The European Union has requested consultations with the Philippines at the World Trade Organisation (WTO) regarding excise taxes on distilled spirits, which the EU considers to be discriminatory and therefore in breach of international trade rules.

Imported spirits including Spanish brandy and Scotch whisky can face taxes 10 to 50 times higher than those on domestic products in the Philippines, and exports to the Philippines have fallen significantly as a result. Consumption of spirits in the Philippines in 2007 was estimated by the International Wine & Spirits Record at about 47 million cases, making it one of the largest spirits markets in the Asia-Pacific region.

The EU has raised the issue repeatedly in recent years without success, and now hopes to use the WTO consultation process to arrive at a mutually satisfactory solution. The request for consultations formally initiates a dispute under the WTO dispute settlement rules. Bilateral consultations give WTO members the opportunity to discuss the matter and to find a satisfactory solution without resorting to litigation. If these consultations fail to reach a satisfactory solution within 60 days after the receipt of the request for consultations, the complaining party may request the establishment of a WTO panel.

Full details of the EU press release are available at http://europa.eu/rapid/pressReleasesAction.do?reference=IP/09/1200&format=HTML&aged=0&language=en&guiLanguage=en