Category: Press Releases and Statements
NFTC Applauds Proclamation to Implement U.S.-Peru FTA
Washington, DC – The National Foreign Trade Council (NFTC) today welcomed the President’s signing of a proclamation to implement the U.S.-Peru Trade Promotion Agreement on February 1, 2009.
“We welcome today’s announcement regarding the entry into force of the U.S.-Peru FTA in just a matter of weeks. The agreement is well-crafted and was developed based on a bipartisan vision for U.S. trade policy,” said NFTC Vice President for Regional Trade Initiatives Chuck Dittrich. “We applaud the Peruvian government for its extraordinary efforts to work with the United States to put in place high standard commitments on labor rights and the environment. We praise both governments for working together to achieve implementation in a timely fashion.”
“The Peruvian market is dynamic and growing, and implementation of the FTA will provide numerous opportunities for U.S. businesses, from farms and small and medium-sized enterprises to the multinational corporations the NFTC represents,” said NFTC President Bill Reinsch. “During this time of economic uncertainty, expanding market access for U.S. goods and services is critical to ensuring that our exports play a role in our economic recovery.”
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Advancing Global Commerce for Over 90 Years
The National Foreign Trade Council (www.nftc.org) is a leading business organization advocating an open, rules-based global trading system. Founded in 1914 by a broad-based group of American companies, the NFTC now serves hundreds of member companies through its offices in Washington and New York.
NFTC Welcomes Richard Sawaya as New Director of USA*Engage
Washington, DC The National Foreign Trade Council (NFTC) today announced that Richard Sawaya will join the organization as the new Director of USA*Engage, effective January 19, 2009. In this role, he will oversee the advocacy efforts of the coalition, which was formed in 1997 to promote alternatives to the use of costly and ineffective unilateral U.S. sanctions. Sawaya will also work with the NFTC to press for reform of U.S. visa and entry policies and the export control system.
We welcome Richard to the team, and look forward to working with him to continue the important work of USA*Engage, said Del Renigar, Co-Chairman of USA*Engage and Corporate Counsel for International Policy & Trade Regulation for General Electric (GE) Company. Richard brings with him many years of experience in international affairs and will be key to our efforts to press for a U.S. foreign policy that includes the right balance of diplomacy, engagement and multilateralism.
Prior to joining USA*Engage, Sawaya served in a wide range of capacities, from leadership of key U.S. business organizations and associations to teaching and advocacy work in higher education. Sawaya joined Atlantic Richfield Company (ARCO) in 1979, where he remained until 2000, holding a number of positions, including Senior Speechwriter and Manager of Planning and Corporate Issues at the companys Los Angeles headquarters. He also served as Director of Government & Tax Affairs and Director of International Affairs in ARCOs Washington, D.C. office.
Sawaya led efforts to facilitate ARCOs legal re-entry into Iran and successfully positioned the company to negotiate exploration contracts with Azerbaijans state-owned oil company, as well as those of the Republic of Georgia and Turkey. He also worked on ARCOs participation in the Baku-Tbilisi-Ceyhan pipeline and secured the pivotal endorsement of the Gore-Chernomydrin Commission for ARCOs partnership with LUKoil.
Sawaya then founded the U.S.-Venezuela Business Council, focusing on U.S. corporate investment in Venezuela and the promotion of other business community priorities, including the 2001 bilateral tax treaty. Sawaya also served as Special Adviser to the President at the Fund for Peace, Director of Government Relations at the American Turkish Council, and as Special Representative on the Middle East for the Chevron Corporation.
Following these posts, Sawaya became Special Adviser to the President of George Washington University, and then Vice President for Government, International and Community Relations. Concurrently, Sawaya was an Associate Professorial Lecturer at the university, teaching undergraduate and graduate courses at the Elliott School of International Affairs and the university Honors Program.
Sawaya succeeds Susan Frank, who recently left USA*Engage in light of family obligations. Frank has joined Lockheed Martins PAE subsidiary as in-house counsel.
The NTFC and USA*Engage are sorry to announce Susans departure, and on behalf of our members we thank her for all of her contributions and wish her the very best in her next endeavor, said NFTC President and USA*Engage Co-Chair Bill Reinsch.
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About USA*Engage
USA*Engage (www.usaengage.org) is a coalition of small and large businesses, agriculture groups and trade associations working to seek alternatives to the proliferation of unilateral U.S. foreign policy sanctions and to promote the benefits of U.S. engagement abroad. Established in 1997 and organized under the National Foreign Trade Council (www.nftc.org), USA*Engage leads a campaign to inform policy-makers, opinion-leaders, and the public about the counterproductive nature of unilateral sanctions, the importance of exports and overseas investment for American competitiveness and jobs, and the role of American companies in promoting human rights and democracy world wide.
