World Trade Organization | WT/DS54/R WT/DS55/R WT/DS59/R WT/DS64/R
2 July 1998 (98-2505) Original: English |
Indonesia - Certain Measures Affecting the Automobile Industry
Report of the Panel
The report of the Panel on Indonesia - Certain Measures Affecting the Automobile Industry is being circulated
to all Members, pursuant to the DSU. The report is being circulated as an unrestricted document from 2 July
pursuant to the Procedures for the Circulation and Derestriction of WTO Documents (WT/L/160/Rev.1). Members are
reminded that in accordance with the DSU only parties to the dispute may appeal a panel report. An appeal shall
be limited to issues of law covered in the Panel report and legal interpretations developed by the Panel. There
shall be no ex parte communications with the Panel or Appellate Body concerning matters under consideration
by the Panel or Appellate Body.
Note by the Secretariat: This Panel Report shall be adopted by the Dispute Settlement Body (DSB) within
60 days after the date of its circulation unless a party to the dispute decides to appeal or the DSB decides by
consensus not to adopt the report. If the Panel Report is appealed to the Appellate Body, it shall not be
considered for adoption by the DSB until after the completion of the appeal. Information on the current status
of the Panel Report is available from the WTO Secretariat.
TABLE OF CONTENTS
I. Introduction
II. Factual Aspects
III. Findings and Recommendations Requested by the Parties
IV. Request for Preliminary Rulings
V. Claims Under Article III of GATT 1994
D. General Response by Indonesia to Claims under Article III
of GATT 1994 -SCM Agreement prevails
1. The SCM Agreement is the lex specialis for review
of the 199 and 1996 subsidy programmes, which Indonesia, as a developing country, is permitted to maintain
2. Indonesia's luxury tax subsidies to the automotive industry
are governed by the disciplines of the SCM Agreement and not by Article III of the GATT 1994
(a) Both the 1993 incentive programme and the February 1996 National Car Programme
subsidize certainautomobile producers by granting reduced luxury tax
(b) Subsidies are governed by and subject to the disciplines of the SCM Agreement
(c) General rules of treaty interpretation preclude finding
that a subsidy permissible under the SCM Agreement is proscribed by Article III of the GATT 1994
(d) The proper interpretation of Article III:8(b) of the GATT 1994
supports the view that Article III does not override the SCM Agreement
(e) In a conflict between the SCM Agreement and Article III of the GATT 1994,
the SCM Agreement prevails
(f) The SCM Agreement defines subsidies and sets out all of the rights and obligations
pertaining to them
(g) The definition of "subsidy" in the SCM Agreement is all-encompassing,
contrary to the United States assertion
(h) Article VI:5 of the GATT 1994 is irrelevant
and serves to limit a Complainant's unilateral remedy
(i) The United States' interpretation of Article 32.1, footnote 56,
of the SCM Agreement is flawed
(j) Indonesia's right, as a developing country, to maintain domestic-content subsidies
is subject only to Indonesia's obligation not to cause serious prejudice to a like product
(k) The application to this dispute of Article III of the GATT 1994,
as complainants advocate, would render the SCM Agreement meaningless
(l) Conversely, Indonesia's interpretation does not render Article III useless,
as complainants maintain, but confines it appropriately
(m) Complainants' assertion that the SCM Agreement cannot be lex specialis
because, if it were, generally available and Article 8 subsidies would not be constrained, is incorrect
(n) Even if the United States example were relevant,
the point the United States seeks to advance is incorrect as a matter of law - the SCM Agreement
addresses generally available and other Article 8
(o) Japan's and the United States' claims that Indonesia's measures violate Article III:2,
second sentence are incorrect
(p) Japan's view that Indonesia's argument renders the General Interpretative Note meaningless
is incorrect
(q) Parts and components are not "indirectly" taxed in excess of like domestic goods
E. Rebuttals to Indonesia's General Response to the Claims Raised under Article III of GATT 1994
F. Additional Arguments Regarding the Claims under Article III:4 of GATT 1994
Pertaining to the Tariff Measures
VI. Claims Under the Trims Agreement
To Continue with Table of Contents.
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