WT/DS371/37  
 
11 March 2020  
(20-1925) Page: 1/2 
  Original: English  
 
THAILAND – CUSTOMS A ND FISCAL MEASURES O N CIGARETTES  
FROM THE PHILIPPINES   
COMMUNICATION FROM THE PHILIPPINES  
The following communication, received on 9 March  2020, was received from the delegation of the 
Philippines with the request that it be circulated to the Dispute Settlement Body (DSB).  
 
_______________  
 
 
1. The Philippines thanks the Chair for the opportunity to present its request, under Article 22.2 
of the DSU for authorization to suspend the application to Thailand of concessions or other 
obligations under the covered agreements, in the dispute Thailand – Customs and Fiscal Measures 
on Cigarettes from the Philippines , or "DS371 ".  
2. The Philippines regrets that the work of the DSB has been delayed this week and thanks the 
Chair for resuming the meeting to take up all matters in the agenda.  The Philippines app reciates 
that the DSB is now properly taking up consideration of our Article 22.2 request.  
3. The Philippines notes with respect Thailand 's concerns relating to the application of the 
provisions of the Sequencing Understanding and the current impasse at the A B level of the WTO 
dispute resolution system which we have just discussed today under Agenda item 9.  As Thailand has 
stated, there are far reaching implications for the rules -based WTO system and this serves as well 
now as an opportunity for Members to exp ress their own views on this important matter of a conflict 
between Article 22 and 21.5 rights and obligations and procedures, while also touching upon the 
viability and integrity of the WTO dispute settlement system.  
4. The Philippines takes exception howeve r to the characterization that the Philippines is 
attempting to act unilaterally.  This is the very reason the Philippines is before the DSB today and 
also last February 28, i.e., in order to seek proper and appropriate multilateral authorization to 
suspend  concessions pursuant to the clear provisions of Article 22 of the DSU.  
5. Thailand had already agreed to two reasonable periods of time (RPTs) for the implementation 
of the DSB 's adopted recommendations and rulings, which apply to distinct measures.  The firs t 
period expired on 15 May 2012, and the second expired on 15 October 2012.  
6. On 1 June 2012, the Philippines and Thailand did conclude a Sequencing Understanding which 
was notified to the Chair of the DSB on 7 June 2012 for distribution to the members of th e DSB in 
WT/DS371/16, which was expressly stated to be without prejudice to their respective rights and 
obligations under the DSU, including the Philippines rights under Article 22, and Thailand expressly 
committed not to object to the exercise of the Phil ippines rights under Article 22 and Thailand 
expressly preserved its rights to Article 22.6 arbitration.  
7. In good faith, the Philippines did pursue parallel Article 21.5 compliance proceedings, and the 
first compliance Panel Report was issued on 12 November  2018.  The Philippines also obtained a 
second compliance Panel Report on 12 July 2019.  Both compliance Panels did confirm that Thailand 
had failed to comply with the DSB 's recommendations and rulings.  Under the Sequencing 
Understanding between the two part ies, any appeal of said 21.5 panel reports was to be mandatorily 
resolved within 90 days from their initiation.  The 90 -day period for the first and second compliance WT/DS371/37  
 
- 2 - 
 
  appeals have well expired since 2019.  On 10 December 2019, the AB Division in each appeal 
informed the parties that it had indefinitely suspended its work.  
8. In the sequencing understanding, the parties have agreed to cooperate to find a prompt 
solution to any procedural issue not addressed in the understanding.  The sequencing understanding 
does not address the procedural impasse  at the Appellate Body but its spirit requires us to cooperate 
and find solutions, and the Philippines is prepared to do so.  
9. The Philippines therefore is fully respecting the procedures and the sequencing understanding 
and should not be prevented from asserting its valid and substantial rights under Article 22.  We 
have at various times expressed a need to adopt the 21.5 panel reports and to obtain full compliance 
by Thailand with the duly adopted DSB recommendations (15 Jul y 2011).  
10. The Philippines remains open to constructive and time -bound solutions to the current 
situation, that respects the spirit of the Sequencing Understanding mandatory 90 -day period for 
appeals to be resolved.  We therefore call on Thailand and members of the DSB under the leadership 
of the Chair to guide the Philippines on obtaining full compliance by Thailand with the DSB 
recommendations and rulings, or to afford and respect the right of the Philippines to be c ompensated 
or to be authorized to suspend concessions.  
11. In consultations, the Chair has mentioned the possibility of referring the resolution of the 
pending appeals to alternative methods and rules, including but not limited to Article 25 of the DSU.  
The Ph ilippines has expressed its openness to this suggestion, as well as our open -ness to resort to 
Article 22.6 arbitration or any other hybrid alternative.  Our open -ness remains and we welcome and 
solicit views to be expressed today by members of the DSB.  
12. From the Philippines ' perspective, if Thailand does not accept some solution to complete 
Thailand 's appeals promptly under alternative procedures, including through resort to Article 25 of 
the DSU, this matter will have to inevitably return to the DSB for dec ision under the mandatory 
decision -making rules mandated by Article 22.6 of the DSU.  
13. The Philippines is prepared to be guided by the Chair and the DSB on compromise approaches 
and can formally communicate this to the Chair and Thailand, but the Philippines  would not be in a 
position to an indefinite suspension of its exercise of its Article 22 rights.  The mandatory decision -
making rules in Article 22.6 of the DSU are designed precisely to prevent a respondent from 
frustrating WTO dispute settlement in such manner.  
14. In these circumstances, Mr Chairman, the Philippines does formally present its request to the 
DSB for authorization to suspend concessions or other obligations under the covered agreements, 
subject, to our willingness to suspend consideration of th is matter pending further consultations 
among the parties as well as hearing members ' views today, and subject to the condition that the 
DSB will revert to and retain this agenda item at the next and subsequent meetings in order to 
preserve all rights and remedies of the Philippines.  
15. We reserve our right to speak again after hearing other members ' perspectives and update 
members as well of any developments at our next meeting.  
 
__________