The European Commission has requested consultations at the World Trade Organization over Thailand’s customs practices which it complains are damaging EU industry, notably wine and spirits exporters, it said.

Thailand’s customs valuation practices rejected the declared price of EU products imported into Thailand and applied an arbitrary value instead, the Commission said.

“These measures are arbitrary and damaging for EU companies seeking to do business in Thailand. We believe they are not compatible with WTO rules,” EU Trade Commissioner Peter Mandelson said in a statement.

“We believe it will be possible to resolve this issue quickly and amicably,” he said. Thailand’s wine and spirits market is worth some 72 million euros ($105 million) to EU exporters, their eighth largest foreign market by sales volume.

Consultations are the first step in the WTO dispute settlement process. If they fail after 60 days, the EU may ask for a WTO panel to rule on the legality of the Thai measures.

Since September 2006, Thailand had systematically challenged—and mostly rejected—the declared transaction price of certain EU products imported into Thailand, to which it then gave an arbitrary value instead, the Commission said.

That practice violated the basic principle that customs valuation was normally based on the transaction value of the imported goods as set out in the WTO Customs Valuation Agreement, it said.

It also had a significant impact on EU companies, since it created unnecessary administrative burdens and delayed customs clearance as well as imposing bank guarantee and cash deposit obligations on them over unreasonable periods of time.

Brussels’ decision was taken after intense lobbying by the EU wine and spirits industry, led by CEPS, the European Spirits Organization—which warmly welcomed the Commission’s move.

“We fully support the EU decision to launch formal talks at the WTO on the Thai customs valuation procedure and hope that Thai policy will be brought into line with WTO requirements at the earliest opportunity,” CEPS Director General Jamie Fortescue said in a statement. (Reuters)