THE Philippines is considering retaliatory measures against Thailand’s automotive exports after a decade-long dispute over cigarette imports, Trade Undersecretary Ceferino S. Rodolfo said in a briefing Thursday.
Under the World Trade Organization (WTO) dispute settlement system, a country may impose countermeasures against a WTO member for non-compliance with the organization’s ruling.
Thailand has been filing appeals with WTO after it was found to have failed to comply with WTO’s ruling against its customs measures on Philippine cigarette exports.
The Philippines is studying either tariff or quantitative restriction (QR) measures on Thailand’s automotive exports.
“We are studying retaliation as an option that is allowed under the WTO… We are seriously considering and calculating our retaliatory rights on auto,” Mr. Rodolfo said.
Trade Secretary Ramon M. Lopez told reporters at a forum Wednesday that he prefers tariff measures.
“Tariff to me is preferred always. Kapag QR kasi (because if it’s a quantitative restriction), there are rent-seekers. Subject to corruption… and there’s no revenue but there is an impact on the price in the end,” he said.
“Whereas if it’s tariff, there’s a clear protection and there’s revenue.”
If the Philippines chooses to impose a quota or quantitative restriction, Mr. Rodolfo said, automotive import volumes above a particular threshold would be imposed a higher tariff.
Mr. Rodolfo said that retaliatory measures are usually placed on the same product, but the Philippines does not import a significant amount of cigarettes and tobacco from Thailand.
In this case, the WTO allows a “cross-sector” retaliation.
“If the complainant considers it impracticable or ineffective to remain within the same sector, the sanctions can be imposed in a different sector under the same agreement,” the WTO dispute settlement system said.
Mr. Rodolfo said that the department chose auto because of the volume of such Thai exports to the Philippines.
The Philippines first complained of Thailand’s fiscal and customs policies on importing cigarettes in 2008, a case that the WTO decided in favor of the Philippines in 2010.
The DTI will be requesting a meeting with Thailand to relay its plans, and give Thailand the opportunity to lift its non-compliant measures.
“We will file to exercise retaliatory rights before the end of the year,” Mr. Rodolfo said. — Jenina P. Ibañez