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The Evolution of the Dispute Settlement Mechanism in Preferential Trade Agreements [PTAs]: The Case of Indonesia

Published online by Cambridge University Press:  28 August 2020

I Gusti Ngurah Parikesit WIDIATEDJA
I Gusti Ngurah Parikesit WIDIATEDJA*
Affiliation:
Udayana University, [email protected]
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Abstract

The dispute settlement mechanism [DSM] under preferential trade agreements [PTAs] is crucial to ensure adequate implementation and enforcement of commitments among contracting parties. The DSM has evolved from political/diplomatic styles with a low level of legalism to judicial styles with a high level of legalism. Indonesia has also experienced this evolution process in its PTAs. This paper aims to show the evolution of the DSM in Indonesian PTAs, analyzing several related factors behind this trend. The paper argues that the evolution of the DSM from the GATT to WTO, Indonesia's participation in regional trade agreement, that is, ASEAN, the influence of trade partners, the existence of domestic factors, and the ongoing WTO dispute encourage the evolution of the DSM in Indonesian PTAs from political styles to more judicial styles with a high level of legalism.

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Articles
Information
Asian Journal of International Law , Volume 10 , Issue 2 , July 2020 , pp. 346 - 374
Copyright
Copyright © Asian Journal of International Law, 2020

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Footnotes

*

Lecturer of Faculty of Law Udayana University, Indonesia; PhD Candidate Melbourne Law School, Australia. The author is grateful to the anonymous reviewers of the Journal.

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86. Ibid., art. 22.7.

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97. Smith, supra note 42.

98. Agreement on the Establishment of a Free Trade Area Between the Government of Israel and the Government of the United States of America, 22 April 1985 (entered into force 19 August 1985), art. 19.

99. Revised Treaty of Chaguaramas Establishing the Caribbean Community Including the Caricom Single Market and Economy, 5 July 2001 (entered into force 4 February 2002), art. 188-224 [CARICOM].

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102. Nguyen, supra note 74.

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107. Agreement Establishing an Association Between the European Community and the Republic of Chile, 18 November 2002 (entered into force 1 February 2003), art. 184.

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109. Davey, supra note 28 at 354.

110. Ibid., at 355.

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115. Trade Agreement Between the Republic of Indonesia and the Republic of India, 30 January 1953 (entered into force 30 January 1953) [Indonesia-India PTA 1].

116. Indonesia-Japan PTA 1, supra note 114, art. I.

117. Indonesia-India PTA 1, supra note 115, art. III.

118. Indonesia-Japan PTA 1, supra note 114, art. II.

119. Trade Agreement Between the Republic of Indonesia and the People's Republic of China, 30 November 1953.

120. Trade Agreement Between the Republic of Indonesia and the Islamic Republic of Pakistan, 7 February 1953 (entered into force 1 January 1953).

121. Trade Agreement Between the Republic of Indonesia and the Republic of Iraq, 4 April 1960 (entered into force 14 December 1961).

122. Long-term Trade Agreement Between the Republic of Indonesia and the People's Republic of Bulgaria, 5 May 1961.

123. Long Term Trade Agreement Between the Republic of Indonesia and the Rumanian People's Republic for the period 1963–1965, 11 October 1962 (entered into force 1 January 1963).

124. The Long Term Trade Agreement Between the Government of the Republic of Indonesia and Hungarian People's Republic, 15 April 1965 (entered into force 15 April 1965).

125. Trade Agreement Between the Government of the Republic of Indonesia and the Government of the Commonwealth of Australia, 14 November 1972 (entered into force 14 November 1972), art. 2.

126. Ibid.

127. Trade Agreement Between the Government of the Republic of Indonesia and the Government of Malaysia, 16 October 1973 (entered into force 16 October 1973).

128. Trade Agreement Between the Government of the Republic of Indonesia and the Government of the Republic of the Philippines, 8 August 1974 (entered into force 8 August 1974).

129. Trade Agreement Between the Government of the Republic of Indonesia and the Government of the Socialist Republic of Romania, 8 March 1975 (entered into force 8 March 1975).

