EU-US trade dispute looms

Exporters are charged with anti-competitive behaviour

A new row has broken out between the United States and some of its major trading partners. The BBC's Mark Gregory reports.

The dispute has been prompted by a change to US law, known as the Byrd amendment, which was approved by president Clinton just before Christmas.

Pascal Lamy: Rules provide incentive for bringing cases

Under the new rules the American government will distribute the proceeds of fines imposed on foreign firms for selling excessively low priced goods directly to US companies found to have suffered from unfair competition.

EU trade commissioner Pascal Lamy told BBC World Service that America's new rules breached guidelines set by the World Trade Organisation (WTO), and would encourage US firms to initiate complaints against foreign competitors as a way of raising money.

"What is at stake in this case is that it provides for a super incentive for bringing cases because you can hope on top of the counterveiling duty to benefit from an extra subsidy," he said.

The EU is not alone in its anger.

A complaint to the World Trade Organisation has been initiated in conjunction with eight other nations - including substantial trading powers such as Japan, Korea, Brazil, India, Thailand, Australia and Chile.

In line with WTO procedures, the American government has been given a two month "consultation" period in which to back down.

The US has already locked horns with major trading partners on hormone treated beef, bananas, agricultural subsidies and a host of other trade issues.

Now the vexed question of anti-dumping duties has joined the list.