Brussels, Oct. 25 (Reuters): The EU called off its sanctions on $4 billion worth of US goods today after Washington repealed illegal export tax subsidies, bringing some balm to transatlantic ties wounded by a battle over Airbus and Boeing.

But the EU left the door open to hit back over loopholes in the law that may keep benefits flowing for giants such as Microsoft, Motorola, General Electric and Boeing itself.

European trade commissioner Pascal Lamy said the EU would go to the WTO dispute settlement system to establish whether surviving subsidies under the US Foreign Sales Corporation (FSC) system comply with international rules.

?We have been trying to put FSC to bed for a long time,? Lamy said, announcing that he would recommend an end to the 25-nation bloc?s sanctions. ?It is now in bed, but we need to just check before the lights go out.?