Chuck Grassley: “as chairman of the International Trade Subcommittee, I rise to express extreme disappointment about a very adverse…”

“as chairman of the International Trade Subcommittee, I rise to express extreme disappointment about a very adverse decision to the United States handed down in Geneva today by the World Trade Organization appellate body in the Foreign Sales Corporation case, sometimes called the FSC case. I suppose I should not be standing here on the floor crying about the United States losing a case before the World Trade Organization because we win most of these cases. The reason I am so disappointed in this one is that I think there is a fundamental misunderstanding of the purpose of our Foreign Sales Corporation tax law. From that standpoint, when we rely so much on income taxes and the European Community relies so much on value-added taxes, this sales corporation tax law is to equalize the playing field between Europe and the United States on a lot of key manufactured products. The appellate body decision essentially means the Foreign Sales Corporation rules in our Tax Code violate the WTO rules. As I indicated, the appellate body fundamentally misunderstood the nature and the intent of the Foreign Sales Corporation plan. The FSC plan was designed to address the competitive disadvantage faced by United States businesses that compete with foreign firms in European countries that have value-added tax regimes.”