Statement by USTR Susan C. Schwab on India's Withdrawal of the Additional Duty on Beer, Wine and Distilled Spirits
WASHINGTON, DC – United States Trade Representative Susan C. Schwab made the following statement regarding India’s announcement that it has withdrawn the “additional duty” on beer, wine and distilled spirits (alcoholic beverages) that the United States is currently challenging in WTO dispute settlement proceedings:
“We are studying India’s recent announcement that it has withdrawn the additional duty on imports of alcoholic beverages,” said Ambassador Schwab. “Withdrawal of this duty would be a positive step in addressing U.S. concerns. What we are seeking is a level playing field, consistent with India’s WTO commitments.”
Background
On July 3, 2007, the Government of India announced the apparent withdrawal of its “additional duty” on beer, wine and distilled spirits, as well as an increase in the basic customs tariff on wine from 100 to 150 percent.
On June 20, 2007 a WTO dispute settlement panel was established to consider U.S. claims that the additional duty and a separate extra additional duty result in customs duties on U.S. imports of alcoholic beverages as well as other products that are in excess of India’s WTO bound rates.
The additional duty established tariffs – applied on top of the basic customs duties – ranging from 20 to 75 percent ad valorem on imports of beer and wine and from 25 to 150 percent ad valorem on imports of distilled spirits. The extra additional established an additional four percent duty, calculated on top of the additional duty and basic customs duties on alcoholic beverages. Taken together, these duties have resulted in tariffs on alcoholic beverages ranging from approximately 150 to 550 percent – far in excess of India’s WTO commitments. In the WTO, India committed that its bound tariffs on alcoholic beverages would not exceed 150 percent. The additional duty and extra additional duty also apply to other imports from the United States, resulting in other cases of tariffs that exceed India’s WTO bound rates. The specific WTO obligations concerned are Articles II and III of the General Agreement on Tariffs and Trade 1994 (GATT 1994).
A WTO panel has also been established to consider EC claims against the additional duty and extra additional duty on wine and distilled spirits.
Between 2000 and 2005, U.S. exports of wine and spirits world-wide averaged approximately $630 million and $633 million, respectively, making the United States the world’s sixth largest exporter of wine and third largest exporter of spirits.