3rd-party mediator defers advice on Phl-thailand trade dispute

- By Tyrone Jasper C. Piad @Tyronepiad

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.

Suspending concession­s

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.

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