Indonesia is threatening to take Australia to the international trade umpire over its "discriminatory" decision to suspend live cattle exports.
Agriculture Minister Joe Ludwig on Wednesday banned cattle from being sent to Indonesia for up to six months following a public outcry over their mistreatment in local abattoirs.
But the ban has earned the ire of Australian farmers and exporters, and now Indonesia.
"We hope that this is not mainly a special policy for Indonesia," its deputy agriculture minister Bayu Krisnamurthi told reporters in Jakarta.
"If only applied to Indonesia, this is discriminative and we will submit (a complaint) to the WTO (World Trade Organisation).
"There are several other countries importing from Australia facing the same (animal welfare) situation."
Senator Ludwig was on the phone to Indonesia prior to making the decision but Australia's ambassador to the southeast Asian country, Greg Moriarty, has been called in to explain it again, a sign bilateral relations may already be under strain.
Senator Ludwig is also under fire for failing to answer calls for compensation, given concerns over existing contracts and the thousands of cattle waiting to be exported at Australian wharves.
The minister couldn't say how many shipments might be affected but the industry insists there are major questions about how to proceed.
Asked if industry players could expect compensation, Senator Ludwig said he was keen to discuss the issue with stakeholders.
"I do accept that there's been impacts to industry, but let's not, let's not divert from where we are," he said in Brisbane.
"We are here because of the animal welfare outcomes."
Although some have applauded the move, others, including the Australian Greens and independents Andrew Wilkie and Nick Xenophon, say the government should go further and end all live animal exports.
They plan to launch private bills in parliament during the next sitting, which begins on Monday - the Greens wanting an immediate ban, and the independents happy with a three-year phase-out.
Former policewoman turned animal activist Lyn White, who shot the original footage that sparked the whole debate, said she won't rest until all live animal exports are stopped.
"We're still sending animals to about a dozen other countries where there are no laws to protect them from cruelty," she said.
But Senator Ludwig has hinted ending the entire $1 billion live export sector was a step too far, arguing a sustainable industry is the government's key priority.
He defended his rejection of a livestock industry plan to send only cattle to Indonesia's top 25 abattoirs, five of which use the preferred method of stunning prior to slaughter.
Senator Ludwig, who admitted he was not an expert on the livestock industry, said it was important the entire supply chain was reviewed.
He would not comment on reports Indonesia would be looking elsewhere to fill its large beef void, saying he wasn't going to speculate about another government's actions.
A spokeswoman from Senator Ludwig's office later said Australia stood by the suspension, despite Indonesia's threats.
"Australia has the right under World Trade Organisation rules to take actions to ensure that Australian cattle are treated in accordance with international standards on animal welfare," she said in a statement.
She also noted that the suspension could be lifted early or as soon as Indonesia's slaughter processes are brought up to standard.
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