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Hastings International and Comparative Law Review

Abstract

The World Trade Organization (WTO) administers, enforces, and decides international trade disputes by establishing uniform rules of trade engagement designed to minimize trade wars. Countries that fail to abide by the WTO rules can be taken to the WTO courts and face eventual sanctioned retaliation. Without such rules, global economic competition can be as fierce as the most devastating battle and, as history has shown, can be the catalyst for war.

This Article examines the United States' alleged disregard of the WTO uniform trade rules through the use of foreign sales corporations, and how this tax regime almost ignited an international trade war. It examines the demise of the foreign sales corporation, its new replacement on the international tax stage, and the concomitant policy implications.

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