The WTO legal panel hearing the cigarette tax dispute between the Philippines and Thailand has to issue an interim report by end of March this year and final report in May.

Trade and Industry Assistant Secretary Jose Antonio Buencamino told reporters that depending on the comment that would be presented by both parties, the WTO panel is expected to issue a final report by May this year.

The parties though have the opportunity to file for an appeal depending on the ruling of the Dispute Settlement Body.

Buencamino said the Philippines might no longer comment on the interim report of the WTO panel, but rather wait for the decision of the dispute settlement body.

Buencamino said that trade disputes in the WTO take long process before their resolution.

In the case of the Philippine-Thailand cigarette tax row, the process has dragged on for almost two years already excluding the consultation proceedings.

The dispute started in August 2006 when Thai authorities disregarded declared transaction amounts and charged higher duties, suspecting that exports from Philip Morris' Philippines Manufacturing Inc., the country’s largest cigarette manufacturer and exporter, were undervalued.

Thailand suspected that since the cigarette exporter, Philip Morris Philippines Manufacturing, Inc., and the importer, Philip Morris Thailand, are related parties, the declared prices may have been artificially low to reduce tax payments.

During the second substantive meeting on November 4 to 6 in Geneva last year by the WTO panel hearing the case (DS 371 Philippines versus Thailand on cigarette Customs valuation), Philippine Ambassador to Geneva/WTO Ambassador Manuel AJ Teehankee Teehankee highlighted issues of transparency, discrimination, and domestic protection in Thailand ’s regulatory regime, which affects the entry of Philippine-made cigarettes in the country.

The Philippine tobacco industry is a major employer and contributor to the Philippine economy.

“The Philippines remains confident that the WTO legal panel will review all facts and hopefully requests Thailand to correct its tax measure,” Teehankee said.