US file WTO protest against Philippine whisky, gin duties

THE United States has requested World Trade Organisation (WTO) dispute settlement consultations with the Philippines regarding the Philippine excise taxes on imported distilled spirits such as whisky and gin.

"Although the United States has raised this issue many times, the Philippines continues to tax distilled spirits from the United States at much higher rates than distilled spirits produced in the Philippines," said US Trade Representative Ron Kirk. "

"We urge the Philippine government to eliminate that discrepancy and level the playing field for our exports immediately," he said.

According to a statement issued by the Office of the US Trade Representative: "The Philippines applies tax rates to distilled spirits that differ depending on the product from which the spirit is distilled. The Philippines taxes distilled spirits made from certain materials that are typically produced in the Philippines, such as sugar and palm, at a low rate (e.g. 13.59 pesos per proof litre in 2009). Imported distilled spirits are taxed at significantly higher rates (from approximately 10 to 40 times higher) than the low rate applied to domestic products."

It pointed out that WTO rules generally bar WTO members from discriminating between imported and domestic products in their tax regimes.

"The US government has raised concerns over this issue with the Philippines over the past several years, both bilaterally and in WTO forums. In addition, the EU requested WTO dispute settlement consultations on these taxes in July 2009, and the United States joined these consultations and participated in meetings between the EU and the Philippines in October 2009," the statement said.

Between 2006 and 2008 US distilled spirits exports worldwide averaged more than US$1 billion annually. Philippine imports, including US products, never exceeded five per cent of total sales of spirits in the Philippine market since 2003.

The Office of the US Trade Representative said the first step in this WTO dispute is for both parties to consult formally. If consultations fail to resolve the dispute, the US will be entitled to request that a panel be established to determine whether the Philippines is acting consistently with its WTO obligations.

Source: www.schednet.com