llm paper by andrew donovan student number : 2002841

Faculty of Law

Academic Year 2015-16

Exam Session 1

The WTO Dispute Settlement System: an analysis of the

EU-ASEAN jurisprudence

LLM Paper

by Andrew Donovan

Student number : 2002841

Promoter: Prof. Dr. Diederik Bruloot

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TABLE OF CONTENTS

I. INTRODUCTION ........................................................................................................................................ 1

II. ASEAN AND AEC ....................................................................................................................................... 3

1. HISTORICAL OVERVIEW OF ASEAN .................................................................................................. 3

2. INSTITUTIONAL STRUCTURE OF ASEAN ......................................................................................... 5

3. THE ASEAN ECONOMIC INTEGRATION AND THE AEC BLUEPRINTS......................................... 7

4. CONFLICTING DOMESTIC INTERESTS WITHIN ASEAN ................................................................. 9

III. EU- ASEAN RELATIONS ........................................................................................................................ 11

1. INTRODUCTION ................................................................................................................................... 11

2. EU PERSPECTIVE ................................................................................................................................. 11

3. ASEAN PERSPECTIVE.......................................................................................................................... 12

4. EU-ASEAN FTA ..................................................................................................................................... 13

IV. ASEAN MEMBER STATES IN RELATION TO WTO ................................................................... 16

1. REGIONAL TRADE AGREEMENTS WITHIN WTO .......................................................................... 16

2. OVERVIEW OF ASEAN MEMBER STATES WITHIN WTO .............................................................. 17

V. ANALYSIS OF THE EU-ASEAN JURISPRUDENCE UNDER THE WTO DISPUTE

SETTLEMENT SYSTEM .................................................................................................................................. 23

1. INTRODUCTION ................................................................................................................................... 23

2. TRADE DISPUTES ................................................................................................................................. 24

2.1 THE PHILIPPINES .................................................................................................................................. 24

2.1.1 The Philippines – Taxes on Distilled Spirits (DS396, 403) ............................................................. 24

2.2 THAILAND ............................................................................................................................................ 27

2.2.1 European Communities – Duties on imports of rice (DS17) ........................................................... 27

2.2.2 European Communities- Generalized System of Preferences (DS 242) .......................................... 28

2.2.3 European Communities – Export Subsidies on Sugar (DS 283, 265, 266)...................................... 30

2.2.4 European Communities- Customs Classification of frozen boneless chicken cuts (DS 286) .......... 34

2.2.5 Thailand Customs Valuation of Certain Products from the European Communities (DS 370) ...... 37

2.3 INDONESIA ........................................................................................................................................... 38

2.3.1 Indonesia- Certain Measures Affecting the Automobile Industry (DS54) ....................................... 38

2.3.2 European Union – Anti- Dumping Measures on Imports of Certain Fatty Alcohols from Indonesia

(DS 442) ....................................................................................................................................................... 42

2.3.3 European Union- Anti-Dumping Measures on Biodiesel from Indonesia (DS 480) ....................... 45

3. OUTCOME OF TRADE DISPUTES BETWEEN EU AND ASEAN MEMBER STATES (1995-2015) 48

VI. CONCLUDING REMARKS................................................................................................................. 51

VII. BIBLIOGRAPHY .................................................................................................................................. 52

1. JOURNAL ARTICLES ................................................................................................................................... 52

2. BOOKS ...................................................................................................................................................... 53

3. LEGISLATION ............................................................................................................................................ 53

4. JURISPRUDENCE ........................................................................................................................................ 54

5. WEB RESOURCES (LAST CONSULTED APRIL 2016) .................................................................................... 54

6. OTHER ...................................................................................................................................................... 55

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TABLE OF ABBREVIATIONS

AEC ASEAN Economic Community

AEMF ASEAN Expanded Maritime Forum

AFTA ASEAN Free Trade Agreement

APSC ASEAN Political-Security Community

Art. Article

ASC ASEAN Security Community

ASCC ASEAN Socio-Cultural Community

ASCM Agreement on Subsidies and Countervailing Measures

ASEAN Association of South East Asian Nations

CAFTA Comprehensive ASEAN Free Trade Agreement

CEPT Common Effective Preferential Tariffs

CN Combines Nomenclatura

DSB Dispute Settlement Body

DSU Dispute Settlement Understanding

EC European Community

EEC European Economic Community

EU European Union

GATT General Agreement on Tariffs and Trade

GNP Gross National Product

GSP Generalised System of Preferences

FDI Foreign Direct Investment

FTAs Free Trade Agreements

HR Harmonized System

IPR Intellectual Property Rights

IMF International Monetary Fund

LDC Least Developed Countries

MFN Most Favourite Nation

NATO North Atlantic Treaty Organization

NT National Treatment

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RTAs Regional Trade Agreements

SCM Subsidies and Countervailing Measures

TRIMs Trade-related Investment Measures

UNCTAD United Nations Conference on Trade and Development

USSR Union of Soviet Socialist Republics

VCLT Vienna Convention on the law of the treaties

WCO World Customs Organization

WTO World Trade Organization

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I. INTRODUCTION

The economic and trade relationship between EU and ASEAN is mainly determined by EU’s

interest in FDIs1 in ASEAN Member States and in exporting its technologies and services

2 to

the ASEAN market, and by ASEANs interest to develop multiple economic partnerships to

escape from over-dependency on US and Japanese economy3.

The political interest of the EU in the ASEAN region is inspired by the greater influence that

EU wants to have on the security in the ASEAN region and by the wish to cooperate on issues

like climate, environmental protection and the fight against transnational organized crimes4.

ASEAN can use the cooperation with the EU to reinforce its influence in Asia in order to

counterbalance the power of China and US in the region5 and to “manage” the situation in the

South China Sea6.

Within this economic and political context, I will analyse the EU-ASEAN jurisprudence

between 1995 - 2015 on trade disputes under the WTO dispute settlement system.

The first part of this Paper will explain the historical and institutional context of ASEAN. It

will also describe the ASEAN economic integration process that led to the AEC Blueprint,

including an analysis on the conflicting domestic interests within ASEAN7.

In the second part, the EU-ASEAN relations from a EU and ASEAN perspective and FTAs

between EU and ASEAN Member States will be analysed.

1 Foreign Direct Investment (FDI), definition given by the OECD, OECD benchmark definition of Foreign

Direct Investment (2008), Fourth Edition, p. 17: “Foreign Direct investment is a category of cross-border

investment made by a resident in one economy (the direct investor) with the objective of establishing a lasting

interest in an enterprise (the direct investment enterprise) that is resident in an economy other than that of the

direct investor”. 2 Jing Xu and Fei Chen, Analysis on Motivation of EU in Economic and Trade Investment in ASEAN and

Regional Influence (2014), International Journal of Business Administration, vol. 5, No. 5, pp.84-90, “This way

EU also increases its role in politics, security, counter-terrorism, human rights, education and other fields of

ASEAN”. 3 Ibid.

4 Ibid.

5 Eva Pejsova, The EU and ASEAN in 2016 (2016), European Union Institute for Security Studies (EUISS),

pp.1-2 6 Ibid., p.1, “The escalation of tensions between China and US has pushed ASEAN capitals to take side. A strong

and united ASEAN is more essential today than ever before… EU can be of help to ASEAN to deal with the

South China Sea issue” 7 Tham Siew Yean and Sanchita Basu Das, The ASEAN Economic Community and conflicting domestic

interests (2015), Journal of Southeast Asian Economies, Vol. 32, No. 2, pp. 189- 201

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The third part will be dedicated to the RTAs within WTO and an overview of the

characteristic trade volumes of the ASEAN Member States of WTO will be provided.

In the last part, the major cases of EU-ASEAN jurisprudence at the WTO dispute settlement

level will be analysed to discover the main trade disputes and issues between EU and ASEAN

over the last 20 years (1995 – 2015).

Given the particular situation and interests of ASEAN and the economic and political role of

the EU in the region, the main research theme of this Paper is to discover which kind of

disputes between EU and ASEAN have been encountered and if (and to what extend) the

dispute settlement system of WTO has been able to solve the trade issues between EU and the

Member States of ASEAN.

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II. ASEAN AND AEC

1. HISTORICAL OVERVIEW OF ASEAN

The Association of South East Asian Nations is an international organisation established on

August 8th 1967. Five South East Asian states signed the so-called Bangkok Declaration8.

The founding states were the Philippines, Thailand, Indonesia, Singapore and Malaysia. The

Association has to be seen against the common fear of communism during that period (war in

Vietnam). The Bangkok Declaration is a five-page document, declaring “the establishment of

an Association for Regional Cooperation among countries of South-East Asia to be known as

the Association of South-East Asian Nations (ASEAN)”. The most important aims and

purposes of the Association were to “accelerate the economic growth, social progress and

cultural development in the region through joint endeavours in the spirit of equality and

partnership…; promote regional peace and stability through abiding respect for justice and

the rule of law in the relationship among countries of the region and adherence to the

principles of the United Nations Charter; promote active collaboration and mutual assistance

on matters of common interest in the economic, social, cultural, technical and administrative

fields;….”9. In order to carry out the aims and purposes of the Association, the text describes

the establishment of intergovernmental instruments such as annual meetings of the Foreign

Ministers, a standing committee, ad-hoc committees, permanent committees and a National

Secretariat in each member state10

.

On February 24th 1976, during the first ASEAN summit, the five founding member states of

ASEAN signed the “Agreement on the Establishment of the ASEAN Secretariat (in force

May 21st 1976), the “Treaty of Amity and Cooperation in South East Asia” (in force June

21st 1976) and the “1976 Declaration of ASEAN Concord”, or so-called “Bali Concord I”11

.

The “Bali Concord I” had a political, economic, social, cultural, security and “ASEAN

8 Centre For International Law, National University of Singapore (NUS), http://www.aseansec.org/1212.htm,

“1967 ASEAN Declaration” or “Bangkok Declaration”– unofficial text. For the official text, see website of

ASEAN: http://agreement.asean.org/media/ download/20140117154159.pdf 9 Ibid.

10 The current institutional structure of ASEAN will be described more in detail in section 2 of this chapter

11 For the full original text on the “Agreement on the Establishment of the ASEAN Secretariat “ and “Treaty of

Amity and Cooperation in South East Asia”, please consult

http://agreement.asean.org/media/download/20140117151823.pdf and

http://agreement.asean.org/media/download/20131230235433.pdf

http://www.aseansec.org/1212.htm

http://agreement.asean.org/


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machinery” section, describing vaguely the main issues and agreements on the respectively

sections of the concord.

Later on, the “Agreement on the Establishment of the ASEAN Secretariat” and the “Treaty of

Amity and Cooperation in South East Asia” were amended with protocols with new Member

States becoming part of ASEAN12

. The documents signed during the first summit of ASEAN

and the “Bali Concord I” has to be seen in the context of the end of the Vietnam war and the

changing balance of power in the South-East Asian region. The region’s economic growth

during the seventies and the signature of the agreements in Bali resulted in several industrial

projects within the ASEAN region.

The end of the Cold War between the USSR and the USA gave the region more political

independence and allowed ASEAN to become a greater regional power during the nineties.

Vietnam, Laos, Myanmar and Cambodia joined ASEAN during that period.

In the aftermath of the 1997 Asian financial crisis, the challenges posed by the globalisation

and the 2002 Bali terrorist attacks, the “Declaration of the ASEAN Concord II”, the so-called

“Bali Concord II” was signed in Bali on October 7th 2003. This declaration was concluded

during the 9th ASEAN summit and accelerated the regional integration of ASEAN, based on

a framework of 3 pillars: the ASEAN Security Community (ASC), the ASEAN Economic

Community (AEC) and the ASEAN Socio-Cultural Community (ASCC)13

. The ASC relies on

the peaceful intra-regional processes14

. In order to enhance ASEAN’s economic weight and

power in the region, the final goal of AEC was (and still is) to establish a single market and

production base by 202015

. The AEC16

comprises two fundamental approaches: regional

integration and competitiveness. The ASCC aims to reduce unemployment, to attain better

Human Resources development, and to develop programs to tackle human health issues.

12 Brunei Darussalam (January 8th 1984), Vietnam (July 28th 1995), Laos and Myanmar (July 23th 1997) and

Cambodia (April 30th 1999) 13

For the full original text on the “Declaration of Asean Concord II”, please consult the website of Asean.org 14

The ASC includes maritime cooperation and fight against terrorism, but no military or defence pacts. The

main instrument is the “Treaty of Amity and Cooperation” 15

Rosabel B. Guerrero, “Regional Integration: the ASEAN vision in 2020 (2010 ), IFC Bulletin, No. 32, pp.52-

58 16

The AEC and its evolution will be analysed more in detail in section 3 of this chapter.

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There is an attachment to the “Bali Concord II” declaration, containing “Recommendations of

the high-level task force on ASEAN Economic Integration”17

.

On November 20th 2007, the “Charter of the Association of South East Asian Nations” was

signed in Singapore18

(effective December 15th 2008). This charter turned ASEAN into a

legal entity and aimed to create a single free-trade area. The “Charter of the Association of

South East Asian Nations” did not only confer “legal personality” to ASEAN, but also

explicitly permitted ASEAN to sign treaties19

.

On March 1st 2009, in Cha-Am, Thailand the “Cha-Am Hua Hin Declaration on the Roadmap

for an ASEAN Community 2009 – 2015” was signed. It comprised the Blueprints on APSC20

,

AEC and ASCC as roadmap for the ASEAN integration process 2009 – 2015, with detailed

implementation schedules. On December 31st 2015 the AEC was a fact.

2. INSTITUTIONAL STRUCTURE OF ASEAN

ASEAN is an international organisation with an intergovernmental structure21

. The emphasis

on consensus and collective decision-making reflects the fact that ASEAN Member States do

not give supra-national power to the Association.

Mr. Rodolfo C. Severino, former ASEAN Secretary-General, formulated it as follows: “It is

not and was not meant to be a supranational entity acting independently of its members. It

has no regional parliament or council of ministers with law-making powers, no power of

enforcement, no judicial system. Much less is it like NATO, with armed forces at its command,

or the United Nation Security Council, which can authorize military action by its members

17 This document has a full chapter on “current economic cooperation initiatives” in trade of goods, trade in

services, investments, intellectual property rights (IPR’s), capital mobility. It also contains a chapter on “New

initiatives and measures” with “priority of integration sectors” (coordinated by country – Indonesia: wood-based

products and automotive; Malaysia: rubber-based products, textiles and apparels; Myanmar: agro-based products

and fisheries; Singapore: e-ASEAN and healthcare; Thailand: air travel and tourism).

The third chapter describes the “institutional strengthening”, the fourth chapter describes the “outreach” and the

last chapter handles about technical cooperation. Annex 1 to the attachment describes the ASEAN “mechanism

of the dispute settlement system”, also including the enforcement mechanism. 18

Full original text available on http://agreement.asean.org/media/download/20141204151618.pdf 19

Art. 3 of the ASEAN Charter 20

APSC: ASEAN Political-Security Community 21

Chesterman, Simon, “Does ASEAN exist? The Association of Southeast Asian Nations as an International

Legal Person” (2008), Singapore Year Book of International Law, Vol. 12, pp. 199-211

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under one flag”22

. According to the former Minister of Foreign Affairs of Singapore, Mr

George Yeo: “Europe is built on a common value system which has its roots in Rome, Greece,

and Judeo-Christianity. We do not have that same common history, and in fact ASEAN is

marked by its diversity. The fact that we have such an admixture of religions and political

systems, and historical connections, indicates that the founding basis of ASEAN cannot be the

same as that of Europe…Many of us in ASEAN do not see us ever becoming like the Europe of

today, but we can certainly become the Europe of the Common Market, the Europe of the

Economic Community”23

The ASEAN bodies defined by the charter are the ASEAN Summit, the ASEAN Coordinating

Council, the ASEAN Community Councils, the ASEAN Sectoral Ministers Bodies, the

Secretary-General, The ASEAN Secretariat, the Committee of Permanent Representatives to

ASEAN, the ASEAN National Secretariats, the ASEAN Human Rights Body and the ASEAN

Foundation.24

Table 1; Source: Yuyun Wahyuningrum, Senior Advisor on ASEAN, Human Rights Working Group, 31.10.2013, slide 18 of presentation

22 Rodolfo SEVERINO, ‘‘Asia Policy Lecture: What ASEAN is and What it Stands for’’, (1998), The Research

Institute for Asia and the Pacific, University of Sydney, Australia 23

Singapore Parliamentary Debates, vol. 84 at col. 1181 (2008). 24

ASEAN charter , Art. 7-14

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Explaining all the different bodies of ASEAN in detail is beyond the scope of this research

Paper. I will limit myself by naming the most important bodies and its main function (s). The

ASEAN Summit is the supreme policy-making body and contains the heads of states or

government of the Member States25

. The ASEAN Coordinating Council is the second most

important body and comprises the ASEAN Foreign Ministers of the Member States26

. It

coordinates the implementation of decisions of the ASEAN Summit27

. The Secretary-General

is the chief Administrative Officer of ASEAN and is appointed by the ASEAN Summit for a

non-renewal period of five years28

. The current Secretary-General of ASEAN for the period

2013-2017 is H.E. Le Luong Minh from Vietnam. The Secretary-General is the head of the

ASEAN Secretariat. Among other tasks, the ASEAN Secretariat is the administrative organ

that facilitates and monitors the implementation of ASEAN agreements29

. The ASEAN

Secretariat is seated in Jakarta since 1992.

