The EU had said earlier this month it wanted to retaliate against the United States by imposing duties of $311 million on U.S. exports over Washington's failure to comply with WTO rulings on anti-dumping measures.
But the United States objected to the level of sanctions, and it will now be settled by a WTO arbitrator within 60 days.
WTO courts have repeatedly ruled against Washington's use of zeroing -- a method of calculating anti-dumping duties rejected by all other WTO members.
The European Union said it was seeking retaliation because the United States had failed to comply with these rulings, missing a deadline of April 2007. The United States also missed a December 2009 deadline to comply in a second case over zeroing, it told the WTO's dispute settlement body.
Brussels said the U.S. measures were hurting exporters in products including steel, ball bearings, chemicals and pasta.
"Since the entry into force of the WTO Agreements, the United States has collected hundreds of millions of dollars in excess anti-dumping duties, not mention the far greater economic harm that such measures have been causing in terms of lost trade," the EU said.
A brief U.S. statement regretted the EU's decision to escalate the dispute.
Japan also called on the United States to correct the measures, noting that it had the right to revive an arbitration process in a similar case that has been suspended while the United States works on the rulings.
In a further case involving zeroing, the WTO adopted rulings in a dispute brought by Thailand on duties imposed on imports of plastic bags, which the United States did not contest.
WTO rules allow countries to impose duties on imports that are dumped -- sold for less than they cost in the exporting country.
Calculating these duties typically involves comparisons of batches of goods to work out the average difference in price. In zeroing the authorities ignore cases where the imports actually cost more than at home, which according to critics inflates the duty unfairly.
The United States also reminded the dispute body that the March 20 deadline for China to comply with a ruling calling on it to respect intellectual property rights was fast approaching. China said it was working to amend legislation in time. (Reuters)
