Question

Which of the following was a major U.S. tax incentive for exporters that the WTO recently ruled was an illegal subsidy?

A) NTR
B) CVD
C) FSC
D) NTB
E) HTS

Answer 1

The WTO ruled the Foreign Sales Corporation (FSC) as an illegal subsidy for U.S. exporters; this substantiates the WTO's role in regulating international trade practices and addressing barriers and subsidies.

Step-by-step explanation:

The major U.S. tax incentive for exporters that the World Trade Organization (WTO) recently ruled as an illegal subsidy is the Foreign Sales Corporation (FSC). WTO's dispute settlement body determined that the FSC provided prohibited subsidies to U.S. exporters by allowing them to reduce their taxable income through the use of offshore entities. This ruling was a result of the WTO's principles which aim to eliminate practices that distort trade, such as certain forms of subsidies. The FSC, along with matters like tariffs, nontariff barriers, services, intellectual property, dispute settlement, textiles, agriculture, and the creation of the WTO, are significant aspects of the international trade system which the WTO oversees.