The US House of Representatives is expected to vote today on an export-tax reform bill that must be approved this week to delay threatened European Union trade sanctions until next summer, congressional aides said yesterday.

The EU has threatened to impose sanctions by February if Congress does not repeal the Foreign Sales Corporation (FSC) programme that doles out billions of dollars in tax breaks to US exporters each year. "We have a deadline of Thursday," House Majority Leader Mr Dick Armey told reporters.

A spokeswoman for the House Ways and Means Committee said the FSC bill was scheduled for action today. Congress recessed for last week's presidential and congressional elections after missing an earlier November 1st deadline to pass the legislation.

In February, the World Trade Organisation ruled the FSC was an illegal export subsidy, handing the EU a major trade victory. The EU had given the United States until November 1st to repeal the FSC, but extended that deadline until this Friday.

Although the EU has threatened to challenge any US moves in the complicated trade dispute, saying the new US legislation may be as bad as the FSC, action by Congress this week would buy US negotiators time and delay costly EU sanctions on American exports until at least next June.

The EU must begin proceedings by Friday or it forfeits its right under World Trade Organisation rules to do so.