PHL may seek more WTO arbitration vs Thailand in cigarette tax issue

The Philippines may seek further arbitration by the World Trade Organization (WTO) if Thailand does not adjust its policies to provide fair taxation for imported cigarettes, the Philippine Mission to the WTO said in a statement Thursday. “Since February, the Philippines has yet to be informed of progress toward resolution of the remaining WTO inconsistencies. 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 Philippine Mission said. It added that for the last month, the Philippines “sought further progress toward resolving the remaining WTO-inconsistencies in the dispute, short of a return to formal dispute settlement.” The Philippines and Thailand last met with the WTO's Dispute Settlement Body (DSB) on February 27, and will meet again on March 26. In its February 15 status report to the WTO, Thailand said that it “has continued to engage with the Philippines in discussions on issues of concern to the Philippines and looks forward to achieving a mutually satisfactory outcome to the dispute.” In 2006, the Philippine government filed a complaint at the WTO on behalf of Philip Morris Philippines Manufacturing, Inc., saying that Thailand was in violation of the General Agreement on Tariffs and Trade of 1994 by exempting local brands from administrative requirements like filing tax returns and expense reports. According to the WTO, the Philippines also disputed a number of Thai fiscal and customs measures affecting Philippine cigarettes, including customs valuation practices, excise tax, health tax, TV tax, VAT regime, retail licensing requirements and import guarantees, which it said Thailand was administering in "a partial and unreasonable manner." The WTO ruled in the Philippines' favor in 2010, saying that "Thailand treats imported cigarettes less favorably than like domestic cigarettes by imposing additional administrative requirements only on resellers of imported cigarettes," and junked Thailand's appeal in 2011. According to the WTO, “Thailand and the Philippines informed the DSB that they had mutually agreed on the reasonable period of time for Thailand to comply with the recommendations and rulings of the DSB”—and set a deadline of Oct. 15, 2012 for Thailand to comply, with the Philippines later allowing Thailand more time as some of the reforms needed legislation. — BM, GMA News