February 13,2006

Grassley: Congress Unlikely to Revisit FSC-ETI Bill, Europe Should Recognize U.S. Effort


To: Reporters and Editors
Re: World Trade Organization decision in the FSC/ETI dispute
Da: Monday, Feb. 13, 2006

Sen. Chuck Grassley, chairman of the Committee on Finance, today made the following
comment on the World Trade Organization’s adverse decision in the Foreign Sales
Corporation/Extraterritorial Income Act dispute with the United States.

“I’ve said many times how disappointed I am by the European Commission’s insistence on
perpetuating this dispute. The United States Congress worked for years to come into compliance
with our WTO obligations. And, the Europeans seemed to have appreciated and accepted our
compliance efforts on FSC/ETI. That’s until we raised the issue of Airbus subsidies in the WTO.
Their blatant linkage of WTO disputes is a dangerous precedent.

“I’m not the only one who feels this way. I understand that few in the European business
community favor perpetuation of this dispute or any resumption of trade sanctions, especially now
when we’re trying to work together to enhance U.S.-EU cooperation both bilaterally and within the
World Trade Organization. I want to underscore this point. If sanctions are resumed, they’ll only
disrupt our bilateral economic relations. I doubt Congress will revisit this legislation. That’s
especially so since the two-year transition is over at the end of this year. After that, any benefits from
the grandfathering provisions will be small.

“I hope the Europeans will reconsider their decision to re-authorize sanctions. The
Airbus/Boeing disputes will be decided on their own merits. There’s just no reason to aggravate
tensions by dragging FSC/ETI on any longer.”