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Taiwan faces tough WTO fight to slash rice wine tax

ludahai

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Taiwan may face a tough job persuading WTO members to agree to a cut in the rice wine tax even after the legislature approved an amendment to the Tobacco and Liquor Tax Act (菸酒稅法) in an extraordinary session yesterday.
The passage of the amendment provides the legal basis for the government to halve the price of rice wine from NT$50 a bottle to NT$25. In submitting the proposal, the Cabinet said that rice wine is a cultural staple in cooking and should not be levied the same tax as high-proof alcoholic beverages.

However, WTO members have expressed concern that lowering the rice wine tax would put imported alcoholic beverages at a disadvantage.
I understand the advantages of WTO membership considering the large number of quality products that Taiwan exports, but this has been a sticking point among Taiwanese for years and caused problems here several years ago.

Rice wine in Taiwan, unlike sake and soju in Japan and Korea respectively, is used for cooking. I don't know anyone who drinks the stuff. Japanese sake is popular here, but local rice wine is used for cooking. A government survey noted that only 4% is consumed as a potent potable.

The US and EU pressured Taiwan to classify it as a distilled liquer even though it is not consumed as a drink. Local radio reports that EU is threatening WTO action over this change. This despite the fact that most European alcohols imported from Europe are your higher level whiskeys, wines, and premium beers which wouldn't compete with rice wine. Only Japanese sake could be reasonably seen as a competitor and I haven't heard a peep out of them ... probably because they understand different grades of rice wine are used for different purposes.

While Taiwan was wrong in its tiff with the US on beef, this is absolutely right. Sad that the EU and US are using their size and clout in the WTO to pressure a smaller member to bend to their will. I look forward to the EU losing this case because their complaint has absolutely no merit whatsoever.
 

Korimyr the Rat

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All the more reason that the WTO shouldn't exist. Meddling with its members' cultures in this fashion is inexcusable.
 

ludahai

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All the more reason that the WTO shouldn't exist. Meddling with its members' cultures in this fashion is inexcusable.
I am not against the WTO completely... it has the potential to bring benefits, but the current piecemeal FTA regime in the absense of comprehensive global trading rules is not working...

And the EU and US are dead wrong on this. I don't know anyone who drinks it. It is used for cooking. There are some absolutely delicious dishes that this stuff is used to make. With all of the high-level liquers imported from Europe and Japan, they don't have much reason to complain... French wine, Scottish whiskey, premium German and Dutch beers are all popular here...
 

rathi

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In the U.S. you can buy various cooking wines with additives that make them undrinkable without them being classified as liquor. As far the WTO, it has the sole purpose of pushing around smaller countries economically. While obviously the U.S. benefits from the current arrangement, I think it might be beneficial to start changing that. Our world economic influence is shifting, and we might find ourselves on wrong end of a unfair trade in the future.
 

ludahai

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In the U.S. you can buy various cooking wines with additives that make them undrinkable without them being classified as liquor. As far the WTO, it has the sole purpose of pushing around smaller countries economically. While obviously the U.S. benefits from the current arrangement, I think it might be beneficial to start changing that. Our world economic influence is shifting, and we might find ourselves on wrong end of a unfair trade in the future.
On the whole, Taiwan benefits from more open and liberalized trade. Unlike many of its neighbors, Taiwan is far more open to imported products than China, Japan, and Korea are. Many U.S. exports do very well here. I really don't understand why the EU and US are complaining about this. They don't export alcohol to Taiwan that competed with red label rice wine. The only countries that could concievably have reason to complain would be Japan and South Korea and neither are. Taiwan imports significant amounts of sake for Japanese restaurants and Korea has never really tried to market soju here...
 

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I dont know who in their right mind would drink the stuff. It's some pretty hardcore poverty punch, but domestic lighter fluid-grade alcohol is cheaper.

Rice wine is used a lot as a replacement for or is cut with vinegar in a lot of dishes.
 

ludahai

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I dont know who in their right mind would drink the stuff. It's some pretty hardcore poverty punch, but domestic lighter fluid-grade alcohol is cheaper.

Rice wine is used a lot as a replacement for or is cut with vinegar in a lot of dishes.
Tell that to the EU trade office...
 
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This sucks. Why does trade between nations have to be so difficult?
 

ludahai

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no-one wants anyone to make more money than them, it's the nature of Capitalism.
Actually, it is the nature of mercantilism, and no one practices the modern variant of it more ruthlessly than China, though they learned from Japan and Korea...
 
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This sucks. Why does trade between nations have to be so difficult?
That is the question I asked. I come from the free market perspective that free trade should be free 100%(99%) of the time.
no-one wants anyone to make more money than them, it's the nature of Capitalism.
You respond to me with that. I accepted this as a criticism of capitalism. The free market however does not permit this mentality even though the free market is capitalist so the free market must be going against nature or the free market is not capitalist. Either way it sounds like you're saying that capitalism is the blame for free trade being difficult since capitalist institutions are advocating trade restrictions because it makes them more money or something like that.
So socialism creates more free trade?
Since you've established that the nature of capitalism is the reason why free trade is difficult, I had to wonder what would make free trade easier. Since the nature of capitalism does not, the free market can't unless the free market is to be considered noncapitalist since free trade in the free market goes against the nature of capitalism. This led me to believe that socialism, which isn't capitalist, can create more free trade?

Perhaps you have a different -ism in mind so I'll ask differently.

spud_meister, would noncapitalism create more free trade? if yes, what -ism would it be?
 
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