TABLE OF CONTENTS
Page
I. INTRODUCTION.......................................................................................................... 1
A. request
for consultations.......................................................................................... 1
B. establishment
and composition of the panel............................................................. 1
C. Panel
proceedings......................................................................................................... 2
II. FACTUAL ASPECTS.................................................................................................... 4
A. The
Excise Tax............................................................................................................... 4
B. Products
at issue........................................................................................................ 11
1. Products at issue........................................................................................................... 11
2. Characteristics of distilled spirits................................................................................. 12
3. Distilled spirits market in the Philippines..................................................................... 14
4. Tariff classification....................................................................................................... 21
5. Gin................................................................................................................................ 24
6. Brandy.......................................................................................................................... 27
7. Rum............................................................................................................................... 30
8. Vodka............................................................................................................................ 32
9. Whisky.......................................................................................................................... 35
10. Tequila.......................................................................................................................... 37
III. PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS................. 39
IV. arguments of the PARTIES............................................................................. 41
V. arguments of the third PARTIES................................................................ 41
VI. INTERIM REVIEW..................................................................................................... 41
A. Interim
Review Changes to the Descriptive Sections.............................................. 41
B. Interim
Review Changes to the Findings Section..................................................... 42
C. Interim
Review Changes to the Conclusions and Recommendations Section...... 49
D. Minor
Corrections and Addition of References..................................................... 49
VII. FINDINGS.................................................................................................................... 49
A. Claims
and order of analysis................................................................................... 49
1. The complainants' claims............................................................................................. 49
2. Applicable provisions................................................................................................... 51
3. Order of analysis.......................................................................................................... 52
B. Burden of
proof.......................................................................................................... 53
C. Claims
under the first sentence of Article III:2 of GATT 1994............................. 54
1. The complainants' claims............................................................................................. 54
2. The Philippines' response............................................................................................. 55
3. Panel's analysis............................................................................................................. 56
(i) Products' properties, nature and quality........................................................................ 57
(ii) End uses........................................................................................................................ 61
(iii) Consumers' tastes and habits......................................................................................... 61
(iv) Tariff classification........................................................................................................ 65
(v) Internal regulations....................................................................................................... 67
(vi) Conclusions on "likeness".............................................................................................. 67
(vii) Excess taxation.............................................................................................................. 70
(viii) Conclusions regarding the claims under the
first sentence of Article III:2 of GATT 1994 70
D. Claims
under the Second Sentence of Article III:2 of the GATT 1994.................. 71
1. Complainants' claims.................................................................................................... 71
2. The Philippines' response............................................................................................. 71
3. Panel's analysis............................................................................................................. 71
(a) "Directly competitive or substitutable
products"............................................................ 72
(i) Introduction................................................................................................................... 72
(ii) The competitive relationship between the
products at issue........................................... 74
(iii) Products' channels of distribution.................................................................................. 80
(iv) Products' properties, nature and quality........................................................................ 80
(v) End uses and marketing................................................................................................. 81
(vi) Tariff classification........................................................................................................ 82
(vii) Internal regulations....................................................................................................... 83
(viii) Conclusions on "directly competitive
or substitutable".................................................. 83
(b) "Not similarly taxed"...................................................................................................... 83
(i) Introduction................................................................................................................... 83
(ii) Arguments of the parties................................................................................................ 84
(iii) Consideration by the Panel............................................................................................ 86
(c) "So as to afford protection to
domestic production"...................................................... 90
(i) Introduction................................................................................................................... 90
(ii) Arguments of the parties................................................................................................ 90
(iii) Consideration by the Panel............................................................................................ 93
(d) Conclusions regarding the claim under the
second sentence of Article III:2 of GATT 1994 96
E. Special
and differential treatment.......................................................................... 96
VIII. conclusions and recommendations........................................................ 97