RESTRICTED
WORLD TRADE WT/DSB/M/34
8July1997
ORGANIZATION(97-2844)
Dispute Settlement Body
12June 1997
MINUTES OFMEETING
Held intheCentre William Rappard
on12June1997
Chairman: Mr.Wade Armstrong (New Zealand)
Prior totheadoption oftheagenda, theitementitled: "European Communities -Regime for
theImportation, SaleandDistribution ofBananas -Reports ofthePanel" waswithdrawn from the
proposed agenda since on11June1997, theCommunities notified theDSBoftheirdecision toappeal
these Reports (WT/DS27/9).
Subjects discussed: Page
1. Indonesia -Certain measures affecting theautomobile industry ..............1
- Request fortheestablishment ofapanel byJapan ..................1
- Request fortheestablishment ofapanel bytheEuropean Communities ....1
2. Confidentiality ofpanel andAppellate Body reports .....................3
1. Indonesia -Certain measures affecting theautomobile industry
- Request fortheestablishment ofapanel byJapan (WT/DS55/6 -WT/DS64/4)
- Request fortheestablishment ofapanel bytheEuropean Communities (WT/DS54/6)
TheChairman proposed thattheDSBconsider these twosub-items separately. First, hedrew
attention tothecommunication fromJapan contained inWT/DS55/6 -WT/DS64/4. Herecalled that
theDSBhadconsidered thismatter atitsmeeting on30April 1997 andhadagreed torevert toit.
TherepresentativeofJapansaidthathisGovernmenthadnotifieditsrequestfortheestablishment
ofapanel on17April 1997, which hadbeenconsidered bytheDSB atitsmeeting on30April.
Subsequently,JapanandIndonesiahadcontinuedconsultationsbuthadnotbeenabletosettlethisdispute.
Therefore, Japan haddecided toreiterate itsrequest fortheestablishment ofapanel. Itintended to
continue holding bilateral consultations withIndonesia inorder tofindamutually satisfactory solution
atanearlystageinaccordance withthespirit ofArticle 3.7oftheDSUwhich stated that"...asolution
mutually acceptable totheparties tothedispute andconsistent withthecovered agreements isclearly
preferred". Japan hoped thatthisobjective wasunderstood andshared byIndonesia.WT/DSB/M/34
Page2
TheDSBtooknoteofthestatement andagreed toestablish apanel inaccordance withthe
provisions ofArticle 6oftheDSU withstandard terms ofreference.1
TheChairman drewattention tothecommunication fromtheEuropean Communities contained
inWT/DS54/6. Herecalled thattheDSBhadconsidered thismatter atitsmeeting on23May1997
andhadagreed torevert toit.
Therepresentative oftheEuropean Communities saidthathisdelegation hadfirstsubmitted
therequest fortheestablishment ofapanel attheDSBmeeting on23May1997, butIndonesia had
beenunable toaccept therequest. Theprincipal reason forthisrequest wasthattheCommunities
considered thatthemeasures inquestion wereinconsistent withIndonesia 'sobligations under GATT
1994, theAgreement onTrade-Related Investment Measures (TRIMs) aswellastheAgreement on
Subsidies andCountervailing Measures (SCM). These measures included inparticular thegranting
ofimport duty relief forparts andcomponents formotor vehicles contingent onlocal content
requirements, luxury taxexemption forcertain motor vehicles contingent onlocalcontent requirements,
andexemption fromimport duties andluxury taxformotor vehicles produced bycertain companies,
which hadbeengranted thestatus ofpioneer companies. Therequest fortheestablishment ofapanel
followed tworounds ofconsultations inlate1996, aswellasanumber ofinformal contacts withthe
aimoffinding amutually satisfactory solution. Indonesia hadfailed toputforward satisfactory proposals
which could bring these measures intoconformity withtheWTO Agreement. TheCommunities,
therefore, considered thatitwasnecessary tomake asecond request totheDSBtoestablish apanel.
TheDSBtooknoteofthestatement andagreed toestablish apanel inaccordance withthe
provisions ofArticle 6oftheDSU withstandard terms ofreference.
Therepresentative ofJapan reserved hisGovernment 'sthird-party rights toparticipate inthe
Panel proceedings.2
TheChairmanrecalledthattheCommunitieshadalsorequestedtheDSBtoinitiatetheprocedures
provided forinAnnex VoftheSCM Agreement. Inaccordance withthese procedures theDSBwas
required todesignate arepresentative toserve thefunction offacilitating theinformation-gathering
process needed bytheparties andthepanel. Inorder tomeettheCommunities 'request, hehadbeen
consulting withtheparties tothedispute onthismatter. Heproposed thattheDSB appoint this
representativeatthepresentmeetingwhichwouldenablehimtoinitiatetheinformation-gatheringprocess
immediately, sothattheparties would havetherelevant information before thempriortomaking their
first submissions. Onthebasis oftheconsultations, heproposed thattheDSB designate
Mr.S.Harbinson, therepresentative ofHong Kong toperform thistask.
