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MANILA - (UPDATED 11:49 a.m.) The Philippines warned that it would bring Thailand back to arbitration if it refuses to comply with a World Trade Organization (WTO) decision that found Bangkok's tobacco taxes unfair.
The WTO Dispute Settlement Body (DSB) met on February 27, during which Thailand presented a February 14 report on its implementation of the WTO decision and recommendations.
“Thailand stated that it is continuing to engage with the Philippines on the concerns the Philippines may have, and stated it was currently in the process of scheduling further informal bilateral meetings,” the Philippine Mission to the WTO said in a statement on Thursday.
During the DSB meeting, the Philippine mission complained that Thailand has been taking its sweet time in complying with the WTO ruling, adding that the deadline fell last year.
“The Philippines emphasized that for the last month, it sought further progress toward resolving the remaining WTO-inconsistencies in the dispute, short of a return to formal dispute settlement. Since February, the Philippines has yet to be informed of progress toward resolution of the remaining WTO inconsistencies,” the Philippine WTO mission said.
“The Philippines urged Thailand to expeditiously pursue further bilateral engagement, in the absence of which appropriate steps will be taken shortly by the Philippines,” the mission added.
To comply with the WTO ruling, Thailand last year adopted a royal decree abolishing the value-added tax (VAT) exemption enjoyed by resellers of locally-made cigarettes, making them at par with imports, which were not VAT-exempt.
But a few stumbling blocks remain in the way of Thailand’s full compliance with the WTO decision.
For one, the November ruling of the Thai Customs’ Board of Appeals (BOA) on certain customs valuation entries of imported tobacco from 2002 to 2003 is inconsistent with WTO rules, the Philippine mission had said.
Also, “Thailand’s reference to additional guidance from its Revenue Department concerning amended VAT rules also raises questions of WTO-consistency,” the Philippine WTO mission said in January.
The case stemmed from a complaint lodged by the Philippine unit of Philip Morris, which said Thai import duties discriminated against the company’s products. The WTO ruled in favor of the Philippines in 2011.
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