... revenue is forgone and exports are taxed more favourably than production abroad. (www.iie.com) The US was then given until 1st November 2000 to withdraw the FSC scheme. As a result on 15th November 2000, in an effort to comply with the WTO demands, President Clinton, signed the FSC replacement; the Extraterritorial Income Exclusion Act (ETI). However the ETI did not meet the demands of the WTO who in Jan 2002, deemed this also as an illegal export subsidy. (www.eurunion.org). The ETI act seemed like a desperate attempt to show progress had been made as it was signed in the midst of the presidential elections. A Diagram showing how the FSC legislation helps the US Companies to export (See Appendix A) A diagram showing the effect of EU sanctions on US Goods. (See Appendix B) Are there any other reasons why the US gives these Breaks In 1981 GATT gave the US the backing of FSC's which ...

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