Brussels, 14/10/2004 (Agence Europe) - The European Commission is to study the new US legislation on FSC (Foreign Sales Corporations) very closely. The legislation is the result of a compromise between the US House of Representatives and the US Senate. Arancha Gonzalez, Spokesperson for Trade Commissioner Pascal Lamy, told reporters on Thursday: "On Monday, we received legislation 700 pages long. We hope to have a complete picture of it in a few days". There is nothing in this to suggest that sanctions imposed on the United States by the EU against FSCs, an export subsidy mechanism condemned by the World Trade Organisation (WTO), will be lifted.
Ms Gonzalez explained that, in order to take effect, the compromise between the two houses of the US Congress require the signature of the President, which is not yet the case. The spokesperson also pointed out that experts were examining two specific points of the compromise, namely a provision stipulating a transition period that would allow US exporters to benefit from the FSC system until 2007, and a so-called "grand fathering" clause whereby some exporters could continue to benefit from the system in place after 2007. "In the meantime, sanctions continue to apply at the rate of 12% since 1 October", she added. Although, in Brussels, the move forward made by the Congress compromise is welcomed, it seems too early to speak of lifting European sanctions against Washington.
In an interview with a small number of journalists, reported by The Financial Times in its 14 October issue, Pascal Lamy established a clear link between the FSC issue and the row over State aid to Boeing and Airbus. He stressed: "The fact is that Boeing is the number one or number two beneficiary of this [FSC] system", and said that, in this respect, "There are a number of issues that are not that clear".