Transatlantic trade war sanctioned

Stiff sanctions on US exports ranging from almonds to ski jackets intended to punish Washington for failing to repeal the so-called Byrd amendment were approved by the World Trade Organisation today.

“It’s been approved,” said Amina Mohamed, Kenyan ambassador to the WTO in Geneva, who is chairwoman of the organisation’s dispute settlement body.

The EU and other plaintiffs sought formal WTO authorisation to retaliate by imposing new duties against various US products. Among the other potential targets are cod, textiles, glassware, mobile homes and apples.

Named after its sponsor, Senator Robert Byrd, the 2000 US law was written with the steel industry in mind. It was ruled illegal two years ago by the 148 nation WTO – which referees global commerce – following a complaint spearheaded by the EU.

The contested law allows American companies to receive proceeds from duties levied on foreign rivals for alleged ”dumping” – selling goods at below-market prices, making it impossible for American producers to compete.

The WTO backed claims that the amendment breaks trade laws by punishing exporters to the United States twice because they are first fined, and then those fines are passed on to their competitors.

In August, a WTO arbitrator approved penalties of up to 72% of the money collected from foreign exporters and handed to American companies and said the winners in the case should submit lists of potential targets. Under WTO rules, however, formal authorisation must come from the dispute settlement body.

The EU was joined in its complaint by seven other countries: Brazil, Canada, Mexico, South Korea, Japan, India and Chile.

New EU trade chief Peter Mandelson said the sanctions could be applied early next year.

Their value has yet to be determined, but trade officials have said they could amount to more than £80m (€114m) a year – a tiny sum in comparison with the £1bn (€1.4bn) in sanctions the EU threatened in its successful bid to force the US to lift illegal tariffs on foreign steel last year.