The WTO Dispute Settlement System: an analysis of the EU-ASEAN jurisprudence

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Faculty of Law Academic Year 2015-16 Exam Session 1 The WTO Dispute Settlement System: an analysis of the EU-ASEAN jurisprudence LLM Paper by Andrew Donovan Student number : 2002841 Promoter: Prof. Dr. Diederik Bruloot

TABLE OF CONTENTS I. INTRODUCTION... 1 II. ASEAN AND AEC... 3 1. HISTORICAL OVERVIEW OF ASEAN... 3 2. INSTITUTIONAL STRUCTURE OF ASEAN... 5 3. THE ASEAN ECONOMIC INTEGRATION AND THE AEC BLUEPRINTS... 7 4. CONFLICTING DOMESTIC INTERESTS WITHIN ASEAN... 9 III. EU- ASEAN RELATIONS... 11 1. INTRODUCTION... 11 2. EU PERSPECTIVE... 11 3. ASEAN PERSPECTIVE... 12 4. EU-ASEAN FTA... 13 IV. ASEAN MEMBER STATES IN RELATION TO WTO... 16 1. REGIONAL TRADE AGREEMENTS WITHIN WTO... 16 2. OVERVIEW OF ASEAN MEMBER STATES WITHIN WTO... 17 V. ANALYSIS OF THE EU-ASEAN JURISPRUDENCE UNDER THE WTO DISPUTE SETTLEMENT SYSTEM... 23 1. INTRODUCTION... 23 2. TRADE DISPUTES... 24 2.1 THE PHILIPPINES... 24 2.1.1 The Philippines Taxes on Distilled Spirits (DS396, 403)... 24 2.2 THAILAND... 27 2.2.1 European Communities Duties on imports of rice (DS17)... 27 2.2.2 European Communities- Generalized System of Preferences (DS 242)... 28 2.2.3 European Communities Export Subsidies on Sugar (DS 283, 265, 266)... 30 2.2.4 European Communities- Customs Classification of frozen boneless chicken cuts (DS 286)... 34 2.2.5 Thailand Customs Valuation of Certain Products from the European Communities (DS 370)... 37 2.3 INDONESIA... 38 2.3.1 Indonesia- Certain Measures Affecting the Automobile Industry (DS54)... 38 2.3.2 European Union Anti- Dumping Measures on Imports of Certain Fatty Alcohols from Indonesia (DS 442)... 42 2.3.3 European Union- Anti-Dumping Measures on Biodiesel from Indonesia (DS 480)... 45 3. OUTCOME OF TRADE DISPUTES BETWEEN EU AND ASEAN MEMBER STATES (1995-2015) 48 VI. CONCLUDING REMARKS... 51 VII. BIBLIOGRAPHY... 52 1. JOURNAL ARTICLES... 52 2. BOOKS... 53 3. LEGISLATION... 53 4. JURISPRUDENCE... 54 5. WEB RESOURCES (LAST CONSULTED APRIL 2016)... 54 6. OTHER... 55 LL.M. Paper ii

TABLE OF ABBREVIATIONS AEC AEMF AFTA APSC Art. ASC ASCC ASCM ASEAN CAFTA CEPT CN DSB DSU EC EEC EU GATT GNP GSP FDI FTAs HR IPR IMF LDC MFN NATO NT ASEAN Economic Community ASEAN Expanded Maritime Forum ASEAN Free Trade Agreement ASEAN Political-Security Community Article ASEAN Security Community ASEAN Socio-Cultural Community Agreement on Subsidies and Countervailing Measures Association of South East Asian Nations Comprehensive ASEAN Free Trade Agreement Common Effective Preferential Tariffs Combines Nomenclatura Dispute Settlement Body Dispute Settlement Understanding European Community European Economic Community European Union General Agreement on Tariffs and Trade Gross National Product Generalised System of Preferences Foreign Direct Investment Free Trade Agreements Harmonized System Intellectual Property Rights International Monetary Fund Least Developed Countries Most Favourite Nation North Atlantic Treaty Organization National Treatment LL.M. Paper iii

RTAs SCM TRIMs UNCTAD USSR VCLT WCO WTO Regional Trade Agreements Subsidies and Countervailing Measures Trade-related Investment Measures United Nations Conference on Trade and Development Union of Soviet Socialist Republics Vienna Convention on the law of the treaties World Customs Organization World Trade Organization LL.M. Paper iv

I. INTRODUCTION The economic and trade relationship between EU and ASEAN is mainly determined by EU s interest in FDIs 1 in ASEAN Member States and in exporting its technologies and services 2 to the ASEAN market, and by ASEANs interest to develop multiple economic partnerships to escape from over-dependency on US and Japanese economy 3. The political interest of the EU in the ASEAN region is inspired by the greater influence that EU wants to have on the security in the ASEAN region and by the wish to cooperate on issues like climate, environmental protection and the fight against transnational organized crimes 4. ASEAN can use the cooperation with the EU to reinforce its influence in Asia in order to counterbalance the power of China and US in the region 5 and to manage the situation in the South China Sea 6. Within this economic and political context, I will analyse the EU-ASEAN jurisprudence between 1995-2015 on trade disputes under the WTO dispute settlement system. The first part of this Paper will explain the historical and institutional context of ASEAN. It will also describe the ASEAN economic integration process that led to the AEC Blueprint, including an analysis on the conflicting domestic interests within ASEAN 7. In the second part, the EU-ASEAN relations from a EU and ASEAN perspective and FTAs between EU and ASEAN Member States will be analysed. 1 Foreign Direct Investment (FDI), definition given by the OECD, OECD benchmark definition of Foreign Direct Investment (2008), Fourth Edition, p. 17: Foreign Direct investment is a category of cross-border investment made by a resident in one economy (the direct investor) with the objective of establishing a lasting interest in an enterprise (the direct investment enterprise) that is resident in an economy other than that of the direct investor. 2 Jing Xu and Fei Chen, Analysis on Motivation of EU in Economic and Trade Investment in ASEAN and Regional Influence (2014), International Journal of Business Administration, vol. 5, No. 5, pp.84-90, This way EU also increases its role in politics, security, counter-terrorism, human rights, education and other fields of ASEAN. 3 Ibid. 4 Ibid. 5 Eva Pejsova, The EU and ASEAN in 2016 (2016), European Union Institute for Security Studies (EUISS), pp.1-2 6 Ibid., p.1, The escalation of tensions between China and US has pushed ASEAN capitals to take side. A strong and united ASEAN is more essential today than ever before EU can be of help to ASEAN to deal with the South China Sea issue 7 Tham Siew Yean and Sanchita Basu Das, The ASEAN Economic Community and conflicting domestic interests (2015), Journal of Southeast Asian Economies, Vol. 32, No. 2, pp. 189-201 LL.M. Paper 1

