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Statement by USTR Susan C. Schwab on India's Withdrawal of the Additional Duty on Beer, Wine and Distilled Spirits

July 06, 2007



WASHINGTON, DC – United States Trade Representative Susan
C. Schwab made the following statement regarding India’s announcement that it
has withdrawn the “additional duty” on beer, wine and distilled spirits
(alcoholic beverages) that the United States is currently challenging in WTO
dispute settlement proceedings: 

are studying India’s recent
announcement that it has withdrawn the additional duty on imports of alcoholic
beverages,” said Ambassador Schwab.  “Withdrawal of this duty would be a
positive step in addressing U.S. concerns.  What we are
seeking is a level playing field, consistent with India’s WTO


On July 3, 2007, the Government of India announced the
apparent withdrawal of its “additional duty” on beer, wine and distilled
spirits, as well as an increase in the basic customs tariff on wine from 100 to
150 percent. 

On June 20, 2007 a WTO dispute settlement panel was
established to consider U.S. claims that the additional duty and a separate
extra additional duty result in customs duties on U.S. imports of alcoholic
beverages as well as other products that are in excess of India’s WTO bound

The additional duty established tariffs – applied on top
of the basic customs duties – ranging from 20 to 75 percent ad valorem on
imports of beer and wine and from 25 to 150 percent ad valorem on imports of
distilled spirits.  The extra additional established an additional four
percent duty, calculated on top of the additional duty and basic customs duties
on alcoholic beverages.  Taken together, these duties have resulted in
tariffs on alcoholic beverages ranging from approximately 150 to 550 percent –
far in excess of India’s WTO commitments.  In the
WTO, India committed that its bound
tariffs on alcoholic beverages would not exceed 150 percent.  The
additional duty and extra additional duty also apply to other imports from the
United States, resulting in
other cases of tariffs that exceed India’s WTO bound rates.  The
specific WTO obligations concerned are Articles II and III of the General
Agreement on Tariffs and Trade 1994 (GATT 1994).

A WTO panel has also been established to consider EC
claims against the additional duty and extra additional duty on wine and
distilled spirits.

Between 2000 and 2005, U.S. exports of wine and spirits world-wide
averaged approximately $630 million and $633 million, respectively, making the
States the world’s sixth largest exporter of
wine and third largest exporter of spirits.