UNITED STATES - IMPOSITION OF IMPORT DUTIES ON AUTOMOBILES FROM JAPAN UNDER SECTIONS 301 AND 304 OF THE TRADE ACT OF 1974
Document: Communication by Japan
Date: 27 June 1995
Document codes: WT/DS6/5; WT/DS6/1
Complainant: Japan
Respondent: U.S.
Dispute stage: Consultation
Agreements cited: Art. 23  Dispute Settlement Understanding (DSU)Art. I, II  GATT 1994

UNITED STATES - IMPOSITION OF IMPORT DUTIES ON
AUTOMOBILES FROM JAPAN
UNDER SECTIONS 301 AND 304 OF THE TRADE ACT OF 1974
Communication by Japan
The following communication dated 13 June 1995 from the Permanent Mission of Japan in
Geneva to the WTO Secretariat is circulated at the request of the Permanent Mission of Japan.
The Article XXII:1 consultations requested by Japan () were held on 12 June 1995
in the WTO. During the consultations, the delegation of Japan presented the attached paper to the
delegation of the United States.

CONSULTATIONS PURSUANT
TO ARTICLE XXII:1 OF GATT 1994 AND ARTICLE 4
OF THE DSU CONCERNING UNITED STATES IMPOSITION
OF IMPORT DUTIES ON AUTOMOBILES FROM JAPAN
UNDER SECTIONS 301 AND 304 OF THE TRADE ACT OF 1974
A. Introduction
(1) the Government of Japan (the "GOJ") requested the Government of the United States
of America (the "USG") to enter into consultations pursuant to Article 4 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes ("DSU") and Article XXII:1 of the General
Agreement on Tariffs and Trade 1994 ("GATT 1994") with respect to the affirmative determination
against Japan under Sections 301 and 304 of the Trade Act of 1974, as amended, made on May 10,
1995 and the announcement made on May 16, 1995.
(2) The purpose of this paper is to further clarify the legal basis of the "Request for
Consultations by Japan".
(3) The GOJ emphasizesits desire to seek a settlementof thisdispute, which can be achieved
by the USG withdrawing the affirmative determination made on May 10 and the announcement made
on May 16, inter alia, not proceeding to the imposition of 100 per cent duties and terminating immediately
the withholding of liquidation of entries of the listed Japanese products.
B. Violation of Article I of GATT 1994
The withholding of liquidation of entries of the listed Japanese products announced on May 16,
1995, which has been implemented since May 20, 1995, combined with the announcement of the proposed
imposition of 100 per cent duties which can retroactively go into effect as of May 20, is discriminatory
and therefore violates Article I of GATT 1994.
The imposition of 100 per cent duties or any other discriminatory duty on the listed Japanese
products by the USG, if implemented, will also violate Article I of GATT 1994.
C. Violation of Article II of GATT 1994
The imposition of 100 per cent duties or any other duty in excess of those set forth and provided
for in the Schedule of concessions of the United States of America (in case of automobiles, 2.5 per
cent) on the listed Japanese products by the USG, if implemented, will violate the obligation of the
USG under Article II of GATT 1994.
D. Violations of Articles XI and XIII of GATT 1994
Since the said withholding of liquidation, combined with the announcement of the proposed
impositionof 100 per cent dutieswhich can retroactively go into effect as of May 20, restricts importation
of the listed Japanese products into the territory of the United States, it is in violation of Article XI
of GATT 1994. It is discriminatory and thus also violates Article XIII of GATT 1994, because this
restriction applies only to the listed Japanese products.

E. Violation of Article 23 of the DSU
The affirmative determination made on May 10, the said withholding of liquidation and the
announcement made on May 16 of the proposed imposition of 100 per cent duties, both individually
and collectively, violate Article 23 of the DSU.
The imposition of 100 per cent duties or any other increase in duties on the listed Japanese
products, if implemented, will also violate Article 23 of the DSU.
F. Nullification and Impairment in the Sense of Article XXIII:1(b) of GATT 1994
The said withholding of liquidation, combined with the announcement of the proposed imposition
of 100 per cent duties which can retroactively go into effect as of May 20, has resulted in upsetting
the competitive relationship in the luxury car markets, could not have been reasonably anticipated by
the GOJ at the time of negotiation of the tariff concession on the products concerned, and therefore
nullifies and impairs the benefit accruing to Japan under Article II of GATT 1994 in the sense of
Article XXIII:1(b) of GATT 1994.
G. Need for Treatment as a Case of Urgency
The GOJ believes that this case represents a "case of urgency" referred to in Articles 4 and
12 of the DSU.
(1) These consultations, followed, if necessary, by panel procedures, must move forward
as expeditiously as possible before the situation worsens with the actual imposition of 100 per cent
duties.
(2) The said withholding of liquidation, combined with the announcement of the proposed
imposition of 100 per cent duties which can retroactively go into effect as of May 20, has already caused
significant damage not only to the Japanese automobile industry but also to the US dealers handling
the listed Japanese luxury cars. Unless urgently addressed, the damage, because of its accumulative
nature, would become irreparable.
(3) Since the USG's recourse to the unilateral measures constitutessucha clear-cut violation
of the WTO Agreement, it must be redressed immediately.