Statement from NCBA to the World Trade Organization’s Ruling Against Legislation on Foreign Sales Co

The World Trade Organization (WTO) announced yesterday that legislation passed by Congress in November intended to bring the U.S. Tax Code’s foreign sales corporation (FSC) program in line with international trade policy still discriminates in favor of U.S. goods in breach of WTO rules. Following is the NCBA's reaction to the announcement:

“NCBA will review the report released by the WTO Compliance Committee to determine specifically what provisions of the FSC Replacement Act of 2000 have been identified as not meeting U.S. obligations.

“The United States has until October 19, 2001, to appeal this ruling and United States Trade Representative (USTR) Robert Zoellick has announced his intention to do so. The cattle industry supports efforts exerted by USTR and looks forward to the results of the appeal.

“Regardless of the decision, NCBA will abide by its long standing policy support for the U.S. to meet all requirements necessary to keep the doors open to allow U.S. beef to be exported to foreign countries.

“NCBA will continue to monitor international trade issues to ensure U.S. beef producers have fair and equal access to the markets of competing exporting countries. The overall goal of our involvement is to position America’s cattle producers to be major exporters of beef products around the world while assuring that other countries do not have an unfair disproportionate access to the U.S. beef market.”

According to recently released reports, USTR, says the United States will continue to work with Congress, U.S. companies and the European Union (EU) to find an acceptable solution to the tax dispute. “Our goal is to promote U.S. economic interests while at the same time, fulfilling our WTO obligations, and we believe we will be able to accomplish both,” said Zoellick.

A FSC is an off-shore, foreign corporation that U.S. exporting companies establish, per the U.S. tax code, to manage revenues from foreign sales to minimize federal income tax. The debate between the U.S. and the EU over FSCs is one of several issues including the EU ban on U.S. beef that NCBA is working to resolve.

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Producer-directed and consumer-focused, the National Cattlemen's Beef Association is the trade association of America’s cattle farmers and ranchers, and the marketing organization for the largest segment of the nation’s food and fiber industry.