The US must do more to scrap a disputed system of tax breaks for exports by year's end if it wants to avoid up to US$4 billion of EU sanctions, the European Comm-ission said on Thursday.
The WTO let the EU impose the sanctions after it ruled the tax breaks, called the Foreign Sales Corporation, or FSC, were illegal export subsidies. The US Senate Finance Committee passed a bill on Wednesday aimed at meeting the EU demands.
But Arancha Gonzalez, spokeswoman for EU Trade Commissioner Pascal Lamy, said the proposed law still had holes in it as it included a three-year transition period to end the FSC system.
"We have already waited for three years to get the legislation repealed and therefore an extra three-year period could not be acceptable to us," she told a news conference.
The EU was encouraged that the process to repeal the disputed law was moving ahead in Congress, but Gonzalez added: "We would impose sanctions if and when the illegal FSC is not replaced by the end of the year."
In Washington, Senate Finance Committee chairman Senator Charles Grassley bristled at the renewed sanctions threat.
"I would think the European Union would have some appreciation for the extent of this undertaking and show some restraint and patience," the Iowa Republican said. "The imposition of sanctions now will only contribute to soften the economic recovery and slow economic growth worldwide."
He took issue with the EU's claim that the three-year transition period ran afoul of WTO rules. Unlike current tax breaks, which require a company to export in order to receive the benefit, "there is absolutely no requirement in our bill to export a single item to benefit from the transition," he said.
Democratic Representatives also objected to Gonzalez's remarks, saying they violated a pledge by Lamy not to take sides in the congressional debate.
Lawmakers also complained the EU's recent demand for final congressional action by the end of the year contradicts earlier statements indicating Brussels would not impose sanctions if lawmakers were making significant progress on the issue.
The launch of the sanctions, the biggest awarded by the WTO, would hurt US exporters and damage trans-Atlantic trade ties, already strained by other disputes and seeking new direction after the collapse of world trade talks.
Lamy has given Washington until autumn to change its tax laws or he will launch the EU internal legislative process that would result in the sanctions, in the form of punitive duties on a wide range of US goods, from Jan. 1.
US President George W. Bush proposed repealing the FSC system, which grants tax breaks for giants such as Boeing and Microsoft, in his budget for next year.
But Congress has come under pressure from industry not to hastily scrap the scheme.
‘FORM OF PROTEST’: The German Institute Taipei said it was ‘shocked’ to see Nazi symbolism used in connection with political aims as it condemned the incident Sung Chien-liang (宋建樑), who led efforts to recall Democratic Progressive Party (DPP) Legislator Lee Kun-cheng (李坤城), was released on bail of NT$80,000 yesterday amid an outcry over a Nazi armband he wore to questioning the night before. Sung arrived at the New Taipei City District Prosecutors’ Office for questioning in a recall petition forgery case on Tuesday night wearing a red armband bearing a swastika, carrying a copy of Adolf Hitler’s Mein Kampf and giving a Nazi salute. Sung left the building at 1:15am without the armband and apparently covering the book with a coat. This is a serious international scandal and Chinese
PERSONAL DATA: The implicated KMT members allegedly compiled their petitions by copying names from party lists without the consent of the people concerned Judicial authorities searched six locations yesterday and questioned six people, including one elderly Chinese Nationalist Party (KMT) member and five KMT Youth League associates, about alleged signature forgery and fraud relating to their recall efforts against two Democratic Progressive Party (DPP) legislators. After launching a probe into alleged signature forgery and related fraud in the KMT’s recall effort, prosecutors received a number of complaints, including about one petition that had 1,748 signatures of voters whose family members said they had already passed away, and also voters who said they did not approve the use of their name, Taipei Deputy Chief Prosecutor
A US Marine Corps regiment equipped with Naval Strike Missiles (NSM) is set to participate in the upcoming Balikatan 25 exercise in the Luzon Strait, marking the system’s first-ever deployment in the Philippines. US and Philippine officials have separately confirmed that the Navy Marine Expeditionary Ship Interdiction System (NMESIS) — the mobile launch platform for the Naval Strike Missile — would take part in the joint exercise. The missiles are being deployed to “a strategic first island chain chokepoint” in the waters between Taiwan proper and the Philippines, US-based Naval News reported. “The Luzon Strait and Bashi Channel represent a critical access
COUNTERINTELLIGENCE TRAINING: The ministry said 87.5 percent of the apprehended Chinese agents were reported by service members they tried to lure into becoming spies Taiwanese organized crime, illegal money lenders, temples and civic groups are complicit in Beijing’s infiltration of the armed forces, the Ministry of National Defense (MND) said in a report yesterday. Retired service members who had been turned to Beijing’s cause mainly relied on those channels to infiltrate the Taiwanese military, according to the report to be submitted to lawmakers ahead of tomorrow’s hearing on Chinese espionage in the military. Chinese intelligence typically used blackmail, Internet-based communications, bribery or debts to loan sharks to leverage active service personnel to do its bidding, it said. China’s main goals are to collect intelligence, and develop a
RSS