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486 paper - In this case the Korean government expericened...

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In this case the Korean government expericened the WTO dispute settlement procedure for the first time. The WTO Dispute Settlement Body required the Korean government to balance the tax rate between soju and whisky according to the WTO regulations. The Article 3: 2 of GATT 1994 is the most involved one in this case. It concerns whether one country should apply the national tradement to import goods in the areas of government pricing. The WTO dispute settlement example, Article 3.2 involves how to define the meaning of domestic taxes and how to understand the different meaning of regulations in Article 3.2 in order to determine the scope of application. The WTO has different national treatment requirements for imported goods, it is stricter when are imported products sold as directly competitive or substitutable products than when sold as products which have same property as domestic products. So the analysis steps are different (WTO, 1998). The Korean case was similar to the Japanese alcoholic beverage taxes case in 1995 (WTO, 1998). The WTO panel concluded that to determine whether the imported products are directly competive or subsitutable products, one of the methods is find out the end use of this product.
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