Washington, June 27: Europe's top trade official warned the Bush administration that the European Union will not hesitate to impose billions of dollars of sanctions on American products if the United States does not scrap a $4 billion tax break for exporters and remove penalty tariffs on imported steel. EU trade commissioner Pascal Lamy said yesterday the United States had to understand that the 15-nation EU did not plan to delay the penalties in the two biggest cases the United States has lost before the World Trade Organization. Lamy's tough talk to an audience of US business executives came a day after he and other EU officials participated in a White House meeting with President George W Bush. Both sides sought to emphasize points of agreement in foreign policy and trade matters as a way of moving on from the dispute over the US-led Iraq war.
Lamy said he and US trade representative Robert Zoellick wanted to prevent the trade disputes from affecting the overall economic relations between Europe and America. But he indicated that Europe will not hesitate to move toward sanctions in both the export tax and steel disputes. In the export subsidy case, the EU has published a list of $4 billion worth of American products that will be penalised if Congress has not scrapped by year's end a part of US tax law which the WTO said violates global trade rules.
The other case involves a WTO ruling that bush violated trade rules in 2002 by imposing penalty tariffs of up to 30 per cent on various steel imports to provide temporary relief to the US steel industry against a surge of imports. Bureau Report