EU, others seek trade sanctions against US

The European Union and major trading states yesterday sought approval for sanctions against the United States, risking fresh tension with Washington just as efforts to revive global commerce talks get under way.

Canada, Japan, India and Brazil were amongst seven World Trade Organisation (WTO) nations joining the EU in requesting the right to retaliate against a controversial US trade law - the so-called Byrd amendment - which has been deemed illegal by the Geneva-based body.

The threat of possibly hundreds of millions of dollars of new duties on US goods aims to force Washington to revoke the scheme under which local companies benefit when anti-dumping duties are imposed on foreign competitors.

It is the latest in a series of international rows involving the government of US President George W. Bush, an avowed free trader who critics accuse of being reluctant to bow to WTO rules when they go against his administration.

"The Byrd amendment has raised widespread concerns... as evidenced by the large number of complainants in this case," European Trade Commissioner Pascal Lamy said.

"I hope the US will now take action to remove this measure, thus avoiding the risk of sanctions," he added in a statement in Brussels.

The fight has come to a head days after the top US trade official called for talks on liberalising global trade to be revived after flopping last year.

Officials on both sides of the Atlantic dismiss suggestions the battles over trade rules may weaken their resolve to win a deal at the WTO on lowering barriers to business, which the World Bank says would give a powerful boost to the struggling international economy.

Nevertheless, the Byrd amendment enjoys strong support in the US Congress and the threat of sanctions could spark a backlash amongst US politicians as they prepare for a presidential election in November.