The Philippines will exercise its right to retaliatory trade remedy measures against Thailand for its alleged non-compliance with measures sanctioned by the World Trade Organization, Trade Undersecretary Ceferino Rodolfo said over the weekend.
Rodolfo said the negotiating team of the Philippines planned to subject all vehicle imports from Thailand to quantitative restriction before the end of the year. The issue stemmed from the two countries’ seven-year dispute over cigarette exports.
“We are following WTO rules on dispute settlement, studying cross-sector retaliation as an option allowed by the WTO. There are provisions that allow us to retaliate,” Rodolfo said.
He said the aggrieved country would normally initiate a measure to retaliate to the fullest extent possible on the same product by increasing the tariff that should be equivalent to the injury.
Rodolfo, however, said finding the most vulnerable export of the non-compliant country, which in this case was automotive vehicles to the Philippines, and imposing cross-sector retaliation were allowed by the WTO.
Automotive vehicles are the top imports of the Philippines from Thailand. Under the WTO, these vehicles have the headings of 8703 and 8704, one for the transfer of goods and the other for transport of passengers.
Rodolfo said the Philippines had won several times over Thailand on the issue of alleged export undervaluation of Philip Morris Philippines Manufacturing Inc.’s cigarette exports to Thailand.
Using QR as trade remedy, the Philippines could impose higher tariff on imported vehicles once the volume of imports went beyond the threshold.
The Philippines instructed the WTO in Geneva to request the dispute settlement body secretariat for a meeting with Thailand to relay its plans.
The process, which is still ongoing, also gave Thailand the chance to lift its non-compliant measures.
The WTO ruled as early as 2001 that Thailand should correct the trade malpractice it subjected the Philippines and Philip Morris Thailand.
The non-compliance of Thailand on the rulings of the WTO is a disregard of the world cooperation on trade, according to the Philippines.