Indonesia Seeks $2.8–$5.6 Billion
Retaliation Against EU in Palm Oil Dispute; WTO Panel Formed in EU–China SEP
Patent Licensing Case
A WTO arbitrator was tasked on 19 March with determining the level of trade suspension
Indonesia may impose on the European Union in the palm oil biofuels dispute, following
Indonesia's request to suspend concessions worth US$ 2.8-5.6 billion annually. At
the same meeting, the Dispute Settlement Body (DSB) also agreed to the EU's second
request for a panel to review Chinese measures on global licensing terms for standard
essential patents
DS593: EU – Palm Oil Biofuels Dispute
·
Indonesia’s Request: Authorization to suspend concessions against the EU worth US$ 2.8–5.6
billion annually.
·
Reason: EU failed to comply with the panel ruling by the deadline of 24 February
2026.
·
Scope of Suspension: Goods, services, and/or intellectual property rights.
·
EU’s Position: Strongly objected, arguing Indonesia’s proposal violates WTO rules. Offered
a sequencing agreement, but Indonesia rejected it as untimely.
·
Outcome: DSB referred the matter to arbitration under DSU Article 22.6 to
determine the level of suspension.
DS632: China – Licensing Terms for Standard
Essential Patents (SEPs)
·
EU’s Complaint: China’s measures restrict patent owners from exercising rights for non-Chinese
patents globally, undermining territoriality of patents and limiting freedom
to negotiate licensing contracts.
·
China’s Response: Called the EU’s move “deeply disappointing,” arguing the issue is complex,
novel, and based on flawed interpretations.
·
Outcome: DSB agreed to establish a panel.
·
Third Parties: Japan, Canada, Colombia, Australia, Brazil, UK, Viet Nam, Norway, Switzerland,
US, Singapore, Pakistan, Russia, Indonesia, and India reserved rights to participate.
Next Steps
·
Arbitration: WTO arbitrator to decide Indonesia’s permissible level of trade suspension
against the EU.
·
Panel Proceedings: EU vs. China SEP licensing dispute to move forward.
[ABS News Service/20.03.2026]
DS593: European Union - Certain
Measures Concerning Palm Oil and Oil Palm Crop-Based Biofuels
On
9 March, Indonesia submitted a request for authorization to suspend concessions
with respect to the European Union as a result of what it said was the EU's failure
to bring its measures into compliance with the panel ruling in DS593.
Indonesia
told a special DSB meeting on 19 March that the reasonable period of time for the
EU to comply with the ruling was 24 February and that, in its view, the EU failed
to ensure compliance by that date. As a result,
Indonesia said it was requesting DSB authorization to suspend concessions on goods
and/or other sectors (services sectors and/or intellectual property rights) at an
annual level estimated at between US$ 2.8 billion and US$ 5.6 billion per annum. Indonesia said the proposed level of suspension
reflects the adverse effect and the nullification or impairment of benefits suffered
by Indonesia's palm oil industry since the implementation of the EU measures.
The
European Union said it strongly objects to Indonesia's proposed level of suspension
and said the proposal was not in line with requirements under the WTO's Dispute
Settlement Understanding (DSU). The EU also
said that it had offered Indonesia a so-called sequencing agreement which would
remove any procedural uncertainty regarding Indonesia's right to pursue its request.
Indonesia
said the absence of a sequencing agreement at this stage is a direct consequence
of the untimely nature of the EU's offer, which did not allow sufficient time for
meaningful domestic engagement with its domestic industry.
The
DSB agreed to refer the matter to arbitration, as required by Article 22.6 of the
DSU.
DS632: China - Worldwide Licensing
Terms for Standard Essential Patents (SEPs)
The
European Union submitted its second request for the establishment of a dispute panel
with respect to Chinese patent licensing measures. China had said it was not ready
to accept the EU's first request for a panel at the DSB meeting on 24 February.
The
EU reiterated its claim that China's measures unduly restrict the ability of patent
owners to exercise and enforce their rights for non-Chinese patents in the territories
of WTO members that grant those patents and that these measures undermine the principle
of territoriality of patents. Moreover, patent owners cannot freely negotiate and
conclude licensing contracts for the use of their non-Chinese patents in other territories.
Consultations with China failed to resolve the matter, the EU said.
China
said it was deeply disappointed with the EU's decision to proceed with its panel
request. The underlying issue in this dispute
- the transnational litigation of private disputes concerning global royalty rates
for SEPs - is both complex and novel, and no international resolution is currently
available, it said.
China
said it has serious concerns regarding the EU's approach, which seeks to rely on
a materially flawed interpretation in a recent dispute to support its claims. China
said it will rigorously defend its measures in the panel proceedings and is confident
that a panel will find them fully consistent with WTO rules.
The DSB agreed to the establishment
of the panel.
Japan,
Canada, Colombia, Australia, Brazil, the United Kingdom, Viet Nam, Norway, Switzerland,
the United States, Singapore, Pakistan, the Russian Federation, Indonesia and India
reserved their third-party rights to participate in the proceedings. Other delegations
wishing to reserve their third-party rights must do so within the next 10 days after
this meeting through a written communication.
Next meeting
The
next regular DSB meeting is scheduled for 21 April.