Trade disputes can arise from a number of different issues related to commercial transactions and international trade regulations. This article explores the legal framework, common types of disputes, and resolution mechanisms for trade disputes in Thailand.
The Philippines argued that Thailand’s ad valorem excise tax, health tax, and TV tax on domestic cigarettes violated its obligations under Article III:2 and III:4. The DSB disagreed.
Alternative Dispute Resolution
Alternative dispute resolution (ADR) is conflict management processes and techniques that are conducted outside the courts. These methods are often less adversarial and more cost-effective than traditional court proceedings. ADR includes negotiation, mediation, conciliation and arbitration. These alternative methods of Thailand dispute resolution can help businesses avoid costly litigation and remain competitive in the global marketplace.
For example, the ADR process of negotiation is an excellent way to resolve trade disputes without a full-blown court trial. This method of dispute resolution can also be more flexible than formal court proceedings, as the parties involved in a dispute are allowed to customize the terms and conditions of their agreement. This flexibility can be an important advantage for foreign businesses that are trying to enter the Thai market.
As a result, ADR has become an increasingly popular means of resolving trade disputes in Thailand. Despite this growing popularity, ADR is not without its challenges. A major challenge of ADR is maintaining the unity and momentum of a dispute settlement effort. This can be difficult when the issue is highly political and emotive.
The case of the tobacco dispute between Thailand and the US was one such instance. During the negotiations on DS371, many USCEA members were uneasy over reports that Thailand may have offered to restrict imports from the Philippines, in exchange for access to the Thai market (Kennedy 1989). Furthermore, they were concerned by reports that the USTR was considering referring the dispute to GATT arbitration (Downham, 1989a). Nonetheless, the USCEA continued to pursue the case with Thailand as a matter of principle, on the grounds that the preferential tariff constituted negative discrimination against the complainants and had therefore breached WTO rules.
Courts
While the Thai court system can be effective in resolving disputes, it is often slower and more costly than alternative dispute resolution methods. It is important to consider the legal and commercial implications of taking your case through the courts before choosing this route. However, the Thai courts do offer a number of positive aspects for litigants, including a mandatory mediation process and an arbitration section that focuses on disputes between international companies and may be conducted in English.
The court system also allows parties to agree on a particular law to govern their case, and this can be advantageous for those who want their case resolved using foreign law. The court system also has a specialized court for intellectual property matters.
As a general rule, it can take between one and three years for a trade dispute to reach trial and be determined by the court. This can be especially challenging during times of national emergency such as the COVID-19 outbreak, when many court hearings were postponed.
In addition to the normal trial process, the Thai court system allows witnesses to testify via video conference. This is especially helpful for cases that involve distant or international witnesses. When a judgment is rendered in favor of the plaintiff, the court typically orders that the defendant pay the costs of the litigation. This includes advanced court expenses and attorney fees.
Online Dispute Resolution
In some situations, consumers and businesses are able to resolve their disputes outside of court. This means that they agree with a neutral third party to act as intermediary and try to reach an outcome. This is known as Alternative Dispute Resolution (ADR). It includes mediation, conciliation, arbitration and even ombudsman services. ADR is often quicker, simpler and costs less than going to court.
One of the ways ADR can be conducted is through online dispute resolution. The term “online dispute resolution” has a wide definition, and can refer to any technology used to facilitate an ADR process, whether it be for a single step of a process or the entire proceedings. This can include using tools like Zoom or Google Meet to conduct hearings or the use of an online platform that enables parties to participate in an ADR procedure via videoconferencing. For example, the Thailand Arbitration Center offers a service called AMO 24/7 that allows disputing parties to file different documents, and also allows them to have a live discussion with their arbitrator over videoconferencing.
The growth of cross-border consumer e-commerce presents new challenges for traditional legal systems. Thailand has the potential to become a leader in ADR for this market, thanks to its robust legal framework and cultural emphasis on mediation. The country’s strategic location and strong network of trade agreements within the region further bolster its position as an international ADR hub.
International Dispute Resolution
Niccolo is a Lecturer in International Law at King’s College London. He specialises in cross-border business-to-consumer (B2C) e-commerce, and has a particular interest in the interaction between international consumer protection laws and private online dispute resolution mechanisms.
The Philippines initiated a WTO dispute, DS371, with Thailand in February 2008 on the basis that its taxes and customs policies for imported cigarettes were discriminatory against them. The DSB ruled that Thailand had breached numerous articles of the CVA and GATT, particularly those concerning the tariff structure and anti-dumping duties. The DSB’s Panel Report and the subsequent Appellate Body decision were largely in favour of the Philippines’ claims.
US positions adopted during the DS371 dispute seem to have influenced the Bush administration’s broad adoption of developing country positions in FCTC negotiations requested by Thailand (Waxman, 2002; Yeoman, 2003). This has further heightened concerns over the compatibility of trade and tobacco control policy agendas (Eckhardt, 2002).
The 301 case did serve to accelerate Thailand’s enactment of far-reaching tobacco control legislation, though it would prove difficult for TTC marketers to replicate the intensity of marketing activities exhibited in other 301 countries (Vateesatokit et al, 2000; Chitanondh, 2001). Strategic uses of indirect advertising and sponsorship schemes were circumscribed by domestic legislation, and did not reach the same level of brand stretching as in other 301 countries (MacKenzie et al, 2007). Despite the apparent success of the dispute, the USCEA remained concerned that a settlement to the dispute would provide foreign protectionist lobbies and enemies of free enterprise with additional pretexts for action against U.S. producers and manufacturers (USCEA, 1989b).
