WTO Finds US Still At Fault Over Tax Breaks For Exporters

by Glen Shapiro, LawAndTax-News.com, New York

26 July 2005

According to a report in the Wall Street Journal this week, a trade dispute between the United States and the European Union over tax breaks granted to US exporters may soon be re-opened.

Reporting on a decision handed down by the World Trade Organisation on Friday, details of which have not yet been made public, the WSJ revealed that despite Congressional action taken last year to remove the tax breaks for entities known as foreign sales corporations, the WTO sided with the European Union last week.

The Organisation reportedly stated that the transition periods put in place by the US authorities represented a contravention of global trade rules, according to unnamed sources close to the matter.

Observers have suggested that the US government is unlikely to move quickly to address the disputed provisions, however, feeling that the legislation put in place last October was sufficient. This in turn may eventually lead the European Union to reimpose sanctions on various American exports.

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