JAPAN-TAXES ON ALCOHOLIC BEVERAGES: Canada v. Japan, European Communities v. Japan, United States v. Japan
Brian Smith
Columbia Southern University
I. CITATION
World Trade Organization, Appellate Body, 1996 Appellate Body Report AB-1996-2
II. FACTS
A. Material
The United States, Canada and the European Communities claimed that alcoholic beverages exported to Japan were discriminated against under Shuzeiho, the Japanese liquor tax system. They alleged that under Shuzeiho, Japan imposed a lower tax on locally produced liquor than on imported spirits such as whisky, cognac and white spirits (Japan — Taxes on Alcoholic Beverages, 2013).
B. Legal
By placing a different (higher) tax on imported liquor than locally produce liquor, Japan was in violation of the 1994 General Agreement on Tariffs and Trade (GATT) Article III, para 2 (August, Mayer, & Bixby, 2009).
III. LEGAL ISSUES
The complainants argued whether the panel that was appointed to consider the complaints by the U.S, Canada and the European Communities was wrong in its interpretation of Article 1(b)(iv) of GATT 1994 that provides institutional recognition that adopted panel reports constitute subsequent practice (August et al ., 2009).
The U.S argued whether the Panel erred in its characterization of panel reports adopted by the GATT CONTRACTING PARTIES and the WTO Dispute Settlement Body as "subsequent practice in a specific case by virtue of the decision to adopt them (Japan - Taxes on Alcoholic Beverages, 1996).
Japan argued that the panel made an error by equating the language "not similarly taxed" in Article III. Para 2, with "so as to afford protection" in Article III. Para 1, (Japan - Taxes on Alcoholic Beverages, 1996).
IV. THE HOLDING
The Appellate Body affirms the Panel's conclusions that shochu and vodka are like products and that Japan, by taxing imported products in excess of like domestic products, is in violation of its obligations under...