RESTRICTED
WORLD TRADE WT/DS6/5
27June 1995
ORGANIZATION
(95-1727)
Original: English
UNITED STATES -IMPOSITION OFIMPORT DUTIES ON
AUTOMOBILES FROM JAPAN
UNDER SECTIONS 301AND 304OFTHE TRADE ACT OF1974
Communication byJapan
Thefollowing communication dated 13June 1995 from thePermanent Mission ofJapan in
Geneva totheWTO Secretariat iscirculated attherequest ofthePermanent Mission ofJapan.
_______________
TheArticle XXII:1 consultations requested byJapan (WT/DS6/1) were held on12June 1995
intheWTO. During theconsultations, thedelegation ofJapan presented theattached paper tothe
delegation oftheUnited States.
_______________WT/DS6/5
Page 2
CONSULTATIONS PURSUANT
TOARTICLE XXII:1 OFGATT 1994 AND ARTICLE 4
OFTHE DSU CONCERNING UNITED STATES IMPOSITION
OFIMPORT DUTIES ONAUTOMOBILES FROM JAPAN
UNDER SECTIONS 301AND 304OFTHE TRADE ACT OF1974
A. Introduction
(1) theGovernment ofJapan (the"GOJ") requested theGovernment oftheUnited States
ofAmerica (the"USG") toenter intoconsultations pursuant toArticle 4oftheUnderstanding onRules
andProcedures Governing theSettlement ofDisputes ("DSU") andArticle XXII:1 oftheGeneral
Agreement onTariffs andTrade 1994 ("GATT 1994") with respect totheaffirmative determination
against Japan under Sections 301and304oftheTrade Actof1974, asamended, made onMay 10,
1995 andtheannouncement made onMay 16,1995.
(2) The purpose ofthispaper istofurther clarify thelegal basis ofthe"Request for
Consultations byJapan".
(3) TheGOJ emphasizes itsdesire toseekasettlement ofthisdispute, which canbeachieved
bytheUSG withdrawing theaffirmative determination made onMay 10andtheannouncement made
onMay16,interalia,notproceedingtotheimpositionof100percentdutiesandterminatingimmediately
thewithholding ofliquidation ofentries ofthelisted Japanese products.
B. Violation ofArticle IofGATT 1994
Thewithholding ofliquidation ofentries ofthelisted Japanese products announced onMay 16,
1995,whichhasbeenimplementedsinceMay20,1995,combinedwiththeannouncementoftheproposed
imposition of100percentduties which canretroactively gointoeffect asofMay 20,isdiscriminatory
andtherefore violates Article IofGATT 1994.
Theimposition of100percentduties oranyother discriminatory duty onthelisted Japanese
products bytheUSG, ifimplemented, willalsoviolate Article IofGATT 1994.
C. Violation ofArticle IIofGATT 1994
Theimposition of100percentduties oranyother duty inexcess ofthose setforth andprovided
forintheSchedule ofconcessions oftheUnited States ofAmerica (incase ofautomobiles, 2.5per
cent) onthelisted Japanese products bytheUSG, ifimplemented, willviolate theobligation ofthe
USG under Article IIofGATT 1994.
D. Violations ofArticles XIandXIII ofGATT 1994
Since thesaidwithholding ofliquidation, combined with theannouncement oftheproposed
imposition of100percentduties which canretroactively gointoeffect asofMay 20,restricts importation
ofthelisted Japanese products intotheterritory oftheUnited States, itisinviolation ofArticle XI
ofGATT 1994. Itisdiscriminatory andthus alsoviolates Article XIII ofGATT 1994, because this
restriction applies only tothelisted Japanese products.WT/DS6/5
Page3
E. Violation ofArticle 23oftheDSU
Theaffirmative determination made onMay 10,thesaidwithholding ofliquidation andthe
announcement made onMay 16oftheproposed imposition of100percentduties, both individually
andcollectively, violate Article 23oftheDSU.
Theimposition of100percent duties oranyother increase induties onthelisted Japanese
products, ifimplemented, willalsoviolate Article 23oftheDSU.
F. Nullification andImpairment intheSense ofArticle XXIII:1(b) ofGATT 1994
Thesaidwithholdingofliquidation,combinedwiththeannouncementoftheproposedimposition
of100percent duties which canretroactively gointoeffect asofMay 20,hasresulted inupsetting
thecompetitive relationship intheluxury carmarkets, could nothave been reasonably anticipated by
theGOJ atthetime ofnegotiation ofthetariff concession ontheproducts concerned, andtherefore
nullifies andimpairs thebenefit accruing toJapan under Article IIofGATT 1994 inthesense of
Article XXIII:1(b) ofGATT 1994.
G. Need forTreatment asaCase ofUrgency
TheGOJ believes thatthiscase represents a"case ofurgency" referred toinArticles 4and
12oftheDSU.
(1) These consultations, followed, ifnecessary, bypanel procedures, must move forward
asexpeditiously aspossible before thesituation worsens with theactual imposition of100percent
duties.
(2) Thesaidwithholding ofliquidation, combined with theannouncement oftheproposed
imposition of100percentduties which canretroactively gointoeffect asofMay 20,hasalready caused
significant damage notonly totheJapanese automobile industry butalsototheUSdealers handling
thelisted Japanese luxury cars. Unless urgently addressed, thedamage, because ofitsaccumulative
nature, would become irreparable.
(3) Since theUSG 'srecourse totheunilateral measures constitutes suchaclear-cut violation
oftheWTO Agreement, itmust beredressed immediately.