Fri, 19 Oct 2018

Brazil won a commercial dispute against Indonesia at the World Trade Organization (OTW) and will be allowed to sell chicken to the country next year, depending on the progress of deliberations. The market represents a $70 million to $100 million potential for Brazil.

The decision settles a dispute started by Brazil in 2014 over Indonesian norms banning Brazilian exports of meat and chicken products. The outcome was announced today (Oct. 17). The conclusion of the panel that considered the case is that the measures, which favor Indonesian goods, violate WTO deals and agreements forged by the country with the organization.

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"We understand, as does the private sector, that the implementation of the panel's recommendations will make it possible to eliminate the barriers on Brazilian imports," said Carlos Cozendey, sub-secretary-general for economic and financial affairs at the Foreign Ministry.

Both countries were given 60 days to file an appeal against the decision. In case neither does, the panel's report will be adopted by WTO's controversy solution body also within a period of 60 days, and both parties will set a term to implement the recommendations, usually six months. Thus, exports are expected to be authorized sometime in 2018.

In practice, Indonesia's chicken market is closed. The decision is to give other countries access to the country's chicken market, among them the US.

In the view of Ricardo Santin, vice-President and markets director at the Brazilian Animal Protein Association (ABPA), Brazil is a competitive country and is likely to grab a sizable slice of the market. Indonesia's population is mostly Muslim, and the main product exported by Brazil to Indonesia is likely to be halal chicken, which is slaughtered in accordance with norms dictated by the Koran.

Brazil has been the biggest exporter of halal chicken since 2004. Brazil holds approximately 40% of all of the world's chicken market. In 2016, exports of frozen chicken, fresh or refrigerated total $5.95 billion, representing 3.2% of Brazilian exports and ranking fifth among the most exported Brazilian goods.

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