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Friday, March 29, 2024

Thailand blocks WTO in cigarette case

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Thailand has blocked the adoption of the agenda of the WTO Dispute Settlement Body during a recent meeting in a bid to prevent the body from granting the Philippines the right to retaliate against it in a 12-year old dispute that Manila won.

The DSB is the highest body in the World Trade Organization in charge of dispute management, resolution and decisions.

One of the pillars of the WTO dispute settlement system is the relative automaticity of providing remedies to parties to disputes.

The dispute stems from the wrong customs values assigned by Thailand to Philippine exports of cigarettes. The Philippines initiated dispute settlement proceedings against Thailand in 2008. 

A WTO dispute settlement panel ruled against Thailand in 2011. Thailand appealed, and again lost the case in 2012.

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There have been serious questions about Thailand’s full compliance with DSB rulings since then. Thailand, rather than complying, imposed new measures that were inconsistent with WTO rulings. 

The Philippines, deferring retaliation filed two Article 21.5 proceedings against Thailand for Bangkok’s non-compliance. Both compliance panels ruled against Thailand in 2019, and under the agreements with Thailand.

Despite efforts by the Philippines to reach out to Thailand to settle the dispute, Bangkok declined to cooperate, prompting Manila to recourse to retaliation rights. 

Thailand’s decision to block the agenda, meanwhile, has sent the WTO system into further disarray.

“What we are fighting for is the relevance of a responsive WTO. This is critical to show the world that countries who follow the rules, are also protected by the WTO,” said Trade Secretary Ramon Lopez.

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