. . . is the topic of my latest Trade Tripper column in this Friday-Saturday issue of BusinessWorld. Excerpts:
"Interestingly, in a communiqué dated Aug. 12, 2009, our largest trading partner declared that it is 'the desire of the United States to be joined in these consultations .... As a leading producer and exporter of spirits, the United States has a substantial trade interest in these consultations. Over the period 2004-2008, US exports of spirits worldwide averaged over $970 million, making the United States one of the world’s largest exporters of spirits.'
It would be fascinating to see how this case turns out. As BusinessWorld reported — correctly — last Monday, the 'EU and US have jointly filed cases against three other WTO members over liquor taxes — Chile, Japan and Korea — all of which were decided in favor of the two major exporters, dispute archives show. In the Korea case, for instance, arbiters decided that soju, an indigenous beverage which enjoyed lower tax rates than its foreign counterparts, was ’directly competitive and substitutable with imported distilled alcoholic beverages’. Korea had to comply with the WTO ruling in 1999, amending its tax laws to instead require flat rates on all liquor products.' To the foregoing is added recent research findings, most notably Andrew Guzman’s of the University of California, Berkeley, in his paper The Political Economy of Litigation and Settlement at the WTO (corroborated in recent empirical analysis by Juscelino Colares of Syracuse University), which showed that complainant countries in WTO disputes win their cases almost 90% of the time.
People might need to go for a drink after this."