TWN Info Service on WTO and Trade Issues (Oct25/20)
31 October 2025
Third World Network

WTO: EU gains right to retaliate to tune of $13.64 million annually against US
Published in SUNS #10322 dated 31 October 2025

Geneva, 30 Oct (D. Ravi Kanth) — The European Union on 29 October secured a favourable ruling from a World Trade Organization (WTO) arbitrator, granting it the right to impose countermeasures worth US$13.64 million per annum against the United States.

The decision came following the US failure to comply with a WTO dispute settlement ruling (DS577) that found that anti-dumping and countervailing duties imposed by the US on ripe olives from Spain were inconsistent with the WTO rules.

In accordance with Article 22.4 of the Dispute Settlement Understanding (DSU), the EU may now request authorization from the Dispute Settlement Body (DSB) to impose countermeasures against the US.

However, it remains to be seen whether the US will accept the arbitrator’s decision, according to people familiar with the development.

This is particularly contentious as the Trump administration has imposed its own controversial reciprocal tariffs on EU goods and appears disinclined to abide by the WTO’s rulebook.

The dispute originated in 2019 when the EU challenged the anti-dumping and countervailing duties imposed by the US on ripe olives from Spain.

A WTO dispute panel ruled against the US duties in November 2021, but the case saw several further appeals and compliance proceedings, ultimately leading to arbitration.

The WTO arbitrator – comprising Daniel Moulis, Martin Garcia, and Charis Tan – determined that “the level of nullification or impairment of benefits accruing to the European Union as a result of the application of Section 771B in the CVD investigation on ripe olives from Spain is USD 13.64 million.”

This was significantly less than the approximately US$30 million that the EU had originally sought.

The arbitrator stated that the amount of USD 13.64 million “may be adjusted for inflation in 2024 and on an annual basis thereafter, and to reflect modifications to the duty rates.”

It also determined that for any future application of the disputed US law, the EU may request DSB authorization to suspend trade concessions using a predetermined methodology.

The US was originally required to bring its measures into compliance with the WTO rules by 14 January 2023.

Having allegedly failed to do so, the EU initiated compliance proceedings, which concluded that the US was still in violation of its WTO obligations.

The arbitration stems from a dispute concerning US anti-dumping and countervailing duties on Spanish ripe olives and the underlying legislation – Section 771B of the Tariff Act of 1930.

The original panel found this law to be inconsistent with the WTO rules because it required US authorities to presume a full pass-through of subsidies from raw to processed products without considering other relevant factors.

A key task for the arbitrator was to calculate the level of “nullification or impairment” suffered by the EU.

Both sides proposed different hypothetical scenarios for how trade would have flowed had the US complied with the WTO panel ruling.

The arbitrator rejected the EU’s proposed scenario and also dismissed the US assumption that a compliant analysis would have still resulted in a 100% pass-through rate (and therefore zero impairment).

Instead, the arbitrator adopted a proxy pass-through rate of 0% for its calculations.

The EU may now request that the DSB authorize countermeasures in line with the arbitrator’s decision.

The request can be made at the next regular meeting of the DSB on 24 November, or at a special meeting convened with 10 days’ notice. +