WTO takes up Vietnam, Indonesia safeguard case

In addition, the International Centre for Trade and Sustainable Development (ICTSD) has reported that the last few weeks have witnessed a flurry of activity by WTO members on how to improve the functioning of the dispute settlement system.

According to the ICTSD, many cases utilizing WTO dispute resolution procedures have been facing repeated and extensive delays due to the growing caseload and complexity of the cases.

As it pertains to this case, safeguard measures essentially allow Indonesia, as a WTO member, to temporarily restrict imports of Vietnam iron and steel imports to protect the Indonesian industry from an increase in imports.

The reason for invoking the measures is that Vietnamese iron and steel imports allegedly ‘threaten’ to cause serious injury to the industry in Indonesia and the temporary restrictions remain in place until a WTO court issues a final ruling.

Panel to hear Vietnam-Indonesia safeguard case

At last week’s meeting of the WTO Dispute Settlement Body (DSB), a panel was established to hear the Vietnam government’s dispute (DS496) with Indonesia over the latter’s safeguard measures on iron and steel products.

This is the second request from Hanoi said the ICTSD as a previous request had been blocked by Jakarta last September.

The concerns raised by both complainants regarding the safeguards fall under the longstanding General Agreement on Tariffs and Trade (GATT) as well as the WTO Agreement on Safeguards.

The main thrust of Vietnam’s argument is that Indonesia did not provide “reasoned and adequate findings and conclusions regarding the alleged unforeseen developments and the effect of GATT obligations that led to the threat of serious injury (or threat thereof)” that were the reasoning behind the safeguard measures – which have been in place since mid-2014.

Although the case is still winding its way through the WTO process, the ICTSD has reported widespread dissatisfaction with system delays in bringing disputes to a prompt conclusion.

Meanwhile, the Vietnam Chamber of Commerce and Industry (VCCI) cautions that the deeper the country integrates into the global economy the more safeguard measures and other trade disputes it will encounter.

Trade disputes are inevitable said the VCCI and there is no sure-fire way to avoid them but most importantly domestic businesses need to have an understanding of the WTO’s procedures for resolving quarrels.

To this end, the VCCI said the Vietnam Competition Authority holds around 20 seminars on trade safeguard and dispute resolution procedures per year to assist the companies in developing effective strategies for coping with them.