130. Trade Agreement Between the Government of the Republic of Indonesia and the Government of the Czech Republic, 23 May 1994 (entered into force 14 June 2000).

131. Trade Agreement Between the Government of the Republic of Indonesia and the Government of the Independent State of Papua New Guinea, 15 September 2000.

132. Trade Agreement Between the Government of the Republic of Indonesia and the Government of the Slovak Republic, 19 June 2002.

133. Trade Agreement Between the Government of the Republic of Indonesia and the Government of the Republic of Bulgaria, 29 January 2004 (entered into force 3 April 2006).

134. Trade Agreement Between the Government of the Republic of Indonesia and the Government of the Kingdom of Thailand, 16 November 2011 (entered into force 3 August 2012).

135. IA-CEPA, supra note 2.

136. Indonesia-Bulgaria PTA, supra note 133, art. 2.

137. Trade Agreement Between the Government of the Republic of Indonesia and the Government of the Republic of Uzbekistan, 13 May 2008 (entered into force 30 September 2009).

138. Ibid., art. 2.

139. Agreement on ASEAN Preferential Trading Arrangements, 24 February 1977 (entered into force 25 August 1977).

140. Agreement on the Common Effective Preferential Tariff (CEPT) Scheme for the ASEAN Free Trade Area (AFTA), 28 January 1992 (entered into force 28 January 1992).

141. Ibid., art. 1.

142. Ibid., art. 2.

143. Cebu Declaration on the Acceleration of the Establishment of an ASEAN Community by 2015, 13 January 2007 (entered into force 13 January 2007).

144. ASEAN Trade in Goods Agreement, 26 February 2009 (entered into force 30 April 2010).

145. Ibid.

146. ASEAN-China FTA, supra note 22.

147. ASEAN-India FTA, supra note 23.

148. ASEAN-Korea FTA, supra note 24.

149. ASEAN-Japan FTA, supra note 25.

150. ASEAN-ANZ FTA, supra note 26.

151. Ibid., art. 1.

152. ASEAN-Japan FTA, supra note 25, art. 3.

153. Long Term Trade Agreement Between the Republic of Indonesia and the Government of the United Arab Republic, 30 September 1965, art. 13.

154. Ibid.

155. Indonesia-Japan PTA, supra note 114, art. 6.

156. Indonesia-Romania PTA, supra note 129, art. 5.

157. Trade Agreement Between the Republic of Indonesia and the Commonwealth of Australia, 17 December 1959 (entered into force 1 July 1959), art. 7.

158. Trade Agreement Between the Republic of Indonesia and the Republic of Turkey, 14 September 1959 (entered into force 14 September 1959), art. 5.

159. Indonesia-Bulgaria PTA, supra note 133, art. 9.

160. Agricultural Commodities Agreement Between the Republic of Indonesia and the Government of the United States of America, 26 October 1961 (entered into force 26 October 1961), art. 5.

161. Trade Agreement Between the Republic of Indonesia and the Democratic People's Republic of Korea, 15 November 1963, art. 12.

162. Trade Agreement Between the Government of the Republic of Indonesia and the Government of the Commonwealth of Australia, 14 November 1972 (entered into force 14 November 1972), art. 10.

163. Trade Agreement Between the Government of the Republic of Indonesia and the Government of the Republic of the Philippines, 8 August 1974 (entered into force 8 August 1974), art. 9.

164. Trade Agreement Between the Government of the Republic of Indonesia and the Government of the Socialist Republic of Romania, 8 March 1975 (entered into force 8 March 1975), art. 10.

165. Agreement on Trade and Economic Cooperation Between the Government of the Republic of Indonesia and the Government of the Hashemite Kingdom of Jordan, 3 April 1986, art. 8.

166. Trade Agreement Between the Government of the Republic of Indonesia and the Government of the Czech Republic, 23 May 1994, art. 11.

167. Trade Agreement Between the Government of the Republic of Indonesia and the Government of the Republic of Chile, 2 September 1992, art. 9.

168. Trade Agreement Between the Government of the Republic of Indonesia and the Government of the Republic of Suriname, 13 May 1994, art. 9.