The third part will be dedicated to the RTAs within WTO and an overview of the characteristic trade volumes of the ASEAN Member States of WTO will be provided. In the last part, the major cases of EU-ASEAN jurisprudence at the WTO dispute settlement level will be analysed to discover the main trade disputes and issues between EU and ASEAN over the last 20 years (1995 2015). Given the particular situation and interests of ASEAN and the economic and political role of the EU in the region, the main research theme of this Paper is to discover which kind of disputes between EU and ASEAN have been encountered and if (and to what extend) the dispute settlement system of WTO has been able to solve the trade issues between EU and the Member States of ASEAN. LL.M. Paper 2

II. ASEAN AND AEC 1. HISTORICAL OVERVIEW OF ASEAN The Association of South East Asian Nations is an international organisation established on August 8th 1967. Five South East Asian states signed the so-called Bangkok Declaration 8. The founding states were the Philippines, Thailand, Indonesia, Singapore and Malaysia. The Association has to be seen against the common fear of communism during that period (war in Vietnam). The Bangkok Declaration is a five-page document, declaring the establishment of an Association for Regional Cooperation among countries of South-East Asia to be known as the Association of South-East Asian Nations (ASEAN). The most important aims and purposes of the Association were to accelerate the economic growth, social progress and cultural development in the region through joint endeavours in the spirit of equality and partnership ; promote regional peace and stability through abiding respect for justice and the rule of law in the relationship among countries of the region and adherence to the principles of the United Nations Charter; promote active collaboration and mutual assistance on matters of common interest in the economic, social, cultural, technical and administrative fields;. 9. In order to carry out the aims and purposes of the Association, the text describes the establishment of intergovernmental instruments such as annual meetings of the Foreign Ministers, a standing committee, ad-hoc committees, permanent committees and a National Secretariat in each member state 10. On February 24th 1976, during the first ASEAN summit, the five founding member states of ASEAN signed the Agreement on the Establishment of the ASEAN Secretariat (in force May 21st 1976), the Treaty of Amity and Cooperation in South East Asia (in force June 21st 1976) and the 1976 Declaration of ASEAN Concord, or so-called Bali Concord I 11. The Bali Concord I had a political, economic, social, cultural, security and ASEAN 8 Centre For International Law, National University of Singapore (NUS), http://www.aseansec.org/1212.htm, 1967 ASEAN Declaration or Bangkok Declaration unofficial text. For the official text, see website of ASEAN: http://agreement.asean.org/media/ download/20140117154159.pdf 9 Ibid. 10 The current institutional structure of ASEAN will be described more in detail in section 2 of this chapter 11 For the full original text on the Agreement on the Establishment of the ASEAN Secretariat and Treaty of Amity and Cooperation in South East Asia, please consult http://agreement.asean.org/media/download/20140117151823.pdf and http://agreement.asean.org/media/download/20131230235433.pdf LL.M. Paper 3

machinery section, describing vaguely the main issues and agreements on the respectively sections of the concord. Later on, the Agreement on the Establishment of the ASEAN Secretariat and the Treaty of Amity and Cooperation in South East Asia were amended with protocols with new Member States becoming part of ASEAN 12. The documents signed during the first summit of ASEAN and the Bali Concord I has to be seen in the context of the end of the Vietnam war and the changing balance of power in the South-East Asian region. The region s economic growth during the seventies and the signature of the agreements in Bali resulted in several industrial projects within the ASEAN region. The end of the Cold War between the USSR and the USA gave the region more political independence and allowed ASEAN to become a greater regional power during the nineties. Vietnam, Laos, Myanmar and Cambodia joined ASEAN during that period. In the aftermath of the 1997 Asian financial crisis, the challenges posed by the globalisation and the 2002 Bali terrorist attacks, the Declaration of the ASEAN Concord II, the so-called Bali Concord II was signed in Bali on October 7th 2003. This declaration was concluded during the 9th ASEAN summit and accelerated the regional integration of ASEAN, based on a framework of 3 pillars: the ASEAN Security Community (ASC), the ASEAN Economic Community (AEC) and the ASEAN Socio-Cultural Community (ASCC) 13. The ASC relies on the peaceful intra-regional processes 14. In order to enhance ASEAN s economic weight and power in the region, the final goal of AEC was (and still is) to establish a single market and production base by 2020 15. The AEC 16 comprises two fundamental approaches: regional integration and competitiveness. The ASCC aims to reduce unemployment, to attain better Human Resources development, and to develop programs to tackle human health issues. 12 Brunei Darussalam (January 8th 1984), Vietnam (July 28th 1995), Laos and Myanmar (July 23th 1997) and Cambodia (April 30th 1999) 13 For the full original text on the Declaration of Asean Concord II, please consult the website of Asean.org 14 The ASC includes maritime cooperation and fight against terrorism, but no military or defence pacts. The main instrument is the Treaty of Amity and Cooperation 15 Rosabel B. Guerrero, Regional Integration: the ASEAN vision in 2020 (2010 ), IFC Bulletin, No. 32, pp.52-58 16 The AEC and its evolution will be analysed more in detail in section 3 of this chapter. LL.M. Paper 4

There is an attachment to the Bali Concord II declaration, containing Recommendations of the high-level task force on ASEAN Economic Integration 17. On November 20th 2007, the Charter of the Association of South East Asian Nations was signed in Singapore 18 (effective December 15th 2008). This charter turned ASEAN into a legal entity and aimed to create a single free-trade area. The Charter of the Association of South East Asian Nations did not only confer legal personality to ASEAN, but also explicitly permitted ASEAN to sign treaties 19. On March 1st 2009, in Cha-Am, Thailand the Cha-Am Hua Hin Declaration on the Roadmap for an ASEAN Community 2009 2015 was signed. It comprised the Blueprints on APSC 20, AEC and ASCC as roadmap for the ASEAN integration process 2009 2015, with detailed implementation schedules. On December 31st 2015 the AEC was a fact. 2. INSTITUTIONAL STRUCTURE OF ASEAN ASEAN is an international organisation with an intergovernmental structure 21. The emphasis on consensus and collective decision-making reflects the fact that ASEAN Member States do not give supra-national power to the Association. Mr. Rodolfo C. Severino, former ASEAN Secretary-General, formulated it as follows: It is not and was not meant to be a supranational entity acting independently of its members. It has no regional parliament or council of ministers with law-making powers, no power of enforcement, no judicial system. Much less is it like NATO, with armed forces at its command, or the United Nation Security Council, which can authorize military action by its members 17 This document has a full chapter on current economic cooperation initiatives in trade of goods, trade in services, investments, intellectual property rights (IPR s), capital mobility. It also contains a chapter on New initiatives and measures with priority of integration sectors (coordinated by country Indonesia: wood-based products and automotive; Malaysia: rubber-based products, textiles and apparels; Myanmar: agro-based products and fisheries; Singapore: e-asean and healthcare; Thailand: air travel and tourism). The third chapter describes the institutional strengthening, the fourth chapter describes the outreach and the last chapter handles about technical cooperation. Annex 1 to the attachment describes the ASEAN mechanism of the dispute settlement system, also including the enforcement mechanism. 18 Full original text available on http://agreement.asean.org/media/download/20141204151618.pdf 19 Art. 3 of the ASEAN Charter 20 APSC: ASEAN Political-Security Community 21 Chesterman, Simon, Does ASEAN exist? The Association of Southeast Asian Nations as an International Legal Person (2008), Singapore Year Book of International Law, Vol. 12, pp. 199-211 LL.M. Paper 5

