The World Trade Organisation on Tuesday allowed the European Union in principle to impose retaliatory measures on the United States over an 88-year-old anti-dumping law, which the EU claims could financially damage European firms.
"The decision of the arbitrators is a welcome reaffirmation that the WTO is a rule-based system and members may not ignore their obligations with impunity,” commented EU Trade Commissioner Pascal Lamy. “I welcome the recent move the US Congress to bring legislation forward to implement the WTO ruling. I hope that rapid action from Congress will make sanctions unnecessary."
The decision of the WTO arbitrators gives the European Union permission to adopt a regulation mirroring the US 1916 Anti-Dumping Act, which will be applicable exclusively to products originating in the United States.
The terms of the US anti-dumping legislation allow for fines up to US $5,000, or imprisonment for up to one year to be imposed on guilty parties, and the EU mirror legislation will entitle European companies to bring complaints against US companies under the same basic conditions.
However, the EU has yet to publicly show that any European companies have been damaged by the anti-dumping law. Neither has a US court ever ordered a European firm to pay a fine under the legislation, a fact that left America claiming a small victory from the WTO’s decision.
"We're pleased that a World Trade Organization arbitrator agreed with the United States today that the EU has no current right to retaliate against the 1916 Act," noted Richard Mills, a spokesman for the U.S. Trade Representative.
The US Anti-Dumping Act was condemned by the WTO in September 2000, and the United States government was given until December 2001 to repeal the measures, giving rise to the EU’s recent course of action.
The full text of the WTO Decision on US Anti-Dumping Laws can be found in the Tax-News Resources section.
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