The European Union, risking fresh tensions with the United States, on Thursday asked for the go ahead to slap trade sanctions against Washington just as efforts get under way to revive global commerce talks.
The sanctions, which could run to hundreds of millions of dollars of duties on U.S. goods, aim to force Washington to revoke a scheme under which local companies benefit when anti-dumping duties are imposed on foreign competitors.
The World Trade Organization (WTO) has repeatedly ruled the measure, known as the “Byrd amendment,” illegal. The EU was set to be joined in its sanctions request later on Thursday by other nations including Japan, China, Brazil, India and South Korea.
“The Byrd amendment has raised widespread concerns from the outset as evidenced by the large number of complainants in this case,” European Trade Commissioner Pascal Lamy said.
“I hope the U.S. will now take action to remove this measure, thus avoiding the risk of sanctions,” he added in a statement.
U.S. calls to revive talks
The fight has come to a head days after the top U.S. trade official called for efforts to revive talks to liberalize global trade, which flopped last year.
The sanctions request will be heard by the WTO’s disputes settlement body at a special session called for Jan. 26.
Thailand and Australia, which are also among complainants in the case, reached a separate deal with Washington giving it until the end of the year to withdraw the measure.
The United States, under pressure to respect a number of other WTO rulings, was expected to oppose the sanctions call. As a result, the case was likely to go to arbitration, which could delay any decision on the sanctions for another 60 days.
The amendment, which distributes to U.S. companies money raised by anti-dumping duties on “unfairly traded” imports, was approved by Congress in 2000 and has strong political backing.
In the past three years, the Bush administration has doled out about $710 million to U.S. ball bearing, steel, seafood, pasta, candle and other companies under the program.
The complainants have not put a figure on the sanctions, but are to take account of the amounts given by Washington.
