GENEVA, Nov 17 (Reuters) - The World Trade Organisation (WTO), acting on a complaint from the Philippines, on Monday set up a panel to investigate whether taxes affecting foreign cigarettes in Thailand violate global trade rules.
In submissions to the trade watchdog, Manila argues that imported cigarettes are subjected to unfair taxation and other measures in the Thai market, which is dominated by the Thailand Tobacco Monopoly.
"The playing field on which imported and domestic cigarettes compete is uneven," the Philippines said in a submission to the WTO's Dispute Settlement Body (DSB).
Thailand responded by saying its customs and fiscal laws were fully consistent with WTO rules, and it hoped to resolve the matter through bilateral talks.
Last month it blocked the Philippines' initial request for a panel, as is permitted under WTO rules, to allow more time for consultations to resolve the matter outside WTO arbitration.
But Manila said those discussions did not ease its concerns. It lodged a second panel request with the DSB, automatically triggering the launch of an investigation.
It said in a statement: "Bilateral discussions on specific matters described in the panel request have not yet resulted in a mutually agreeable solution to the Philippines' concerns."
Thailand said it was open to holding more talks to resolve the matter. But it also raised a potential legal hurdle for the case, saying that some issues outlined in the Philippines' request for a WTO panel had not been described in its call for the bilateral consultations preceding it.
"Thailand therefore reserves the right to bring claims regarding these deficiencies to the attention of the panel as necessary," it said in a written submission.
The Philippines' biggest cigarette maker is Fortune Tobacco Corp. (Reporting by Laura MacInnis; Editing by Robert Evans and Mark Trevelyan)