|
THE
DISPUTE OVER THE INDONESIAN NATIONAL CAR PROGRAM
Case Study A | Case
Study B |
Simulations
& Questions for Students Case A | Case B
| Teaching
Note Available upon request from ICDP |
Case B
Simulations and Questions for Students
Simulation I
Options/Decision Paper
Assume that it is early June of 1997 and that you are one of the officials
listed below.
Japan
and the EU have already requested the formation of a WTO dispute
settlement panel regarding the National Car Program.
Prepare an options/decision paper which addresses the questions
posed to you.
A.
Senior advisor to the Indonesian Minister of Industry and
Trade, Tungky Ariwibowo
The Minister asks you to
prepare an options paper with recommendations that address the following
questions:
-
What are my options
for dealing with the National Car Program at this point in time?
-
Should I try to
negotiate a settlement, and, if so, what are the benefits and costs of
pursuing this course? Under
what constraints will I be operating?
If I engage in negotiations, what should be my negotiating
objectives? What should be
my bottom line?
-
What are the benefits
and costs of engaging in international dispute settlement litigation?
What do you think are the strengths and weaknesses of my
opponents’ case? How
long could dispute settlement take and what bearing should this have
on my decision?
-
Finally, what are the
domestic political considerations I must take into account?
What are the views of the different groups with an economic
interest in the outcome of the negotiations?
B.
Assistant U.S. Trade Representative for
Asia
(other than
Japan
and
China
)
The U.S. Trade
Representative Charlene Barshefsky has asked you to prepare an option memo
regarding the Indonesian National Car Program in light of the decision of
Japan
and the EU to request the formation of a WTO dispute settlement panel.
What options are
available to the
United States
at this point? What are the
benefits and costs of each option?
Simulation II
Bilateral Negotiations
Assume that it is early June of 1997.
The Indonesian Minister of Industry and Trade, Tungky Ariwibowo,
and the Acting U.S. Trade Representative, Charlene Barshefsky, have agreed
that officials from the
United States
and
Indonesia
should meet one last time to try to negotiate a resolution of the dispute
over the National Car Program before the
United States
requests the establishment of a WTO dispute settlement panel.
A.
Indonesia’s Chief Trade Negotiator
As
Indonesia
’s Chief Trade Negotiator, you will lead
your government’s team. Prepare
your negotiating instructions for approval by the Minister, assemble a
team, and then conduct the negotiations.
The negotiating instructions should be based on the options paper
prepared above. The
instructions should address your negotiating objectives and the scope of
your authority, including when you should seek further instructions from
Jakarta
. Prepare talking points for
the key issues to be addressed in the negotiations.
B. Assistant
U.S. Trade Representative for
Asia
Prepare your negotiating instructions for approval by the relevant
interagency staff committee, assemble a team, and then conduct the
negotiations. The negotiating
instructions should be based on the options paper prepared above.
The instructions should address what should be your negotiating
objectives and the scope of your authority, including when you should seek
further instructions from
Washington
. Prepare talking points for
the key issues to be addressed in the negotiations.
Part
II
Simulation
I
Draft Panel Report
Assume that you are on
the panel regarding measures affecting Indonesian autos.
Outline the decisions you would make on the various GATT
non-subsidy claims identified in the panel proceeding.
How would you handle the procedural issues raised by the parties?
Questions for students
who do not engage in simulations
In June of 1997 what
options do Indonesian trade officials have?
Should
Indonesia
make concessions and, if so, what concessions should it make to settle the
case quickly? Should
Indonesia
stonewall and take its chances with a WTO proceeding?
From the
US
, EU and Japanese perspective: What options does each country have?
Give pros and cons for each. Students
should consider: Should the country push for inclusion of its firms in the
National Car Program while allowing WTO violations to continue?
Should you fight WTO violations, even if it excludes your companies
from the market?
How were the WTO dispute
settlement process and the US Section 301 provisions used to set up a
resolution of the case?
In July of 1998, how
would you answer the following questions: What would have been the outcome
of the case if the WTO dispute settlement panel procedures didn’t exist?
What if the arbitration procedures for implementation didn’t
exist? What role did the
financial crisis and the IMF have in the resolution of the case?
What are the advantages and disadvantages of coordinating with
other countries in a trade dispute? What
impact might the Indonesian auto case have on other developing countries
that want to develop an auto industry?
Why didn’t
Japan
file a complaint against the 1993 National Car Program? Why
was
Indonesia
prepared to concede that the incentive and national car programs were
subsidy programs covered by the SCM Agreement?
After the panel proceedings, is
Indonesia
still able to fulfill its objectives to develop a national car industry?
top |