[Congressional Record (Bound Edition), Volume 152 (2006), Part 3]
[Extensions of Remarks]
[Page 3106]
[From the U.S. Government Publishing Office, www.gpo.gov]




              INTRODUCING THE TRADE SANCTION AVOIDANCE ACT

                                  _____
                                 

                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                        Wednesday, March 8, 2006

  Mr. STARK. Mr. Speaker, I rise today to introduce the Trade Sanction 
A void Act--Iegislation that will stop American manufacturers from 
facing $809 million in annual trade sanctions from the European Union.
  On February 12, the World Trade Organization (WTO) Appellate Body--
for the third time--found that U.S. corporate tax laws violate WTO 
rules. We failed to fix the flawed foreign sales corporation (FSC) 
regime with extra-territorial incentive (ETI) scheme. Now we've failed 
once again to fix the ETI with incentives in the JOBS Act. According to 
the WTO, the transitional and grandfathered tax breaks in the JOBS Act 
continue to violate WTO rules. This foolishness must stop now.
  I've heard many members of this august body talk bout how the U.S. 
must stand up and be a leader in the world. How can we expect other 
countries to take us seriously as a world leader when this Congress 
continually undermines and ignores rules we've agreed to live by?
  We refuse to join the International Criminal Court, we won't sign the 
Kyoto Treaty, and we pulled out of the Anti-Ballistic Missile Treaty. 
Given our track record, is it any wonder the EU continues to bring WTO 
cases against our non-compliant corporate tax break schemes? We've 
broken these rules time and time again, and if we don't pass my bill, 
American manufacturers will pay the price.
  The EU reacted to the WTO decision by asserting its right to impose 
retaliatory duties against U.S. exports. Those duties apply to a broad 
range of goods, and could reach 17 percent by September. If Congress 
fails to act, U.S. corporations will pay $809 million a year in 
retaliatory sanctions.
  The Trade Sanction Avoidance Act will put an end to this game of 
international tax chicken. By repealing the transitional and 
grandfathered tax breaks in the JOBS act, Congress will ensure American 
manufacturers avoid hundreds of millions in unnecessary trade 
sanctions. This approach is so inherently reasonable; some may wonder 
why anyone would oppose it.
  Unfortunately, in the current culture of corruption, protecting tax 
breaks for big corporations is more important than protecting farmers 
and small manufacturers from hundreds of millions in trade sanctions. 
For example, Boeing alone stands to rake in over $600 million from the 
JOBS Act tax breaks. My legislation protects farmers and small 
manufacturers from these sanctions so that they can remain competitive 
in the European Union marketplace. Boeing--which made $2.56 billion in 
net profit last year--should be willing to give up at least a portion 
of its tax break to help protect American businesses from sanctions and 
to help our tax code comply with the WTO rules we've agreed to live by.
  We can't claim to help American businesses on one hand, while turning 
our backs on them by failing to fix this problem. This bill is a simple 
solution to a problem we should have solved years ago. I urge all my 
colleagues to support this legislation.

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