EU says it will impose trade sanctions on U.S.

/ Source: The Associated Press

The European Union said Thursday it will impose sanctions on U.S. products to punish Washington for failing to repeal an antidumping law ruled illegal by the World Trade Organization.

The EU head office said its action would be joined soon by seven other nations, including Japan, South Korea and Brazil, which had all requested the WTO authorize retaliation.

The EU's move would slap additional duties of up to 15 percent as of May 1 on such U.S. products as paper, textiles, machinery and farm produce.

The EU head office said it took its latest step "in light of the continuing failure of the United States to bring its legislation in conformity with its international obligations."

The 25-nation EU has long asked for Washington to repeal the 3-year-old legislation and the Bush administration has been working with Congress to bring it into line with its obligations. Yet the EU executive Commission said it was time to bring further action.

It said that according to the latest information, the level of retaliation would amount to slightly less than $28 million.

The Geneva-based WTO first ruled the U.S. legislation illegal in 2002 and gave the United States until the end of 2003 to conform. When it didn't, the eight complainants were given the option late last year to impose sanctions.

"The EU understands that Canada will be announcing retaliatory measures against certain products from the United States and expects that other co-complainants will soon join it in applying retaliation," the EU head office said.

The other complainants are Brazil, Chile, India, Japan, South Korea and Mexico.

The law, known as the Byrd amendment, allows American companies to receive proceeds from antidumping duties levied on foreign rivals. In four annual distributions, over $1 billion has been distributed to such industries as steel and metal producers and food and household items.

The European Commission said there were no negotiating meetings with U.S. officials planned ahead of the May 1 deadline.