The reciprocal trade agreement between the U.S. and Indonesia which was signed on February 19th stands to have a positive impact on the prospects for poultry exports to one of the world’s largest markets. Indonesia will allow imports of U.S. chicken parts, including leg quarters, breasts, legs, and thighs.
USAPEEC estimates that if Indonesia were to permit imports of U.S. chicken products, the short-term potential would be about 115,000 metric tons valued at $127 million. However, the long-term potential could be far greater. The annual per capita chicken consumption in Indonesia was about 15.8 kilograms in 2023 according to the Food and Agriculture Organization of the U.N. (FAO), which is far less than the average of 18.7 kilograms in all other ASEAN countries in the same year.
If per capita chicken consumption in Indonesia reaches 18.7 kilograms by 2030, an estimated gap of 857,000 metric tons will have to be filled by increased production and imports. It is unlikely that domestic chicken production will be able to fill the bulk of this amount given how heavily dependent Indonesia’s industry is on the importation of basic feed products that are becoming more in demand around the world.
Here are some key provisions of the deal:
1) Indonesia shall accept the FSIS Meat, Poultry and Egg Product Inspection (MPI) Directory, which lists all federally inspected establishments producing meat, poultry and egg products regulated by FSIS, as the official list of U.S. establishments eligible to export meat, poultry (including offal), meat and poultry products, processed meat,poultry and egg products to Indonesia.
2) Indonesia shall accept digitally signed FSIS Form 9060-5 series certificates signed by any FSIS authorized personnel.
3) Indonesia shall impose no additional product registration or facility registration requirements on U.S. meat and poultry (including offal), meat and poultry products, processed meat, poultry, and egg products.
4) Indonesia shall not apply import licensing to U.S. goods in a manner that restricts the importation of such goods. Indonesia shall ensure that any non-automatic import licensing that it applies is applied only to administer an underlying measure, and in a manner that is transparent, nondiscriminatory, and not unduly burdensome, and that does not reduce the competitiveness of U.S. exports.
5) Within six months of the date of entry into force of the agreement, Indonesia shall decrease the scope of HPAI regionalization of the United States to a 10km zone for live poultry, poultry genetics, poultry products, or eggs and egg products. Indonesia shall ensure that any import restrictions imposed on U.S. live poultry, poultry genetics, poultry products, or eggs and eggs products in response to outbreaks of HPAI are limited to the 10km zone in which the outbreak was confirmed. Poultry and products originating outside of the 10km zone shall continue to be eligible for import.
6) Indonesia shall allow the importation of chicken parts, which includes items such as leg quarters, breasts, legs, or thighs.
Halal requirements also were addressed. Some key points:
1) Indonesia shall accept U.S. slaughter practices that comply with Islamic law or standards of any country that is a member state of the Standards and Metrology Institute for Islamic Countries (SMIIC).
2) Indonesia shall exempt non-animal products and animal feed, whether genetically engineered or not, from any halal certification and halal labeling requirements.
3) Indonesia shall exempt containers and other materials used to transport food and agricultural products from any halal certification and halal labeling requirements.
4) Indonesia shall exempt U.S. packing, storage, and warehousing companies in the supply chain of halal-certified U.S. agricultural exports to Indonesia from any halal competency testing and certification requirements for their employees.
5) Indonesia shall not adopt or maintain any measure that requires U.S. companies to appoint a halal subject matter expert to oversee company operations.
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