NATIONAL TREATEMENT

National treatment: Treating

foreigners and locals equally
Imported and locally-produced goods
should be treated equally at least
after the foreign goods have entered the
market. The same should apply to
foreign and domestic services, and to
foreign and local trademarks, copyrights
and patents.

National treatment only applies once a

product, service or item of intellectual
property has entered the market.
Therefore, charging customs duty on an
import is not a violation of national
treatment even if locally-produced
products are not charged an equivalent
tax.

RA 10351

Philippines vs Thailand

On 7 February 2008, the Philippines

requested consultations with Thailand
concerning a number of Thai fiscal and
customs measures affecting cigarettes
from the Philippines. Such measures
include Thailand's customs valuation
practices, excise tax, health tax, TV
tax, VAT regime, retail licensing
requirements and import guarantees
imposed upon cigarette importers. The
Philippines claims that Thailand
administers these measures in a partial
and unreasonable manner and thereby

The Philippines argued that a series of

customs valuation and domestic
taxation measures starting in 2006 had
undermined the competitiveness of
imported cigarettes against those
produced by the state-controlled
Thailand Tobacco Monopoly.

The Appellate Body backed the

initial panels findings issued in that
Thailand had violated WTO rules by
subjecting imported cigarettes to
VAT liability in excess of that applied
to like domestic cigarettes.

The Appellate Body called for

Thailands measures to be brought
into conformity with the Agreement
on Customs Valuation

EU and US vs Phil

 In 2004, Republic Act No. 9334

increased excise taxes imposed on
alcohol and tobacco products.
The resulting rates taxed imported
spirits at a higher rate in violation of the
national treatment obligation of PH.
Art. III.1 and III.2 of the GATT says
that imports should be taxed at rates no
higher than subjected to internal taxes
or charges in excess of like domestic
products or give them the same

 July 29, 2009. The EU and the US

filed a complaint against the PH at the
WTO. Allegation: Violation of PH
obligation re national treatment.
October 2009 and January 2010.
Consultations held between PH and
EU and the US.
April 2010. Panel was formed on
this dispute by the WTO.

Ph Defense
The tax treatment makes no
distinction between the countries
of origin of the products. rather
on the raw material base of the
spirit. E.g. rums from Caribbean.

 Panel heard the case in two meetings

between April 2010 and August 2011.
August 2011. The panel ruled in favor
of the complainants.
September 2011. PH appealed the
case to the WTO Appellate Body, which
in turn upheld the panels report in
December 2011.

 February 22, 2012, the WTO Dispute

Settlement Body upheld the findings of
the panel and ruled that the Ph violated
its NT obligation.
January 2013, the PH notified the
WTO that it complied with the decision
with its passage of the Sin Tax Law.

Thank you and I love you all