"Wait, what?", you might be saying. "I thought Indonesia was complaining about the U.S. clove cigarettes measure. Why is the EU complaining against Indonesia now?" The full consultations request is not public yet, but here is the WTO news release:
The EU considers that Indonesia has acted inconsistently with the procedures of the Dispute Settlement Body (DSB) in unilaterally requesting “sanctions” against the US (for failing to comply with the recommendations and rulings of the DSB in the dispute) without requesting a “compliance panel” to consider whether the measures taken by the US were in compliance with what was recommended by the DSB.
The EU also complains that Indonesia rejected the participation of the EU, as a third party, at the compliance/arbitration panel procedures, preventing the interests of the EU from being taken into account.
Both issues, the “sequencing” problem (the possibility of applying sanctions without waiting for the results of a compliance panel) and the participation of third parties at compliance/arbitration procedures, have been a subject of systemic concern by WTO members for a long time and are part of the current negotiations to improve the Dispute Settlement Understanding.
There was disagreement between the United States and Indonesia over compliance, and the matter was referred to arbitration. Indonesia requested “sanctions” against the US for US$ 50.5 million to which the US objected. It was not possible to reach a “sequencing” agreement between both parties and Indonesia claimed it was not necessary to request a “compliance” panel because the US had taken “no action”.
In a nutshell, the core EU claim is that Indonesia violated the DSU by suspending concessions under Article 22 without first going through the Article 21.5 compliance process. That systemic issue has been around for a while. The third party participation claim is, I believe, a new one.
