By Bruno Waterfield - 11th October 2004
The EU has welcomed US moves to end tax breaks for American corporations – four years after a WTO deadline to scrap the subsidies.
Europe’s trade chief Pascal Lamy will “carefully study the details in the final compromise” legislation passed by US Congress on Monday.
The move could herald an end to a bitter Trans-Atlantic trade row over Foreign Sales Corporations (FSC/ETI).
“I am pleased that Congress has finally taken this step towards US compliance with the WTO ruling. It vindicates the EU's patient but firm approach,” said Lamy.
“Our objective throughout has been to obtain the withdrawal of these illegal subsidies by introducing progressively rising countermeasures.”
The WTO ruled that the $4 billion tax breaks were illegal and opened the door in 2003 to EU countermeasures.
But Brussels held off the imposition of sanctions “so as to give a reasonable time for the US administration and Congress to adopt the necessary legislation for the repeal of FSC”.
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