3. THE ASEAN ECONOMIC INTEGRATION AND THE AEC BLUEPRINTS

The first major step into regionalism has been the AFTA put in place in 1992 and aiming to

promote the region as a single production unit30

. It committed the Member States to reduce

and to ultimately eliminate tariffs and non-tariff barriers over a period of 15 years. Free trade

was defined within an average of 0-5 percentage of tariffs and excluded certain sensitive

products. The AFTA for the founding Member States of ASEAN and Brunei Darussalem

became operational in 2004, and theoretically the full implementation was in 2006 (Vietnam),

2008 (Laos and Myanmar) and in 2010 (Cambodia). There remained some country-specific

implementations exeptions on certain products though. During the same period, there were

also some other initiatives such as the ASEAN “one-stop investment centers” and the

“ASEAN Investment Area” (AIA), both with maximum 0-5 percent tariffs and non-tariff

barrier incentives31

.

25 Ibid. Art 7.2 (a) and Art. 7.1

26 Ibid. Art. 8.1

27 Ibid. Art. 8.2 (a) and 8.2 (b)

28 Ibid. Art. 11

29 Supra 23, Art. 11.2

30 Yu, Miaojie, “Paterns of trade, comparative advantages and productivity in the ASEAN-China-India Region

(2011), available on SSRN: http://ssrn.com/abstract=1854907 31

Rosabel B. Guerrero, “Regional Integration: the ASEAN vision in 2020 (2010 ), IFC Bulletin, No. 32, pp.52-

58

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During the Bali Concord II in 2003, ASEAN pursued on the establishment of an ASEAN

Community by 2020, founded on the three pillars ASC, AEC and ASCC32

and on an earlier

text, adopted in Kuala Lumpur on December 15th 1997, “ASEAN Vision 2020”33

.

In 2003 the end-goal of the AEC seemed to be the most advanced of the three, being the

establishment of a single market and of a single production base by 2020 to enhance the

ASEAN economic weight. From the start the AFTA and AEC were initiated from an “open

regionalism” concern, meaning that the important economic partners are outside the ASEAN

region34

.

On November 20th 2007, the ASEAN Member States adopted during the 12th ASEAN

Summit the “Declaration on the ASEAN Economic Community Blueprint”35

. The Blueprint

would transform ASEAN into a single market and production base, a highly competitive

economic region, a region of equitable economic development, and a region fully integrated

into the global economy36

. The AEC Bleuprint included its strategic schedule in annexe to the

declaration37

. The declaration literally stated that the AEC should transform “ASEAN into a

region with free movement of goods, services, investment, skilled labour and freer flow of

capital”. Paragraph 11 of the declaration stipulates the remaining issues to be resolved to

obtain the free movement of goods, such as the removal of non-tariff barriers, integrating

customs procedures, establishing the ASEAN Single Window38

, CEPT39

, Rules of Origin40

and harmonising standards procedures41

. As already mentioned supra p.7 (footnote 17),

twelve priority integration sectors had been identified for accelerated economic integration42

.

32 For the notions of ASC, AEC and ASCC, see supra p.7

33 http://www.asean.org/?static_post=asean-vision-2020

34 “open regionalism” of ASEAN as oposed to the initial “inward looking” approach of the EU. See Rosabel B.

Guerrero, “Regional Integration: the ASEAN vision in 2020 (2010 ), IFC Bulletin, No. 32, p.54 35

Signed in Singapore. See original text on: http://www.asean.org/wp-content/uploads/archive/5187-10.pdf 36

Chia, Siowyue, The ASEAN Economic Community: Progress, Challenges and Prospects (2013), ADBI

working paper 440 37

As stated in the preamble to the “Declaration on the ASEAN Economic Community Blueprint” of 2007 38

AEC Blueprint, p.9 (18), “The ASEAN Single Window is an environment where the National Single Windows

of individual Member States operate and integrate. National Single Window enables a single submission of data

and information, a single and synchronous processing of data and information and a single decision making for

customs clearance of cargo. This would enhance trade efficiency and competiviness.” 39

CEPT: Common Effective Preferential Tariffs 40

Including the operational certification procedures 41

Manchin, Miriam and Pelkmans-Balaoing, Annette O., “Rules of Origin and the web of East Asian Free Trade

Agreements” (2007), World Bank policy research working paper No. 4273 42

Blueprint, section A6, para. 35-37

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Food, Agriculture and Forestry programs within the AEC Blueprint aimed at promoting the

ASEAN agricultural cooperatives for the benefit of farmers in the region43

. There is also a

part on IPR, with the ASEAN IPR Action Plan 2004-2010 and the Work Plan for ASEAN

Cooperation on Copyrights44

and the accession to the Madrid Protocol, where possible.

During the 47th ASEAN Economic Minister’s Meeting held in Kuala Lumpur, Malaysia, on

August 22th 2015, the Ministers noted that 91,5% of the prioritised AEC Blueprint measures

had been implemented45

. They also prepared the new AEC Blueprint for 202546

.

4. CONFLICTING DOMESTIC INTERESTS WITHIN ASEAN

Although the notification during the 47th ASEAN Economic Minister’s Meeting indicated

that the success rate of implementation of the 2007 AEC Blueprint goals stands at 91.5%47

,

studies question the use of the monitoring mechanism approach48

.

Indeed, certain studies indicate that tariffs among ASEAN countries have been reduced, but

the non-tariff barriers49

have not. Examples of non-tariff barriers still remaining in ASEAN

are for example: non-automatic licensing schemes, technical regulations, benchmarked

standards, administrative costs, lack of physical and institutional connectivity50

. In their

article on “AEC and the conflicting domestic interests” (2015), Tham and Basu Das argue

that the economic integration within ASEAN is part of the “new regionalism”; first there was

the AFTA51

in the early nineties to provide new political purpose to the Association after the

end of the cold war. Then there was the AEC for the first time announced during the “ASEAN

Vision 2020” in 1997, and founded during the Bali Concord II in 2003, as an answer to the

43 Ibid., section A7, para. 38-40

44 Ibid., section B3, para. 43-45

45 http://www.eria.org/2015_0822_JointMediaStatement-AEM-FINAL.pdf

46 For details on the AEC Blueprint 2025, please visit:

http://www.asean.org/storage/images/2015/November/aec-page/AEC-Blueprint-2025-FINAL.pdf 47

The 26th ASEAN Summit (April 2015) stated that 90,5% of the 2007 AEC Blueprint goals were achieved 48

Tham Siew Yeah and Sanchita Basu Das, “The ASEAN Economic Community and conflicting domestic

interests: an overview” (2015), Journal of South East Asian Economics, Vol. 32, No. 2, pp. 189-201 49

Kawai Masahiro and Ganesh Wignaraja, “Main findings and policy recommendations”. In Asia’s Free Trade

Agreements: How is business responding?”, edited by Kawai Masahiro and Ganesh Wignaraja. Cheltenham and

Northhampton: Asia Development Bank Institute and Edward Elgar Publishing (2011) 50

Ibid. 45 51

Supra p.9

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Asian Financial crisis of 199752

, and as an answer to the accession of China to the WTO53

.

Finally, to remain relevant in multilateral negotiations in a period of a multiplication of

RTAs54

, ASEAN understood that economic integration was necessary: economic, political

and strategical imperatives were at the basis of AEC and pushed these ten small economies to

cooperate.

However, the implementation of AEC commitments shows that most countries encounter

domestic conflicts with the liberalization action plans and timelines described in the 2007

AEC Blueprint55

. These conflicts are due to domestic policies of the concerned country or to a

lack of domestic support and/or consultation among key stakeholders in that economy. In The

Philippines and in Malaysia for example, domestic policies are not aligned with the

liberalization commitments. Research in Thailand and Vietnam shows a lack of stakeholder

consultations to make them better understand the commitments of their countries to the AEC.

In most ASEAN Member States there are no or not enough assistance programmes or social

safety nets for the poor and small domestic producers nor for the workers. Preparing these

domestic producers and workers to the AEC market will be a main challenge to fully

implement AEC and to benefit from its liberalization measures.

The 2025 AEC Blueprint should help reducing these conflicting domestic interests in ASEAN

and prepare the region to move towards a deeper economic integration beyond 2015.

52 The Asian Financial Crisis (AFC) made ASEAN realise the importance of a collective economic mechanism

for regional stability. 53

The accession of China to the WTO and its succes and rapid growth made ASEAN realise that it was

necessary to cooperate and promote the region as a single production base and attractive market, and to benefit

from economies of scale. 54

RTA’s by European nations and the US 55

Singapore is an exception to this rule. The research of Tham and Basu Das shows that, given increasing

globalization, protectionist measures are no longer a viable policy repsonse. The Singapore policy response has

been to fully support liberalization trade in goods within the AEC while assisting affected businesses and

workers; helping them upgrade and move resources into more competitive sectors and activities.

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III. EU- ASEAN RELATIONS

1. INTRODUCTION

The EU and ASEAN are both regional organisations and power centres managing

interdependence and security issues. The bilateral relations between the EU and Member

States of ASEAN have been initiated in the eighties and have been intensified and Multi-

layered ever since. Bilateral agreements exist on political, economic, trade, investment and

cultural issues. In 2012, the EU was the third largest trading partner of ASEAN and ASEAN

was the fifth largest trading partner of the EU56

. More recent studies show that EU is now the

second largest trading partner of ASEAN, after China and before Japan.57

2. EU PERSPECTIVE

The EU has played an important role in the regional integration process of ASEAN. In 2001

the European Commission and Council launched the communication “Europe and Asia: a

Strategic Framework for Enhanced Partnership”58

as an updated strategic framework for the

European relations with Asia59

. Among other things, “further strengthen our mutual trade and

investment flows with the region” was a major concern. Within this framework the EU has

been granting financial assistance and best practices advice to the ASEAN region (2001 –

2007). In 2007, the ASEAN-EU Plan of Action to implement the Nuremberg Declaration on

an EU-ASEAN Enhanced Partnership (2007 – 2012) has been signed and in April 2012, the

EU and ASEAN signed the Bandar Seri Bagawan 5-year Plan of Action on political and

economic affairs (2012-2017)60

. The current cooperative programmes mainly invest in trade,

energy, environment and higher education. Funding ASEAN projects fulfils the EU’s main

ambitions to be present in Asia and to support regional cooperation and multilaterism. With

China and US re-orientating their policies and influence towards the Asian continent, ASEAN

could become for the EU an important gateway into Asia.

56 Gauri Khandekar, “Mapping EU-ASEAN Relations” (2014), FRIDE (European Think Tank For Global

Action), pp. 1-69 57

European Commission, Directorate for Trade (2015) (source IMF) 58

http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52001DC0469&from=EN 59

“Towards a new Asia Strategy” has been a communication from the commission in 1994. “Europe and Asia: a

Strategic Framework for Enhanced Partnership” was an updated version taking into account the key

developments since 1994. 60

Ibid. 52

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The most important strategic economic interests that the EU has in the ASEAN region are

FDIs, export market for highly developed technologies and services, and the gate to connect

to other Asian countries through the already existing ASEAN partnerships with countries in

the region (China-ASEAN Free Trade Area – CAFTA – Comprehensive Partnerships with

Japan and India)61

. The top-five trading partners in ASEAN are Singapore, Malaysia,

Thailand, Indonesia and The Philippines. Singapore is the most important trading partner for

the EU, capturing more than 35% of EU’s total trade with ASEAN. Laos, Cambodia and

Myanmar benefit from Europe’s EBA scheme62

.

3. ASEAN PERSPECTIVE

ASEAN does its best to build cooperative solutions between the major economic and political

powers at stake in East-Asia, being China, India and Japan. Maritime security for example is

of great importance through the Asian continent, with growing political turbulence over the

China Sea dispute. The AEMF63

is a recent initiative of ASEAN that shows the importance of

this issue in Asia.

The ASEAN economy is highly depending on extra-regional trade, with a very high export

rate. To overcome over-dependency on Japan and China, ASEAN has to develop multiple

economic partnerships such as cooperation with the EU. The main trade flows by HS section

2010 - 201464

are “Machinerie and appliances”, “Products of the chemical or allied

61 Jing Xu and Fei Chen, supra 2

62 Supra 52, EBA scheme: Laos, Cambodia and Myanmar benefit as LDCs (Least Developed Countries) from

the “Everything But Arms” scheme, enjoying duty and quota-free access on all exports except arms and

ammunition to the European Single Market. 63

Supra 52, AEMF: ASEAN’s Expanded Maritime Forum held for the first time in 2012 with ASEAN,

Australia, China, India, Japan, New-Zealand, South Korea, Russia and the US under the UN Convention on the

Law of the Sea and new dispute settlement mechanisms shows the importance of the maritime issue for the

Asian continent. 64

Harmonized System (HS), opposed to the Standard International Trade Classification (SITC). Definition given

by the World Customs Organisation: “The Standard International Trade Classification (SITC) and Harmonized

System (HS) are two different trade classifications, the main difference being that the SITC is focused more on

the economic functions of products at various stages of development, whereas the HS deals with a precise

breakdown of the products' individual categories. The HS was introduced in 1988, and has since then it has

become an internationally accepted method of classification wherever products are traded. The HS classification

is "harmonized" in relation to the classifications of the United Nations and the European Communities. Goods

are classified according to simple objective criteria and applications. The HS, a revision of the CCCN (Customs

Cooperation Council Nomenclature), 1974 classification system, includes a six-digit sub-heading that was

introduced for more precise tagging of products. At present this system contains 21 sections, 97 chapters and

1,241 headings at the four-digit level, 930 of which are further divided in sub headings. HS-1996 (revision 1)

represented a total of 5,113 separate categories of goods identified by a six-digit code. Most of the countries that

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industries”, “Plastics, rubber and articles thereof” and “Textiles and textile articles”65

. A

recent report of Mckinsey indicates that ASEAN is the fourth largest exporting zone in the

world. It accounts for 7% of world trade: “Vietnam specializes in textiles and apparel, while

Singapore and Malaysia are leading exporters of electronics. Thailand has joined the ranks of

leading vehicle and automotive-parts exporters. Other ASEAN members have built export industries

around natural resources. Indonesia is the world’s largest producer and exporter of palm oil, the

largest exporter of coal, and the second-largest producer of cocoa and tin. While Myanmar is just

beginning to open its economy, it has large reserves of oil, gas, and precious minerals. In addition

to exporting manufactured and agricultural products, the Philippines has established a thriving

business-process-outsourcing industry. China, a competitor, has become a customer. In fact, it is

now the most important export market for Malaysia and Singapore. But demand from the United

States, Europe, and Japan continues to propel growth. Export-processing zones, once dominated by

China, have been established across ASEAN. The Batam Free Trade Zone (Singapore–Indonesia),

the Southern Regional Industrial Estate (Thailand), the Tanjung Emas Export Processing Zone

(Indonesia), the Port Klang Free Zone (Malaysia), the Thilawa Special Economic Zone (Myanmar),

and the Tan Thuan Export Processing Zone (Vietnam) are all expected to propel export growth.”66

.

In general we could state that ASEAN is standing at a crossroad of world trade flows, hence its

growing economic importance. A report of IHS Global Insight67

estimates that ASEAN may have a

10 trillion dollar economy by 2030, becoming one of the five biggest economies in the world.

