EU Complains To WTO About Thai Pricing Of Its Alcohol Imports

[Jai Dee]

EU complains to WTO about Thai pricing of its imports

European Union has made the first step with the World Trade Organisation towards a formal complaint over Thailand's pricing policy for EU alcohol imports, the European Commission said on Sunday.

The Commission has accused Thailand of consistently rejecting the declared price of EU products imported into Thailand "and applying an arbitrary value instead."

"These measures are arbitrary and damaging for EU companies seeking to do business in Thailand," said EU Trade Commissioner Peter Mandelson in the statement.

"We believe they are not compatible with WTO rules." The EU lodged the request on Friday. If talks between the two sides do not resolve the issue within 60 days, the EU will be able to ask a WTO to rule on the legality of the Thai measures.

Brussels registered a similar complaint in November at the WTO against India so as to secure a change in practices that blocked access to the Indian market for European wine and spirits producers.

Source: Economic Times - 28 January 2008

[Jai Dee]

EU takes 'erratic' Thai tariffs to WTO

Requests formal trade consultation

The European Union has formally requested consultations at the World Trade Organisation over the Thai customs practice of rejecting the declared valuation of EU products and applying an arbitrary value instead. The EU said the measures are having a significant impact on EU companies, especially exporters of wines and spirits. The problem also appears to be affecting car exports, it said.

EU Trade Commissioner Peter Mandelson said these measures are arbitrary and damaging for EU companies seeking to do business in Thailand.

More from the Bangkok Post here.

[Mobi]

Interesting.

A battle between one of the most corrupt customs departement in the world and the EU commission.

I wonder who will win?

[cclub75]

A battle between one of the most corrupt customs departement in the world and the EU commission.

I wonder who will win?

The EU of course...

Because obviously... we hold the thais by their balls... with their exports.

It's the only remaining growth engine for the thay economy.

So to give up a few corrupted customs officers... and loosing some "pocket money" on imported wines... against the survival of thai exports... well even by thai standards, it's a seriously unbalanced game.

Edited January 28, 2008 by cclub75

[BigSnake]

In a word "GREED" enough said

[Mobi]

You may well be right, but don't underestimate the cunning of the "wily orientals". They don't play by the same rules.

There's winning and winning.....

I seem to recall the the Americans have been battling the Japanese for decades over various 'restraint of trade" and "unfair trading practices". At the end of the day, import and trading licences etc, can get bogged down in a bureaucratic morass for years.

[mellow1]

You may well be right, but don't underestimate the cunning of the "wily orientals". They don't play by the same rules.

There's winning and winning.....

I seem to recall the the Americans have been battling the Japanese for decades over various 'restraint of trade" and "unfair trading practices". At the end of the day, import and trading licences etc, can get bogged down in a bureaucratic morass for years.

Many of you keep reminding us Americans of how much smarter you are compared to us, lets see.

[Seneque]

Funny ... since the 'coup d'etat' suddenly .... The Military have been controling the import of alcohol for ages (particularly wine)... when in power they could do, of course, whatever they wanted, the EU didn't complain too loudly while the military dictatorship was in power (strangely enough !) ... This story is just one of the many which shows that Thailand 'never' play by the rules and is 'always' getting away with it ... I wonder why so much complacency ... bring them to court and make them pay ...

[Scott]

Maybe it's just like the in the market--they're bargaining!

In which case, the EU loses!

[jayjayjayjay]

A battle between one of the most corrupt customs departement in the world and the EU commission.

I wonder who will win?

The EU of course...

Because obviously... we hold the thais by their balls... with their exports.

It's the only remaining growth engine for the thay economy.

So to give up a few corrupted customs officers... and loosing some "pocket money" on imported wines... against the survival of thai exports... well even by thai standards, it's a seriously unbalanced game.

God I only hope so, it would be nice to be able to buy things on the world market, ie ebay, online book shops, literally anything, and allow this country to progress........... this ridiculous department has held all captive to long. This would be one for the Thai people, they have been held for randsom too long..... the selective elite....

