An arbitration panel should rule by the end of next month on a request by the EU and seven other US trading partners to slap tit-for-tat sanctions on certain imports from the US, the WTO said on Monday.
Washington disputes the demand by the EU, Brazil, Canada, Chile, India, Japan, Mexico and South Korea to impose duties on US goods -- potentially worth hundreds of millions of dollars -- to compensate for illegal US trade rules.
The so-called Byrd amendment allows Washington to distribute proceeds from anti-dumping tariffs on steel and other products to American firms that complain of damage from foreign imports.
Last January, the WTO ruled that the provision was illegal and set a deadline of Dec. 27 last year for its revision, but the US Congress has so far failed to comply.
At a meeting on Monday by the WTO's dispute settlement body, the eight complaining parties reiterated their request to impose sanctions and expressed confidence that the arbitration panel would rule in their favor.
"We have already noted the systemic and direct commercial harm done to Canada by the continued operation of this measure," Canada's ambassador to the Geneva-based WTO, Sergio Marchi, told the body.
"Canada is seeking authorization to suspend tariff concessions and other obligations in an amount linked to disbursements under the Byrd amendment," he said -- words that were echoed by officials from the seven other complainants.
It was the first time such a large group of WTO member states had ganged together to ask for the suspension of concessions, Marchi noted, though he expressed regret at being obliged to take such an action.
"Retaliation is not a course of action we relish," the ambassador said. "Regrettably, seeking authority to retaliate is the only option left to a member to protect its rights in the face of another member simply choosing not to comply with the rules."
For its part, the US -- which formally requested the matter be taken to arbitration last Friday -- was also sorry about the course of events and pointed out that work was underway to bring the disputed legislation into conformity with its WTO obligations.
"At the same time, we strongly disagree with the proposal to suspend concessions," said US diplomat Steven Fabry.
Washington was also concerned that all parties involved -- with the exception of Chile -- had requested to impose sanctions worth the total of alleged damages suffered by all countries under the Byrd rules.
The exact value of the requested sanctions was not specified, but some of the countries gave figures they had calculated for the total amount of duties paid out under the Byrd amendment in previous years.
According to a statement from Brazil, the total duties in 2001 and 2002 coupled with the projected amount for last year came to US$800 million.
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