The Philippines and Thailand have signed an “understanding” agreement to resolve the decade-long dispute over the customs value of cigarettes, the World Trade Organization (WTO) has announced.
In a message posted on its website, the WTO said the two ASEAN countries on June 7 signed an “Agreement on Agreed Procedures for Comprehensive Settlement of the Dispute in Thailand – Customs and Fiscal Measures on Cigarettes from the Philippines (DS371)”.
Reacting to the agreement, DTI Trade and Industry Secretary Ramon Lopez said: “This bilateral agreement shows the good faith and
strong commitment of ASEAN partners to resolve their disputes and support the rules-based dispute settlement system of the WTO. Thailand and its government agencies, including its judiciary, have made positive progress in complying with WTO rules and the Customs Valuation Agreement.
In a recent related development, Lopez said the Thai appeals court had finally upheld the acquittal of Philip Morris Thailand employees in a case related to imports of cigarettes from the Philippines, while also reducing civil and other penalties. penalties that could have discouraged greater trade between the Philippines and Thailand.
As part of the agreement on agreed procedures, the two countries have agreed to establish a Bilateral Consultation Mechanism (BCM), which will serve as a channel for their respective competent authorities to cooperate and dialogue on a regular basis, with the aim of to build confidence that will help them reach a comprehensive settlement of their dispute in DS371, in accordance with their rights and obligations under the WTO Agreement, as well as the recommendations and rulings of the DSB.
The Agreement may be terminated by either party upon 60 days written notice. Given the progress made in implementing their cooperation, this should ideally lead to the notification by the parties of a mutually agreed solution under Article 3.6 of the DSU.
The WTO said the “Agreed Procedures Memorandum of Understanding” underscores the commitment of Thailand and the Philippines to continue their close cooperation, particularly through the process of frank and open dialogue that will be facilitated under the of the BCM, in accordance with the strong ASEAN spirit of solidarity and friendship. that unites them and their attachment to the rules-based dispute settlement system of the WTO.
The Memorandum of Understanding on Agreed Procedures was negotiated between the two members of the Association of Southeast Asian Nations (ASEAN) to be consistent with relevant bilateral treaties, treaties and values of the ASEAN, WTO law and agreements, including the Customs Valuation Agreement, WTO Dispute Settlement Body (DSB rulings and recommendations as well as their national laws and regulations .
Reflecting the determination and shared efforts of the two countries to resolve their long-standing differences, the formal signing of the Agreed Procedures Agreement on June 7 represents a successful culmination of the facilitator-assisted process launched in 2021 following the “Agreement between the Philippines and Thailand”. continue facilitator-assisted discussions aimed at moving forward and resolving outstanding issues regarding DS371” in December 2020
Throughout the process and under the leadership of Ambassador George Mina, Permanent Representative of Australia to the WTO, acting as Facilitator, the Philippines and Thailand engaged in active and constructive discussions, both in Geneva in their respective capitals, with a view to exploring possible ways for the two countries to reach a mutually acceptable resolution to their customs valuation dispute, without prejudice to their respective rights and obligations under the Memorandum of Understanding on Dispute Settlement (Memorandum of Understanding).
The Philippines and Thailand, represented by their Permanent Representatives to the
WTO in Geneva, Amb. Manuel AJ Teehankee and Amb. Pimchanok Pitfield has signed the Memorandum of Understanding on Agreed Procedures for the Comprehensive Settlement of the Dispute in Thailand – Customs and Fiscal Measures on Cigarettes from the Philippines (DS 371).
The cigarette tax dispute began in 2008 when the Philippines, on behalf of Philip Morris Philippines Manufacturing Inc., asked the WTO panel to examine the Thai government’s discriminatory tax treatment of cigarettes imports, in particular with regard to customs valuation.
The case has dragged on for a total of 14 years over Thailand’s stalling tactics, affecting the Philippines’ cigarette exports and the local tobacco industry.
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