[cclub75]

I seem to recall the the Americans have been battling the Japanese for decades over various 'restraint of trade" and "unfair trading practices". At the end of the day, import and trading licences etc, can get bogged down in a bureaucratic morass for years.

You are right. And we have clearly the same scenario with China (another big liar and cheater)...

But... but... I start to think that at the end of the day, the US might eventually have won this battle... with paradoxical logic.

By making Japan and China accumulate mountains of USD (as their currency reserves) and US debts, having them financing the US deficit and US consumption for years... Like a bomb ready to explode in their backyard...

And then, by letting the USD drop like a stone...

Boum. Game over for Japan and China.

[Tony Clifton]

A battle between one of the most corrupt customs departement in the world and the EU commission.

I wonder who will win?

The EU of course...

Because obviously... we hold the thais by their balls... with their exports.

It's the only remaining growth engine for the thay economy.

So to give up a few corrupted customs officers... and loosing some "pocket money" on imported wines... against the survival of thai exports... well even by thai standards, it's a seriously unbalanced game.

That's another area where a major flush to get rid of criminals and organized crime has been long overdue.

[geriatrickid]

As a consumer, I'd love for the EU to be successful. However, the Thai authorities can easily fix the problem. They can just follow the example of Canada where alcohol taxes are ridiculous. The Ontario Liquor Control Board (LCBO) is the single largest purchaser of alcohol and the 2nd largest purchaser of wine in the world. The largest purchaser of wine in the world is the Societie des Alcools de Quebec. Both are the respective provincial government monopolies that control alcohol and wine sales in their respective provinces. Each of these provinces adds taxes on top of the federal government duties that make wine & spirits more expensive than what is available in Thailand. The EU hasn't taken action against those provinces, or any Canadian province for that matter and the markups can be as high as 500%. For example a bottle of cheap Bordeaux that I can get for 200B in France retails for 600B in Canada. The government justification for such high sin taxes is that it is for the good of the people.

[Maxi101]

Maybe it's just like the in the market--they're bargaining!

In which case, the EU loses!

I am certain, that if the EU is sure and united with what they are doing and pulls through - they are going to steer clear.

What is the EU by the way --- they are not as united as you might think.

But the real weakness in such dealings is the superior attitude which might lead to the loss of such a battle.

Same experienced by some of the esp. new Expat fellows of such countries.

maxi

[adjan jb]

For example a bottle of cheap Bordeaux that I can get for 200B in France retails for 600B in Canada. The government justification for such high sin taxes is that it is for the good of the people.

People who drink red wine live longer, have less cholesterol and are more intelligent. The French are a perfect illustration of this last point.

[Jai Dee]

Posts concerning US politics have been deleted from this thread.

I'm still thinking about the validity of the French one...

[Jai Dee]

Thailand rejects EU complaints on alcohol imports

Thailand is ready to discuss its pricing policy for alcohol imports from the EU, but rejected a European complaint that its system was 'arbitrary,' a top customs official said Monday.

The European Union has made the first step with the World Trade Organization towards a formal complaint over Thailand's pricing for EU alcohol imports, accusing the kingdom of ignoring the declared value of the products.

EU Trade Commissioner Peter Mandelson said in a statement that the policy was 'arbitrary and damaging for EU companies seeking to do business in Thailand.'

Natina Santiyanont, head of Thailand's Customs Procedures and Valuation Directorate, said the kingdom was ready to meet with the Europeans to explain their policy.

She said that values on products were only changed if companies failed to prove that their pricing was accurate.

'We have standards to maintain and to facilitate importers that are honest and comply with rules and regulations,' she said.

'Our pricing policy is based on the transaction value of the imported goods... That is in line with the WTO and recognized by Thai laws,' she said.

Natina said the customs department would meet with EU representatives within a few days.

The EU lodged the request on Friday. If talks between the two sides do not resolve the issue within 60 days, the EU will be able to ask the WTO to rule on the legality of the Thai measures.

Brussels registered a similar complaint in November at the WTO against India so as to secure a change in practices that blocked access to the Indian market for European wine and spirits producers.

