Copyright 2000 The Christian Science Publishing Society
The Christian Science Monitor
February 25, 2000, Friday
SECTION: NEWS IN BRIEF; Pg. 24
LENGTH: 986 words
HEADLINE:
Business & Finance
BODY:
By Oct.
1, a controversial system that gives billions of
dollars in
tax breaks to American exporters must be scrapped if the US is
to meet the terms of a new ruling by the World Trade Organization. A WTO appeals
panel in Geneva upheld an earlier decision that international trade rules are
violated by the Foreign Sales Corporation program, which allows
makers of computer software, chemicals, and other goods to shield some export
income from taxes. This is done through "subsidiaries" that the
European Union contends are often little more than post-office boxes in offshore
"tax havens" such as the US Virgin Islands, Barbados, and Guam. The ruling was
welcomed by the EU, which calls the program an illegal subsidy. In Washington,
the Clinton administration said the new ruling, the worst defeat for the US to
date in an international trade dispute, will spur negotiations to ensure that
American companies are not at "a competitive disadvantage" with their European
rivals.
Orders to US factories for durable goods - items expected
to last at least three years - fell by 1.3 percent last month to a seasonally
adjusted $ 214.8 billion, the Commerce Department reported. But economists
cautioned that the drop shouldn't be viewed as weakness in the industrial
sector; overall, orders were more than 6 percent higher than for the same month
last year. Electronic and electrical equipment registered a 13.2 percent plunge
in orders in January, the largest decrease since July 1997. Meanwhile, orders
for industrial machinery - a category that includes computers - jumped by 12.3
percent, the strongest pace since February 1985.
(c) Copyright 2000. The
Christian Science Publishing Society
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February 24, 2000 
