WORLD TRADE WT/DS55/1
G/L/114
G/TRIMS/D/3
ORGANIZATION 10October 1996
(96-4170)
Original: English
INDONESIA -CERTAIN MEASURES AFFECTING THE
AUTOMOBILE INDUSTRY
Request forConsultations from Japan
Thefollowing communication, dated 4October 1996, fromthePermanent Mission ofJapan
tothePermanent Mission ofIndonesia andtheDispute Settlement Body, iscirculated inaccordance
withArticle 4.4oftheDSU.
_______________
Upon instructions frommyauthorities, Ihereby wishtoconvey therequest oftheGovernment
ofJapan forconsultations withtheGovernment ofIndonesia pursuant toArticle 4oftheUnderstanding
onRules andProcedures Governing theSettlement ofDisputes ("DSU"), Article XXII:1 oftheGeneral
Agreement onTariffs andTrade 1994("GATT 1994") andArticle 8oftheAgreement onTrade-Related
Investment Measures ("theTRIMs Agreement") regarding certain automotive industry measures ("the
Measures")ofIndonesia(i.e.so-calledNationalCarProgram),whichwereintroducedbytheGovernment
ofIndonesia inFebruary 1996 bymeans ofitsPresidential Decree No.2andmodified inJune1996
through itsPresidential Decree No.42.
TheNationalCarProgramcurrentlyappliedbytheGovernmentofIndonesiaprovidessubstantial
taxanddutypreferences toanewautomobile model ("the Timor"), assembled fororbyaspecific
Indonesian company thathasreceived "pioneer" status. Thiscompany, "PTTimor Putra Nasional",
formed ajointventure exclusively withKiaMotor Corp. ("Kia") oftheRepublic ofKorea toproduce
theTimor firstintheRepublic ofKorea andsubsequently inIndonesia. Under theNational Car
Program, theTimor imported from theRepublic ofKorea inthefirstyear, aswellascomponents
subsequently imported fortheassembly oftheTimor inIndonesia, willincur nocustoms duties or
other import charges, whereas other imported automobiles andcomponents aresubject tosubstantial
tariffs. Anexemption fromIndonesia 'ssubstantial luxury taxonsalesofautomobiles (normally 35%)
willalsoapply toboththeimported andlocally-assembled Timor onmore relaxed conditions thatin
thecaseoftheother automobiles. Toretain itstariff andtaxexemption status, theTimor mustfulfil
several requirements, including aspecified levelofdomestic content. TheNational CarProgram was
effectively implemented inOctober 1996, withtheimportation byPTTimor Putra Nasional ofa
substantial number ofTimors forcommercial saleinIndonesia.
TheGovernment ofJapan considers thattheMeasures areinconsistent withobligations of
Indonesia under theWTO Agreement, including, inparticular, GATT 1994andtheTRIMs Agreement.
Theprovisions ofthese Agreements withwhich theMeasures appear tobeinconsistent include, but
arenotlimited to,thefollowing:
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(1) Articles I:1,III:2, III:4, X:3(a) ofGATT 1994; and
(2) Article 2and5.4oftheTRIMs Agreement.
TheGovernment ofJapan reserves therighttoraiseadditional factual claims andlegalmatters
during thecourse oftheconsultations.
Welookforward toreceiving yourreply tothisrequest forconsultations andtoagreeing upon
amutually acceptable datefortheconsultations. Wewishtorequest thattheybeheldwithin theweek
beginning on21October 1996.