Article: WTO REJECTS U.S. TAX LAW RULING COULD COST BOEING, MICROSOFT AND OTHERS BILLIONS ANNUALLY.(News)

Byline: P-I STAFF AND NEWS SERVICES

A tax break that saves The Boeing Co., Microsoft Corp. and others billions of dollars annually is illegal, a World Trade Organization panel ruled yesterday, handing the United States its biggest defeat in a trade dispute.

The ruling sets the stage for the European Union to seek a record $4 billion in annual sanctions unless the United States complies with WTO rules. But the EU and the United States signaled their desire to avert a trade war that could dwarf any previous dispute.

European Union Trade Commissioner Pascal Lamy said the EU remained open to meaningful discussions with the Bush administration to ...

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