WTO gives EU OK for $4 bln sanctions on U.S.-diplomat

GENEVA, Aug 30 (Reuters) - The World Trade Organisation (WTO) ruled on Friday that the European Union could impose sanctions worth $4 billion on the United States over tax breaks to U.S. companies, trade diplomats said.

The diplomats were speaking just before the anxiously-awaited official report from WTO arbitrators, who have been looking at the issue for several months, was due to be released.

"The figure is four billion dollars," one well-informed envoy close to the case told Reuters.

The $4 billion ruling met exactly the EU calculations on trade losses companies in the 15 countries of the grouping are losing annually as a result of the concessions, granted to big U.S. firms like Microsoft (nasdaq: MSFT - news - people), Boeing (nyse: MSFT - news - people) and Walt Disney Co (nyse: MSFT - news - people). U.S. officials had argued that $1.1 billion would be a fairer estimate.

The ruling is unlikely to lead to immediate sanctions from the EU, which will consult industry on which products could be hit in retaliation. Brussels has said it would delay sanctions if Washington worked to reform the tax regime. (Geneva Newsroom, +41 22 733 38 31, fax 734 87 60, e-mail geneva.newsroom@reuters.com))

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