Brussels, 17/06/2014 (Agence Europe) - On 13 June, the EU notified the WTO secretariat of a request for consultations with Indonesia concerning compliance and arbitration issues in the dispute between the US and Indonesia over clove cigarettes, in which the EU is a third party (DS 406).
The EU considers that Indonesia has acted inconsistently with the procedures of the Dispute Settlement Body (DSB) in unilaterally requesting sanctions against the US (for failing to comply with the recommendations of the DSB) without requesting a compliance panel to examine whether the US was in line with the DSB verdict.
The EU also complains that Indonesia rejected the participation of the EU, as a third party, in the compliance and arbitration procedures, preventing the interests of the EU from being taken into account.
The problems of sequencing (the possibility of applying sanctions without waiting for the results of a compliance panel) and of the participation of third countries at compliance and arbitration procedures have for long been a subject of systematic concern by the WTO member countries, the WTO states in a press release - and they are part of the current negotiations to improve the protocol agreement on dispute settlement.
After a disagreement between the US and Indonesia over compliance with regard to the DSB verdict on the Indonesian complaint against US measures on the production and sale of clove cigarettes, case DS 406 was sent to arbitration. Indonesia called for sanctions against the US for $50.5 million. Washington objected to this. It was not then possible to reach a sequencing agreement between both parties, and Indonesia claimed it was not necessary to request a compliance panel because the US had taken no action.
The European procedure against Indonesia is case DS 481 at the WTO. Consultations, which are the starting point for the dispute settlement procedure at the WTO, last for 60 days - at the end of which, if a satisfactory solution is not found, the complainant may request adjudication by a panel. (EH)