I did a google:
WTO Dispute Settlement
US Foreign Sales Corporations (FSC): EU starts countermeasures on US products
Brussels, 1 March 2004
The EU countermeasures on a list of US products in the long-standing WTO dispute on the US Foreign Sales Corporations enter into force today 1 March 2004. Countermeasures on the selected products consist of an additional customs duty of 5% to be enforced as from today, followed by automatic, monthly increases by 1% up to a ceiling of 17% to be reached on 1 March 2005, if compliance has not happened in-between.
EU Trade Commissioner Pascal Lamy said: "Despite waiting for more than two years, the US has not brought its legislation in line with WTO rules. We are therefore left with no choice but to impose countermeasures. The name of the game is not retaliation but compliance: countermeasures will be lifted the day the FSC is repealed. We now need to turn our attention to the post 1 March period. In my recent trip to Washington, I have discussed this issue with the US administration and congressional leaders and I am encouraged that progress can be rapidly achieved to adopt legislation repealing the FSC. "
With the clear objective of obtaining withdrawal of the US measures, Council Regulation 2193/2003 (OJ L 328 p.3) provides for a gradual imposition of countermeasures as from 1 March 2004. It also includes a detailed list of products on which countermeasures will be applied, which was prepared following extensive consultations with EU economic operators and Member States. The countermeasures are well below the US $ 4 billion level authorised by the WTO last year.
Background
In subsequent rulings by a Panel and the Appellate Body, the WTO found the FSC to constitute an illegal export subsidy under both the Subsidies Agreement and (in relation to agricultural products) the Agriculture Agreement. The US was then given until 1 November 2000 to withdraw the FSC scheme.
On 15 November 2000, President Clinton signed the Extra Territorial Income Act (ETI), which meant to replace the FSC. The ETI Act, however, did not modify the substance of the export subsidy scheme and as a result the EU challenged it before the WTO. In January 2002, the WTO confirmed that the ETI Act also constituted a prohibited export subsidy and that the US had not, therefore, complied with its previous ruling.
On 7 May 2003 the WTO endorsed the EU request for countermeasures for a level roughly equal to the estimated annual US subsidy, i.e. US$ 4 billion. The EU had, however, avoided any immediate recourse to retaliation so as to give a reasonable time for the US Administration and Congress to adopt the necessary legislation for the repeal of FSC.