169. Trade Agreement Between the Government of the Republic of Indonesia and the Socialist Republic of Vietnam, 23 March 1995, art. 7.

170. Trade Agreement Between the Government of the Republic of Indonesia and the Government of Ukraine, 11 April 1996, art. 9.

171. Trade Agreement Between the Government of the Republic of Indonesia and the Government of the Kingdom of Cambodia, 18 February 1997 (entered into force 18 February 1997), art. 9.

172. Trade Agreement Between the Government of the Republic of Indonesia and the Government of the Republic of Yemen, 20 February 1998, art. 12.

173. Agreement on the Common Effective Preferential Tariff (CEPT) Scheme for the ASEAN Free Trade Area (AFTA), 28 January 1992 (entered into force 28 January 1992), art. 8.

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179. Ibid.

180. Ibid.

181. John H JACKSON, World Trade and The Law of GATT (Indianapolis, IN: Bobbs-Merrill Company, 1969) at 89.

182. Ibid., at 98.

183. Ibid.

184. World Trade Organization, “Indonesia and the WTO”, online: WTO <https://www.wto.org/english/thewto_e/countries_e/indonesia_e.htm>.

185. Jo and Namgung, supra note 50 at 1051.

186. Ibid., at 1053.

187. Agreement on Economic Cooperation Between the Government of the Republic of Indonesia and the Government of the Kingdom of the Netherlands, 7 July 1968, art. 22.

188. Ibid.

189. Ibid.

190. Ibid.

191. Ibid.

192. Ibid.

193. Ibid.

194. Jo and Namgung, supra note 50 at 1049.

195. Organization for Economic Co-operation and Development, OECD Investment Policy Reviews Indonesia 2010 (Paris: OECD, 2010)Google Scholar at 40–1.

196. Trade Agreement Between the Government of the Republic of Indonesia and the Government of the State of Kuwait, 30 May 2007, art. 9.

197. Ibid.

198. Agreement on Economic Cooperation Between the Government of the Republic of Indonesia and the Government of the Slovak Republic, 2 May 2006, art. 6.

199. Agreement Between the Government of the Republic of Indonesia and the Government of the Czech Republic on Economic Cooperation, 12 November 2007, art. 8.

200. Trade Agreement Between the Government of the Republic of Indonesia and the Government of the Republic of Uzbekistan, 13 May 2008 (entered into force 30 September 2009), art. 13.

201. Agreement Between the Government of the Republic of Indonesia and the Government of the People's Republic of China on Expanding and Deepening Bilateral Economic and Trade Cooperation, 29 April 2011 (entered into force 29 April 2011), art. 10.

202. Trade Agreement Between the Government of the Republic of Indonesia and the Government of the Kingdom of Thailand, 16 November 2011 (entered into force 3 August 2012), art. 13.

203. Preferential Trade Agreement Between the Government of the Republic of Indonesia and the Government of the Islamic Republic of Pakistan, 3 February 2012, art. VI.

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207. Indonesia-Thailand FTA, supra note 202, art. 13.

208. ASEAN Protocol on Enhanced Dispute Settlement Mechanism, 29 November 2004 (entered into force 29 November 2004), online: ASEAN <http://asean.org/?static_post=asean-protocol-on-enhanced-dispute-settlement-mechanism>.

209. Yan, supra note 27 at 431.

210. ASEAN DSM, supra note 208, art. 3.

211. Ibid., art. 5.

212. Ibid.

213. Ibid., art. 8.

214. Yan, supra note 27.

215. ASEAN DSM, supra note 208, art. 9.

216. Ibid., art. 12(1).

217. Ibid., art. 12(12).

218. Ibid., art. 12(2).

219. Ibid., art. 12(3).

220. Ibid., art. 12(13).

221. Yan, supra note 27.

222. ASEAN DSM, supra note 208, art. 14.

223. Ibid., art. 15(1).

224. Ibid., art. 15(4).

225. Ibid., art. 15(6).

226. Ibid.

227. Ibid., art. 12(3).

228. Ibid., art. 17.

229. Yan, supra note 27.

230. Walter WOON, “Dispute Settlement in ASEAN” Centre for International Law (17 October 2011), online: NUS <https://cil.nus.edu.sg/wp-content/uploads/2010/08/DISPUTE-SETTLEMENT-IN-ASEAN-KSIL-ProfWalterWoon.pdf>.

