The World Trade Organisation (WTO) said it would issue a keenly awaited final verdict later on Monday in a row between the United States and several leading trade partners over steel import duties.

Diplomats said it was widely expected to uphold an earlier decision by WTO trade judges that the duties, imposed in March 2002 to protect the struggling US industry, violate international trade rules.

The Geneva-based WTO said that the ruling of its Appellate Body, its highest trade court, would be released at 1530 GMT.

"The court rarely grants appeals. It can happen, but the expectation is that it will not," said one trade diplomat.

If the US loses, President George Bush must quickly withdraw the tariffs or face retaliation from the European Union, one of the trade partners involved, which is threatening to hit back with some $2.2 billion in duties on US goods.

The steel conflict is among a number of high profile disputes between the United States and the EU which are threatening to further sour the mood at troubled WTO talks to lower barriers to world trade.

The EU is already preparing a raft of sanctions against U.S. exports after winning another WTO tussle with Washington over exporter tax breaks, while the United States has taken aim at Brussels over its effective ban on genetically modified crops.

The United States argued that the steel duties, which were initially for up to 30 percent but which have been lowered, were needed to protect producers against a flood of cheap imports.

But a panel of WTO judges declared in July that Washington had failed to prove its industry was under real threat from the EU, Japan, South Korea, China, Brazil, Switzerland, Norway and New Zealand, countries hit by the measure.

It also found Washington guilty of

discriminating between partners by excluding members of the North American Free Trade Agreement (NAFTA) -- Mexico and Canada -- from the new duties.

The US administration, which faces presidential elections in November 2004, is already under attack from political opponents for allegedly pushing its free trade agenda to the detriment of U.S. jobs and the domestic economy.

A WTO defeat could also deepen resentment in the U.S. Congress, where

many are already critical of the trade body for recent decisions that have gone against Washington.

But US steel consumers have also been pressing for an end to the tariffs, which they say simply drive up costs at a time when world steel prices have been recovering sharply.

Both consumers and producers are important constituents in battleground states in the run-up to the November election, and the government has said that it is reviewing the tariffs, which were initially imposed for three years.