EU files WTO case over Philippine taxes on spirits

GENEVA – The European Union filed a trade complaint against Philippines yesterday over taxes the southeast Asian country charges on imports of distilled spirits such as Scotch whisky and Spanish brandy.

The EU’s complaint to the World Trade Organisation alleges that the Philippine taxes that are 10 to 50 times higher than for domestic liquors, making them ‘discriminatory and therefore in breach of international trade rules.’The complaint starts a 60-day consultation period, after which the 27-nation bloc can ask the WTO to establish an investigative panel. WTO cases can result in retaliatory trade sanctions, but generally only after years of litigation.’This long-running problem has prevented EU exporters from competing fairly in the Philippine market, and has led to a sharp decrease in imports of European spirits,’ EU Trade Commissioner Catherine Ashton said in a statement.The Philippines mission to the WTO declined to immediately comment.European liquor makers have long complained about the taxes, according to the EU, which said it has raised the issue repeatedly with the Philippines in recent years.Brussels said the higher taxes have prevented European exporters from fully participating in the country’s growing market for alcoholic beverages. While overall spirits sales have risen eight per cent in the country since 2005, sales of foreign-made liquors have declined, the EU contended.It said EU exports of spirits to the Philippines fell to around 18 million euro in 2007, from 37 million euro in 2004. – Nampa-AP