WTO Gives Nod to Philippines to Ask for Tobacco Retaliation vs Thailand

Source from:  Manila Bulletin 08/20/2014

The World Trade Organization (WTO) said the Philippines, at anytime, can ask for the organization's approval to impose sanctions against Thailand regarding the tobacco case.

During a seminar for Southeast Asian journalists held here, a WTO official said the organization has allowed the Philippines to do so after the complainant (Philippines) disagreed that Thailand has fully completed the implementation process and complied with the Dispute Settlement Body's (DSB) recommendations and rulings.

Thailand asserted during a DSB meeting on June 18, 2014 that it did not have to take any further action to implement the DSB's recommendations and rulings.

However, the Philippines insisted that the respondent (Thailand) has not yet fully complied with the WTO's decision.

The WTO attested that Thailand has not complied with the DSB's recommendations and rulings.

"The Philippines can appeal for retaliation anytime at the WTO," the WTO official said.

To recall, the dispute rooted since 2006 when Philippines filed complaint to WTO on the violation of Thailand in the General Agreement on Tariffs and Trade (GATT) of 1994.

The Philippines argued that Thailand imposed higher tax duties on imported tobacco products than domestic cigarettes, thus affecting Philippine cigarettes to Thailand and not promoting a fair trade competition.

Also, the country raised to WTO other issues on Thailand such as customs valuation practices, excise tax, health tax, TV tax, VAT regime, retail licensing requirements and import guarantees in which the Philippines claimed that Thailand administered those measures in a "partial and unreasonable manner."

The WTO favored Philippines' arguments, thus resulted to issuance of recommendations and ruling to Thailand in June, 2011.

On August, 2011, Thailand informed the WTO that it intends to comply with the issued recommendations and ruling of the WTO regarding this issue.

On September, 2011, both Philippines and Thailand mutually agreed on a "reasonable period of time" to comply with the ruling. This "reasonable period of time" expired in 2012.

On January, 2013, Thailand told the WTO that "it had completed the final outstanding steps in its implementation process."

However, on February 2013, the Philippines expressed to WTO that Thailand did not fully implemented the WTO recommendations and ruling and the latter did not inform the former of any progress on resolving the dispute.

If the Philippines will ask WTO to apply retaliation against Thailand and the WTO will approve it, the country will be allowed to impose higher tax duties on an imported product from Thailand to compensate the loss from unfair trade in tobacco, according to the WTO official. Enditem