The current FSC regime is set to be repealed, but Senate leaders are hopeful the World Trade Organization will agree to an extended deadline of November 1.
Senate Majority Leader Trent Lott yesterday attempted to secure a unanimous consent agreement to bring the issue of the Foreign Sales Corporation bill to the floor for consideration, but was met with unexplained democratic opposition.
Off the Senate floor, a number of democrats voiced their desire to add amendments to the FSC bill, including such issues as campaign finance reform and the denial of FSC benefits to certain industries.
Lott feels the amendments are unrelated to the FSC bill and should not be considered simultaneously, stating his concern that unrelated amendments could bog the bill down and prevent its passage before the end of the year.
The tax law, as it stands today, provides American exporters that set up Foreign Trade Corporations with the ability to slash their tax liability by up to 30% per year. The European Union has argued that the current legislation is not WTO compatible.
Danial Patrick Moynihan, the ranking democrat on the Senate Finance Committee, warned that it is imperative that the Senate reach agreement on the FSC bill this term, or the US will face the possibility of “a trade war with Europe that will astonish and injure us.”