Negotiating with WTO members to reduce taxes on rice wine is not the solution to the bootleg rice wine crisis, said Taiwan's representative to the WTO Yen Ching-chang (
"As a member of the WTO, Taiwan has to adhere to its accession commitments. It's not impossible to open another round of negotiation in order to change these agreements, but it would require a lot of work," Yen said.
Yen made the remark at the Foreign and Overseas Chinese Affairs Committee in the legislature yesterday when lawmakers grilled him on a solution to the bootleg rice wine crisis.
As a result of Taiwan's WTO entry, the price of rice wine -- a popular cooking ingredient in Taiwanese households -- surged from NT$21 to NT$130 per bottle because of the WTO's tax requirements.
High prices have fuelled bootleg-wine operations that have resulted in the sale of lethal wine that has killed 10 people over the past few weeks.
Although the Cabinet has been toying with possibility of going ahead with a unilateral reduction of rice-wine tax, signs of opposition to such a move emerged during pertinent talks with the US and the EU earlier this month.
"The first round of talks with the US is less-than-ideal," Yen said. "The EU, on the other hand, said it would wait and look at the details pertinent to Taiwan's proposals."
Yen said if Taiwan goes ahead with its unilateral move to reduce the rice-wine tax, he could not rule out the possibility that WTO members would bring the case forward to settle the dispute.
Improved law enforcement and a thorough crackdown on bootleg rice wine operations would be the key to curbing the problem, Yen said.
Yen also said it's likely that WTO members would express concerns about the recent introduction of the do-it-yourself (DIY) rice wine by state-run Taiwan Sugar Corp designed to bring down the price of a 0.6 liter bottle down to NT$85.
"It's possible that WTO members will express concerns over the sale of this kind of wine .... We can explain the situation to them, although it remains uncertain whether we'll be able to convince them without any opposition," Yen said.
The company said it planned to sell its DIY beverage kit in a three-bottle package that includes alcohol produced from molasses, ethanol made from fermented rice and mineral water.
Consumers then can mix the three ingredients to make a 0.6 liter bottle of rice wine, the company said.
Since the ingredients are sold separately, the product can be exempt from WTO-imposed taxes on distilled liquors. The kit, as it stands now, only has an NT$11 per liter alcohol tax, the company said.
The Ministry of Finance has given the green light to the sale of the newly introduced rice wine kit from the company, saying no incumbent laws can forbid the sale of the kit.
Meanwhile, the interpellation also touched upon the controversial announcement by Taiwan back in October to change its rice import regime for next year.
Yen said the US and Australia have expressed serious concerns with Taipei's proposal and asked for further consultation with Taiwan over the issue.
"The protest from the US is morally justifiable as it's the largest rice exporter to Taiwan constituting some 69 percent of total rice imports," Yen said.
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