WASHINGTON, Oct 3: The United States plans to appeal a World Trade Organization ruling over tax breaks for US companies that have raised the threat of European Union sanctions, a top official said Monday.
“I informed Congress that the US does intend to appeal,” US Trade Representative Rob Portman said after the WTO ruled last week that Washington has failed properly to repeal its old Foreign Sales Corporations (FSC) system.
New US rules have maintained subsidies that were declared in breach of the rules of international trade by the WTO in March 2000, after a European Union complaint, a WTO dispute settlement panel ruled.
In October 2004, President George W. Bush signed legislation that ended the FSC system of export tax breaks for US corporations operating in offshore tax havens. The EU then lifted a threat to implement penalty tariffs on US goods.
But earlier this year, the EU’s executive commission said it would be ready to slap punitive duties worth up to $4 billion on US imports after complaining afresh to the WTO over the new US tax breaks.
Portman said he hoped the WTO appeals process could be speedily concluded before the EU makes good on its vow to slap the hefty sanctions on US goods.—AFP
