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US EXPORTS TO EU
PENALIZED
FSC: EU STARTS
COUNTERMEASURES ON US PRODUCTS
The EU, armed with a WTO
decision banning US
Foreign Sales Corporations (FSCs) and the inability for Congress and
the President to pass conforming legislation have begun to assess punitive
additional duties on selected imports from the US.
The additional duties
consist of an additional customs duty of 5%, followed by automatic monthly
increases of 1% up to a ceiling of 17% to be reached on 1 March 2005, if
compliance has not happened in the meantime.
The WTO found the FSC to
constitute an illegal export subsidy. The US was then given until 1
November 2000 to withdraw the FSC scheme. On 7 May 2003 the WTO endorsed
the EU request for countermeasures for a level roughly equal to the
estimated annual US subsidy, i.e., US $4 billion. The EU had, however,
avoided any immediate recourse to retaliation so as to give a reasonable
time for the US Administration and Congress to adopt the necessary
legislation for the repeal of FSC.
For further information
please view the
Official Journal of
the European Union (pdf) |
