EU Lifts US Trade Sanctions…With a Catch

The EU is going to be lifting the sanctions they had earlier placed in response to US tax cuts for exporters that were declared illegal by the WTO.

The sanctions will be lifted retroactively from January 1.

Many countries in the EU wanted to keep the sanctions in place because the new tax bill passed by the US included new tax breaks for corporations such as Boeing.

That's where the catch comes in.
They are reserving the right to reimpose many of the sanctions if the provisions in that tax bill are not resolved in a reasonable amount of time.

caltradereport

BRUSSELS, Belgium - 01/25/05 - The European Union has said it will lift its punitive trade sanctions on a wide variety of US-produced goods now that Congress has repealed tax cuts for exporters that were declared illegal two years ago by the World Trade Organization.........

..........The penalty tariffs - which covered more than 1,500 products from rolled steel and motorcycles to jewelry and apparel - had increased by one percentage point each month since they went into effect March 1 at a rate of 5% in an effort to bring pressure on Congress to repeal a $5 billion annual tax break provided to American exporters that had been ruled illegal by the WTO......................


................The EU announcement reportedly followed intense debate among the member states of the union, with some countries insisting that the sanctions be kept in place until the US removed several provisions in a new corporate tax bill passed last October to bring it into closer conformity with the WTO ruling. .....

.......Last October, Congress approved a corporate tax bill that did away with the $5 billion export subsidy mechanism, but the measure, some three years in the making, included $136 billion in new tax breaks to companies ranging from multi-national giants such as Boeing and Hewlett Packard to several shopping mall developers and even restaurants.