European Union is set to launch a formal complaint against India at the World Trade Organization over high import tariffs on wine and spirits, Wall Street Journal Asia reports. The EU move follows the collapse this summer of global trade talks. The US already is pressing India on a number of trade issues, including barriers to retail investment and quirky health and environmental standards that effectively block certain imports, such as big-engine Harley Davidson motorcycles, it adds.
The complaint would be the EU's first case of any kind filed against India at the Geneva trading arbiter since 2003, the report said. The EU opposes Indian taxes on imported spirits and wines that are imposed on top of ordinary customs duties. The 25-nation bloc says the extra levies handicap European wine and spirits companies hoping to profit from growing consumption in the world's second most populous country.
EU Trade Commissioner Peter Mandelson was in China last week lobbying for the country to open up more markets for EU companies. He is traveling to India this week, and is expected to bring up the wine tariff issue again. 'It is our intention to go ahead with a formal request for consultations at the WTO on Nov. 17,' Peter Power, a spokesman for the European Commission in Brussels.
The EU's trade with India amounted to €40 Billion of goods and services last year, with exports to India accounting for less than 2 pct of the EU total. India ranks 89th in buying bottled wine from the EU. At € 6.4 million last year it is a mere drop in its overall €11.5 Billion in total bottled-wine exports, according to Global Trade Information Services.
A request for consultations is the first step in the WTO's dispute process. The two sides must negotiate for at least two months before the commission, the EU's executive arm, can ask the Geneva-based global arbiter to step in and begin work on a ruling. A legal decision, once that work starts, could last at least 18 months.
The EU complaint follows five years of unsuccessful diplomatic efforts to resolve the dispute as well as a 10-month European probe that the commission says was marked by an ``unprecedented'' lack of cooperation from India.
Another sector that is also really peeved at the high taxes of up to 550% on spirits is the Scotch Whiskey Association based in Edinburgh. ' India bought € 38.6 million worth of Scotch whiskey in 2005, says its spokesman, David Williamson. 'That's less than a percent of a 100 million case spirit market , so we are missing out on a huge potential,' said Williamson, as reported by WSAJ.