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11 April 2010

Philippines blocks US attempt to push WTO for liquor dispute decision

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The Philippines blocked a US request for the World Trade Organization (WTO) to decide whether Philippine excise taxes on imports of distilled spirits made by companies such as Brown-Forman Corp. break global rules, reported the Bloomberg News.

The US says the Philippines taxes imported liquor at rates that are as much as 40 times higher than levies on domestic products. While the US tried to negotiate a solution to the dispute, “the Philippines continues to maintain its discriminatory tax regime,” Carol Guthrie, a spokesman for the US Trade Representative’s (USTR) Office in Washington, said.

The European Union, the biggest liquor exporter, lodged a complaint at the Geneva-based WTO last July about the Philippine taxes, which it said discriminate against European producers including Diageo Plc., Pernod Ricard SA and Remy Cointreau SA.

WTO judges are investigating the EU complaint.

US distilled-spirits exports worldwide averaged more than $1 billion a year between 2006 and 2009, making the country one of the world’s top liquor exporters. Since 2003, imports in the Philippines—including US products—never exceeded 5 percent of total sales of spirits in the country.

According to industry figures cited by the USTR, the US distilled-spirits industry contributed to more than $113 billion of economic activity and more than 1.2 million jobs in 2007. Brown-Forman produces Jack Daniel’s whiskey and Southern Comfort.

The US will probably make a second request for WTO judges to rule on the complaint, possibly as early as April 20. The Philippines can’t block a second request.


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