WTO ruling strikes further blow to American workers

WASHINGTON -- The World Trade Organization (WTO) today struck a further blow to U.S. manufacturers and their employees with a ruling against the U.S. tax code pertaining to exports.  Ways and Means Subcommittee on Trade Ranking Member Benjamin L. Cardin responded to this news with a call for action, outlining comprehensive trade reform legislation he plans to introduce, including a provision to level the playing field for American manufacturers.

“Today’s ruling reflects how fundamentally unfair differences in international taxes, sanctioned under WTO rules are to American manufacturers,” said Rep. Cardin.  “Congress has waited in vain for the Administration to negotiate a level playing field for our manufacturers, but enough is enough.  I will soon be introducing legislation to restore international tax fairness to prevent further discrimination against American workers.”

Rep. Cardin’s comprehensive trade reform bill will include a provision on international tax fairness, calling for equal treatment of direct and indirect taxes.  The provision would minimize the advantage currently held by countries relying heavily on “indirect taxes, such as the Value Added Tax (VAT).  Rep. Cardin’s bill would level countervailing duties against any products found in an investigation under U.S. countervailing duty law to benefit from rebates of indirect taxes.

“This discrimination translated into about a $220 billion subsidy for foreign producers in 2004, and an additional tax on U.S. exporters of almost $110 billion,” cautioned Rep. Cardin.  “If we’d passed the Crane / Rangel version of FSC reform, we wouldn’t be in this unfortunate position.”
 
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