Posted on 07/25/2005 8:28:55 PM PDT by anymouse
The United States has not decided whether to appeal a new loss at the World Trade Organization in a long-running dispute with the European Union over tax breaks for Boeing and other U.S. exporters, a top U.S. trade official said on Monday.
"We're still looking at it. It just came out on Friday and we're looking at the decision," U.S. Trade Representative Rob Portman said, confirming reports that a confidential preliminary ruling had gone against the United States.
"I was disappointed by it -- not terribly surprised, but still disappointed because we tried very hard to comply" with earlier WTO rulings in the case, Portman said.
The United States repealed a set of tax breaks, previously known as the Foreign Sales Corporation (FSC) law, last year after the WTO repeatedly ruled they were illegal export subsidies under international trade rules.
Boeing was a beneficiary of the tax break, along with other U.S. exporters like Caterpillar Inc. and Microsoft Corp.
The WTO granted the EU the right to slap punitive duties on $4 billion worth of U.S. exports in the dispute.
Brussels began imposing duties in March 2004 with an initial duty of 5 percent on a broad range of products from steel to textiles and raised it to 14 percent by year-end.
The EU lifted the sanctions in January 2005 after Congress passed legislation to comply with the WTO rulings.
However, it warned at the time it could reimpose them on 60 percent of the goods if the WTO declared that the United States was still in breach of its obligations.
Brussels challenged two provisions of the new U.S. law. One provided two years of transitional relief for companies that had previously benefited from the tax break.
The other allowed exporters that had signed a binding contract before Sept. 17, 2003 to continue to receive the tax break for the life of the contract.
Portman said the decision whether to appeal the latest WTO ruling would be made by members of Congress, who would have to approve any further changes to U.S. tax law.
"The administration will be analyzing it this week ... and providing our best legal counsel on it as to what the impact might be," Portman said.
He noted the EU's ability to retaliate would diminish over time as the transitional period expires.
I thought this was only for manufacturing operations in the US.
Was I wrong?
Do you thnk that an international "rationalized" tax system will bring businesses back.
BY the way, if Boeing did not take workm overseas, they would not be making the sales they are.
We will never get a fair shake out of the WTO - they will through us a few bones but that is it.
No one could claim to understand all the ins and outs of a complicated case like this without considerable study, but I am suspicious that the WTO decides with such regularity against the United States. To me it suggests that our trade rivals have more representation on the WTO than we do. Since the UN and the World Court work that way and are clearly biased against us, I suspect the deck is stacked at the WTO too.
To those who claim that trade agreements like CAFTA, etc., are giving up U.S. soverneignty please note that all this must be approved by Congress or we don't comply. We can stay in the WTO or get out and the same with all other agreements.
How does Airbus, a government owned company, escape this?
Well, the airplane factories here (WA) are humming again.
But I say we should get the heck out of the WTO, and the UN, while we are at it!
Concur. We used to wonder why we couldn't get resolutions approved by the Security Concil of the UN and then - whoops - we uncovered the Oil-for-Food scam. I suspect some colossal bribes are taking place within the WTO. When it comes to international organizations it appears only the English-speaking peoples actually try to play fair, and end up looking like fools.
When are Congress and our business leaders going to learn, NO world body is EVER going to side with the USA in an international dispute.
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