WTO rules Mexico taxes on U.S. soft drinks illegal

The World Trade Organization (WTO) on Monday upheld an earlier panel ruling on a dispute between Mexico and the United States, saying Mexico's taxes on U.S. soft drinks violate WTO regulations.

The WTO's Appellate Body rejected Mexico's appeal against the dispute settlement panel verdict circulated to WTO members last October, which concluded that the tax was inconsistent with global trade rules.

"The appellate body recommends that the dispute settlement body request Mexico to bring the measures that were found in the Panel Report to be inconsistent with the General Agreement on Tariffs and Trade (GATT) 1994 into conformity with its obligations," Monday's ruling said.

Mexico imposed a 20 percent tax in 2002 on U.S. soft drinks, as well as on syrups that use sweeteners instead of cane sugar.

U.S. officials argued that the tax was inconsistent with related articles of GATT 1994 and requested the WTO's dispute settlement body to establish a panel in 2004 to investigate this.

The panel circulated its report on the dispute to WTO members in October 2005.

Monday's ruling by the WTO Appellate Body was the final one and cannot be reappealed.

Source: Xinhua

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