EU imposes sanctions on U.S.
Tuesday, March 2, 2004 Posted: 0355 GMT (11:55 AM HKT)
(CNN) -- The European Commission has launched retaliatory trade measures against the United States that will cost American companies hundreds of millions.
The sanctions are intended to compensate European businesses for a U.S. tax break scheme for American exporters that was ruled illegal by the World Trade Organization (WTO) last year.
Monday was the deadline for Washington to eliminate the so-called Foreign Sales Corporation Scheme, which Europe believes grants U.S. exporters tax benefits, giving American companies an unfair advantage.
The U.S. Congress has made no move to roll back the scheme.
The EC's trade commission has signaled it initially will impose $200 million worth of sanctions, five percent of the total sanctions allowed, on U.S. goods from dairy and meat products to textiles.
The penalties will be imposed in a gradual tariff scheme, whereby there will be an additional custom duty of five percent on selected goods from March 1, 2004. The commission can then raise sanctions by one percent each month, until the U.S. Congress agrees to repeal the controversial legislation.
"The name of the game is not retaliation, it is compliance," a spokeswoman for European Trade Commissioner Pascal Lamy told Reuters. "The day the new measures are passed by the Congress, we will stop the sanctions."
The WTO has authorized the EC to seek up to $4 billion worth of sanctions from the United States over its illegal export tax break.
In early December, U.S. President George W. Bush bowed to international pressures by dropping U.S. steel tariffs, another trade dispute the EC took to the WTO.
早在12月份，美国总统乔治 W 布什迫于国际压力,将与欧盟之间的关于钢铁关税及其他的贸易争端提交至WTO.
The decision to drop the tariffs averted what was shaping up to be a trade war between the United States and Europe, as the EU had threatened over $2 billion in retaliatory sanctions.