USTR Requests Comments on WTO Dispute on the American JOBS Creation Act of 2004
The Office of the U.S. Trade Representative (USTR) has issued a notice announcing that the European Communities (EC) has requested World Trade Organization (WTO) dispute settlement consultations with respect to the American JOBS Creation Act of 2004.
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The USTR also states that it is inviting written comments from the public by January 10, 2005 concerning the issues raised in this dispute.
(The American JOBS Creation Act of 2004 (Public Law (P.L.) 108-357) repeals the Foreign Sales Corporation (FSC)/FSC Replacement and Extraterritorial Income Exclusion Act (ETI) tax regime (but provides transitional relief over three years (2004-2006). (See ITT's Online Archives or 10/26/04 news, 04102605, for recent BP summary.)
The USTR states that the EC views Section 101 of the JOBS Act (the Section that contains the FSC/ETI tax regime repeal provisions) as containing transitional provisions that will allow U.S. exporters to continue to benefit from the FSC Replacement and Extraterritorial Income Exclusions Act as follows: (a) in the years 2005 and 2006 with respect to all export transactions; and (b) for an indefinite period with respect to certain binding contracts.
According to the EC, this results in a failure to withdraw the subsidy and implement the WTO Dispute Settlement Body's (DSB's) recommendations and rulings.
(The USTR notes that if the requested consultations should fail to resolve the matter and a WTO dispute settlement panel (DSP) is established, it would be expected to issue a report on its findings and recommendations within 90 days.)
- comments accepted during course of proceedings, but should be submitted by January 10, 2005 to be assured of timely consideration
USTR contact - William Hunter (202) 395-3582
USTR notice (FR Pub 01/03/05, D/N WTO/DS108) available at
http://a257.g.akamaitech.net/7/257/2422/01jan20051800/edocket.access.gpo.gov/2005/pdf/04-28673.pdf.
BP Note
BP is checking to determine whether the European Union (EU) has repealed the additional customs duties it has imposed on certain U.S.-origin products in connection with an earlier EU's WTO dispute over the U.S. FSC/ETI tax regime, as the EU had proposed repealing them effective January 1, 2005. (See ITT's Online Archives or 10/26/04 news, 04102605 for relevant summary.)