EU and Canada to cooperate in US sanctions issue
The European Union and
Canada have recently announced that they will cooperate to ensure the maximum effect of sanctions they plan to impose on $4 billion worth of US goods on the condition that the US tax law continues not to meet EU requirements.
As previously reported by SteelOrbis, the World Trade Organization ruled that US Foreign Sales Corporation Tax Legislation was illegal. Upon the ruling of WTO, the EU imposed initially 5% duty on US goods such as steel and textiles in March. The initial duty has been increased by 1% in each month and has reached to 14% in December. The EU announced that these duties will expire on January 1, 2005 following the repeal of the law in October. However, the remaining subsidies under the US law pose a problem to the EU. Unless they are lifted, the EU will ask WTO to reimpose the duties on about 60% of the $4 billion in US exports.
Moreover, last month the WTO gave an approval to the EU,
Canada and six other countries to impose punitive tariffs on US goods. The value of the sanctions has not been revealed, however it is stated that they may exceed $150 million a year.