This lecture reviews how Indonesia has engaged with the WTO dispute settlement system both as complainant and respondent and concludes that Indonesia still has a long way to go before it earns the fear and respect of other WTO Members as a no-hold's barred advocate of its own export interests!

1. WTO Dispute Settlement | Indonesia
Simon Lacey | Last Updated 18 April 2013

2. Indonesia’s Track Record So Far
www.uph-analytics.com
2
As Complainant (6 cases)
Argentina — Safeguard Measures on Imports of Footwear
United States — Continued Dumping and Subsidy Offset Act of 2000
Korea — Anti-Dumping Duties on Imports of Certain Paper from Indonesia
South Africa — Anti-Dumping Measures on Uncoated Woodfree Paper
United States — Measures Affecting the Production and Sale of Clove Cigarettes
European Union — Anti-Dumping Measures on Imports of Certain Fatty Alcohols from
Indonesia
As Defendant (5 cases – but really only 2)
Indonesia — Certain Measures Affecting the Automobile Industry (4 cases DS
54/55/59/64)
Indonesia —Importation of horticultural products, animals and animal products

3. Argentina Footwear
www.uph-analytics.com
3
Parties
- Complainant: Indonesia
- Respondent: Argentina
Issue(s)
GATT 1994: Art. XIX
Safeguards: Art. 2, 4, 5, 6, 7, 12
Status
On 23 April 1998, Indonesia requested consultations
On 15 April 1999, Indonesia requested the establishment of a panel.
In a communication dated 10 May 1999, Indonesia informed the DSB that it was not pursuing its
request for a panel at the next DSB meeting, but that this was without prejudice to its rights under the
DSU to resurrect the panel request.
Significance
Indonesia was able to free-ride off the action taken by the EC in regard to the same measure.

4. Byrd Amendment Case
www.uph-analytics.com
4
Parties
Complainant: Australia; Brazil; Chile; European Communities; India; Indonesia; Japan;
Korea, Republic of; Thailand
Respondent: United States
Third Parties: Argentina; Canada; Costa Rica; Hong Kong, China; Israel; Mexico; Norway
Issue
Various provisions of the WTO Antidumping and Subsidies Agreements.
Status
Authorization to retaliate granted on 26 November 2004, BUT, Indonesia was NOT one of the countries
that requested authorization to retaliate (these were Brazil, Chile, the EC, India, Japan, Korea, Canada
and Mexico).
Significance
Systemically important decision for the WTO.

5. Korea – Certain Paper
www.uph-analytics.com
5
Parties
Complainant: Indonesia
Respondent: Korea, Republic of
Third Parties: Canada; China; European Communities; Japan; United
States; Chinese Taipei
Issue
Various provisions of the AD Agreement and GATT Art. VI
Status
Compliance proceedings completed with finding(s) of non-compliance on 22 October 2007
Significance
Was an important victory for Indonesia but some observers would argue that Indonesia dropped the
ball in the end game.

6. South Africa - Paper
www.uph-analytics.com
6
Parties
Complainant: Indonesia

Respondent: South Africa
Issue
Anti-dumping (Article VI of GATT 1994): Art. 11.3, 11.4
Status
Settled or terminated (withdrawn, mutually agreed solution) on 20 November 2008
Significance
No apparent far-reaching implications to this dispute, except that like Korea Paper, it is testimony to
the importance Indonesia attaches to its paper exports.

7. United States - Clove Cigarettes
www.uph-analytics.com
7
Parties
Complainant: Indonesia

Respondent: United States
Issue
Various provisions under GATT 1994 and the TBT Agreement
Status
Report(s) adopted, with recommendation to bring measure(s) into conformity by 24 July 2013
(Reasonable Period of Time).
Significance
Part of a broader strategy of push-back from the global tobacco industry

8. European Union - Fatty Alcohols
www.uph-analytics.com
8
Parties
Complainant: Indonesia

Respondent: European Union
Issue
Various provisions of GATT 1994 and the AD Agreement
Status
In consultations on 30 July 2012
Significance
Too early to tell

9. Indonesia - Autos
www.uph-analytics.com
9
Parties
Complainants: European Communities; United States, Japan,
Respondent: Indonesia
Third Parties: India; Korea, Republic of; United States; European Communities; Japan
Issue
Various provisions of GATT 1994 and the TRIMS Agreement
Status
Implementation notified by respondent on 26 July 1999
Significance
Discussed below

10. Indonesia - horticultural products
www.uph-analytics.com
10
Parties
Complainant: United States

Respondent: Indonesia
Issue
Various provisions of GATT 1994, the Agreement on Agriculture and the Import Licensing Agreement
Status
Panel established on 24 April 2013
Significance
Still to early to tell, but could deal a significant blow to the “permit raj” that increasingly dominates
Indonesia’s import sector

