonesia has dealt with recurrent trade remedy cases with the EU involving palm oil derivatives, including fatty alcohols.
Earlier this year, the country filed a formal complaint with the WTO over the EU's anti-dumping duty on biodiesel, which created a barrier for exports from Southeast Asia's largest economy. Indonesia is expecting the body to set up a dispute panel to process the case soon.
Indonesian palm oil exporters are facing another challenge from India, which is currently investigating a surge in imports of fatty alcohols.
India has been the top destination for palm oil shipments from Indonesia. Last year the East Asian country imported around 6.1 million tons of palm oil, comprising crude palm oil (CPO) and refined oils, from Indonesia. The figure was a 5.17 per cent increase from 2012.
The Trade Ministry has estimated that sales of fatty alcohol to India could plunge by between 30 per cent and 40 per cent per year due to the ongoing probe. Overall fatty alcohol exports to India annually amount to around $120 million.