Source: Forbes - 29 January 2008

[Seneque]

Posts concerning US politics have been deleted from this thread.

I'm still thinking about the validity of the French one...

Don't think too much, don't be jealous it's not your fault, drink their wine and you'll see ... the statement is true !

[Seneque]

'We have standards to maintain and to facilitate importers that are honest'

May I laugh ....

[adjan jb]

Posts concerning US politics have been deleted from this thread.

I'm still thinking about the validity of the French one...

Don't think too much, don't be jealous it's not your fault, drink their wine and you'll see ... the statement is true !

A toast to lower cholesterol

Red Wine

By Alex Markels

Health researchers have long wondered why the French, who have a predilection for creamy sauces, foie gras, and similarly high-fat foods, tend to live just as long as people with better eating habits. A spate of recent studies point to a possible reason: France's equally strong taste for red wines that contain resveratrol, a chemical compound proven to extend the lives of yeast cultures and fruit flies, and which may have similarly beneficial effects on humans by lowering cholesterol levels. In one study just published in the journal Nature, scientists found that the chemical mimics the effect of a low-calorie diet, which has been found to extend the lives of lab rats by 30 percent to 50 percent. "It needs more study, but there's the potential that human life could be extended, too," says David Sinclair, a Harvard researcher who coauthored the study.

U.S. News & World Report

-----------------------------------------------------------------

Other research has shown that while red wine may be protective, other forms of alcohol are not. That, say the researchers, may be explained by other lifestyle differences between people who favour different kinds of drink.

The Daily Mail

[raro]

The EU is opening a can of worms!

The Thai import duties and the excise tax on alcohol is ridiculously high. Reckon about factor 3 from arrival Bangkok port to cleared out of the customs. As a result, some of the importers might fiddle with the invoices and this again prompts the customs officers to question the amounts stated. This of course is not only the duty, but also the purpose of customs officers - in Thailand like anywhere else.

[selftaopath]

A battle between one of the most corrupt customs departement in the world and the EU commission.

I wonder who will win?

The EU of course...

Because obviously... we hold the thais by their balls... with their exports.

It's the only remaining growth engine for the thay economy.

So to give up a few corrupted customs officers... and loosing some "pocket money" on imported wines... against the survival of thai exports... well even by thai standards, it's a seriously unbalanced game.

God I only hope so, it would be nice to be able to buy things on the world market, ie ebay, online book shops, literally anything, and allow this country to progress........... this ridiculous department has held all captive to long. This would be one for the Thai people, they have been held for randsom too long..... the selective elite....

I could not agree more. Incidently I wanted to purchase a musical instrument in Thailand. YIKES the taxes are more than the actual price. Wouldn't it be grand to have some type of ability to purchase things for prices that were competitive?

Ah but maybe not in Thailand any time soon. And yes the "common people" loose again.

[Plus]

And then, by letting the USD drop like a stone...

Boum. Game over for Japan and China.

I think I just read somewhere that China's exports to the US account for only 14%.

Not that the crash in the US will not have effect on them, but they'll probably just sneeze and move on.

[ChiangMaiAmerican]

And then, by letting the USD drop like a stone...

Boum. Game over for Japan and China.

I think I just read somewhere that China's exports to the US account for only 14%.

Not that the crash in the US will not have effect on them, but they'll probably just sneeze and move on.

It's a lot more than 14%. The direct exports to the US in 2006 were 287.8 Billion Dollars. China's total exports in 2006 were 969.1 Billion dollars. The US portion of China's total exports is almost 30% (29.7%). Then there are the indirect inputs of component parts manufactured in China that find their way into finished goods. The true total is probably a lot more than 30%.

http://www.uschina.org/statistics/tradetable.html

Edited January 30, 2008 by ChiangMaiAmerican

[Plus]

According to the last table on that page Chinese exports to the US were 203.5 billion, not 287.8 which makes it closer to 20 than 30%.

That was in 2006. Last year the US share in their exports has probably fallen.

