DS: Philippines — Measures Affecting Trade and Investment in the Motor Vehicle Sector

This summary has been prepared by the Secretariat under its own responsibility. The summary is for general information only and is not intended to affect the rights and obligations of Members.


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Summary of the dispute to date

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Complaint by the United States.

On 23 May 2000, the US requested consultations with the Philippines in respect of certain measures in the Philippines’ Motor Vehicle Development Program (“MVDP”), including the Car Development Program, the Commercial Vehicle Development Program, and the Motorcycle Development Program. The United States asserted that:

  • the MVDP provided that motor vehicle manufacturers located in the Philippines who meet certain requirements are entitled to import parts, components and finished vehicles at a preferential tariff rate;
  • foreign manufacturers’ import licenses for parts, components and finished vehicles are conditioned on compliance with these requirements. Among the requirements referred to by the United States are the requirement that manufacturers use parts and components produced in the Philippines and that they earn a percentage of the foreign exchange needed to import those parts and components by exporting finished vehicles; and
  • The United States considered that these measures are inconsistent with the obligations of the Philippines under Articles III:4, III:5 and XI:1 of the GATT 1994, Articles 2.1 and 2.2 of the TRIMS Agreement, and Article 3.1(b) of the SCM Agreement.

On 12 October 2000, the US requested the establishment of a panel. At its meeting on 23 October 2000, the DSB deferred the establishment of a panel.


Panel and Appellate Body proceedings

Further to a second request to establish a panel by the US, the DSB established a panel at its meeting of 17 November 2000. India and Japan reserved their third party rights. This panel has not yet been composed.


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