[Federal Register Volume 62, Number 180 (Wednesday, September 17, 1997)]
[Notices]
[Pages 48916-48917]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-24671]
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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE
[Docket No. WTO/D-17]
WTO Dispute Settlement Proceeding Regarding Certain Indonesian
Measures Affecting the Automobile Industry
AGENCY: Office of the United States Trade Representative.
ACTION: Notice; request for comments.
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SUMMARY: Pursuant to section 127(b)(1) of the Uruguay Round Agreements
Act (URAA) (19 U.S.C. 3537(b)(1)), the Office of the United States
Trade Representative (USTR) is providing notice that, at the request of
the United States, a dispute settlement panel has been established
under the Agreement Establishing the World Trade Organization (WTO), to
examine certain Indonesian measures affecting the automobile industry.
More specifically, in this dispute the United States alleges that the
Indonesian measures in question are inconsistent with several WTO
agreements, including Articles I:1, III:2, and III:7 of the General
Agreement on Tariffs and Trade 1994 (GATT 1994); Article 2 of the
Agreement on Trade-related Investment Measures (TRIMs Agreements);
Articles 3, 20 and 65 of the Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPs Agreement); and Article 28.2 of the
Agreement on Subsidies and Countervailing Measures (SCM Agreement); In
addition, the United States alleges that the measures in question
constitute subsidies that cause ``serious prejudice'' to the interests
of the United States in view of Articles 6 and 27 of the SCM Agreement.
USTR also invites written comments from the public concerning the
issues raised in the dispute.
DATES: Although USTR will accept any comments received during the
course of the dispute settlement proceedings, comments should be
submitted on or before October 3, 1997, to be assured of timely
consideration by USTR in preparing its first written submission to the
panel.
ADDRESSES: Comments may be submitted to Ileana Falticeni, Office of
Monitoring and Enforcement, Room 501, Attn: Indonesia Automobile
Industry Dispute, Office of the U.S. Trade Representative, 600 17th
Street, N.W., Washington, DC 20508.
FOR FURTHER INFORMATION CONTACT:
William D. Hunter, Assistant General Counsel, (202) 395-3582, or Mary
Latimer, Office of Asia & the Pacific, (202) 395-4755.
SUPPLEMENTARY INFORMATION: On June 12, 1997, the United States
requested the establishment of a WTO dispute settlement panel to
examine whether certain Indonesian measures affecting the automobile
industry are inconsistent with Indonesia's obligations under several
WTO agreements, and whether such measures constitute subsidies that
cause serious prejudice to the interests of the United States under the
SCM Agreement. Previously, on April 17, 1997 and May 12, 1997, Japan
and the European Communities (EC), respectively, had requested the
establishment of a panel regarding some of the same measures, making
claims that were similar to, but narrower in scope than, those made by
the United States. On June 12, 1997, the WTO Dispute Settlement Body
(DSB) established a panel to examine the complaints of Japan and the
EC. On July 30, 1997, the DSB established a panel to examine the U.S.
complaint, and decided to consolidate the U.S. panel with the Japan/EC
panel established earlier. Under normal circumstances, the panel, which
will hold its meetings in Geneva, Switzerland, would be expected to
issue a report detailing its findings and recommendations within twelve
months after it is established.
Major Issues Raised by the United States and Legal Basis of
Complaint
In 1993, Indonesia adopted a system of incentives for manufacturers
of motor vehicles and parts in the form of duty reductions on imports
of certain products and tax reductions on the sale of motor vehicles.
These incentives are conditional on compliance with local content
requirements with respect to inputs. In February, 1996, Indonesia
expanded this system of incentives to provide additional tax and tariff
incentives designed to promote a ``national car'' that was produced by
an Indonesian company, carried a unique Indonesian trademark, and had a
gradually-increasing percentage of local content over the ensuing three
years. Indonesia made a modification to this program in June, 1996,
when it
[[Page 48917]]
permitted the ``national car'' to be produced outside Indonesia.
The USTR believes that these measures are inconsistent with several
provisions of the WTO agreements, including the following:
--The grant of tax and tariff benefits under the ``national motor
vehicle'' program to finished cars imported into Indonesia from a sole
supplier in Korea is inconsistent with Articles I:1 and III:7 of the
GATT 1994;
--The grant of benefits tied to percentage local content under the 1993
program and the ``national car'' program is inconsistent with Article
III:4 of the GATT 1994 and Article 2 of the TRIMs Agreement;
--The effective imposition of a lower tax on domestic motor vehicle
parts and components than on imported parts components is inconsistent
with Article III:2 of the GATT 1994;
--The grant of luxury tax-free treatment to ``national motor vehicle''
that is not granted to imported finished vehicles is inconsistent with
Article III:2 of the GATT 1994;
--The grant of national car benefits only to those cars bearing a
unique Indonesian trademark owned by Indonesia nationals discriminates
against foreign-owned trademarks and their owners in a manner
inconsistent with Articles 3, 30 and 65 of the TRIPs Agreement;
--The adoption of the ``national car program'' in 1996 had the effect
of extending the scope of tax- and tariff-based subsides in a manner
inconsistent with Article 28.2 of the SCM Agreement; and
--The grant of the tax and tariff benefits described above constitute
specific subsidies that cause serious prejudice to the interests of the
United States within the meaning of the SCM Agreement by displacing or
impeding imports of U.S. motor vehicles, and of parts or components
thereof, into the Indonesian market and/or by creating significant
price and undercutting, price suppression, price depression and/or loss
of sales for U.S. exporters to that market.
Public Comment: Requirements for Submissions
Interested persons are invited to submit written comments
concerning the issues raised in the dispute. Comments must be in
English and provided in fifteen copies. A person requesting that
information contained in a comment submitted by that person be treated
as confidential business information must certify that such information
is business confidential and would not customarily be released to the
public by the commenter. Confidential business information must be
clearly marked ``BUSINESS CONFIDENTIAL'' in a contrasting color ink at
the top of each page of each copy.
Information or advice contained in a comment submitted, other than
business confidential information, may be determined by USTR to be
confidential in accordance with section 135(g)(2) of the Trade Act of
1974 (19 U.S.C. 2155(g)(2)). If the submitter believes that information
or advice may qualify as such, the submitter--
(1) must so designate that information or advice;
(2) must clearly mark the material as ``SUBMITTED IN CONFIDENCE''
in a contrasting color ink at the top of each page of each copy; and
(3) is encouraged to provide a non-confidential summary of the
information or advice.
Pursuant to section 127(e) of the URAA (19 U.S.C. 3537(e)), USTR
will maintain a file on this dispute settlement proceeding, accessible
to the public, in the USTR Reading Room; Room 101, Office of the United
States Trade Representative, 600 17th Street, N.W., Washington, DC
20508. The public file will include a listing of any comments received
by USTR from the public with respect to the proceeding; the U.S.
submissions to the panel in the proceeding; the submissions, or non-
confidential summaries of submissions, to the panel received from other
participants in the dispute, as well as the report of the dispute
settlement panel and, if applicable, the report of the Appellate Body.
An appointment to review the public file (Docket WTO/D-17 (``U.S.-
Indonesia Automobile Industry Dispute'') may be made by calling Brenda
Webb, (202) 395-6186. The USTR Reading Room is open to the public from
9:30 a.m. to 12 noon and 1 p.m. to 4 p.m., Monday through Friday.
A. Jane Bradley,
Assistant U.S. Trade Representative for Monitoring and Enforcement.
[FR Doc. 97-24671 Filed 9-16-97; 8:45 am]
BILLING CODE 3190-01-M
