Tinjauan Hukum Resolusi Konflik Retalias
1
JURIDICIAL REVIEW RETALIATION BENEFITS AS PART OF TRADING
CONFLICT RESOLUTION UNDER WTO SYSTEM FOR
INDONESIA
Manuscript for Publication
Research of Postgraduate
Magister Program of Law
Proposed by:
RM. Muhammad Arridho Surya Putra
12/342131/PHK/07640
Kepada
POSTGRADUATE PROGRAM OF LAW FACULTY
GADJAH MADA UNIVERSITY
YOGYAKARTA
2014
2
JURIDICIAL REVIEW RETALIATION BENEFITS AS PART OF TRADING
CONFLICT RESOLUTION UNDER WTO SYSTEM FOR
INDONESIA
MANUSCRIPT FOR PUBLICATION
Periodical Research of Postgraduate
Gadjah Mada University
Prepared and Compiled by:
RM. Muhammad Arridho Surya Putra
12/342131PHK/07640
Yogyakarta, November 2014
Approved by:
Adviser
Prof. M. Hawin, SH., LLM., Ph.D
3
STATEMENT
Herewith, we as the thesis advisers for the student of Postgraduate Program below:
Name
:
RM. Muhammad Arridho Surya Putra
Student Number
:
12/342131/PHK/07640
Program of Study
:
Law Magister on Bussines Law
Agree/disagree*) with the manuscript of research summary (candidate of
manuscript of Periodic Research of Postgraduate Program) compiled by the one
concerned above to be published with/without including the name of the adviser as
co-author.
Then Please be concerned.
Yogyakarta, December 2014
Advicer,
Prof. M. Hawin, SH.,
LLM., Ph.D
*) pick up as required
4
JURIDICIAL REVIEW RETALIATION BENEFITS AS PART OF
TRADING CONFLICT RESOLUTION UNDER WTO SYSTEM FOR
INDONESIA
ABSTRACT
RM. Muhammad Arridho Surya Putra1, M. Hawin2
The purpose of this study was to determine and analyze the constraints and
obstacles faced by Indonesia as a developing country and a member of the WTO in
using the instrument of conflict resolution retaliation. Then, this study aims to
analyze the potential benefits to be gained when using retaliation Indonesia in the
WTO system.
Researchers will begin by describing an event study related law enforcement
in the WTO system. Furthermore, we will look for what is becoming an obstacle for
retaliation Indonesia to apply and what are the benefits that can be used Indonesia as
a developing country when using the conflict resolution process retaliation in the
WTO system. The experiment was conducted by using the method of the normative.
All data were analyzed using qualitative methods. The results of this study are
presented in a report that is descriptive analysis. This type of descriptive research that
writers choose in writing this time, research will be carried out comparative approach
and a case approach. Case approach would be to look at the case of conflict resolution
facing Indonesia under the WTO system.
The results show that constraints Indonesia to retaliation because of the
political power of the state is opposed to Indonesian dispute, lack of human resources
in Indonesia in conducting litigation in the WTO, Indonesia has economic interests
conflict with opponents and different understanding among WTO member countries
related to the strength binding rules of the WTO. While the potential to be gained
when using the instrument of retaliation Indonesia is Indonesia could provide
subsidies to companies that suffered losses due to unfair trade from the retaliation and
Indonesia will bring a good precedent for the rule of law in the WTO.
Key Word: WTO, Retaliation, Conflict Resolution
1
2
Student, Graduate Program, Master of Law, Universitas Gadjah Mada, Yogyakarta
Faculty Member, Faculty of Law, Universitas Gadjah Mada, Yogyakarta.
5
A. Back Ground
Indonesia had been involved in GATT since Februari 24th 1950. As a
developing country, Indonesia has shown positive attitude in the regulations
of multilateral free trades. Indonesia had become the original member in
ratifications of "Agreement Establishing The World Trade Organization" in
Country Regulations No. 7 year 1994.3
Since the establishment of WTO in 1995, as a permanent institution to
handle cases and conflicts in international trade, WTO will be the enforcer of
law in any trade conflicts. Since then, as officially stamped in the "Dispute
Settlement Understanding," there are three official conflict resolution agent.
The first is DSB (Dispute Settlement Body), the second is Appellate Body and
the third is Arbitration.4
Problems occured in the review of the beneficial value on the
retaliation process in WTO trading systems. Rules made in the DSU about
retaliation defines that these conflict resolution is to end any conflict in a
positive way. If there isn't any way to resolve the conflict by agreement on
both sides, then the first mechanism of conflict resolution is to make sure any
Hata, Perdagangan Internasional Dalam Sistem GATT Dan WTO-Aspek-aspek Hukum Dan
Non Hukum, Refika Adiatama, Bandung, 2006, hlm 204
4
Huala Adolf, Hukum Penyelesaian Sengketa Internasional, Sinar Grafika, ctk ke 3, Jakarta
2008, hlm 141
3
6
action is under the approval of WTO.5 In fact, the use of retaliation are rare to
be implemented by developing country, because the implementations often
incriminating them.
Indonesia as shown in "antidumping" conflict in some certain paper
brands with South Korea, doesn't use retaliation process as conflict resolution.
This is because of political reason and economical interests. Then Indonesia
as the developing country declined the use of retaliation as law enforcing act.6
South Korea now seated in the third place as biggest foreign investor
in Indonesia. Investment in the realty sector by South Korea brought positive
development for the people of Indonesia.7 South Korea now seated in the third
place as biggest foreign investor in Indonesia. Investment in the realty sector
by South Korea brought positive development for the people of Indonesia. As
a developing country with population of more than 200 million, Indonesia are
in need of many workplace for their popullation. As for 2015, South Korea
had approved to invest up to US$ 4 billion in the realty sector development
alone.8 By comparing this scale to the loss by the cost of antidumping certain
5
Sebagian terjemahan kalimat dari Pasal 3 ayat 7, Dispute Settlement Understanding dari
http://kemendag.go.id
6
Freddy Joseph Pelawi, Retaliasi Dalam Kerangka WTO, KPI, Buletin 46, 2007,
7
lima besar negara asal yang melakukan penanaman modalnya di Indonesia sepanjang
semester I 2013 adalah Jepang sebesar US$ 2,3 miliar, Singapura sebesar US$ 1,9 miliar, Amerika
Serikat sebesar US$ 1,3 miliar, Korea Selatan sebesar Rp 1,2 miliar, Inggris sebesar US$ 600 juta.
Data diperoleh dari: http://www.kemenperin.go.id/artikel/7445/Investasi-Korsel-Masih-Lima-Besar,
diakses pada 25-10-2014, pukul 15.03 WIB
8
Ibid., hasil kesepakatan investasi Indonesia dan Korea Selatan. Investasi tersebut ada pada
lanjutan kucuran dana untuk investasi perusahaan Korea Selatan yang sudah ada yaitu pabrik ban
7
paper product in South Korea wich costs Indonesia up to US$ 90 miliion,
means that Indonesia are standing on the losing side.9
Another interesting case could be found in "banana case" faced by
United States together with Ecuador, Guatemala, Honduras and Mexico to act
against a trade arrangement by European Union, which eventually prove a
successful retaliation from the Americans. 10 . In this case, retaliation were
held to repress the loss caused by the unfair trade. United States persisted on
doing retaliation on every products from European Union as a response for
them on doing a discriminating regulation in importing bananas, this is
because U.S. company "Chiquita Brands" is a major company to contribute to
the nation's(U.S.) income.
