GENEVA, Dec 10: A World Trade Organization appellate body has partially overturned an earlier ruling in a case involving United States tariffs against privatised European steel companies, according to a WTO statement released late Monday.

In reversing part of the July finding, the appellate body ruled that US legislation does comply with the Geneva-based trady body’s accord on subsidies and countervailing measures, trade sources said.

The US duties had been applied against certain steel products from European Union countries which were produced by 12 previously state-owned companies, which had received state subsidies before privatization.

The countries are Britain, France, Germany, Italy, Sweden and Spain.

Washington had claimed that European steel companies, privatized between 1987 and 1998, had unfairly received state aid.

But the appeals experts said that the earlier ruling had been based on the “erroneous” finding that “an arm’s length, fair market value” privatisation always prevented the benefit from the state subsidy from accruing to the new private firm.

The appellate body said that while privatisation gave rise to a “presumption” that the benefit no longer existed, it was “rebuttable”.

However, the appeals body upheld the earlier WTO panel’s ruling on another aspect of the dispute, which centres around 12 countervailing duty determinations by the US, as well as its legislation.

The body agreed with the earlier finding that Washington had acted inconsistently with the agreement by imposing and maintaining countervailing measures on steel products from privatised European steel companies without determining whether subsidies actually continued to exist.

The case is separate from the highly publicised imposition by Washington in March of tariffs ranging from eight to 30 percent on selected steel imports. The European Union and six other countries have filed complaints against them.

Reacting to the appeal’s outcome, a US Trade Representative spokesman in Washington said: We are pleased that they found the underlying US law to be consistent.

But we are disappointed with their findings concerning the methodology, the spokesman added.

Brussels had countered that when privatisation took place at arm’s length and for fair market value, which happened in all 12 cases, the new owner effectively repays the subsidy to the government. —AFP