WORLD TRADE  
ORGANIZATION  WT/DS354/2 
G/L/806/Add.1 
G/SCM/D72/1/Add.1 
23 December 2008 
 (08-6306) 
 Original:   English 
  
 
CANADA – TAX EXEMPTIONS AND REDUCTIONS 
FOR WINE AND BEER 
 
Notification of Mutually Agreed Solution
 
 
 
 The following communication, dated 17 Decembe r 2008, from the delegation of the European 
Communities and the delegation of Canada to the Chairman of the Dispute Settlement Body, is 
circulated pursuant to Article 3.6 of the DSU.  
_______________ 
 
  The Government of Canada and the European Communities wish to notify the Dispute Settlement Body that, in accordance with Article 3.6 of the Understanding on Rules and Procedures 
Governing the Settlement of Disputes , they have reached a mutually agreed solution to the matters 
raised by the European Communities in its requ est for consultations in WT/DS354/1, G/L/806, 
G/SCM/D72/1 dated 4 December 2006.     The mutually agreed solution pursuant to Article 3.6 of the  Understanding on Rules and 
Procedures Governing the Settlement of Disputes  entails the reduction, on a most-favoured nation 
basis, of applied customs duties on certain products im ported in Canada.  We w ould be grateful if you 
could circulate this notification to the relevant Councils and Committees, as well as to the Dispute 
Settlement Body.   
 
For the European Communities 
    
 
H.E. Mr. Eckart Guth 
Ambassador For Canada 
    
 
H.E. Mr. John Gero 
Ambassador 
 WT/DS354/2 
G/L/806/Add.1 G/SCM/D72/1/Add.1 
Page 2 
  
  Agreed Minutes of bilateral consultations in the context of DS354  
"Canada – Tax Exemptions and Reduction for Wine and Beer " 
 
These agreed minutes set out the mu tually agreed solution between the European Commission and the 
Government of Canada pursua nt to Article 3.6 of the Understanding on Rules and Procedures 
Governing the Settlement of Disputes with regard to the issues raised  by the European Communities in 
DS354 " Canada – Tax Exemptions and Reduction for Wine and Beer ". 
 
Canada will, on a most-favoured nation basis, reduce applied customs duties on certain products 
imported into Canada as set out in detail in Annex 1. 
 Effective reduction of the applied customs duties as  listed in Annex I will allow the termination of 
DS354 Canada – Tax Exemptions and Reduction for Wine and Beer pursuant to Article 3.6  of the 
Understanding on Rules and procedures governing the settlement of Disputes.  
Following the completion of each party's internal pr ocedures, and not later than 19 December 2008, 
Canada and the European Communities will notify this  mutually satisfactory solution and, hence, the 
termination of DS354 proceedings, to the WTO Dispute Settlement Body.  
 
For the Government of Canada 
 
  
 
  
Date 10 October 2008 For the European Commission 
 
 
 
 
  
Date 10 October 2008  
   WT/DS354/2 
 G/L/806/Add.1 
 G/SCM/D72/1/Add.1 
 Page 3 
  
  Annex I 
Canadian Customs Duty Reductions 
  
1. As of January 1, 2009, Canada will, on a mo st favoured nation basis, remove all applied 
customs duties on the following goods: 
(a) Non-alcoholic beer (tariff line 2202.90.10); 
(b) Bulk wine (tariff lines 2204.29.10, 2204.29.21, 2204.29.22, 2204.29.23, 2204.29.24, 
2204.29.25, 2204.29.26, 2204.29.27, 2204.29.28, 2204.29.31, 2204.29.32, 
2204.29.41, 2204.29.49); 
(c) Fortified wines (tariff lines 2204.21.22, 2204.21.23, 2204.21.24, 2204.21.25, 
2204.21.26, 2204.21.27, 2204.21.28, 2204.21.31, 2204.21.32, 2204.21.41, 2204.21.49); 
(d) Vermouth wines (tariff lines 2205.10.10, 2205.10.20, 2205.10.30, 2205.90.10, 
2205.90.20, 2205.90.30); and 
(e) Other grape must (tariff lines 2204.30.10, 2204.30.90). 
2. Canada will, on most favoured nation basis, re duce the applied customs duty on bottled wine 
of tariff line 2204.21.10 in two steps from the current applied MFN customs duty of 3.74 cents per litre to: 
− 2.62 cents per litre as of 1 January 2009; and 
− 1.87 cents per litre as of 1 January 2010. 
3. Canada will, on a most favoured nation basis,  reduce the applied customs duty on bottled 
wine of tariff line 2204.21.21 in two steps from the current applied MFN customs duty of 9.35 cents per litre to: 
− 6.55 cents per litre as of 1 January 2009:  and 
− 4.68 cents pre litre as of 1 January 2010. 
4. Canada will, on a most favoured nation basis, reduce the applied customs duty on sparking 
wine (tariff lines 2204.10.10 and 2204.10.90) in two steps from the current applied MFN customs 
duty of 37.4 cents per litre to: 
− 14.96 cents per litre as of 1 January 2009;  and 
− Duty free as of 1 January 2010. 
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