Thailand, Philippines set to cooperate on cigarette taxes
The Thai government has expressed its willingness to cooperate with the Philippine government in ironing out a recently settled dispute on alleged discriminatory fiscal and customs measures against Philippine-made cigarettes exported to Thailand.
This developed as the World Trade Organization Dispute Settlement Body (DSB) last July 15 adopted the Panel and Appellate Body reports, which sided with the Philippines in its complaint against the Thai government.
In a statement posted on the WTO website, the Thai government said it was “strongly supportive of the binding dispute settlement system in the multilateral trading system, on which it had successfully relied in the past to vindicate its rights under WTO law.”
“Thailand looked forward to working cooperatively with the Philippines,” the statement read.
The Thai government, however, expressed concern that the Appellate Body believed that a panel could make an objective finding based on evidence that one of the parties had not yet commented on.
The Appellate Body could have given Thailand a chance to express its arguments regarding its value-added tax regime in more detail, the Thai government said.
The Philippines, on the other hand, expressed “deep satisfaction” with the ruling, particularly as the case had something to do with an industry that provided livelihood to thousands of Filipinos, from leaf-growers to manufacturers.
The objective of raising the complaint with the WTO, the Philippine government said, was to end the “arbitrary and discriminatory treatment” of its exports, and to place its exports “back on the secure and predictable ground of the rule of WTO law.”
“The Philippines is satisfied with the findings and rulings of both the Panel and Appellate Body of the WTO. We believe that the WTO decision strengthens the multilateral trading system and addresses our concerns on the treatment of the Thai government of Philippine cigarette exports,” Trade Secretary Gregory Domingo had earlier said.
Trade Undersecretary Adrian Cristobal Jr. added: “This victory is not for the Philippines alone, but for the rules-based trading system. The decision upholds fairness and transparency in trading practices among countries, and secures jobs and investments in the country.”
According to the Philippine government, this was the first dispute to discuss in detail rules on customs valuation.
“The Philippines expected Thailand to promptly and fully implement the DSB ruling, affording its goods the treatment required under WTO rules,” the WTO statement read.
The Philippine complaint to the WTO was filed on behalf of Philip Morris Philippines Manufacturing Inc., which cited the Thai government’s bias against imported cigarette brands, particularly in terms of the customs valuation practices, excise tax, health tax, TV tax, value-added tax regime, retail licensing requirements, and import guarantees imposed upon cigarette importers.
The Philippines claimed these measures were administered in violation of the General Agreement on Tariffs and Trade 1994 Article X 3a, or in a partial and unreasonable manner.
