EPCA ’04: US Congress repeal of FSC seen by year end

27 September 2004 16:39  [Source: ICIS news]

MONTE CARLO, Monaco (CNI)--US Congressional repeal of the Foreign Sales Corporation (FSC) tax benefit that has triggered European Union (EU) tariff sanctions on US exports is hoped for before year end, a leading chemical industry official said here Monday.

 

Bob Slaughter, president of the National Petrochemical & Refiners Association (NPRA) told CNI here today that legislation to repeal the FSC – and so end mounting EU sanctions against US exports – might be concluded before the US national elections on 2 November or, failing that, before the end of the Congressional year in December.

 

Speaking with CNI on the sidelines of the 38th annual European Petrochemical Association (EPCA) conference here, Slaughter said repeal of FSC is “a major focus for all manufacturers as well as chemicals producers, and we want to see it repealed, but there is so much concern about this session of Congress and the time left to it.”

 

Slaughter noted that Congress has yet to deal with a major appropriations bill and a huge highway bill.  Congress also is working on a major postal rates reform bill.

 

But the bill to repeal FSC, said Slaughter, is getting attention on Capitol Hill because of the costly duties that are being levied on a range of US export products by the EU.

 

Congress is acting to kill FSC because the EU won a case before the World Trade Organization (WTO), which ruled that FSC is an illegal export credit.  WTO authorized the EU to impose tariffs on a range of US goods until the FSC is repealed.  The tariffs started at 5% earlier this year and are increased by 1% each month.

 

“Because of the increasing cost to US exporters,” Slaughter said, “there is considerable attention to this bill on the Hill.” 

 

But a problem looms, said Slaughter, in that various interests in Congress want to add various amendments to the bill – most unrelated to the issue – that could impede progress of the bill in a House-Senate conference committee.  “These things tend to become a ‘Christmas tree’,” Slaughter noted, “with people adding all sorts of bits and pieces to the legislation.”

 

But Slaughter said the high cost to US business for failure to act before year end is likely to move Congress to finish the legislation.

 

The 38th annual EPCA conference runs through Tuesday (29th September).

 

CNI EPCA newsroom: Suite Naiades C, Grand Hotel; Tel: + 377-9315-1070/71

By: Joe Kamalick
+1 713 525 2653

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