IV. EXPERIENCES AND EXPECTATION OF THAILAND
IN THE DISPUTE SETTLEMENT BODY (DSB) OF THE WTO
Since the establishment of GATT in 1947 until the WTO was set
up in 1995, Thailand has experienced as being a complainant, respondent
or third party in referring several disputes to the dispute settlement
mechanism of GATT and WTO. Some disputes could be settled at the consultation
stage whereas a number of disputes went through the entire process,
i.e., establishment of panels, panel procedures, adoption of panel reports
and the appellate review. It is expected that Thailand will refer more
disputes, especially those with the developed nations, to the WTO dispute
settlement mechanism since the DSB is a crucial forum to assist a weak
bargaining power country like Thailand to deal with developed nations
over serious trade disputes. It is also likely that Thailand will increase
its cooperation with other nations when it deals with international
trade disputes.
Examples of interesting disputes Thailand was involved
are as follows:
4.1 Dispute Settlement under GATT
a) Thailand -Restrictions on Importation of
and Internal Taxes on Cigarettes(52)
The U.S. claimed that the measure under the Zbbacco Act B.E. 2509 of
Thailand which prohibited imports of cigarettes violated GATT Article
XI. Thailand argued that the Thai measure fell under the exception in
GATT Articles XI: 2(c) and XX(b). The GATT panel ruled that the Thai
measure violated GATT Article XI: 1 and could not apply the exception
under Articles XI: 2(c) and XX(b) since cigarettes are not agricultural
products and the ban offoreign cigarettes was not necessary measure
under Article XX(b) to protect human life or health. Although such decision
of the GATT panel seems to point out that Thailand lost in this dispute,
part of the ruling providing that a ban on the advertisement of cigarettes
of both domestic and foreign origin would normally meet the requirements
of Article III: 4 and was regarded as a necessary measure within the
meaning of Article XX (b) has given wide authority to the Thai government
to ban the cigarette advertisement. This authority enables Thailand
to control the level of smoking despite the permission of foreign cigarette
imports to the Thai market.
b) United States - Measures affecting the Importation,
Internal Sale and Use of Tobacco(53)
Thailand joined the other tobacco export nations, i.e., Argentina, Brazil,
Columbia, El Salvador, Guatemala and Zimbabwe claimed that the Domestic
Marketing Assessment (DMA) measure of the U.S. which required the domestic
cigarette manufactures to use domestic tobacco for not less than 75%
of the volume of tobacco used in manufacturing cigarettes in each year
and the Budget Deficit Assessment (BDA) and the No Net Cost Assessment
(NNCA) levied from the importers higher than those levied from the domestic
producers violated GATT Article III: 5 and III: 2 respectively. The
U.S. argued that the DMA measure did not require that the cigarettes
sold in the U.S. need to contain any particular tobacco leaves and did
not restrict imports of tobacco products. The purpose of imposing the
DMA measure was to adjust the cost of the program on price support of
tobacco in the country whereas BDA and NNCA was the adjustment of the
border taxes aimed to improve the competition condition between the
foreign and domestic tobacco to create fair competition.
The GATT panel ruled that the DMA measure and the BDA
and the NNCA measures of the U.S. violated GATT Article III: 5 and III:
2 respectively. The U.S. had to adjust its law in accordance with GATT
provisions and agreed to compensate Thailand in form of tariff quota.
4.2 Dispute Settlement under WTO
a) United States-Import Prohibition of Certain Shrimp and Shrimp
Products(54)
Thailand joined Malaysia, India and Pakistan in requesting the Dispute
Settlement Body to establish a panel to examine their complaint regarding
a prohibition imposed by the U.S. on the importation of certain shrimp
and shrimp products by Section 609 of Public Law 101-162. Section 609
banned import of shrimps harvested with commercial fishing technology
which may adversely affect sea turtles. The United States argued that
its measure was justified under the general exception in Article XX(b),
(g) of GATT 1994. The panel concluded that the import ban on shrimp
and shrimp products as applied by the U.S. on the basis of Section 609
was not consistent with Article XI:1 of GATT 1994 and could not be justified
under Article XX of GATT 1994.
The United States appealed certain issues of law covered
in the panel report by claiming that the panel erred in finding that
the measure constituted unjustifiable discrimination between countries
where the same conditions prevailed and thus was outside the scope of
measures permitted under Article XX.
The Appellate Body held that although Section 609 was
a measure "relating to" the conservation of an exhaustible
natural resource within the meaning of Article XX(g) of GATT 1994, this
measure was applied by the United States in a manner which constituted
arbitrary and unjustifiable discrimination between Members of the WTO,
contrary to the requirements of the chapeau of Article XX. The Appellate
then recommended that the DSB request the U.S. to bring its measure
into conformity with the obligations of the United States under that
Agreement.
b) Thailand- Anti-Dumping Duties on Angles,
Shape and Section of Iron or Non-Alloy Steel and H-Beams from Poland(55)
Poland claimed that in imposing the definitive anti-dumping
measure on imports of H-beams originating in Poland, Thailand had violated
Articles 2, 3, 5 and 6 of the Anti-Dumping Agreement (AD Agreement).
