REPEAL OF COUNCIL REGULATION (EC) NO 171/2005
(15892/04)
Letter from Rt Hon Ian McCartney MP, Minister
of State for Trade, Investment and Foreign Affairs, Department
of Trade and Industry/Foreign and Commonwealth Office to the Chairman
I am writing to inform you that the UK Government
intends to agree to the adoption of a European Commission proposal
to repeal Council Regulation (EC) No 171/2005. The Council of
Ministers may be asked to adopt this proposal as early as Friday
19 May 2006, which would prevent Parliamentary scrutiny in the
usual way.
Regulation 171/2005 suspended EU retaliation
against US non-compliance with the rulings of the World Trade
Organisation (WTO) that its Foreign Sales Corporation (FSC) legislation
breaches US commitments to the WTO, following the passage of the
Jumpstart Our Business Strength (JOBS) Act in the US in December
2004. EM 15892/04 COM (2004) 822 Final refers.
However, the Regulation contains provision for
the automatic reimposition of retaliatory measures by means of
an increase in duty of 14 per cent on imports into the Community
of an identified list of products of US-origin, to start 60 days
following the adoption of any WTO ruling that the US continues
to be in beach of its WTO commitments. The WTO ruled on 13 February
2006 that the US is still in breach of its commitments, and retaliation
is therefore set to be reintroduced on Tuesday 16 May.
In a welcome turn of events, the US Congress
has taken further steps to repeal the most contentious residual
benefits of the FSC regime, meeting EU concerns. As a consequence,
the Commission has put forward as a matter of urgency a proposal
to withdraw the implementation of the tariff duty increases against
the US which were due to come into effect on 16 May. No draft
text has yet been submitted by the Commission.
I trust you will understand why I am not keeping
to the Parliamentary Scrutiny procedures in this instance and
would like to give you my assurance that this action is not taken
lightly. My Department will send to you the appropriate Explanatory
Memorandum for your approval as soon as the Commission issues
its written proposal.
17 May 2006
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