under one flag 22. According to the former Minister of Foreign Affairs of Singapore, Mr George Yeo: Europe is built on a common value system which has its roots in Rome, Greece, and Judeo-Christianity. We do not have that same common history, and in fact ASEAN is marked by its diversity. The fact that we have such an admixture of religions and political systems, and historical connections, indicates that the founding basis of ASEAN cannot be the same as that of Europe Many of us in ASEAN do not see us ever becoming like the Europe of today, but we can certainly become the Europe of the Common Market, the Europe of the Economic Community 23 The ASEAN bodies defined by the charter are the ASEAN Summit, the ASEAN Coordinating Council, the ASEAN Community Councils, the ASEAN Sectoral Ministers Bodies, the Secretary-General, The ASEAN Secretariat, the Committee of Permanent Representatives to ASEAN, the ASEAN National Secretariats, the ASEAN Human Rights Body and the ASEAN Foundation. 24 Table 1; Source: Yuyun Wahyuningrum, Senior Advisor on ASEAN, Human Rights Working Group, 31.10.2013, slide 18 of presentation 22 Rodolfo SEVERINO, Asia Policy Lecture: What ASEAN is and What it Stands for, (1998), The Research Institute for Asia and the Pacific, University of Sydney, Australia 23 Singapore Parliamentary Debates, vol. 84 at col. 1181 (2008). 24 ASEAN charter, Art. 7-14 LL.M. Paper 6

Explaining all the different bodies of ASEAN in detail is beyond the scope of this research Paper. I will limit myself by naming the most important bodies and its main function (s). The ASEAN Summit is the supreme policy-making body and contains the heads of states or government of the Member States 25. The ASEAN Coordinating Council is the second most important body and comprises the ASEAN Foreign Ministers of the Member States 26. It coordinates the implementation of decisions of the ASEAN Summit 27. The Secretary-General is the chief Administrative Officer of ASEAN and is appointed by the ASEAN Summit for a non-renewal period of five years 28. The current Secretary-General of ASEAN for the period 2013-2017 is H.E. Le Luong Minh from Vietnam. The Secretary-General is the head of the ASEAN Secretariat. Among other tasks, the ASEAN Secretariat is the administrative organ that facilitates and monitors the implementation of ASEAN agreements 29. The ASEAN Secretariat is seated in Jakarta since 1992. 3. THE ASEAN ECONOMIC INTEGRATION AND THE AEC BLUEPRINTS The first major step into regionalism has been the AFTA put in place in 1992 and aiming to promote the region as a single production unit 30. It committed the Member States to reduce and to ultimately eliminate tariffs and non-tariff barriers over a period of 15 years. Free trade was defined within an average of 0-5 percentage of tariffs and excluded certain sensitive products. The AFTA for the founding Member States of ASEAN and Brunei Darussalem became operational in 2004, and theoretically the full implementation was in 2006 (Vietnam), 2008 (Laos and Myanmar) and in 2010 (Cambodia). There remained some country-specific implementations exeptions on certain products though. During the same period, there were also some other initiatives such as the ASEAN one-stop investment centers and the ASEAN Investment Area (AIA), both with maximum 0-5 percent tariffs and non-tariff barrier incentives 31. 25 Ibid. Art 7.2 (a) and Art. 7.1 26 Ibid. Art. 8.1 27 Ibid. Art. 8.2 (a) and 8.2 (b) 28 Ibid. Art. 11 29 Supra 23, Art. 11.2 30 Yu, Miaojie, Paterns of trade, comparative advantages and productivity in the ASEAN-China-India Region (2011), available on SSRN: http://ssrn.com/abstract=1854907 31 Rosabel B. Guerrero, Regional Integration: the ASEAN vision in 2020 (2010 ), IFC Bulletin, No. 32, pp.52-58 LL.M. Paper 7

During the Bali Concord II in 2003, ASEAN pursued on the establishment of an ASEAN Community by 2020, founded on the three pillars ASC, AEC and ASCC 32 and on an earlier text, adopted in Kuala Lumpur on December 15th 1997, ASEAN Vision 2020 33. In 2003 the end-goal of the AEC seemed to be the most advanced of the three, being the establishment of a single market and of a single production base by 2020 to enhance the ASEAN economic weight. From the start the AFTA and AEC were initiated from an open regionalism concern, meaning that the important economic partners are outside the ASEAN region 34. On November 20th 2007, the ASEAN Member States adopted during the 12th ASEAN Summit the Declaration on the ASEAN Economic Community Blueprint 35. The Blueprint would transform ASEAN into a single market and production base, a highly competitive economic region, a region of equitable economic development, and a region fully integrated into the global economy 36. The AEC Bleuprint included its strategic schedule in annexe to the declaration 37. The declaration literally stated that the AEC should transform ASEAN into a region with free movement of goods, services, investment, skilled labour and freer flow of capital. Paragraph 11 of the declaration stipulates the remaining issues to be resolved to obtain the free movement of goods, such as the removal of non-tariff barriers, integrating customs procedures, establishing the ASEAN Single Window 38, CEPT 39, Rules of Origin 40 and harmonising standards procedures 41. As already mentioned supra p.7 (footnote 17), twelve priority integration sectors had been identified for accelerated economic integration 42. 32 For the notions of ASC, AEC and ASCC, see supra p.7 33 http://www.asean.org/?static_post=asean-vision-2020 34 open regionalism of ASEAN as oposed to the initial inward looking approach of the EU. See Rosabel B. Guerrero, Regional Integration: the ASEAN vision in 2020 (2010 ), IFC Bulletin, No. 32, p.54 35 Signed in Singapore. See original text on: http://www.asean.org/wp-content/uploads/archive/5187-10.pdf 36 Chia, Siowyue, The ASEAN Economic Community: Progress, Challenges and Prospects (2013), ADBI working paper 440 37 As stated in the preamble to the Declaration on the ASEAN Economic Community Blueprint of 2007 38 AEC Blueprint, p.9 (18), The ASEAN Single Window is an environment where the National Single Windows of individual Member States operate and integrate. National Single Window enables a single submission of data and information, a single and synchronous processing of data and information and a single decision making for customs clearance of cargo. This would enhance trade efficiency and competiviness. 39 CEPT: Common Effective Preferential Tariffs 40 Including the operational certification procedures 41 Manchin, Miriam and Pelkmans-Balaoing, Annette O., Rules of Origin and the web of East Asian Free Trade Agreements (2007), World Bank policy research working paper No. 4273 42 Blueprint, section A6, para. 35-37 LL.M. Paper 8

