The EU said it could launch $4 billion of punitive duties on US goods from chewing gum and boiled sweets to parts for nuclear reactors in an increasingly tense trade row with Washington.
The European Union won the right to impose the duties after the World Trade Organisation ruled that a US tax break scheme was illegal under global trade rules, but the EU has said it would prefer Washington to change the offending law.
The EU published a list in its Official Journal on the Internet today which includes a range of meat, dairy, vegetable and cereal products, as well as leather, fur and textiles, foresty products, iron and steel, ceramics and glassware, jewellery, electronic products including sound and image recorders, and toys and games.
The goods are worth around $14 billion, but this will be whittled down once EU industry has lobbied to get products it needs and does not want hit by duties dropped from the hit list.
'It has been published today and we have given industry 60 days to react, up to November 12,' said an EU trade official. 'After that we will draw up a definitive list.'
European Trade Commissioner Pascal Lamy, who conducts commerce policy for all 15 EU states, has said he will only apply sanctions if Washington does not make sufficient progress in scrapping the scheme.
US Trade Representative Robert Zoellick has said that launching the sanctions would be like using a nuclear weapon against the world trade system. Both sides are keen to avoid boosting tensions as they still row new US steel duties, which has also prompted the EU to wave the sanctions stick.
The two global trading giants are also leading talks to liberalise world commerce. The talks, launched at Doha in Qatar last year, are supposed to end in 2005.
