8:54 AM Feb 3, 1995

WTO DISPUTE SETTLEMENT BODY TO MEET FRIDAY

Geneva 3 Feb (TWN) -- The Dispute Settlement Body (DSB) of the World Trade Organization will hold its first meeting on 10 February, GATT officials said here.

The DSB is mandated to run and administer the WT0's Dispute Settlement Understanding - the integrated dispute settlement mechanism of the WTO covering all its agreements.

At the first meeting, besides settling its rules and procedures etc, the DSB will be seized of the first dispute being brought before it: a complaint by Singapore against Malaysian import regime and licensing requirements on imports of two petrochemical products -- polypropylene and polyethylene.

Singapore has asked for Article XXIII consultations with Malaysia on this. Such consultations are the first step before calling for a panel.

Under the DSU rules, unless otherwise mutually agreed, consultations have to be held within 10 days of request and, if no satisfactory solution is found within 60 days, the party concerned may seek, and can automatically get the establishment of a panel.

Singapore has contended that Malaysia's import licensing requirements are effectively a regime for quantitative import restrictions and thus contrary to GATT and Singapore rights under it.

Malaysian officials say that the action is a temporary one, aimed at giving needed protection for a nascent industry being established, and thus justified in terms of Art XVIII:C of the General Agreement. Recourse to Art. XVIII:C on the part of a developing country is allowed, subject to an elaborate procedure for notification and consultations, when sought, with contracting parties whose interests may be affected, and for providing them with compensation through concessions elsewhere.

GATT officials could not say offhand whether any notification has been received from Malaysia.

Malaysian officials say that several of the Asean countries apart from Malaysia (including Thailand and Indonesia) are now beginning to undertake downstream activities based on their own petroleum and gas reserves and that this is the real problem facing Singapore which has industrial plants that import such raw material and process and export downstream products.