Good old fashioned trade war anyone?:
WTO to rule on multibillion-dollar U.S. tax scheme
9.21 a.m. ET (1421 GMT) February 23, 2000
BRUSSELS, Belgium ? The World Trade Organization (WTO) appellate body is expected to rule Thursday on the legality of a U.S. tax plan affecting hundreds of billions of dollars of American exports.
A WTO dispute panel, ruling last September in a high-profile case brought by the EU, found that the 16-year-old Foreign Sales Corporations plan was a prohibited export subsidy. The United States, insisting the tax plan is consistent with WTO rules, appealed.
If the appellate body decision, to be issued in Geneva, confirms the dispute panel ruling, it could send shock waves through U.S. business and strain EU-U.S. relations.
The WTO's appellate body only once has overturned a panel ruling, although it has sometimes toned down decisions.
U.S. Trade Representative Charlene Barshefsky has said that the Foreign Sales Corporations (FSC) case, if not resolved in Washington's favor, could "dwarf' heated transatlantic disputes over bananas and beef.
"Our plan is to do everything we can to get the (WTO dispute) panel report overturned,' she said earlier this month. 'Europe needs to be cautious.'
Republican U.S. Rep. Philip Crane of Illinois, chairman of the House Ways and Means subcommittee on trade, warned this month that the dispute could become a "dangerous and destabilizing conflict' between the United States and the EU. (cont)
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