The Taiwanese economic affairs minister, Lin Yi-Fu, has said that the US and the EU have agreed to talks with Taiwan regarding the possibility of Taiwan lowering its tax on rice wine.

The minister said separate bilateral talks could begin at any time. The Taiwanese government is hoping to be able to bring the tax on rice wine down from NT$130 ($3.78) per 60cl bottle to between NT$50 and NT$60.

As a condition of joining the WTO this year, Taiwan agreed to impose a tax of NT$150 per litre on rice wine in the first year after accession. But the tax has pushed up the price of locally produced rice wine from NT$20 per bottle to NT$130, increasing the prevalence of bootlegging.

Under the framework of the WTO accession agreement, Taiwan cannot reduce the wine tax for 30 months after accession. And if the US and the EU are not willing to compromise on this, Taiwan would have to turn to WTO arbitrators for settlement of the issue.