4. EU-ASEAN FTA

In April 2007 the European Commission got a mandate from the Council to negotiate a Free

Trade Agreement with countries of ASEAN. In its communication “Global Europe:

competing in the world”, the European Commission confirmed its commitment to the WTO

as being the most effective way to expand world-trade. It also stated that the EU would use

the WTO platform to open new opportunities to trade, for example by negotiating

comprehensive Free Trade Agreements with carefully chosen parties.

have adopted HS have added one or more digits to further classify products of particular national interest (8-

digit or 10-didgit level”. 65

European Commission, Directorate for Trade (2015) (source IMF) 66

McKinsey report, “ Southeast Asia is one of the world’s fastest-growing markets - and one of the least well known” (2016) 67

IHS is a consulting company offering information, analytics and expertise on the global business landscape

www.ihs.com

http://www.ihs.com/

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Negotiations with a regional grouping of 7 ASEAN Member States started in July 2007. The

efforts to negotiate a EU-ASEAN FTA failed and in 2009 the EU decided to discuss FTA’s

on bilateral basis with some ASEAN Member States. In 2010 negotiations with Singapore and

Malaysia were launched, in 2012 with Vietnam, and in 2013 with Thailand. Negotiations with

The Philippines were formally launched on December 22nd 2015.

The FTA with Singapore was completed at the end of 2014. The draft agreement needs to be

formally approved by the European Commission and the Council, and to be ratified by the

European Parliament68

.

The FTA with Vietnam has been initiated by Commissioner De Gucht in June 2012 and on

December 2015, the European Commission announced the formal conclusion of the EU-

Vietnam FTA. The text is now subject to a legal review and has to be translated into the EU

languages. Then it will be presented for the Council and the European Parliament for

ratification.

The negotiations on the FTA with Malaysia are half-way, but the most difficult issues remain

unsolved. There is still a long way to go.

The last meeting with Thailand on the EU-Thailand FTA took place in April 2014.

Negotiations on tariffs, non-tariffs, services, investment, procurement, IP, competition,

regulatory issues and sustainable development have been negotiated. There is currently no

next FTA round scheduled.

Negotiations for a FTA with The Philippines were launched December 22nd 2015. The first

round of negotiations will take place in the first half of 2016.

An official working document69

from the European Commission on EU-ASEAN FTA

confirms that “the commission continues exploratory informal talks with other individual

68 European Commission, Directorate-General Trade, in July 2015 the Commission initiated proceedings with

the ECJ to rule on the competence to sign and ratify the FTA. 69

Official “working document” on ASEAN FTA negociations status, European Commission, Directorate-

General Trade (2016)

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ASEAN members states with a view to assess the level of ambition at bilateral level…A

regional agreement remains the ultimate objective…region-region negotiations has taken

place in January 2016 and is expected to continue over a number of meetings.”

Based on the content of this document one could expect that the 2009 EU-ASEAN FTA

frozen region-region negotiations, will re-start in the years to come.

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IV. ASEAN Member States in relation to WTO

1. REGIONAL TRADE AGREEMENTS WITHIN WTO

The WTO was established to promote and facilitate free trade across the globe built on the

principle of non-discrimination and multilateral trade negotiations70

. WTO was established in

Marrakesh on April 14th 1994 (effective January 1st 1995), where 123 nations signed the

Marrakesh agreement71

. Most WTO Member States are also involved in RTAs, such as FTAs.

Based on article XXIV of the GATT, and under strict conditions described in this article,

these RTAs are allowed to foster closer integration between the economies of countries

parties to such agreements. The purpose should be to “facilitate trade between the constituent

territories and not to raise barriers to the trade of other contracting parties with such

territories”72

.

ASEAN has been engaged in negotiating and concluding some FTAs. There is the AFTA73

itself, binding the 10 ASEAN Member States, the ASEAN-Australia and New Zealand FTA74

and negotiations on an ASEAN-Hong-Kong, China FTA have been launched75

.

At Doha the WTO Member States agreed to negotiate on better procedures concerning the

WTO provisions applying to Regional Trade Agreements and to take into account the

developmental aspects of certain regions76

. Currently there are worldwide 267 RTAs in

force77

. The question of whether these RTAs lead to more global free trade is relevant.

According to traditional theory of Adam Smith and David Ricardo we know that global free

70 S. Lester, B. Mercurio, A. Davies, World Trade Law Materials and commentary (2012), Hart Publishing, pp.

635-639 71

Under the WTO framework the GATT text (General Agreement on Tariffs and Trade), signed by 23 nations in

Geneva (October 30th 1947, effective January 1st 1948), is still in effect (the original GATT text has been

modified by the so-called GATT 94 text). 72

GATT, Art. XXIV, para. 4 73

Supra p. 9 74

In effect since January 1st 2010 75

ASEAN also concluded an ASEAN-India Comprehensive Economic Cooperation Agreement, an ASEAN-

Japan Comprehensive Economic Partnership, an ASEAN People’s Republic of China Comprehensive Economic

Cooperation Agreement and an ASEAN-Korea Comprehensive Economic Cooperation Agreement. ASEAN+6

(Regional Comprehansive Economic Partnership) negotiations have been launched in 2013. 76

Cf. WTO General Council Decision on the Transparency Mechanism for RTAs (2006) 77

RTAs have to be notified to the WTO https://www.wto.org/english/tratop_e/region_e/region_e.htm

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trade is more beneficial to countries than regional free trade78

. However, research suggests

that RTAs among like-minded nations produce faster agreements on trade liberalization than

the WTO-based multilateral approach. In his article “The future of global trade and the

WTO”79

, Jean-Pierre Cling suggests that the WTO could try to articulate regional agreements

and to make them consistent between themselves and with WTO rules (and not as a

derogation on WTO rules).

2. OVERVIEW OF ASEAN MEMBER STATES WITHIN WTO

There are currently 162 States member of WTO80

. All 10 ASEAN Member States are WTO

Member States. ASEAN as such is not a Member State81

.

Myanmar has signed the GATT agreement on July 29th 1948 and accessed the WTO on

January 1st 1995. With a population of 54 mio the country ranks 64th (exports) and 61st

(imports) on the WTO world trade ranking for Merchandise82

and 74th (exports) and 96th

(imports) on the WTO world trade ranking for Commercial services83

. The value of its

merchandise exports in 2014 was worth 11.031 mio US dollars (F.O.B)84

, being 0,06 % of

total world exports . The main export merchandises by commodity group were “Agricultural

products” (26,5%), “Fuels and mining products” (43,8%) and “Manufactures” (29,5%). The

main export destinations were Thailand (41,7%), Hong Kong, China (21,1%), India (12,6%),

China (6,2%) and Singapore (3,6%). The value of its merchandise imports in 2014 was worth

16.226 mio US dollars (C.I.F)85

, being 0,08% of total world imports. The main import

merchandises by commodity Group were “Agricultural products” (5,1%), “Fuels and mining

products” (17,3%) and Manufactures (67,9%). The main countries of origin for the imports of

Myanmar are China (27,1%), Singapore (27%), Thailand (11,4%), Republic of Korea (6,1%)

and Japan (5,3%)86

.

78 Jose L. Tongzon, “Free Trade Agreements: WTO and ASEAN Implications” (2004), The Copenhagen Journal

of Asian Studies, vol. 20, pp. 98-110 79

Jean-Pierre Cling, “The future of global trade and the WTO” (2014), Emerald Group Publishing Limited, vol.

16, No. 2, pp. 109-125 80

Source online: www.wto.org 81

The European Union is a Member State of the WTO; ASEAN is not. 82

Source: online stat.wto.org. (2014) excluding intra-EU trade 83

Ibid. 84

Free On Board (F.O.B) 85

Cost, Insurance and Freight (C.I.F) 86

Source: online stat.wto.org. (2014)

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Indonesia has signed the GATT agreement on February 24th 1950 and accessed the WTO on

January 1st 1995. With a population of 253 mio the country ranks 20th (exports) and 20th

(imports) on the WTO world ranking for Merchandise87

and 22nd (exports) and 20th (imports)

on the WTO world trade ranking for Commercial services88

. The value of its merchandise

exports in 2014 was worth 176.293 mio US dollars (F.O.B), being 0,93 % of total world

exports . The main export merchandises by commodity group were “Agricultural products”

(25%), “Fuels and mining products” (33,9%) and “Manufactures” (40,2%). The main export

destinations were Japan (13,1%), China (10%), European Union (9,6%), Singapore (9,5%)

and United States (9,4%). The value of its merchandise imports in 2014 was worth 178.179

mio US dollars (C.I.F), being 0,93% of total world imports. The main import merchandises by

commodity Group were “Agricultural products” (12,5%), “Fuels and mining products”

(27,9%) and Manufactures (58,8%). The main countries of origin for the imports of Indonesia

are China (17,2%), Singapore (14,1%), Japan (9,6%), European Union (7,1%) and Republic

of Korea (6,7%)89

.

Malaysia has signed the GATT agreement on October 24th 1957 and accessed the WTO on



and 18th (exports) and 19th (imports)



exports in 2014 was worth 234.139 mio US dollars (F.O.B), being 1,23% of total world


(12,9%), “Fuels and mining products” (25%) and “Manufactures” (61,6%). The main export

destinations were Singapore (14,2%), China (12,1%), Japan (10,8%), European Union (9,5%)

and United States (8,4%). The value of its merchandise imports in 2014 was worth 208.864

mio US dollars (C.I.F), being 1,09% of total world imports. The main import merchandises by

commodity Group were “Agricultural products” (9,7%), “Fuels and mining products”

(22,5%) and Manufactures (65,8%). The main countries of origin for the imports of Malaysia

87 Ibid. 77

88 Ibid.

89 Ibid. 81

90 Supra 77

91 Ibid.

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are China (16,9%), Singapore (12,5%), European Union (10,4%), Japan (8,0%) and United

States (7,7%)92

.

Singapore has signed the GATT agreement on August 20th 1973 and accessed the WTO on

January 1st 1995. With a population of 5.5 mio the country ranks 9th (exports) and 10th


and 6th (exports) and 6th (imports) on

the WTO world trade ranking for Commercial services94




(2,9%), “Fuels and mining products” (17,9%) and “Manufactures” (70,9%). The main export

destinations were China (12,6%), Malaysia (12,0%), Hong Kong, China (11,0%), Indonesia

(9,4%) and the European Union (8,0%). The value of its merchandise imports in 2014 was

worth 366.247 mio US dollars (C.I.F), being 1,92% of total world imports. The main import



Singapore are China (12,1%), European Union (12,0%), Malaysia (10,7%), United States

(10,4%) and Chinese Taipei (8,2%)95

.

The Philippines have signed the GATT agreement on December 27th 1979 and accessed the

WTO on January 1st 1995. With a population of 100 mio the country ranks 37th (exports) and

27th (imports) on the WTO world ranking for Merchandise96

and 21st (exports) and 28th

(imports) on the WTO world trade ranking for Commercial services97

. The value of its

merchandise exports in 2014 was worth 62.100 mio US dollars (F.O.B), being 0,33% of total

world exports . The main export merchandises by commodity group were “Agricultural

products” (11,2%), “Fuels and mining products” (9,5%) and “Manufactures” (78,3%). The

main export destinations were Japan (22,5%), United States (14,1%), China (13,0%),

European Union (10,9%) and Hong Kong, China (9,0%). The value of its merchandise

imports in 2014 was worth 67.546 mio US dollars (C.I.F), being 0,35% of total world

92 Supra 81

93 Ibid. 85

94 Ibid.

95 Ibid. 87

96 Ibid. 85

97 Ibid.

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imports. The main import merchandises by commodity Group were “Agricultural products”

(12,8%), “Fuels and mining products” (21,8%) and Manufactures (65,0%). The main

countries of origin for the imports of The Philippines are China (15,2%), the European Union

(11,6%), United States (8,9%), Japan (8,2%) and Republic of Korea (7,7%)98

.

Thailand has signed the GATT agreement on November 20th 1982 and accessed the WTO on



and 13th (exports) and 17th (imports)





(17,5%), “Fuels and mining products” (6,6%) and “Manufactures” (74,7%). The main export

destinations were China (11,0%), United States (10,5%), European Union (10,3%), Japan

(9,6%) and Malaysia (5,6%). The value of its merchandise imports in 2014 was worth

227.952 mio US dollars (C.I.F), being 1,19% of total world imports. The main import



Thailand are China (16,9%), Japan (15,7%), European Union (8,5%), United States (6,4%)

and Malaysia (5,6%)101

.

Brunei Darussalam has signed the GATT agreement on December 9th 1993 and accessed the

WTO on January 1st 1995. With a population of 423 thousands the country ranks 67th

(exports) and 113th (imports) on the WTO world ranking for Merchandise102

and 120th

(exports) and 87th (imports) on the WTO world trade ranking for Commercial services103

.

The value of its merchandise exports in 2014 was worth 10.509 mio US dollars (F.O.B),

being 0,06% of total world exports . The main export merchandises by commodity group

were “Agricultural products” (0,4%), “Fuels and mining products” (92,6%) and

“Manufactures” (6,8%). The main export destinations were Japan (37,2%), Republic of Korea

98 Supra 81

99 Supra 77

100 Ibid.

101 Ibid. 93

102 Ibid. 94

103 Ibid.

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(11,0%), India (9,1%), Australia (7,6%) and Indonesia (6,1%). The value of its merchandise

imports in 2014 was worth 3.599 mio US dollars (C.I.F), being 0,02% of total world imports.

The main import merchandises by commodity Group were “Agricultural products” (15,6%),

“Fuels and mining products” (11,4%) and Manufactures (72,5%). The main countries of

origin for the imports of Brunei Darussalam are Malaysia (20,6%), Singapore (20,4%),

European Union (11,5%), China (9,9%) and United States (9,0%)104

.

Cambodia has accessed the WTO on October 13th 2004. With a population of 15 mio the

country ranks 66th (exports) and 65th (imports) on the WTO world ranking for

Merchandise105

and 54th (exports) and 88th (imports) on the WTO world trade ranking for

Commercial services106

. The value of its merchandise exports in 2014 was worth 10.800 mio

US dollars (F.O.B), being 0,06% of total world exports . The main export merchandises by

commodity group were “Agricultural products” (7,0%), “Fuels and mining products” (0,2%)

and “Manufactures” (92,8%). The main export destinations were European Union (27,2%),

United States (23,5%), Hong Kong, China (17,2%), Singapore (8,6%) and Canada (5,2%).

The value of its merchandise imports in 2014 was worth 13.500 mio US dollars (C.I.F), being

0,07% of total world imports. The main import merchandises by commodity Group were

“Agricultural products” (5,0%), “Fuels and mining products” (8,7%) and Manufactures

(57,6%). The main countries of origin for the imports of Cambodia are China (32,6%), United

States (12,2%), Thailand (11,9%), Vietnam (10,7%) and Hong Kong, China (7,2%)107

.

Vietnam has accessed the WTO on January 11th 2007. With a population of 90 mio the

country ranks 22nd (exports) and 22nd (imports) on the WTO world ranking for

Merchandise108

and 36th (exports) and 36th (imports) on the WTO world trade ranking for

Commercial services109

. The value of its merchandise exports in 2014 was worth 150.475 mio

US dollars (F.O.B), being 0,79% of total world exports . The main export merchandises by

commodity group were “Agricultural products” (17,6%), “Fuels and mining products” (8,0%)

and “Manufactures” (73,9%). The main export destinations were European Union (18,4%),

104 Ibid. 93

105 Supra 77

106 Ibid.

107 Supra 81

108 Ibid. 100

109 Ibid.

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United States (18,1%), Japan (10,3%), China (10,0%) and Republic of Korea (5,1%). The

value of its merchandise imports in 2014 was worth 149.261 mio US dollars (C.I.F), being

0,78% of total world imports. The main import merchandises by commodity Group were

“Agricultural products” (11,5%), “Fuels and mining products” (11,4%) and Manufactures

(76,5%). The main countries of origin for the imports of Vietnam are China (27,9%),

Republic of Korea (15,7%), Japan (8,8%), European Union (7,1%) and Chinese Taipei

(7,1%)110

.

Laos has accessed the WTO on February 2nd 2013. With a population of 7 mio the country

ranks 101st (exports) and 115th (imports) on the WTO world ranking for Merchandise111

and

110th (exports) and 126th (imports) on the WTO world trade ranking for Commercial

services112

. The value of its merchandise exports in 2014 was worth 2.650 mio US dollars

(F.O.B), being 0,01% of total world exports . The details on trade repartition and main export

and import countries are not yet available on the website of the WTO.

