(Corrects sanctions figure to $311 mln from $375 mln, correction also applies to Update 1)
* Case is further attack on U.S. "zeroing" method
* Retaliation request likely to go to arbitration
(Adds details and quotes)
By Jonathan Lynn
GENEVA, Feb 3 (Reuters) - The European Union is seeking up to $311 million a year in sanctions from the United States in their dispute over a U.S. method for tackling unfairly priced imports.
The move by Brussels is another blow against the U.S. practice of "zeroing" when calculating duties on goods that have been dumped, or sold for less than they cost in the exporting country.
Every other member of the World Trade Organisation (WTO) rejects zeroing, which has been condemned by WTO judges. Only yesterday Vietnam launched its first WTO dispute with a complaint against the United States over zeroing on shrimp imports.
An EU official said the request was made "in response to the United States' persistent refusal to comply with WTO rulings on the anti-dumping practice of 'zeroing'".
A document filed by the bloc this week said it was seeking WTO authority to retaliate against the United States in its dispute over Washington's "zeroing" method used in anti-dumping cases, dating back nearly seven years.
The EU request, to be submitted to the next meeting of the WTO's dispute settlement body (DSB) on Feb. 18, followed a WTO ruling last June that the United States had failed to comply with an original decision in a case launched by Brussels in 2003 over anti-dumping duties on steel products and other goods.
"The European Union hereby requests authorisation from the DSB to suspend the application to the United States of concessions or other obligations under the covered agreements," the EU filing said.
The EU cited a similar case where the WTO found in favour of Japan in a dispute over zeroing, and where Japan had previously sought permission to impose $250 million in sanctions.
The United States is almost certain to object to the EU's request, meaning it would go to arbitration, a process usually taking about two months.
The EU said it proposed imposing a prohibitive import tariff of 100 percent on U.S. exports worth $311 million, or a tariff of 13.8 percent on exports worth $477 million, and reserved the right to impose further sanctions related to zeroing.
WTO rules allow members to impose extra duties on goods that are dumped if that hurts businesses in the importing country.
Calculating these anti-dumping duties typically involves comparisons of the prices of different batches of imported goods to work out the average difference in price.
In zeroing the U.S. authorities ignore -- or treat as zero -- examples where the imported goods actually cost more than at home, which critics say unfairly inflates the duty. (Reporting by Jonathan Lynn; editing by Robert Evans)