The Association said: "South Korea is one of the most important, and potentially most valuable markets for Scotch Whisky in the world. Even with current tax discrimination, sales of Scotch in Korea earned £129 million in 1996, putting it slightly ahead of Japan in fourth place in the league table of export markets for Scotch Whisky.

"Although there have been limited recent tax changes in South Korea, the position remains one in which the tax on Scotch Whisky, other whiskies and on brandy are three times those on the locally produced spirit, soju.

"Korea’s membership of the WTO should be an indicator of its commitment to uphold its obligations to free trade. Given the WTO’s 1996 ruling against Japan’s virtually identical liquor tax arrangements -- changes to which start to come into effect on 1 October -- and in the absence of Korea’s willingness to eliminate its current tax differentials, the Association believes the EU’s action at the WTO to be fully justified."