US urges PHL to comply with WTO alcohol ruling

WASHINGTON — The United States on Monday urged the Philippines to "immediately" open its market to US alcoholic beverage exports like Jack Daniel's and Jim Beam after a World Trade Organization ruling in Washington's favor. "Today's panel report confirms that the Philippines' taxes on imported distilled spirits are discriminatory and inconsistent with WTO rules," US Trade Representative Ron Kirk said in statement. "We urge the Philippine government to comply swiftly with the panel's recommendations and rulings, and level the playing field for our exports immediately," Kirk said. The United States is one of the largest exporters of distilled spirits, with worldwide exports averaging more than $1 billion per year from 2006 through 2008. In a case filed last year at the WTO, Washington accused the Philippines of taxing foreign alcoholic beverages at rates 10 to 40 times higher than brands made in the Philippines from home-grown materials such as sugar and palm. The WTO generally bars its members from discriminating between imported and domestic products in their tax regimes. The United States brought two legal claims against the Philippines' measures, and prevailed on both, USTR said. Specifically, the panel found the Philippines applies higher taxes to imported alcohol than it does to similar domestic products or to "directly competitive or substitutable" domestic products, USTR said. The main US alcohol industry group, the Distilled Spirits Council, has said a victory could help US producers like Brown-Forman and Fortune Brands break into the $3 billion Philippines spirits market. — Reuters Brown-Forman, based in Louisville, Kentucky, owns the Jack Daniel's brand, and Fortune Brands, headquartered in Deerfield Illinois, produces Jim Beam whiskey. — Reuters