Thailand argued that Poland violated its obligations under Article 6:
2 of the Understanding on Rules and Procedures Governing the Settlement
of Disputes DSU) to identify the claims in its requests for establishment
of a panel with sufficient clarity to present the problems clearly by
merely listing Articles 5 and 6 without adding additional detail and
that Thailand acted consistently with its obligation under Article VI
of GATT 1994 and the AD Agreement. The panel concluded that Thailand's
measure was inconsistent with the requirements of Article 3 of the AD
Agreement since:
(a) The Thai authorities did not consider the basis
of an "objective examination" of "positive evidence"
in the disclosed factual basis, the price effects of dumped imports
(inconsistently with the second sentence of Articles 3: 2 and 3: 1);
(b) The Thai investigating authorities failed to consider certain factors
listed in Article 3:4 and failed to provide an adequate explanation
of how the determination of injury could be reached on the basis of
an "unbiased or objective evaluation" or an "objective
examination" of "positive evidence" in the disclosed
factual basis (inconsistently with Articles 3: 4 and 3: 1); and
(c) The Thai authorities made a determination of a causal relationship
between dumped imports and any possible injury on the basis of (i) their
findings concerning the price effects of dumped imports; and (ii) their
findings concerning injury (inconsistently with Articles 3: 5 and 3:
1). Thailand appealed certain issues of law covered in the panel report
and certain legal interpretations developed by the panel, and filed
a Notice of Appeal with the Appellate Body.
The Appellate Body ruled on main issues as follows:
upholded the panel's finding that the panel request submitted by Poland
with respect to claims relating to Articles 2, 3 and 5 of the AD Agreement
was sufficient to meet the requirements of Article 6: 2 of the DSU;
(b) upholded the panel's interpretation that kale %. 4 Zequzies a mandatory
evaluation of all of the factors listed in that provision, and that,
therefore, the panel did not err in its application of the standard
of review under Article 17: 6(u) of the AD Agreement;
(c) left undisturbed the panel's findings of violation under Articles
3: 1, 3: 2, 3: 4 and 3: 5 of the AD Agreement.
c) European Communities - Export Subsidies
on Sugar(56)
Thailand joined Australia and Brazil in claiming that the European Communities
had, since 1995, been exporting quantities of subsidized sugar in excess
of its annual commitment levels, contrary to- Articles 3 and 8 of the
WTO's Agreement on Agriculture. Regardless of how the sugar was categorized,
such subsidized exports of sugar were inconsistent with the European
Communities' obligations under Articles 3, 8 and 9, or in the alternative,
with Article 10.1 on the Agreement on Agriculture.
The European Communities argued that its export subsidy
commitments for sugar was, in fact, made up of two components : (i)
one component which had been subject to progressive reduction during
the implementation period, and (ii) a second component containing the
so - called "ACP/India sugar Footnote" which was subject to
a ceiling of 1.6 million tonnes. Thus, its exports of ACP/India equivalent
sugar were not in excess of its commitment level.
The panel found that the European Communities had been
acting inconsistently with its obligations under Articles 3.3 and 8
of the Agreement on Agriculture by providing export subsidies on sugar
within the meaning ofArticles 9.1 (a) and 9.1 (c) of the Agreement on
Agriculture, in excess of the quantity commitment levels specified in
Section II, Part 1V of its Schedule. In light of Article 10.3, the panel
concluded that the European Communities had not demonstrated that its
exports of sugar in excess of its commitment level were not subsidized.
CONCLUSION
The establishment of the WTO occurred together with the extension of
the scope of the world regulation of international trade to cover more
areas concerning trade. As a result, trade liberalization has been accelerated
whereas unfair trade barriers and protectionism are discouraged. In
contrast, every nation still has great needs to protect their domestic
industry in order to cope with higher trade competition. Thus, having
wider scope and complicated regulation of world trade does not necessarily
mean that there will be no more distorted trade barriers and unfair
trade practices. Rather, trade disputes resulting from trade barriers
are likely to increase and become more complex. Like many other ASEAN
nations, Thailand has been struggling in fighting with its economic
crisis by providing more assistance to local industries but at the same
time has had to comply with the WTO obligations. Experiences of Thailand
on the WTO application seems to go along the right direction towards
trade liberalization.
So far, both trade policies and legislation of the
country have positively been progressed in accordance with the trend
of the WTO. The slow pace of the WTO's multilateral negotiation at present,
however, has turned many nations, including Thailand, to move for FTAs.
Although the FTA approach . can be proceeded bilaterally, its role must
be limited to supplement the WTO process. A weak bargaining nation like
Thailand needs to enter ETA negotiations with cautions. In the author's
view, instead of using most of its resources to prepare for concluding
FTAs with the main trading partners, the Thai government should make
best use of the WTO mechanisms by putting more efforts to study the
WTO issues in depth. The greatest challenge confronting Thailand and
other ASEAN members is to keep abreast of the rapid development of the
world trade regulations and to deal with trade conflicts effectively.
This task will be much easier with close cooperation among ASEAN countries.
(52)
DS10/R, 7 November 1990.
(53) DS44/R.
(54) WT/DS58/AB/R, 12 October 1998.
(55) WT/DS122/R, 28 September 2000; WT/DS122/AB/R.
12 March 2001.
(56) W/DS266/R. 15 October 2004