The world trade data (2014) of the ASEAN Member States show that export to the European

Union is important for Cambodia (27,2% of its total export), Vietnam (18,4% of its total

export), The Philippines (10,9% of its total export), Thailand (10,3% of its total export),

Indonesia (9,6% of its total export), Malaysia (9,5% of its total export) and Singapore (8,0%

of its total export). Import of European products into ASEAN is important for Singapore

(12% of its total import), The Philippines (11,6% of its total import), Brunei Darussalem

(11,5% of its total import), Malaysia (10,4% of its total import), Thailand (8,5% of its total

import), Indonesia (7,1% of its total import) and Vietnam (7,1% of its total import).

110 Ibid. 102

111 Ibid. 100

112 Ibid.

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V. ANALYSIS OF THE EU-ASEAN JURISPRUDENCE UNDER THE WTO

DISPUTE SETTLEMENT SYSTEM

1. INTRODUCTION

For the period 1995 – 2015, I could identify 9 relevant trade dispute cases between the EU

and an ASEAN Member State113

: The Philippines (1 case), Thailand (5 cases) and Indonesia

(3 cases). Singapore, Malaysia, Brunei Darussalam, Myanmar, Laos, Cambodia and Vietnam

have not brought any trade dispute cases with the EU to the DSB of WTO.

As tables 2 and 3 indicate, Myanmar, Laos, Cambodia and Brunei Darussalam have so far not

brought any trade dispute case on any WTO Member to the DSB of WTO. Singapore has only

brought one request for consultation (no panel or Appellate Body report); Malaysia has been

involved in 2 trade disputes (2 reports) and Vietnam in 3 trade disputes (2 reports). So far,

The Philippines (11 trade disputes with 4 reports), Thailand (16 trade disputes with 8 reports)

and Indonesia (23 trade disputes with 8 reports) are the three ASEAN countries having

initiated the most trade disputes at the DSB of WTO114

.

EU-ASEAN cases

EU-ASEAN reports

Total DSU consultation requests

Total DSU reports

Philippines 1 1 11 4

Thailand 5 2 16 8

Indonesia 3 1 23 8

Singapore 0 0 1 0

Malaysia 0 0 2 2

Brunei Darussalam 0 0 0 0

Myanmar 0 0 0 0

Laos 0 0 0 0

Cambodia 0 0 0 0

Vietnam 0 0 3 2

total 9 4 56 24 Table 2: ASEAN Trade Disputes and consultation requests

113 I will not analyse case DS481”Indonesia — Recourse to article 22.2 of the DSU in the US — Clove cigarettes

dispute”. This case deals with the EU claiming third party rights in a “settled” case between The US and

Indonesia. 114

https://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm

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Table 3: Total ASEAN Trade Disputes and consultation requests compared to EU-ASEAN Trade Disputes

I will classify the trade disputes at WTO level between the EU and an ASEAN Member State

by country and within that country by date, to start with the earliest cases.

2. TRADE DISPUTES

2.1 The Philippines

2.1.1 The Philippines – Taxes on Distilled Spirits (DS396, 403)

“The Philippines – Taxes on Distilled Spirits” case (DS396)115

was a dispute between EU

(complainant) and The Philippines (respondent) on an excise tax on distilled spirits levied by

the Philippine tax authority on distilled spirits depending on the raw material used to make the

spirit. Spirits made from non-designated materials were caught by a higher tax rate than

spirits made from certain designated raw materials. All distilled spirits (gins, rums, vodkas,

whiskies and tequila-type) produced in The Philippines were made from one of the designated

materials (cane sugar), and the most imported spirits were made from non-designated

115 https://www.wto.org/english/tratop_e/dispu_e/cases_e/1pagesum_e/ds396sum_e.pdf

0

10

20

30

40

50

60

70

80

90

Total DSU reports

Total DSU requests for consultation

EU-ASEAN cases

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materials (cereals, grapes). As a result, de facto domestic spirits were taxed at a low flat tax

rate and most of the imported spirits were subject to a 10 to 40 times higher tax rate.

On July 29th 2009 the EU asked The Philippines for consultations on the existing Excise Tax

regime on distilled spirits116

, claiming that the measure was inconsistent with the obligations

of The Philippines under the core national treatment discipline of GATT 1994, Art. III:2

(“charge” provision)117

. On August 10th 2009 the US requested to join the consultations. The

DSB established a single panel on January 19th 2010118

for DS 396 and DS 403 together119

.

The final report of the panel was circulated to the Members on August 15th 2011.

The panel found that “through its excise tax, the Philippines subjects imported distilled spirits

made from non-designated raw materials to internal taxes in excess of those applied to “like”

domestic distilled spirits made from the designated raw materials, thus acting in a manner

inconsistent with Article III:2, first sentence, of the GATT 1994”. The panel also found that

“the Philippines has acted inconsistently with Article III:2, second sentence, of the GATT

1994 by applying dissimilar taxes on imported distilled spirits and on “directly competitive or

substitutable” domestic distilled spirits, so as to afford protection to Philippine production of

distilled spirits”. The Philippines appealed the findings of the panel under art. III:2, first and

second sentences of the GATT 1994 and the EU cross-appealed the findings of the panel

under art.III:2 of the GATT 1994.

116 On January 14th 2010, the US also asked for consultations on the existing Excise Tax regime on distilled

spirits ; On April 20th 2010, the DSB established a panel in this dispute (DS 403). 117

Gerard, L. Chan, “Continuing the liquor tax cases saga, Philippines – Taxes on distilled spirits: a critical

analysis” (2011), Philippine Law Journal, Vol. 85, pp. 453- 504 “The NT obligations are set forth in Article III of

the GATT. Article III:1 begins by reiterating the general principle that internal measures should not be applied

so as to afford protection to domestic production. Article III:2 governs internal tax measures, such as value

added taxes, sales taxes and excise duties, while Article III:4 covers internal regulatory (non-tax) measures,

such as regulations affecting the sale and use of products. Article III:2 consists of two sentences, each of which

covers a particular aspect of the NT obligation. The first sentence refers to the internal taxation of “like

products”. It states that imported products should not be subject to internal taxes or other charges in excess of those applied to “like” domestic products. The second sentence on the other hand, prohibits the application of

internal tax measures contrary to the terms of Article III:1. An “Ad Note” to Article III:2 explains that a

violation of Article III:2 is committed when imported “directly competitive or substitutable products” are taxed

in excess of domestic “like products” “so as to afford protection” to domestic production”. 118

Australia, China, Mexico, Thailand, Chines Taipei, India and the US reserved their third-party rights 119

As foreseen in art. 9 (1) of DSU in respect to multiple complainants

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On December 21st 2011, the WTO Appellate Body upheld the panel ruling against the

Philippine liquor industry120

. The Appellate Body recommended that The Philippines would

bring its tax regime on distilled spirits into conformity with its obligations under the GATT

1994 agreement. The Appellate Body focused its report on the idea that “competitiveness” is

key to investigate the concept of “likeness”. A panel examines for example the physical

characteristics of the products to determine “likeness”, but merely to make a determination

about the nature and extend of a competitive relationship between those products. In

paragraphs 119-120 of the Appellate Body report, we could read “While in the determination

of "likeness" a panel may logically start from the physical characteristics of the products,

none of the criteria that a panel considers necessarily has an overarching role in the

determination of "likeness" under Article III:2 of the GATT 1994. A panel examines these

criteria in order to make a determination about the nature and extent of a competitive

relationship between and among the products” and “We understand that products that have

very similar physical characteristics may not be "like", within the meaning of Article III:2, if

their competitiveness or substitutability is low, while products that present certain physical

differences may still be considered "like" if such physical differences have a limited impact on

the competitive relationship between and among the products”121

.

Pursuant to Art. 21 (3) of the DSU, The Philippines communicated to the DSB on February

20th 2012 on its intentions with respect to the implementation of the recommendations and

rulings of the DSB. In this communication The Philippines confirmed that they had the

intention to implement the recommendations and rulings of the DSB in a manner that respect

its WTO obligations. The Philippines asked for a reasonable period of time to conduct

internal consultations on the options of implementation and confirmed their intentions to

engage into discussions with the EU and US on the timetable of implementation. On April

25th The Philippines announced to the DSB that the EU and The Philippines had agreed on a

reasonable time period to implement the recommendations and rulings of the DSB, being 13

months and 16 days from the January 20th

2012 date of adoption of the DSB

recommendations and rulings.

120 Jemy Gatdula, blog on International Economic Law and Natural Law (2012),

www.jemygatdula.blogspot.be/2012_01_01_archive.html?m=1 121

In EC – Asbestos the Appellate Body found that "a determination of 'likeness' under Article III:4 is,

fundamentally, a determination about the nature and extent of a competitive relationship between and among

products". (Appellate Body Report, EC – Asbestos, para. 99)

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On January 18th 2013, the Philippine delegation sent a communication to the DSB confirming

that Republic Act No. 10351122

was passed by the Philippine House of Representatives and

the Philippine Senate on December 11th 2012, approved by the President on December 19th

2012. “This new tax system adopts a uniform tax that applies equally to all distilled spirits,

thus eliminating the system of taxation found to be discriminatory by the Panel and the

Appellate Body – both in law and in fact123

.

The outcome of this case demonstrates the well-functioning of the dispute settlement system

at WTO level and shows how a country finally adopts a new tax system based on the

recommendations of the panel report.

2.2 Thailand

2.2.1 European Communities – Duties on imports of rice (DS17)

This case dates from the early days of WTO. On October 11th 1995, the Permanent Mission

of Thailand introduced a request for consultations to the Permanent Delegation of the

European Commission concerning a trade dispute on duties on imports of rice. Following the

view of Thailand, the Council Regulation 1418/76124

and Commission Regulation 1573/95125

were in contravention of the provisions of the GATT 1994, Art. I (Most-Favoured-Nation

Treatment), GATT 1994, Art. II (Schedules of Concessions) and of GATT 1994, Art. VII

122 Republic Act No. 10351, entitled “An Act Restructuring the Excise Tax on Alcohol and Tobacco Products by

Amending Sections 141, 142, 143, 144, 145, 8, 131 and 288 of Republic Act No. 8424, Otherwise Known as the

National Internal Revenue Code Of 1997, as Amended by Republic Act No. 9334, and for Other Purposes” 123

Status Report by The Philippines to the DSB (January 18th 2013): “Subsequently, implementing rules and

regulations were promulgated by the Bureau of Internal Revenue. Revenue Regulation No. 17-2012 prescribes

the implementing guidelines on the revised tax rates on alcohol and tobacco products pursuant to the provisions

of Republic Act No. 10351 and clarifies certain provisions of existing Revenue Regulations. It was issued on 26

December 2012 and published on 28 December 2012. Republic Act No. 10351, as elaborated by Revenue

Regulation No. 17-2012, eliminates the raw materials distinction and has now adopted an Ad Valorem and

Specific Tax System. More specifically, an Ad Valorem tax Rate equivalent to 15% of the Net Retail Price per

proof (excluding the excise tax and the value-added taxes) has been imposed effective 1 January 2013. This rate

will be increased to 20% beginning 1 January 2015. In addition to the Ad Valorem Tax, a specific tax of

PHP20.00 will also be imposed per proof liter beginning 1 January 2013, with subsequent legislated

adjustments beginning 1 January 2016”. 124

COUNCIL REGULATION (EEC) No 1432/76 of 21 June 1976 laying down general rules to be applied in

the event of the market in rice being disturbed 125

COMMISSION REGULATION (EC) No 1573/95 of 30 June 1995 on the detailed rules for the application of

Council Regulation (EEC) No 1418/76 with regard to import duties on rice

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(Valuation for Customs Purpose)126

. The official communication on the request for

consultations by the Kingdom of Thailand stated that “Council Regulation (ECC) No.

1418/76 and Commission Regulation (EC) No. 1573/95 provide for the method of calculation

of duties to be imposed on imports of rice which are equal to the intervention buying-in price

valid for those products on importation, increased by a certain percentage according to

whether it is husked or milled rice, indica rice or japonica rice, and minus the import price.

In addition, these cited Regulations give special treatment to the basmati rice originating

from India and Pakistan”127

. This same document stated that the aim of these consultations

was to find a “mutually satisfactory result”.

There has not been any dispute panel established nor has there been a mutual agreement

notified to the WTO. There is no official communication on DS17 to the WTO beyond the

request for consultations128

.

2.2.2 European Communities- Generalized System of Preferences (DS 242)

Thailand (Complainant) requested consultations with the EU (Respondent) on measures

described in the EC Generalized System of Preferences (GSP) scheme (1999 – 2001)

implemented through Council Regulation 2820/98129

and on the amended proposal of a

scheme for the period 2002-2004. This multiannual scheme defined the conditions to benefit

preferential tariffs on importation on certain goods coming from certain countries. Art. 1 (3)

of this regulation defines which countries and territories have access to the general tariff

preferences for the period 1999 - 2001130

. Thailand is included in this list. Art. 1 (4) limits the

new list of beneficiary countries or territories in annex III depending on per capita gross

national product (GNP) 131

and cumulatively on a development index greater than -1132

.

126 Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994, Art. 1-7

and annex 1 127

WTO, “European Communities – Duties on imports of rice, request for consultations by Thailand”, Restricted

document 95-3019 (11 October 1995) - https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds17_e.htm 128

Kyle Bagwell, Petros Mavroidis, Robert Staiger, “The case for tradable remedies in WTO Dispute

Settlement”, discussion paper 0405-05 (2004), p. 35, Columbia University (New York), Department of

Economics. 129

COUNCIL REGULATION (EC) No 2820/98 of 21 December 1998 applying a multiannual scheme of

generalised tariff preferences for the period 1 July 1999 to 31 December 2001 130

Listed in annex III of Council Regulation 2820/98 131

To be removed from the preferential list of countries benefiting from the “generalised tariff preferences”

defined by Reg. 2820/98: a per capita gross national (GNP) product exceeding USD 8 210 for 1995, according to

the most recent World Bank figures. Definition given by The World Bank of GNP per capita: “gross domestic

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The per capita GNP of Thailand for the year 1995 was 2.750 dollars133

, not exceeding the per

capita GNP maximum of 8.210 defined by the Regulation 2820/98. Based on Art. 1 Thailand

was part of the list of beneficiary countries under the GSP (and would remain there for a

while). Art. 2 defines the preferential duty applying to products listed in part 1, 2, 3 and 4 of

annex I134

, ranging from 85% to zero of the Common Customs Tariff Duty applicable to the

product concerned. Thailand was concerned that imports into the EU for certain goods

originating in Thailand would be affected by the regulation 2820/98 and its list of products in

annex I. Therefore Thailand claimed that with the GSP scheme the EU violated GATT 94,

Art. I (Most-Favoured-Nation Treatment) and the Enabling Clause135

.

As a result of this violation, Thailand considered that “the benefits accruing to it directly or

indirectly under the WTO Agreement are being nullified or impaired. The Kingdom of

Thailand also considers that the application by the EC of the above-mentioned measures

nullifies or impairs the benefits accruing to it directly or indirectly under the WTO Agreement

pursuant to Article XXIII:1(b) of GATT 1994”136

.

product devided by midyear population. GNP is the sum of value added by all resident producers plus any

product taxes and minus any subsidies not included in the valuation of output plus net receipts of primary

income (compensation of employees and property income) from abroad. It is calculated without making

deductions for depreciation of fabricated assets or for depletion and degradation of natural resources”. 132

Annex II, part 2 of Reg. 2820/98: “The development index represents each country’s overall level of

industrial development compared with that of the European Union. It is based on the following formula, which

combines per capita income with the level of manufactured exports:

{log[(Yi/POPi)/(Yue/POPue)]+log[Xi/Xue]}:2 in which: Y = the beneficiary country’s income, Yue = the

European Union’s income, POPi = the beneficiary country’s population, POPue = the population of the

European Union, Xi = the value of the beneficiary country’s manufactured exports, Xue = the value of the

European Union’s manufactured exports. Using this formula, an index of 0 means the beneficiary’s level of

industrial developments is equal to that of the European Union”. Figures for income and population are taken

from World Bank statistics (World Development Report 1993) and those for manufactured exports from the

UNCTAD Handbook of International Trade and Development Statistics (1992). 133

Source: http://data.worldbank.org/indicator/NY.GNP.PCAP.CD?page=4 To compare: the per capita NDP for

Belgium in 1995 was 27.200 dollars. 134

Products listed in part 1 of annex I (85% of the Common Customs Tariff Duty applicable to the product

concerned ), products listed in part 2 of annex I (70% of the Common Customs Tariff Duty applicable to the

product concerned ), products listed in part 3 of annex I (35% of the Common Customs Tariff Duty applicable to

the product concerned ), products listed in part 4 of annex I (suspended in their entirety of the Common Customs

Tariff Duty applicable to the product concerned ). 135

The Enabling Clause has been incorporated in the GATT 94, and was part of the Tokyo Round Agreements

(November 28th 1979). The “Differential and more favourable treatment reciprocity and fuller participation of

developing countries” allowed (among other things) in art. 1 that “Notwithstanding the provisions of Article 1 of

the General Agreement, contracting parties may accord differential and more favourable treatment to

developing countries, without according such treatment to other contracting parties”. 136

WTO, “European Communities – Generalized System of Preferences, request for consultations by Thailand”,

document 01-6292 (12 December 2001) - https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds242_e.htm

http://data.worldbank.org/indicator/NY.GNP.PCAP.CD?page=4

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notified to the WTO.

