The World Trade Organisation has ruled against the US in a row with the EU over tax breaks for exporters, opening the way for a possible $4 billion in retaliatory duties by Brussels.
The WTO's Appellate Body rejected a bid by the US to overturn earlier WTO rulings that the tax scheme violated international trade rules.
'We have won on all points. It is a full victory,' one EU source in Geneva said. Brussels can now ask another WTO panel to fix the level of trade sanctions to be imposed unless the US revises the disputed tax scheme, which benefits major corporations such as Microsoft and Boeing.
The scheme allows US companies to establish offshore subsidiaries, where they enjoy significant tax breaks on profits earned from exports.
Most European and US trade experts had expected the judicial panel to support earlier findings by the WTO that the United States was in the wrong.
But they added that Brussels may hesitate before hitting back at US goods for fear the dispute could degenerate into an all-out trade war which the EU might lose.
