With the announcement of the U.S. and Indonesian framework for a trade agreement, more access for U.S. beef and pork could become a reality.
U.S. Meat Export Federation Vice President of Economic Analysis Erin Borror says the U.S. has had limited access to Indonesia. While tariffs are low at 5%, significant non-tariff trade barriers that have also been in place. These include import licensing regime, the commodity balance and facility registration, or plant-by-plant approvals for U.S. beef.
“Those kind of three pillars of market access barriers are how Indonesia has really managed imports for decades at this point,” Borror says.
Removing all non-tariff barriers would open the doors for beef demand in Indonesia.
“The opportunity there is $250 million annually,” Borror says. “That’s a short run estimate. If we remain out of that China market, having Indonesia compete on these short plates, short ribs, chuck short ribs, a number of the offal items, would be tremendous.”
In addition, U.S. pork faces similar trade barriers in Indonesia, a country with 30 million non-Muslims who have shown a growing demand for U.S. pork. Exporters and importers have seen that barrier in action so far this year.
“Trying to manage those pork imports through its variety of commodity balance and import licensing regimes, we’ve already had a doubling in our volumes to Indonesia on the pork side, albeit from a small base, but you see that strong growth,” Borror adds. “African Swine Fever remains rampant kind of in the region.”
She sees potential as Indonesian customers keep asking for more U.S. pork.
