CANADA – TAX EXEMPTIONS AND REDUCTIONS FOR WINE AND BEER
Document: Notification of Mutually Agreed Solution
Date: 23 December 2008
Document codes: WT/DS354/2; G/L/806/Add.1; G/SCM/D72/1/Add.1
Complainant: EU
Respondent: Canada
Dispute stage: Consultation
Agreements cited: Art. III:1, III:2, III:4  GATT 1994Art. 3.1, 3.2  Subsidies and Countervailing Measures (SCM)

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 , ,
 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 would 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

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 mutually 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

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.