2.2.3 European Communities – Export Subsidies on Sugar (DS 283, 265, 266)

Thailand (Complainant in case DS 283), Australia (Complainant in case DS 265) and Brazil

(Complainant in case DS 266) initiated proceedings and requested consultations with the EC

(Respondent) concerning export subsidies provided by the EC (Council Regulation

1260/2001137

) to its sugar industry138

. Consultations between Thailand and the EC were held

in Geneva on April 8th 2003, without positive result139

. On July 9th 2003 Thailand, Australia

and Brazil each requested the establishment of a panel, which was established by the DSB

August 29th 2003140

.

According to the Complainants, the EC Regulation 1260/2001 and measures taken thereunder

were inconsistent with Art. 3.3, 8, 9.1, 10.1 and 11 of the Agreement on Agriculture141

, Art.

3.1 and 3.2 of the Subsidies and Countervailing Measures (SCM) Agreement142

and GATT

1994, Art. III (4)143

.

137 COUNCIL REGULATION (EC) No 1260/2001 of 19 June 2001 on the common organisation of the markets

in the sugar sector 138

Consultations with Australia and Brazil were initiated November 21st 2002, without positive result. 139 P. Van Den Bossche and W. Zdouc, The law and policy of the World Trade Organisation (2008), Cambridge

University Press, p. 213, p. 185, p. 223, p. 252, 140

Following the report of the panel (October 15th 2004), “the parties to the dispute agreed to establish a single

panel pursuant to Article 9.1 of the DSU with standard terms of reference”. 141

The “Agreement on Agriculture” has been negotiated during the Uruguay Round Agreement and had to

“establish a fair and market-oriented agricultural trading system”. It has been decided that “a reform process

should be initiated through the negotiation of commitments on support and protection and through the

establishment of strengthened and more operationally effective GATT rules and disciplines”. This agreement

only applied (applies) to agricultural products defined in annex 1 to the “Agreement on Agriculture”. “The

domestic support and export subsidy commitments in Part IV of each Member’s Schedule constitute

commitments limiting subsidization and are hereby made an integral part of GATT 1994. Subject to the

provisions of Article 6, a Member shall not provide support in favour of domestic producers in excess of the

commitment levels specified in Section I of Part IV of its Schedule”. 142

The “Agreement on Subsidies and Countervailing Measures” has been agreed upon during the Uruguay

Round Agreement. Art. 1 defines “a subsidy” and art. 3 lists the prohibited subsidies: “3.1 Except as provided in

the Agreement on Agriculture, the following subsidies, within the meaning of Article 1, shall be prohibited:

(a) subsidies contingent, in law or in fact, whether solely or as one of several other conditions, upon export

performance, including those illustrated in Annex I; (b) subsidies contingent, whether solely or as one of several

other conditions, upon the use of domestic over imported goods. 3.2 A Member shall neither grant nor maintain

subsidies referred to in paragraph “1. 143

National Treatment on Internal Taxation and Regulation: “The products of the territory of any contracting

party imported into the territory of any other contracting party shall be accorded treatment no less favourable

that that accorded to LIKE PRODUCTS of national origin in respect of all laws, regulations and requirements

affecting their internal sale, offering for sale, purchase, transportation, distribution or use”

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The Regulation 1260/2001 and “Common Organization for sugar” (CMO)144

provides the

rules to intervention prices for raw145

and white sugar146

, the basic price on beet A and B147

,

the A and B sugar quota148

, the so-called C sugar149

, import and export licenses, export

refunds and preferential import measures150

. This EU Regulation established two categories of

production quotas (“A sugar” and “B sugar”) and sugar produced in excess of A and B (“C

sugar”). “C sugar” had to be exported and was not eligible for domestic price support or direct

export subsidies151

.

Among other things, Thailand (and Australia and Brazil as well) mainly argued that the EU

accorded subsidies to its exports of C sugar152

and that the quantity of sugar for which the EU

grants export subsidies are in excess of its export reduction and budgetary outlay reduction

commitments. It also claimed that the subsidies granted by the EU to its exports of sugar were

inconsistent with the “Agreement on Agriculture”, art. 3.3 and 8. There was also an issue on

the ACP/India “equivalent “ sugar “footnote” 153

. The complainants claimed that the EU had

144 The CMO was set out in Reg. 1260/2001

145 Art. 1.2 (b) of Reg. 1260/2001 definition of “raw sugar”: sugars, not flavoured or coloured or containing any

other added substances, containing, in the dry state, 99,5 % by weight of sucrose, determined by the polarimetric

method” 146

Art. 1.2 (a) of Reg. 1260/2001 definition of “white sugar: “sugars, not flavoured or coloured or containing

any other added substances, containing, in the dry state, 99,5 % or more by weight of sucrose, determined by the

polarimetric method” 147

Art. 1.2 (h and i) of Reg. 1260/2001 definition of “Beet A” and ” Beet B ”: “all beet processed into A sugar

or B sugar” 148

Art. 1.2 (e and f) of Reg. 1260/2001 definition of “sugar A”: “any quantity of sugar or isoglucose production

attributed to a specific marketing year under the A quota of the undertaking concerned”; definition of “sugar B”:

“any quantity of sugar or isoglucose production attributed to a specific marketing year in excess of the A quota

but within the sum of the A and B quotas of the undertaking concerned”. The quota sugar A and sugar B are the

maximum quantities eligible for domestic price support and direct export subsidies (refunds). Para. 3.4 panel

report: “The quota system does not involve any limits on the quantities of sugar that may be produced or

exported. However, sugar produced in excess of A and B quantities, called C sugar, while not subject to quota, is

not eligible for domestic price support or direct export subsidies and must be exported. If no proof has been

supplied that the C sugar has been exported within the required time limits, a charge is levied on that sugar”. 149

Art. 1.2 (g) of Reg. 1260/2001 definition of “C sugar”: “any quantity of sugar or isoglucose production

attributed to a specific marketing year either over and above the sum of the A and B quotas of the undertaking

concerned or by an undertaking which has no quota”. 150

Para. 3.2 panel report. 151

WTO Dispute Settlement Report 2015, “EC – Export Subsidies on Sugar (DS 265, 266, 283)”, p. 105 152

Under art. 9.1 (c) of “Agreement on Agriculture” 153

Para. 4.217 of panel report: “The European Communities sustained that it was well known to all parties, at

the time of the conclusion of the WTO Agreement, that the European Communities did not grant export refunds

only on the re-export of sugar originally of ACP and Indian origin, but to a quantity equivalent to such exports.

According to the European Communities, this was reflected in the drafting of the footnote which referred to the

"average of export" as being 1.6 million tonnes. The European Communities argued that this was a reference to

exports which were not ACP/India raw sugar imported, refined, and subsequently exported, but rather the

equivalent quantity of ACP/India sugar that had been imported”.

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been exporting subsidized sugar in excess of its annual commitment levels. During 2001-2002

the EU had been exporting 4,097 million tonns of subsidized sugar, while its schedule only

allowed 1,237 million tonns154

.

The EU as respondent replied: “The European Communities admits that its exports of sugar

have been in excess of the figure shown in Section II, Part IV of its Schedule. The European

Communities submits that its export subsidy commitments for sugar are, in fact, made up of

two components: (i) one component which has been subject to progressive reduction during

the implementation period; and (ii) a second component, Footnote 1 to Section II, Part IV to

its Schedule containing the so-called "ACP/India sugar Footnote" which, it maintains, is

subject to a ceiling of 1.6 million tonnes.Thus, for the European Communities, its exports of

ACP/India equivalent sugar are not in excess of its commitment level. The European

Communities denies that C sugar benefits from subsidies that are inconsistent with the

Agreement on Agriculture or the SCM Agreement. The European Communities argues,

"subsidiarity", that if the Panel concludes that C sugar is subsidized, the only course of action

consistent with the requirement of good faith would be for the Complainants to agree to the

correction of the European Communities' Schedule, in accordance with the Modalities Paper

when interpreted in light of the principle of good faith155

. The European Communities rejects

the Complainants' claims under Article 10.1 of the Agreement on Agriculture on the grounds

that they are outside the Panel's terms of reference. In the alternative, the European

Communities submits that exports of C sugar do not benefit from any "other export subsidies"

within the meaning of Article 10.1. Finally, the European Communities contests the

applicability of the SCM Agreement to the present dispute”156

.

The Panel ruled that the EU had acted outside its obligations under Art. 3.3 and Art. 8 of the

“Agreement on Agriculture” and provided export subsidies through its sugar regime within

the meaning of Art. 9.1 (a) and (c) of the “Agreement on Agriculture”. The EU provided

export subsidies to its sugar sector in excess of the quantity and budgetary outlay

154 Para. 4.217 of panel report . In violation of art. 3, 8 and 9 and/or 10.1 of “The agreement on Agriculture”.

155 Also see the second oral statement of the EC “Closing Statement by the European Communities at the second

substantive meeting with the parties”, Geneva, May 12th 2004 156

Para. 7.2 of panel report

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commitments levels reported in the schedules of section II, part IV of this agreement157

.

Within the meaning of Art. 9.1 (c) the EU provided two types of payments for “C sugar”

producers: sales of C beet below the total costs of production to “C sugar” producers and

transfers of financial resources through cross-subsidization. The EU could not prove that the

exports of “C sugar” that exceeded the EU commitment levels (since 1995) had not been

subsidized158

.

On January 13th 2005, the EU notified its intention to appeal some legal interpretations of the

panel. On April 28th 2005, the report of the Appellate Body was circulated and adopted

(together with the panel report) by the DSB on May 19th 2005. The Appellate Body upheld

the panel’s reasoning on the “footnote 1” issue and on the violation of Art. 3.3 and Art. 8

within the meaning of Art. 9.1 (a) and (c). The reversal of burden of proof (AA Art. 10.3) as

explained by the panel was upheld159

. The claims under the SCM Agreement were not ruled

upon by the Appellate Body because there was insufficient material in the panel report and

certain claims under the SCM Agreement were left unaddressed by the panel.

As the parties to the dispute could not agree on a reasonable time for the implementation of

the recommendations of the adopted panel report (as modified by the Appellate Body report),

the complaining parties demanded to define a “reasonable period of time for implementation”

through binding arbitration160

. Mr. A.V. Ganesan circulated his Award to the Members and

determined the reasonable period of time to be 12 months and 3 days (May 22nd 2006). On

June 8th 2006, Australia, Brazil and Thailand informed the DSB that they had reached an

understanding with the EU161

.

157 The panel also ruled that footnote 1 concerning the imports from certain ACP countries and India did not

modify the EU commitment levels in section II, part IV of the schedule. 158

WTO Dispute Settlement Report 2015, “EC – Export Subsidies on Sugar (DS 265, 266, 283)”, p. 105 159

WTO Dispute Settlement Report 2015, “EC – Export Subsidies on Sugar (DS 265, 266, 283)”, p. 105: “The

Panel explained that AA Art. 10.3 reverses the usual rule of burden of proof such that once the complainant has

proved that the respondent is exporting a certain commodity in quantities exceeding its commitment levels, then

the respondent must prove that such an excessive amount of exports is not subsidized”. 160

As foreseen in art. 21.3 (c) of the DSU 161

Source: https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds283_e.htm

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2.2.4 European Communities- Customs Classification of frozen boneless chicken cuts

(DS 286)

On March 25th 2003, Thailand requested consultations with the European Communities

concerning the Commission Regulation 1223/2002162

. Thailand claimed that the new EC

classification of frozen salted chicken cuts with a salt content of 1.2% by weight (or more)

was inconsistent with the correct interpretation of headings in the EC Schedule of

Concessions163

. These products were previously imported under CN code 0210.99.39164

and

now (under the Reg. 1223/2002) these same products had to be imported under CN code

0207.14.10165

. Because the newly applied tariff rate was in excess of the tariff rate for salted

meat (former code 0210.99.39), Thai exports of frozen salted chicken cuts were treated less

favourable than that accorded to that product in the EC Schedule of Concessions. According

to Thailand, the EC measure was therefore inconsistent with the basic obligations set out in

GATT 1994, art. II:1(a) and GATT 1994, art. II:1(b)166

. The consultations failed and on June

28th 2004, the Director-General composed a panel.

The main argumentation of Thailand stated “a Member's obligation under Article II is to

provide on products from other Members tariff treatment "no less favourable" than that

described and bound on that product in its Schedule. A tariff concession is comprised of at

least four essential elements: (i) the numerical heading, (ii) the description of the product, (ii)

the maximum bound tariff level and, (iv) the method of valuation of the good for customs

purposes. A Member's tariff concession would be rendered meaningless if that Member were

able to alter unilaterally any of those elements in such a manner as to provide "less

favourable treatment" to the products of other Members.” 167

Indeed, as stated by the Appellate Body, "[a] basic object and purpose of GATT 1994 as

reflected in Article II, is to preserve the value of tariff concessions negotiated by a Member

162 COMMISSION REGULATION (EC) No 1223/2002 of 8 July 2002 concerning the classification of certain

goods in the Combined Nomenclature 163

P. Van Den Bossche and W. Zdouc, The law and policy of the World Trade Organisation (2008), Cambridge

University Press, p. 223, p. 240, p. 282 164

Under CN code 0210.99.39 these products were subject to an ad valorem tariff rate of 15,4% 165

Under CN code 0207.14.10 these products were subject to a higher tariff rate of 102,4 euro/100kg/net 166

GATT 1994, Schedules of Concessions 167

Para. 3 of “Executive summary by Thailand after the first substantive meeting” (October 21st 2004)

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with its trading partners, and bound in that Member's Schedule."168

.

The EU argued that “this chicken meat is "salted" within the meaning of its tariff concession

only if the salt was added for the purpose of long-term preservation”. The EU also claimed

that “if long-term preservation is achieved through freezing, the Thai chicken meat can no

longer be deemed to be "salted" and should not benefit from the EC concession”.

Thailand pointed out that “The basic interpretative issue is whether the term "salted"

describes the physical characteristics of the products benefiting from the tariff concession - as

claimed by Thailand - or whether that term refers to the objective or purpose for which the

product has been salted – as argued by the EC. The EC's argument is entirely novel and

would mean that in order to determine the customs classification of a product, it would no

longer be sufficient to examine the physical characteristics of the product. Instead, it would

also be necessary to examine for what purpose the product was given its physical

characteristics. The EC's novel approach is not supported by the term "salted", is completely

foreign to the Harmonised System, deviates from the normal practice of customs classification

of Members and would, if introduced into WTO law, create great uncertainty in the

determination of the scope of the tariff concessions”169

.

