Press Release: WTO Appellate Body confirms that US export subsidies breach international trade rules

The WTO Appellate Body confirmed on 24.2.00 that US subsidies to exports (via the Foreign Sales Corporation (FSC) scheme) breach WTO rules. FSC subsidies assist US exports worth around $250 billion, giving US companies an unfair advantage and creating major distortions of international trade. The US budgetary cost of the subsidy is around $3.5 billion each year.

'We welcome this decision', said Commissioner Pascal Lamy. 'The FSC system, and its predecessor, have had a major negative effect on international trade to the detriment of European companies. Of course we think that WTO members should be free to decide on their own tax systems. But each Member must do so fairly and in line with the rules. It is now for the US to implement the WTO's findings, in line with its international obligations'.

The Appellate Body ruling upholds the Panel's essential conclusion: that the US needs to bring FSC into conformity with its WTO obligations by the beginning of the next US fiscal year.

• Primary Source

http://europa.eu/rapid/pressReleasesAction.do?reference=IP/00186&format=HTML&rapid=0&language=EN&guiLanguage=en http://europa.eu/rapid/pressReleasesAction.do?reference=IP/00186&format=HTML&rapid=0&language=EN&guiLanguage=en

http://www.treas.gov/press/releases/ls417.htm http://www.treas.gov/press/releases/ls417.htm

---