EU To Delay Lifting Of Tariffs On US Goods
It has been reported that the European Union may delay its pledge to lift trade
tariffs on US goods on January 1 because of lingering doubts over the phasing-out
provisions of illegitimate trade subsidies in the recently passed corporate tax
bill.
The American Jobs Creation Act, passed by Congress in October, repealed legislation
judged illegal by the WTO and was initially welcomed by Brussels, which had imposed
retaliatory tariffs in response. However, Europe remains concerned over the length of the phasing out period
for the legislation, and last month called on the WTO to investigate the new
bill’s grandfathering provisions for long term contracts signed before the
FSC-ETI rules were repealed. According to the Financial Times, the European Commission has now grown impatient
with what it sees as US foot dragging, and has asked the WTO for permission to
re-impose more than $300 million in import tariffs on January 1 2006 unless
the tax breaks are phased out completely in the meantime. The European Commission is reportedly unhappy that US aircraft maker Boeing
will continue to receive some $150 million in tax breaks over the next two years,
although European Trade Commissioner Peter Mandelson has insisted the row has
nothing to do with growing transatlantic antagonism between Boeing and Airbus
over subsidies. The tariffs are due to reach 14% next month on some $4 billion worth of goods,
ranging from steel to clothing to farm produce. A comprehensive report in our Intelligence Report series looking at tax effective structures for global manufacturing firms is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report8.asp
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