As widely known, Indonesia lost the case filed by the European Union at the WTO regarding the ban on nickel ore exports implemented in 2019. The legal battle over Indonesia’s trade loss seems unending. After the official announcement of defeat in October 2022, the government decided to continue fighting against this setback.
The dispute originated from the government’s decision to halt the export of raw mineral materials, specifically nickel ore, to encourage domestic processing and create significantly higher value-added products.
President Joko Widodo’s reaction was revealed upon learning of Indonesia’s defeat in the World Trade Organization (WTO) over the nickel ore export ban. Minister of Investment and Head of the Indonesia Investment Coordinating Board (BKPM) Bahlil Lahadalia disclosed that when he informed Jokowi of the defeat in October 2022, the President’s response was, “Be careful, indeed, when a village person becomes the President, their leadership is strong. What did the President say? Mr. Bahlil, this country is independent; it has its government and its people protected by the law. We must not surrender to any country that wants to press us. Let’s fight against the European Union at the WTO,” as reported by CNBC Indonesia.
Jokowi’s statement indicates a lack of comprehension. He fails to understand the etiquette of international trade that has been collectively agreed upon since 1995.
Indonesia became a member of the World Trade Organization (WTO) on January 1, 1995. As a member, Indonesia has signed multilateral agreements that regulate international trade and trade policies. One of the key agreements Indonesia signed is the Marrakesh Agreement, which established the WTO.
The signing of this agreement involved WTO member countries, and the Marrakesh Agreement encompasses the formation of the WTO, along with rules and principles governing international trade. Since then, Indonesia has participated in various trade negotiation rounds under the auspices of the WTO to discuss various aspects of global trade.
For countries that are signatories to WTO agreements, membership in the WTO holds several meanings and impacts. Here are some significant aspects for signatory countries:
- Access to Global Markets: WTO membership grants Indonesia access to markets of other member countries, promoting freer participation in international trade. By committing to WTO principles, such as equal and non-discriminatory treatment of other members, countries can access global markets and reduce trade barriers.
- Legal Certainty: WTO provides a regulatory framework for international trade, covering rules related to tariffs, non-tariff barriers, intellectual property rights, and more. WTO membership offers legal certainty to signatory countries regarding global trade rules.
- Dispute Resolution Mechanism: WTO has a dispute resolution mechanism that member countries can use to settle their trade disputes. This mechanism provides an official platform for countries to resolve disputes without engaging in direct conflicts.
- Negotiation Opportunities: WTO periodically conducts negotiation rounds to address trade issues and reach new agreements. WTO membership gives signatory countries the opportunity to participate in these processes and influence the shape of global trade rules.
- Protection Against Discriminatory Actions: WTO membership provides protection against discriminatory actions by other countries. Countries can file complaints if they feel unfairly treated by other WTO members.
It is essential to note that while WTO offers benefits to many countries, there are also criticisms of the organization, particularly regarding the inequality in trade agreements and their impact on economic and social development.
