WTO to rule on US, Philippines dispute over taxes on spirits

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The World Trade Organization on Tuesday agreed to rule on a longstanding dispute brought by the United States against the Philippines over taxes imposed on whisky and gin.

"Today, the panel was established at the request of the United States," a trade source said.

The case would be examined along with a similar complaint brought in January by the European Union against the Philippines, the source added.

The United States and the EU claim that the Philippines imposes higher taxes on imported distilled spirits than domestic products, a move which they say is outlawed by WTO rules.

"Spirits distilled from products typically produced in the Philippines are taxed at a low rate, while other distilled spirits are taxed at rates from approximately 10 to 40 times higher," the United States told the WTO's dispute settlement board meeting.

"The taxes appear to be applied in a way that affords protection to domestic production," the US filing to the WTO said.

The Philippines in turn insisted that its tax regime on distilled spirits is "non-discriminatory and impartial."

"The Philippines is disappointed that the United States has chosen to renew its request (to) the WTO dispute settlement body for the establishment of a panel in this matter," a Filipino diplomat said.

The US government had raised concerns over the issue with the Philippines in the past several years, both bilaterally and in WTO forums.

The European Union requested WTO consultations on the taxes in July 2009 and the United States joined the consultations and participated in meetings between the EU and the Philippines in October.

The United States exports about one billion dollars worth of distilled spirits worldwide annually.

© 2010 AFP

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