EU lifts threat of sanctions against U.S.; condition attached

EU lifts threat of sanctions against U.S.; condition attached    The European Union agreed Friday to lift its trade sanctions on $4 billion worth of U.S. exports to Europe, but angered the United States by saying it could re-impose punitive tariffs on 60 percent of the goods if the World Trade Organization (WTO) supports its complaint about remaining U.S. 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,” Reuters quoted European Commission trade spokeswoman Claude Veron-Reville as saying. “We will be in a position to reinstate those sanctions if the WTO finds the American law is not in compliance.”
   U.S. trade officials have reportedly warned that a continuation of the trade dispute could damage U.S./EU relations.
   The WTO ruled that the U.S. Foreign Sales Corporation tax breaks were illegal. In November, the EU said it would impose $4 billion in retaliation duties on imports from the United States.
   After Congress repealed the Foreign Sales Corporation law, the EU agreed to lift its sanctions in 2005, but complained at the same time to the WTO about remaining subsidies under the regime.