Conflict resolution is among the law enforcement system. It should not
show the impression of discrimination and unfair judgement. In the structure
of WTO, retaliation as the instrument of conflict resolution should
accomodate the interest of any WTO members including Indonesia.
B. Problem Statement
Based on the statements shown above, the formulation questions of the
problem are:
Hankook di Cikarang dan pabrik Krakatau Posco di Cilegon. Buka juga situs resmi Kedutaan
Indonesia di Seoul Korea Selatan: http://kbriseoul.kr/
9
http://www.tempo.co/read/news/2010/10/13/090284598/Soal-Dumping-Kertas-PemerintahHarus-Balas-Korea diakses pada 23-11-2014 pukul 17.00 WIB
10
http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds16_e.htm, diakses pada 30-10-2014
pukul 12.30 WIB
8
1. Why Indonesia as the developing country never use a retaliation in
the conflict resolution system of WTO?
2. What are the benefits of retaliation as a conflict resolution structure in
WTO, for Indonesia as a developing country?
C. Research Method
Research method used in this research are by normative methods. Any
data acquired by researcher, are being analyzed with qualitative method. The
result of this research will be presented in a descriptive-analytical report. The
type of descriptive research on this research were done by case study and
comparative approach.11
D. Research Result and Discussion
1. The Reason of Why Indonesia as Developing Country Never Use Retaliation
as Conflict Resolution Method In Any Trade Conflict on The System of WTO
It is considered that there are three main reason of why Indonesia
never use retaliation as a conflict resolution method, even when it is
considered as a legal action under the system of WTO as international trade
organization. First is a general problem in the application process faced by all
members of WTO, the main problem is the different level of understanding to
WTO's rules regarding retaliation.
The second is about the presence of "Preferential Trade Area", which
Peter Mahmud Marzuki, Penelitian Hukum (edisi revisi), Kencana Prenada Media Group,
Jakarta, 2013, hlm 133
11
9
substantially discriminated the principle of "Most Favoured Nation". This
condition gets worse by the lack of Indonesia's own litigation ability, and the
cost also deemed too espensive by a developing country such as Indonesia to
carry out such act of retaliation even under the legal system approved by
WTO.
The third problem is to carry out retaliation in case to case. This third
problem background could be found in the case of "antidumping cost" billed
by South Korea for certain paper products from Indonesia. The difficulty
which is become the main obstacle to carry out retaliation, is because
Indonesia and South Korea as the "adversary" are bound both economically
and politically and is difficult to be confronted by the laws of retaliation.
a.
Different Views Of Member States About The Binding Strength of
WTO Rules Implied In The Instruments Of Retaliation.
If it was reviewed by International Law, agreement in WTO actually
has the power of a treaty, which means it has legal consequences. Because of
this, any rules stamped by WTO should be regarded as law by all members of
the organization. That means every rules by WTO itself stood in the zone of
International Public Law. Despite that, some discussions by experts eventually
questioned if one country violate a rule in WTO, should it be considered a
violation against a contract (default) or a violation against International Law.
From each point of view, there were different implications related to which
10
conflict resolution method needed.12
Experts had considered that WTO is a based-by-contract organization,
because each of their member are called "contracting party". WTO also
choose "dispute settlement" rather than "adjucation" as their conflict
resolution foundation. There are some that considered any agreement stamped
by WTO are regarded as International Commercial Contract.13
Member states with those point ov view, still strictly obey the rules by
WTO, because they know by obeying and understanding any rules by WTO
would give them an edge in many fields of international trade. Because of this,
any member states which believe that they are in disadvantage position
because of the rules by WTO, should be permitted to release themselves from
any contracts they're dealing with.14
Another point of view by experts stated that rules by WTO binds its
members with a power of international pact. Because of this, any member
states with their signature written on the agreement, should obey each of every
words of the rules. Even when WTO rules are no longer facilitate their
interests, even more when those states should pay the compensations, or face
a retaliation, or oven when those states are still in a trade negotiation which
needs political power to solve it, those states must obey any rules by WTO. In
JeffreyJ.Schoot, Role of Remedies In The WTO System, InstituteFor Internasional
Economics, hlm 14, didapat dari http://www.iie.com
13
Ibid, pandangan ini dikemukaka oleh Bello (1996) dan Schwartz (2002), sedangkan
pandangan mengenai WTO sebagai kontrak komersial internasional dengan adanya hak dan kewajiban
secara timbal balik dikemukakan oleh Pauwelyn (2002)
14
Ibid., hlm 15
12
11
that point of view, any violation against WTO regulations will be considered
as violation of an International Pact, not just a mere trade contracts.15
This point of view also state that any violation by a member state
against some WTO regulation about trade conflict with another country will
be considered as violation to all WTO regulations as a whole. Those violation
will not be considered as a mere conflict between a country with their
adversary, but a conflict which ignite a violation against multilateral treaty.16
Because of that, the resolution will not be a face to face discussion by one
country to their adversary, but should be legalized by the resolution court of
WTO. Those panel decision will be a new jurisprudence, which become a
reference to every member state of WTO to strenghten any argument
regarding any trading dispute.17
The difference of perspectives in understanding WTO regulations by
each of member state, would have a serious impact on the process of general
comprehension in conflict resolution process. Any member state whose regard
WTO regulations as a contract, will see no difference between those
15
Ibid
Ibid., aturan WTO adalah perjanjian multirateral
17
Ibid., dikutip dari, Goldstein dan Martin, The oxford Handbook on The World Trade
Organization,2012
16
12
regulations and any bussiness contracts made by their government. A contract
bussiness will always considered inferior under the law. They will not agree
on upholding retaliation as a form of punishment, instead of diplomatic
process as a solution. On the other hand, any member state whose regard
WTO regulations as a multinational treaty, will expect a greater role by WTO
in legalizing new international regulations which have a power to bind its
member states, in their point of view, WTO is an organization with a full
authority as a judge an any international trade dispute.18
b.
Preferential Trade Area, Indonesia's Litigation Ability and The
Cost of Litigation
The existence of PTA brought a decline in any purpose of WTO
regarding non-discrimination principle on most favoured nation. Any country
would decrease the obstacle on a trade process, only to them bound by PTA
regulations.19
Non discrimination principle under WTO regulations are the main
foundation as a multinational treaty. Because of this principle, the
commitment to any obstacle in tariff and non-tariff to another country
extended and applied without any requirements automatically between each
member states. The background of this principle was to reduce billateral
Ibid.,hlm 16
Sjamsul Arifin et.al, Kerjasama Perdagangan Internasional: Peluang dan Tantangan Bagi
Indonesia, Biro Hubungan Dan Studi Internasional Direktorat Internasional Bank Indonesia, Elex
Media Komputindo, Jakarta, 2007, hlm 147
18
19
13
relationships which only give the advantage between two capital states in the
agreement. This kind of billateral relationship was very popular before the
event of World War. This act made some country at those time to uphold
special protection, which had impact on the closing of the market and the
great depression in 1920. Then the principle of most favoured nation (MSN)
was to prevent any appearance of any "trading alliance" which had a risk of
bring down the market, causing a massive loss to all side.20
The truth nowadays, MFN principle only regarded as exceptional
clause and not as a regulation that sould be obeyed by all member state in
WTO. The result is the appearance of Custom Unions, Common Market,
Regional and Free Trade Agreement which agreed by some member states of
WTO or even ratified by non-WTO states.21
Indonesia's litigation ability as a developing country, also becomes an
obstacle in upholding any act of retaliation by Indonesia. This because a
process of conflict resolution since consultation, negotiation, up to litigation
process, all need a legal skill and legal expertise to submit a claim or even to
defend the nation from any accusations from another country (complainant).
