US joins EU in WTO case over Philippine liquor tax

The United States has filed a trade complaint against the Philippines over taxes it imposes on imported whiskey, gin and other spirits, joining the European Union in a similar case at the World Trade Organisation, the Associated Press reported.

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

He urged Manila to eliminate the discrepancy and level the playing field immediately. The Philippine government did not immediately comment Friday.

The EU filed a similar case last year, and its Ambassador Alistair MacDonald told reporters in Manila this week that the complaint will be renewed because the problem had not changed.

A bill to establish a unitary tax policy has been sitting in the Philippine Congress "for quite some time", MacDonald said.

The Philippine WTO envoy, Manuel Teehankee, has said his country was reviewing its tax law, but added that the tax differences needed to be understood as an attempt to help indigenous communities in the Philippines that are producing alcohol from simple ingredients such as coconut and sugarcane.

The Philippines taxes distilled sprits made locally at a low rate, but imported alcoholic drinks - Scotch whisky, Spanish brandy, gin and others - are charged rates that are sometimes 10 to 40 times higher.

If consultations fail to resolve the dispute, the US said it will request a WTO panel to determine whether the Philippines was acting consistently with its WTO obligations.

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