D.  Trade Agreements

Comment: One respondent argued that the application of section 743 of Division D to products, services, or suppliers of a party to the World Trade Organization Government Procurement Agreement (WTO GPA) or a party to a U.S. free trade agreement would be inconsistent with the non-discrimination obligations in those agreements. This respondent proposed that the final rule should be changed so that it does not apply to inverted domestic corporations or U.S. subsidiaries of inverted domestic corporations that have relocated from the United States to countries that are parties to the WTO GPA or U.S. free trade agreements.

Response: The Councils have considered the respondent's arguments regarding the compatibility of section 743 with U.S. trade agreement obligations. The Councils do not consider that the application of section 743 to products, services, or suppliers of a party to the WTO GPA or a party to a U.S. free trade agreement, or to the U.S. subsidiaries of such suppliers, would be inconsistent with the non-discrimination obligations in those agreements. Furthermore, section 743 does not provide for drawing distinctions of the kind the respondent has proposed. Therefore, the Councils do not believe it is appropriate to make this revision.