About NFTC
The National Foreign Trade Council (www.nftc.org) is a leading business organization advocating an open, rules-based global trading system. Founded in 1914 by a broad-based group of American companies, the NFTC now serves hundreds of member companies through its offices in Washington and New York.
National Foreign Trade Council Welcomes U.S.-UAE 123 Agreement
Washington DC – The National Foreign Trade Council (NFTC) today applauded the signing of the U.S.-United Arab Emirates (UAE) 123 Civilian Nuclear Agreement, and congratulated the two nations for working together to achieve such an historic accomplishment. In response to todays signing, the Council released the following statement:
We welcome the signing of the U.S.-UAE 123 Agreement because it is a win-win for both countries and our bilateral relationship, said NFTC President Bill Reinsch. For the UAE, the Agreement will go a long way in helping the country to diversify its energy supply at a time when demand for energy is outpacing the availability of its current resources. Similarly, the United States stands to gain from the Agreement as U.S. companies could play an important role in the development of the UAEs civilian nuclear program.
The United States and the UAE are both committed to peaceful nuclear programs and work in concert with other nations to discourage the proliferation of nuclear weapons, Reinsch continued. The UAEs commitment to operational transparency, participation in the full range of international nuclear non-proliferation cooperation arrangements, the creation of an independent nuclear regulatory authority and the renouncing of any intention to develop a domestic enrichment and reprocessing capability serves as a model for other nations to adopt responsible practices that enhance global nuclear non-proliferation goals.
According to NFTC Vice President for Regional Trade Initiatives Chuck Dittrich, The UAE has long been a critical U.S. ally and partner on the diplomatic front in helping to promote peace in the Middle East and the responsible use and development of nuclear technology. Just as significant is our longstanding bilateral economic relationship, which the Agreement will help to enhance.
With nearly $13 billion dollars in two-way trade in 2007 alone and the UAE serving as the largest market for U.S. exports in the region, the United States has a vested interest in taking steps to expand our bilateral relations, Dittrich stated.
In addition to welcoming the Agreement, the NFTC urged the incoming Administration to send it to Congress for consideration in a timely fashion.
The NFTC serves as the secretariat for the U.S.-Middle East Free Trade Coalition created to promote the expansion of free trade between the US and the Middle East and to encourage economic development, transparent and accountable governance, and enhanced prospects for the people of the Middle East region.
About the NFTC
The National Foreign Trade Council (www.nftc.org) is a leading business organization advocating an open, rules-based global trading system. Founded in 1914 by a broad-based group of American companies, the NFTC now serves hundreds of member companies through its offices in Washington and New York.
IRS International Tax Gap Series Fact Sheet on Foreign Housing Exclusion or Deduction
IRS International Tax Gap Series Fact Sheet on Foreign Housing Exclusion or Deduction
Foreign Housing Exclusion or Deduction
International Tax Gap Series
January 2009
If you are a United States citizen or a resident alien, you are taxed on your worldwide income, whether you live inside or outside of the United States. However, if you live and work abroad, you may be able to exclude all or part of your foreign earnings and, in addition, may qualify to exclude or deduct a foreign housing cost amount.
The May 2008 Foreign Earned Income Exclusion article, in this series of International Tax Gap articles, highlights the general rules for qualifying and claiming the exclusion of foreign earned salary, wages, or other compensation received for personal services. This article highlights the general rules associated with claiming the foreign housing cost exclusion or deduction.
A qualified individual with foreign earned income and foreign housing expenses may elect to exclude or deduct a foreign housing cost amount. The election to exclude or deduct a foreign housing cost amount applies only if the qualified individual files a U.S. Federal income tax return that reports foreign earned income.
General Rule
- To qualify for the foreign housing exclusion or deduction, you must:
- Be a U.S. citizen or resident alien (for federal tax purposes),
- Have foreign earned income (income received for working in a foreign country),
- Have a tax home in a foreign country,
- Meet either the bona fide residence test or the physical presence test, and
- Have paid (or incurred) foreign housing expenses.
Foreign Housing Cost Amount
The housing cost amount is the total of your foreign housing expenses for the year minus a base housing amount.
The base housing amount is 16 percent of the maximum foreign earned income exclusion for the tax year, computed on a daily basis for the number of days in the qualifying period that fall within the tax year. For example, the maximum amount a qualified individual can exclude as foreign earned income for 2008 is $87,600 ($91,400 for 2009). Thus, the base amount for 2008 is $14,016 (16 percent of $87,600), or $38.30 per day.
