EU imposes $4-billion retaliation duties on imports from U.S.

EU imposes $4-billion retaliation duties on imports from U.S.    The European Commission today proposed to impose duties on imports from the United States beginning in March because of the continuation of the U.S. “Foreign Sales Corporations” export tax rebates, ruled illegal by the World Trade Organization.
   The EC said the “countermeasures on selected U.S. products” are in line with a WTO authorization, granted earlier this year, to apply countermeasures of up to $4 billion against the United States.
   The Foreign Sales Corporations provides export subsidies also worth an estimated $4 billion a year.
   Unless the U.S. withdraws the Foreign Sales Corporations regime, the EC will impose duties of 5 percent from March 1, increasing every month by 1 percent up to a ceiling of 17 percent to be reached in March 2005, the Brussels-based executive said.
   The EC proposal to impose import duties on U.S. goods has been sent to the European council of ministers, representing EU governments, for adoption.
   “The commission hopes to pass a very clear message to the U.S. that their continued failure to implement three years after the expiry of the original WTO deadline is unacceptable,” said Pascal Lamy, EC trade commissioner.
   The EC measures target products such as agricultural goods, clothes, shoes, iron, steel, tools, machinery and toys. The list of products can be found at: https://mkaccdb.eu.int/dsu/doc/ds108-26.doc.
   U.S. Congress has discussed changes to the Foreign Sales Corporations, but has not ended the regime.