Posted on 12/16/2004 11:31:04 AM PST by crushelits
BRUSSELS (Reuters) - The European Commission (news - web sites) is sticking with its plan to lift sanctions on $4 billion worth of U.S. goods on Jan. 1 following Washington's repeal of illegal export tax subsidies in October, a spokeswoman said on Thursday.
"There is not a new policy ... our goal is to lift the sanctions on January 1 in recognition of the fact that the United States has made a step forward by amending its legislation," Claude Veron-Reville said.
She was denying a report in the Financial Times that the 25-member European Union (news - web sites) was set to delay its promised removal of punitive import tariffs. However, Veron-Reville said the EU could reimpose sanctions at a lower level in 2006 -- probably around 60 percent of the $4 billion -- if the World Trade Organization (news - web sites) (WTO) finds in its favor on the U.S. law repealing Foreign Sales Corporation (FSC) subsidies.
The law provides three years of transition relief for companies that have benefited from FSC. Also, under a so-called grandfathering clause, all exporters that entered binding contracts before Sept. 17, 2003 will continue to benefit.
This clause favors producers of large capital goods with long delivery times such as Microsoft, Motorola, General Electric and Boeing .
The FSC subsidies triggered the biggest transatlantic trade dispute in 50 years.
The Commission, the EU's executive arm, has sought talks with Washington over the surviving subsidies and the WTO is expected to rule on the case around September next year.
An EU trade diplomat said confusion over whether the sanctions would be lifted as planned on Jan. 1, 2005 arose because some EU member states wanted the legislation repealing them to stipulate that tariffs could automatically be reintroduced in 2006.
"Because those concerns were there the Commission wasn't able to push ahead and have this thing cleared before Christmas," the diplomat said.
"But whatever happens it will come into effect some time in January and ... it can be made retrospective to Jan. 1 so in practice there won't be a delay. There'll be a legal delay but not an actual delay."
This is the legislation, btw, that the left was citing when saying President Bush "supports legislation which give tax breaks to companies that ship jobs overseas." It happens to be identical to Kerry's proposed tax reform plan (see my previous thread)
It's about time they got this pushed through...
"This clause favors producers of large capital goods with long delivery times such as Microsoft".
What new large capital goods have I missed? As a Microsoft shareholder, and having read the annual and quarterly reports, I've been unable to identify "large capital goods" that have been produced and sold by Microsoft.
"If the US does not bring its legislation into conformity with its international obligations the EU would impose retaliatory measures early in 2005," the EU's executive arm said in a statement issued in Brussels.
Washington was targeted by the sanctions request because the US Congress had not repealed the legislation -- which the WTO had earlier condemned as incompatible with its rules -- before a deadline of December 27, 2003.
"The EU hopes that implementation will soon follow and that it will not be necessary to make use of the authorisation," the EU's delegate in the meeting, Raimund Raith, said.
"The European Union calls on the US administration to transmit this message to Congress and to defend the importance for US credibility in the WTO to comply with its obligations without further delay," he added.
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Now doesn't this sound just like the EU is telling America to change her laws to suit the EU? Oh, the free traders say, the WTO is just a regulatory body, and can't make America do anything or change any of her laws. Yeah, right.
http://story.news.yahoo.com/news?tmpl=story&u=/afp/wto_us_eu_trade_dispute
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