Foreign Housing Expenses
Housing expenses include reasonable expenses paid or incurred in the taxable year for housing in a foreign country for you, your spouse and your dependents. Only the housing expenses actually incurred or paid for the part of the year that you qualify for the foreign earned income exclusion are considered.
Eligible housing expenses include rent, the fair rental value of housing provided in kind by your employer, utilities (other than telephone charges), real and personal property insurance, rental of furniture and accessories, repairs, and residential parking.
Reasonable housing expenses do not include expenses that are lavish or extravagant under the circumstances, deductible interest or taxes, the cost of buying property, principle payments on a mortgage, the cost of domestic labor (maids, gardeners, etc.), purchased furniture or accessories, or improvements and other expenses that increase the value or appreciably prolong the life of property. You also cannot include in housing expenses the value of meals or lodging that you exclude from gross income (under the rules for the exclusion of meals and lodging), or that you deduct as moving expenses.
Foreign Housing Expense Limitation
The amount of foreign housing expenses eligible to be considered in calculating the housing cost amount is limited.
Beginning with tax year 2006, the amount of foreign housing expenses in excess of the base amount that can be taken into account in computing the foreign housing cost amount is limited to a maximum foreign housing expense limitation. The maximum limitation on foreign housing expenses is 30 percent of the maximum foreign earned income exclusion for the corresponding year, computed on a daily basis. For 2008, 30 percent of the maximum foreign earned income exclusion is $26,280, or $71.80 per day.
However, the maximum foreign housing expense limit will vary depending on the location of your foreign tax home. Since 2006, the maximum limitations for certain high-cost localities are listed in official notices issued by the IRS. For 2008, the maximum limitations on qualified housing expenses incurred in over 275 high-cost foreign locations are included in Notice 2008-107.
Additionally, foreign housing expenses may not exceed your total foreign earned income for the taxable year.
Foreign Housing Exclusion Amount and Limits
The foreign housing exclusion applies only to amounts considered paid for with employer-provided amounts. Employer-provided amounts include any amounts paid to you or paid or incurred on your behalf by your employer that are taxable foreign earned income to you for the year, such as wages, salary, reimbursement for housing expenses, payments by your employer as part of a tax equalization plan, and the fair rental value of company-owned housing furnished to you (unless that value is excluded from income under the exclusions of meals and lodging rules).
Since the foreign housing cost amount exclusion is in addition to the foreign earned income exclusion, if you choose to exclude a foreign housing cost amount, you must figure the foreign housing exclusion before you figure the foreign earned income exclusion. The foreign housing exclusion is limited to the lesser of the foreign housing costs paid for with employer-provided amounts or your foreign earned income. Also, if you choose the foreign housing exclusion, you cannot claim less than the full amount of the housing exclusion to which you are entitled.
Foreign Housing Deduction Amount and Limits
The foreign housing deduction applies only to amounts paid for with self-employment earnings. If you do not have self-employment income, you cannot take the foreign housing deduction. If you are both an employee and a self-employed individual during the year, you can deduct part of your housing amount and exclude part of it, subject to the following limitation.
Your foreign housing deduction cannot be more than your foreign earned income less the total of your foreign earned income exclusion plus your housing exclusion.
Although the foreign housing exclusion and/or the deduction will reduce your regular income tax, they will not reduce your self-employment tax
How to Claim the Foreign Housing Exclusion or Deduction
Since the foreign housing exclusion and deduction is voluntary, qualified individuals must choose to claim the exclusion or deduction. The foreign housing exclusion and deduction are claimed and figured using Form 2555, Foreign Earned Income, which must be attached to Form 1040, U.S. Individual Income Tax Return. Form 2555-EZ cannot be used to claim the foreign housing exclusion or deduction.
References and Links
Foreign Earned Income Exclusion article
Foreign Housing Expense Limitations
Form 2555, Foreign Earned Income (pdf)
Notice 2008-107, Determination of Housing Cost Amounts Eligible for Exclusion or Deduction for 2008
Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad
Return to: The International Tax Gap Series
National Foreign Trade Council Applauds U.S.-Oman FTA Entry Into Force
Washington DC – The National Foreign Trade Council (NFTC) congratulated the United States and the Government of Oman for working together to achieve the January 1, 2009 implementation of the U.S.-Oman Free Trade Agreement (FTA). NFTC Vice President for Regional Trade Initiatives Chuck Dittrich released the following statement:
We applaud U.S. Trade Representative Susan Schwab and Omani Minister of Commerce and Industry Maqbool Bin Ali Bin Sultan for their commitment to working together for more than two years to implement such a well-crafted agreement.
