Description of the proposed research

State’s Obligation in Transforming World Trade Organization Law into National Law: Indonesian Case

International trade has brought states into closer relation with each other, as technology become more intimate, the range of interest springing from the relationship between states grew in size of complexity. In some regulation of these complex international activities every state had direct interest which rose superior to considerations of national autonomy and independence.

The establishment of the World Trade Organization (WTO) was agreed at a conference in Marrakesh, by 125 countries on 15 April 1994, which concluded the tough negotiation in Uruguay Round of General Agreement on Tariff and Trade (GATT). The negotiations after more than seven years of hard bargaining finally replaced the GATT with the WTO. The Agreement Establishing the WTO had come into force from 1 January 1995 with the support of 85 founding members including Indonesia. Indonesia has become member of the WTO and is considered as the original member under Article XI: 1 of the agreement establishing the WTO. Through Act No. 7 Year 1994 on Ratification Agreement Establishing the World Trade Organization, which bound Indonesia as member of WTO.

Become a member state of WTO has effects in development of Indonesia’s economic and trade, such in domestic market, exports and imports of goods, and the elevation in standard of living. However, the accession as WTO members state potentially raised the issues in legal challenges to take comprehensive advantages in international trade. Article XVI: 4 of the Agreement Establishing WTO, stated that:
“Each Member shall ensure the conformity of its laws, regulations and administrative procedures with its obligations as provided in the annexed Agreements.”

Article XVI: 5 provide that:

“No reservations may be made in respect of any provision of this Agreement. Reservations in respect of any of the provisions of the Multilateral Trade Agreements may only be made to the extent provided for in those Agreements. Reservations in respect of a provision of a Plurilateral Trade Agreement shall be governed by the provisions of that Agreement.”

Although waiver of obligation is possible under article IX: 3 of the WTO Agreement, under ‘exceptional circumstances clause, it is only to postpone the obligations of the state in temporary manner. After the certain time the state should conform its domestic law and regulation to all WTO agreements.

WTO Agreement with all annexes should be considered as treaty that creating legal obligation under international law. This means that WTO Agreement categorized as ‘law-making’ treaty, which lay down rules of universal or general application. Although a ‘law making treaty cannot in the nature of things be one containing rules of international law always of universal application. We should admit that ‘law-making’ treaty might be of two kinds:
a. enunciating rules of universal international law;
b. laying down general or fairly general rules.

The ‘law-making’ treaty is universal or general, it may be really a ‘framework Convention’, imposing duties to enact legislation or offering areas of choice, within the ambit of which state are to apply the principles laid down therein.

Other categorization of treaty is ‘treaty contract’ is treaty between two or few states, dealing with a special matter concerning these state parties exclusively. According to Starke’s, in contrast to ‘law-making’ treaty, ‘treaty contract’ are not directly a source of international law. They only constitute particular law, which bound the parties or signatories of the treaty, such as bilateral agreement.

Although some scholars think that the categorization of international treaties is not very important issues, however it is necessary to determine state obligations in order to transform an international treaty into national laws and regulations. Under an international law which categorized as ‘law-making‘ treaty a state has obligation to transform into national legislation, the reason this kind of treaty needs to be transform because of it has potential to contradict or even as new law or institutions under national law. However, the obligation remained under international treaties. Therefore, the state must and necessary to transform the international treaties into national law in order to bind the citizen or to establish an institution which required under the international treaty. A state’s obligation under an international treaty will remain with or without a state transform its obligation into its national law.

For developing countries like Indonesia, such conformity is not always an easy task. Indonesia’s participation in international ‘law-making’ treaty, gives obligation to transform international treaty into national law. However, there are debates on this issue. First, whether transformation of international into national law is necessary by the state party. Second, whether ratification through state’s legislation is sufficient to bound citizens of state. Third, whether transformation by Indonesia in anti-dumping, intellectual properties rights, and other issues, such as schedule of commitment and Free Trade Agreements is sufficient for carry out its obligation under international treaty.

There are two perspectives on whether international treaty, such as WTO Agreements should be treated in Indonesian law. First, people who views on that it is unnecessary to transform international treaty into national law. Those people base their opinions on Mochtar Kusumaatmadja. Kusumaatmadja on his book ‘Pengantar Hukum Internasinal (Introduction on International law)’ stated that Indonesia is directly bound to international treaty which its ratified or accessed without transformation process. He stated that transformation is not necessary because Indonesia like any other European Continental system directly bound by international treaty immediately after ratification of treaty. Therefore, Indonesia does not need any implementing legislation to legalize the treaty.

The rationale behind this opinion is that Indonesia accepts monism theory because in practice Indonesia still disregards to carry out its obligation into national law. However, Kusumaatmadja stated that enacted legislation is absolutely necessary if there is modification of legislations, which the rights of citizen directly effected. Although, Kusumaatmadja acknowledged that Indonesia has obligation to transform the treaty, nevertheless Indonesia still has troubles to do so, hence transformation into national law is not required.

However, this rational cannot be used as an excuse for Indonesia incapability to transform a treaty into national laws. At least, three reasons why this rational cannot be used. First, an international treaty only binds states or international organizations as subjects of international laws. Therefore, the subject of private law, criminal law, constitutional law and administrative law are not bound by international treaties this include state institutions and citizens of the state.

Second, it is unusual for people to bring claim in the national court by using international treaties as basis of their claim. In Indonesia, there are no claims or prosecutions that base on an international treaty. Third, there are obligations under international treaty for state parties to conform their national laws. Even there is also mechanism to ensure the conformity of states in transforming their obligations into national law, such as Trade Policy Review Mechanism.

