Former US president Donald Trump’s administration slapped extra tariffs on Spain’s iconic agricultural export in 2018, considering their olives were subsidised and being dumped on the US market at prices below their real value.
The combined rates of the anti-subsidy and anti-dumping duties go as high as 44 percent.
The European Commission, which handles trade policy for the 27 EU states, said the move was unacceptable and turned to the WTO, where a panel of experts was appointed to examine the case.
In Friday’s ruling, the WTO panel agreed with the EU’s argument that the anti-subsidy duties were illegal.
But it did not support its stance that the US anti-dumping duties violated international trade rules.
The panel said it “recommended that the United States bring its measures into conformity with its obligations”.
EU trade commissioner Valdis Dombrovskis hailed the ruling, pointing out that the US duties “severely hit Spanish olive producers.”
“We now expect the US to take the appropriate steps to implement the WTO ruling, so that exports of ripe olives from Spain to the US can resume under normal conditions,” he said.
The European Commission charges that Spain’s exports of ripe olives to the United States, which previously raked in €67 million ($75.6 million) annually, have shrunk by nearly 60 percent since the duties were imposed.
The office of the US Trade Representative in Washington did not immediately comment on the ruling.
According to WTO rules, the parties have 60 days to file for an appeal.
If the United States does file an appeal though, it would basically amount to a veto of the ruling.
That is because the WTO Appellate Body — also known as the supreme court of world trade — stopped functioning in late 2019 after Washington blocked the appointment of new judges.