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EU Gets Sanctions Go-Ahead Against U.S.
Reuters - Yahoo ^ | 5/7/2003 | Patrick Lannin and Richard Waddington

Posted on 05/07/2003 8:15:14 AM PDT by ConservativeVoice

EU Gets Sanctions Go-Ahead Against U.S.

9 minutes ago



By Patrick Lannin and Richard Waddington

BRUSSELS/GENEVA (Reuters) - The European Commission (news - web sites) gave the United States an autumn deadline on Wednesday to change disputed tax break laws for major corporations or face the threat of up to $4.0 billion in sanctions.



The long-running row over an export scheme for U.S. majors such as Boeing and Microsoft is one of a series of EU-U.S. trade spats. It re-emerges days after the two pledged to work together to boost stalled global trade talks.

"The Commission will review the situation in the autumn," said European Trade Commissioner Pascal Lamy after the Geneva-based World Trade Organisation (WTO) gave the EU the final green light to impose the sanctions.

"If there is no sign that compliance is on the way at that time, it (the Commission) would then start the legislative procedure for the adoption of countermeasures by January 1, 2004," he added in a statement.

The United States has been discussing ways it can comply with the WTO rulings against the system of tax breaks, known as the Foreign Sales Corporation, and two bills have been introduced in Congress in recent months.

Lamy said the EU was encouraged by the determination of Congress and the U.S. administration to change the law and hoped that any solution would be fully in line with WTO rules. But he has also said in the past that EU patience is not infinite.

The row over FSC goes back to 1998 and the level of the punitive duties was set according to the annual loss in earnings claimed by EU companies. The sum of $4.04 billion set by the WTO was a record for retaliation allowed by the trade body.

The ruling means the EU can set duties up to 100 percent on hundreds of U.S. imports, including live animals, aluminum and copper goods, cereals like buckwheat and nuclear reactor parts.

TRADE TALKS CLOUD

The tax dispute is one of a number of spats involving the world's two biggest economic blocs and both Brussels and Washington are anxious not to stoke tensions, particularly as key WTO talks to free up global commerce have run into trouble.

Lamy and his U.S. counterpart Robert Zoellick pledged last week to try to give the global trade talks, the Doha Round, a push by focusing on where they agree rather than disputes.

Apart from the risk that sanctions could trigger a trade war at a time when the world economy is already struggling, many economists argue that their use could be counter-productive.

The economies of Europe and the United States are so closely intertwined that Europe would also suffer, they argue.

The two economic powerhouses are also at odds over other issues including U.S. duties on steel and a European block on genetically modified foods.


TOPICS: Foreign Affairs; Government
KEYWORDS: eu; wto
Well, this just tears it!!

They're gonna' sanction us!?

Just think a minute about who really needs who economically.

French unemployment is up near 10%. The Belgians aren't far behind. The Germans are still reeling from absorbing the East and the current general slowdown.

We're still experiencing growth, even if it's slower than we'd like.

On top of that, last I checked, we're still a sovereign nation. So, who determines our tax laws, the WTO?

No comment on France, where Chirac is about to bust the EU deficit regulations.

These are the one-worlders at their worst! They've mismanaged their affaris, so now they want to mismanage ours.

While we're at it, lets hop onto the war crimes court so we can send our soldiers to be judged by European jurists. Hey, how about siging up for the Kyoto treaty so we can cripple our industry and give the Chinese a chance to catch up, and dirty the worlds air by a far sight more than we ever could.

1 posted on 05/07/2003 8:15:15 AM PDT by ConservativeVoice
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To: ConservativeVoice
Eh, only looks to be about four billion in sanctions. That's nothing.
2 posted on 05/07/2003 8:17:27 AM PDT by Pyrion
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To: ConservativeVoice
No comment on France, where Chirac is about to bust the EU deficit regulations.

They already have, but of course they're France, so it doesn't count. France's real problem is that other European countries have been letting them get away with this SH*T for far too long.

