Japan delays WTO probe into RI's national car policy<\/p>\n
By Russell Williamson<\/p>\n
JAPAN has offered the Indonesian government a small reprieve
\nin its efforts to bring the \"national car\" controversy before a
\nWTO panel for judgment.<\/p>\n
According to the Japanese wire service Kyodo, Japanese
\nofficials have postponed a request to the World Trade
\nOrganization (WTO) to establish a three-member panel to rule on
\nIndonesia's national car policy until at least June.<\/p>\n
Japan, the United States and the European Union filed a
\ncomplaint with the WTO last October claiming that Indonesia's
\nnational car policy was discriminatory.<\/p>\n
At the center of the controversy is PT Timor Putra Nasional,
\nwhich is headed by President Suharto's youngest son Hutomo
\nMandala Putra.<\/p>\n
Timor Putra is the sole recipient of tax concessions that
\nallow it to import duty free 45,000 cars and completely knocked
\ndown car kits for three years from its South Korean partner Kia.<\/p>\n
At a meeting of the WTO's Dispute Settlement Board (DSB), to
\nbe held on May 23, Japan was to request for the second time the
\nformation of a panel.<\/p>\n
However it has now decided to postpone this request until at
\nleast after the general election.<\/p>\n
\"We would like to give more time to Indonesia to think it
\nover,\" an official said.<\/p>\n
Japan first requested the setting up of a panel at a DSB
\nmeeting on April 30 after talks between the two countries failed
\nto reach an agreement.<\/p>\n
The panel was not established after the first Japanese request
\nbecause Indonesia rejected it.<\/p>\n
However, under WTO rules, Japan could lodge a second request
\nwhich would automatically be granted and a panel would then be
\nformed.<\/p>\n
According to a spokesman from the WTO secretariat, Indonesia
\nis legally bound by the decisions of the WTO and the
\norganization's DSB panel.<\/p>\n
Under the rules and procedures governing the settlement of
\ndisputes, the DSB \"has the sole authority to establish panels,
\nadopt panel and appellate reports, maintain surveillance of
\nimplementation of rulings and recommendations, and authorize
\nretaliatory measures in cases of nonimplementation of
\nrecommendations.\"<\/p>\n
\"If the losing country does not either change its illegal
\nmeasure or negotiate compensation, then the winning country can
\nrequest the DSB for retaliatory measures,\" the spokesman said.<\/p>\n
\"It will assess how much trade damage the winning country is
\nsuffering as a result of that illegal measure and suspend an
\nequal amount worth of concessions which it had negotiated,\" he
\nsaid.<\/p>\n
However, the spokesman said the strict procedures which needed
\nto be followed, could mean that any resolution to a dispute could
\ntake up to 18 months.<\/p>\n
The Japanese official said there was no decision yet on
\nwhether a second request would be made at the June DSB meeting
\nand Japan was still open to further bilateral talks \"if Indonesia
\nso wishes\".<\/p>",
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"sponsor": "Okusi Associates",
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