The European Commission has decided to introduce sanctions, worth $28 million (£15 million), in retaliation at Washington’s failure to repeal controversial anti-dumping measures that the World Trade Organisation (WTO) declared illegal more than two years ago.

Under the US legislation, known as the Byrd Amendment, American companies that have complained of being unfairly undercut by foreign competitors have received a share of the proceeds of the anti-dumping and countervailing duties introduced by the Government. Since 2000 the firms, mainly in the steel, household and food sectors, have received more than $1 billion.

The Commission predicts that if the legislation, which should have been repealed in December 2003, remains in force, American companies will pocket a further windfall of $1.6 billion later this year.

It said yesterday: “The Commission took this latest step in the dispute over the Byrd Amendment in light of the continuing failure of the United States to bring its legislation in conformity with its international obligations.”

The sanctions, due to be approved by EU governments within days, would impose an additional 15 per cent import duty on targeted US exports. These cover shorts and trousers, writing pads and albums, binders, sweetcorn, spectacle frames and crane lorries.

The EU, which received WTO authorisation last November to take action, has drawn up a second, more extensive list of items that could be hit if the dispute escalates. It includes more clothing, blankets, photocopying equipment, hand drills, mobile homes and prefabricated buildings.

The sanctions decision came days after the collapse of efforts by the EU and US to end a long-running row over public subsidies to the rival aircraft makers Airbus and Boeing.

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