Friday, December 21, 2012

Philippines warns it may bring Thailand back to WTO arbitration over discriminatory tobacco taxes

The Philippines said it may hale Thailand back to arbitration before the World Trade Organization after Bangkok's failure to remove taxes that discriminate against imported tobacco products.

During a WTO-Dispute Settlement Body (DSB) meeting last Monday, the Philippines' permanent mission to the global trading body pointed out that a November ruling of Thailand's Board of Appeals (BOA) "may not be WTO-consistent, in particular with the Customs Valuation Agreement."

The case stemmed from a complaint of the Philippine unit of Philip Morris, which said Thai import duties discriminated against the company's products. The WTO had ruled in favor of the Philippines and gave Thailand only until last October to address Manila's concerns.

"The Philippines recalled that the importer of cigarettes had introduced an appeal against a Thai Customs assessment of these entries and that the appeal had been pending with the BOA since 2003. The extraordinarily long delay taken by the BOA in deciding on this appeal was at issue in the original proceedings in this dispute and led to the WTO Panel’s finding that Thailand had violated both Article X:3(a) and X:3(b) of GATT 1994. The BOA's ruling was finally issued on November 16, 2012, after pending for 10 years," the Philippine WTO mission said in an email to

"While progress has been achieved by Thailand in implementing the WTO ruling, the Philippines' concerns about the BOA's ruling are additional to other pending concerns in the dispute," the Philippine WTO mission said.

"Thailand acknowledged in its status report and in its statement at the meeting that there are still a number of issues under discussion, which both parties have tried to resolve at the bilateral level," the Philippine WTO mission said.

"The Philippines also stressed that every effort has been made to resolve the dispute. While the bilateral process has yielded results in respect of some issues and is still ongoing, the Philippines stated that next steps are currently being evaluated, even as it has fully reserved its rights under the Dispute Settlement Understanding, including recourse to compliance proceedings," it added.

During the same DSB meeting that also tackled the Manila's compliance to the WTO ruling on its spirits, the Philippine panel reported that "the Philippine Congress has substantially advanced the consolidation and reconciliation of various legislative proposals" with regards to the country's so-called sin taxes.

The Philippines has to meet a February 2013 deadline, following complaints from the US and the European Union that Philippine duties and taxes discriminated against imports.

"The United States and the European Union welcomed the developments. Pending further review, the US understood that the Philippine Congress had approved a new tax system on distilled spirits that abolishes the raw materials distinction, while the EU noted that the proposed modified tax system appears to have introduced new positive elements," the Philippine mission to the WTO said.-Interaksyon (December 20, 2012 9:46PM)

No comments: