FROM THE OFFICE OF PUBLIC AFFAIRS

We are very pleased by the House passage today of legislation to repeal and replace the current FSC regime. This legislation has important consequences for jobs, the national economy, and international relations with some of our most important trading partners. Today's House action clears the way for the legislation to be signed into law by President Clinton.

This legislation is absolutely essential to avoiding the potential imposition by the European Union of significant sanctions on American industries and to satisfying the United States' obligations in the WTO. We believe that this legislation addresses the concerns raised by the WTO Appellate Body and that it will be found to be WTO-compliant. Moreover, under a procedural agreement reached between the European Union and the United States, enactment of this legislation will avoid an immediate confrontation with the EU by ensuring that the World Trade Organization must review the new law before any decision authorizing retaliation may be made. We plan to continue working with the EU to manage this dispute responsibly and to avoid any escalation of tensions that could harm our strong bilateral relationship, and we remain open to further discussions with the EU about resolving this dispute.

We commend the House and Senate bipartisan leadership, including Speaker Hastert, Minority Leader Gephardt, Chairman Archer, Ranking Member Rangel, Majority Leader Lott, Minority Leader Daschle, Chairman Roth, Ranking Member Moynihan, and their staffs, for their efforts on this important legislation. We also want to thank the staff of the Joint Committee on Taxation, the House Ways and Means Committee, and the Senate Finance Committee for their hard work in fashioning this legislation.