EU given green light to impose trade sanctions on US

The World Trade Organisation today authorised the EU and other leading US trade partners to impose sanctions against the United States in response to illegal antidumping rules.

The WTO was expected to announce the decision later at its headquarters in Geneva, but EU Trade Commission Pascal Lamy already welcomed the ruling, which had been leaked in Brussels.

“This was as we expected,” Lamy said.

The EU and other complainants will be authorised to fine the United States up to 72% of money collected under an US antidumping law known as the Byrd Amendment.

However, Lamy said the 25 nation EU had not yet decided whether to impose the sanctions.

“This is a decision that still has to be taken,” he said.

The EU may prefer to use the threat of sanctions as a ”smoking gun” to force the United States to repeal the legislation more quickly or to obtain concessions in other trade negotiations.

Named after its sponsor, US Senator Robert Byrd, the three-year-old amendment allows the United States give US companies money collected in fines against foreign exporters judged to be selling products in the United States at artificially low prices.

The WTO ruled the measure illegal in 2002, backing claims that it punishes exporters to the United States twice because first they are fined and then those fines are passed on to their competitors.