Jakarta. Indonesia has voiced frustrations over the European Union’s decision to appeal in a stainless steel dispute, citing the years-long paralysis of the World Trade Organization (WTO).

A WTO panel had ruled in favor of Indonesia in a case that slammed the European Union (EU) for slapping countervailing and anti-dumping duties on Jakarta’s stainless steel products. The EU last week went to the crisis-struck Appellate Body that can uphold, modify, or reverse the panel findings. This seven-member body has been unable to hear appeals since late 2019 as the US keeps blocking the appointment of new judges over “judicial activism” concerns.

As any appeals are bound to be in a limbo, Trade Minister Budi Santoso said Thursday that the WTO panel had reviewed the case “objectively”, urging Europe to scrap the duties immediately.

“The panel has come up with a conclusion that the EU’s countervailing duties on Indonesian stainless steel were wrong and had violated the WTO’s rules,” Budi said.

He went on to say how Indonesia was “deeply concerned by the EU’s appeal”, as it had prevented the panel ruling from being adopted. Jakarta acknowledged that the EU had the right to file an appeal as a WTO member, but doing so at a time when the Appellate Body is dysfunctional “would not be constructive to solving the problem”.

“All this time, the EU has portrayed itself as a pioneer in the rules-based system,” Budi remarked.

With no revival of the Appellate Body in sight, the EU has offered to settle the dispute via an alternative mechanism: the so-called Multi-Party Interim Appeal Arbitration Arrangement (MPIA). In 2020, the EU and some WTO members set up the MPIA as a temporary solution to the Appellate Body impasse. Budi signalled that Indonesia did not consider MPIA as the best solution out there.

“We are actually open to exploring options to settle this dispute, but the EU is only limiting its options to its own appeal mechanism: the MPIA,” Budi stated.

EU Ambassador to Indonesia Denis Chaibi recently insisted that Jakarta should be open to the MPIA. 

“We are aware that the Appellate Body doesn’t meet. This is why we call upon Indonesia to join the alternative mechanism [of MPIA]. … So we can find an agreement to move forward on this,” Chaibi told the press a week ago.

In 2023, the EU imposed anti-dumping duties of up to 20.2 percent on Indonesian stainless steel cold-rolled flat products. The same goods of Indonesian origin had been subject to countervailing duties of up to 21.4 percent in the EU market since March 2022. The EU had claimed that the Indonesian government had been illegally subsidizing the stainless steel, which the bloc found to be detrimental to local jobs. Indonesia brought the dispute to the WTO to safeguard its exports.

Indonesia-EU trade totaled $30.4 billion in 2024, government data showed. Indonesia’s surplus also grew from $2.5 billion in 2023 to $4.5 billion the following year. They have also recently wrapped up the negotiations for a highly anticipated free trade pact.

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