Ok, here's a quote:

Zhang Tao, deputy head of the international department of the People's Bank of China (the central bank), dismissed the idea that the country's export-driven economy can decouple from the US. He told a financial forum that China's exports will be badly hit if US consumption weakens.

Figures due this week are expected to show that China's gross domestic product grew more than 11 percent in the fourth quarter of 2007 from a year earlier, despite a worsening US credit crunch.

But Zhang said he saw increasing risks to a US slowdown.

"If US consumption really comes down, that's bad news for us," he said. "That will have a pretty severe impact on our exports."

Anyway, this thread is about imports of alcohol from EU, let's leave China-US out of this.

Edited January 30, 2008 by Plus

[dominique355]

Funny thing that Thailand is being sued at WTO for unfair import restrictions while at the same time Thailand has sued USA for unfair import restrictions on shrimps.

And while the EU is looking into unfair import restrictions on wine, I would like to encourage them to also look into unfair import taxes on cars.

Thailand is imposing tax on wine calculated on it's value (price plus transport cost, transport insurance, CIF), while most reasonable countries tax alcohols on value alone (VAT) and then on alcohol content. That's why e.g. a bottle of really cheap Italian wine (12% alcohol, € 3 in Europe) costs in Thailand the same as a bottle of Black Label (41% alcohol, € 15; here THB 1'000).

If that is for the benefit of the people, then perhaps only for the benefit of the alcoholics.

[Plus]

Well, that's the law, they can't change if overnight to help out the EU, and I don't think they should, legally.

The problem lies in disagreement over the value they use to calculate the taxes. Both say that they got it right and the other party cheats.

Both have motives to do so - EU businesses wanted to pay less in taxes, Thailand wants to collect more. This setup opens the door for never ending negotiations with custom officials, who are the only winning party, in the end.

[cclub75]

Funny thing that Thailand is being sued at WTO for unfair import restrictions while at the same time Thailand has sued USA for unfair import restrictions on shrimps.

And while the EU is looking into unfair import restrictions on wine, I would like to encourage them to also look into unfair import taxes on cars.

Thailand is imposing tax on wine calculated on it's value (price plus transport cost, transport insurance, CIF), while most reasonable countries tax alcohols on value alone (VAT) and then on alcohol content. That's why e.g. a bottle of really cheap Italian wine (12% alcohol, € 3 in Europe) costs in Thailand the same as a bottle of Black Label (41% alcohol, € 15; here THB 1'000).

What do you try to prove here ? That all the countries in the world are trying to protect their own markets ? Of course they do.

But in this current case, it's totally different : it's just some rogue custom "officers" who are changing the rule, to their convenience and depending of their daily mood (and their needs for pocket money).

Furthermore you seem to confuse excises taxes (complex, with usually a taxation regarding the content of alcohol) and customs duties (or import taxes). Those are different.

For import taxe you have a fixed % applied on a declared value (the invoice). Period. That could change with some other parameters (like for instance, country of origin and other special regime like FTA).

Apparently the thai customs apply the official %.... but arbitrarily increase the value ! Leading to a great uncertainty for the importers. And a totally biased game.

[highdiver]

I love wine and i spend a lot of money on this hobby.

in thailand the prices of wine are considerably lower then in the west.

I font understand what the European are saying??

how can thailand breach the WTO when in fact the wines in thailand are sold cheaper then in Europe.

for exmaple wines from Saint Emilion, a more prestigious Bordeaux wine growing area are marketed in europe for outragous proces while in thailand they can be bought for less then 100 Euro.

if you wish to compare

a thai wine shop http://www.wineconnection.co.th/

[samran]

Interesting.

A battle between one of the most corrupt customs departement in the world and the EU commission.

I wonder who will win?

the words "pot, kettle and black" come to mind.

The EU aren't exactly the bastion of free trade themselves. NZ I belive is allowed to export the princely sum of 2 kg of chocolate per year to the EU. This huge amount NZ embassy officials distribute for free once a year in brussels, as a protest against high import walls into the EU.