United States Tax Subsidies under DISC, FSC and ETI Legislation within the Framework of the WTO

Since the 1970s a trade conflict between the United States and the European Union has been festering. This conflict concerns certain built-in fiscal subsidies in the US systems of corporation tax [under the DISC, FSC and the ETI legislation respectively] intended to promote US export trade. The trade conflict has been set against the different US and EU approaches to international taxation; and has been drawn out over the years in the form of a number of trade disputes, between the EU and the US, within the WTO dispute settlement system, and its predecessor the GATT 1947. How the dispute is ultimately resolved may have implications for the WTO system itself and its development. This issue of Trade Hot Topics examines the background, the legislation, the WTO obligations, and the national and international implications.