Sometimes I think that being involved in an alcohol tax discrimination dispute is kind of like a rite of passage for WTO Members. The latest one is the first complaint of 2010:
United States Trade Representative Ron Kirk announced today that the United States has requested World Trade Organization (WTO) dispute settlement consultations with the Philippines regarding the Philippine excise taxes on imported distilled spirits such as whiskey and gin. The Philippines taxes imported distilled spirits at significantly higher rates than domestic distilled spirits.
From the U.S. consultations request:
The Philippines taxes distilled spirits at rates that differ depending on the product from which the spirit is distilled. Distilled spirits produced from certain materials that are typically produced in the Philippines are taxed at a low rate. Other distilled spirits are taxed at significantly higher rates. The Philippines' taxes on distilled spirits appear not to tax similarly imported distilled spirits compared to directly competitive or substitutable domestic distilled spirits. The taxes appear to be applied in a way that affords protection to the domestic products. In addition, the taxes appear to subject imported distilled spirits to internal taxes in excess of those applied to like domestic products.
A classic de facto discrimination case. The measures do not explicitly single out foreign products for higher taxes, but they tax certain products higher than others, and the higher taxed products tend to be of foreign origin (allegedly, that is).
The EU is pursuing a related case, for which the panel was established at today's DSB meeting.
