The Philippines is putting pressure on the World Trade Organization (WTO) to give it the clearance to impose additional duties on motor vehicle imports from Thailand in retaliation of the latter’s continued defiance to the trade body’s ruling on a 12-year dispute over Bangkok’s discriminatory taxes on cigarettes.
“We will continue the pressure to get WTO to decide soon,” said Trade Secretary Ramon Lopez, referring to notification made by the Philippines seeking clearance to proceed on the retaliation.
The Philippines is taking the WTO to task in ensuring the country’s right to retaliate against Thailand is protected after Bangkok last on Friday blocked Manila’s bid to slap additional duties on motor vehicles.
The Permanent Mission in the WTO in Geneva in a statement last Saturday said Thailand blocked the adoption of the agenda of the WTO Dispute Settlement Body (DSB) at its meeting to prevent the DSB from granting the Philippines the right to retaliate against Thailand in a 12-year old dispute, which the Philippines won. The dispute stemmed from the wrongful customs values assigned by Thailand to Philippine exports of cigarettes.
Ambassador Manuel A.J. Teehankee, WTO head of mission quoted Lopez, as saying that “what we are fighting for is the relevance of a responsive WTO. This is critical to show the world that countries who follow the rules, are also protected by the WTO.”
Teehankee also said Thai’s blockage of the agenda “throws the WTO system into further disarray, “following the suspension of the Appellate Body on Dec. 11, 2019.
The Philippines spoke strongly that procedural objections “ought not to diminish or derogate” the country’s substantive rights under the dispute settlement unit and WTO rules based system.
The notification by the Philippines, made two weeks ago, seeks to secure the go-signal to implement the retaliation after a letter-request by the trade department to its Bangkok counterpart to resolve the impasse amicably fell on deaf ears.
Instead, Bangkok moved to correct its valuation moving forward.
Lopez said the Philippines does not see that as a compliance to the WTO ruling and is determined to collect on Thailand’s past violations on the trade body’s rules on non-discrimination.
Lopez said the amount of compensation, level of duties and the type of vehicles to be affected are still being determined
“We are in the move where we will be investigating and implementing the retaliation,” he said.
The Philippines initiated dispute settlement proceedings against Thailand in 2008. A WTO dispute settlement panel ruled against Thailand in 2011. Thailand appealed, and again lost in the appeal in 2012.
The DSB is the highest body in the WTO in charge of dispute management, resolution and decisions, and one of the pillars of the WTO dispute settlement system is the relative automaticity of providing remedies to parties to disputes.
Since then, there have been serious questions about Thailand’s full compliance with DSB rulings, as Thailand rather than complying fully imposed new WTO- inconsistent measures.
Deferring retaliation in good faith, the Philippines filed two Article 21.5 proceedings against Thailand for its non-compliance. Both compliance panels ruled against Thailand in 2019, and under the agreements with Thailand, any appeal would be resolved within 90 days.
Despite efforts by the Philippines to reach out to Thailand to settle the dispute — three times since September 2019 to January 2020 — Thailand has declined to cooperate. This led to the current Philippines’ recourse to retaliation rights against Thailand.
Thailand will take a double hit once a separate tariff move, as the Philippines plans to slap a safeguard duty on all imported vehicles.
The retaliatory duty applies only to Thailand while the safeguard duty applies to all countries.
Thailand is the country’s biggest source of vehicle imports. (I. Isip)
