Brussels, 13/01/2016 (Agence Europe) - On Wednesday 13 January, the EU called on the World Trade Organisation (WTO) to open consultations with Colombia as regards the tax and regulatory measures this country applies to imported spirits. The EU believes these measures are discriminatory.
The dispute the EU brings to the WTO dates back a long way. The European Commission explains in a press release that in Colombia, EU spirits face higher taxes than local brands through higher national consumption tax and higher local charges. In addition, Colombia's regional authorities (“departamentos”) impose market-access restrictions for imported spirits.
These measures raise the costs for exporters of spirits to Colombia and place EU spirits at a competitive disadvantage on the Colombian market. This is a contravention of Colombia's non-discrimination obligations under WTO rules, the Commission states.
The EU complains that despite the commitment taken by Colombia as part of its free trade agreement with the EU (in force since 2013) to end these discriminatory practices by 1 August 2015, they continue to take place. The EU gives assurances that it has exhausted all possible means of addressing this issue bilaterally with Bogota - bilateral meetings, WTO meetings, and discussions on Colombia becoming a member of the OECD.
The EU is the top exporter of spirits to the Colombian market (ahead of Mexico, Costa Rica and the USA) and is consequently the trading partner most affected by these measures.
In 2014, EU exports of spirits to Colombia stood at €43 million (including €36 million for whiskies and €4 million for liqueurs and cordials), representing 77% of Colombia's total imports of spirits.
Colombia mainly produces rums and eaux de vie (“aguardientes”), which represented 83% of spirits consumption in Colombia in 2013.
As the starting point for the formal dispute settlement procedure at the WTO, the consultations can last for 60 days - at the end of which, if no satisfactory solution has been found, the complainant can ask for the issue to be put to a special panel in charge of ruling on the dispute. (Original version in French by Emmanuel Hagry)