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Author Topic:   EU says will retaliate if US ignores WTO ruling
AcousticGod
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From: Pleasanton, CA
Registered: Apr 2009

posted February 13, 2006 02:56 PM     Click Here to See the Profile for AcousticGod     Edit/Delete Message   Reply w/Quote
By William Schomberg and Richard Waddington
Mon Feb 13, 11:42 AM ET

The EU on Monday gave the United States three months to avoid retaliatory sanctions after Brussels won a long-running trade dispute, a threat which if carried out would add to transatlantic trade tensions.

The World Trade Organisation's highest court, the appellate body, rejected a U.S. appeal against an earlier ruling that Washington violated global trade rules in the export tax row.

The decision paves the way for the European Union to hit U.S. exports with new duties that could reach billions of euros.

"(The United States) continues to fail to implement fully the operative ... recommendations and rulings," the appellate body said in its finding.

The EU's executive Commission said it would resume applying extra duties to U.S. exports if the United States did not comply with the new WTO ruling in 90 days.

In reply, the United States urged the Commission not to exercise its right to re-impose sanctions.

"Congress has repealed the (export tax break schemes) and prolonging this dispute will not serve to foster harmonious transatlantic relations," said Neena Moorjani, a spokeswoman for the U.S. Trade Representative's office.

The WTO has said the EU can impose sanctions of up to $4.0 billion on U.S. goods. The 25-nation bloc began to levy steadily increasing duties in March 2004 on a range of farm goods, textiles, industrial, electronic and paper products and steel.

Those sanctions were suspended at the start of 2005 pending further rulings which have now gone the EU's way too.

SIXTY DAYS

"Once the appellate body report has been adopted by the WTO in 30 days' time, the U.S. will have 60 days to bring its legislation into line with its WTO obligations," the Commission said in a statement.

"After that time EU retaliatory measures will be re-imposed, unless the U.S. has complied in the meantime," it said, adding duties would be re-introduced at a level of 14 percent.

Brussels had argued the United States did not fully comply with a series of WTO rulings against the tax measures which have benefited firms such as Boeing and Microsoft.

"I stand ready to work closely with the U.S. toward finding a solution to this dispute," EU Trade Commissioner Peter Mandelson said in the Commission's statement.

"But the EU will not accept a system of tax benefits which give U.S. exporters including Boeing an unfair advantage against their European competitors. We are seeking nothing more than the re-establishment of a level playing field," he said.

It is less than two weeks since the EU said it was unhappy that another U.S. tax break program ruled illegal by the WTO would only be phased out gradually. Brussels is applying retaliatory sanctions over that case.

Washington and Brussels are also at loggerheads over allegedly illegal subsidies paid to Boeing and European planemaker Airbus, and over the WTO's Doha round to free up global trade.

The United States says the EU must break the deadlock in the Doha talks by making a more generous offer on agriculture. The EU says the next move has to come from developing economies opening up their markets in industrial goods and services.

(Additional reporting by Doug Palmer in Washington)

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