A request by the European Union (EU) to seek 12 billion U.S. dollars of sanctions annually against the U.S. for the latter's alleged failure to comply with World Trade Organization's (WTO) rulings on the Boeing case has been referred to arbitration, it was reported on Tuesday.

On Tuesday's regular meeting of the dispute settlement body (DSB), the U.S. said it had filed an objection to the EU request but agreed for arbitration.

The DSB also authorized the establishment of a compliance panel at the meeting to examine whether the U.S. claim that it had withdrawn subsidies to Boeing could be sustained as requested by the EU.

The EU requested for consultations with the U.S. on the latter's implementation of the rulings on Boeing case on Sept. 25 after the U.S. notified the DSB that it had withdrawn the subsidies to Boeing. The EU said the U.S. maintained a series of subsidies.

Another panel was established at the meeting to study the case filed by the U.S. against China on its anti-dumping and countervailing duties on U.S.-exported automobiles.

The U.S. said China's alleged dumping and subsidy determinations in the autos investigations appear to involve "profound procedural and substantive deficiencies." They added in conducting these investigations, China "appears to have breached a number of its obligations" to WTO regulations.

China said the imports at issue were "dumped on the Chinese market and where subsidized by the U.S., causing injury to the domestic industry of China." China had acted in a manner consistent with its WTO obligations, it added.

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