In comparison to China which joined WTO in 2001-about 6 years after its
establishement in 1996, stated that their country still have a limited
understanding in viewing WTO as an organization which have its own
20
21
Ibid., hlm 145
Ibid
14
litigation regulations (DSU). Even there was a headline entitled "Chine's
coming Age in the WTO War".”.22
“We have trained our next generation of lawyers in recent years.
Waves of Chinese lawyers who received law degrees in the US, comeback
with understanding of WTO law and different legal system”.23 This statement
were considered as recognition from China being a big nation with a vast
political and economical power, was still not as powerful in a term of buliding
a law structure and legal resources as the United States of America. This
become a different case in Indonesia, which doesn't have any justification and
adequate reasoning when Indonesia joined WTO when Indonesia ratified
Marakesh Agreement. Compared to China's readiness, when joined WTO in
2001, it was clear that Indonesia as a developing country, were not learned
any consequences by joined and ratified the WTO agreement.24
In general, the cost of any proceeding of litigation process in conflict
resolution to have WTO as the court are very expensive. In a mere case, the
Ade Maman Suherman, Hukum Perdagangan Internasional: Lembaga Penyelesaian
Sengketa WTO Dan Negara Berkembang, Sinar Grafika, Jakarta, 2014, hlm 100, dikutip dari Xiao Jin
lawyer untuk pemerintah China yang menangani gugatan yang dilayangkan Amerika Serikat dalam
kasus pipa baja.
23
Ibid., hlm 101 dikutip dari pernyataan Xiao Jinquan lawyer dari kantor hukum, Dacheng
Law Office sekaligus direktur komite Komersial dan korporat pada All China Lawyers Association.
24
Ibid
22
15
legal fees could reach up to US$ 1 Million, and there will be no guarantee for
the disputing party to win or to lose. The cost is relative and will not be
considered expensive when it reach a sensitive political problem. For example,
a dispute between American based-Kodak versus Japanese based-Fujifilm in a
case of "Japan Photographic Film", which costed Japan about US$ 10
Million25 and additional fees still not included. According to Hakan Nodstorm,
a chairman of Economy and Trading council of Sweden, the cost still not
included any litigation supporters fees, such as enonomy analyst, experts
explanation, as non legal expense starts from US$ 100.000 up to
US$ 250.000.26 Also to spoke with the DSU, the fee for deprivaton analysis
could reach US$ 500.000, equal to Rp. 6.000.000.000,- (six billion rupiahs).27
c.
Economic and Political Dependency As The Main Reason of
Indonesia Holding Back The Act of Retaliation to Their
Adversaries.
High competitiveness of another developing country with a greater
access to international market became economical threat to another
developing country such as Indonesia. Like another developing countries,
Indonesia had hoped to get as many investment as possible by another country
in the world. And the main reason of a nation to invest their money outside
Ibid., hlm 102
Ibid dikutip dari Gregory Shafer, How to Make the WTO Dispute Settlement System Work
for Developing Countries, maret 2003
27
Ibid., Hasil interview penulis dengan private law firm di Washington DC 28 oktober 2008
25
26
16
their borders is a hope for greater profit.
When some nation decide to do some investment, an evaluation will
be done in any way to measure any risk for their country. International
Country Risk Guide (ICRG) evaluated three kind of investment risks. It is
financial risk, economic risk, and political risk.28
The law enforced in the case of antidumping certain paper product
from Indonesia in South Korea. Essentially should be considered as a
violation against non-discrimination principle of Most Favoured Nation. This
was done because the case were considered as a common dispute between two
countries (Indonesia and South Korea), and was not seen as a matter should be
involved by WTO as international trading league. This was done despite a
past agreement which approved if any member state violated WTO trading
regulations, then another member state should use multilateral settlement
rather than use individual act. That means all member of WTO should obey all
procedures and decisions written in the agreement.diambil.29
Based on those precedents, it is easy to conclude that law enforcement
process for many WTO regulations are lack in realization. WTO use court
case (jurisprudence) as the main source of law principle in decision making.
In a future, if the same cases appears,a jurisprudence process by DSB under
Lebih jelasnya silahkan baca, International Monetary Fund, The IMF and Recent Capital
Account Crises: Indonesia, Korea, Brazil, Washington, 2003
29
Loc., Cit, Fredy Joseph pelawi, Penyelesaian Sengketa…
28
17
WTO, will be considered all-fine and trouble-free. However, regulations by
WTO are seems like difficult to be implemented consistently on each member
state. In the case of implementation, a decision validated by DSB will not
have any law assurance. Because of this, the successful upholding of
retaliation will only based by the strength of foreign political power between
two nations in dispute.
2.
Potential Benefits of Retaliation for Indonesia as Developing
Country Under Conflict Resolution Structure by WTO
a. Benefits Shown In Another Country After The Use of Retaliation
United States used a successful retaliation act shown in the “banana
case”. Unlike the dispute between Indonesia and South Korea, United States'
problem against the import regulations by European Union sourced from
European Union provided lower requirements special to their former colonial
world, but increased the export tariff for American products (in this case,
bananas). The dispute ended with United States, together with Guatemala,
Honduras and Mexico succesfully upheld retaliation against so many products
from European Union states, in the American market.30
European Union demanded a tariff for the bananas imported from
America. On the other hand, Europen Union give so much simplicity and even
remove the requirement of paying tariff for bananas imported from Carribean,
http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds16_e.htm, diakses pada 30-10-2014
pukul 12.30 WIB
30
18
Africa, and some countries in the Pacific. European Union even give larger
export quota for bananas from Carribean, and decrease the export quota for
bananas from America (Chiquita brands). The purpose of this action was to
relieve the burden of European countries bound to oblige in aiding their
former colonial world, such as Carribean, Africa, and some countries in
Pacific, because some country such as England and France, should provide
aid and support to their former colonial world.31
United States by the act of unilateral retaliation, increased a tariff for
European product up to 100% from the normal rate. Meanwhile, the British
Industrial Union stated that this unilateral retaliation act from U.S. had costed
British exports up to £.82.000.000 (Eighty Two Million Poundsterlings).32
United States insisted to upheld retaliation against products from
European Union whom put discrimination act on American banana products,
this act was done because Chiquita brands as the largest banana exporter in
America, actually gave a great revenue for the nation. Between 1992 – 1994,
Chiquita Brands suffered a loss up to US$ 407 Million, followed by the
decline on their stock price from US$ 40 into US$ 11 per unit.33
http://www.globalissues.org/article/63/the-banana-trade-war,baca bagian “The WTO Rules
Against The Largest Aid And Trade Pact, The Lomé Convention”, diakses pada 30-10-2014, pukul
12.57 WIB
32
http://news.bbc.co.uk/2/hi/business/253705.stm, January 12, 1999 Published, Amerika
serikat memberikan kenaikan tariff produk dari Inggris 100% hingga akhir januari diakses pada 30-102014, pukul 13.25 WIB
33
http://www.wikinvest.com/stock/Chiquita_Brands_International_(CQB), diakses pada 2311-2014 pukul 16.33 WIB
31
19
This successfull retaliation by United States to european Union left
some serious questions about the law enforcing system in WTO, in which the
success is strongly tied with the stregth of economic and political power of the
suitor. In another case approved by Appelate Body, another suitor was
Ecuador,34 which is a developing country, actually suffered a loss because of
the unfair trade by European Union.35
The interesting fact was, unlike the most developing countries
reviewed before, Ecuador actually had the authorization from DSB to do a
crossed retaliation, because they were suffered by a total loss of US$ 201,6
Million 36 caused by the unfair trade, even with these authorization, there was
still no implementation by them. Should a retaliation regulated in the “dispute
statement understanding” be ratified by all member state of WTO, then it will
be logic to assume if all member state prefer a litigation process as resolution
rather than billateral aproach as dispute resolution, there will be no reason for
Ecuador to held back retaliation.
