US Seeks Balanced Solution To Trade Dispute

by Mike Godfrey, Tax-News.com, Washington

17 January 2002

A top US trade official told reporters on Tuesday that the United States hoped fo find a 'balanced solution' to the trade dispute currently raging between the European Union and the US.

This follows a World Trade Organisation ruling supporting the EU's contention that American 'foreign sales corporation' tax breaks go against global trade rules. The European Union is now expected to publish a list of products which will be targeted for retaliatory sanctions, and the cost to the States could be around $4 billion per year if a solution is not found.

Speaking earlier this week, the EU Trade Commissioner, Pascal Lamy, expressed his pleasure at the WTO ruling: 'Of course I'm pleased that the WTO has confirmed what we always believed,' he said. 'We have made a point of handling this dispute in a very reasonable manner. Now it is up to the US to comply with the WTO's findings to settle this matter once and for all. As to how, we look forward to rapid US proposals.'

Although it is currently unclear as to which course of action which Congress is likely to take, the US trade official, who asked not to be named, expressed confidence that both parties recognised the importance of their trading relationship: 'We're not going to do something to screw that up,' he explained, adding that 'the issue should not get in the way of the larger trade relationship.'

Recommended