The European Union has requested that the World Trade Organization convene a dispute resolution panel to resolve a dispute with Colombia over imports of alcoholic beverages.

The EU and Colombia held consultations earlier in March of this year but they failed to reach a solution to the dispute.

The EU’s concerns about discrimination of EU spirits in the Colombian market are longstanding. According to the EU, its spirits are subject to higher taxes and local charges than those applied to local brands. In addition, market restrictions apply in the local subdivisions of Colombia. The localities impose market-access restrictions that distort the competitive conditions in the market to the detriment of EU spirits.

This, the EU contends, contravenes the non-discrimination provisions of WTO rules.

The EU is the number one exporter of spirits to the Colombian market and, as a result, the trading partner most affected by these measures, followed by Mexico, Costa Rica, and the United States. In 2014, EU exports of spirits to Colombia—valued at $49 million—represented approximately 14 percent of total agricultural exports to Colombia and 77 percent of total Colombian imports of spirits. Within the different spirits exported by the EU to Colombia, whiskies represent the highest share followed by liqueurs and cordials. Colombia produces mainly rums and aguardientes, which account for 83 percent of spirits consumption in Colombia in 2013 figures.

Under the bilateral trade agreement with the European Union, Colombia committed itself to ending the discrimination by August 1 of last year. The EU has raised the issue with Colombia on numerous occasions, including in bilateral meetings, WTO meetings, and OECD membership discussions.

The European Union requested consultations with Colombia under the WTO in January 2016. Consultations were held in March but failed to find a positive solution to the dispute.

The EU’s request for the establishment of a WTO panel will be discussed at the meeting of the WTO Dispute Settlement Body (DSB) on September 2. If Colombia does not agree to the establishment of a panel at that meeting, the EU may table a second request at the following DSB meeting which, according to WTO rules, Colombia cannot block.

The European Union says it continues to support Colombia’s efforts to bring about reform in this sector.