EU Suspends WTO Sanction Bid Against U.S. in Dumping Dispute

U.S. provides reassurances it will bring measures into compliance with global trade rules.

The European Union said Wednesday it had suspended a request at the World Trade Organization for the right to impose sanctions on Washington over a controversial U.S. anti-dumping calculation.

"Yesterday the European Union and the United States asked the arbitration panel deciding on the level of sanctions that the EU is entitled to impose on the United States in the zeroing dispute to suspend its work," said John Clancy, spokesman of the European bloc.

Explaining the move, the spokesman said: "We welcome the U.S. reassurances that they are taking the necessary steps to bring their measures in compliance with WTO rules."

As long as Washington complied, sanctions would not be necessary, he noted.

Washington would now be given a year to comply, said a source close to the case.

Brussels won a dispute brought in 2004 against Washington on a complex method called "zeroing" that the U.S. applies when calculating the degree of dumping.

The EU argued that by applying the method, the United States increased its estimate of the degree of dumping -- or the sale of items abroad at less than the cost price in their domestic market -- in its markets.

Despite losing the case at the WTO, Washington failed to end the practice of zeroing.

As a result, Brussels in February asked the WTO to approve either punitive tariffs of 100% on $311 million in U.S. exports to the EU, or a tax of 13.18% on annual trade of $477 million in selected goods.

Copyright Agence France-Presse, 2010

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