The country is set to issue a statement on Thailand’s import restrictions on tobacco products before the Dispute Settlement Body (DSB) of the World Trade Organization (WTO) later this month.
Earlier, the WTO Secretariat circulated a meeting notice which included the Philippine-Thailand dispute on cigarette importation in the proposed agenda for the meeting of the DSB scheduled on August 29.
The dispute arose when the country filed in 2006 a complaint before the WTO protesting Thailand’s alleged violation of the 1994 General Agreement on Tariffs and Trade (GATT).
In its complaint, the Philippines cited that Thailand imposed higher tax duties on imported tobacco products which gave pricing advantages, among others, to domestic cigarettes. The country pointed out that Thailand’s policy put Philippine tobacco products at a disadvantage and underlined that the higher duties impaired free trade.
In addition, the country raised before the WTO other qualms against Thailand involving its customs valuation practices, excise tax, health tax, TV tax, value-added tax regime, retail licensing requirements, and import guarantees. The Philippines complained that Thailand administered the cited measures in “a partial and unreasonable manner.”
The DSB earlier resolved the complaint in favor of the Philippines, resulting in the issuance of a ruling containing recommendations to Thailand in June 2011.
However, the dispute was revived after the Philippines disagreed with a July 18 statement of Thailand that it has fully complied with the recommendations of the DSB.
Because of this, a WTO official said the Philippines, at any time, could ask for the organization’s approval to impose sanctions against Thailand regarding the dispute.
“The Philippines can appeal for retaliation anytime at the WTO,” the official said.
If approved by the WTO, the Philippines’ application for retaliation against Thailand could enable it to impose higher duties on a Thai product to compensate for the losses incurred in the supposedly unfair trade in tobacco products, according to the WTO official.
To recall, Thailand in August 2011 informed the WTO that it intends to comply with the issued recommendations of the DSB regarding this issue.
Subsequently, in September 2011, the Philippines and Thailand mutually agreed on a “reasonable period of time” to comply with the ruling. The period given expired in 2012.
In January 2013, Thailand told the WTO that “it had completed the final outstanding steps in its implementation process.”
However, in February 2013, the Philippines told the WTO that Thailand did not fully implement the cited recommendations and failed to report any progress on the resolution of the dispute.
The DSB is comprised of all WTO members and oversees legal disputes among them.