TheDSBsoagreed.
TheChairman thanked Mr.Harbinson forhiswillingness toundertake thistask. Hedrew
attention tothefactthatunder Annex VoftheSCM Agreement theinformation-gathering process had
tobecompleted within 60days. Inviewoftheshortness ofthisdeadline, heasked that,within the
nextfewdayseachparty provide Mr.Harbinson inwriting withanyquestions thattheywishtoaddress
totheother party. Thiswould enable Mr.Harbinson toprepare andtransmit requests forinformation
toeachparty withaminimum ofdelay. Herequested Mr.Harbinson, incooperation withtheparties,
todetermine suchdeadlines andother working procedures necessary forcompletion ofthistask.
1After themeeting India, Korea andtheUnited States reserved their third-party rights toparticipate inthe
Panel proceedings.
2Idem.WT/DSB/M/34
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TheDSBtooknoteofthestatement.
TheChairman thendrew totheattention ofMembers that,pursuant toArticle 9oftheDSU,
"...where more thanoneMember requests theestablishment ofapanel related tothesame matter,
asingle panel maybeestablished toexamine thesecomplaints". Inthelightofthisprovision heproposed
thatthecomplaints byJapan andtheEuropean Communities beexamined byasingle panel insuch
amannerthattherightswhichthepartiestothedisputewouldhaveenjoyedhadseparatepanelsexamined
thecomplaints were innowayimpaired.
TheDSBsoagreed.
Therepresentative ofJamaica enquired whether asingle panel withstandard terms ofreference
precluded anyother approach interms ofrecourse totheprocedures oftheSCM Agreement andits
time-table.
TheChairman believed thatasingle panel didnotpreclude anyother approach interms of
recourse totheprocedures oftheSCM Agreement inrelation tothecomplaint raised bytheEuropean
Communities.
TheDSBtooknoteofthestatements.
2. Confidentiality ofpanel andAppellate Body reports
Therepresentative ofNorway, speaking under "Other Business", expressed concern overthe
leaking ofpanel andAppellate Body reports which hadbecome arulerather thananexception. He
believed thatthismatter beconsidered bytheDSBsince much timehadbeendevoted tonegotiate the
guidelines oncirculation andderestriction ofWTO documents.3Thequestion ofderestriction ofpanel
andAppellate Body reports hadbeenparticularly sensitive during these negotiations. Heraised this
issueforsystemicreasonssincehiscountry,withsomeotherMembers,hadsoughtasmuchtransparency
aspossible intheareaofdispute settlement. While hisdelegation didnothaveanyconcrete proposal
foraction, itwished tounderline thatthegravity ofthesituation wasfurther undermined bythefact
thatthereports were being leaked attheirinterim review stage.
Herecalled thatduring thenegotiations oncirculation andderestriction ofpanel reports the
issueoftiming hadbeendiscussed i.e.,whether these reports should bederestricted immediately after
circulation toparties toadispute oraftercirculation toMembers, orwhether theyshould bederestricted
afteracertain lapse oftime. Since thereports were nowbeing leaked attheinterim review stage,
which might beparticularly inconvenient forpanels, thetimeofderestriction hadbecome irrelevant.
Hesuggested thatthisproblem might beconsidered inthecontext ofthereview oftheDSU tobe
undertaken in1998, pursuant totheDecision ontheApplication andReview oftheUnderstanding
onRules andProcedures Governing theSettlement ofDisputes.
Therepresentative ofJamaica saidthatNorway hadraised averyimportant issue. Heenquired
whether Norway 'sconcern wasthattheselective manner ofleaking reports hadprejudiced thefairness
oftheadjudication forparties involved.
Therepresentative ofNorway saidthathisdelegation hadnoparticular opinion withregard
tothepossible impact ofleaking reports onthefairness ofpanel orAppellate Body proceedings. But
3WT/L/160/Rev.1.WT/DSB/M/34
Page4
itwould notbeunreasonable toexpect thatthese leaks might haveanegative impact onthework of
panels andtheAppellate Body. Thus, itwaspossible thatapanel which adjusted itsconclusion as
aresult ofcomments byparties attheinterim review stage, might fearthatthese changes would be
seenasresponding, nottocomments fromparties, butrather topressure fromexternal sources. This
wasspeculation, butnevertheless itwasanissue which required some attention.
Therepresentative ofMexico saidthattheissue raised byNorway wasverytimely. His
delegation wasdissatisfied withtheleakage ofinformation referred tobyNorway. Despite oftheefforts
made toimprove transparency intheareaofdispute settlement, Members were notcomplying with
whattheyhadagreed to.Mexico attached great importance tocompliance byallMembers withthe
agreed procedures anditwould bearthisissueinmind atthetimeofthereview oftheDSU. Mexico 's
position during thereview would depend onitsappreciation ofcompliance byMembers withtheagreed
procedures.
TheChairman noted thattwodelegations hadreferred totheopportunity which thereview
oftheDSU would provide toconsider important issues which required attention.
TheDSBtooknoteofthestatements.