231. ASEAN-China FTA, supra note 22.

232. ASEAN-India FTA, supra note 23.

233. ASEAN-Korea FTA, supra note 24.

234. ASEAN-Japan FTA, supra note 25.

235. ASEAN-ANZ FTA, supra note 26.

236. ASEAN-India FTA, art. 4; ASEAN-China FTA, art. 4; ASEAN-Korea FTA, art. 3; ASEAN-Japan FTA, art. 62; ASEAN-ANZ FTA, ch. 17, art. 6.

237. ASEAN-India FTA, art. 5; ASEAN-China FTA, art. 5; ASEAN-Korea FTA, art. 4; ASEAN-Japan FTA, art. 63; ASEAN-ANZ FTA, ch. 17, art. 7.

238. ASEAN-India FTA, art. 6; ASEAN-China FTA, art. 6; ASEAN-Korea FTA, art. 5; ASEAN-Japan FTA, art. 64; ASEAN-ANZ FTA, ch. 17, art. 8.

239. ASEAN-India FTA, art. 8; ASEAN-China FTA, art. 8; ASEAN-Korea FTA, art. 7; ASEAN-Japan FTA, art. 66; ASEAN-ANZ FTA, ch. 17, art. 10.

240. ASEAN-India FTA, art. 7; ASEAN-China FTA, art. 7; ASEAN-Korea FTA, art. 6; ASEAN-Japan FTA, art. 65; ASEAN-ANZ FTA, ch. 17, art. 11

241. ASEAN-China FTA, art. 7; ASEAN-Korea FTA, art. 6(3); ASEAN-Japan FTA, art. 65(3); ASEAN-ANZ FTA, ch. 17, art. 11(7).

242. ASEAN-China FTA, supra note 22, art. 7(3)

243. ASEAN-India FTA, supra note 23, art. 7(3).

244. ASEAN-India FTA, art. 11; ASEAN-China FTA, art. 9; ASEAN-Korea FTA, art. 10; ASEAN-Japan FTA, art. 68; ASEAN-ANZ FTA, ch. 17, art. 13.

245. ASEAN-India FTA, art. 12; ASEAN-China FTA, art. 9(7); ASEAN-Korea FTA, art. 11(2); ASEAN-Japan FTA, art. 69; ASEAN-ANZ FTA, ch. 17, art. 13(13).

246. ASEAN-India FTA, art. 13; ASEAN-China FTA, art. 9(8); ASEAN-Korea FTA, art. 12; ASEAN-Japan FTA, art. 69(6).

247. ASEAN-ANZ FTA, supra note 26, ch. 17, art. 13(3).

248. Ibid., ch. 17, art. 5.

249. Agreement Between the Republic of Indonesia and Japan for an Economic Partnership Agreement, 20 August 2007 (entered into force 1 July 2008), art. 142(6) [Indonesia-Japan EPA].

250. “New Indonesian-Japanese deal to be signed in late 2019” The Jakarta Post (3 July 2019), online: The Jakarta Post <https://www.thejakartapost.com/news/2019/07/03/new-indonesian-japanese-deal-to-be-signed-in-late-2019.html>.

251. Ibid.

252. “Amendment of General Review of IJEPA Targeted Completion in 2019 End” Antaranews (2 July 2019), online: Antaranews <https://en.antaranews.com/news/128199/amendment-of-general-review-of-ijepa-targeted-completion-in-2019-end>.

253. “Indonesia Postpones IJEPA’ Completion to the end of 2019” The Insider Stories (2 July 2019), online: The Insider Stories <https://theinsiderstories.com/indonesia-postpones-ijepa-completion-to-the-end-of-2019/>.

