GENEVA, Nov 10: The World Trade Organisation’s highest court ruled on Monday that hefty US steel import duties violated global trade agreements, piling pressure on Washington to remove them.

The European Union immediately warned US President George W. Bush that he must quickly withdraw the 20-month-old tariffs or face retaliation. Brussels is threatening to hit back with some $2.2 billion in duties on US goods.

Washington said in a brief statement that it disagreed with the WTO decision and was still studying its implications.

The WTO’s Appellate Body, in a final verdict in the case, upheld a decision in July by a panel of trade judges that the so-called “safeguard” measures were “inconsistent with the requirements (of the WTO).”

The EU was among countries — including Japan, Brazil, South Korea and Switzerland — to file a complaint with the Geneva-based WTO over the steel duties, introduced in March 2002 to protect the struggling US steel industry.

The steel conflict is one of a number of high profile disputes involving the United States and the EU and which threaten to further sour the mood at troubled WTO talks on lowering barriers to world trade.

Brussels is already preparing a raft of sanctions against US exports after winning another WTO tussle with Washington over exporter tax breaks. The United States has taken aim at the EU over its effective ban on genetically modified crops.

The 22 countries who filed complaints hailed the decision, saying in a joint statement it “leaves the United States with no other choice but to terminate its WTO incompatible safeguard measures without delay.”

A spokeswoman for EU Trade Commissioner Pascal Lamy told Reuters Television: “The measures (sanctions) are not there to punish the US but to focus the minds of the US administration.

“The sooner they terminate the measures (steel duties), the better, and we don’t need to use these sanctions.”

SANCTIONS WITHIN DAYS: The EU has warned that it could begin imposing sanctions within five days of the court decision being formally adopted by WTO countries in a meeting of the disputes settlement body (DSB) that must be held by early next month.