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.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.
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.