WTO Chief Wants Amicable Solution To EU/US Trade Row

by Ulrika Lomas, Tax-News.com, Brussels

08 March 2004

The head of the World Trade Organization last week urged the European Union and the United States to find an “amicable” solution to the trade dispute surrounding the banned tax breaks given to US exporters.

Last Monday the EU began charging tariffs on many imports originating from the US at a rate of 5%. This is set to rise to 17% by degrees, affecting $4 billion worth of goods by next year unless Congress repeals the controversial Extra-Territorial Income Exclusion Act legislation.

"I certainly would like to see an amicable settlement of the dispute," Supachai Panitchpakdi, head of the 146-country organisation, observed at a press conference in Paris with French Commerce Minister Francois Loos.

Recognising the fact that a remedy could take “quite some time” to implement, the WTO chief urged the two trading blocs to arrive at an interim agreement in a bid to “reduce the tension” in transatlantic trade relations.

The US Senate is due to finish working on a replacement bill proposed by Senate Finance Committee Chairman Charles Grassley later in the month. The bill, known as the ‘Jumpstart Our Business Strength’ (JOBS) Act will replace the current legislation with an effective 3% tax cut for all US manufacturing firms.

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