Summers Letter to Hastert on Importance of FSC Repeal Bill

November 2, 2000

[1] Enactment of legislation (H.R. 4986) repealing and replacing the Foreign Sales Corporation ("FSC") regime has been and remains a top priority for the President. As you know, H.R. 4986 is the product of a unique bipartisan effort involving the Administration, Chairmen Archer and Roth, Ranking Members Rangel and Moynihan, and their staffs.

[2] It was carefully drafted to address issues raised by the WTO regarding the FSC regime. The Administration strongly supports passage of this legislation that has such important consequences for jobs, the national economy, and international relations with some of our most important trading partners.

[3] Passage of H.R. 4986 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. Failure to pass this legislation immediately will compromise the United States' ability to avoid a confrontation with the European Union. Moreover, it would jeopardize an important procedural agreement reached with the European Union to this end. The procedural agreement delays the possibility of retaliation by ensuring that the WTO will review the new replacement legislation before any decision may be made authorizing retaliation. The benefits of the agreement, however, are contingent upon the immediate enactment of the FSC replacement legislation.

[4] Therefore, I urge you in the strongest possible terms to allow the House to act on H.R. 4986 as soon as possible.

Sincerely,