b. Potential Benefits for Indonesia to Uphold a Retaliation Instrument
The first benefit of retaliation, should it be done by Indonesia in the
future, the loss of paper company in their trade with South Korea, would be
minimum, and even provide a subvention from the result of the retaliation.
http://data.worldbank.org/country/Ecuador, diakses pada 21-11-2014, pukul 8.30 WIB
http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds27_e.htm, diakses pada 21-11-2014,
pukul 8.43 WIB
36
http://cwts.ugm.ac.id/2013/03/retaliasi-silang-bagi-negara-berkembang-dalam-disputesettlement-mechanism-wto/ diakses pada 21-11-2014,pukul 8.42
34
35
20
The act of Korean government, really put the export performance of
Indonesian paper industri at disadvantage. When maximum revenue should be
expected to reach US$ 150 Million, the actual revenue achieved by the
industry was only about US$ 50 - 60 Million.37 Which shown a 60% decline
in term of export accomplishement. These phenomenon were caused by the
antidumping act by Korean government, and Indonesia actually have a chance
to resolve with the act of retaliation.38
Since 2012, the realization of cooperation between Indonesia and
South Korea reached US$ 26,9 Billion. Export value of Indonesian product
was US$ 15 Billion, on the other hand South Korean products valued
US$ 11,9 Billion.39 Investment in the reality sector done by South Korea gave
positive development for the people of Indonesia. As a developing country
with popullation more than 200 million, Indonesia in need of so many
workplace for their popullation. For 2015, South Korea has approved to invest
up to US$ 4 billion in the real sector development. 40 This percentage if
compared to the cost of antidumping certain paper product in South Korea
wich costs Indonesia up to US$ 90 in turnover, which is unbalanced.
Indonesia will be the first developing country to break out from the old
37
http://www.tempo.co/read/news/2010/10/13/090284598/Soal-Dumping-Kertas-PemerintahHarus-Balas-Korea, diakses pada 25-10-2014, pkul 14.41 WIB
38
Article 22.1, 22.2 DSU
39
http://politik.news.viva.co.id/news/read/550666-ketua-dpr-ri-bertemu-duta-besar-koreaselatan
40
Ibid., Investasi tersebut ada pada lanjutan kucuran investasi perusahaan Korea Selatan yang
sudah ada yaitu pabrik ban Hankook di Cikarang dan pabrik Krakatau Posco di Cilegon. Buka juga
situs resmi Kedutaan Indonesia di Seoul Korea Selatan: http://kbriseoul.kr/
21
political and economic beliefs, which bothered the law enforcement system of
WTO since a long while, especially in establishing retaliation system. There is
always a doubt wether this act would be seen in a positive way, to uplift the
national pride in the aspect of bargaining position, to strengthen political
relation of Indonesia. A retaliation act against South Korea could also results
in a loss on the macro-economic scale of Indonesian market. But from the
legal aspects, justice values will be the basic standard of future law
enforcement. The justice will be the foundation of law morality and will
become a benchmark of a positive law system. Because justice should be an
undeniable aspect for a law to enforce its power. Without justice, any
regulation are not worthy of any juristical value.41
E.
Closing
1. Conclusions
The reason for Indonesia to hold back any act of retaliation as a part of
conflict resolution under the system of WTO will be explained below:
1. Different level of understanding between each member state
regarding the juridical power of WTO regulations, especially in the
use of retaliation instrument, resulted in different level of
obedience to the regulations itself.
2. Law enforcement in WTO system, still mixed up with the
Bernard L. Tanya dkk, Teori Hukum, Genta Publishing, Yogyakarta, ctk ke 3, 2010, hlm
130, dikutip dari Theo Huijbers, Filsafat Hukum Dalam Lintasan Sejarah, Yayasan Kanisius,
Yogyakarta 1984
41
22
dealings of billateral relationship between nations in a legal
dispute, this means the success of any law enforcement act by
WTO will always closely related to the strength of Indonesia's
political power.
3. The lack of litigation ability commonly found in developing
country as the obstacle in the process of retaliation, especially by
Indonesia. Because any process of conflict resolution, consultation,
negotiation, until the process of litigation, all need a proper legal
skill and legal expertise to suit a legal claim or to defend any
accusation from the compainant.
4. High level of economic dependency of Indonesia to another
member states in WTO regarding investment in Indonesia's realty
sector.
Potential benefit for Indonesia after doing retalitation are:
1. Losses suffered by Indonesian company as a result of unfair
trade, could be subvented by the result of retaliation by the
government.
2. Indonesia as a developing country would be a history maker in
enforcing a legal retaliation under the systems of WTO, the first
country to break out from the old political ways which have been
bothering WTO regulations process from the start.
23
2.
Suggestions
Based on this research paper, researcher will try to give some
suggestions in a hope to provide a good reference for future research about
conflict resolution system in WTO, and to benefit the people with a
knowledge to advance national economic power, especially in international
trade dispute.
1. With the stronger law enforcement in WTO regulations, member
states will no longer use billateral approach to resolve any legal
dispute in trade, all action should be approved by the rules in DSU.
2. Violation against any WTO regulations should be regarded as a
violation in multinational treaty, not as a indirect confrontation
which could result in a more serious impact to each nation.
3. Indonesia need to raise up a case of the difficulty to receive a
fair benefit of retaliation for developing country in the next WTO
summit, to find a solution about the need of agreement for each
nation-after-dispute, after a verdict by DSB.
4. Indonesia to express that "most favoured nation" should not be
applied only for the product in the trading process. But this
principle should always visible in any process of law enforcement,
to provide justice for each member state in WTO.
