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Indonesia rejected at a World Trade Organization meeting on Tuesday a US demand for a panel to settle a dispute over Jakarta's restrictions on imports of a range of agricultural products.
The United States had complained over Indonesia's "broad use of import licensing measures that restrict imports" on products like fruit, vegetables, flowers, dried fruits, juices and meat, as well as live animals, a source close to the matter said.
According to WTO rules, all member countries are permitted to reject a first request for the creation of a trade dispute panel.
However, if the United States renews its request, Indonesia will be required to accept.
In its call for a panel, the United States criticised the Indonesian import licensing system as "opaque and complex", charging that it appeared to be "inconsistent with Indonesia's WTO obligations" and thereby causing "a significant adverse impact" on US exports to the country.
In its rejection, Indonesia said it was preparing a response to the some 100 questions submitted by the United States on the issue and that it was reviewing its regulations.
The European Union and Canada meanwhile both expressed "reservations" and "significant systemic concerns" after Indonesia refused to allow them to take part in consultations with the United States prior to the panel request.