CHILE - TAXES ON ALCOHOLIC BEVERAGES

                     Request for the Establishment of a Panel by the European Communities

        The following communication, dated 3 October 1997, from the Permanent Delegation of the European Commission to the Chairman of the Dispute Settlement Body, is circulated at the request of that delegation.

                                                            _______________

        The European Communities requested consultations with Chile on 4 June 1997 under Article 4  of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) and Article XXII:1 of GATT 1994 regarding the Special Sales Tax on Spirits in Chile.

        On 3 July 1997, consultations were held between the two parties with a view to reaching a mutually satisfactory solution.  Unfortunately, the consultations failed to settle the dispute.