"This is an important victory for American distilled spirits producers and workers ... We urge the Philippine government to comply quickly," U.S. Trade Representative Ron Kirk said in a statement after a WTO appellate body ruling.
The United States and the European Union, in separate cases filed several years ago at the WTO, complained the Philippines had violated global trade rules by taxing foreign alcoholic beverages at rates 10 to 40 times higher than brands made in the Philippines from home-grown materials such as cane and palm sugar.
Global trade rules generally bar countries from discriminating against imported products in their tax regimes.
The EU and United States are the world's No. 1 and No. 2 exporters of distilled spirits, but have been all but shut out of the Philippines, one of the largest markets for alcohol in the Asia-Pacific region.
A WTO dispute settlement panel sided with the transatlantic trade partners in August and the WTO appellate body upheld the decision on Wednesday. The Philippines now has 30 days to say how it plans to comply with the ruling, a U.S. official said.
The victory is expected to help U.S. producers like Brown-Forman and Beam Inc break into the $3.4 billion Philippines spirits market.
Brown-Forman, based in Louisville, Kentucky, owns the Jack Daniel's brand, and Beam, headquartered in Deerfield, Illinois, produces Jim Beam whiskey.
Peter Cressy, president of the Distilled Spirits Council of the United States, urged the Philippines to put in place "a fair, non-discriminatory excise tax system."
He called the current tax regime "is a textbook case of discrimination against imported products." (Reuters)
