WT/DS406/12  
 
13 August 2013  
(13-4353)  Page: 1/2  
  Original: English  
 
 UNITED STATES – MEASURES AFFECTING THE PRODUCTION 
AND SALE OF CLOVE CIGARETTES 
RECOURSE TO ARTICLE 22.2 OF THE DSU BY INDONESIA 
 The following communication, dated 12 August 2013, from the delegation of Indonesia to 
the Chairperson of the Dispute Settlement Body, is circulated pursuant to Article 22.2 of the DSU.  
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Indonesia respectfully requests that a special meeting of the Dispute Settlement Body 
("DSB ") be held on or before 23 August 2013 to consider the following agenda item : 
 
United State s - Measures Affecting the Production and Sale of Clove Cigarettes: 
Recourse by Indonesia to Article 22.2 of the Understanding on Rules and Procedures 
Governing the Settlement of Di sputes (DS406) 
On 20 July 2010 the DSB established a panel at the request of Indonesia to examine the 
United States ' ban on certain flavored cigarettes , including clove cigarettes produced in Indonesia . 
The Panel found that Section 907(a)(1)(A) of the Federal Food , Drug and Cosmetic Act was 
inconsistent with the United States ' obligations under Articles 2 .1, 2.9.2, and 2 .12 of the 
Agreement on Technical Barriers to Trade (''TBT Agreement"). The United States appealed the 
Panel's findings with respect to Articles 2.1 and 2.12. On 4 April 2012 the Appellate Body affirmed 
the Panel's findings , although on other grounds . On 24 April 2012 the DSB adopted the Appellate 
Body Report and the Panel Report, as modified by the Appellate Body Report . In particular , the 
DSB recommended that the United States bring its measure into conformity with its obligations 
under the TBT Agreement (WT/DS406/AB/R, para. 299 ; WT/DS406/R , para. 8.6). 
 
Pursuant to Article 21.3 of the Understanding on the Rules and Procedures Governing the 
Settlement of Disputes ("DSU "), Indonesia and the United States agreed that the "reasonable 
period of time" for the United States to implement the DSB recommendations and rulings would expire on 24 July 2013 (WT/DS406/10) . The United States failed to implement the 
recommendations and rulings of the DSB with resp ect to Section 907(a)(1)(A) by the end of the 
reasonable period of time , and no mutually acceptable arrangement for compensation has been 
reached . Therefore , Indonesia is entitled to redress under Article 22 of the DSU . 
 
Pursuant to Article 22.2 of the DSU , Indonesia requests the authorization of the DSB to 
suspend the application to the United States of tariff concessions and related obligations. In 
considering what concessions or obligations to suspend , Indonesia has followed the principles and 
procedures set forth in Article 22.3(a) of the DSU. As required by Article 22.4 of the DSU, the level of suspension proposed is equivalent on an annual basis to the nullification or impairment of benefits accruing to Indonesia resulting from the Un ited States' failure to bring its ban on flavored 
cigarettes into compliance , by 24 July 2013 , with the TBT Agreement or to otherwise comply with 
the recommendations and rulings of the DSB in "United States - Measures Affecting the Production 
and Sale of Clove Cigarettes." The suspension of concessions and other obligations would consist 
of one or more of the following: 
 
(1) suspension of tariff concessions and other related obligations under the General 
Agreement on Tariffs and Trade 1994 on a list of U .S. products to be established in 
due course ; WT/DS406/12 
 
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(2) suspension of concessions and other obligations under the TBT Agreement; and , 
 (3) suspension of concessions and other obligations under the Agreement on Import 
Licensing . 
 
Indonesia is a developing country . The production and sale of clove cigarettes is important 
to Indonesia 's economy . Clove cigarettes have a long history in Indonesia and are part of its 
culture. When the U.S. banned the sale of certain flavored cigarettes , the burden of that measure 
fell almost entirely on Indonesia. As a result of the contested measure, Indonesia's exports of clove cigarettes to the United States fell to zero . The Indonesian people are following this dispute 
closely . They want to know if the rules-based trading system promised by the WTO is real or a 
mere illusion.  
 
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