3rd-party mediator defers advice on Phl-thailand trade dispute
AUSTRALIA has decided to conduct further investigations on the long-standing cigarette trade dispute between the Philippines and Thailand, proposing to submit its report to the World Trade Organization’s (WTO) Dispute Settlement Body (DSB) before July 31.
Manila and Bangkok entered a facilitator-assisted discussion to settle their trade concerns in December last year, picking Australia as the thirdparty mediator. Ambassador George Mina of Australia took on the role of the facilitator.
Mina, as a facilitator, is tasked with providing a potential settlement course, which should be approved by the parties. He shall also report to the DSB the results of the consultations and the resolutions consented by the Philippines and Thailand by March 31, with the WTO noting that the facilitator can extend the process until July 31.
“[T]aking into account the current state of play, and having consulted with the parties, I am recommending the continuation of the current process up to 31 July 2021,” the facilitator communicated via a WTO document dated April 6.
The facilitator said it was planning to virtually meet with the custom officials and representatives of both countries this month to further discuss the matter. “I am hopeful that these mutually supportive processes will progressively lead to the parties building up elements of agreement,” Mina said.
According to the WTO document, the Philippines and Thailand have met with the facilitator on six separate occasions already since December last year.
The third-party mediator, however, refrained from divulging any details on the progress of the meetings as these are still confidential.
But he said that the consultations with both parties have been “valuable in providing [them] with an opportunity to present their respective views on ways and means of resolving outstanding issues.”
In addition, the facilitator said it has been encouraging both parties to have direct engagements as well.
“Promoting greater transparency and predictability in relation to issues under discussion remain important goals which I believe the dialogue between the parties can usefully promote,” he said.
In February last year, the Philippines filed a petition before the WTO to suspend concessions and obligations to Thailand covering $594 million annually. This, as Bangkok still fails to comply with the WTO ruling on their cigarette dispute.
Manila over a decade ago raised concerns over the inconsistent valuation by Bangkok on the cigarette shipments. While the WTO already ruled in favor of the Philippines in 2011, Thailand has yet to implement the provisions of the ruling.
Thailand argued, however, that the Philippines needs to hold on its suspension of concession given that the Appellate Body—the one tasked with rendering the decision—has no quorum yet.
THE Department of Trade and Industry (DTI) has recently reiterated that the Philippines stands firm on its move to suspend concessions on Thai imports.
“It is important that we maintain a credible and realistic threat to trigger a WTO rules compliant suspension of concession because it is important for us to be able to forge a comprehensive solution for example through the facilitator-led process,” DTI Undersecretary Ceferino Rodolfo said.
In January, the Tariff Commissions held a public hearing where Thai trade executives and exporters asked the DTI to not suspend concessions on Thai imports, arguing that the WTO should decide on the matter instead.
The trade department, in response, said that the Thai stakeholders should also convince their leaders to comply with the WTO ruling on cigarette dispute in 2011.
If the suspension is approved, the Philippines will lift preferential tariffs on corn, milled rice, soya bean oil, mixed condiments and mixed seasoning and non-dairy creamers, as well as motor vehicles, agricultural tractors, fuel tanks, car accessories and motorcycle parts.
Last year, Philippine shipments to Thailand amounted to $2.88 billion, which is 3 percent lower than $2.97 billion in 2019. Imports from Thailand, meanwhile, dropped by 31.3 percent to $4.79 billion in 2020 from $6.98 billion year-on-year.