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April 2004
EU imposes tariffs against US
Washington/Brussels
The EU has imposed a 6% sanction tariff on a broad range of American products including over 165 wood and paper products. This is in retaliation to the US non-compliance with the WTO’s ruling on Foreign Sales Corporations (FSC). The WTO has ruled that the Extraterritorial Income Exclusion Act of 2000, most commonly known as “Foreign Sales Corporations”, constitutes subsidy incompatible with WTO regulations. Furthermore, the WTO granted the EU the authority to impose sanctioning tariffs on incoming US products up to $4bn, until the US brings its laws into harmony with WTO rules. Senate Republican and Democrat leaders hope to make significant legislative progress when they return to session on 19 April.
LINK
See BritishAmerican Business Action below
UK budget deemed business friendly
London
UK small firms, especially those in the hi-tech and research sector, have been given a boost by measures in the 17 March budget that will double the level of tax relief given to venture capital trusts and expand the R&D tax credit. Other good news included a freeze on tax on corporation and capital gains, air passenger duties, vehicle excise duty, aggregates levy and insurance premiums.
The film industry also got a boost as films with budgets of £15million or less were given tax relief of 20% which will go direct to the filmmakers. The Treasury will review progress on joining the Euro in the next Budget. Figures show that the British economy grew by 2.3% in 2003, meeting Treasury forecasts.
LINK
US Trade Barriers Report
Washington
USTR in late March released their annual National Trade Estimate Report on Foreign Trade Barriers.
The section on the European Union (EU) includes citations on wine, poultry, beef, regulation and VAT on e-commerce. There are also issues such as the Chemicals Directive and the potential impact of enlargement. There were two specific UK issues: support for aircraft engines; and competition in advanced data services over fixed-line incumbent BT infrastructure.
LINK
US Committee hold hearing on Bush’s trade agenda
Washington
On 11 March the House Ways and Means Committee met to discuss President Bush’s trade agenda. The only witness was US Trade Representative, Robert Zoellick, who examined current trade issues such as the recently concluded Free Trade Agreements (FTAs) and others being currently negotiated. Additionally, the hearing covered prospects for trade expansion in agriculture, industrial goods and services through multilateral negotiations in the WTO and the recent World Trade Office dispute settlement decisions. For Zoellick’s statement and overview of US trade agenda:
LINK
US threat to EU opposing US data request
Washington/Brussels
On 31 March, the European Parliament (EP) passed a vote against allowing airlines to pass on passenger data to US authorities. It was decided that it would contravene the rules of the Data Protection Directive. The US requested information, including email addresses and billing data, as part of its ‘war on terror’. The 229-202 vote by the Strasbourg assembly is non-binding, but the EP has to right to take it to the European Court of Justice, the EU’s highest court.
Following this decision the US government has revived the threat of hefty fines and the loss of landing rights for airlines flying across the Atlantic if the European Union blocks them from supplying data on passengers as required under a US security law.
For EP decision:
LINK
For US retaliation:
LINK2
Trade and Industry White Paper on Energy
London
On 24 February the Secretary of State for Trade and Industry published the
Government’s Energy White Paper “Our energy future - creating a low carbon economy”. It defines a long-term strategic vision for energy policy combining our environmental, security of supply, competitiveness and social goals.
EU decision on Microsoft Competition Case
Washington/Brussels
On 24 March, the European Commission concluded that Microsoft had breached EC competition rules. The US Department of Justice issued a statement that questioned the EU's proposed remedies, especially where they differed from the US's settlement of a similar antitrust case with Microsoft. The Administration will look closely at its options, as there is a growing Congressional reaction.
LINK
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Biometric Passport deadline looms
Washington
The Department of State and Homeland Security has asked Congress to pass legislation to extend for two years the requirement for Visa Waiver Programme (VWP) countries, which includes the UK, to include biometrics in passports issued on or after 26 October 2004. A Congressional hearing will take place on 21 April to review the current requirements and deadlines imposed by the Enhanced Border Security Act. LINK
See BritishAmerican Business Action below
US/EU Open Skies Agreement
Washington/Brussels
The ‘open skies’ agreement was discussed again by US and EU officials on 6 April. US Secretary of Transportation, Norman Mineta, stated that US authorities were now ready to allow airlines based in one European country to fly to the US from another European country. He also stated that the Administration was willing to ask Congress to allow foreigners to own up to 49% of a US airline, up from the current 25%. Talks resume in May. Talks on liberalising transatlantic travel began in October 2003 after the European Court of Justice ruled that bilateral deals between Washington and individual EU countries were partly illegal because they discriminated against airlines from other EU members. LINK
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Politics at a Glance
Washington:
21 April:
Hearing to review the current requirements and deadlines imposed by the Enhanced Border Security Act.
May:
Primaries in Indiana and North Carolina.
5 June:
Republican Party state convention, Virginia.
Note:
On 16 March John Kerry officially secured enough votes to win the Democratic presidential nomination.
Westminster:
19 April:
Parliament returns from Easter recess.
Note:
Department of Trade and Industry consultation on the European Business Test Panel.
LINK
Washington/Westminster:
16 April:
Prime Minister Blair meeting with President Bush
Brussels:
1 May:
10 new countries join the EU.
10-12 June:
European Parliamentary elections. As a result of the enlargement of the EU to 25 countries, 732 members of the European Parliament will have to be elected. |
UK Wealth Creation Best in Europe
London
On 5 April the Department of Trade and Industry published the 2004 ‘value added scoreboard’, listing the wealth created by the top 600 European and top 800 UK companies. It shows that value added by the top UK companies has increased by four per cent, compared to a European increase of one per cent. The UK also has the highest number of companies in the top 600 businesses in Europe. The UK has 165, Germany has 89 and France 83.
LINK
BritishAmerican Business Action
► 23 February: BritishAmerican Business and AmCham Germany issued joint press release urging US Congress to comply as quickly as possible with the WTO ruling on Foreign Sales Corporations. LINK
► 16 April: BritishAmerican Business sent letter to Chairman Sensenbrenner of the US Congress
Committee on the Judiciary, pressing for a two year extension of the Visa Waiver Programme.
LINK (PDF)
► 16 April:
BritishAmerican Business issued press release to highlight concerns about the US introduction of biometric passports by 26 October 2004 and its impact on business.
LINK
Upcoming BritishAmerican Business Policy Events
► 24 April: BABC Annual Transatlantic Business Conference, UK.
LINK
► 27 April: Washington Insight Briefing- Democrats and George W. Bush: What would a change of leadership mean for Europe?
► 22
June: Breakfast Briefing with Ambassador Schnabel, US Ambassador to the EU.
► 7 July: Breakfast Briefing with Dutch Ambassador as part of EU Presidency Briefing Series.
Please contact:
ukevents@BritishAmerican Businessnc.org
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