EU Commission Publishes Annual US/EU Trade Report
By by Ulrika Lomas, Tax-News.com, Brussels
23 December 2003

The European Commission last week published its nineteenth Annual Report on US Trade Barriers which this year is dominated by the ongoing feud between the two trade blocs over US manufacturing tax breaks.

“Although the vast majority of transatlantic trade passes unhindered, we need to review regularly those obstacles which exist and pursue action to remove them,” Trade Commissioner Pascal Lamy commented, continuing: “This will ensure that business on both sides of the Atlantic benefits from clearer, more transparent trading conditions. This is also why we need to advance in the Positive Economic Agenda adopted in May 2002."

In a statement accompanying the report, the Commission revealed that it believes that the US has been successfully resisted on a number of trade barriers, notably:

• US steel safeguard measures, where the WTO ruled in favour of the EU and its eight co-complainants on the US steel safeguard measures (originally imposed in March 2002). President Bush finally rescinded these measures on 4 December 2003.

• Foreign Sales Corporation/Extraterritorial Income Exclusion Act (FSC/ETI scheme), where the WTO has authorised the EU to impose countermeasures in case of non-compliance by the US. The EU has now decided to introduce sanctions on 1 March 2004 if the US has not complied by then.

• The Byrd Amendment Act, where the WTO set a deadline of 27 December 2003 for the US to bring its Continued Dumping and Subsidy Offset Act (the so-called 'Byrd Amendment') into WTO compliance, a deadline which will not be met, since Congress has now closed down for the year.

“Despite these rulings, progress on implementing the necessary changes to bring such legislation into line with US WTO commitments is slow,” said the Commission. “It is also noted that the US has still not repealed the WTO incompatible 1916 Anti-dumping Act. The trend of US non-compliance with WTO Dispute Settlement findings remains a priority area of concern for the EU.”

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