RESTRICTED
WORLD TRADE WT/DS10/1
17July1995
ORGANIZATION(95-2023)
Original: English
JAPAN -TAXES ONALCOHOLIC BEVERAGES
Request forConsultations byCanada
Thefollowing communication, dated 7July1995, fromthePermanent Mission ofCanada to
thePermanent Mission ofJapan iscirculated attherequest ofthePermanent Mission ofCanada.
_______________
TheGovernment ofCanada requests consultations withtheGovernment ofJapan pursuant to
paragraph 1ofArticle XXII oftheGeneral Agreement onTariffs andTrade 1994 regarding certain
liquor taxation laws. These lawsinclude, butarenotlimited to,theJapanese Liquor TaxLaw, as
amended, pursuant towhich taxratesarelevied oncertain domestic andimported alcoholic beverages.
Theproducts concerned areshochu andallother distilled spirits andliqueurs falling with
HS2208.20 ("Spirits obtained bydistilling grape wine orgrape marc"), HS2208.30 ("whiskies"),
HS2208.40 ("rum andtafia"), HS2208.50 ("gin andgeneva") andHS2208.90 ("other" including
fruitbrandies, vodka, ouzo, korn, cream liqueurs and"classic" liqueurs).
TheGovernment ofCanada understands thatJapan hasamended theJapanese Liquor TaxLaw
following theGeneral Agreement onTariffs andTrade 1947 Panel Report Japan -Customs Duties,
Taxes andLabelling Practices onImported Wines andAlcoholic Beverages (L/6216) thatwasadopted
bytheCONTRACTINGPARTIESon10November1987.However,undertheamendedliquortaxation
law,Japan stillimposes higher ratesoftaxation onimported alcoholic beverages including whiskies,
brandies, other distilled alcoholic beverages andliqueurs thanonJapanese shochu.
TheGovernment ofCanada considers thattheLiquor TaxLaw, asamended, isinconsistent
withtheobligations ofJapan under theGeneral Agreement onTariffs andTrade 1994. Theprovisions
ofthisAgreement withwhich theliquor taxation lawisinconsistent include, butarenotlimited to,
Article III:2oftheGeneral Agreement onTariffs andTrade 1994.
Consequently, theGovernment ofCanada considers thattheJapanese Liquor TaxLaw, as
amended, nullifies andimpairs thebenefits accrued toCanada under theGeneral Agreement onTariffs
andTrade 1994.
Inaccordance withArticle 4oftheUnderstanding onRules andProcedures governing the
Settlement ofDisputes, theGovernment ofCanada requests consultations withtheGovernment ofJapan
todiscuss thismatter withtheintention ofreaching amutually satisfactory result.