24
References
Book
Arifin, Sjamsul et.al, Kerjasama Perdagangan Internasional: Peluang dan Tantangan
Bagi Indonesia. Biro Hubungan Dan Studi Internasional Direktorat
Internasional Bank Indonesia. Elex Media Komputindo. Jakarta. 2007
International Monetary Fund, The IMF and Recent Capital Account Crises:
Indonesia, Korea, Brazil, Washington, 2003
L. Tanya, Bernard dkk. Teori Hukum. Genta Publishing. Yogyakarta. ctk ke 3. 2010
Mahmud Marzuki, Peter. Penelitian Hukum (edisi revisi) Kencana Prenada Media
Group. Jakarta. 2013
Maman Suherman, Ade. Hukum Perdagangan Internasional: Lembaga Penyelesaian
Sengketa WTO Dan Negara Berkembang. Sinar Grafika. Jakarta. 2014
Legislation
General Agreement on Tariff and Trade 1994
Understanding on Rules and Procedures Governing the Settlement of Dispute
Website
Freddy Joseph Pelawi, Penyelesaian Sengketa WTO dan Indonesia, Buletin 44,
Advokasi Tuduhan Dumping, Direktorat Pengamanan Perdagangan, Ditjen
Kerjasama Perdagangan Internasional, Departemen Perdagangan Republik
Indonesia
25
http://cwts.ugm.ac.id/2013/03/retaliasi-silang-bagi-negara-berkembang-dalamdispute-settlement-mechanism-wto/ diakses pada 21-11-2014,pukul 8.42
http://data.worldbank.org/country/Ecuador, diakses pada 21-11-2014, pukul 8.30
WIB
http://kbriseoul.kr/
http://kemendag.go.id
http://news.bbc.co.uk/2/hi/business/253705.stm,
January
12,
1999
Published,
Amerika serikat memberikan kenaikan tariff produk dari Inggris 100% hingga
akhir januari diakses pada 30-10-2014, pukul 13.25 WIB
http://politik.news.viva.co.id/news/read/550666-ketua-dpr-ri-bertemu-duta-besarkorea-selatan
http://www.globalissues.org/article/63/the-banana-trade-war,baca bagian “The WTO
Rules Against The Largest Aid And Trade Pact, The Lomé Convention”,
diakses pada 30-10-2014, pukul 12.57 WIB
http://www.kemenperin.go.id/artikel/7445/Investasi-Korsel-Masih-Lima-Besar,
diakses pada 25-10-2014, pukul 15.03 WIB
http://www.tempo.co/read/news/2010/10/13/090284598/Soal-Dumping-KertasPemerintah-Harus-Balas-Korea, diakses pada 25-10-2014, pkul 14.41 WIB
http://www.wikinvest.com/stock/Chiquita_Brands_International_(CQB),
diakses
pada 23-11-2014 pukul 16.33 WIB
http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds16_e.htm, diakses pada 3010-2014 pukul 12.30 WIB
http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds16_e.htm, diakses pada 3010-2014 pukul 12.30 WIB
26
http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds27_e.htm, diakses pada 2111-2014, pukul 8.43 WIB
J. Schoot, Jeffrey .Role of Remedies In The WTO System. Institute For Internasional
Economics. didapat dari http://www.iie.com
JURIDICIAL REVIEW RETALIATION BENEFITS AS PART OF TRADING
CONFLICT RESOLUTION UNDER WTO SYSTEM FOR
INDONESIA
Manuscript for Publication
Research of Postgraduate
Magister Program of Law
Proposed by:
RM. Muhammad Arridho Surya Putra
12/342131/PHK/07640
Kepada
POSTGRADUATE PROGRAM OF LAW FACULTY
GADJAH MADA UNIVERSITY
YOGYAKARTA
2014
2
JURIDICIAL REVIEW RETALIATION BENEFITS AS PART OF TRADING
CONFLICT RESOLUTION UNDER WTO SYSTEM FOR
INDONESIA
MANUSCRIPT FOR PUBLICATION
Periodical Research of Postgraduate
Gadjah Mada University
Prepared and Compiled by:
RM. Muhammad Arridho Surya Putra
12/342131PHK/07640
Yogyakarta, November 2014
Approved by:
Adviser
Prof. M. Hawin, SH., LLM., Ph.D
3
STATEMENT
Herewith, we as the thesis advisers for the student of Postgraduate Program below:
Name
:
RM. Muhammad Arridho Surya Putra
Student Number
:
12/342131/PHK/07640
Program of Study
:
Law Magister on Bussines Law
Agree/disagree*) with the manuscript of research summary (candidate of
manuscript of Periodic Research of Postgraduate Program) compiled by the one
concerned above to be published with/without including the name of the adviser as
co-author.
Then Please be concerned.
Yogyakarta, December 2014
Advicer,
Prof. M. Hawin, SH.,
LLM., Ph.D
*) pick up as required
4
JURIDICIAL REVIEW RETALIATION BENEFITS AS PART OF
TRADING CONFLICT RESOLUTION UNDER WTO SYSTEM FOR
INDONESIA
ABSTRACT
RM. Muhammad Arridho Surya Putra1, M. Hawin2
The purpose of this study was to determine and analyze the constraints and
obstacles faced by Indonesia as a developing country and a member of the WTO in
using the instrument of conflict resolution retaliation. Then, this study aims to
analyze the potential benefits to be gained when using retaliation Indonesia in the
WTO system.
Researchers will begin by describing an event study related law enforcement
in the WTO system. Furthermore, we will look for what is becoming an obstacle for
retaliation Indonesia to apply and what are the benefits that can be used Indonesia as
a developing country when using the conflict resolution process retaliation in the
WTO system. The experiment was conducted by using the method of the normative.
All data were analyzed using qualitative methods. The results of this study are
presented in a report that is descriptive analysis. This type of descriptive research that
writers choose in writing this time, research will be carried out comparative approach
and a case approach. Case approach would be to look at the case of conflict resolution
facing Indonesia under the WTO system.
The results show that constraints Indonesia to retaliation because of the
political power of the state is opposed to Indonesian dispute, lack of human resources
in Indonesia in conducting litigation in the WTO, Indonesia has economic interests
conflict with opponents and different understanding among WTO member countries
related to the strength binding rules of the WTO. While the potential to be gained
when using the instrument of retaliation Indonesia is Indonesia could provide
subsidies to companies that suffered losses due to unfair trade from the retaliation and
Indonesia will bring a good precedent for the rule of law in the WTO.
Key Word: WTO, Retaliation, Conflict Resolution
1
2
Student, Graduate Program, Master of Law, Universitas Gadjah Mada, Yogyakarta
Faculty Member, Faculty of Law, Universitas Gadjah Mada, Yogyakarta.
5
A. Back Ground
Indonesia had been involved in GATT since Februari 24th 1950. As a
developing country, Indonesia has shown positive attitude in the regulations
of multilateral free trades. Indonesia had become the original member in
ratifications of "Agreement Establishing The World Trade Organization" in
Country Regulations No. 7 year 1994.3
Since the establishment of WTO in 1995, as a permanent institution to
handle cases and conflicts in international trade, WTO will be the enforcer of
law in any trade conflicts. Since then, as officially stamped in the "Dispute
Settlement Understanding," there are three official conflict resolution agent.
The first is DSB (Dispute Settlement Body), the second is Appellate Body and
the third is Arbitration.4
Problems occured in the review of the beneficial value on the
retaliation process in WTO trading systems. Rules made in the DSU about
retaliation defines that these conflict resolution is to end any conflict in a
positive way. If there isn't any way to resolve the conflict by agreement on
both sides, then the first mechanism of conflict resolution is to make sure any
Hata, Perdagangan Internasional Dalam Sistem GATT Dan WTO-Aspek-aspek Hukum Dan
Non Hukum, Refika Adiatama, Bandung, 2006, hlm 204
4
Huala Adolf, Hukum Penyelesaian Sengketa Internasional, Sinar Grafika, ctk ke 3, Jakarta
2008, hlm 141
3
6
action is under the approval of WTO.5 In fact, the use of retaliation are rare to
be implemented by developing country, because the implementations often
incriminating them.
Indonesia as shown in "antidumping" conflict in some certain paper
brands with South Korea, doesn't use retaliation process as conflict resolution.
This is because of political reason and economical interests. Then Indonesia
as the developing country declined the use of retaliation as law enforcing act.6
South Korea now seated in the third place as biggest foreign investor
in Indonesia. Investment in the realty sector by South Korea brought positive
development for the people of Indonesia.7 South Korea now seated in the third
place as biggest foreign investor in Indonesia. Investment in the realty sector
by South Korea brought positive development for the people of Indonesia. As
a developing country with population of more than 200 million, Indonesia are
in need of many workplace for their popullation. As for 2015, South Korea
had approved to invest up to US$ 4 billion in the realty sector development
alone.8 By comparing this scale to the loss by the cost of antidumping certain
5
Sebagian terjemahan kalimat dari Pasal 3 ayat 7, Dispute Settlement Understanding dari
http://kemendag.go.id
6
Freddy Joseph Pelawi, Retaliasi Dalam Kerangka WTO, KPI, Buletin 46, 2007,
7
lima besar negara asal yang melakukan penanaman modalnya di Indonesia sepanjang
semester I 2013 adalah Jepang sebesar US$ 2,3 miliar, Singapura sebesar US$ 1,9 miliar, Amerika
Serikat sebesar US$ 1,3 miliar, Korea Selatan sebesar Rp 1,2 miliar, Inggris sebesar US$ 600 juta.