Food, Agriculture and Forestry programs within the AEC Blueprint aimed at promoting the ASEAN agricultural cooperatives for the benefit of farmers in the region 43. There is also a part on IPR, with the ASEAN IPR Action Plan 2004-2010 and the Work Plan for ASEAN Cooperation on Copyrights 44 and the accession to the Madrid Protocol, where possible. During the 47th ASEAN Economic Minister s Meeting held in Kuala Lumpur, Malaysia, on August 22th 2015, the Ministers noted that 91,5% of the prioritised AEC Blueprint measures had been implemented 45. They also prepared the new AEC Blueprint for 2025 46. 4. CONFLICTING DOMESTIC INTERESTS WITHIN ASEAN Although the notification during the 47th ASEAN Economic Minister s Meeting indicated that the success rate of implementation of the 2007 AEC Blueprint goals stands at 91.5% 47, studies question the use of the monitoring mechanism approach 48. Indeed, certain studies indicate that tariffs among ASEAN countries have been reduced, but the non-tariff barriers 49 have not. Examples of non-tariff barriers still remaining in ASEAN are for example: non-automatic licensing schemes, technical regulations, benchmarked standards, administrative costs, lack of physical and institutional connectivity 50. In their article on AEC and the conflicting domestic interests (2015), Tham and Basu Das argue that the economic integration within ASEAN is part of the new regionalism ; first there was the AFTA 51 in the early nineties to provide new political purpose to the Association after the end of the cold war. Then there was the AEC for the first time announced during the ASEAN Vision 2020 in 1997, and founded during the Bali Concord II in 2003, as an answer to the 43 Ibid., section A7, para. 38-40 44 Ibid., section B3, para. 43-45 45 http://www.eria.org/2015_0822_jointmediastatement-aem-final.pdf 46 For details on the AEC Blueprint 2025, please visit: http://www.asean.org/storage/images/2015/november/aec-page/aec-blueprint-2025-final.pdf 47 The 26th ASEAN Summit (April 2015) stated that 90,5% of the 2007 AEC Blueprint goals were achieved 48 Tham Siew Yeah and Sanchita Basu Das, The ASEAN Economic Community and conflicting domestic interests: an overview (2015), Journal of South East Asian Economics, Vol. 32, No. 2, pp. 189-201 49 Kawai Masahiro and Ganesh Wignaraja, Main findings and policy recommendations. In Asia s Free Trade Agreements: How is business responding?, edited by Kawai Masahiro and Ganesh Wignaraja. Cheltenham and Northhampton: Asia Development Bank Institute and Edward Elgar Publishing (2011) 50 Ibid. 45 51 Supra p.9 LL.M. Paper 9

Asian Financial crisis of 1997 52, and as an answer to the accession of China to the WTO 53. Finally, to remain relevant in multilateral negotiations in a period of a multiplication of RTAs 54, ASEAN understood that economic integration was necessary: economic, political and strategical imperatives were at the basis of AEC and pushed these ten small economies to cooperate. However, the implementation of AEC commitments shows that most countries encounter domestic conflicts with the liberalization action plans and timelines described in the 2007 AEC Blueprint 55. These conflicts are due to domestic policies of the concerned country or to a lack of domestic support and/or consultation among key stakeholders in that economy. In The Philippines and in Malaysia for example, domestic policies are not aligned with the liberalization commitments. Research in Thailand and Vietnam shows a lack of stakeholder consultations to make them better understand the commitments of their countries to the AEC. In most ASEAN Member States there are no or not enough assistance programmes or social safety nets for the poor and small domestic producers nor for the workers. Preparing these domestic producers and workers to the AEC market will be a main challenge to fully implement AEC and to benefit from its liberalization measures. The 2025 AEC Blueprint should help reducing these conflicting domestic interests in ASEAN and prepare the region to move towards a deeper economic integration beyond 2015. 52 The Asian Financial Crisis (AFC) made ASEAN realise the importance of a collective economic mechanism for regional stability. 53 The accession of China to the WTO and its succes and rapid growth made ASEAN realise that it was necessary to cooperate and promote the region as a single production base and attractive market, and to benefit from economies of scale. 54 RTA s by European nations and the US 55 Singapore is an exception to this rule. The research of Tham and Basu Das shows that, given increasing globalization, protectionist measures are no longer a viable policy repsonse. The Singapore policy response has been to fully support liberalization trade in goods within the AEC while assisting affected businesses and workers; helping them upgrade and move resources into more competitive sectors and activities. LL.M. Paper 10

III. EU- ASEAN RELATIONS 1. INTRODUCTION The EU and ASEAN are both regional organisations and power centres managing interdependence and security issues. The bilateral relations between the EU and Member States of ASEAN have been initiated in the eighties and have been intensified and Multilayered ever since. Bilateral agreements exist on political, economic, trade, investment and cultural issues. In 2012, the EU was the third largest trading partner of ASEAN and ASEAN was the fifth largest trading partner of the EU 56. More recent studies show that EU is now the second largest trading partner of ASEAN, after China and before Japan. 57 2. EU PERSPECTIVE The EU has played an important role in the regional integration process of ASEAN. In 2001 the European Commission and Council launched the communication Europe and Asia: a Strategic Framework for Enhanced Partnership 58 as an updated strategic framework for the European relations with Asia 59. Among other things, further strengthen our mutual trade and investment flows with the region was a major concern. Within this framework the EU has been granting financial assistance and best practices advice to the ASEAN region (2001 2007). In 2007, the ASEAN-EU Plan of Action to implement the Nuremberg Declaration on an EU-ASEAN Enhanced Partnership (2007 2012) has been signed and in April 2012, the EU and ASEAN signed the Bandar Seri Bagawan 5-year Plan of Action on political and economic affairs (2012-2017) 60. The current cooperative programmes mainly invest in trade, energy, environment and higher education. Funding ASEAN projects fulfils the EU s main ambitions to be present in Asia and to support regional cooperation and multilaterism. With China and US re-orientating their policies and influence towards the Asian continent, ASEAN could become for the EU an important gateway into Asia. 56 Gauri Khandekar, Mapping EU-ASEAN Relations (2014), FRIDE (European Think Tank For Global Action), pp. 1-69 57 European Commission, Directorate for Trade (2015) (source IMF) 58 http://eur-lex.europa.eu/legal-content/en/txt/pdf/?uri=celex:52001dc0469&from=en 59 Towards a new Asia Strategy has been a communication from the commission in 1994. Europe and Asia: a Strategic Framework for Enhanced Partnership was an updated version taking into account the key developments since 1994. 60 Ibid. 52 LL.M. Paper 11

