PH to retaliate vs. Thailand over cigarette import dispute

A modernized jeepney.

The Philippine government is keen on imposing quantitative restrictions (QR) against automotive imports from Thailand for the latter’s alleged non-compliance with measures sanctioned by the World Trade Organization (WTO).

Rodolfo Ceferino, undersecretary of the Philippines’ Trade department, told the Philippine media that the negotiating team of the Philippines is planning to subject all automotive imports from Thailand to a QR by year-end.

Using QR as a remedy would allow for higher tarriffs on excess vehicle imports from Thailand.

“We are following WTO rules on dispute settlement, studying cross-sector retaliation as an option allowed by the WTO,” Ceferino was quoted as saying.

“There are provisions that allow us to retaliate,” he added.

The issue stemmed from the two countries’ seven-year dispute over cigarette exports. It was brought by the Philippines to the WTO, a Geneva-based organization, which found that Thailand was unable to follow recommendations on cigarette imports.

Ceferino said that the aggrieved country would normally retaliate through raising tariffs equivalent to the injury on the same product, but said that the WTO allowed that goods which are most vulnerable to the exporting country could be subjected to cross-sector retaliation.

Automotive products are the top exports of Thailand to the Philippines. Such vehicles are used for the transfer of goods and the other for passenger use.

The Philippines had asked WTO’s dispute settlement body for a meeting with Thailand to disseminate its plans.

The Philippines first raised concerns on the fiscal and customs policies of Thailand on importing cigarettes in February 2008. The case was decided by the WTO in favor of the Philippines in 2010.

On the same year, the WTO ruled that Thailand should correct its trade malpractice.

The Philippines said Thailand’s non-compliance with the rulings of the WTO is a disregard of the world cooperation on trade.

In 2013, the Philippines complained about Thailand’s failure to comply with the recommendations of the WTO, which Thailand said in 2014 it already accomplished. The issue was elevated to the WTO dispute panel, which eventually found Thailand did not comply with the ruling. 

In January this year, Thailand appealed the decision of WTO’s dispute panel that determined its failure to comply with the ruling.

On another development, Ceferino said that the Philippines is mulling over safeguard measures on all imported automobiles amid the surge in passenger vehicles.

Data showed the total number of imported brand new motor vehicles that entered the country between 2014 to 2018 reached more than a million units, in which 428,000 units came from Thailand, 312,000 from Indonesia, and 101,000 units from South Korea. Other sources were Japan, India, the United States, China, Germany, Belgium and Malaysia.