PH eyes suspension of Thai concessions

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    The Philippines has reiterated its request to the Dispute Settlement Body (DSB) of the
    World Trade Organization (WTO) to grant it the authority to suspend its concessions to Thailand as a retaliation for Bangkok’s non-compliance to a decade-long ruling on its discriminatory taxes on Manila’s export of cigarettes.

    Thailand’s customs and fiscal measures on cigarettes from the Philippines will be among the proposed topics at the DSB meeting on August 28 where both sides are expected to present updates on the case.

    But in a July 30, 2020 communication, the Philippines once again asked that the DSB grant it the authority to suspend “concessions or other obligations to Thailand . . . unless the DSB decides by consensus to reject the request.”

    The Philippines in the communication acknowledged that the DSB can refer the matter to arbitration if Thailand objects “to the level of suspension proposed.”

    “Therefore, there are only two options under the reverse-consensus rule of the Dispute Settlement Understanding: the DSB granting authorization to suspend concessions, or the DSB referring the matter to arbitration,” the Philippines said in a document posted on the WTO website.

    The communication was an offshoot of earlier DSB meetings where the Philippines presented legal examples and a range of constructive options to settle the matter following the cessation of operations of the WTO’s Appellate Body.

    The Philippines noted Thailand has not responded to its proposal on how to move forward on the dispute.

    “ While the Philippines has always been open to a constructive solution to the issue at hand, the Philippines has been consistent in asserting that it is fully within its rights to seek recourse under Article 22.2 of the DSU,” the Philippines added.

    This article provides that a country may request authorization from the DSB to suspend the application to the member concerned of concessions or other obligations.

    Thailand’s position is that any request for suspension of concessions under Article 22.2 of the DSU in this dispute would be improper as the two compliance proceedings have not concluded. It said the Philippines’ request for suspension of concessions is also contrary to the sequencing agreement signed by the parties which states that the Philippines could request retaliation only after the completion of proceedings.

    Thailand nevertheless expressed openness to a bilateral dialogue with the Philippines with an aim to identify a possible solution to the substantive issues in this WTO dispute that is mutually acceptable to both parties.