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FSC's - Explain briefly the history of the dispute and what is it about.
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FSC's Explain briefly the history if the dispute and what is it about. The disagreement is in tax relief provided by the US to its major exporting companies. It is between EU and US, and has existed since the 60's. In 1971, with a growing trade deficit, the US formed the Domestic International Sales Corporation (DISC); a partial tax deferral for the earnings of American companies, exporting outside the US. DISC was declared an illegal export subsidy in 1976 by GATT. As a result, the US set up the Foreign Sales Corporation (FSC) in 1984. FSC's are shell companies in offshore tax havens through which US companies channel foreign income to avoid tax. (Economist 2000). The dispute has arisen again in 1999 when, Sir Leon Brittan former EU commissioner, challenged the FSC, stating that it violated the Code on Subsidies & Countervailing Measures (SCM) agreed at the Uruguay Round. The WTO body did...
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