According to sources in Manila, the Philippine government is contemplating on filing another case against the European Union should it fail to compensate local tuna canners for the preferential tariffs the 15-nation body granted tuna products of African, Caribbean and Pacific (ACP) states. Also a Philippine government source informed that Philippine trade officials are considering another case, this time involving the EU’s grant of preferential tariffs to tuna products of Andean states, namely Bolivia, Colombia, Ecuador, Peru and Venezuela.
Both the ACP Agreement and the Andean Agreement require a special waiver from the World Trade Organization (WTO). A waiver represents a World Trade Organization member-state’s consent to a tariff concession a trading partner granted a third party. Barring such a waiver, any concession granted a third party is considered a violation of the WTO’s “most favored nation†principle, which holds that all members of the multilateral trading body should extend to all other members any concessions they granted any member-state.
In the past, a waiver has been given by Thailand and Philippines for the ACP Agreement, but the EU officials’ fear is that, if both Asian nations do not get seriously reduced tuna duties, they might not approve a waiver for the ACP agreement again.
The Andean Agreement did not receive a WTO waiver. As such, the EU’s concession to the Andean states constitutes a violation of the WTO’s most favored nation principle. Therefore, the Philippines is confident of winning should it pursue the case.
Last Friday the EU was supposed to have voted on a resolution in a special “113 Trade committee meeting†adopting a WTO mediator’s opinion seen favorable to the Philippine case involving ACP tuna concessions. The mediator has proposed last month a 12% duty for a canned tuna quota for 25,000 M/T of about 1,500 20 ft containers. Although the EU is considering the proposal, both Thailand and Philippines have officially not given their consent yet to the WTO mediation proposal. No official news has come out of Brussels yet about the outcome of this closed-door meeting. Expectations are that the procedure could take another 3 to 6 months at the maximum, although there is pressure from the WTO to reach a fast decision.
Within circles in Brussels it is said that the blockage of a waiver for the ACP and possibly also the Andean agreement, could have far-reaching and chaotic effects on the economic situation of ACP nations. This effect would over-shadow the limited damage, which a possible 25,000 M/T quota at 12% could cause to EU member states, ACP and Andean nations; EU sources say.