254. Jo and Namgung, supra note 50 at 1048.

255. “Indonesia-Australia Finally Sign Free Trade Agreement” The Australian (4 March 2019), online: The Australian <https://www.theaustralian.com.au/national-affairs/foreign-affairs/indonesia-australia-finally-sign-freetrade-agreement/news-story/f93dcc1f01ceb196f99fae84a1e806be>.

256. Amy MAGUIRE and Shelby HOUGHTON, “The Bali Nine, Capital Punishment and Australia's Obligation to Seek Abolition” (2016) 28 Current Issues Criminal Justice 67 at 67.

257. The Australian, supra note 255.

258. Ibid.

259. ARNDT, H.W., “Trade Relations between Australia and Indonesia” (1968) 44 Economic Record 168CrossRefGoogle Scholar at 168.

260. HILL, Hal, “Australia and Indonesia: Challenges and Opportunities in a ‘Small’ Economic Relationship” (1990) 6 ASEAN Economic Bulletin 283CrossRefGoogle Scholar at 284.

261. Department of Foreign Affairs and Trade of Australia, Why has the Australian Government Negotiated a Comprehensive Economic Partnership Agreement with Indonesia?, online: DFAT <https://dfat.gov.au/trade/agreements/not-yet-in-force/iacepa/Pages/why-has-the-australian-government-negotiated-a-comprehensive-economic-partnership-agreement-with-indonesia.aspx>.

262. Ibid.

263. Ibid.

264. Department of Foreign Affairs and Trade Australia, “Indonesia-Australia Comprehensive Partnership Agreement, Outcome: Skills Development” (last updated 27 June 2019), online: DFAT <https://dfat.gov.au/trade/agreements/not-yet-in-force/iacepa/outcomes-documents/Pages/outcomes-skills-development.aspx>.

265. Ibid.

266. Ibid.

267. VANDENBOSCH, Amry and VANDENBOSCH, Mary Belle, Australia Faces Southeast Asia: The Emergence of a Foreign Policy (Kentucky, KY: University Press of Kentucky, 1967)Google Scholar at 41.

268. CHAUVEL, Richard, “Australia's Strategic Environment: The Problem of Papua” (2004) 11 Journal of Policy Analysis and Reform at 40–1Google Scholar. See also UMETSU, Hiroyuki, “Australia's Response to the West New Guinea Dispute, 1952–53” (2004) 39 Journal of Pacific History at 59CrossRefGoogle Scholar.

269. Chauvel, ibid., at 48.

270. CHALK, Peter, “Australia and Indonesia: Rebuilding Relations After East Timor” (2001) 23 Contemporary Southeast Asia at 234CrossRefGoogle Scholar.

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275. IA-CEPA, supra note 2, preamble.

276. Ibid., art. 20.4.

277. Ibid., art. 20.8.

278. Ibid., art. 20.9.

279. Ibid., art. 20.10.

280. Ibid., art. 20.15.

281. Ibid., art. 20.11.

282. Ibid., art. 20.13.

283. Ibid., art. 20.14.

284. Jo and Namgung, supra note 50 at 1048.

285. IA-CEPA, supra note 2, art. 20.3.

286. World Trade Organization, “Australia—Certain Measures Concerning Trademarks, Geographical Indications and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging” (28 August 2018), online: WTO <https://www.wto.org/english/tratop_e/dispu_e/cases_e/DS467_e.htm>.

287. Ibid.

288. World Trade Organization, “Australia—Anti-Dumping Measures on A4 Copy Paper”, online: WTO <https://www.wto.org/english/tratop_e/dispu_e/cases_e/DS529_e.htm>.

289. Ibid.

290. The reformation process reflects the transitional process of Indonesia's governmental systems from authoritarian rule to democracy by amending Indonesia's constitution. Some basic reforms are the restriction of presidential powers, the adoption of decentralization, people's sovereignty, direct presidential election, and legislative and judicial reform. See e.g. INDRAYANA, Denny, Indonesian Constitutional Reform 1999–2002: An Evaluation of Constitution-Making in Transition (Jakarta: Kompas, 2008)Google Scholar at 148–53.