The most important strategic economic interests that the EU has in the ASEAN region are FDIs, export market for highly developed technologies and services, and the gate to connect to other Asian countries through the already existing ASEAN partnerships with countries in the region (China-ASEAN Free Trade Area CAFTA Comprehensive Partnerships with Japan and India) 61. The top-five trading partners in ASEAN are Singapore, Malaysia, Thailand, Indonesia and The Philippines. Singapore is the most important trading partner for the EU, capturing more than 35% of EU s total trade with ASEAN. Laos, Cambodia and Myanmar benefit from Europe s EBA scheme 62. 3. ASEAN PERSPECTIVE ASEAN does its best to build cooperative solutions between the major economic and political powers at stake in East-Asia, being China, India and Japan. Maritime security for example is of great importance through the Asian continent, with growing political turbulence over the China Sea dispute. The AEMF 63 is a recent initiative of ASEAN that shows the importance of this issue in Asia. The ASEAN economy is highly depending on extra-regional trade, with a very high export rate. To overcome over-dependency on Japan and China, ASEAN has to develop multiple economic partnerships such as cooperation with the EU. The main trade flows by HS section 2010-2014 64 are Machinerie and appliances, Products of the chemical or allied 61 Jing Xu and Fei Chen, supra 2 62 Supra 52, EBA scheme: Laos, Cambodia and Myanmar benefit as LDCs (Least Developed Countries) from the Everything But Arms scheme, enjoying duty and quota-free access on all exports except arms and ammunition to the European Single Market. 63 Supra 52, AEMF: ASEAN s Expanded Maritime Forum held for the first time in 2012 with ASEAN, Australia, China, India, Japan, New-Zealand, South Korea, Russia and the US under the UN Convention on the Law of the Sea and new dispute settlement mechanisms shows the importance of the maritime issue for the Asian continent. 64 Harmonized System (HS), opposed to the Standard International Trade Classification (SITC). Definition given by the World Customs Organisation: The Standard International Trade Classification (SITC) and Harmonized System (HS) are two different trade classifications, the main difference being that the SITC is focused more on the economic functions of products at various stages of development, whereas the HS deals with a precise breakdown of the products' individual categories. The HS was introduced in 1988, and has since then it has become an internationally accepted method of classification wherever products are traded. The HS classification is "harmonized" in relation to the classifications of the United Nations and the European Communities. Goods are classified according to simple objective criteria and applications. The HS, a revision of the CCCN (Customs Cooperation Council Nomenclature), 1974 classification system, includes a six-digit sub-heading that was introduced for more precise tagging of products. At present this system contains 21 sections, 97 chapters and 1,241 headings at the four-digit level, 930 of which are further divided in sub headings. HS-1996 (revision 1) represented a total of 5,113 separate categories of goods identified by a six-digit code. Most of the countries that LL.M. Paper 12

industries, Plastics, rubber and articles thereof and Textiles and textile articles 65. A recent report of Mckinsey indicates that ASEAN is the fourth largest exporting zone in the world. It accounts for 7% of world trade: Vietnam specializes in textiles and apparel, while Singapore and Malaysia are leading exporters of electronics. Thailand has joined the ranks of leading vehicle and automotive-parts exporters. Other ASEAN members have built export industries around natural resources. Indonesia is the world s largest producer and exporter of palm oil, the largest exporter of coal, and the second-largest producer of cocoa and tin. While Myanmar is just beginning to open its economy, it has large reserves of oil, gas, and precious minerals. In addition to exporting manufactured and agricultural products, the Philippines has established a thriving business-process-outsourcing industry. China, a competitor, has become a customer. In fact, it is now the most important export market for Malaysia and Singapore. But demand from the United States, Europe, and Japan continues to propel growth. Export-processing zones, once dominated by China, have been established across ASEAN. The Batam Free Trade Zone (Singapore Indonesia), the Southern Regional Industrial Estate (Thailand), the Tanjung Emas Export Processing Zone (Indonesia), the Port Klang Free Zone (Malaysia), the Thilawa Special Economic Zone (Myanmar), and the Tan Thuan Export Processing Zone (Vietnam) are all expected to propel export growth. 66. In general we could state that ASEAN is standing at a crossroad of world trade flows, hence its growing economic importance. A report of IHS Global Insight 67 estimates that ASEAN may have a 10 trillion dollar economy by 2030, becoming one of the five biggest economies in the world. 4. EU-ASEAN FTA In April 2007 the European Commission got a mandate from the Council to negotiate a Free Trade Agreement with countries of ASEAN. In its communication Global Europe: competing in the world, the European Commission confirmed its commitment to the WTO as being the most effective way to expand world-trade. It also stated that the EU would use the WTO platform to open new opportunities to trade, for example by negotiating comprehensive Free Trade Agreements with carefully chosen parties. have adopted HS have added one or more digits to further classify products of particular national interest (8- digit or 10-didgit level. 65 European Commission, Directorate for Trade (2015) (source IMF) 66 McKinsey report, Southeast Asia is one of the world s fastest-growing markets - and one of the least well known (2016) 67 IHS is a consulting company offering information, analytics and expertise on the global business landscape www.ihs.com LL.M. Paper 13

