Thailand yesterday cautioned the Philippines against implementing retaliatory measures against Thai imports, describing such act as illegal, unjust, inconsistent to the latter’s obligations to international trade agreements and morally objectionable for its far-reaching effects on “innocent bystanders” or industries other than its target, cigarettes.
Kungsawanich Kanitha, representative of the Department of Trade Negotiations of Thailand, urged the Philippines to terminate “without delay” any actions, including yesterday’s public hearing of the Tariff Commission (TC) where she read the statement, that would lead the Philippines imposing retaliatory measures against Thai imports.
The Department of Trade and Industry (DTI) has sought authority from the World Trade Organization (WTO) to remove tariff concessions on 112 tariff lines of Thai imports, 87 of which are in machinery products including 32 in motor vehicles, in retaliation as compensation to Thailand’s failure to comply with the trade body’s ruling that declared its taxes on cigarettes discriminatory.
“Any actions that would lead the Philippines taking retaliatory measures … will be detrimental to efforts to resolve (the dispute). Settlement would all be the more difficult,” said Kanitha.
Discussions are underway in Geneva through a facilitator aimed at resolving the 12-year old dispute.
Kanitha also took note of the “ill-conceived timing” of the retaliatory measures since the crisis brought about by the new coronavirus disease 2019 is “not behind us.”
Thailand took note of the fact that in the proposed list are raw materials or intermediate products like chemicals and plastics and integrated circuits, “products the Philippines is dependent to a large extent on imports and which local demand cannot be met.”
The retaliatory measures, she said, will push prices of motor vehicles and will disrupt the supply chain of parts not just between the two countries but to the entire Asean.
Rommel Gutierrez, president of the Chamber of Automotive Manufacturers of the Philippines Inc., expressed the group’s opposition of the plan as this affects 32 tariff lines of motor vehicles, and asked government to pursue positive solution to the impasse.
“CBUs (completely built-up vehicles) from Thailand play a crucial role in market needs. The imposition of duties, whether safeguards or retaliatory measures will drastically increase prices (of motor vehicles)… (is) economically inefficient and counterproductive both to the domestic and regional markets,” Gutierrez said.
Charoenlert Suchanita, representative of the Thai Automotive Industry Association (TAIA) said the planned retaliation just comes two weeks after the imposition by the Philippines of provisional safeguard duties on passenger cars and light commercial vehicles as Thailand is the biggest source of these products of the country.
TAIA said its members have to prepare for the worst over the next two years as these moves, coming in succession, have impaired their outlook.
Angelo Benedictos, assistant director of the Philippines’ Bureau of International Trade Relations, lamented the fact that after nearly 13 years and after having won the dispute and all appeals, the Philippines have yet to see Thailand complying with the WTO ruling.
Benedictos urged Thai stakeholders to convince their government “to act on what we expect from them given what has happened in the case.”
Thailand is the Philippines’ fifth largest source of imports, amounting to $6.9 billion in 2019.
Other attendees at the TC representing the plastics, air conditioning and monosodium glutamate industries also expressed opposition to the retaliation.
The TC has set a February 10 deadline for all concerned to submit their inputs, afterwhich the body will submit a recommendation to the National Economic and Development Authority (NEDA) and the Department of Trade and Industry which co-chair the Committee on Tariff and Related Matters that in turn recommend changes to the President as chair of the NEDA board. (I. Isip)