[Federal Register Volume 61, Number 202 (Thursday, October 17, 1996)]
[Notices]
[Pages 54246-54247]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-26592]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[Docket No. 301-109]


Initiation of Section 302 Investigation and Request for Public 
Comment: Practices of the Government of Indonesia Regarding Certain 
Incentives Related to the Promotion of the Indonesian Motor Vehicle 
Sector

AGENCY: Office of the United States Trade Representative.

ACTION: Notice of initiation of investigation; request for written 
comments.

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SUMMARY: The Acting United States Trade Representative (USTR) has 
initiated an investigation under section 302(b)(1) of the Trade Act of 
1974, as amended, with respect to certain acts, policies and practices 
of the Government of Indonesia concerning the grant of conditional tax 
and tariff benefits intended to develop a motor vehicle sector in 
Indonesia. The United States alleges that these acts, policies and 
practices are inconsistent with certain provisions of the General 
Agreement on Tariffs and Trade 1994 (GATT 1994), the Agreement on 
Trade-Related Investment Measures (TRIMS Agreement), the Agreement on 
Subsidies and Countervailing Measures (SCM Agreement), and the 
Agreement on Trade-Related Aspects of Intellectual Property Rights 
(TRIPs Agreement), each administered by the World Trade Organization 
(WTO). USTR invites written comments from the public on the matters 
being investigated.

DATES: This investigation was initiated on October 8, 1996. Written 
comments from the public are due on or before noon on Friday, November 
15, 1996.

ADDRESS: Office of the United States Trade Representative, 600 17th 
Street N.W., Washington, DC 20508.

FOR FURTHER INFORMATION CONTACT:
Joseph Damond, Director for Southeast Asia, (202) 395-6813, or Thomas 
Robertson, Associate General Counsel, (202) 395-6800.

SUPPLEMENTARY INFORMATION: Section 302(b)(1) of the Trade Act of 1974, 
as amended (the Trade Act) (19 U.S.C. 2412(b)(1)), authorizes the USTR 
to initiate an investigation under chapter 1 of title III of the Trade 
Act (commonly referred to as ``section 301'') with respect to any 
matter in order to determine whether the matter is actionable under 
section 301. Matters actionable under section 301 include, inter alia, 
the denial of rights of the United States under a trade agreement, or 
acts, policies, and practices of a foreign country that violate or are 
inconsistent with the provisions of, or otherwise deny benefits to the 
United States under, any trade agreement.
    On October 8, 1996, having consulted with the appropriate private 
sector advisory committees, the USTR determined that an investigation 
should be initiated to determine whether certain acts, policies and 
practices of Indonesia intended to promote the development of an 
Indonesian motor vehicle sector are actionable under section 301(a). 
Indonesia adopted in 1993 a system of incentives for manufacturers of 
motor vehicles and parts in the form of a reduction in duties on their 
imports of certain products and a reduction in taxes on the sale of 
motor vehicles. These benefits are conditional on compliance with 
domestic content requirements and local content requirements with 
regard to inputs. This system was expanded in February of 1996 to 
provide additional tax and tariff incentives designed to promote a 
``national car'' that was produced by an

[[Page 54247]]

Indonesian company, carried a unique Indonesian trademark and had a 
gradually-increasing percentage of local content over the next three 
years. The system was last modified in June of 1996, when the 
``national car'' policy was modified to permit the ``national car'' to 
be produced outside Indonesia.
    The USTR believes that these acts, policies and practices are 
inconsistent with certain aspects of the GATT 1994, the TRIMs 
Agreement, the SCM Agreement and the TRIPS Agreement. In particular, 
the program appears to be inconsistent with the most-favored-nation 
treatment and national treatment provisions found in Articles I and III 
of the GATT 1994; the prohibition in Article 2 of the TRIMs Agreement 
on investment measures that are inconsistent with the national 
treatment and quantitative restriction provisions in the GATT 1994; the 
prohibition on certain subsidies in Articles 3, 6, and 28.2 of the SCM 
Agreement; and the national treatment provision and prohibition on 
unjustifiable encumbrances on the use of trademarks found in Articles 
3, 20, and 65.5 of the TRIPs Agreement. The United States has reserved 
the right to raise additional factual claims and legal matters during 
the course of the consultations.

Investigation and Consultations

    As required in section 303(a) of the Trade Act, the USTR has 
requested consultations with the Government of Indonesia regarding the 
issues under investigation. The request was made pursuant to Articles 1 
and 4 of the Understanding on Rules and Procedures Governing the 
Settlement of Disputes (DSU), Article XXII:1 of the GATT 1994, Article 
8 of the TRIMs Agreement, Articles 7 and 30 of the SCM Agreement, and 
Article 64 of the TRIPS Agreement. If the consultations do not result 
in a satisfactory resolution of the matter, the USTR will request the 
establishment of a panel pursuant to Article 6 of the DSU.
    Under section 304 of the Trade Act, the USTR must determine within 
18 months after the date on which this investigation was initiated, or 
within 30 days after the conclusion of WTO dispute settlement 
procedures, whichever is earlier, whether any act, policy, or practice 
or denial of trade agreement rights described in section 301 of the 
Trade Act exists and, if that determination is affirmative, the USTR 
must determine what action, if any, to take under section 301 of the 
Trade Act.

Public Comment: Requirements for Submissions

    Interested persons are invited to submit written comments 
concerning the acts, policies and practices of Indonesia which are the 
subject of this investigation, the amount of burden or restriction on 
U.S. commerce caused by these acts, policies and practices, and the 
determinations required under section 304 of the Trade Act. Comments 
must be filed in accordance with the requirements set forth in 15 CFR 
2006.8(b) (55 FR 20593) and must be filed on or before noon on Friday, 
November 15, 1996. Comments must be in English and provided in twenty 
copies to: Sybia Harrison, Staff Assistant to the Section 301 
Committee, Room 223, Office of the U.S. Trade Representative, 600 17th 
Street, N.W., Washington, DC 20508.
    Comments will be placed in a file (Docket 301-109) open to public 
inspection pursuant to 15 CFR 2006.13, except confidential business 
information exempt from public inspection in accordance with 15 CFR 
2006.15. Confidential business information submitted in accordance with 
15 CFR 2006.15 must be clearly marked ``BUSINESS CONFIDENTIAL'' in a 
contrasting color ink at the top of each page on each of 20 copies, and 
must be accompanied by a nonconfidential summary of the confidential 
information. The nonconfidential summary shall be placed in the file 
that is open to public inspection. An appointment to review the docket 
(Docket No. 301-109) may be made by calling Brenda Webb (202) 395-6186. 
The USTR Reading Room is open to the public from 10:00 a.m. to 12 noon 
and 1:00 p.m. to 4:00 p.m., Monday through Friday, and is located in 
Room 101.
Irving A. Williamson,
Chairman, Section 301 Committee.
[FR Doc. 96-26592 Filed 10-16-96; 8:45 am]
BILLING CODE 3190-01-M