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US trading partners ask the WTO to impose sanctions

The EU and other leading US-trading partners asked the WTO for permission Thursday to impose sanctions on the US in a dispute about a law that gives American firms money raised in fines levied on foreign rivals.

The 15-nation European bloc was joined by Canada, Japan, Brazil, South Korea, Chile, Mexico and India in lodging requests before Thursday evening's deadline after the US Congress failed to repeal the so-called Byrd Amendment, which has been ruled illegal by the WTO.

The Geneva-based trade organization that sets rules on cross-border trade had given the US until Dec. 27 to act.

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

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

The EU did not specify the level of sanctions it will seek, but spokeswoman Arancha Gonzalez said the US legislation had cost companies from the EU some US$70 million last year. In Tokyo, Trade Ministry spokesman Tamotsu Moriguchi said Japan will seek permission to impose sanctions worth US$100 million on unspecified American products.

Under the three-year-old Byrd Amendment -- named for its sponsor, US Senator Robert Byrd -- hundreds of millions of dollars in fines collected by the US government have been handed over to companies that lodge complaints against foreign exporters judged to be selling products in the US at artificially low prices.

The countries that complained claimed that the law punishes exporters to the US twice because first they are fined and then those fines are passed on to their competitors.

Canada's trade minister, Jim Peterson, said the law continues to give US firms an unfair and illegal advantage that must be stopped.

"It is our view that it effectively provides a distorting double advantage to US industry and, if left in place, could lead to billions of dollars in Canadian paid duties being handed over the US companies," Peterson said in a statement.

Canadian exporters paid US$5.2 million in duties in 2001. And another US$2.5 million was paid in 2002. Figures for last year have been estimated at US$4.4 million.

The WTO's dispute settlement body is expected to discuss the sanctions requests at a special meeting Jan. 26. Although it acknowledges that it hasn't repealed the amendment, the US still may appeal against the sanctions.
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