NEWS RELEASES
CANADA WINS FIRST WTO APPEAL RULINGIN JAPAN LIQUOR TAX CASE
October 4, 1996 No. 182
CANADA WINS FIRST WTO APPEAL RULING
IN JAPAN LIQUOR TAX CASE
The Honourable Art Eggleton, Minister for International Trade, today welcomed a
ruling by the World Trade Organization (WTO) Appellate Body requesting that Japan
change its liquor tax regime to remove barriers to imports of a wide variety of
distilled liquor products ranging from whiskey to gin. It is the first Appellate
Body ruling involving Canada.
"I am very pleased with this ruling, a first for Canada," said Mr. Eggleton. "It
will end a long-standing dispute and we expect that it will lead to higher
Canadian exports to the Japanese distilled liquor market. I urge Japan to carry
out the ruling quickly."
Currently, distilled liquor such as Canadian whiskey is taxed at significantly
higher rates than competing Japanese distilled spirits such as shochu.
A 1987 panel under the General Agreement on Tariffs and Trade (GATT) upheld a
complaint by the European Commission that Japan's liquor tax law gave a
competitive advantage to Japanese distilled liquor. Japan made changes to its
law, but there continued to be a preferential rate for shochu. This led to
consultations betweeen Japan and Canada, the United States (U.S.), and the
European Union (EU) and ultimately a case before a WTO dispute settlement panel.
The dispute settlement panel ruled in favour of Canada, the U.S. and the EU in
July, and its ruling was upheld today in a report by the WTO Appellate Body.
Under WTO rules, the Appellate Body report must be adopted within 30 days of being
circulated to WTO members. Japan will then have
30 days to notify the WTO Dispute Settlement Body of its plans on implementing the
report's recommendation.
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For further information, media representatives may contact:
Nicole Bourget
Director of Communications
Office of the Minister for International Trade
(613) 996-6271
Media Relations Office
Department of Foreign Affairs and International Trade
(613) 995-1874
This document is also available on the Department's Internet site:
http://www.dfait.maeci.gc.ca
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