Retaliation on Thailand’s non-compliance pushed

The Philippine government is seriously studying a possible trade remedy, most possibly punitive tariffs, on car exports from Thailand before end this year in retaliation to its fellow ASEAN country’s continued refusal to comply with the WTO ruling to correct its discriminatory cigarette tax treatment on Philippine tobacco products.

Trade and Industry Undersecretary Ceferino S. Rodolfo said the DTI has already instructed the Philippine Mission to WTO in Geneva to request the dispute settlement body secretariat to a meeting with Thailand to lay the Philippine position last week.

Rodolfo said the process can be fast saying the Philippine government may exercise its “retaliatory rights by December or before end of this year.”

In a chance interview, Trade and Industry Secretary Ramon M. Lopez said he had tried to convince Thailand to comply with the WTO. “If they would not still comply, then we will be forced to move for the retaliatory,” Lopez said.

Lopez said he support the review towards the exercise of a retaliatory trade remedy, but stressed, “we have to study well,” noting there will still be negotiation and hopefully Thailand would compensate for the injury caused on cigarette exports.

If Thailand still refuses, Lopez, said he would prefer the use of tariffs over quantitative restrictions (QR) noting that QR would be subject to regulations with no revenue impact but at the end there will be higher prices on the affected products.

“But the with tariff, there is a clear protection and revenue from the imposition of the tariff rate that is why tariff is usually preferred over QR as a trade remedy,” he said.

Rodolfo further said that the Philippine government has followed all the sequencing agreement with Thailand signed in 2012 over the cigarette dispute settlement or DS 371 before the WTO. The Philippines won in all of its cases against Thailand with favorable WTO ruling, but Thailand remained uncompliant.