Brussels, 29/07/2009 (Agence Europe) - On Wednesday 29 July, the Union called on the WTO to open consultations with the Philippines regarding excise taxes on distilled spirits, which the EU considers to be discriminatory and therefore in breach of international trade rules. Imported spirits including Spanish brandy and Scotch whisky can face taxes 10 to 50 times higher than those on domestic products, and exports to the Philippines have fallen significantly as a result. This has been denounced by European producers. The Commission explains that the Philippine specific excise tax regime means that spirits produced from certain raw materials typically used domestically in the Philippines are taxed at a specific flat rate while other spirits, including most imported products, face a much higher tax. Sales of local spirits have therefore increased by more than 8% since 2005, whilst the sales of imported spirits have fallen. From 2004 to 2007, EU exports of spirits to the Philippines fell from around €37 million to €18 million. In a press release the EU Trade Commissioner Catherine Ashton said: "I hope that we can still find an amicable solution to this issue through the consultation process." The European organisation of spirits producers welcomed the initiative taken at Geneva by the European Commission. The consultations process will last up to a maximum of 60 days and is the first stage of the WTO dispute arbitration process. In the event of the consultations breaking down the WTO will set up a special group to examine the complaint and reach a decision on the dossier. (E.H./transl.rh)