Today, the WTO Appellate Body confirmed 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. The US will need to bring FSC into conformity with its WTO obligations by the beginning of the next US fiscal year.
European Trade Commissioner Pascal Lamy said: We welcome this decision. Of course we think that WTO members should be free to decide their own tax systems. But each Member must do so fairly and in line with the rules.
For more background information, please see: http://europa.eu.int/comm/trade/miti/dispute/fsc_sum.htm
In another development, the latest round of talks taking place in Beijing between the European Union and China on China's accession to the WTO wound up today (24th February). Progress was made. No date has yet been fixed to continue.
Mr. Hans-Frederich Beseler, the leader of the EU team, said: The gap has narrowed but we are not there yet.:
