WORLD TRADE WT/DS75/1
9April 1997
ORGANIZATION(97-1483)
Original: English
KOREA -TAXES ONALCOHOLIC BEVERAGES
Request forConsultations bytheEuropean Communities
Thefollowing communication, dated 2April 1997, from thePermanent Delegation ofthe
European Commission tothePermanent Mission ofKorea andtotheDispute Settlement Body, is
circulated inaccordance withArticle 4.4oftheDSU.
_______________________
Myauthorities haveinstructed metorequest consultations withKorea under Article 4ofthe
Understanding onRules andProcedures Governing theSettlement ofDisputes (DSU) andArticle XXII:1
oftheGeneral Agreement onTariffs andTrade 1994(GATT 1994) asregards theinternal taxesimposed
byKorea oncertain alcoholic beverages pursuant totheLiquor TaxLawandtheEducation TaxLaw.
Attheconsultations which tookplace inJanuary, theEuropean Commission onbehalf ofthe
European Community requested by15March aconcrete Korean proposal forbringing itssystem of
taxation ofalcoholic beverages intofullconformity withGATT/WTO obligations within areasonable
time-frame. However, thereply oftheKorean authorities refers onlyto"asubstantial reduction in
thetaxratedifference".
TheEuropeanCommunityhasthereforedecidedtorequestWTOconsultations,sincetheKorean
Liquor TaxLawandtheEducation TaxLawappear tobeinconsistent withtheKorean obligations
under GATT 1994. Inparticular, theabove mentioned lawsappear toimpose alower taxonsoju
thanonother likeliquors imported from theEuropean Community, thereby infringing Article III:2,
firstsentence, ofGATT 1994. Theabove mentioned lawsalsoappear toimpose alower taxonsoju
thanonother directly competitive orsubstitutable liquors imported from theEuropean Community,
soastoafford protection tothedomestic production ofsoju,thusviolating Article III:2, second sentence,
ofGATT 1994.
Ilookforward toreceiving yourreply tothisrequest andtosetting amutually convenient date
fortheconsultations.