The panel followed the main reasoning of Thailand and circulated its report to the Members

on May 30th 2005170

. The panel used a chapter to clarify the interrelationship between the

former EC Schedule, the new EC Combined Nomenclature (CN)171

and the Harmonized

Commodity Description and Coding System (HS)172

. Stating Art. 3.1 of the HS Convention,

168 Appellate Body Report, Argentina – Measures Affecting Imports of Footwear, Textiles, Apparel and other

Items ("Argentina – Textiles and Apparel"), WT/DS56/AB/R, para. 47. 169

Para. 5 of “Executive summary by Thailand after the first substantive meeting” (October 21st 2004) 170

Brazil also requested the establishment of a panel on the same grounds (on September 19th 2003). The DBS

established a single panel for both disputes. 171

The CN contains the EC domestic tariff nomenclature, which was established through the enactment of EEC

Regulation No. 2658/87. For the purposes of assessing the complainant’s claim that the EC has violated Article

II:1(a) and/or Article II:1(b) of the GATT 1994, the question was whether the treatment of the products at issue

in the CN were less favourable than that provided for in the former EC Schedule. 172

Para. 7.12 of panel report (May 30th 2005)“The Harmonized Commodity Description and Coding System,

generally referred to as the "Harmonized System" or simply the "HS", is a multipurpose international product

nomenclature developed by the World Customs Organization (WCO). It comprises about 5,000 commodity

groups, each identified by a 6-digit code, arranged in a legal and logical structure and is supported by

welldefined rules to achieve uniform classification. The system is used by more than 190 countries and

economies as a basis for their customs tariffs and for the collection of international trade statistics. The HS is

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the panel claimed that it was the responsibility of the EU as contracting party to the HS to

ensure that its laws are in conformity with the Convention and in line with the Schedule of

Concessions of GATT 1994, art. II. The treatment of products under HS could under no

circumstances be less favourable than under the former EC Schedule. The panel ruled that

‘the EC measures (relating to tariff classification) imposed duties on the products at issue in

excess of the relevant heading of the EC tariff commitment because under the EC Schedule,

tariffs on frozen meat (02.07) are higher than on salted meat (02.10) and, thus, violated

Arts. II:1(a) and (b)”173

. The panel also ruled on the term at issue “salted” in the EC

Schedule: the “ordinary meaning”, the “context”, the “subsequent practice” and the

“circumstances of conclusion”. To do so, the panel provided a detailed analysis on the “EC

Schedule” interpretation relying on “customary rules of treaty interpretation” laid down in the

“Convention de Vienne sur le droit des traités” (May 23rd 1969)174

. Under Art. 31 (1) of

VCLT the panel found that the ordinary meaning of “salted” “indicates that the character of a

product has been altered through the addition of salt” and that “there is nothing in the range

of meanings comprising the ordinary meaning of the term 'salted' that indicates that chicken

to which salt has been added is not covered by the concession contained in heading 02.10 of

the EC Schedule”. Under art. 31 (2) of VCLT the panel found that “the term “salted” in the

relevant EC tariff commitment was not necessarily characterized by the notion of long-term

preservation as argued by the European Communities, but rather encompassed both

concepts, i.e. “preparation” and “preservation” by the addition of salt”. Under Art. 31 (3)

(b) of VCLT the panel concludes that “the European Communities' consistent practice of

classifying the products at issue under heading 02.10 amounts to "subsequent practice" under

Article 31(3)(b) of the Vienna Convention”175

. Under Art. 32 of VCLT the panel found that

“the supplementary means of interpretation considered under VCLT Art. 32 (including

circumstances of conclusion at the time of tariff negotiations, such as European Communities'

legislation on customs classification, the relevant judgments of the European Court of Justice

and EC classification practice) confirmed that the products at issue were covered by the tariff

commitment under heading 02.10 of the EC Schedule”.

governed by the International Convention on the Harmonized Commodity Description and Coding System (the

HS Convention). The European Communities implemented its obligations under the HS Convention through the

enactment of EEC Regulation No. 2658/87, which established the CN” 173

Source: https://www.wto.org/english/tratop_e/dispu_e/cases_e/1pagesum_e/ds286sum_e.pdf 174

Vienna Convention on the law of treaties (VCLT) 175

Para. 7.290 of panel report

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The EU appealed to certain legal interpretations developed in the panel report and the

Appellate Body circulated its report to the Members on September 12th 2005. The Appellate

Body upheld the substantive conclusions of the panel but reversed the panel’s finding on the

“subsequent practice” based on VCLT, art 31 (3) (b). It held that “the importing Member’s

practice alone could not constitute “subsequent practice”. Consequently, it reversed the

Panel's conclusion that the EC practice of classifying the products at issue under heading

02.10 between 1996 and 2002 amounted to “subsequent practice” within the meaning of

VCLT 31(3)(b)176

.

The EC announced that they would comply with the rulings in the dispute, but parties could

not agree on a reasonable time to do so. An Arbitrator decided on February 20th 2006 that the

reasonable time for implementation was nine months (June 27th 2006). The EU implemented

the DSB recommendations on June 27th 2006 through Reg. 949/2006177

.

2.2.5 Thailand Customs Valuation of Certain Products from the European

Communities (DS 370)

On January 25th 2008, the EU requested for consultations with Thailand concerning the way

alcoholic beverages and other products were valued by the Thai Customs authorities. The EU

based it claims (among others) on GATT 1994, Art. VII178

. The EU had noticed that since

2006 the Thai customs authorities applied an arbitrary value on imported alcoholic beverages

and other products from the EU. Instead of using the declared transaction value as basis for

customs duties and taxes to be paid on imported goods, the EU claimed that the Thai customs

used an (arbitrary) “assessed value” based on standard margin, general expenses and the

wholesale price of those goods in the Thai market. For randomly tested imports for which the

declared value was different from the assessed value, the Thai customs authorities would

require a deposit for an indefinite period of time. In its official WTO request for consultations

on the trade matter, the EU mentioned several Acts, Ministerial Regulations, Customs

Notifications and Internal Customs Memoranda and claimed that these measures and

176 Source: https://www.wto.org/english/tratop_e/dispu_e/cases_e/1pagesum_e/ds286sum_e.pdf

177 COMMISSION REGULATION (EC) No 949/2006 of 27 June 2006 amending Annex I to Council

Regulation (EEC) No 2658/87 on the Tariff and Statistical Nomenclature and on the Common Customs Tariff 178

Art. 19 of “The Agreement on Implementation of Article VII” of GATT 1994.

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methodologies for the assessed values on imported goods are inconsistent with Thailand’s

obligations under the WTO Agreements.

The EU claimed that Thailand is in breach of GATT 1994, Art. I by not granting immediately

and unconditionally the same advantages destined for other countries to the like products

coming from the EU. According to the EU, Thailand was also acting inconsistently with

GATT 1994, Art. II (1) (a) and GATT 1994, Art II (1) (b) by treating imported products from

EU less favourable than provided in the Schedule of Thailand and by altering its method of

dutiable value provided in the Schedule (GATT 1994, Art II (3)). Furthermore, the EU

claimed in the document that Thailand is acting inconsistently with GATT 1994, Art. III (2),

Art. III (4), Art. X (publication and administration of trade regulations), Art. XI by imposing

restrictions other than duties or taxes, and to GATT 1994, Art. VII and its provisions in “The

Agreement on Customs Valuation”. The main reasoning of the EU according to the violation

of GATT 1994, Art VII, was that Thailand did not value imported alcohols and other goods

coming from the EU in a consistent way with a reasonable degree of certainty (disregarding

the transaction value as the customs value, but using an arbitrary “assessed value” instead).

For these reasons the EU estimated that these measures nullify and impair the benefits

negotiated under GATT 1994. On February 7th 2008, there was a communication from The

Philippines, requesting to join the consultations requested by the EU; The US sent the same

request to the parties and DSB on February 11th 2008, stating that the US is Thailand’s fourth

largest supplier of spirits and the fifth largest supplier of imported wines179

.


notified to the WTO.

2.3 Indonesia

2.3.1 Indonesia- Certain Measures Affecting the Automobile Industry (DS54)

This case has been treated in the early days of WTO, between 1996 and 1999. The European

Communities, Japan and the United States (Complainants) requested consultations with

179 Source: https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds370_e.htm

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Indonesia (Respondent) on the occasion of three separate cases180

on the same matter. The

products at issue were imported motor vehicles, including its parts and components. The

Indonesian “1996 National Car Programme” together with the “1993 Programme” gave

import duty reductions and exemptions and various other benefits to qualifying cars or

Indonesian car companies181

. The EU claimed that these measures were in violation with the

obligations of Indonesia under GATT 1994, Art. I and III (MFN and NT), under the TRIMS

Agreement182

, Art. 2 and under the SCM Agreement183

, Art. 3. The consultations did not

bring any answers to the dispute and on June 12th 1997 the DSB established a single panel

examining together DS54, DS55 and DS64184

. The panel report was adopted by the DSB on

July 23th 1998 and Indonesia indicated that it was willing to comply with the ruling of the

panel.

The dispute concerned a series of measures decided by Indonesia on the import of motor

vehicles, including parts and components. Completely built-up motor vehicles were subject to

luxury tax and import duty, ranging from 5% up to 200% (depending on the type and category

of motor vehicle). The “1993 Programme” allowed import duty reliefs and exemptions on

imports of automotive parts and accessories depending on the level of percentage of local

content of the finished motor vehicle in which the parts were used and on the type of vehicle

these parts were used. The applied reductions rated between 0% (if less than 20% local

content) up to 100% (if more than 60% local content). These reduction and exemption plans

were concluded in a couple of decrees185

. The “National Car Programme” introduced two sets

of measures. The first set of measures provided for a “National Car Status” to Indonesian car

companies that met certain conditions. These “National Car” companies benefited from

exemptions from luxury tax on sales of “National Cars” and import duty on parts and

components. The second set of measures gave the same exemption advantages to “National

Cars manufactured in a foreign country by Indonesian nationals and which fulfil the local

180 The EC requested consulations on October 3rd 1996 (DS54), followed by Japan (DS55) and US (DS59) -

https://www.wto.org/english/tratop_e/dispu_e/cases_e/1pagesum_e/ds54sum_e.pdf 181

P. Van Den Bossche and W. Zdouc, The law and policy of the World Trade Organisation (2008), Cambridge

University Press, p. 223, p. 232, p. 345 182

Trade-Related Investment Measures (TRIMS). The coverage of this agreement is limited to trade in goods

related investment measures only, and is part of the Uruguay Round Agreement. 183

Subsidies and Countervailing Measures (SCM), part of the Uruguay Round Agreement, deals with subsidies

and the countervailing measures. 184

As foreseen in Art. 9.1 of the DSU 185

Decrees No. 114/1993, 645/1993, 647/1993, 223/1995 and 36/1997

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content requirements prescribed by the Minister of Industry and Trade”186

. The “National Car

Programme was written in a couple of decrees and regulations between February and March

1996 (“February 1996 Programme”) 187

and in June 1996 (“June 1996 Programme”)188

.

The EU claimed that Indonesia was in violation of GATT 1994, Art. III:2, first sentence

because exemption on luxury sales tax was granted to “(i) domestically manufactured motor

cycles with engines of 250 cc or less; (ii) combines, minibuses, vans and pick-ups using

gasoline as fuel which are manufactured domestically and have a local content of more than

60 per cent; (iii) combines, minibuses, vans and pick-ups using diesel oil as fuel which are

manufactured domestically and have a local content of more than 60 per cent;(iv)

domestically manufactured buses, domestically manufactured sedans and stations wagons of

less than 1,600 cc with a local content of more than 60 per cent; (v) National Cars assembled

in Indonesia by pioneer companies and (vi) imported National Cars”189

. Indeed, GATT 1994,

Art. III:2, first sentence states that there should “not be internal taxes or other internal charges

of any kind in excess of those applied to the like domestic product”. The EU also claimed that

there were measures in the set of decrees and regulations that favoured the use of domestic

parts and components over “like” imported parts and components and that therefore Indonesia

was in breach with GATT 1994, Art. III:4. The EU summed up the measures that it esteemed

violating this provision: “ (i) the exemption from the luxury sales tax of locally manufactured

combines, minibuses, vans and pick-ups with more than 60 per cent local content; (ii) the

exemption from the luxury sales tax of locally manufactured sedans and stations wagons of

less than 1,600 cc with more than 60 per cent local content; (iii) the exemption from the

luxury sales tax of National Cars assembled in Indonesia by pioneer companies meeting

certain local content requirements; (iv) the exemption from the luxury sales tax of National

Cars assembled in Korea by “overseas producers” meeting certain counter-purchasing

obligations; (v) the grant of import duty relief to parts and components used in the assembly

of motor vehicles (or of other parts and components for the assembly of motor vehicles) in

Indonesia based on the finished vehicles (or the parts and components) meeting certain local

186 WT/DS54/R (1998), p. 9

187 Presidential Instruction No. 2/1996, Decrees No. 31/1996 and 82/1996, Government Regulation No. 20/1996,

Decree of the State Minister for Mobilization of Investment Funds/Chairman of the Investment Coordinating

Board No. 01/SK/1996, Ministry of Industry and Trade Decree No. 002/SK/DJ-ILMK/II/1996, 188

Presidential Decree No. 42/1996, Regulation No. 36/1996, Decree No. 142/1996. 189

Supra (221), pp. 16-17

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content requirements; (vi) the exemption from import duties for parts and components used

for the assembly of National Cars in Indonesia by pioneer companies meeting certain local

content obligations”190

. The General Most Favoured Nation Treatment principle under GATT

1994, Art. I:1 was also violated according to the EU. Indeed, “(i) the exemption from customs

duties on imports of National Cars; (ii) the exemption from the sales tax on luxury goods for

imported National Cars; (iii) the exemption from the sales tax on luxury goods for National

Cars assembled in Indonesia; and (iv) the exemption from customs duties on imports of parts

and components for the assembly of National Cars in Indonesia”191

, all these measures

seemed to give advantages or privileges to certain parties and were not “immediately and

unconditionally” accorded to the “like product” from other parties. The EU claimed also that

the TRIMS Agreement, Art. 2.1 had been violated and that the incentives granted by the

Indonesian government under the “National Car Programme” constituted “specific subsidies”

under the SCM Agreement, Art. 1, 2 and 5 (c) . According to the EU, specific subsidies were

accorded under following measures:“(i) customs duty relief for parts and components

intended for assembly into National Cars; (ii) exemption from the luxury sales tax for

National Cars; (iii) customs duty relief for National Cars imported from Korea”192

.

The panel ruled that Indonesia was in violation with GATT, Art. III:2, first and second

sentence, because the Indonesian car programme resulted in the fact that imported vehicles

were taxed at a higher rate than the “like” domestic vehicles and that the programme clearly

promoted the national car industry193

. The panel also found that the MFN-principle under

GATT 1994, Art. I:1 was violated because the advantages granted to vehicles imported from

Korea into Indonesia were not accorded “unconditionally” to the “like” products of other

WTO Members. On the TRIMS Agreement, Art. 2.1 issue, the panel found that Indonesia was

in violation because the measure indeed was a “trade-related investment” and because the

measure fell within the list of TRIMs described in the annex of the TRIMS Agreement194

.

Finally, on the ASCM, Art. 5 (c), the panel ruled that the measures (duty and sales tax

190 Ibid., p. 17

191 Ibid., p. 17

192 Ibid., pp. 17-18

193 The panel ruled that “any imported vehicle would not be taxed similarly to a directly competitive or

substituable domestic car due to the Indonesian car programmes whose pupose was to promote a national

industry”. 194

This list sets out the TRIM that are inconsistant with NT-principle under GATT 1994, Art. I:4

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exemption) under the “National Car Programme” were “specific subsidies” with “serious

prejudice” to the “like” imports from EU195

.

As already explained, Indonesia indicated that it would comply with the recommendations of

the DSB and it was a binding arbitration award that decided that the reasonable time for

implementation of the ruling was 12 months from the date of the adoption of the Panel Report

(July 23th 1999 was the deadline for implementation). On June 24th 1999 Indonesia issued a

new automotive policy in line with the recommendations described in the DSB report.

2.3.2 European Union – Anti- Dumping Measures on Imports of Certain Fatty

Alcohols from Indonesia (DS 442)

Indonesia introduced a request for consultations with the EU on July 27th 2012. The issue

concerned the anti-dumping measures taken by the EU on the importation of fatty alcohols

and on the investigation prior to these measures.

The provisional EU Regulation 446/2011 on (provisional) anti-dumping duty on imports of

certain fatty alcohols and their blends coming from Indonesia (and also from India and

Malaysia) had become permanently by EU Regulation 1138/2011196

, and imposed definitive

anti-dumping duty on imports of certain fatty alcohols and their blands originating from

above mentioned countries. Indonesia challenged both the provisional and the definitive

measures imposed by the EU Regulations 446/2011 and 1138/2011197

. The products

concerned certain saturated fatty alcohols with CN Codes ex 2905 16 85, 2905 17 00, ex 2905

19 00 and ex 3823 70 00 as specified in the Recitals of Regulation 446/2011198

.