Negotiations with a regional grouping of 7 ASEAN Member States started in July 2007. The efforts to negotiate a EU-ASEAN FTA failed and in 2009 the EU decided to discuss FTA s on bilateral basis with some ASEAN Member States. In 2010 negotiations with Singapore and Malaysia were launched, in 2012 with Vietnam, and in 2013 with Thailand. Negotiations with The Philippines were formally launched on December 22nd 2015. The FTA with Singapore was completed at the end of 2014. The draft agreement needs to be formally approved by the European Commission and the Council, and to be ratified by the European Parliament 68. The FTA with Vietnam has been initiated by Commissioner De Gucht in June 2012 and on December 2015, the European Commission announced the formal conclusion of the EU- Vietnam FTA. The text is now subject to a legal review and has to be translated into the EU languages. Then it will be presented for the Council and the European Parliament for ratification. The negotiations on the FTA with Malaysia are half-way, but the most difficult issues remain unsolved. There is still a long way to go. The last meeting with Thailand on the EU-Thailand FTA took place in April 2014. Negotiations on tariffs, non-tariffs, services, investment, procurement, IP, competition, regulatory issues and sustainable development have been negotiated. There is currently no next FTA round scheduled. Negotiations for a FTA with The Philippines were launched December 22nd 2015. The first round of negotiations will take place in the first half of 2016. An official working document 69 from the European Commission on EU-ASEAN FTA confirms that the commission continues exploratory informal talks with other individual 68 European Commission, Directorate-General Trade, in July 2015 the Commission initiated proceedings with the ECJ to rule on the competence to sign and ratify the FTA. 69 Official working document on ASEAN FTA negociations status, European Commission, Directorate- General Trade (2016) LL.M. Paper 14

ASEAN members states with a view to assess the level of ambition at bilateral level A regional agreement remains the ultimate objective region-region negotiations has taken place in January 2016 and is expected to continue over a number of meetings. Based on the content of this document one could expect that the 2009 EU-ASEAN FTA frozen region-region negotiations, will re-start in the years to come. LL.M. Paper 15

IV. ASEAN Member States in relation to WTO 1. REGIONAL TRADE AGREEMENTS WITHIN WTO The WTO was established to promote and facilitate free trade across the globe built on the principle of non-discrimination and multilateral trade negotiations 70. WTO was established in Marrakesh on April 14th 1994 (effective January 1st 1995), where 123 nations signed the Marrakesh agreement 71. Most WTO Member States are also involved in RTAs, such as FTAs. Based on article XXIV of the GATT, and under strict conditions described in this article, these RTAs are allowed to foster closer integration between the economies of countries parties to such agreements. The purpose should be to facilitate trade between the constituent territories and not to raise barriers to the trade of other contracting parties with such territories 72. ASEAN has been engaged in negotiating and concluding some FTAs. There is the AFTA 73 itself, binding the 10 ASEAN Member States, the ASEAN-Australia and New Zealand FTA 74 and negotiations on an ASEAN-Hong-Kong, China FTA have been launched 75. At Doha the WTO Member States agreed to negotiate on better procedures concerning the WTO provisions applying to Regional Trade Agreements and to take into account the developmental aspects of certain regions 76. Currently there are worldwide 267 RTAs in force 77. The question of whether these RTAs lead to more global free trade is relevant. According to traditional theory of Adam Smith and David Ricardo we know that global free 70 S. Lester, B. Mercurio, A. Davies, World Trade Law Materials and commentary (2012), Hart Publishing, pp. 635-639 71 Under the WTO framework the GATT text (General Agreement on Tariffs and Trade), signed by 23 nations in Geneva (October 30th 1947, effective January 1st 1948), is still in effect (the original GATT text has been modified by the so-called GATT 94 text). 72 GATT, Art. XXIV, para. 4 73 Supra p. 9 74 In effect since January 1st 2010 75 ASEAN also concluded an ASEAN-India Comprehensive Economic Cooperation Agreement, an ASEAN- Japan Comprehensive Economic Partnership, an ASEAN People s Republic of China Comprehensive Economic Cooperation Agreement and an ASEAN-Korea Comprehensive Economic Cooperation Agreement. ASEAN+6 (Regional Comprehansive Economic Partnership) negotiations have been launched in 2013. 76 Cf. WTO General Council Decision on the Transparency Mechanism for RTAs (2006) 77 RTAs have to be notified to the WTO https://www.wto.org/english/tratop_e/region_e/region_e.htm LL.M. Paper 16

trade is more beneficial to countries than regional free trade 78. However, research suggests that RTAs among like-minded nations produce faster agreements on trade liberalization than the WTO-based multilateral approach. In his article The future of global trade and the WTO 79, Jean-Pierre Cling suggests that the WTO could try to articulate regional agreements and to make them consistent between themselves and with WTO rules (and not as a derogation on WTO rules). 2. OVERVIEW OF ASEAN MEMBER STATES WITHIN WTO There are currently 162 States member of WTO 80. All 10 ASEAN Member States are WTO Member States. ASEAN as such is not a Member State 81. Myanmar has signed the GATT agreement on July 29th 1948 and accessed the WTO on January 1st 1995. With a population of 54 mio the country ranks 64th (exports) and 61st (imports) on the WTO world trade ranking for Merchandise 82 and 74th (exports) and 96th (imports) on the WTO world trade ranking for Commercial services 83. The value of its merchandise exports in 2014 was worth 11.031 mio US dollars (F.O.B) 84, being 0,06 % of total world exports. The main export merchandises by commodity group were Agricultural products (26,5%), Fuels and mining products (43,8%) and Manufactures (29,5%). The main export destinations were Thailand (41,7%), Hong Kong, China (21,1%), India (12,6%), China (6,2%) and Singapore (3,6%). The value of its merchandise imports in 2014 was worth 16.226 mio US dollars (C.I.F) 85, being 0,08% of total world imports. The main import merchandises by commodity Group were Agricultural products (5,1%), Fuels and mining products (17,3%) and Manufactures (67,9%). The main countries of origin for the imports of Myanmar are China (27,1%), Singapore (27%), Thailand (11,4%), Republic of Korea (6,1%) and Japan (5,3%) 86. 78 Jose L. Tongzon, Free Trade Agreements: WTO and ASEAN Implications (2004), The Copenhagen Journal of Asian Studies, vol. 20, pp. 98-110 79 Jean-Pierre Cling, The future of global trade and the WTO (2014), Emerald Group Publishing Limited, vol. 16, No. 2, pp. 109-125 80 Source online: www.wto.org 81 The European Union is a Member State of the WTO; ASEAN is not. 82 Source: online stat.wto.org. (2014) excluding intra-eu trade 83 Ibid. 84 Free On Board (F.O.B) 85 Cost, Insurance and Freight (C.I.F) 86 Source: online stat.wto.org. (2014) LL.M. Paper 17

