From: Bob Olsen <[EMAIL PROTECTED]>
Date: Mon, 14 Jan 2002 21:19:07 -0500
To: (Recipient list suppressed)
Subject: U.S. violates WTO
Date: Mon, 14 Jan 2002 05:00:14 -0800 (PST)
From: MichaelP <[EMAIL PROTECTED]>
Subject: [MAI-NOT] WTO slams U$ corporate welfare
The Guardian (London) Monday January 14, 2002
$4bn US subsidies incur WTO's wrath
Charlotte Denny, economics correspondent
Transatlantic trade relations will take a step closer full scale war today
when the World Trade Organisation is expected to confirm that a $4bn
(2.7bn) export subsidy programme for some of America's best known
companies violates global trade rules.
A WTO rejection of the US appeal against an earlier judgment in favour of
the European Union will pave the way for Brussels to slap up to $4bn in
retaliatory sanctions on US goods, a move which Washington has described
as a "nuclear weapon".
The $4bn being demanded by Europe would be the largest sanctions bill in
the history of the WTO.
Brussels and Washington agreed to observe a ceasefire on several
long-running trade disputes last year while they united to back the new
round of global trade negotiations successfully launched in Doha in
November.
However, today's ruling on the US foreign sales corporations (FSC) laws is
likely to reignite festering tensions over issues such as proposed
American restrictions on steel imports and the EU's ban on imports of
hormone treated beef.
Brussels has called on Washington to amend the rules of the FSC programme
which channels tax breaks to big exporters including Boeing and Microsoft.
But with Congress having already rewritten its laws once, only to have the
new scheme rejected by the WTO, observers say there is little appetite in
Washington for further compromise.
Last August, the WTO ruled that the amended FSC law provided illegal
export subsidies, violated the trade body's agriculture agreement and
discriminated in favour of American goods.
If as expected, the WTO confirms its earlier judgment, there will be a
further two month delay while it decides the size of the sanctions bill
the EU can levy.
Brussels has asked for $4bn, which would be the largest sanctions bill in
the history of the WTO, dwarfing earlier rulings in Washington's favour
over beef and bananas.
EU officials hope that the US will agree to a voluntary compensation
programme rather than forcing it to impose sanctions. Few member states
have shown much enthusiasm over drawing up lists of US goods to target,
fearing that America could retaliate by putting to test the legality of
the EU's own agricultural export subsidy programes at the WTO.
Some member states fear that punitive sanctions on the scale demanded by
Brussels could backfire at a time when both Europe and the US are
struggling to pull their economies out of recession.
Renewed strain between world's two biggest trading blocs could not come at
a worse time for officials at the Geneva-based body who are preparing for
the complex negotiations launched at Doha.
The WTO's director general, Mike Moore, warned in December that the first
few months of this year would be critical for the success of the round.
The next transatlantic flashpoint is likely to be over steel, where the US
has threatened to restrict imports to protect its producers from the
global supply glut.
At a meeting before Christmas, 30 of the world's biggest steel producing
countries agreed to cut 100m tonnes from global steel output this year to
stabilise prices.
But the EU made clear at the time that the reductions were dependent on
Washington withdrawing its threat to impose import restrictions in
February.
If Washington goes ahead and imposes tariffs on foreign steel imports, the
EU has already said that it will respond by taking the US to the WTO.
======================
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............................................
Bob Olsen Toronto <[EMAIL PROTECTED]
The most important office in a democracy is
the office of citizen.
--Justice Louis Brandeis
............................................
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