Thailand is like pointing its fingers back to themselves as the fellow ASEAN country urged Philippines to follow the multilateral trading body - World Trade Organization (WTO), which ruling Thailand ignored for the past 10 years.
Thailand’s Department of Industry and Commerce was represented by Kungsawanich Kanitha at yesterday’s public videoconferencing conducted by the Tariff Commission on the Philippines Department of Trade and Industry’s move to impose safeguard measure on various imports from Thailand totaling 37 tiff lines including motor vehicles, auto spare parts, and rice, among others,
The Thai representative told the public hearing that the WTO has not granted the Philippines any authorization to retaliate against Thailand. Without such, she said, any retaliation by the Philippines at this stage is impermissible under WTO rules.”
The Thai lady representative said “it would be inconsistent with the Philippine obligation” to take unilateral action and imposing measures against other WTO members.
She warned that any measures as a result of this process would be inconsistent with WTO, of the General Agreement on Tariffs and Trade, and against the WTO rules to respect tariff binding.
Any retaliatory measures not previously sanctioned by WTO, she said, is “illegal in nature” as this will “erode the goodwill” in the current efforts in Geneva to settle the cigarette tax issue between the two countries.
Thailand admitted that the Philippine move to impose safeguard tariffs will affect both economies with Thailand being the fifth largest source of imports for the Philippines, particularly motor vehicles.
She said that prices of motor vehicles will increase because of new tariffs, disrupt markets and affects supply chain across ASEAN, the damage of which could be irreparable.
Ironically, the Philippine move to retaliate was a result of Thailand’s refusal for the past 10 years to follow WTO’s decision for Thailand to align the taxes it imposed on Philippine cigarettes to its local tax rates (DS371 Thailand-Customs and Fiscal Measures on Cigarettes from the Philippines).
Once the Philippines makes good of its threat to retaliate, this will affect various Thailand exports. These products include AHTN 2017 Code under tariff lines 8701.92.10; 87.03;87.04; 8708.99.21; 8708.99.99; and 8714.10. Items covered are agricultural tractors; motor cars and other motor vehicles principally designed for the transport of persons (other than those of heading 87.02); motor vehicles for the transport of goods; fuel tanks and other parts and accessories of motor vehicles; parts and accessories of motorcycles (including mopeds).
Thailand is Philippines number one source of automobile imports. From 2014 to 2018, the Philippines imported 428,000 units from Thailand. These are products covered under HS Codes 8703 and 8704 or the tariff lines for automobiles used for the transport of persons and goods. ASEAN countries allow duty-free importation of cars produced in the region.
Some agricultural products such as maize (corn); semi-milled or wholly milled rice; soya-bean oil and its fractions; mixed condiments and mixed seasonings; and non-dairy creamer are also identified as among those that could lose tariff concessions. These products are under tariff lines 1005.90.90; 1006.30.99; 1507.90.90; 2103.90.29; and 2106.90.30. The country’s third biggest import from Thailand is rice.
Also included are tariff lines 6809.19.90; 7207.11.100; 7408.11.10; 8415.82; 8418.10.19; 8433.51.00; 8473.30.90; 8479.90;8482.10.00;8482.80.00; 8501.10; 8542.39.00; 8542.90.00; and 8544.49.21. Product coverage are boards, sheets, panels, tiles and similar articles of plaster or of compositions based on plaster, not ornamented; semi-finished products of iron or non-alloy steel; wire of refined copper; air conditioning machines incorporating a refrigerating unit; combined refrigerator-freezers; combine harvester-threshers; parts and accessories suitable for use solely or principally with the machines of heading 8471; parts of machines and mechanical appliances having individual functions; machine parts and mechanical appliances ball or roller bearings, electric motors; electronics integrated circuits; and shielded wire for use in the manufacture of automotive wiring harness.
Also in the list of products that could lose tariff free concessions are white cement; lubricating oils; monosodium glutamate; medicaments; face or skin creams and lotions; preparations for use on the hair; dentifrices; polyethylene; plates, sheets, film, foil and strip of plastics of chemical derivatives of natural rubber; supplementary feeding system for babies, of plastics; new pneumatic tyres of rubber; rubber grommets and rubber covers for automotive wiring harnesses. These products are under tariff lines 2523.21.00; 2710.19.43; 2922.42.20; 3004.90.99; 3304.99.30; 3305.10.90; 3306.10.90; 3901.20.00; 3921.90.30; 3924.90.30; 4011.10.00; 4011.20.10; and 4016.99.54.