195 https://www.wto.org/english/tratop_e/dispu_e/cases_e/1pagesum_e/ds54sum_e.pdf

196 COUNCIL IMPLEMENTING REGULATION (EU) No 1138/2011 of 8 November 2011 imposing a

definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of certain fatty

alcohols and their blends originating in India, Indonesia and Malaysia. 197

Regulations published in Official Journal of the European Union, L 122, p. 47, 11.05.2011 (446/2011) and L

293, p.1, 11.11. 2011 (1138/2011) 198

“saturated fatty alcohols with a carbon chain length of C8, C10, C12, C14, C16 or C18 (not including

branched isomers) including single saturated fatty alcohols (also referred to as ‘single cuts’) and blends

predominantly containing a combination of carbon chain lengths C6-C8, C6-C10, C8-C10, C10-C12 (commonly

categorised as C8-C10), blends predominantly containing a combination of carbon chain lengths C12-C14,

C12-C16, C12-C18, C14-C16 (commonly categorised as C12-C14) and blends predominantly containing a

combination of carbon chain lengths C16-C18, originating in India, Indonesia, and Malaysia. The product

investigated is an intermediary product produced from natural (oleo-chemical) or synthetic (petrochemical)

sources, such as natural fats and oils, crude oil, natural gas, natural gas liquids and coal. It is mainly used as an

input material for the production of fatty alcohol sulphates, fatty alcohol ethoxylates and fatty alcohol ether

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In the mid- 2010, two EU producers (Cognis GmbH and Sasol Olefins & Surfactants GmbH)

brought complaints with prima facie evidence of dumping of these products from above

mentioned countries and the material injury was considered sufficient for the commission to

initiate investigations199

. The Commission investigated the complaint and sent questionnaries

to exporting producers, Union producers, importers and other parties concerned200

.

The Commission investigated two exporting producers from Indonesia, P.T. Ecogreen

Oleochemicals and its related companies, Batam, Singapore, Dessau, and P.T. Musim Mas

and its related companies, Medan, Singapore, Hamburg201

. Based on calculation methods

defined in Art. 2 of the so-called basic Regulation and its chapeau202

, the Commission

calculated the provisional dumping margins as a percentage of CIF Union frontier price (duty

unpaid) for Indonesia to be 6,3% (P.T. Ecogreen Oleochemicals), 7,6% (P.T. Musim Mas)

and 7,6% (all other companies)203

. Based on the analysis of the Commission it was confirmed

that there was serious injury for the Union producers concerned and that there was a causality

between the injury to the Union industry and the dumped imports originating from the

concerned countries. The provisional anti-dumping duty applicable to the net, free-at-Union-

frontier price, before duty, imposed by the Regulation 446/2011 for the Indonesian companies

involved, were 6,3% (P.T. Ecogreen Oleochemicals, Kabil, Batam), 4,3% (P.T. Musim Mas,

Tanjung Mulia, Medan, Sumatera Utara) and 7,6% (all other companies). In Regulation

1138/2011, the definitive dumping margins as a percentage of CIF Union frontier price (duty

unpaid) for the Indonesian companies involved were estimated at 7,3% (P.T. Ecogreen

Oleochemicals), 5,4% (P.T. Musim Mas) and 7,3% (all other companies). The definitive anti-

dumping duty applicable to the products described in paragraph 1 of Art. 1 of Regulation

sulphates (so-called surfactants). Surfactants are used to produce detergents, household, cleaning and personal

care products”. 199

Both companies were incorporated under German law and had production facilities in Germany, France and

Italy. These two companies produced more than 25% of total EU production of this product type (and like

product). 200

Recital, 1.2 (6) of COMMISSION REGULATION (EU) No 446/2011 of 10 May 2011 imposing a

provisional anti-dumping duty on imports of certain fatty alcohols and their blends originating in India,

Indonesia and Malaysia. 201

Ibid., Recital, 1.2 (8) (e) 202

COUNCIL REGULATION (EC) No 1225/2009 of 30 November 2009 on protection against dumped imports

from countries not members of the European Community 203

Ibid., 192, Recital, 3.2.4 (43)

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1138/2011 had been set at 45,63 euro per tonne net (P.T. Musim Mas, Tanjung Mulia, Medan,

Sumatera Utara) and 80,34 (all other companies)204

.

Indonesia claimed that the measures of EU Regulations 446/2011 and 1138/2011 were

inconsistent with GATT 1994, Art. VI (anti-dumping and countervailing duties), with GATT

1994, Art. X (3) (a) (publication and administration of trade regulations) and with the main

provisions of the “Anti-Dumping Agreement”205

. Indonesia claimed breaches of Art. 2.3 and

2.4 of the “Anti-Dumping Agreement” because the EU would inappropriately have adopted

the export price of Indonesian exporters with an unfair comparison between the export price

and normal value206

. As the dumping margin for the Indonesian exporters fell below the “de

minimis” threshold explained in Art. 5.8 of the “Anti-Dumping Agreement”, the Indonesian

delegation claimed that there could not be imposed anti-dumping duties on those exporters.

Following the “de minimis” provision concluded under Art 5.8 of the “Anti-Dumping

Agreement”, an investigation of dumping should be terminated immediately if the dumping

margin is less than 2 percent. The claim of Indonesia was also based on Art. 3.1 and 3.5 of the

“Anti-Dumping Agreement”(lack of causal link between the dumped products and the

material injury suffered by the domestic industry), on Art. 9.4 of the “Anti-Dumping

Agreement” (incorrectly calculation and application of the term “all others”, relating to

exporters other than P.T. Musim Mas, Tanjung Mulia, Medan and Sumatera Utara), on Art.

9.2 of the “Anti-Dumping Agreement” (failure to collect anti-dumping duties in appropriate

amounts) and on articles of the “Anti-Dumping Agreement” relating to the scope of domestic

“like” products and the definition of “domestic industry” (Art. 2.6, Art. 3.1, Art. 4.1 and Art.

3.1 – Art. 3.5). In the “Request for Consultations by Indonesia”, Indonesia also suggests that

the EU had not provided the Indonesian exporters with the reports of the EU verification

visits to the exporters, thereby breaching Art. 6.7 and Art. 6.9 of the “Anti-Dumping

Agreement”. Concerning the violation of GATT 1994, Art. X (3) (a), Indonesia claimed that

the EU “Failed and continues to fail to administer its laws, regulations, decisions and rulings

in a uniform, impartial and reasonable manner”207

.

204 Art. 1.2 of COUNCIL IMPLEMENTING REGULATION (EU) No 1138/2011 of 8 November 2011

imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of

certain fatty alcohols and their blends originating in India, Indonesia and Malaysia. 205

Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 206

WTO, document WT/DS442/1G/ADP/D94/1G/L/993 (August 1st 2012 – English) 207

WTO, document WT/DS442/1G/ADP/D94/1G/L/993 (August 1st 2012 – English), p.2

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On May 13th 2013 Indonesia requested the establishment of a panel and based its demand on

five EU legal instruments: Regulation 446/2011, Regulation 1138/2011, “Notice of initiation

of an anti-dumping proceeding concerning imports of certain fatty alcohols and their blends

originating in India, Indonesia and Malaysia208

, Regulation 1241/2012 (amending

Implementing Regulation 1138/2011209

and “Notice concerning a partial reopening of the

anti-dumping investigation concerning imports of certain fatty alcohols and their blends

originating in India, Indonesia and Malaysia (2013/C58/08)210

. On December 18th 2014 the

Director-General of the DSB composed the panel211

. In a communication from the panel on

June 11th 2015, the panel communicated: “The beginning of the Panel's work has been

delayed as a result of a lack of available experienced lawyers in the Secretariat. The Panel

expects to begin its substantive work shortly and to issue its final report to the parties in the

second half of 2016”.

2.3.3 European Union- Anti-Dumping Measures on Biodiesel from Indonesia (DS 480)

On June 10th 2014, Indonesia requested consultations with the EU on anti-dumping measures

taken on imported Indonesian biodiesel. The government of Indonesia considered that the

measures described in Regulation 1225/2009212

, Regulation 490/2013213

and Regulation

1194/2013214

(and its underlying investigations) were inconsistent with the obligations of the

EU under the relevant provisions of the WTO Agreements. The claims of Indonesia were

based on Art. 2 (5) and Art. 2 (6) (b) of Regulation 1225/2009 (so-called “basic anti-dumping

regulation”) and on Regulations 490/2013 and 1194/2013, which describe the specific anti-

dumping duty on imports of biodiesel originating from Indonesia and the underlying

investigations.

208 Official Journal of the European Union, C219, 13.8.2010, p.12

209 Official Journal of the European Union, L352, 21.12.2012, p.1

210 Official Journal of the European Union, C58, 28.02.2013, p. 24

211 WT/DS442/3 (19.12.2014) ; Chairperson: Mr. Paul O’Connor, Members: Mr. Greg Tereposky and Mr. Mateo

Diego Fernandez 212

COUNCIL REGULATION (EC) No 1225/2009 of 30 November 2009 on protection against dumped imports

from countries not members of the European Community 213

COMMISSION REGULATION (EU) No 490/2013 of 27 May 2013 imposing a provisional anti-dumping

duty on imports of biodiesel originating in Argentina and Indonesia 214

COUNCIL IMPLEMENTING REGULATION (EU) No 1194/2013 of 19 November 2013 imposing a

definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of biodiesel

originating in Argentina and Indonesia

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Art. 1 of Regulation 1225/2009 stipulates that an anti-dumping duty may be applied to any

dumped product put into free circulation in the EU which causes injury. A product is

considered to be dumped if the price is less than the like product215

coming from the

concerned country (under normal trade conditions). Art. 2 of Regulation 1225/2009 is an

elaborated article that deals with the determination of dumping. The first part defines the

“normal value” of a product. Art. 2 (5) explains how the total costs of a product should be

calculated and proved by the concerned country (party) and what should happen if the costs

are not duly reflected in the used accounting methods. Art. 2 (6) gives guidelines on how

overhead costs should be calculated and determined and what to do if those data are not

available216

.

Concerning Regulation 1225/2009, Art. 2 (5) Indonesia claims that the second paragraph217

is

inconsistent with certain articles of the Anti-Dumping Agreement (mainly Art. 2.2 and Art.

9.3) and provisions under GATT 1994 (mainly Art. VI). One of the main arguments of

Indonesia consists in the claim that Art. 2.2 of the Anti-Dumping Agreement does not allow

to adjust or establish the cost of production based on other data than on the one relating to the

production in the country of origin. Indonesia also claims that the costs should be calculated

on the basis of the records218

kept by the producers under investigation. Regulation 1225/2009

indeed allows to adapt the costs if they would be considered to be artificially low, depressed

or distorted. On Art. 2 (6) (b) of Regulation 1225/2009, Indonesia disagree on the calculation

methods allowed by the Regulation. Indeed, Regulation 1225/2009 allows to calculate the

actual costs for selling, general and administrative costs (in case that these cannot be

determined from the existing data pertaining to production and sales) “based on the actual

amounts applicable to production and sales, in the ordinary course of trade, of the same

general category of products for the exporter or producer in question in the domestic market

of the country of origin”. Indonesia claims that this provision is inconsistent with Art. 2.2.2 (i)

215 The concept of “like” product under the Regulation 1225/2009 is explained in Art. 1 (4): “For the purpose of

this Regulation, ‘like product’ means a product which is identical, that is to say, alike in all respects, to the

product under consideration, or in the absence of such a product, another product which, although not alike in

all respects, has characteristics closely resembling those of the product under consideration”. 216

One could use the weighted-average method of the like product for other exporters or producers or compare

prices of like products in the domestic market of the exporter 217

“If costs associated with the production and sale of the product under investigation are not reasonably

reflected in the records of the party concerned, they shall be adjusted or established on the basis of the costs of

other producers or exporters in the same country or, where such information is not available or cannot be used,

on any other reasonable basis, including information from other representative markets”. 218

Under generally accepted accounting principles

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and Art. 18.4 of the Anti-Dumping Agreement and with Art. XVI:4 of the Marrakesh

Agreement.

During the consultations with the EU, Indonesia explained its claims concerning the anti-

dumping measures imposed on imports of Indonesian biodiesel and the underlying

investigation. These claims were based on Regulations 490/2013 and 1194/2013 which

described the specific anti-dumping duty imposed on imports of biodiesel originating from

Indonesia219

.

The consultations were not successful and on June 30th 2015, Indonesia demanded for the

establishment of a panel and repeated its claims based on Regulation 1225/2009 and on

Regulations 490/2013 and 1194/2013. It was the anti-dumping biodiesel investigation against

imports from Indonesia (initiated by the Commission following complaints of the Union

producers of biodiesel, representing 60% of the market) that led to provisional anti-dumping

measures (Regulation 490/2013) and definitive anti-dumping measures (Regulation

1194/2013). As the biodiesel market in Indonesia is very much regulated by the state, the EU

found that “domestic sales were not considered as being made in the ordinary course of trade.

As a consequence, the normal value of the like product had to be constructed pursuant to

Article 2(3) and (6) of Regulation 1225/2009”. Indonesia claimed that the anti-dumping

calculations were inconsistent with Art. 2.2 and Art. 2.2.1.1 of the Anti-Dumping Agreement

because the EU adjusted the cost of production of biodiesel by Indonesian producers wrongly

and based its calculations on a (for the EU) particular market situation as regards to the cost

of raw material used in the production of biodiesel. The EU indeed estimated that some raw

materials220

used in the production of biodiesel were artificially low and had to be adjusted221

.

As stated in the Recitals 28 to 34 of Regulation 1194/2013 the Commission concluded that

the calculation system used by Indonesia to define the production cost of biodiesel is distorted

219 WTO document WT/DS480/1G/L/1071 G/ADP/D104/1, June 17th 2014

220 In particular “crude palm oil”

221 This has also been stated in Recital 31 of COUNCIL IMPLEMENTING REGULATION (EU) No

1194/2013 of 19 November 2013 imposing a definitive anti-dumping duty and collecting definitively the

provisional duty imposed on imports of biodiesel originating in Argentina and Indonesia : “The General Court

has confirmed (1) that when the prices of raw materials are regulated in such a way that they are artificially low

on the domestic market, it may be presumed that the cost of producing the product concerned is affected by a

distortion. The General Court considered that under such circumstances, the Union institutions are entitled to

conclude that one of the items in the records cannot be regarded as reasonable and that, consequently, such item

can be adjusted”.

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and that production and sale costs are not duly reflected in the records kept by the Indonesian

producers of biodiesel. In order to calculate the real value, the Commission therefore replaced

the actual cost of crude palm as recorded in the accounts of the concerned producers by a

“real” price in the absence of distortion. Furthermore, Indonesia argued that there was a

breach of Art. 2.2 and Art. 2.2.1.1 of the Anti-Dumping Agreement and of Art. VI:1(b)(ii) of

GATT 1994222

because the EU failed to properly calculate the cost of production and to

define the normal value for those producers. On page 4-6 of the “Request for the

establishment of a panel by Indonesia”223

there are more arguments to be read why Indonesia

thinks that the EU has breached several provisions of the “Anti-Dumping Agreement”, mainly

based on the miscalculations of the EU to define the “normal value” (and consequently

wrongly defined anti-dumping duty) for the producers of biodiesel.

A panel has been established on November 4th 2015 and is currently investigating the matter.

The panel is composed of Ms. Deborah Milstein (Chairperson), Mr. Gilles Le Blanc and Mr.

Mathias Francke.

3. OUTCOME OF TRADE DISPUTES BETWEEN EU AND ASEAN MEMBER

STATES (1995 – 2015)

During the analysed period (1995 – 2015), I could identify nine trade disputes involving the

EU and an ASEAN Member State. Of the ten Member States of ASEAN, only three countries

have been involved in dispute settlement at the WTO level (for disputes against the EU): the

Philippines (1 dispute), Thailand (5 disputes) and Indonesia (3 disputes). Of the nine trade

dispute cases, three have been initiated by the EU as complainant, and six by one of the three

Member States of ASEAN (as complainant). Four trade disputes have been resolved by the

DSU procedure (DS396, DS283, DS286, DS54); two disputes are still ongoing (DS442,

DS480); 3 disputes did not go further than a request for consultations (DS17, DS242, DS370);

Most probably these 3 disputes have been resolved by diplomatic means. Of the four trade

disputes which have been resolved by the DSU, two had been initiated by the EU (one against

the Philippines and one against Indonesia) and two had been initiated by Thailand.

