THE PHILIPPINES and Thailand have signed a bilateral understanding to resolve their 14-year dispute over the customs valuation of cigarettes, the World Trade Organization (WTO) said on Saturday.   

The WTO said in a statement on its website that the understanding signed on June 7 is meant to help the two countries come up with agreed procedures for the “comprehensive” settlement of their longstanding trade dispute over Thailand’s customs and fiscal measures on cigarettes imported from the Philippines.

The understanding was signed by the permanent representatives of the Philippines and Thailand to the WTO in Geneva, Switzerland namely ambassadors Manuel A.J. Teehankee and Pimchanok Pitfield, respectively.   

This marks the successful result of the mediated facilitator-assisted process that began in 2021.

“Throughout the facilitation process, the Philippines and Thailand have actively and constructively engaged in discussions, both in Geneva and through their respective capitals and demonstrate the commitment of the parties to the WTO Dispute Settlement System,” Permanent Representative of Australia to the WTO and facilitator between the two parties George Mina said.

The Philippines first complained in 2008 of Thailand’s customs valuation of Philippine cigarette exports.

In 2010, the WTO decided in favor of the Philippines. However, Thailand had not complied with the measures included in the ruling issued by the WTO, resulting in strained trade relations between the two countries.

Under the latest agreement, the two parties decided to create a bilateral consultative mechanism, which will become a channel for their respective government authorities to coordinate and build confidence for support efforts to reach a settlement on the dispute.

“Taking into account the progress made in the implementation of their cooperation, it should ideally lead to the notification by the parties of a mutually agreed solution under Article 3.6 of the Dispute Settlement Understanding,” the WTO said.

It said the understanding can still be terminated by either party up to 60 days after its signing.

Philippine Trade Secretary Ramon M. Lopez said in a statement on Sunday that the understanding shows the countries’ “good faith and strong commitment…to resolve their differences and support the WTO’s rules-based dispute settlement system.”

“Thailand and its agencies of government including its judicial branch, have shown positive progress towards upholding WTO rules and the Customs Valuation Agreement,” Mr. Lopez said.   

He said the Thailand Appellate Court recently affirmed with finality the acquittal of Philip Morris Thailand employees in a case related to cigarette imports from the Philippines while also lowering the civil penalties and other fines that could deter improved trade between the two countries. — Revin Mikhael D. Ochave