Exports that benefit from FSC regime create jobs, according to PwC report
Washington DC – The National Foreign Trade Council today released a new study prepared by PricewaterhouseCoopers LLP (PwC) which shows that a total of 3.5 million jobs were attributable to exports that benefited from the U.S. Foreign Sales Corporation-Extraterritorial Income (FSC-ETI) regime. The study is based on 1999 data, the most recent available.
“The PwC study makes clear how important the FSC/ETI regime has been to American exporters and American jobs,” said Bill Reinsch, President of the National Foreign Trade Council. “If we are to maintain those benefits, we need new WTO-compliant legislation that continues to support U.S. job creation and U.S. exports.”
The PwC study estimates:
· a total of 3.5 million U.S. jobs were attributable to exports that benefited from the U.S. FSC-ETI regime;
· one million jobs were directly attributable to FSC-ETI benefited exports;
· 2.5 million jobs were indirectly attributable to these exports as a result of intermediate goods and services used in the production and distribution processes;
· $310 billion of the nation’s $990 billion of exports of goods and services benefited from the FSC-ETI tax incentive;
· FSC-ETI-benefited exports accounted for 3.4 percent of the nation’s Gross Domestic Product (GDP).
Since 1971, the United States has provided tax incentives to encourage U.S. exports — first through Domestic International Sales Corporations (DISCs), then Foreign Sales Corporations (FSCs), and currently through the Extraterritorial Income (ETI) regime. The World Trade Organization has found the FSC-ETI regime to be out of compliance with WTO rules.
“The President has indicated his intention to comply with the WTO decision, and both the House Ways and Means Committee and the Senate Finance Committee are considering how best to do that,” said Reinsch. “The NFTC has put forward a legislative proposal that would replace FSC/ETI with a number of international tax law changes and looks forward to working with both Committees to produce legislation that will maintain American jobs and competitiveness in a global economy.”
Copies of the executive summary of the study are available from the National Foreign Trade Council.