EU Threatens Retaliation Over US Anti-Dumping Laws

by Ulrika Lomas, Tax-News.com, Brussels

23 September 2003

Yet another storm appears to be brewing in the already strained trade relationship between the European Union and the United States, after the EU Commission revealed last week that it may retaliate against US anti-dumping laws.

This time, the EU is threatening retaliatory measures against the US over the latter's failure to repeal the anti-dumping law of 1916 which the World Trade Organisation ruled illegal in 2000. The WTO found that provisions such as the imposition of heavy fines, and the threat of imprisonment contravened international trade laws.

"The EU considers retaliatory measures as last resort and has given the US more than enough time to comply with the WTO decision in this dispute," EU Trade Commissioner Pascal Lamy observed.

He continued: "(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. I hope that our move will give the impetus for immediate action by Congress to repeal the 1916 Anti-Dumping Act and terminate all pending cases."

Although the 1916 legislation is rarely used, the Commission says there are currently three cases pending against European firms in US courts. Accordingly, the EU Commission has proposed a new regulation which will prevent EU courts from enforcing decisions made by US courts under the auspices of the 1916 Act. It will allow EU companies or individuals to counter-sue the US plaintiff in order to recover any outlays, costs, damages and expenses caused by the application of the Anti-Dumping Act of 1916.

The EU is also on the brink of imposing some $4 billion worth of retaliatory tariffs on imports from the United States for its failure to repeal Extraterritorial Income Exclusion legislation, ruled an illegal subsidy to US exporting firms by the WTO. Whilst Congress is considering a number of measures to replace the act, the EU could well impose sanctions early in 2004.

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