The United States is aiming to complete the replacement of legislation allowing export subsidies to manufacturers before the European Union imposes retaliatory tariffs in March next year, says US Commerce Under-Secretary Grant Aldonas.
The European Union is impatient with long-drawn-out efforts in the US Congress to respond to the WTO's banning of 'Foreign Sales Corporation' tax-breaks (now known as ETI or the Extra-Territorial Income Exclusion Act) used by such companies as Boeing and Caterpillar, and has threatened to put in place counter tariffs in March 2004 on a range of US goods starting at a rate of 5%. This will then rise in 1% increments every month until the EU is satisfied that appropriate action has been taken by US lawmakers.
However, speaking at a conference recently, Aldonas remarked that the new legislation set to replace the Extra Territorial Income Exclusion Act is “set up to move within the first quarter of next year”.
It is also becoming more likely that the Bush administration will be forced to act on steel tariffs after the US lost its appeal at the WTO and Japan announced this week that it would follow the EU and impose counter measures on imports of US steel.
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