Number: RS21742
Title: European Trade Retaliation: The FSC-ETI Case
Authors: Raymond J. Ahearn, Foreign Affairs, Defense, and Trade Division 
Abstract: In announcing the EU's decision to reimpose sanctions, Peter Mandelson, the EU's top trade official, said that "the EU will not accept a system of tax benefits which give U.S. exporters, including Boeing, unfair advantage against their European competitors." The EU had planned to reimpose the sanctions on May 16, 2006, but Congress passed on May 11, 2006, a tax bill which, among other things, repealed the grandfathered FSC-ETI benefits for sales contracts and leases. Subsequently, the EU repealed the countermeasures, thus ending one of the longest-running and most bitter transatlantic trade dispute in recent years. This report describes the EU action within the context of the WTO, evaluates the old EU retaliation list, and the outcome.
Pages: 6
Date: July 26, 2006