Data diperoleh dari: http://www.kemenperin.go.id/artikel/7445/Investasi-Korsel-Masih-Lima-Besar,
diakses pada 25-10-2014, pukul 15.03 WIB
8
Ibid., hasil kesepakatan investasi Indonesia dan Korea Selatan. Investasi tersebut ada pada
lanjutan kucuran dana untuk investasi perusahaan Korea Selatan yang sudah ada yaitu pabrik ban
7
paper product in South Korea wich costs Indonesia up to US$ 90 miliion,
means that Indonesia are standing on the losing side.9
Another interesting case could be found in "banana case" faced by
United States together with Ecuador, Guatemala, Honduras and Mexico to act
against a trade arrangement by European Union, which eventually prove a
successful retaliation from the Americans. 10 . In this case, retaliation were
held to repress the loss caused by the unfair trade. United States persisted on
doing retaliation on every products from European Union as a response for
them on doing a discriminating regulation in importing bananas, this is
because U.S. company "Chiquita Brands" is a major company to contribute to
the nation's(U.S.) income.
Conflict resolution is among the law enforcement system. It should not
show the impression of discrimination and unfair judgement. In the structure
of WTO, retaliation as the instrument of conflict resolution should
accomodate the interest of any WTO members including Indonesia.
B. Problem Statement
Based on the statements shown above, the formulation questions of the
problem are:
Hankook di Cikarang dan pabrik Krakatau Posco di Cilegon. Buka juga situs resmi Kedutaan
Indonesia di Seoul Korea Selatan: http://kbriseoul.kr/
9
http://www.tempo.co/read/news/2010/10/13/090284598/Soal-Dumping-Kertas-PemerintahHarus-Balas-Korea diakses pada 23-11-2014 pukul 17.00 WIB
10
http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds16_e.htm, diakses pada 30-10-2014
pukul 12.30 WIB
8
1. Why Indonesia as the developing country never use a retaliation in
the conflict resolution system of WTO?
2. What are the benefits of retaliation as a conflict resolution structure in
WTO, for Indonesia as a developing country?
C. Research Method
Research method used in this research are by normative methods. Any
data acquired by researcher, are being analyzed with qualitative method. The
result of this research will be presented in a descriptive-analytical report. The
type of descriptive research on this research were done by case study and
comparative approach.11
D. Research Result and Discussion
1. The Reason of Why Indonesia as Developing Country Never Use Retaliation
as Conflict Resolution Method In Any Trade Conflict on The System of WTO
It is considered that there are three main reason of why Indonesia
never use retaliation as a conflict resolution method, even when it is
considered as a legal action under the system of WTO as international trade
organization. First is a general problem in the application process faced by all
members of WTO, the main problem is the different level of understanding to
WTO's rules regarding retaliation.
The second is about the presence of "Preferential Trade Area", which
Peter Mahmud Marzuki, Penelitian Hukum (edisi revisi), Kencana Prenada Media Group,
Jakarta, 2013, hlm 133
11
9
substantially discriminated the principle of "Most Favoured Nation". This
condition gets worse by the lack of Indonesia's own litigation ability, and the
cost also deemed too espensive by a developing country such as Indonesia to
carry out such act of retaliation even under the legal system approved by
WTO.
The third problem is to carry out retaliation in case to case. This third
problem background could be found in the case of "antidumping cost" billed
by South Korea for certain paper products from Indonesia. The difficulty
which is become the main obstacle to carry out retaliation, is because
Indonesia and South Korea as the "adversary" are bound both economically
and politically and is difficult to be confronted by the laws of retaliation.
a.
Different Views Of Member States About The Binding Strength of
WTO Rules Implied In The Instruments Of Retaliation.
If it was reviewed by International Law, agreement in WTO actually
has the power of a treaty, which means it has legal consequences. Because of
this, any rules stamped by WTO should be regarded as law by all members of
the organization. That means every rules by WTO itself stood in the zone of
International Public Law. Despite that, some discussions by experts eventually
questioned if one country violate a rule in WTO, should it be considered a
violation against a contract (default) or a violation against International Law.
From each point of view, there were different implications related to which
10
conflict resolution method needed.12
Experts had considered that WTO is a based-by-contract organization,
because each of their member are called "contracting party". WTO also
choose "dispute settlement" rather than "adjucation" as their conflict
resolution foundation. There are some that considered any agreement stamped
by WTO are regarded as International Commercial Contract.13
Member states with those point ov view, still strictly obey the rules by
WTO, because they know by obeying and understanding any rules by WTO
would give them an edge in many fields of international trade. Because of this,
any member states which believe that they are in disadvantage position
because of the rules by WTO, should be permitted to release themselves from
any contracts they're dealing with.14
Another point of view by experts stated that rules by WTO binds its
members with a power of international pact. Because of this, any member
states with their signature written on the agreement, should obey each of every
words of the rules. Even when WTO rules are no longer facilitate their
interests, even more when those states should pay the compensations, or face
a retaliation, or oven when those states are still in a trade negotiation which
needs political power to solve it, those states must obey any rules by WTO. In
JeffreyJ.Schoot, Role of Remedies In The WTO System, InstituteFor Internasional
Economics, hlm 14, didapat dari http://www.iie.com
13
Ibid, pandangan ini dikemukaka oleh Bello (1996) dan Schwartz (2002), sedangkan
pandangan mengenai WTO sebagai kontrak komersial internasional dengan adanya hak dan kewajiban
secara timbal balik dikemukakan oleh Pauwelyn (2002)
14
Ibid., hlm 15
12
11
that point of view, any violation against WTO regulations will be considered
as violation of an International Pact, not just a mere trade contracts.15
This point of view also state that any violation by a member state
against some WTO regulation about trade conflict with another country will
be considered as violation to all WTO regulations as a whole. Those violation
will not be considered as a mere conflict between a country with their
adversary, but a conflict which ignite a violation against multilateral treaty.16
Because of that, the resolution will not be a face to face discussion by one
country to their adversary, but should be legalized by the resolution court of
WTO. Those panel decision will be a new jurisprudence, which become a
reference to every member state of WTO to strenghten any argument
regarding any trading dispute.17
The difference of perspectives in understanding WTO regulations by
each of member state, would have a serious impact on the process of general
comprehension in conflict resolution process. Any member state whose regard
WTO regulations as a contract, will see no difference between those
15
Ibid
Ibid., aturan WTO adalah perjanjian multirateral
17
Ibid., dikutip dari, Goldstein dan Martin, The oxford Handbook on The World Trade
Organization,2012
16
12
regulations and any bussiness contracts made by their government. A contract
bussiness will always considered inferior under the law. They will not agree
on upholding retaliation as a form of punishment, instead of diplomatic
process as a solution. On the other hand, any member state whose regard
WTO regulations as a multinational treaty, will expect a greater role by WTO
in legalizing new international regulations which have a power to bind its
member states, in their point of view, WTO is an organization with a full
authority as a judge an any international trade dispute.18
b.