Indonesia has signed the GATT agreement on February 24th 1950 and accessed the WTO on January 1st 1995. With a population of 253 mio the country ranks 20th (exports) and 20th (imports) on the WTO world ranking for Merchandise 87 and 22nd (exports) and 20th (imports) on the WTO world trade ranking for Commercial services 88. The value of its merchandise exports in 2014 was worth 176.293 mio US dollars (F.O.B), being 0,93 % of total world exports. The main export merchandises by commodity group were Agricultural products (25%), Fuels and mining products (33,9%) and Manufactures (40,2%). The main export destinations were Japan (13,1%), China (10%), European Union (9,6%), Singapore (9,5%) and United States (9,4%). The value of its merchandise imports in 2014 was worth 178.179 mio US dollars (C.I.F), being 0,93% of total world imports. The main import merchandises by commodity Group were Agricultural products (12,5%), Fuels and mining products (27,9%) and Manufactures (58,8%). The main countries of origin for the imports of Indonesia are China (17,2%), Singapore (14,1%), Japan (9,6%), European Union (7,1%) and Republic of Korea (6,7%) 89. Malaysia has signed the GATT agreement on October 24th 1957 and accessed the WTO on January 1st 1995. With a population of 30 mio the country ranks 17th (exports) and 19th (imports) on the WTO world ranking for Merchandise 90 and 18th (exports) and 19th (imports) on the WTO world trade ranking for Commercial services 91. The value of its merchandise exports in 2014 was worth 234.139 mio US dollars (F.O.B), being 1,23% of total world exports. The main export merchandises by commodity group were Agricultural products (12,9%), Fuels and mining products (25%) and Manufactures (61,6%). The main export destinations were Singapore (14,2%), China (12,1%), Japan (10,8%), European Union (9,5%) and United States (8,4%). The value of its merchandise imports in 2014 was worth 208.864 mio US dollars (C.I.F), being 1,09% of total world imports. The main import merchandises by commodity Group were Agricultural products (9,7%), Fuels and mining products (22,5%) and Manufactures (65,8%). The main countries of origin for the imports of Malaysia 87 Ibid. 77 88 Ibid. 89 Ibid. 81 90 Supra 77 91 Ibid. LL.M. Paper 18

are China (16,9%), Singapore (12,5%), European Union (10,4%), Japan (8,0%) and United States (7,7%) 92. Singapore has signed the GATT agreement on August 20th 1973 and accessed the WTO on January 1st 1995. With a population of 5.5 mio the country ranks 9th (exports) and 10th (imports) on the WTO world ranking for Merchandise 93 and 6th (exports) and 6th (imports) on the WTO world trade ranking for Commercial services 94. The value of its merchandise exports in 2014 was worth 409.769 mio US dollars (F.O.B), being 2,16% of total world exports. The main export merchandises by commodity group were Agricultural products (2,9%), Fuels and mining products (17,9%) and Manufactures (70,9%). The main export destinations were China (12,6%), Malaysia (12,0%), Hong Kong, China (11,0%), Indonesia (9,4%) and the European Union (8,0%). The value of its merchandise imports in 2014 was worth 366.247 mio US dollars (C.I.F), being 1,92% of total world imports. The main import merchandises by commodity Group were Agricultural products (4,0%), Fuels and mining products (32,8%) and Manufactures (61,3%). The main countries of origin for the imports of Singapore are China (12,1%), European Union (12,0%), Malaysia (10,7%), United States (10,4%) and Chinese Taipei (8,2%) 95. The Philippines have signed the GATT agreement on December 27th 1979 and accessed the WTO on January 1st 1995. With a population of 100 mio the country ranks 37th (exports) and 27th (imports) on the WTO world ranking for Merchandise 96 and 21st (exports) and 28th (imports) on the WTO world trade ranking for Commercial services 97. The value of its merchandise exports in 2014 was worth 62.100 mio US dollars (F.O.B), being 0,33% of total world exports. The main export merchandises by commodity group were Agricultural products (11,2%), Fuels and mining products (9,5%) and Manufactures (78,3%). The main export destinations were Japan (22,5%), United States (14,1%), China (13,0%), European Union (10,9%) and Hong Kong, China (9,0%). The value of its merchandise imports in 2014 was worth 67.546 mio US dollars (C.I.F), being 0,35% of total world 92 Supra 81 93 Ibid. 85 94 Ibid. 95 Ibid. 87 96 Ibid. 85 97 Ibid. LL.M. Paper 19

imports. The main import merchandises by commodity Group were Agricultural products (12,8%), Fuels and mining products (21,8%) and Manufactures (65,0%). The main countries of origin for the imports of The Philippines are China (15,2%), the European Union (11,6%), United States (8,9%), Japan (8,2%) and Republic of Korea (7,7%) 98. Thailand has signed the GATT agreement on November 20th 1982 and accessed the WTO on January 1st 1995. With a population of 67 mio the country ranks 18th (exports) and 18th (imports) on the WTO world ranking for Merchandise 99 and 13th (exports) and 17th (imports) on the WTO world trade ranking for Commercial services 100. The value of its merchandise exports in 2014 was worth 227.574 mio US dollars (F.O.B), being 1,20% of total world exports. The main export merchandises by commodity group were Agricultural products (17,5%), Fuels and mining products (6,6%) and Manufactures (74,7%). The main export destinations were China (11,0%), United States (10,5%), European Union (10,3%), Japan (9,6%) and Malaysia (5,6%). The value of its merchandise imports in 2014 was worth 227.952 mio US dollars (C.I.F), being 1,19% of total world imports. The main import merchandises by commodity Group were Agricultural products (7,1%), Fuels and mining products (24,8%) and Manufactures (65,1%). The main countries of origin for the imports of Thailand are China (16,9%), Japan (15,7%), European Union (8,5%), United States (6,4%) and Malaysia (5,6%) 101. Brunei Darussalam has signed the GATT agreement on December 9th 1993 and accessed the WTO on January 1st 1995. With a population of 423 thousands the country ranks 67th (exports) and 113th (imports) on the WTO world ranking for Merchandise 102 and 120th (exports) and 87th (imports) on the WTO world trade ranking for Commercial services 103. The value of its merchandise exports in 2014 was worth 10.509 mio US dollars (F.O.B), being 0,06% of total world exports. The main export merchandises by commodity group were Agricultural products (0,4%), Fuels and mining products (92,6%) and Manufactures (6,8%). The main export destinations were Japan (37,2%), Republic of Korea 98 Supra 81 99 Supra 77 100 Ibid. 101 Ibid. 93 102 Ibid. 94 103 Ibid. LL.M. Paper 20

