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American Shipper

U.S. requests WTO consultation over Indian wine and spirits duties

U.S. requests WTO consultation over Indian wine and spirits duties

The United States on Tuesday requested World Trade Organization dispute settlement consultations with India over customs duties India imposes on imports of wine and distilled spirits.

   On top of its basic customs duties, India imposes an 'additional duty' and an 'extra additional duty' on imports of wine and distilled spirits, resulting in aggregated duties on these imports that range from about 150 percent to 550 percent. In the WTO, India committed to tariffs on wine and spirits not exceeding 150 percent.

   'With its fast-growing middle class, India could be an important export market for American wines and distilled sprits if not for these layers of duties,' said U.S. Trade Representative Susan C. Schwab. 'We have raised this issue with the government of India on several occasions over a number of years. We hope the matter can be successfully resolved in WTO consultations.'

   In cases where wine and distilled spirits may enter India under special duty-free rules, such as for airport duty-free and use at luxury hotels, U.S. exports of these products to India have grown by 350 percent and 200 percent, respectively, between 2000 and 2005, the trade representative's office said. However, because of the high duties imposed on the vast majority of American wines and spirits, total exports to India remain low.

   U.S. exports of wine and spirits worldwide averaged from $630 million to $633 million between 2000 and 2005, respectively, making the United States the world's sixth-largest exporter of wine and third largest exporter of spirits.

   Consultations are the first step in a WTO dispute. Under WTO rules, parties that do not resolve an issue through consultations may refer the matter to a WTO dispute settlement panel.

   The European Communities has also requested WTO dispute settlement consultations on India's duties on wine and distilled spirits. The United States requested to join these consultations, but India denied the U.S. request. WTO rules specifically provide that a member whose request to join consultations as a third party is denied may request consultations in its own right.