Preferential Trade Area, Indonesia's Litigation Ability and The
Cost of Litigation
The existence of PTA brought a decline in any purpose of WTO
regarding non-discrimination principle on most favoured nation. Any country
would decrease the obstacle on a trade process, only to them bound by PTA
regulations.19
Non discrimination principle under WTO regulations are the main
foundation as a multinational treaty. Because of this principle, the
commitment to any obstacle in tariff and non-tariff to another country
extended and applied without any requirements automatically between each
member states. The background of this principle was to reduce billateral
Ibid.,hlm 16
Sjamsul Arifin et.al, Kerjasama Perdagangan Internasional: Peluang dan Tantangan Bagi
Indonesia, Biro Hubungan Dan Studi Internasional Direktorat Internasional Bank Indonesia, Elex
Media Komputindo, Jakarta, 2007, hlm 147
18
19
13
relationships which only give the advantage between two capital states in the
agreement. This kind of billateral relationship was very popular before the
event of World War. This act made some country at those time to uphold
special protection, which had impact on the closing of the market and the
great depression in 1920. Then the principle of most favoured nation (MSN)
was to prevent any appearance of any "trading alliance" which had a risk of
bring down the market, causing a massive loss to all side.20
The truth nowadays, MFN principle only regarded as exceptional
clause and not as a regulation that sould be obeyed by all member state in
WTO. The result is the appearance of Custom Unions, Common Market,
Regional and Free Trade Agreement which agreed by some member states of
WTO or even ratified by non-WTO states.21
Indonesia's litigation ability as a developing country, also becomes an
obstacle in upholding any act of retaliation by Indonesia. This because a
process of conflict resolution since consultation, negotiation, up to litigation
process, all need a legal skill and legal expertise to submit a claim or even to
defend the nation from any accusations from another country (complainant).
In comparison to China which joined WTO in 2001-about 6 years after its
establishement in 1996, stated that their country still have a limited
understanding in viewing WTO as an organization which have its own
20
21
Ibid., hlm 145
Ibid
14
litigation regulations (DSU). Even there was a headline entitled "Chine's
coming Age in the WTO War".”.22
“We have trained our next generation of lawyers in recent years.
Waves of Chinese lawyers who received law degrees in the US, comeback
with understanding of WTO law and different legal system”.23 This statement
were considered as recognition from China being a big nation with a vast
political and economical power, was still not as powerful in a term of buliding
a law structure and legal resources as the United States of America. This
become a different case in Indonesia, which doesn't have any justification and
adequate reasoning when Indonesia joined WTO when Indonesia ratified
Marakesh Agreement. Compared to China's readiness, when joined WTO in
2001, it was clear that Indonesia as a developing country, were not learned
any consequences by joined and ratified the WTO agreement.24
In general, the cost of any proceeding of litigation process in conflict
resolution to have WTO as the court are very expensive. In a mere case, the
Ade Maman Suherman, Hukum Perdagangan Internasional: Lembaga Penyelesaian
Sengketa WTO Dan Negara Berkembang, Sinar Grafika, Jakarta, 2014, hlm 100, dikutip dari Xiao Jin
lawyer untuk pemerintah China yang menangani gugatan yang dilayangkan Amerika Serikat dalam
kasus pipa baja.
23
Ibid., hlm 101 dikutip dari pernyataan Xiao Jinquan lawyer dari kantor hukum, Dacheng
Law Office sekaligus direktur komite Komersial dan korporat pada All China Lawyers Association.
24
Ibid
22
15
legal fees could reach up to US$ 1 Million, and there will be no guarantee for
the disputing party to win or to lose. The cost is relative and will not be
considered expensive when it reach a sensitive political problem. For example,
a dispute between American based-Kodak versus Japanese based-Fujifilm in a
case of "Japan Photographic Film", which costed Japan about US$ 10
Million25 and additional fees still not included. According to Hakan Nodstorm,
a chairman of Economy and Trading council of Sweden, the cost still not
included any litigation supporters fees, such as enonomy analyst, experts
explanation, as non legal expense starts from US$ 100.000 up to
US$ 250.000.26 Also to spoke with the DSU, the fee for deprivaton analysis
could reach US$ 500.000, equal to Rp. 6.000.000.000,- (six billion rupiahs).27
c.
Economic and Political Dependency As The Main Reason of
Indonesia Holding Back The Act of Retaliation to Their
Adversaries.
High competitiveness of another developing country with a greater
access to international market became economical threat to another
developing country such as Indonesia. Like another developing countries,
Indonesia had hoped to get as many investment as possible by another country
in the world. And the main reason of a nation to invest their money outside
Ibid., hlm 102
Ibid dikutip dari Gregory Shafer, How to Make the WTO Dispute Settlement System Work
for Developing Countries, maret 2003
27
Ibid., Hasil interview penulis dengan private law firm di Washington DC 28 oktober 2008
25
26
16
their borders is a hope for greater profit.
When some nation decide to do some investment, an evaluation will
be done in any way to measure any risk for their country. International
Country Risk Guide (ICRG) evaluated three kind of investment risks. It is
financial risk, economic risk, and political risk.28
The law enforced in the case of antidumping certain paper product
from Indonesia in South Korea. Essentially should be considered as a
violation against non-discrimination principle of Most Favoured Nation. This
was done because the case were considered as a common dispute between two
countries (Indonesia and South Korea), and was not seen as a matter should be
involved by WTO as international trading league. This was done despite a
past agreement which approved if any member state violated WTO trading
regulations, then another member state should use multilateral settlement
rather than use individual act. That means all member of WTO should obey all
procedures and decisions written in the agreement.diambil.29
Based on those precedents, it is easy to conclude that law enforcement
process for many WTO regulations are lack in realization. WTO use court
case (jurisprudence) as the main source of law principle in decision making.
In a future, if the same cases appears,a jurisprudence process by DSB under
Lebih jelasnya silahkan baca, International Monetary Fund, The IMF and Recent Capital
Account Crises: Indonesia, Korea, Brazil, Washington, 2003
29
Loc., Cit, Fredy Joseph pelawi, Penyelesaian Sengketa…
28
17
WTO, will be considered all-fine and trouble-free. However, regulations by
WTO are seems like difficult to be implemented consistently on each member
state. In the case of implementation, a decision validated by DSB will not
have any law assurance. Because of this, the successful upholding of
retaliation will only based by the strength of foreign political power between
two nations in dispute.
2.
