November 01,2000

Senator Roth's Senate Floor Statement On H.R. 4986, the


Mr. ROTH. Mr. President, this bill passed by the Senate satisfies the United States' WTO obligations and ensures that U.S. companies will compete on a level playing field in the global marketplace.

By enacting this legislation, we will avoid a needless trade dispute, protect the American economy, and satisfy our international obligations to our trading partners. This bill also represents a continuation of this Senate's outstanding record of accomplishment in promoting free trade. This legislation is the third significant piece of trade legislation passed by the Senate this year. I believe you would have to search long and hard to find a better record of trade legislation.

I don't believe it is necessary to go through the extended history of the dispute between the United States and the European Union that gave rise to the need for the bill before us. The bill represents a good faith attempt to comply with the WTO's ruling that the current FSC provisions constitute an illegal export subsidy. This bill withdraws the current FSC provisions and, in their place, makes fundamental adjustments to the Internal Revenue Code that incorporate territorial features akin to those of several European tax systems. The bill not only addresses the specific concerns raised by the WTO, it also takes into account the comments received from the EU in the course of consultations over the last eight months.

I want to stress the need to pass this bill. Failure to do so could result in the imposition of retaliatory duties against American exports to the European Union. Under the WTO rules, the EU will have the right to retaliate against U.S. exports as of today unless this legislation is passed. A failure to enact this legislation would prove costly for the American worker, the American farmer, and for American business.

So it is with a great sense of satisfaction that we pass this bill today. I compliment the Senate on its farsighted vote for passage of this legislation.

The staff of the Joint Committee on Taxation has prepared a technical explanation of H.R. 4986, as amended by the Senate. This explanation, entitled the "Technical Explanation of the Senate Amendment to H.R. 4986, the 'FSC Repeal and Extraterritorial Income Exclusion Act of 2000', November 1, 2000 (JCX-111-00)," provides a detailed description of this bill and embodies the Finance Committee's legislative intent regarding H.R. 4986. Taxpayers may rely on this technical explanation (JCX-111-00) in interpreting the provisions of H.R. 4986. In addition, regulations issued by the Department of Treasury should be consistent with the language and intent of this technical explanation.