The lack of seating judges in the World Trade Organization’s (WTO) Appellate Body is hampering the Philippines’s bid to retaliate against Thailand for its noncompliance with the ruling on their cigarette dispute.
At the Dispute Settlement Body (DSB) meeting on Monday, it was reported the Philippines and Thailand are nowhere near resolving their differences over the next step on their cigarette case. What was reached during the meeting was the conclusion that the matter can only be resolved if the Appellate Body is functioning as usual.
The Philippines is trying to secure the WTO’s approval to suspend concessions on $594 million of Thai imports as a retaliation for Thailand’s disregard of the ruling on their cigarette dispute.
According to a Geneva trade official, the two Southeast Asian nations expressed their resolve to reach a solution. The Philippines, for one, raised again its willingness to resort to arbitration as stipulated under Article 25 of the WTO’s Dispute Settlement Understanding (DSU).
Likewise, it stood firm with its push to retaliate against Thailand, citing Article 22.2 of the DSU, for its continued noncompliance with the ruling issued nearly a decade ago.
For its part, Bangkok argued its appeals are pending the review of the Appellate Body, and that proceedings would have to stop for the meantime that the tribunal is nonoperational. Dubbed as the supreme court of world trade, the Appellate Body only has one member at the moment, and can only hear cases with a quorum of three seating judges.
The United States is blocking the nomination of any new member on frustrations against some decisions made by the Appellate Body, especially those related to its trade conflict with China.
The European Union, as such, said both the Philippines and Thailand have the right to carry out their respective actions with regard their cigarette dispute. However, all would be at lost for as long as the Appellate Body is lacking the quorum to review and decide on disputes.
“The EU said the dispute reflects the disruptive effect of a functioning Appellate Body is having on the rights of WTO members: the Philippines has the right to pursue the matter, and Thailand has the right to have its appeals reviewed,” the Geneva trade official said.
In 2008 the Philippines initiated dispute settlement proceedings against Thailand over wrongful values assigned to its cigarette exports.
The WTO in 2011 ruled in favor of the Philippines, to which Thailand appealed and lost in 2012. In spite of losing both the proceedings and the appeal, Thailand failed to implement measures consistent with what the WTO indicated in its decision.
In response, Manila deferred its option of retaliation at first and asked the WTO to investigate Thailand for its noncompliance instead.
Last year, the WTO’s compliance panels ruled that Thailand has yet to comply with the ruling, and any appeals thereafter would be resolved within 90 days. Thailand declined to cooperate with the Philippines in its efforts to settle the dispute, compelling it to go the hard way and use retaliatory rights against one of its neighbors in the region.
2 comments