WTO Lets EU, Others Hit U.S. with Trade Sanctions

WTO Lets EU, Others Hit U.S. with Trade Sanctions

Fri Nov 26, 4:59 PM ET


GENEVA (Reuters) - The World Trade Organization (news - web sites) gave final approval on Friday to the European Union (news - web sites), Japan and others to hit the United States with an initial $150 million in trade sanctions in a dispute over an illegal anti-dumping law.

"They've got the go-ahead," said Kenyan ambassador Amina Mohamed, chairwoman of the WTO's Dispute Settlement Body.

When asked about the step, President Bush (news - web sites) pledged to work with Congress to ensure the United States complies with the WTO, while urging the global trade body to hold Europe accountable for "unfair" subsidies to aircraft maker Airbus.

"I'll work with Congress to get into compliance," Bush said in Crawford, Texas, where he is vacationing on his ranch.

The case involves the so-called Byrd amendment, which the WTO has repeatedly said breaks trade rules by handing out duties raised in anti-dumping cases to U.S. firms.

The White House has asked Congress to drop the law, but it is popular with legislators, who see it as a way to level the playing field for companies hurt by dumping, defined as exporting goods at below the cost of production.

Bush also struck back at Europe over subsidies for Airbus, saying: "We expect the WTO, as well, to treat our trading partners as they treat us. And that's why, for example, I filed (a) complaint on the Airbus situation."

The anti-dumping case, along with the aircraft dispute, which saw the United States and Europe file tit-for-tat complaints last month over support for Airbus and U.S. rival Boeing, are among several pitting Brussels against Washington.

The opening round of punitive duties -- which will be reviewed each year -- is relatively modest, when compared with the $4 billion the EU was awarded in a case over corporate tax breaks. But the figure could soar in coming years.

The lion's share of the right to retaliate goes to the European Union and Japan, since their companies are the most affected. Brussels has warned it could slap additional duties on U.S. goods early in 2005 if Washington does not repeal the law.

"We are delighted that the authorization confirmed our case. ... We hope that the U.S. will bring the legislation as soon as possible into conformity (with international rules)," EU trade spokeswoman Claude Veron-Reville said in Brussels.

The green light for sanctions was automatic because the case has exhausted all the WTO steps for settling disputes, including appeals and arbitration. Only a unanimous decision by all 148 WTO member states, including those seeking the sanctions, could have blocked it.

Both the EU and Japan, given the right to additional levies of $50 million and $80 million, respectively, by arbitrators, have presented the WTO with a list of products they plan to hit -- ranging from sweet corn to metals and textiles.
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