EU to complain again about US trade practice

The European Union is poised to initiate a fresh trade complaint against the US in a move that could deliver yet another blow…

The European Union is poised to initiate a fresh trade complaint against the US in a move that could deliver yet another blow to transatlantic relations at a sensitive time for the international trading system.

Brussels argues that the US is using an illegal way of calculating anti-dumping duties.

The method is known as zeroing, a practice Brussels claims has a "significant adverse economic impact on [EU exporters".

The EU was reprimanded for using zeroing in a case involving anti-dumping duties on Indian bed-linen last year.

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People close to the case said the European Commission was likely to file a formal complaint against the US at the World Trade Organisation within the next few weeks - a move that could eventually lead to trade sanctions against the US.

The dispute over zeroing would come on top of a string of other trade clashes between Washington and Brussels, including the long-running stand-off over tax breaks for US exporters enshrined in the Foreign Sales Corporations (FSC) legislation.

The EU has given US Congress just over a month to revoke FSC - or for the first time in the history of transatlantic trade relations face trade sanctions on US goods shipped to Europe.

Washington and Brussels have also clashed over a clause in US anti-dumping law known as the Byrd amendment; over genetically modified crops and Iraqi reconstruction contracts.

At the same time, however, the two sides have recently redoubled efforts to revive the stalled round of trade negotiations held under the auspices of the WTO.

The US administration has already told Brussels in consultations that it will not end the practice of zeroing.

Such consultations are required by the WTO before any country can initiate a formal complaint.