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USA:EU agrees to remove sanctions on US imports |
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2005-1-24
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In a major decision having far reaching implication for US exporters, the European Union agreed to lift sanctions on about 60 percent of goods (like textiles, steel etc) worth $4 billion with retrospective effect from Jan. 1.
Earlier, in March 2004, the European Union had slapped an initial duty of 5 percent on a broad range of goods from steel to textiles and paper, rising up to 14 percent by the year end, last year.
But the move is not free from threat next year of re-imposition of punitive tariffs next year provided WTO backs its complaint about residual export tax breaks.
"We have delivered on our commitment to suspend sanctions from Jan. 1, as announced and in recognition of the U.S. move to repeal its FSC (Foreign Sales Corporation) law," European Commission Trade spokeswoman Claude Veron-Reville said.
"We will be in a position to reinstate those sanctions if the WTO (World Trade Organization) finds the American law is not in compliance," she added.
The U.S. Foreign Sales Corporation (FSC) legislation, ruled illegal by the WTO, was the trigger for the biggest transatlantic trade dispute in 50 years.
The bloc announced it would lift its sanctions in 2005 after the law was repealed, but complained at the same time to the WTO about remaining subsidies under the regime.
These include three years of transition relief for companies that have benefited from the FSC and under a so-called grandfathering clause - continued benefits for all exporters that entered binding contracts before Sept. 17, 2003.
By September, officials say the WTO is expected to rule on the legitimacy of remaining FSC subsidies. However, Washington says it has honored its obligation to eliminate illegal subsidies.
Britain and the Netherlands, have objected to this ‘a(chǎn)utomaticity’ clause, saying it could unnecessarily vitiate the trade relationships with Washington at this crucial juncture. |
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