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Brussels, 12 May 2006

EU welcomes repeal of US tax breaks to US exporters, will withdraw reintroduction of sanctions

The European Union has today warmly welcomed the repeal by the US Congress of WTO-incompatible tax breaks for US companies contained in the Jobs Act. The US has today repealed the tax benefits as part of wider tax legislation. The EU welcomes the constructive work of the USTR’s office and Chairman Bill Thomas and Chairman Charles Grassley in removing the measures from US law.

EU Trade Commissioner Peter Mandelson said: “I welcome the constructive line taken by the US, in particular by USTR Rob Portman and USTR-designate Susan Schwab and by Chairman Thomas and Chairman Grassley. This decision also creates a positive atmosphere for the EU-US Summit in June.”

The US decision contributes to a positive atmosphere in the EU-US trade relationship to coincide with the transition to incoming USTR Susan Schwab and as the EU and US prepare for the EU-US Summit in June. The EU, which had been authorised by the WTO to enforce retaliatory measures if the tax benefits were not removed, will now withdraw the reintroduction of sanctions foreseen for May 16.

For more information on FSC see MEMO/06/72

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