EU Attempt to Thwart U.S. Trade Law Fails

A World Trade Organization panel upheld a key U.S. trade law used to impose sanctions against imports from the European Union in disputes over bananas and beef, U.S. officials said Wednesday.

In a 350-page report, the WTO panel rejected complaints by the 15-nation EU that Washington’s use of the so-called Section 301 trade law to impose trade sanctions violated global trade rules. The panel said aspects of the law challenged by the EU “are not inconsistent” with U.S. obligations under the WTO.

“We have maintained all along that Section 301 is consistent with our WTO obligations, and are pleased that the panel concurs,” U.S. Trade Representative Charlene Barshefsky said in a statement. “Section 301 has served, and will continue to serve, as a cornerstone of our efforts to enforce our international trade rights.”

Although the panel rejected the EU complaint, an EU spokesman said the bloc was satisfied with the ruling.

“We are very satisfied with the panel’s conclusions in this case. What the panel has done is clarified the limits within which [the U.S.] can use the 301 legislation. Unilateralism is out. WTO rules and procedures have to be followed,” the EU spokesman said.

The panel ruling, made on Nov. 8 but made public Wednesday, thwarts an EU effort to end U.S. sanctions in transatlantic trade disputes over bananas and hormone-treated beef. The United States accused the EU of failing to comply with WTO rulings on bananas and beef and earlier this year won WTO support to impose more than $300 million in punitive import duties on EU goods.

U.S. officials said a second EU challenge against the way the United States imposed punitive tariffs in the banana trade dispute is still pending at the WTO.

The European Union had argued that the Section 301 law was incompatible with the WTO because it allows unilateral action while the Geneva-based body operates on a multilateral basis.