WORLD TRADE WT/DS110/1
18December 1997
ORGANIZATION(97-5574)
Original: English
CHILE -TAXES ONALCOHOLIC BEVERAGES
Request forConsultations bytheEuropean Communities
Thefollowing communication, dated 15December 1997, from thePermanent Delegation of
theEuropean Commission tothePermanent Mission ofChile andtotheDispute Settlement Body,
iscirculated inaccordance withArticle 4.4.oftheDSU.
_______________
Myauthorities haveinstructed metorequest consultations withChile under Article 4ofthe
Understanding onRules andProcedures Governing theSettlement ofDisputes andArticle XXII:1 of
theGeneral Agreement onTariffs andTrade 1994 (the“GATT ”)withregard totheAdditional Tax
onAlcoholic Beverages (“Impuesto Adicional alasBebidas Alcoholicas ”),asrecently modified by
LawNo.19.534.
On13November 1997thePresident oftheRepublic ofChile signed thenewLawNo.19.534
modifying Article 42oftheDecree-Law No.824of1974concerning theAdditional TaxonAlcoholic
Beverages. LawNo.19.534 waspublished inChile’sOfficial Journal on18November, i.e.onthe
same daytheDispute Settlement Body agreed totherequest oftheEuropean Communities toestablish
apanel withrespect totheAdditional TaxonAlcoholic Beverages (WT/DS87/5). LawNo.19.534
provides fortheapplication ofatransitional regime until1December 2000.
Likethemeasures which arethesubject ofthepanel established on18November 1997, the
modifications introduced byLawNo.19.534, including those tobeapplied onatransitional basisuntil
1December 2000, appear tobeinconsistent withChile’sobligations under theGATT. Inparticular,
themodifications introduced byLawNo.19.534 appear toimpose alower taxrateondomestic products
thanoncertain otherlikedistilled spirits andliqueurs, imported fromtheEuropean Community, thereby
infringing GATT Article III:2, firstsentence. Those modifications alsoappear toimpose alower tax
rateondomestic products thanoncertain other directly competitive orsubstitutable distilled spirits
andliqueurs imported from theEuropean Community, soastoafford protection tothedomestic
production, thusviolating GATT Article III:2, second sentence.
Ilookforward toreceiving yourreply tothisrequest andtosetting amutually convenient date
fortheconsultations.