RESTRICTED
WORLD TRADE WT/DS1/2
17March 1995
ORGANIZATION(95-0587)
DISPUTE SETTLEMENT BODY Original: English
29March 1995
MALAYSIA -PROHIBITION OFIMPORTS OF
POLYETHYLENE AND POLYPROPYLENE
Request bySingapore forEstablishment ofPanel under
Article XXIII:2 oftheGATT 1994 andtheUnderstanding
onRules andProcedures Governing theSettlement ofDisputes
Thefollowing communication, dated 16March 1995, sentbythePermanent Representative
ofSingapore totheChairman oftheDispute Settlement Body (DSB), iscirculated totheDSBMembers
withtherequest thatthematter beinscribed ontheAgenda oftheDSBmeeting scheduled for29March
1995.
_______________
On10January 1995 theGovernment ofSingapore requested theGovernment ofMalaysia to
enter intoconsultations pursuant toArticle XXIII:1 ofthe1994 General Agreement onTariffs and
Trade (GATT) andArticle 4.3oftheUnderstanding onRules andProcedures Governing theSettlement
ofDisputes (DSU) regarding theprohibition ofimports ofpolyethylene (HS3901.10.000 and
3901.20.000) ("PE") andpolypropylene (HS3902.10.300 and3902.30.000) ("PP") instituted and
maintained bytheMalaysian Government under theCustoms (Prohibition ofImports) (Amendment)
(No5)Order 1994 dated 16March 1994andwhich came intoforce on7April 1994. Acopyofthis
letter wassenttotheWTO fornotification totheDispute Settlement Body (DSB) inaccordance with
Article 4.4oftheDSU (seedocument WT/DS1/1).
SingaporerequestedconsultationsunderArticleXXIII:1becauseitsbenefitsundertheAgreement
arebeing nullified andimpaired asaresult oftheinstitution andmaintenance oftheimport prohibitions
on"PE" and"PP"inviolation ofMalaysia 'sobligations under, interalia:(i)Article XIoftheGATT;
(ii)Article XoftheGATT; (iii)Article 3oftheAgreement onImport Licensing Procedures; and
(iv)thenotification requirements under paragraph 3ofthe1979Understanding Regarding Notification,
Consultation, Dispute Settlement andSurveillance (L/4907). Asaresult ofthesemeasures, Singapore 's
exports of"PE" and"PP" toMalaysia havebeen significantly reduced anditsbenefits under the
Agreement havebeennullified andimpaired.
Malaysia filedadocument dated 30January 1995notifying theWTO ofitsApril 1994import
restrictions on"PE" and"PP", purportedly under theprovisions ofArticle XVIII:C andthe1979
Decision onSafeguard Action forDevelopment Purposes inviolation ofSingapore 'srights under those
provisions. Inrespect oftheimport prohibitions thathavebeeninplace tenmonths prior totheir
notification, Malaysia isnotentitled toinvoke Article XVIII:C, because Article XVIII:C requires (1)
prior notification of"thespecial difficulties ...intheachievement oftheobjective outlined in
paragraph 13ofthisArticle and...thespecific measure affecting imports which itproposes tointroduce
toremedy thesedifficulties" (Article XVIII:14); (2)priorconsultations pursuant toArticle XVIII:15,
toArticle XVIII:18 and(3)prior concurrence bytheCONTRACTING PARTIES totheextent
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Page2
Malaysia 'stariff bindings on"PE" and"PP" areaffected (Article XVIII:18). Asnoneofthese three
procedural andsubstantive conditions hasbeenmetbyMalaysia, Article XVIII:C remains inapplicable.
The1979 Decision onSafeguard Action forDevelopment Purposes islikewise onlyapplicable "after
notification" of"unusual circumstances". Apart fromtheabsence ofsuchanotification andofsuch
"unusual circumstances", theDecision explicitly states thatitcanjustify onlyprovisional deviations
from Article XVIII:C.
Singapore hasheldconsultations withMalaysia on13-15 February 1995 andon8-9March
1995 withaview toreaching amutually satisfactory resolution ofthematter. Unfortunately the
consultations havefailed tosettle thedispute within 60daysafterthedateofthereceipt oftherequest
forconsultations. TheGovernment ofSingapore hereby requests theestablishment ofaPanel forthwith
pursuant toArticle XXIII:2 oftheGATT andArticles 4.7and6oftheDSU uponthestandard terms
ofreference asprovided inArticle 7.1oftheDSU. Singapore requests thatthePanel consider and
findthat:
(a) theMalaysian import prohibitions on"PE" and"PP" areinconsistent withArticle XI
oftheGATT andnotjustified under Article XVIII:C andarealsoinconsistent with
the1994 Agreement onImport Licensing Procedures; and
(b) Malaysia hadfailed tocomply withthenotification requirements under paragraph 3
ofthe1979Understanding Regarding Notification, Consultation, Dispute Settlement
andSurveillance (L/4907).
Inthelightofthelimited information available toSingapore ontheadministration oftheimport
prohibitions, Singapore reserves theright toraiseadditional legal arguments before thePanel, ifit
should emerge thattheimport prohibitions arealsoinconsistent withGATT Article II,III,XandXIII.
TheGovernmentofSingaporesubmitsthisrequestfortheestablishmentofaPanelforinscription
ontheagenda ofthenextmeeting oftheDispute Settlement Body (DSB) on29March 1995.
Singapore requests thatthiscommunication becirculated toallmembers oftheDSB.