11. An Analysis of the Indonesian Autos
Case
 Simon Lacey | Last Updated 15 January 2013

12. Time Line of the Dispute
12
Date Event
Feb 19, 1996 National Car Program Launched
Feb 26, 1996 Kia Motor / Timor Putra Nasional Joint Venture announced
Mar 12, 1996 Japanese MITI reported as announcing possibility of taking action at the WTO
Apr 24, 1996 Sir Leon Britain visits Jakarta and criticizes the national car program
Jun 4, 1996 Presidential decree No. 42/1996 National Cars made overseas by foreign workers
and that fulfill the content requirement would be treated as if made in Indonesia
Oct 3, 1996 EU requests consultations with Indonesia (similar requests from Japan on Oct 4 and
USA on Oct 8)
www.uph-analytics.com

13. Time Line of the Dispute 2
13
Date Event
Apr 17, 1997 Japan requests establishment of a Panel (similar requests from EC on May 12 and the US
on June 12
Early June
1997
Minister Tunky announces that negotiating teams have been sent to Japan, Europe and the
US to try and find a negotiated settlement
Jun 12, 1997 Panel established (EC/Japan) with a panel also established for the US on July 30.
Oct 31, 1997 Indonesia issues commitment letter to the IMF agrees to phase out local content
requirements for motor vehicles by 2000 and to implement the WTO ruling ahead of
schedule.
Mar 24, 1998 Interim report issued
Jul 2, 1998 Final report circulated.
Jul 23, 1998 Panel report adopted by the DSB
Dec 7, 1998 Arbitrator’s report circulated for the reasonable period of time for implementation (12
months).
www.uph-analytics.com

14. The Main Actors
www.uph-analytics.com
14
 Tungky Ariwobowo - Minister of Trade and Industry
 Hutomo Mandala Putra – owner of TPN
 Aburizal Bakrie – Chairman of KADIN (welcomes the TPN initiative)
 Bambang Trihatmojo – behind a competing national car program
 Sir Leon Britain – EC Commissioner for External Relations
 Andrew Card, President of the American Automobile Manufacturers Associations
 Mari Elka Pangestu – CIS Jakarta – warns of the danger to Indonesia of letting the
matter go to a WTO dispute
 Japanese car manufacturers (Toyota, Honda, Isuzu)
 European car manufacturers (BMW, VW, Citroën, etc.)

15. Dispute Settlement at the WTO
www.uph-analytics.com
15
 Panel Proceedings (no Appeal)
 Main legal issues covered:
- GATT 1994: Art. I, I:1, III, III:2, III:4
- Subsidies and Countervailing Measures: Art. 1, 2, 3.1(b), 6
- Trade-Related Investment Measures (TRIMs): Art. 2
 Followed by arbitration to determine the reasonable period
for implementation (12 months, i.e. until 23 July 1999)
 Implementation largely unproblematic:
“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.”

16. An Analysis of US –Clove Cigarettes
 Simon Lacey | Last Updated 15 January 2013

17. Time Line of the Dispute
17
Date Event
Jun 22, 2009 Family Smoking Prevention and Tobacco Control Act becomes law, essentially
banning flavored cigarettes (except menthol)
Apr 7, 2010 Indonesia requests consultations with the United States
Jun 9, 2010 Indonesia requests the establishment of a panel
Jul 20, 2010 Panel established
May 27, 2011 Interim report issued
Sep 2, 2011 Final report circulated
Jan 5, 2012 Notice of appeal
Apr 4, 2012 AB report circulated
Apr 24 2012 Panel and AB reports adopted
www.uph-analytics.com

18. The Main Actors
www.uph-analytics.com
18
 Parties
- Complainant - Indonesia
- Respondent – United States
- Third Parties - Brazil, Colombia, Dominican Republic, EU,
Guatemala, Mexico, Norway, Turkey
- Parties
 Interests
- What is the importance of tobacco in Indonesia?
- Why was menthol not banned by the Act too?
 Other (indirect) actors?
- Tobacco companies
- WHO

19. Dispute Settlement at the WTO
www.uph-analytics.com
19
 Panel upheld Indonesia’s argument that the US measure
constituted a violation of Art. 2.1 TBT, i.e. that the ban on
clove cigarettes, but not menthol was a national treatment
violation.
 Panel rejected Indonesia’s argument that the US measure
constituted a violation of Art. 2.2 TBT, i.e. that the US
measure was more trade restrictive than necessary.
 Appellate Body upheld Panel’s findings on these points.
 Current status: US has until 24 July 2013 to comply.

20. Other Observations on Indonesia’s
Participation in WTO Dispute
Settlement Simon Lacey | Last Updated 15 January 2013

21. Potential Future Issues
www.uph-analytics.com
21
Indonesia still has a lot of outstanding compliance issues under its WTO
obligations as can be seen from this years USTR Trade Barriers Estimate
Report (we will go through this now).
Indonesia will have to tread carefully if it does not want to bear the brunt of
challenges that could in fact be aimed at opening larger and more important
markets.

22. Assessing Indonesia’s Use of the System
 Indonesia has only used the system sparingly, even reluctantly.
 Indonesia’s first experience with the WTO dispute settlement system was
a painful one, but since then it has had some moderate successes.
 Indonesia still has some way to go before it obtains the respect of other
members as a serious and fearless user of the system.
www.uph-analytics.com
22