EU proposes end of dispute with Washington

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Monday, Oct. 25, 2004 | 9:21 a.m.

BRUSSELS, Belgium -- The European Union moved today to lift millions of dollars in punitive tariffs on U.S. goods following the repeal in Washington of corporate tax breaks that were ruled illegal by the World Trade Organization.

But EU Trade Commissioner Pascal Lamy warned that the sanctions -- which add up to more than $300 million in 2004 -- could reappear because of alleged loopholes in the law signed by President Bush on Friday.

"Legally speaking, we will suspend the sanctions and we will keep our options open," Lamy said.

Lamy said he would ask the WTO for another ruling on whether the new U.S. law fully complies with global trade rules, a process that normally takes 90 days.