US may quash challenge against India on wine

07 July 2007

After the reduction of additional customs duty on wine and spirits to the WTO-mandated levels announced this week, US trade officials are discussing whether to continue their reference to the WTO for an inquiry against India.

The withdrawal was announced after both the EU and the United States filed challenges at the WTO''s dispute settlement body. (See: US to move WTO against Indian duties on wine and spirits)

Earlier India had managed to stall the EU''s attempt to refer the tariffs issue to the WTO settlement body (India stalls EU''s WTO probe attempt on Indian liquor) US trade representative Susan Schwab said in a statement, "We are studying India''s recent announcement that it has withdrawn the additional duty on imports of alcoholic beverages."

"Withdrawal of this duty would be a positive step in addressing US concerns," Schwab said.

Schwab''s spokesman Steve Norton said the Bush administration had not yet decided whether to press ahead with its challenge of Indian duties at the World Trade Organisation''s dispute settlement body.

However, India also increased the basic customs duty on wines to 150 per cent, which puts it on par with spirits and liquor duties as mandated by the WTO.