Dispute Settlement DS059

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Indonesia — Certain Measures Affecting the Automobile Industry

Short title: Indonesia — Autos
Complainant: United States
Respondent: Indonesia
Third Parties: India; Korea, Republic of
Agreements cited:
(as cited in request for consultations)
GATT 1994: Art. I:1III:2III:4,III:5III:7
Subsidies and Countervailing Measures: Art. 12362728.2
Trade-Related Investment Measures (TRIMs): Art. 2
Intellectual Property (TRIPS): Art.3206565.5
Request for Consultations received: 8 October 1996
Panel Report circulated: 2 July 1998
Article 21.3(c) Arbitration Reportcirculated: 7 December 1998

Consultations

Complaints by the European Communities (WT/DS54), Japan (WT/DS55 and WT/DS64), and the United States (WT/DS59).

On 3 October 1996, the EC requested consultations with Indonesia, on 4 October 1996 and 29 November 1996, Japan requested consultations with Indonesia, and on 8 October 1996, the US requested consultations with Indonesia concerning Indonesia’s National Car Programme. The EC alleged that the exemption from customs duties and luxury taxes on imports of “national vehicles” and components thereof, and related measures were in violation of Indonesia’s obligations under Articles I and III of GATT 1994, Article 2 of the TRIMs Agreement and Article 3 of the SCM Agreement. Japan contended that these measures were in violation of Indonesia’s obligations under Articles I:1, III:2, III:4 and X:3(a) of GATT 1994, as well as Articles 2 and 5.4 of the TRIMs Agreement. The US contended that the measures were in violation of Indonesia’s obligations under Article I and III of GATT 1994, Article 2 of the TRIMs Agreement, Article 3, 6 and 28 of the SCM Agreement and Articles 3, 20 and 65 of the TRIPS Agreement.

On 17 April 1997, Japan requested the establishment of a panel with respect to complaints WT/DS55 and WT/DS64. At its meeting on 30 April 1997, the DSB deferred the establishment of a panel. On 12 May 1997, the EC requested the establishment of a panel with respect to WT/DS54. At its meeting on 23 May 1997, the DSB deferred the establishment of a panel.

 

Panel and Appellate Body proceedings

Further to the EC’s and Japan’s second requests, the DSB established a panel at its meeting on 12 June 1997. In accordance with Article 9.1 of the DSU, the DSB decided that a single panel will examine the disputes WT/DS54, WT/DS55 and WT/DS64. India, Korea and the US reserved their third party rights.

On 12 June 1997, the US requested the establishment of a panel. At its meeting on 25 June 1997, the DSB deferred the establishment of a panel. Further to a second request to establish a panel by the US, the DSB established a Panel at its meeting on 30 July 1997. In accordance with Article 9.1 of the DSU, the DSB decided that a single panel will examine this dispute together with WT/DS54, WT/DS55 and WT/DS64. India and Korea reserved their third party rights.

On 25 July 1997, the EC and Japan requested the Director-General to determine the composition of the Panel. On 29 July 1997, the Panel was composed.

The report of the Panel was circulated to Members on 2 July 1998. The Panel found that Indonesia was in violation of Articles I and II:2 of GATT 1994, Article 2 of the TRIMs Agreement, Article 5(c) of the SCM Agreement, but was not in violation of Article 28.2 of the SCM Agreement. The Panel however, found that the complainants had not demonstrated that Indonesia was in violation of Articles 3 and 65.5 of the TRIPS Agreement. At its meeting on 23 July 1998, the DSB adopted the Panel report.

 

Implementation of adopted reports

Indonesia indicated its intention to comply with the recommendations of the DSB within the time permissible under Article 21 of the DSU. On 8 October 1998, the EC, pursuant to Article 21.3 of the DSU, requested that the reasonable period of implementation be determined by binding arbitration. The Arbitrator determined that the reasonable period of time for Indonesia to implement the recommendations and rulings of the DSB was 12 months from the date of adoption of the Panel Report i.e. it expired on 23 July 1999. The report of the Arbitrator was circulated to Members on 7 December 1998.

By a communication dated 15 July 1999, Indonesia informed the DSB that it had issued a new automotive policy on 24 June 1999 (the 1999 Automotive Policy), which effectively implemented the recommendations and rulings of the DSB in this matter.