Thailand appeals WTO ruling on cigar case vs Philippines

MANILA, Philippines – Thailand has filed for partial appeal on Tuesday over the WTO panel ruling which found the country guilty of violating customs valuation agreement and transparency rules by charging Philippine cigarettes higher taxes its locally manufactured cigarettes and was ordered to conform with the rules of the multilateral trading body.

Philippine Ambassador to Geneva/WTO Ambassador Manuel AJ Teehankee in an email message said that Thailand submitted its partial appeal of the panel report findings before the WTO Appellate Body on Tuesday, Feb. 22.

Teehankee explained that Thailand’s appeal is meant to prevent WTO from adopting the panel report, which is due for adoption at the upcoming Dispute Settlement Body meeting to be held on Thursday, February 24. “Thailand has the right to prevent adoption of the report if it filed an appeal before then,” Teehankee said in the message.

Commenting on the Thailand move, Trade and Industry Secretary Gregory L. Domingo said the Philippines will strongly defend the WTO panel report.

“The Philippines, being a major tobacco producer and a growing exporter of manufactured cigarettes to Thailand will strongly defend the findings of the panel report and we are confident that the Appellate Body will uphold the position of the Philippines and require Thailand to comply with its WTO obligations with respect to Philippine exports, “Domingo said.

It could be recalled that only November 15 last year, the WTO panel issued its report declaring Thailand guilty of violating provisions of the Customs Valuation Agreement for its discriminatory tax treatment on Philippine cigarette exports.

The case started in 2006 when the Philippines filed its complaint before the WTO Dispute Settlement body against Thailand. The case was docketed DS371.

The Thailand Tobacco Monopoly (TTM), which is under the control of the Ministry of Finance of Thailand, is the only company allowed to produce cigarettes in Thailand. All other cigarettes are thus imported. A number of actions were taken by Thailand beginning in August 2006, with regard to the importation of cigarettes manufactured in the Philippines, thereby severely affecting the competitiveness of these imported products compared to those produced domestically by TTM. These actions involved, initially, customs valuation practices and, subsequently, domestic taxation. Informal consultations in the bilateral and ASEAN contexts, as well as two rounds of formal consultations under the WTO Dispute Settlement Understanding, all failed in the period 2006 to September 2008.

Thus, in November 2008, at the request of the Philippines, the WTO Dispute Settlement Body established a Dispute Settlement Panel in order to examine the Philippine claims that Thailand’s actions constituted practices that were not consistent with, inter alia, the Customs Valuation Agreement, the provisions of GATT 1994, and Thailand’s basic obligations with respect to transparency. The first substantive meeting of the Panel was held on 10-12 June 2009, and the second substantive meeting took place on 4-6 November 2009.

The investigation culminated in that Panel Report issued on November 15, 2010 which finds Thailand in violations of the WTO principles.

source: www.mb.com.ph

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