Potential Benefits of Retaliation for Indonesia as Developing
Country Under Conflict Resolution Structure by WTO
a. Benefits Shown In Another Country After The Use of Retaliation
United States used a successful retaliation act shown in the “banana
case”. Unlike the dispute between Indonesia and South Korea, United States'
problem against the import regulations by European Union sourced from
European Union provided lower requirements special to their former colonial
world, but increased the export tariff for American products (in this case,
bananas). The dispute ended with United States, together with Guatemala,
Honduras and Mexico succesfully upheld retaliation against so many products
from European Union states, in the American market.30
European Union demanded a tariff for the bananas imported from
America. On the other hand, Europen Union give so much simplicity and even
remove the requirement of paying tariff for bananas imported from Carribean,
http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds16_e.htm, diakses pada 30-10-2014
pukul 12.30 WIB
30
18
Africa, and some countries in the Pacific. European Union even give larger
export quota for bananas from Carribean, and decrease the export quota for
bananas from America (Chiquita brands). The purpose of this action was to
relieve the burden of European countries bound to oblige in aiding their
former colonial world, such as Carribean, Africa, and some countries in
Pacific, because some country such as England and France, should provide
aid and support to their former colonial world.31
United States by the act of unilateral retaliation, increased a tariff for
European product up to 100% from the normal rate. Meanwhile, the British
Industrial Union stated that this unilateral retaliation act from U.S. had costed
British exports up to £.82.000.000 (Eighty Two Million Poundsterlings).32
United States insisted to upheld retaliation against products from
European Union whom put discrimination act on American banana products,
this act was done because Chiquita brands as the largest banana exporter in
America, actually gave a great revenue for the nation. Between 1992 – 1994,
Chiquita Brands suffered a loss up to US$ 407 Million, followed by the
decline on their stock price from US$ 40 into US$ 11 per unit.33
http://www.globalissues.org/article/63/the-banana-trade-war,baca bagian “The WTO Rules
Against The Largest Aid And Trade Pact, The Lomé Convention”, diakses pada 30-10-2014, pukul
12.57 WIB
32
http://news.bbc.co.uk/2/hi/business/253705.stm, January 12, 1999 Published, Amerika
serikat memberikan kenaikan tariff produk dari Inggris 100% hingga akhir januari diakses pada 30-102014, pukul 13.25 WIB
33
http://www.wikinvest.com/stock/Chiquita_Brands_International_(CQB), diakses pada 2311-2014 pukul 16.33 WIB
31
19
This successfull retaliation by United States to european Union left
some serious questions about the law enforcing system in WTO, in which the
success is strongly tied with the stregth of economic and political power of the
suitor. In another case approved by Appelate Body, another suitor was
Ecuador,34 which is a developing country, actually suffered a loss because of
the unfair trade by European Union.35
The interesting fact was, unlike the most developing countries
reviewed before, Ecuador actually had the authorization from DSB to do a
crossed retaliation, because they were suffered by a total loss of US$ 201,6
Million 36 caused by the unfair trade, even with these authorization, there was
still no implementation by them. Should a retaliation regulated in the “dispute
statement understanding” be ratified by all member state of WTO, then it will
be logic to assume if all member state prefer a litigation process as resolution
rather than billateral aproach as dispute resolution, there will be no reason for
Ecuador to held back retaliation.
b. Potential Benefits for Indonesia to Uphold a Retaliation Instrument
The first benefit of retaliation, should it be done by Indonesia in the
future, the loss of paper company in their trade with South Korea, would be
minimum, and even provide a subvention from the result of the retaliation.
http://data.worldbank.org/country/Ecuador, diakses pada 21-11-2014, pukul 8.30 WIB
http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds27_e.htm, diakses pada 21-11-2014,
pukul 8.43 WIB
36
http://cwts.ugm.ac.id/2013/03/retaliasi-silang-bagi-negara-berkembang-dalam-disputesettlement-mechanism-wto/ diakses pada 21-11-2014,pukul 8.42
34
35
20
The act of Korean government, really put the export performance of
Indonesian paper industri at disadvantage. When maximum revenue should be
expected to reach US$ 150 Million, the actual revenue achieved by the
industry was only about US$ 50 - 60 Million.37 Which shown a 60% decline
in term of export accomplishement. These phenomenon were caused by the
antidumping act by Korean government, and Indonesia actually have a chance
to resolve with the act of retaliation.38
Since 2012, the realization of cooperation between Indonesia and
South Korea reached US$ 26,9 Billion. Export value of Indonesian product
was US$ 15 Billion, on the other hand South Korean products valued
US$ 11,9 Billion.39 Investment in the reality sector done by South Korea gave
positive development for the people of Indonesia. As a developing country
with popullation more than 200 million, Indonesia in need of so many
workplace for their popullation. For 2015, South Korea has approved to invest
up to US$ 4 billion in the real sector development. 40 This percentage if
compared to the cost of antidumping certain paper product in South Korea
wich costs Indonesia up to US$ 90 in turnover, which is unbalanced.
Indonesia will be the first developing country to break out from the old
37
http://www.tempo.co/read/news/2010/10/13/090284598/Soal-Dumping-Kertas-PemerintahHarus-Balas-Korea, diakses pada 25-10-2014, pkul 14.41 WIB
38
Article 22.1, 22.2 DSU
39
http://politik.news.viva.co.id/news/read/550666-ketua-dpr-ri-bertemu-duta-besar-koreaselatan
40
Ibid., Investasi tersebut ada pada lanjutan kucuran investasi perusahaan Korea Selatan yang
sudah ada yaitu pabrik ban Hankook di Cikarang dan pabrik Krakatau Posco di Cilegon. Buka juga
situs resmi Kedutaan Indonesia di Seoul Korea Selatan: http://kbriseoul.kr/
21
political and economic beliefs, which bothered the law enforcement system of
WTO since a long while, especially in establishing retaliation system. There is
always a doubt wether this act would be seen in a positive way, to uplift the
national pride in the aspect of bargaining position, to strengthen political
relation of Indonesia. A retaliation act against South Korea could also results
in a loss on the macro-economic scale of Indonesian market. But from the
legal aspects, justice values will be the basic standard of future law
enforcement. The justice will be the foundation of law morality and will
become a benchmark of a positive law system. Because justice should be an
undeniable aspect for a law to enforce its power. Without justice, any
regulation are not worthy of any juristical value.41
E.
Closing
1. Conclusions
The reason for Indonesia to hold back any act of retaliation as a part of
conflict resolution under the system of WTO will be explained below:
1. Different level of understanding between each member state
regarding the juridical power of WTO regulations, especially in the
use of retaliation instrument, resulted in different level of
obedience to the regulations itself.
2. Law enforcement in WTO system, still mixed up with the
Bernard L. Tanya dkk, Teori Hukum, Genta Publishing, Yogyakarta, ctk ke 3, 2010, hlm
130, dikutip dari Theo Huijbers, Filsafat Hukum Dalam Lintasan Sejarah, Yayasan Kanisius,
Yogyakarta 1984
41
22
dealings of billateral relationship between nations in a legal
dispute, this means the success of any law enforcement act by
WTO will always closely related to the strength of Indonesia's
political power.
3. The lack of litigation ability commonly found in developing
country as the obstacle in the process of retaliation, especially by
Indonesia. Because any process of conflict resolution, consultation,
negotiation, until the process of litigation, all need a proper legal
skill and legal expertise to suit a legal claim or to defend any
accusation from the compainant.
4. High level of economic dependency of Indonesia to another
member states in WTO regarding investment in Indonesia's realty
sector.
Potential benefit for Indonesia after doing retalitation are:
1. Losses suffered by Indonesian company as a result of unfair
trade, could be subvented by the result of retaliation by the
government.
2. Indonesia as a developing country would be a history maker in
enforcing a legal retaliation under the systems of WTO, the first
country to break out from the old political ways which have been
bothering WTO regulations process from the start.
23
2.
Suggestions
Based on this research paper, researcher will try to give some
suggestions in a hope to provide a good reference for future research about
conflict resolution system in WTO, and to benefit the people with a
knowledge to advance national economic power, especially in international
trade dispute.
1. With the stronger law enforcement in WTO regulations, member
states will no longer use billateral approach to resolve any legal
dispute in trade, all action should be approved by the rules in DSU.
2. Violation against any WTO regulations should be regarded as a
violation in multinational treaty, not as a indirect confrontation
which could result in a more serious impact to each nation.
3. Indonesia need to raise up a case of the difficulty to receive a
fair benefit of retaliation for developing country in the next WTO
summit, to find a solution about the need of agreement for each
nation-after-dispute, after a verdict by DSB.
4. Indonesia to express that "most favoured nation" should not be
applied only for the product in the trading process. But this
principle should always visible in any process of law enforcement,
to provide justice for each member state in WTO.
24
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