Japan, EU want early creation of WTO panel on RI car row

Japan, EU want early creation of WTO panel on RI car row

GENEVA (Kyodo): Japan and the European Union have taken action
to pave the way for the early creation of a dispute settlement
panel in the World Trade Organization (WTO) over Indonesia's
national car policy, trade officials have confirmed.

Japan filed a request Friday with the WTO Dispute Settlement
Body (DSB), seeking to convene an extraordinary meeting June 12
to set up such a panel, the officials said on Friday.

Under WTO rules, if a complainant country in a trade dispute
fails to reach an accord through bilateral talks and requests
that a settlement panel be set up at two separate DSB meetings,
the request will be automatically granted regardless of the
defendant country's response.

Japan made its first request for a panel at a regular DSB
meeting in April, and the EU made the same request at another
regular meeting on May 23. But Indonesia rejected both requests
out-of-hand.

WTO members had expected Tokyo to make a second request at the
next regular DSB meeting June 25.

The EU, meanwhile, officially notified the DSB on Thursday of
its intent to make a second panel request at the body's next
meeting, which will be on June 12 as requested by Japan.

Tokyo could have made its second request at the DSB May 23
meeting, but refrained from doing so out of consideration for the
general election in Indonesia, Japanese officials said.

Warned

Nobutoshi Akao, Japan's ambassador to the WTO, instead warned
Indonesia at the meeting that Japan would have no choice but to
seek the early establishment of a panel if Indonesia failed to
soon offer a proposal "which could provide a basis for a mutually
satisfactory solution."

Indonesia's Industry and Trade Minister Tunky Ariwibowo said
Friday in Jakarta, "We still hope to settle this dispute without
a WTO panel."

Tunky said Indonesia would have further bilateral meetings
with Japan, the EU and the United States to iron out differences
on the car dispute.

The three trade powers lodged a complaint with the WTO over
Indonesia's national car policy last October, claiming it
discriminated against foreign competitors.

The policy provides domestically owned automakers with tariff
and luxury sales tax exemptions on condition they raise the
content of locally produced components in their cars to 60
percent in three years.

However, only a joint venture between PT Timor Putra Nasional,
headed by Hutomo Mandala Putra, President Soeharto's youngest
son, and South Korean Kia Motors, has been qualified for the
privilege until 1999.