Europe’s trading relationship with the United States deteriorated further this week when the European Commission said it had no option but to impose tit-for-tat sanctions in a rumbling row over an illegal US trade law.
In an unusually acerbic outburst Brussels said it had lost patience with Washington over the issue and called the apparent flouting of international trade law ”very disturbing”.
The offending US law — the anti-dumping Act of 1916 — allows the US to punish foreign firms it deems guilty of flooding the market with cheap imports.
Under the law, ruled illegal by the World Trade Organisation in 2000, the US can hit foreign firms with fines equivalent to three times the damages sustained and can even jail executives.
Brussels said this week it had given the US ample time to scrap the law but saw no signs of compliance.
”The European Union considers retaliatory measures a last resort and has given the US more than enough time to comply with the World Trade Organisation (WTO) decision in this dispute,” said Pascal Lamy, the EU’s trade commissioner.
”[The] time has come for the US to show diligence and commitment to its WTO obligations. The sign that international trade law will simply be ignored is very disturbing and cannot go unchallenged.”
Lamy said at least three European firms had run into trouble with the US law. He said the EU would be asking the WTO for permission to impose sanctions on US firms guilty of flooding the EU with cheap imports in retaliation.
Such firms should, he said, face import duties equivalent to three times the amount of damages which EU firms have sustained under the US law.
He said that the EU would take steps to protect its own firms in the meantime, allowing European firms to counter-sue any US entity that invokes the offending US law.
Disagreements over steel tariffs, US tax breaks for multinationals and the US practice of feeding cattle growth hormones continue to sour the transatlantic relationship.— Â