A World Trade Organization (WTO) panel has upheld on July 12 Philippine claims that Thailand violated the WTO agreement on customs valuation relating to Philippine exports of cigarettes.
Initiated by the Philippines in 2008, the dispute concerns Thailand’s persistent failure to value Philippine exports consistently with the WTO Customs Valuation Agreement (CVA), the Department of Trade and Industry (DTI) said in a statement. This threatens viability of the private sector both in the Philippines and in Thailand, harm Philippine tobacco farmers, and is inimical to the overall export interests of the Philippines. It also sours bilateral relations, the statement added.
The Philippines has accused Thailand of repeated allegations of underdeclaration of the customs value of cigarettes on the basis of valuation determinations consistently ruled as illegal under WTO rules. The Thailand decision has resulted in threats of criminal prosecution and even imprisonment of a number of employees of the cigarette importer in Thailand, Philip Morris International Thailand (PMTL), the DTI said.
“This WTO dispute has been going on for more than ten years now. Thailand has lost all three panel and appellate rulings, and it is about time that Thailand accepts the rulings and implement the customs valuation reforms called for by those rulings,” Philippine Trade and Industry Secretary Ramon Lopez said.
“Thailand is a strong supporter of the WTO multilateral trading system, and currently chairs the WTO General Council. Thailand is also ASEAN host for 2019. Accepting the panel report in this dispute would be a clear demonstration of Thailand’s responsibility and leadership in the WTO and in ASEAN,” Lopez added.
According to DTI, Thailand has lost three WTO panel proceedings, to wit:
In the original proceedings, a WTO panel and the Appellate Body ruled in 2010 that the Thai customs valuation measures violated the CVA and other WTO rules.
Following this ruling, Thailand brought further new WTO-inconsistent customs valuation measures against Philippine cigarettes and filed criminal charges against PMTL for underdeclaration. The Philippines successfully brought a first set of WTO compliance proceedings; in November 2018, the WTO compliance panel found that Thailand’s new customs valuation measures and the first criminal charges violate the CVA.
While these proceedings were ongoing, Thailand issued a second set of criminal charges, forcing the Philippines to initiate second WTO compliance proceedings. This latest WTO panel ruled on July 12 that the second charges also violate the CVA.
Thailand has yet to implement the WTO rulings, amend its customs valuations policy and practices, and withdraw the two criminal charges based on WTO-illegal measures, DTI said.