Trade agreement with Indonesia expected to open major market for American beef
On Feb. 19, President Donald Trump and several Indonesian officials signed an Agreement on Reciprocal Trade to eliminate tariffs on multiple U.S. products exported to Indonesia, including major agricultural products like beef.
The trade agreement is expected to significantly expand export opportunities for American cattle producers, granting duty-free access to one of the world’s largest consumer markets and removing barriers which have long limited U.S. beef sales.
Removing longstanding barriers
Under the agreement, Indonesia will remove tariffs on 99 percent of U.S. products, including those in the agriculture, health, seafood, information and communications technology, automative and chemical industries.
The U.S. will maintain a 19 percent reciprocal tariff on Indonesian exports, excluding certain products for which the tariff will be eliminated, and will allow a certain volume of Indonesian textile and apparel goods – which is yet to be determined – at a zero percent reciprocal trade.
In addition, Indonesia committed to purchasing more than $4.5 billion in U.S. agricultural products and pledged to increase imports of U.S. beef, corn, corn gluten meal, soybeans, soybean meal, wheat, ethanol, rice, fresh fruit and cotton, as part of a broader investment framework valued at approximately $33 billion across the ag, aerospace and energy sectors.
According to multiple sources, one of the most significant changes outlined in the agreement is Indonesia’s recognition of the U.S. Department of Agriculture’s authority over food safety and animal health, which officials believe will remove regulatory obstacles previously slowing down or preventing the approval of U.S. beef shipments.
Indonesia also agreed to exempt agricultural products from restrictive import licensing systems and commodity balance policies, which had effectively capped U.S. imports and limited consistent access to the market.
Specifically, the agreement removes barriers for U.S. pork exports by expanding plant approvals and eliminating restrictive licensing requirements, creating new opportunities for American pork producers.
The dairy industry is expected to benefit as well, with Indonesia eliminating tariffs on U.S. dairy products, recognizing U.S. regulatory oversight and streamlining facility registration requirements which previously slowed exports.
In a statement published on Feb. 19, U.S. Trade Representative Ambassador Jamieson Greer says, “President Trump is unlocking Indonesia’s market of over 280 million people to create commercially meaningful opportunities for American farmers and manufacturers. This landmark agreement breaks down trade barriers while advancing the economic and national security interests of the American people.”
A major breakthrough for beef
Also within the newly signed Agreement on Reciprocal Trade, Indonesia agreed to purchase at least 50,000 metric tons of U.S. beef and beef products annually, which industry leaders believe may quickly translate into hundreds of millions of dollars in export value.
Ag groups like the U.S. Meat Export Federation (USMEF) and National Cattlemen’s Beef Association (NCBA) praised the move, noting the agreement addresses restrictions that have kept U.S. beef of Indonesia for far too long.
“Currently, Indonesia is essentially closed to U.S. beef due to its trade-limiting import licensing system and effective cap on imports,” states USMEF President and Chief Executive Officer Dan Halstrom. “The new agreement addresses these barriers and will allow Indonesian importers and consumers to have meaningful, consistent access to U.S. beef for the first time.”
Halstrom goes on to estimate the agreement could potentially generate $400 million to $500 million in annual U.S. beef export value once fully implemented.
NCBA President and Virginia Cattleman Gene Copenhaver comments, “U.S. beef exports to Indonesia have faced numerous tariff and non-tariff trade barriers, which has made it incredibly difficult to develop any type of market presence. With this agreement, American cattle producers now have access to the fourth most populous country, the largest halal beef market in the world and more opportunities for producer profitability.”
“When combined with the Taiwan trade deal signed on Feb. 12, U.S. cattle producers now have more market access than they have had in decades,” Copenhaver continues. “NCBA thanks Trump and Greer for their diligent work to sign this trade deal to the benefit of American producers.”
Hannah Bugas is the managing editor of the Wyoming Livestock Roundup. Send comments on this article to roundup@wylr.net.
