The EU is expecting the US to stop illegal export subsidies violating the WTO, the Foreign Sales Corporations scheme. The WTO Dispute Settlement Body authorized retaliatory sanctions of $4 billion of US trade, and the EU plans to introduce sanctions by next year if the US insists on keeping up the illegal export subsidy scheme.
$4 billion sounds like a lot of money, and it is. However, total imports to the EU from the US were over 195 billion Euro in 2001, according to the statistics on the Commission homepage. So $4 billion seems to be less than two percent of all imports. A speedbump, not significant in the big picture.
This violation of international trade law is no new idea of the Bush government, for a change. It goes back all the way to 1971. It will be interesting to see if these new sanctions actually join existing ones of the EU against the US, and if they will have any practical force to stop illegal American subsidies. I'll believe it when I see it, but I would be surprised to see substantial American movement on this issue.
Posted by Karl-Friedrich Lenz at May 8, 2003 10:18 PM | TrackBack