India delays probe of tariffs on American wine
GENEVA — India blocked a World Trade Organization investigation of import duties on American wine and spirits Monday, delaying a U.S. complaint alleging that the country discriminates against products like wines from Napa Valley and Jack Daniel’s whiskey.
India is one of the largest markets for alcohol in the world and has huge potential for growth.
The Geneva-based trade referee is already reviewing a European legal challenge of wine and liquor restrictions in a number of Indian states. A second investigative panel examining Washington’s complaint will almost certainly be established later this month.
Under WTO rules, a second request for a formal investigation is automatically approved. A case can result in punitive sanctions, but panels take months, and sometimes years, to reach a decision.
“The layers of customs duties India applies to U.S. products, in particular to wine and distilled spirits, are not in line with its WTO commitments,” U.S. Trade Representative Susan Schwab said last month. “We must ensure a level playing field for U.S. products around the world.”
India’s basic import duties on wine are 100 percent, while the tariff on spirits is 150 percent, both within WTO limits. However, government surcharges take the tariffs up to levels reaching as high as 550 percent.
The United States, the European Union and Japan, by contrast, allow nearly all spirits to enter their markets duty-free. China tacks a 10 percent charge to foreign liquor.
India on Monday criticized Washington’s decision to bring the case to the WTO as “unfortunate and disappointing.”
India said it is reviewing its own trade rules to resolve the dispute, a claim it also made in criticizing Brussels’ decision to bring the case to the WTO.
The U.S. said wine sales in India through special duty-free rules, such as at airports and luxury hotels, grew by 350 percent between 2000 and 2005. The growth was 200 percent for American liquors.
But high import duties imposed on the vast majority of American wines and spirits means total exports remain low, the U.S. says. The Distilled Spirits Council of the United States estimates that all foreign liquors together account for less than 1 percent of the Indian market.
The 27-nation EU, in making its complaint, said India bought $31.3 million worth of European spirits in 2004 — from French cognac to Finnish vodka — and $5.4 million worth of Bordeaux, Chianti, Rioja and other European wines.
That compares with global European spirits exports amounting to $6.7 billion and wine exports of $6.1 billion each year.
It is unclear if the U.S. and the EU will combine their cases against India before the WTO.
The goal of the story comments section at NapaValleyRegister.com is to have an open, thought-provoking, civil community forum for all issues.
What gets your comment posted?
• Staying on topic
• Keeping your comment to 300 words or less
• Avoiding name-calling
• Addressing your comments to the message rather than the messenger
What gets your comment deleted?
• Personal attacks
• Derogatory remarks
• Name-calling of any sort
• Going off-topic
• Hate speech
• Racially-insensitive comments
• Implying guilt of a subject in a crime story before there is a court verdict
• Posting e-mail addresses
• Posting comments of a commercial nature
• POSTING WITH ALL CAPITAL LETTERS
• Linking multiple comments together with "to be continued..." to get around the 300 word limit.
The fine print
- Comments are either approved or denied. We do not edit comments.
- You are welcome to modify and resubmit a denied comment.
- Comments may take several hours to be posted.
- Comments posted are those of the writer, and do not necessarily reflect the opinion of NapaValleyRegister.com, its employees or its parent company.
- Do you have information on a story? Please go to our
virtual newsroom to send us a news tip.
- If you feel a posted comment has violated our guidelines, please contact
online@napanews.com or add a comment indicating you have an issue and our moderators will review the comment in question.