RESTRICTED
WORLD TRADE G/SCM/Q2/IDN/7
16April 1997
ORGANIZATION(97-1643)
Original: English Committee onSubsidies andCountervailing Measures
SUBSIDIES
Questions from JAPAN Regarding the
Updating Notification ofINDONESIA1
Thefollowing communication, dated 11April 1997, hasbeenreceived from thePermanent
Mission ofJapan.
_______________
1. Tax-holiday scheme
Japan asked Indonesia toprovide information onthisscheme atthereview meeting. Could
Indonesia provide information onthecurrent situation ofthescheme? Isthescheme going tobenotified
soon?
2. "The Granting ofImport Duty Relief toCertain Parts andAccessories ofMotor Vehicles for
theAssembling and/or Manufacturing ofMotor Vehicles" and"Development oftheNational
Automobile Industry"
(i) Arethetwomeasure related toeachother? Could abeneficiary ofonemeasure be
abeneficiary oftheother measure?
(ii) According tothePresidential Decree No.42,thecomplete vehicles imported from
Korea areexempted from theimposition oftheimport dutyandtheluxury tax.
Does Indonesia recognize thatthese exemptions constitute subsidies inthemeaning
oftheSCM Agreement?
Thisbeing thecase, could Indonesia explain howthemeasure could bejustified in
thecontext ofconsistency withArticle 1oftheGATT?
(iii) Themeasure mentioned inthenotification isrecognized asthesame measure asthe
onethatIndonesia hadnotified under Article 5oftheTRIMs Agreement andwithdrew
recently.
InJapan'sviewthere isnoconflict toconsider ameasure asasubsidy andaTRIM
atthesametime. Moreover, Japan considers thattheSCM Agreement cannot beused
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tojustify aviolation under theTRIMs Agreement. Could Indonesia clarify itsview
concerning these matters?
(iv) Could Indonesia explain whyitneeds toapply different conditions forthecarsproduced
bythe"Pioneer Companies" from those produced byother companies interms of
imposition ofimport dutyandluxury tax?
Could Indonesia explain therationale ofthemeasure andtheconsistency ofthemeasure
withArticles 1,3and10oftheGATT?