222 GATT 1994, Art. VI:1(b)(ii) stipulates that, “in the absence of domestic price comparaison, the “normal”

price of a product should be calculated on the basis of the cost of production of the product in the country of

origin plus a reasonable addition for selling cost and profit” 223

WTO document WT/DS480/2, July 8th 2015

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The two trade disputes initiated by Thailand as complainant have been resolved by the EU

changing its legislation (as a result of the Panel and Appellate Body report) within a

reasonable timeperiod (decided upon by Arbitration). Both disputes concerned food and/or

agricultural products (sugar – case DS283 and frozen boneless chicken cuts – case DS286). In

the sugar-case, Thailand mainly argued that the EU accorded subsidies to its exports of sugar

and that the quantity of sugar for which the EU granted export subsidies were in excess of its

export reduction and budgetary outlay reduction commitments. The complainants claimed

that the EU had been exporting subsidized sugar in excess of its annual commitment levels.

During 2001-2002 the EU had been exporting 4,097 million tonns of subsidized sugar, while

its schedule only allowed 1,237 million tonns. Claims were based on violation of Art. 3.3, 8,

9.1 (a) and (c) and 10.3 of the “Agreement on Agriculture”. In the chicken cuts-case, Thailand

claimed that the new EC classification of frozen salted chicken cuts with a salt content of

1.2% by weight (or more) was inconsistent with the correct interpretation of headings in the

EC Schedule of Concessions. Because the newly applied tariff rate was in excess of the tariff

rate for salted meat (former code 0210.99.39), Thai exports of frozen salted chicken cuts were

treated less favourable than that accorded to that product in the EC Schedule of Concessions.

According to Thailand, the EC measure was therefore inconsistent with the basic obligations

set out in GATT 1994, art. II:1(a) and GATT 1994, art. II:1(b). In both cases the Appellate

Body upheld the main conclusions of the panel reports and ruled in favour of Thailand. The

“sugar” and “chicken” disputes were both resolved in 2006.

The trade dispute between the Philippines and the EU concerned taxes on distilled spirits

(DS396) and was resolved in 2013 by the Philippines changing their existing excise tax

regime on distilled spirits by a new tax regime applying equally to all distilled spirits

(domestic and imported), as suggested in the panel and Appellate Body report. The EU based

its claim on the core national treatment discipline of GATT 1994, Art. III:2 (“charge”

provision). The panel found that “through its excise tax, the Philippines subjects imported

distilled spirits made from non-designated raw materials to internal taxes in excess of those

applied to “like” domestic distilled spirits made from the designated raw materials, thus

acting in a manner inconsistent with Article III:2, first sentence, of the GATT 1994”. The

panel also found that “the Philippines has acted inconsistently with Article III:2, second

sentence, of the GATT 1994 by applying dissimilar taxes on imported distilled spirits and on

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“directly competitive or substitutable” domestic distilled spirits, so as to afford protection to

Philippine production of distilled spirits”. In paragraphs 119-120 of the Appellate Body

report, we could read how to interpret “likeness” of products: “While in the determination of

"likeness" a panel may logically start from the physical characteristics of the products, none

of the criteria that a panel considers necessarily has an overarching role in the determination

of "likeness" under Article III:2 of the GATT 1994. A panel examines these criteria in order to

make a determination about the nature and extent of a competitive relationship between and

among the products” and “We understand that products that have very similar physical

characteristics may not be "like", within the meaning of Article III:2, if their competitiveness

or substitutability is low, while products that present certain physical differences may still be

considered "like" if such physical differences have a limited impact on the competitive

relationship between and among the products”. The outcome of this case is a good example

of how a country finally adopts a new tax system based on the recommendations of a WTO

DSU panel report.

The trade dispute between Indonesia and the EU (DS54) concerned measures in the

automobile industry, discriminating the local produced cars above imported cars. The EU

claimed that these measures were in violation with the obligations of Indonesia under GATT

1994, Art. I and III (MFN and NT), under the TRIMS Agreement, Art. 2 and under the SCM

Agreement, Art. 3. This dispute was resolved in 1999 by Indonesia issuing a new automotive

policy in line with the recommendations described in the DSB report.

The two pending trade disputes between Indonesia and the EU tackle the anti-dumping

measures in the EU on Fatty Alcohols (DS442) and on Biodiesel (DS480).

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VI. CONCLUDING REMARKS

The focus of the EU integration process has traditionally been inspired by the internal

European market (inward looking). The rationale behind ASEAN has been triggered by the

idea of open regionalism (external looking). While the EU was originally created for

economic reasons, ASEAN was initially established for political and security purposes. This

paper has showed that the underlaying powers and influences activating the creation of the

EU and ASEAN are not similar. This study also showed that the attempts of ASEAN to create

a single production base catering world economy has partly succeeded, but that there are still

some main challenges to overcome world trade obstacles. Examples are the further removal of

non-tariff barriers, the integration of customs procedures with the “ASEAN Single Window”

and the drafting of clear Rules of Origin procedures. We have seen that nine trade disputes

involving the EU and an ASEAN Member State have been initiated at the WTO Dispute

Settlement level. Of the ten Member States of ASEAN, only three countries have been

involved in dispute settlement at the WTO level (for disputes against the EU): the Philippines

(1 dispute), Thailand (5 disputes) and Indonesia (3 disputes). Of the nine trade dispute cases,

three have been initiated by the EU as complainant, and six by one of the three Member States

of ASEAN (as complainant). Four trade disputes have been resolved by the DSU procedure

(DS396, DS283, DS286, DS54); two disputes are still ongoing (DS442, DS480); 3 disputes

did not go further than a request for consultations (DS17, DS242, DS370) and are probably

solved by diplomatic means. Of the four trade disputes which have been resolved by the DSU,

two had been initiated by the EU (one against the Philippines and one against Indonesia) and

two had been initiated by Thailand. Considering the fact that in 2012, the EU was the third

largest trading partner of ASEAN and ASEAN the fifth largest trading partner of the EU, and

taking into account that today some studies suggest that the EU is the second largest trading

partner of ASEAN (after China and before Japan), we could postulate that 6 main trade

disputes over a period of twenty years, of which four have been solved by the DSU, and two

are still pending for a decision, could be considered as little and as a big success for trade

between the EU and ASEAN Member States. It has to be seen if the current vague of

individual FTAs concluded between the EU and ASEAN Member States will influence the

amount of trade dispute cases brought to the DSU of WTO; One could presume that because

of these FTAs there will be even less trade disputes between the EU and ASEAN Member

States in the years to come.

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VII. BIBLIOGRAPHY

1. Journal articles

Kyle Bagwell, Petros Mavroidis, Robert Staiger, “The case for tradable remedies in

WTO Dispute Settlement”, discussion paper 0405-05 (2004), p. 35, Columbia

University (New York), Department of Economics.

Gerard, L. Chan, “Continuing the liquor tax cases saga, Philippines – Taxes on distilled

spirits: a critical analysis” (2011), Philippine Law Journal, Vol. 85, pp. 453- 504

Chesterman, Simon, “Does ASEAN exist? The Association of Southeast Asian Nations

as an International Legal Person” (2008), Singapore Year Book of International Law,

Vol. 12, pp. 199-211

Chia, Siowyue, “The ASEAN Economic Community: Progress, Challenges and

Prospects” (2013), ADBI working paper 440

Jean-Pierre Cling, “The future of global trade and the WTO” (2014), Emerald Group

Publishing Limited, vol. 16, No. 2, pp. 109-125

Rosabel B. Guerrero, “Regional Integration: the ASEAN vision in 2020”

(2010 ), IFC Bulletin, No. 32, pp.52-58

Gauri Khandekar, “Mapping EU-ASEAN Relations” (2014), FRIDE (European Think

Tank For Global Action), pp. 1-69

Manchin, Miriam and Pelkmans-Balaoing, Annette O., “Rules of Origin and the web of

East Asian Free Trade Agreements” (2007), World Bank policy research working

paper No. 4273

Kawai Masahiro and Ganesh Wignaraja, “Main findings and policy recommendations”.

In Asia’s Free Trade Agreements: How is business responding?”, edited by Kawai

Masahiro and Ganesh Wignaraja. Cheltenham and Northhampton: Asia Development

Bank Institute and Edward Elgar Publishing (2011)

Yu, Miaojie, “Paterns of trade, comparative advantages and productivity in the

ASEAN-China-India Region (2011), available on SSRN:

http://ssrn.com/abstract=1854907

Official Journal of the European Union, C219, 13.8.2010, p.12

Official Journal of the European Union, L352, 21.12.2012, p.1

Official Journal of the European Union, C58, 28.02.2013, p. 24

Eva Pejsova, The EU and ASEAN in 2016 (2016), European Union Institute for

Security Studies (EUISS), pp.1-2

Rodolfo Severino, ‘‘Asia Policy Lecture: What ASEAN is and What it Stands for’’,

(1998), The Research Institute for Asia and the Pacific, University of Sydney, Australia

Tham Siew Yean and Sanchita Basu Das, The ASEAN Economic Community and

conflicting domestic interests (2015), Journal of Southeast Asian Economies, Vol. 32,

No. 2, pp. 189- 201

Jose L. Tongzon, “Free Trade Agreements: WTO and ASEAN Implications” (2004),

The Copenhagen Journal of Asian Studies, vol. 20, pp. 98-110

Jing Xu and Fei Chen, Analysis on Motivation of EU in Economic and Trade

Investment in ASEAN and Regional Influence (2014), International Journal of

Business Administration, vol. 5, No. 5, pp.84-90

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2. Books

A. D. Mitchell, Legal Principles in WTO Disputes (2008), Cambridge University Press

A. Narlikar, M.Daunton, R.M.Stern, The Oxford handbook on the World Trade

Organization (2012), Oxford University Press

H.Horn, P.C. Mavroidis, Legal and Economic Principles of World Trade Law (2013),

Cambridge University Press

M. Herdegen, Principles of International Economic Law (2013), Oxford University

Press

M. Trebilcock, Understanding trade law (2011), Edward Elgar

P. Van Den Bossche and W. Zdouc, The law and policy of the World Trade

Organisation (2008), Cambridge University Press

S. Lester, B. Mercurio, A. Davies, World Trade Law Materials and commentary

(2012), Hart Publishing

3. Legislation

COMMISSION REGULATION (EC) No 1223/2002 of 8 July 2002 concerning the

classification of certain goods in the Combined Nomenclature

Vienna Convention on the law of treaties (VCLT)

COMMISSION REGULATION (EC) No 949/2006 of 27 June 2006 amending Annex

I to Council Regulation (EEC) No 2658/87 on the Tariff and Statistical Nomenclature

and on the Common Customs Tariff

COMMISSION REGULATION (EU) No 446/2011 of 10 May 2011 imposing a

provisional anti-dumping duty on imports of certain fatty alcohols and their blends

originating in India, Indonesia and Malaysia.

COMMISSION REGULATION (EU) No 490/2013 of 27 May 2013 imposing a

provisional anti-dumping duty on imports of biodiesel originating in Argentina and

Indonesia

COUNCIL REGULATION (EEC) No 1432/76 of 21 June 1976 laying down general

rules to be applied in the event of the market in rice being disturbed

COMMISSION REGULATION (EC) No 1573/95 of 30 June 1995 on the detailed

rules for the application of Council Regulation (EEC) No 1418/76 with regard to

import duties on rice

COUNCIL REGULATION (EC) No 2820/98 of 21 December 1998 applying a

multiannual scheme of generalised tariff preferences for the period 1 July 1999 to 31

December 2001

COUNCIL REGULATION (EC) No 1260/2001 of 19 June 2001 on the common

organisation of the markets in the sugar sector

COUNCIL IMPLEMENTING REGULATION (EU) No 1138/2011 of 8 November

2011 imposing a definitive anti-dumping duty and collecting definitively the

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provisional duty imposed on imports of certain fatty alcohols and their blends

originating in India, Indonesia and Malaysia.

COUNCIL REGULATION (EC) No 1225/2009 of 30 November 2009 on protection

against dumped imports from countries not members of the European Community

COUNCIL IMPLEMENTING REGULATION (EU) No 1194/2013 of 19 November

2013 imposing a definitive anti-dumping duty and collecting definitively the

provisional duty imposed on imports of biodiesel originating in Argentina and

Indonesia

Declaration on the Asean Economic Community Blueprint (2007)

Marrakesh Declaration (15 April 1994)

The General Agreement on Tariffs and Trade (GATT 1994)

4. Jurisprudence

Appellate Body Report, Argentina – Measures Affecting Imports of Footwear,

Textiles, Apparel and other Items ("Argentina – Textiles and Apparel"),

WT/DS56/AB/R, para. 47.

Panel Report DS286 (May 30th 2005), para. 7.12

WTO Dispute Settlement Report (2015), “EC – Export Subsidies on Sugar (DS 265,

266, 283)”, p. 105

5. Web resources (last consulted April 2016)

Centre For International Law, National University of Singapore (NUS)


ASEAN http://agreement.asean.org/media/ download/20140117154159.pdf

Agreement on the Establishment of the ASEAN Secretariat


Treaty of Amity and Cooperation in South East Asia


Charter of the Association of South East Asian Nations


ASEAN Vision 2020: http://www.asean.org/?static_post=asean-vision-2020

Declaration on the ASEAN Economic Community Blueprint http://www.asean.org/wp-

content/uploads/archive/5187-10.pdf

prioritised AEC Blueprint measures

http://www.eria.org/2015_0822_JointMediaStatement-AEM-FINAL.pdf

AEC Blueprint 2025 http://www.asean.org/storage/images/2015/November/aec-

page/AEC-Blueprint-2025-FINAL.pdf

IHS www.ihs.com

WTO: www.wto.org and stat.wto.org

Trade Disputes at WTO


DS396

https://www.wto.org/english/tratop_e/dispu_e/cases_e/1pagesum_e/ds396sum.pdf


http://agreement.asean.org/


http://www.asean.org/wp-content/uploads/archive/5187-10.pdf

http://www.asean.org/wp-content/uploads/archive/5187-10.pdf

http://www.asean.org/storage/images/2015/November/aec-page/AEC-Blueprint-2025-FINAL.pdf

http://www.asean.org/storage/images/2015/November/aec-page/AEC-Blueprint-2025-FINAL.pdf

http://www.ihs.com/

http://www.wto.org/


https://www.wto.org/english/tratop_e/dispu_e/cases_e/1pagesum_e/ds396sum.pdf

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Jemy Gatdula, blog on International Economic Law and Natural Law (2012),

www.jemygatdula.blogspot.be/2012_01_01_archive.html?m=1

per capita GNP http://data.worldbank.org/indicator/NY.GNP.PCAP.CD?page=4

Arbitration on case DS283

https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds283_e.htm

Panel Report on DS 286

https://www.wto.org/english/tratop_e/dispu_e/cases_e/1pagesum_e/ds286sum_e.pdf

Appellate Body on DS 286


DS370 Request for Consultations


Panel Report case DS54

https://www.wto.org/english/tratop_e/dispu_e/cases_e/1pagesum_e/ds54sum.e.pdf

6. Other

“Executive summary by Thailand after the first substantive meeting” (October 21st

2004) – case DS286, para. 5

McKinsey report, “ Southeast Asia is one of the world’s fastest-growing markets - and one

of the least well known” (2016)

Official “working document” on ASEAN FTA negociations status, European

Commission, Directorte-General Trade (2016)

Singapore Parliamentary Debates, vol. 84 at col. 1181 (2008)

Status Report by The Philippines to the DSB (January 18th 2013)

WTO, “European Communities – Duties on imports of rice, request for consultations

by Thailand”, Restricted document 95-3019 (11 October 1995)

WTO, “European Communities – Generalized System of Preferences, request for

consultations by Thailand”, document 01-6292 (12 December 2001)

WTO, document WT/DS442/1G/ADP/D94/1G/L/993 (August 1st 2012 – English)

WTO document WT/DS480/1G/L/1071 G/ADP/D104/1, June 17th 2014

WTO document WT/DS480/2, July 8th 2015

http://www.jemygatdula.blogspot.be/2012_01_01_archive.html?m=1

http://data.worldbank.org/indicator/NY.GNP.PCAP.CD?page=4





https://www.wto.org/english/tratop_e/dispu_e/cases_e/1pagesum_e/ds54sum

llm paper by andrew donovan student number : 2002841

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