Upon its entry into force, the FTA will provide opportunities for the expansion of U.S. business, products and services into a new and growing market, and will afford the people of Oman enhanced economic opportunity.
Oman is a key ally and the agreement helps to strengthen both U.S. economic and diplomatic ties in the region.
About the NFTC
The National Foreign Trade Council (www.nftc.org) is a leading business organization advocating an open, rules-based global trading system. Founded in 1914 by a broad-based group of American companies, the NFTC now serves hundreds of member companies through its offices in Washington and New York.
WTO Forecast for 2009
WTO Forecast for 2009
Please note that the following is our forecast, not our preferred outcome!
Officials at the World Trade Organization (WTO) are planning an active agenda for 2009, which is likely to include broadening the scope of Doha Round negotiations and efforts to make the organization relevant beyond the Round.
President-elect Barack Obama is likely to face a new push to conclude the Doha Round at the next meeting of the G-20 ministers, which will be hosted by British Prime Minister Gordon Brown beginning April 2. We expect that, much like the recent G-20 meeting in November, the next session will spur new calls at the ministerial level for concluding talks. However, such calls are unlikely to have much of an impact on trade negotiators, particularly in advance of elections in India this spring. (Doha is also likely to be on the agenda of the World Economic Forum in January, though President-elect Obama is not expected to attend.) Rather we expect more attention at the next G-20 to focus on the “trade pledge” – the commitment by participants not to take new protectionist actions, which is already being ignored by a number of countries.
WTO Director-General Pascal Lamy intends to broaden the negotiations next year instead of focusing only on a framework for agriculture and non-agricultural market access (NAMA). It has become clear that the strategy of focusing on the agriculture portfolio and then expecting that NAMA negotiations would proceed more easily has not been successful. Lamy is expected to engage senior officials on NAMA and services in a more serious and strategic way next year and will also begin to address other issues, like rules and nontariff barriers, simultaneously.
Given comments from some developing countries in recent weeks, we believe that there will be pressure for Lamy to flesh out proposals on sectoral negotiations — perhaps seeking to exchange some flexibility on tariff elimination within certain sectors for commitments by developing countries that they will participate as part of a comprehensive package. Recent comments from Lamy also suggest that negotiators may seek to move forward separately on issues where there is substantial agreement – such as trade facilitation – if a comprehensive agreement cannot be reached soon.
There are also efforts underway in Geneva to give life to the WTO beyond the Doha Round. Next year, for instance, the WTO will monitor members’ trade actions in light of the economic crisis. This work will likely reveal a serious deterioration in the trading environment. Highlighting these trends could help generate momentum at the G-20 to do something about it.
Lamy has also indicated that he will facilitate broader discussions of issues outside the Doha mandate. Climate change is likely to at the top of the agenda, particularly as a post-Kyoto agreement under the United Nations framework becomes clearer in the second half of the year. This could provide an opportunity for the Obama Administration to introduce new items to the post-Doha work program at the WTO, including climate change and workers rights.
A WTO ministerial is likely in 2009, though the focus may not be exclusively on the Doha Round. Officials in Geneva are considering a broader discussion, which is likely to include climate change as well as topics related to the future of the organization such as institutional reform and a two-track approach to trade liberalization. (Lamy said recently that, “this need not be the big jamboree we have seen in the past, but rather a venue where Members take a strategic look at the future and steps to advance the goals of the organisation.”)
A Doha Round deal is unlikely in the first half of the year, though countries like the UK, Australia and Brazil will continue to use the global economic crisis as a way of generating momentum for further negotiations. In the wake of elections in India, and as the Obama administration ramps up its international economics operations, some sort of an agreement within the Doha framework is possible towards the end of the year, either on a comprehensive package or – more likely – on pieces of a deal that could move separately.
NFTC would like to acknowledge the advice of John Weekes, a Senior Policy Advisor to Sidley Austin LLP and a former Canadian Ambassador to the WTO, in the preparation of this forecast.
Joint Association NAFTA Trucking Letter to House
Forecast for U.S.-Russian Trade Relations in 2009 (Revised and Updated Version)
Forecast for U.S.-Russian Trade Relations in 2009 (Revised and Updated Version)
Increasing Russian assertiveness, including in foreign commercial relations, will provide the context of U.S. commercial and trade policy relations with Russia in 2009. This is reflected in Russian treatment of international energy companies and of intellectual property rights (despite recent progress in some areas) and restrictions on foreign financial services. Trade policy with Russia in 2009 will continue to be largely focused on Russia’s WTO accession negotiations.
