Does Japanese Liquor Taste Different?: Empirical analysis on the national treatment under the WTO
The national treatment obligation, along with most favored nation obligation, is an important principle of non-discrimination adopted by the WTO. It requires that foreign products be treated no less favorably than national products. This paper empirically examines the 1996 WTO recommendation that a Japanese distilled alcohol beverage, shochu, is a 'directly competitive or substitute product' to other distilled drinks, and thus not taxing similarly is in violation of its national treatment obligation. Demand estimates obtained from a three-stage nested logit model reveal that shochu and other distilled beverages are matched substitutes for each other. Upon the recommendation by the WTO Appellate Body, Japan changed its liquor tax rates closer to the optimal level.
|Date of creation:||Nov 2010|
|Date of revision:|
|Contact details of provider:|| Postal: 11th floor, Annex, Ministry of Economy, Trade and Industry (METI) 1-3-1, Kasumigaseki Chiyoda-ku, Tokyo, 100-8901|
Web page: http://www.rieti.go.jp/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:eti:dpaper:10058. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (NUKATANI Sorahiko)
If references are entirely missing, you can add them using this form.