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Well-Known Member
EUOBSERVER / BRUSSELS - The EU has today, Wednesday, been given the final go-ahead to slap a whopping four billion euro worth of sanctions on US products.
Approval from the World Trade Organisation of a list of US products, submitted by the EU, clears the way for Brussels to hit Washington with the record beating sanctions.
The Geneva-based body passed the list as a justified recourse to counteract the negative economic effects of US tax law, which have long been a bone of contention between the transatlantic trade partners.
The EU however, is unlikely to push on with the sanctions straight away, and instead is likely to use the ruling to crank up the pressure on Washington to reform the controversial laws.
The so-called Foreign Sales Corporation, allows US exports to exempt 15-30 per cent of their income from taxation, by setting up a foreign subsidiary.
With WTO Doha Development round negotiations entering a critical period and little progress being made in the round, the EU is even more unlikely to implement the sanctions before a ministerial meeting in Cancun in September.
In Brussels the effect on the world economy of stoking a major trade war between the worlds two largest economic blocs will also be at the forefront of policy makers minds.
"If there is no sign of compliance on its way by autumn, then we will start the EU procedures for adopting countermeasures" a Commission spokesperson told journalists.
http://www.euobserver.com/index.phtml?sid=9&aid=11137
Approval from the World Trade Organisation of a list of US products, submitted by the EU, clears the way for Brussels to hit Washington with the record beating sanctions.
The Geneva-based body passed the list as a justified recourse to counteract the negative economic effects of US tax law, which have long been a bone of contention between the transatlantic trade partners.
The EU however, is unlikely to push on with the sanctions straight away, and instead is likely to use the ruling to crank up the pressure on Washington to reform the controversial laws.
The so-called Foreign Sales Corporation, allows US exports to exempt 15-30 per cent of their income from taxation, by setting up a foreign subsidiary.
With WTO Doha Development round negotiations entering a critical period and little progress being made in the round, the EU is even more unlikely to implement the sanctions before a ministerial meeting in Cancun in September.
In Brussels the effect on the world economy of stoking a major trade war between the worlds two largest economic blocs will also be at the forefront of policy makers minds.
"If there is no sign of compliance on its way by autumn, then we will start the EU procedures for adopting countermeasures" a Commission spokesperson told journalists.
http://www.euobserver.com/index.phtml?sid=9&aid=11137