The initiative on U.S. trade policy with Russia will lie with the Executive, although foreign policy sanctions proposals in Congress are possible in the event of renewed tensions. The U.S. bilateral agreement on Russian WTO accession was signed in November, 2006. At the conclusion of the accession process, the Congress will need to act on permanent normal trade relations for Russia in order for the U.S. to gain full benefits from its WTO accession. Negotiations for a Bilateral Investment Treaty remain incomplete. The “123 Agreement” on civil nuclear cooperation was withdrawn from congressional consideration following the Georgia invasion but can be taken up in the 111th Congress. The U.S.-Russia Energy Working Group continues to discuss collaboration on energy efficiency initiatives, clean coal technologies and fuel cell initiatives.
Russian accession to the WTO remains a U.S. policy priority, but Russian commitment to the process has been strongly linked to other perceived interests and has therefore been variable. Recently deflating commodity prices appear to have had a salutary effect on at least their rhetorical level of commitment. Accession talks had slowed in July of 2008 even before the invasion of Georgia and, although the invasion did not elicit punitive measures from the Congress, it did further slow down accession talks. Then in August Prime Minister Putin disparaged WTO membership and threatened to abandon commitments Russia had made during 15 years of accession talks, including bilaterals with the U.S. on leasing of aircraft, telecom equipment and phytosanitary measures. Russia’s top negotiator quickly reaffirmed their commitment to WTO accession on the prescient grounds that the financial crisis might grow into a commodity crisis and by November President Medvedev was urging quick accession.
U.S. exports of meat and poultry (Russia recently reduced their quota for chicken imports from the U.S., but raised the pork quota), treatment of state owned enterprises, IPR protection, and Russian treatment for foreign investment, especially in the energy and automotive sectors, will continue to be areas of potential dispute. On the positive side, the U.S. could support Russian entry into the OECD and, of course, in time grant PNTR, if not outright repeal of Jackson-Vanik.
Cuba Forecast for 2009
Initially, we expect President-elect Obama to do exactly what he said he would do during the campaign — loosen or lift restrictions on the ability of Cuban Americans to travel to Cuba and to send money to family members. We also expect that Obama will initiate additional diplomatic contacts within already-established bilateral channels, for example on migration, narcotics and military issues.
While Cuba is unlikely to be a top priority for the incoming administration, these changes could occur fairly quickly given that these were promises that Obama made during the campaign. Latin America experts, including individuals close the Obama campaign, suggest that any other changes for example restoring the people-to-people contacts and travel exchanges that existed during the Clinton administration would be put off until later. The success or failure of initial diplomatic contacts could help determine how quickly the administration decides to act on broader initiatives.
Congress is unlikely to alter Cuba sanctions in any significant way next year, at least not without a clear signal from the President. Speaker Pelosi and Senator Reid are aware of divisions in the caucus on Cuba policy and Senator Reid appears to have little appetite for a dramatic policy change. (This prediction could change were certain changes to occur in Cuba.) That said, Members of Congress will likely introduce multiple bills to end the embargo, end the travel ban, and facilitate trade by allowing direct banking and removing Bush administration restrictions on payments for agricultural goods. Of those efforts, Congress could move early to reverse the cash in advance rule governing U.S. exports to Cuba. NFTC/USA*Engage staff are participating in meetings of the Cuba legislative working groups and plan to set up meetings next year with relevant hill staff.
Update on recent NFTC efforts
Over the past several months, NFTC and USA*Engage have been working to encourage the next administration to take a new approach to U.S. Cuba policy. Earlier this month, NFTC and USA*Engage spearheaded a business community letter to President-elect Obama, which was signed by ten other associations including the American Farm Bureau Federation, Business Roundtable, and U.S. Chamber of Commerce. The letter called for the eventual end to all sanctions as well as the immediate removal of travel restrictions on American citizens and the temporary suspension of certain trade restrictions to allow American companies to help Cuba rebuild from the recent hurricanes.
Also this month, NFTC Vice President Jake Colvin released a paper, The Case for a New Cuba Policy, in which he suggests that changing Cuba policy could have broader foreign policy, national security and domestic political benefits. Drawing on the advice of former Treasury Department officials, he also highlights the broad discretion that the Executive Branch retains to change the restrictions on travel and trade.
Largely as a result of these efforts, NFTC has enjoyed good press coverage on Cuba policy in recent weeks, including in the Christian Science Monitor, Los Angeles Times (twice), Miami Herald (twice), U.S. News and World Report, CQ, Reuters and Inter-Press Service.
