Is WTO relevant? PHL asks as world trade body favors Thailand


THE Philippines is calling on the World Trade Organization (WTO) to favor its retaliation against Thailand in their cigarette dispute to prove that multilateral trading rules remain relevant at the height of protectionism.

Trade Undersecretary Ceferino S. Rodolfo on Monday said the ongoing standoff between the two Southeast Asian nations is an opportunity for the WTO to reassert its relevance. It can do so by proving it is an institution that errs on the side of those who abide by the rules, which, in this case, should be the Philippines, he claimed.

“In a rules-based environment, those who break the rules and who go unpunished, derive the most benefits—at the expense of those who diligently abide by the rules,” Rodolfo argued in a statement.

“This is an opportunity for the WTO to reassert its relevance and decisively prove that it is an institution that protects the rights of those who follow the rules. The Philippines has and will exercise its rights and uphold the interests of Filipinos and of Philippine-based enterprises; and in the process, demonstrate that the WTO works,” he added.

The Philippines is requesting the WTO’s authorization in its move to suspend concessions and obligations on $594 million of Thai imports as a retaliation for Thailand’s noncompliance with the WTO ruling on their cigarette dispute, which dates back to 2008.

However, the Philippines failed in its first attempt to secure approval after the Dispute Settlement Body suspended its Friday meeting, where the retaliation was scheduled to be tackled. The DSB decided to call off the meeting—moving it to March 5—to provide the Philippines and Thailand more time to talk it over.

Thailand favored

The cancellation virtually favored Thailand, who insisted on suspending the meeting unless the request for retaliation is taken off the agenda, which the Philippines refused to do so.

To this, Rodolfo said the Manila camp is optimistic the WTO will see through the tactics being employed by Bangkok to dodge the retaliation bullet. He argued the country should be given permission to carry out its next move, as the cigarette dispute was decided nine years ago and yet Thailand has yet to uphold the ruling.

He pointed out that the Philippines is even seeking WTO approval to exercise its retaliation rights at a time economies are resorting to unilaterally imposing trade measures, restrictions and barriers.

“The Philippines is confident that the WTO and its members will see through the tactics being used by the other party in order to impair the country’s exercise of its substantive rights. The Philippines has been a decent and responsible member of the WTO, abiding by its rules and even spearheading key initiatives,” Rodolfo said.

“As the Philippines has already won the case, as well as the two appeals on the case, it is time to say that enough is enough,” the trade official added. “We cannot let the impasse in the WTO impair our substantive rights. Hence, we have sought authorization to already retaliate.”

The Philippines in 2008 initiated dispute settlement proceedings against Thailand over wrongful values assigned to its cigarette exports. In 2011 the WTO issued its ruling favoring Manila, to which Bangkok appealed and lost the following year.

In spite of losing both the proceedings and the appeal, Thailand failed to implement measures consistent with what was indicated in the WTO decision.

Deferring retaliation at first, the Philippines asked the WTO to investigate Thailand for its failure to comply with the ruling. Last year, the compliance panels tasked to probe Bangkok confirmed its noncompliance, and any appeals thereafter would be resolved within 90 days.

After Thailand declined to cooperate and exhausting all available options, the Philippines was compelled to file for retaliation to hold its trading partner accountable for violating the decision on their cigarette dispute.

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