WASHINGTON – The Distilled Spirits Council of the United States (DISCUS) submitted a detailed report yesterday with the United States Trade Representative (USTR) identifying key foreign trade barriers impeding U.S. distilled spirits exports.
The report provided a comprehensive review of the major trade barriers in countries around the globe, such as retaliatory tariffs, discriminatory taxation, import policies, and certification and labeling measures.
“This detailed report provides USTR with an analysis of the major international trade barriers facing U.S. spirits exporters across the United States,” said Robert Maron, Distilled Spirits Council Vice President for International Trade.
“The retaliatory tariffs on American Whiskey exports to key markets, including our largest market the EU, is the number one trade barrier facing the U.S. spirits industry, which is facing enormous economic hardships due to the pandemic,” said Maron. “DISCUS strongly encourages all parties to resolve the trade disputes and eliminate the retaliatory tariffs on spirits exports as soon as possible and avoid the imposition of additional tariffs on spirits.”
Retaliatory tariffs have been imposed on U.S. distilled spirits since mid-2018 by the European Union, Turkey and China. In 2019, total U.S. spirits exports declined by 14.3 percent to $1.5 billion and American Whiskey exports declined by 16 percent to $996 million, compared to 2018. Annual American Whiskey exports to the EU declined 41%, from $757 million (July 2017 to June 2018) to $449 million (August 2019 to July 2020).
“While the removal of retaliatory tariffs on U.S. distilled spirits exports remains our top trade priority, the U.S. spirits sector faces an array of other trade barriers in more than 20 countries,” said Maron. “We appreciate the U.S. government’s longstanding and continued assistance in fighting for free and fair trade for U.S. spirits.”
U.S. spirits exports have expanded significantly over the past two decades, in large part due to the comprehensive market-opening trade agreements that the United States has achieved. DISCUS member companies export to more than 130 countries worldwide, with total U.S. spirits exports in 2019 valued at more than $1.5 billion. Additionally, U.S. spirits are now exported from small, medium and large distillers located in 45 states.
The DISCUS submission also identified countries that assess excessive tariffs, discriminatory excise taxes, and other non-tariff barriers on imported distilled spirits, including:
- India: maintains an excessive tariff of 150 percent ad valorem
- Vietnam: imposes a 45 percent ad valorem tariff
- EU, Brazil, Thailand, Indonesia, Peru, Costa Rica, and Ecuador: continue to apply discriminatory spirits taxes in favor of domestically produced spirits
- Thailand, Ireland, India, South Africa, India, Argentina and elsewhere: labeling requirements and standards of identity are under consideration, which are inconsistent with standard international practices and could impose unnecessary barriers to entry for U.S. spirits exporters