February 25, 2003	Tuesday	Zul Hijjah 23, 1423

BRUSSELS, Feb 24: The European Commission will revive pressure on the United States this week in a long-running trade row by presenting its final plans for sanctions worth $4 billion, Commission officials said on Monday.

The EU won the right to sanctions when the World Trade Organization (WTO) ruled against US export tax breaks, and the new Commission proposal will come just before European Trade Commissioner Pascal Lamy visits the United States for talks.

The Commission, which negotiates trade for the 15 EU states, presented a first list in September of a myriad of goods to be hit by punitive tariffs worth $12 billion — from parts for nuclear reactors to bubble gum and television sets.

It has now pared down this list after listening to industry and member states’ reactions.

“It will be this week,” said a Commission official, when asked when the new list would be handed to EU states for consideration. He said Wednesday or Friday were likely.

The proposed measures would be spread over a number of sectors, the same as in the initial list of goods.

The Commission wants to keep up its pressure on the US administration, but has said it will not impose the sanctions if progress is made on ending the US scheme, called the Foreign Sales Corporation (FSC).

Lamy will meet US officials next week to hear their plans for repealing the tax provisions, but key members of Congress continue to disagree on how exactly to do that.

The FSC scheme was targeted at exporting US companies such as aircraft maker Boeing and Caterpillar. Boeing said last year it could be forced to cut 10,000 jobs if Congress repealed the FSC scheme without a suitable replacement.

After the Commission has handed over its draft list to member states, they will again scan it carefully to make sure domestic industries are not harmed by having increased tariffs on US imports that they might need.

Another Commission official said the new list would not include specific recommendations on the tariffs that should be applied, but added that the EU executive had the right to impose duties of as much as 100 per cent on items if it wished.

The export tax break row is one of several to have cast a cloud over EU and US trade relations, including a dispute that broke out in March 2002 after the United States slapped tariffs of up to 30 per cent on steel imports.

The EU has also taken that case to the WTO and a ruling is expected in the spring of 2003.—Reuters