(11,0%), India (9,1%), Australia (7,6%) and Indonesia (6,1%). The value of its merchandise imports in 2014 was worth 3.599 mio US dollars (C.I.F), being 0,02% of total world imports. The main import merchandises by commodity Group were Agricultural products (15,6%), Fuels and mining products (11,4%) and Manufactures (72,5%). The main countries of origin for the imports of Brunei Darussalam are Malaysia (20,6%), Singapore (20,4%), European Union (11,5%), China (9,9%) and United States (9,0%) 104. Cambodia has accessed the WTO on October 13th 2004. With a population of 15 mio the country ranks 66th (exports) and 65th (imports) on the WTO world ranking for Merchandise 105 and 54th (exports) and 88th (imports) on the WTO world trade ranking for Commercial services 106. The value of its merchandise exports in 2014 was worth 10.800 mio US dollars (F.O.B), being 0,06% of total world exports. The main export merchandises by commodity group were Agricultural products (7,0%), Fuels and mining products (0,2%) and Manufactures (92,8%). The main export destinations were European Union (27,2%), United States (23,5%), Hong Kong, China (17,2%), Singapore (8,6%) and Canada (5,2%). The value of its merchandise imports in 2014 was worth 13.500 mio US dollars (C.I.F), being 0,07% of total world imports. The main import merchandises by commodity Group were Agricultural products (5,0%), Fuels and mining products (8,7%) and Manufactures (57,6%). The main countries of origin for the imports of Cambodia are China (32,6%), United States (12,2%), Thailand (11,9%), Vietnam (10,7%) and Hong Kong, China (7,2%) 107. Vietnam has accessed the WTO on January 11th 2007. With a population of 90 mio the country ranks 22nd (exports) and 22nd (imports) on the WTO world ranking for Merchandise 108 and 36th (exports) and 36th (imports) on the WTO world trade ranking for Commercial services 109. The value of its merchandise exports in 2014 was worth 150.475 mio US dollars (F.O.B), being 0,79% of total world exports. The main export merchandises by commodity group were Agricultural products (17,6%), Fuels and mining products (8,0%) and Manufactures (73,9%). The main export destinations were European Union (18,4%), 104 Ibid. 93 105 Supra 77 106 Ibid. 107 Supra 81 108 Ibid. 100 109 Ibid. LL.M. Paper 21

United States (18,1%), Japan (10,3%), China (10,0%) and Republic of Korea (5,1%). The value of its merchandise imports in 2014 was worth 149.261 mio US dollars (C.I.F), being 0,78% of total world imports. The main import merchandises by commodity Group were Agricultural products (11,5%), Fuels and mining products (11,4%) and Manufactures (76,5%). The main countries of origin for the imports of Vietnam are China (27,9%), Republic of Korea (15,7%), Japan (8,8%), European Union (7,1%) and Chinese Taipei (7,1%) 110. Laos has accessed the WTO on February 2nd 2013. With a population of 7 mio the country ranks 101st (exports) and 115th (imports) on the WTO world ranking for Merchandise 111 and 110th (exports) and 126th (imports) on the WTO world trade ranking for Commercial services 112. The value of its merchandise exports in 2014 was worth 2.650 mio US dollars (F.O.B), being 0,01% of total world exports. The details on trade repartition and main export and import countries are not yet available on the website of the WTO. The world trade data (2014) of the ASEAN Member States show that export to the European Union is important for Cambodia (27,2% of its total export), Vietnam (18,4% of its total export), The Philippines (10,9% of its total export), Thailand (10,3% of its total export), Indonesia (9,6% of its total export), Malaysia (9,5% of its total export) and Singapore (8,0% of its total export). Import of European products into ASEAN is important for Singapore (12% of its total import), The Philippines (11,6% of its total import), Brunei Darussalem (11,5% of its total import), Malaysia (10,4% of its total import), Thailand (8,5% of its total import), Indonesia (7,1% of its total import) and Vietnam (7,1% of its total import). 110 Ibid. 102 111 Ibid. 100 112 Ibid. LL.M. Paper 22

V. ANALYSIS OF THE EU-ASEAN JURISPRUDENCE UNDER THE WTO DISPUTE SETTLEMENT SYSTEM 1. INTRODUCTION For the period 1995 2015, I could identify 9 relevant trade dispute cases between the EU and an ASEAN Member State 113 : The Philippines (1 case), Thailand (5 cases) and Indonesia (3 cases). Singapore, Malaysia, Brunei Darussalam, Myanmar, Laos, Cambodia and Vietnam have not brought any trade dispute cases with the EU to the DSB of WTO. As tables 2 and 3 indicate, Myanmar, Laos, Cambodia and Brunei Darussalam have so far not brought any trade dispute case on any WTO Member to the DSB of WTO. Singapore has only brought one request for consultation (no panel or Appellate Body report); Malaysia has been involved in 2 trade disputes (2 reports) and Vietnam in 3 trade disputes (2 reports). So far, The Philippines (11 trade disputes with 4 reports), Thailand (16 trade disputes with 8 reports) and Indonesia (23 trade disputes with 8 reports) are the three ASEAN countries having initiated the most trade disputes at the DSB of WTO 114. EU-ASEAN EU-ASEAN Total DSU consultation Total DSU cases reports requests reports Philippines 1 1 11 4 Thailand 5 2 16 8 Indonesia 3 1 23 8 Singapore 0 0 1 0 Malaysia 0 0 2 2 Brunei Darussalam 0 0 0 0 Myanmar 0 0 0 0 Laos 0 0 0 0 Cambodia 0 0 0 0 Vietnam 0 0 3 2 total 9 4 56 24 Table 2: ASEAN Trade Disputes and consultation requests 113 I will not analyse case DS481 Indonesia Recourse to article 22.2 of the DSU in the US Clove cigarettes dispute. This case deals with the EU claiming third party rights in a settled case between The US and Indonesia. 114 https://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm LL.M. Paper 23

90 80 70 60 50 40 30 20 10 0 Total DSU reports Total DSU requests for consultation EU-ASEAN cases Table 3: Total ASEAN Trade Disputes and consultation requests compared to EU-ASEAN Trade Disputes I will classify the trade disputes at WTO level between the EU and an ASEAN Member State by country and within that country by date, to start with the earliest cases. 2. TRADE DISPUTES 2.1 The Philippines 2.1.1 The Philippines Taxes on Distilled Spirits (DS396, 403) The Philippines Taxes on Distilled Spirits case (DS396) 115 was a dispute between EU (complainant) and The Philippines (respondent) on an excise tax on distilled spirits levied by the Philippine tax authority on distilled spirits depending on the raw material used to make the spirit. Spirits made from non-designated materials were caught by a higher tax rate than spirits made from certain designated raw materials. All distilled spirits (gins, rums, vodkas, whiskies and tequila-type) produced in The Philippines were made from one of the designated materials (cane sugar), and the most imported spirits were made from non-designated 115 https://www.wto.org/english/tratop_e/dispu_e/cases_e/1pagesum_e/ds396sum_e.pdf LL.M. Paper 24