PHL to WTO: Compel Thailand to follow tobacco ruling

THE Philippines has formally asked the World Trade Organization (WTO) to compel Thailand to act consistently with the multilateral trade body’s ruling favoring the customs valuation of Philippine-made cigarette imports.

The move was prompted by a legal action taken by the Thai government against Philip Morris Thailand (PMT), which imports cigarettes from its Philippine affiliate.

This was viewed by the Philippines as inconsistent with the WTO decision that ruled against Thailand’s customs valuation on imported cigarettes. In an official statement submitted to the WTO, the  Philippines cited Thailand for repeatedly giving  assurances that they will take steps to comply with the WTO ruling and, yet they proceeded to file charges against the importer of Philippine cigarettes.

“The circumstances surrounding the prosecution demonstrate a very close relationship to the circumstances surrounding the measures at issue in the original WTO proceedings. Specifically, the original WTO proceedings and the prosecution involve the same importer into Thailand, the same exporter, the same exporting country, the same product, the same declared customs values for the same brands, and the same circumstances of sale,” the official Philippine statement read.

In a message posted on its web site, the WTO said “the Philippines reiterated its concerns about outstanding compliance issues in this dispute and called on Thailand to fully comply with the DSB’s [Dispute Settlement Body] recommendations and rulings.”

The trade dispute erupted after Thai authorities accused Philip Morris Thailand of under-declaring the value of its imports from the Philippines, while the Philippines countered that the higher import duties was a violation of the General Agreement on Tariffs and Trade.

In 2006, the Philippines brought Thailand before the Dispute Settlement Body (DSB) of the WTO and in June 2011, the global trade body ruled in favor of the Philippines.

In its latest statement, the Philippines said the circumstances surrounding the new case are very similar to those cited in the original WTO proceedings.

“To determine what it considers to be the proper customs value, Thailand has used, as the basis for the prosecution, a WTO-inconsistent method that Thailand initially relied upon in the original panel proceedings but then expressly abandoned as the grounds for its valuation decisions,” it said. “The WTO panel ruled that Thailand enjoyed no legitimate grounds to reject the customs values it now subjects to criminal prosecution.”

Lawyer Anthony Abad, one of the Philippine lawyers in the WTO case, said Thailand’s disregard of the WTO’s recommendation on valuation is inconsistent with the ruling. Likewise, prosecution of this case would be in violation of the WTO decision.

“At the WTO, the Philippines challenged Thailand’s claims of under valuation for cigarette imports and the WTO has ruled with finality in favor of the Philippines,” Abad said.

In a statement, PMT Branch Manager Troy Modlin said the company has done nothing wrong and prosecuting the case will undermine Thailand’s desire to revitalize its reputation in the international community as a market-based open economy that is investor friendly.”

“Not only are these charges wholly without merit and in violation of Thailand’s obligations to comply with the WTO Customs Valuation Agreement, they also call into question Thailand’s commitment to fairness, transparency and the rule of law,” Modlin said.

The Philippines, during a January 25 meeting of the WTO’s DSB, called on Thailand to fully comply with the DSB’s recommendations and rulings on Thailand’s customs and tax measures on Philippine –sourced cigarettes.

“The Philippines reiterated its concerns about outstanding compliance issues in this dispute and called on Thailand to fully comply with the DSB’s recommendations and rulings,” a summary of the meeting posted on the WTO web site said.

But Thailand said it had taken all actions necessary to implement the DSB’s recommendations and rulings on the dispute.

(Catherine N. Pillas, PNA)



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