In Indonesia, there are sources of national law, which provide under Law No. 10 Year 2004 on establishment of Laws and Regulations Article 7 (1), stated that the hierarchy of Indonesia national law and regulation are (1) Constitution 1945; (2) Acts; (3) Government Regulations; (4) Presidential Decrees and (5) Municipal Regulation. Under Law No. 10 Year 2004, international treaties or laws are not mentioned as sources of law in Indonesia. Therefore, international treaties that already ratified by Indonesia cannot directly apply in Indonesia.

There are people who argues Indonesian ratification of international treaties should be directly bind Indonesia on international obligation, because ratification on international treaties are based on Laws or Presidential Decrees. However I have to object on this view. The rational behind my objection are first, a legislation that ratified international treaty is approval of the authority of the state (a parliament or a president) to be bound by international treaty. The legislation on the ratification usually oblige by international treaties or by national laws and legislations. These laws cannot be basis for the implementation of an international treaty in national milieu. The provision on the ratification legislation only has two articles. First article provides that ratification on an international treaty. Second article provides the when the Law entry into force.

Numerous international treaties that have been ratified by Indonesia are inconsistence with Indonesian laws, hence the national laws need to be amended or changed to conform to international treaties. There are also rules of international treaties, which cannot be found in national law although the treaties are already ratified by Indonesia. Therefore it is necessary to create the law in national level. Consequently, amendment and creation of new law are necessary in order to international obligations can bind state’s institutions, officials and citizens.

Lawrence M Friedman in American Law. London: WW Norton and Company. (1984)., stated that to make national law apply needs: the structure of a legal system consists of elements of this kind: the number and size of courts, their jurisdiction, and modes of appeal from one court to another, how the legislature is organized, what procedures the police departement follows, and so on; substance, by this meant the actual rules, norms, and behavior patterns of people inside the system; legal culture, by this we mean people’s attitudes toward law and legal system, their beliefs, values, ideas, and expectations

The cases study that would analyze on this research are Anti-dumping rules in Indonesia; Trade Related aspects on Intellectual Property Rights; Schedule of Commitment; and Free Trade Agreements.


Approach/methodology

In order to pursue this research, first I have to find out all primary sources of data that is related to how WTO Agreement and all annex that all ready regulated under Indonesian Law. The Indonesian Law that I will collect such as Acts on Intellectual Property Rights, Government Regulations on Anti-dumping, Presidential Decree, Ministerial Decrees regarding the implementation of Schedule of Commitments and implementation on Free Trade Agreement in Indonesia.


Literature references

1. Aust, Anthony, Modern Treaty Law and Practice, Cambrige University Press, London, 1999.
2. Brownlie, Ian, Principles of Public International Law, 5th edition, Oxford University Press, Oxford, 1998.
3. Cassesse, Atonio, International Law, Oxford University Press, New York, 2002
4. Friedmann, Wolfgang, The Changing Structure of International Law, Valkis, Feffer & Simon Private, Ltd., Bombay, 1964.
5. Friedman, Lawrence. M, American Law. London: WW Norton and Company. 1984
6. Jackson, John H, William J. Davey, and Allan O. Sykes, Jr., Legal Problems of International Economic Relations, 4th ed., West Group, US, 2002
7. Kusumaatmadja, Mochtar and Etty R Agus, Pengantar Hukum International, Pt Alumni, Bandung, 2003
8. Maria Farida Indrati Suprapto, Ilmu Perundang-undangan, Kanisius.
9. Shearer, IA, Starke’s International Law, 11th Edition, Butherworhts, Singapore, 1994.
10. Van den Bossche, Peter, The Law and Policy of the World Trade Organization, Cambrige University Press, UK, 2007
11. Wallace, Rebeca, International Law, 2nd edition, Sweet&Maxwell, London, 1992.
12. Juwana, Hikmahanto, Hukum Ekonomi Dan Hukum Internasional: Bunga Rampai, Lentera Hati, Jakarta, 2002
13. Seidl-Hohenvelde, Ignaz, Transformation Or Adoption Of International Law Into Municipal Law, The International And Comparative Law Quarterly, Vol. 12, No. 1 (Jan., 1963), Pp. 88- 124 Published By: Cambridge University Press On Behalf Of The British Institute Of International And Comparative Law
14. Azam, Mohammad Monirul, Establishment Of The Wto And Challenges For The Legal System Of Bangladesh,
15. Sands, Philippe Turtles And Torturers: Thetransformation Of International Law, Inaugural Public Lecture as Professor of Public International Law, University of London, June 6, 2000.
16. Hongju Koh, Harold, Is International Law Really State Law?, Harvard Law Review, Vol. 111, No. 7 (May, 1998)



Scientific relevance/innovation

This research should give benefit in theory and practice, on how developing countries, Indonesia in this case, transform its obligation under WTO law into its national law in order to make international trade work. This research also will give awareness that transformation of treaty into national law is not as easy task for developing countries because of obstacles that this countries faces in its legal system.

There is small comparative research concerning the impact of international trade law on the legal systems of various States. The theories, which explain the impact of international trade law usually, base on monism and dualism theories. However, in practice every states have different obstacles in implementing international law obligation, because they face constitutional issues, political issues, cultural issues, social issues, which sometimes being disregard as issues in transforming the treaty into national law. This would be the focus on this research.


Societal relevance

This research hopefully can give contribution for development of international law especially on how international treaty should be transform in national law. This research also has relevance for Indonesia on how to carry out its obligation under WTO Law and how to have benefit in international trade. Therefore other developing countries could learn from the Indonesia experience in transforming the law.