Monday, March 25, 2013

Philippines, Thailand to discuss tobacco row in Bangkok--DFA

Philippine and Thai trade officials will meet in Bangkok to resolve the remaining issues in their cigarette tax dispute, the Department of Foreign Affairs (DFA) said.

Foreign Affairs Undersecretary for international economic relations Laura Q. Del Rosario said the Philippines’ permanent mission to the World Trade Organization (WTO) asked its Thai counterpart to schedule a meeting in Bangkok to discuss the remaining concerns on the tobacco case.

“The request came from Ambassador [Esteban B.] Conejos,” Del Rosario said, noting that the Philippines wants Thailand to fully comply with the WTO ruling, hence it was Manila that requested for the meeting.

In a March 14 status report, the Thai WTO mission said “Thailand is currently in the process of scheduling additional informal consultations requested by the Philippines with several Thai government agencies.”

Thai officials told their Philippine counterparts that the meeting may be held next month, Del Rosario said.

A meeting between the two country's trade officials next month, however, may not push through as Trade Undersecretary Adrian S. Cristobal Jr., who is handling the WTO dispute, is on sick leave until April, several government sources said.

In 2011, Thailand lost the tobacco case lodged by the Philippines before the WTO in behalf of the Philippine unit of cigarette manufacturer Philip Morris. Manila had alleged that Bangkok slapped discriminatory taxes on cigarettes imported from the Philippines.

Thailand has yet to fully comply with the WTO ruling even as the reasonable period of time to comply lapsed last year.

The Philippines had been telling Thailand that Manila may hale back Bangkok into arbitration, but Del Rosario said bilateral discussions will be exhausted first. “Arbitration can be complicated. It can also be costly,” she said.

To comply with the WTO ruling, Thailand last year adopted a royal decree abolishing the value-added tax (VAT) exemption enjoyed by resellers of locally-made cigarettes, making them at par with imports, which were not VAT-exempt.

But a few stumbling blocks remain in the way of Thailand’s full compliance with the WTO decision. For one, the November ruling of the Thai Customs’ Board of Appeals (BOA) on certain customs valuation entries of imported tobacco from 2002 to 2003 is inconsistent with WTO rules, the Philippine mission had said.

“Thailand’s reference to additional guidance from its Revenue Department concerning amended VAT rules also raises questions of WTO-consistency,” the Philippine WTO mission said in January.

The Philippine-Thai tobacco row is on the agenda of WTO’s Dispute Settlement Body (DSB) meeting on March 26.-Interaksyon (March 25, 2013)

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