PHL Talks with Thailand to Continue despite Disappointment over Cigarette Taxes

Source from:  GMA News  07/30/2013

Despite the Philippines' disappointment with Thailand over the latter's lack of transparency  on its compliance with a World Trade Organization's (WTO) ruling on cigarette taxation, the Trade department said it was still open to continued bilateral discussions.

"While Thailand has made strides in implementing a number of measures, full compliance that adheres to WTO rules is yet to be realized. The bilateral engagements hoped to achieve this and it is, therefore, a disappointment for the Philippines that the information committed during the bilateral meetings has yet to be completely provided," said Trade Assistant Secretary Ceferino S. Rodolfo in a statement.

Bilateral meetings between the Philippines and Thailand have been ongoing since May.

The dispute stemmed from a 2006 complaint filed by the Philippine government on behalf of Philip Morris Philippines Manufacturing, Inc. that the Thai government was biased against imported cigarette brands.

Deliberations between the Philippines, Thailand and the Dispute Settlement Body of the WTO resulted in Thailand being required to enact taxation reforms.

The reforms Thailand was required to implement were: a general rule for customs valuation of imported cigarettes and make the methodology public, use the same computation for maximum suggested retail prices, publish methodology used to determine value-added tax, publish a general rule on the release of guarantees, and establish independent review tribunals or processes for the prompt review of customs valuations.

The final deadline given to Thailand to implement the reforms was Oct. 15 last year but the Philippines allowed some leeway for the changes that may require legislation.

Rodolfo said the Philippines was still awaiting the implementation of the rule for customs valuation and has not received information regarding the matter during the bilateral meetings.

Despite this, Rodolfo added, "We are continuing with bilateral discussions but intently monitoring actions of Thailand. Depending on Thai actions, we are reserving the right to pursue action in the WTO."

Though the Trade Department refused to specify which measures it is looking at, options available include: requesting for compensation from Thailand, arbitration with the WTO, or retaliation which would mean increasing taxes against like products from Thailand.

"Our guiding principle is to uphold and protect our national interest as we have fully preserved our rights in this dispute," said Trade Undersecretary Adrian S. Cristobal in the statement. Enditem