WORLD TRADE WT/DS87/1
11June1997
ORGANIZATION(97-2412)
Original: English
CHILE -TAXES ONALCOHOLIC BEVERAGES
Request forConsultations bytheEuropean Communities
Thefollowing communication, dated 4June1997, from thePermanent Delegation ofthe
European Commission tothePermanent Mission ofChile andtotheDispute Settlement Body, is
circulated inaccordance withArticle 4.4oftheDSU.
_______________
Myauthorities haveinstructed metorequest consultations withChile under Article 4ofthe
Understanding onRules andProcedures Governing theSettlement ofDisputes andArticle XXII:1 of
theGeneral Agreement onTariffs andTrade 1994 (GATT 1994) regarding theSpecial Sales Taxon
spirits inChile.
Consultations withChile onthisissue werefirstheldin1989, buttheywereinterrupted for
theUruguay Round. In1994, theywererestarted onabilateral basis andChile gaveassurances that
theproblem would beresolved. Various representations anddiscussions in1995 and1996 failed to
resolve theissue.
TheEuropeanCommunityhasthereforedecidedtorequestWTOconsultations,sincetheChilean
Special Sales TaxonSpirits appears tobeinconsistent withtheChilean obligations under GATT 1994.
Inparticular, Chile appears toimpose alower taxonPisco thanoncertain other likespirits imported
fromtheEuropean Community, thereby infringing Article III:2, firstsentence, ofGATT 1994. Chile
alsoappears toimpose alower taxonPisco thanonother directly competitive orsubstitutable spirits
imported fromtheEuropean Community, soastoafford protection tothedomestic production ofPisco,
thusviolating Article III:2, second sentence, ofGATT 1994.
Ilookforward toreceiving yourreply tothisrequest andtosetting amutually convenient date
fortheconsultations.