The European Commission formally notified the WTO on Tuesday of its plans to slap sanctions on the US if it fails to settle a row with Washington over steel duties.
European trade commissioner Pascal Lamy said he would try to make progress during a visit this week to Washington, particularly in persuading the US to grant European steel firms wider exemptions from the duties.
The row has added to disputes on US tax breaks for its exporters, hormone-treated beef and a new US farm subsidy bill to overshadow EU-US trade relations at a time when the two are supposed to be leading world trade liberalization talks.
Under international trade rules in the steel dispute, the EU had to inform the WTO of its intention to impose sanctions on the US by June 18 and Commission trade spokesman Anthony Gooch said this had been done.
"Effectively what we are doing is freeing our hand to raise our tariff levels," he told a news conference.
The Commission has said it would slap heavy duties on a range of goods from politically sensitive US states, including fruit juice and textiles, if Washington did not offer European producers wide exemptions from steel duties introduced in March.
It also wants the US to provide compensation in the form of lower tariffs on other goods.
Lamy said the Commission had consulted Europe's steel industry over the dispute and had been told that it wanted EU officials to work on winning more exemptions from the duties.
"I will to continue talks on that subject in Washington," he told the European Parliament's trade committee.
Lamy is to meet US Trade Representative Robert Zoellick during his visit to Washington on June 21.
The EU and nations including Japan have also filed complaints against the US steel duties at the WTO, but a ruling is not expected until next year.
A final decision on whether to go ahead with sanctions will be made after the Commission reports back to EU states on July 19 about negotiations with Washington over exemptions and compensation.
Washington has already granted some exemptions from the tariffs, imposed at 30 percent on a range of steel products, but European producers are hoping for more.
The European Union has been cagey on the progress of talks over compensation, although the US has so far not recognized it should take any trade steps to soften the blow of the steel duties.
The EU is still waiting for a ruling from the WTO on how much it can expect in compensation in the form of higher import duties on some U.S. goods for the US export tax break scheme, which the global trade body has already ruled to be illegal.
In the meantime, the US wants Europe to open its markets to hormone-treated beef and genetically modified products, dubbed "Frankenstein foods" by some but which producers say are safe.
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