US Urges EU To Rescind Trade Tariffs

by Mike Godfrey, Tax-News.com, Washington

18 October 2004

The United States Trade Representative's Office last week urged the European Union to withdraw tariffs on $4 billion worth of US exports now that Congress has approved legislation bringing America back into line with WTO trade rules.

In a statement, US Trade Representative Robert Zoellick argued that the EU has no grounds to prolong the trade sanctions.

"We believe the concerns that prompted the EU to bring (their WTO complaint) in 1997 have been addressed satisfactorily," he stated, adding:

"We urge Europe to quickly move to end their tariffs on US exports, so that trade can resume to the mutual benefit of both sides of the Atlantic."

Whilst chief EU trade negotiator Pascal Lamy has welcomed the passing of the ‘American Jobs Creation Act 2004,’ which repeals illegitimate trade subsidies and provides wide-ranging tax cuts, he indicated last week that Commission officials will need to spend some time studying its provisions before making a decision on the tariff issue.

Two of the provisions contained within the act are likely to prove contentious with the EU: one provides firms affected by the loss of FSC-ETI subsidies with three years of transitional relief; the other excludes contracts that were signed before September 18, 2003.

The EU’s tariffs currently stand at 12%, and are rising at a rate of 1% per month.

Lamy and Zoellick are scheduled to meet in Brussels this week.

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