EU clears sanctions over US tax breaks (What Next? Guns)

http://www.eubusiness.com/ ^ | 08 December 2003 | http://www.eubusiness.com/

[MrFreedom]

EU clears sanctions over US tax breaks

08 December 2003

The European Union gave the green light Monday to multi-million-dollar trade sanctions against the United States unless illegal tax breaks for US exporters are repealed.

Fresh from declaring peace on one front of a transatlantic trade war over US steel tariffs, the EU pledged to press ahead with retaliation unless Congress repeals the Foreign Sales Corporation (FSC) law.

Tariffs starting from 200 million dollars (164 million euros) will be imposed on March 1 until the FSC tax breaks are scrapped, after EU foreign ministers nodded through the duties recommended by the European Commission.

The duties, on goods from meat and paper to nuclear power parts and semi-precious stones, will rise by 40 million dollars a month after March until the FSC regime is ended.

The World Trade Organisation (WTO) ruled in January last year that the FSC law flouted its rules by allowing thousands of US firms, operating through subsidiaries in offshore tax havens, to benefit from reduced export taxes.

The WTO had ruled that the EU could impose four billion dollars in sanctions if the FSC system was not dismantled by the end of 2003.

But the European Commission -- the EU's executive arm -- last month stopped short of imposing such an unprecedented penalty, which would have sent shockwaves through strained US-EU trade relations.

Congress is working on repealing the FSC law but with the US legislature now in recess, any decision is unlikely before next month at the earliest.

The EU says it has waited long enough after the WTO first ruled against the FSC scheme in 2000.

The tax row is one of a range of trade disputes causing anger on both sides of the Atlantic.

The EU last week lifted the threat of 2.2 billion dollars in trade sanctions against the United States after US President George W. Bush scrapped the tariffs on steel imports.

Washington, for its part, is unhappy over EU bans on genetically modified food and growth hormones in cattle. A committee of EU scientists voted Monday against approval for a type of GM sweetcorn, ensuring that that row will stay on the political agenda for some time yet.

[Centurion2000]

I think this one is a duplicate post ..... FYI.

[Centurion2000]

they want a trade war ... let's give them a trade war .... full embargo of france and germany

[Maelstrom]

and Only france and germany.

[Colosis]

I hope Bush won't buckle to this euroweenie pessure.

[misterrob]

Trade wars ultimately hurt consumers the most both by raising prices on the things we pay for and the working people who's industries are targeted in return.

Pandering to unions is a dangerous tactic.

[joesnuffy]

give them an inch they take a mile....
And we are going to award a huge tanker contract to Air Bus????

[VeniVidiVici]

Can somebody fill me in on whether or not the EU has a case? I dislike the WTO but it sure would be nice if I know that this also is BS.

So we give export tax breaks to US companies. Don't countries of the EU give government subsidies to their companies? What the heck is the difference?

[NRA2BFree]

I hope Bush won*t buckle to this euroweenie pessure.

Hah! Of course, he*ll buckle, he*s as much of a globalist as the Euroweenies are!

[Fee]

Welcome to the issues of globalism. Our workers complain about unfair low wages from China and losing jobs to them. The EU workers complain that unfair low taxes in US is forcing their government to cutback on social spending because people with money (who pay most of their taxes) are leaving to live in US. So what is the future, somehow, someone is going to force every nation to have the same hourly wages and taxrates? Sounds like the 21st Century is in for a few World Wars.

[harpseal]

Ping on or off let me know

[harpseal]

I can not wait for the Free Traitors to come on this thread and tell us how the WTO has the right to dictate to the US Congress that taxes must be raised in the USA

[hermgem]

EU contries impose a sales tax called value added tax averaging 20%. This tax is waived for exports and therefore amounts to a 20% export subsidy. On imports this tax is applied. What a deal to indirectly export unemployment by lowering export but raising import prices.

[Dead Dog]

especially the European Union.

[misterrob]

Trade wars solve nothing. The only way enacting tariffs makes any sense is when another country's govt. sponsored industry is dumping in your country or has placed tariffs on your products without provication.