Statement on Signing the FSC Repeal and Extraterritorial Income Exclusion Act of 2000

Today I am pleased to sign into law H.R. 4986, the "FSC Repeal and Extraterritorial Income Exclusion Act of 2000." This legislation is necessary to address a World Trade Organization Appellate Body finding that the Foreign Sales Corporation (FSC) provisions of U.S. tax law violated the WTO Agreement on Subsidies and Countervailing Measures, and the Agreement on Agriculture. Enactment of this legislation is possible due to extraordinary bipartisan cooperation between the Congress and my Administration and the strong involvement of the business community.

Never before has the United States had to enact legislation—and particularly legislation in the sensitive field of taxation policy—in order to implement the findings of a dispute settlement panel of the World Trade Organization (WTO). We believe that this legislation specifically addresses the concerns raised by the WTO Appellate Body and will be found to be WTOcompliant.

Under a procedural agreement reached between the European Union and the United States, enactment of this legislation will avoid an immediate confrontation with the EU by ensuring that the World Trade Organization must review the new law before any decision authorizing retaliation may be made. We plan to continue working with the EU to manage this difference of views responsibly and to avoid any harm to our strong bilateral relationship, and we remain open to further discussions with the EU about resolving this issue.

WILLIAM J. CLINTON

The White House, November 15, 2000.