Oct. 19 Is Next Deadline In FSC Dispute

ByJohn S. McClenahen Amid reports of the European Union (EU) softening its stance on sanctions and of the Bush Administration consulting with U.S. business and Congress on next steps, Oct. 19 is the only certainty in the ongoing trade dispute between the U.S. and the EU over so-called foreign sales corporations (FSCs). The World Trade Organization (WTO) ruled Aug. 20 that legislation the U.S. enacted last year to meet previous EU objections to FSCs constitutes a prohibited export subsidy -- and runs afoul of other WTO regulations. The U.S. has until Oct. 19 to appeal the WTO's ruling. FSCs were created in the 1980s to encourage U.S. companies to export by deferring income tax on some of their foreign sales.