A Case Study on the WTO Dispute Settlement Mechanism: Japan - Taxes on Alcoholic Beverages Wook Chae The dispute arose from complaints by the European Community, Canada and the United States with respect to the Japanese Liquor Tax Law. The Complainants argued that this Law discriminated against spirits exported to Japan by levying a higher tax on whiskey, cognac and white spirits than on Japanese shochu, thereby nullifying or impairing the benifits accrued to them under GATT 1994.

This case has highlighted four issues based on the Article Ⅲ of GATT 1994 such as definitions of like products and directly competitive or substitutable products, interpretations of 'taxation in excess' and 'similarly taxed' and the meaning of 'so as to afford protection'.

Panel concluded that shochu and vodka are like products and Japan, by taxing the latter in excess of the former, is in violation of its obligation under Article Ⅲ:2, first sentence, of the GATT 1994. It also concluded that shochu and other distilled spirits other than vodka are "directly competitive or substitutable products" and Japan, by not taxing them similarly, is in violation of its obligation under Ariticle Ⅲ:2, second sentence, of the GATT 1994.

While Japan and the United States appealed to the Appellate Body concerning certain legal issues and interpretations, the Appellate Body affirmed most of panel findings and conclusions except for some fundamental issues.

The dispute provides various implications to the on-going case at WTO on Korea's taxation on certain alcholic beverages; that is, it provides good guidelines for developing the relevant logics in the panel process regarding definitions of 'like products' and 'directly competitive or substitutable products', interpretations of 'taxation in excess' and 'not similarly taxed', and the meaning of 'protection of domestic production' and so on.

서언
요약

Ⅰ. 패널節次
1. 事案의 槪要
2. 主要爭點
3. 패널의 評決

Ⅱ. 上訴節次
1. 節次的 進行
2. 主要爭點
3. 上訴機構의 評決

Ⅲ. 示唆點
1. 日本 酒稅紛爭으로부터의 示唆點
2. 韓國 酒稅紛爭에의 示唆點

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