U.S. conciliation on liquor tax proposals to be sought

Senior Japanese officials will visit Washington next week in the hopes of persuading the United States to accept Japan’s proposed reduction of the tax disparity between whiskey and the domestic spirit “shochu” by October 2001, Finance Minister Hiroshi Mitsuzuka said Jan. 10.He acknowledged that the U.S. is seeking arbitration by the World Trade Organization to advance the implementation timetable.Yoshiji Nogami, director general of the Foreign Ministry’s Economic Affairs Bureau, and Finance Ministry officials will depart Jan. 6 for Washington to confirm what action the U.S. intends to take, he said. The case would be the first to be arbitrated by the WTO on the implementation of recommendations adopted through its dispute settlement procedures, according to trade officials in Geneva.”Japan-U.S. relations are very important and I hope this issue will not become a big one (between the two nations,)” Mitsuzuka said, adding that the Japanese side would continue efforts to gain U.S. “understanding.” Last year, the international trade watchdog ruled in favor of the U.S., Canada and the European Union by saying Japan’s liquor taxes were discriminatory and protected domestic producers. In response, Tokyo plans to raise the tax on shochu by a maximum 2.4-fold by October 2001 while slashing the whiskey tax by 58 percent to narrow the gap.