3 posted on 05/07/2003 8:18:53 AM PDT by Mister Baredog ((They wanted to kill 50,000 of us on 9/11, we will never forget!))
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To: ConservativeVoice
Hey EU! I got your sanctions right here.
4 posted on 05/07/2003 8:19:01 AM PDT by CholeraJoe (Standing tough under Stars and Stripes)
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To: ConservativeVoice
When it comes to wealth the only thing socialists know how to do is to take what isn't theirs. Ms. Ryand called them looters for a reason.
5 posted on 05/07/2003 8:21:32 AM PDT by AD from SpringBay
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To: ConservativeVoice

Operation EU Freedom
Target coordinates accepted, start bombing sequence......
6 posted on 05/07/2003 8:23:13 AM PDT by keithtoo (!)
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To: ConservativeVoice
"If there is no sign that compliance is on the way at that time, it (the Commission) would then start the legislative procedure for the adoption of countermeasures by January 1, 2004," he added in a statement."

The noose tightens around America's soverign nation's throat as the neo communist left wing politicians in league with the scheming E.U. nations try to bind America's citizens and drag us into the U.N. authoritaian dictatorship one world order.
7 posted on 05/07/2003 8:23:13 AM PDT by wgeorge2001 ("The truth will set you free.")
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To: ConservativeVoice
I'd say that we could start our own trade war - if that's what they want. An automatic increase in tarrifs for all products imported from the EU (those that are not currently being boycotted!)
8 posted on 05/07/2003 8:23:18 AM PDT by Core_Conservative (Prayer for those who Serve our Country - Pray for our President for the Wisdom of Solomon)
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To: Pyrion
Bring on the sanctions...we can return the favor and cripple European wine sales in America...and watch all the wussie European wineries cry their tears into the Mosul and Rhein Rivers. We can watch Porsche and BMW try to find another market in the world to match the US. We can sit and watch their TV stations come to a grinding halt...unable to show much of anything except reruns of Kojack and Hawaii 5-0. The EU needs to examine what flows in from the US...and its an awful lot.
9 posted on 05/07/2003 8:24:49 AM PDT by pepsionice
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To: ConservativeVoice
That's an easy one to get around. Just give all American companies, foreign and domestic, the same tax breaks.
10 posted on 05/07/2003 8:33:09 AM PDT by McGavin999
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To: ConservativeVoice
Verrrry interesting. So the next war may be about trade. I think what is at stake here is which currency will become the paramount medium of exgange in the World: the dollar or the euro. 4 bilion is chump change but let's see if that escalates.
11 posted on 05/07/2003 8:38:35 AM PDT by Eternal_Bear
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To: ConservativeVoice
Ain't jingoism great? We get to skip straight to the bashing without a word about the tax policy itself. Sure saves time.
12 posted on 05/07/2003 10:18:45 AM PDT by gcruse (Vice is nice, but virtue can hurt you. --Bill Bennett)
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To: gcruse
It isn't the EUs business to say a WORD about OUR tax policy!

If they don't like they can stick it where the sun don't shine!

BTW... They don't have a hole big enough for all those air buses!

13 posted on 05/07/2003 10:44:23 AM PDT by sausageseller
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To: wgeorge2001
My friend, you have stated it 100%.
14 posted on 05/07/2003 10:49:44 AM PDT by gulfcoast6 (The only preparation for tomorrow is the right use of today.)
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To: sausageseller
Aren't you one of those who harps on
China's low wages being detrimental to
American industry? Maybe I mistook you
for someone else.
15 posted on 05/07/2003 10:55:20 AM PDT by gcruse (Vice is nice, but virtue can hurt you. --Bill Bennett)
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To: gcruse
Yes you are mistaken.
16 posted on 05/07/2003 5:42:29 PM PDT by sausageseller
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Comment #17 Removed by Moderator

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