The United States and the European Union reached an agreement on Saturday that lifts the immediate threat of a trade war

The United States and the European Union reached an agreement on Saturday that lifts the immediate threat of a trade war over a multibillion dollar U.S.tax break scheme for exporters. The agreement, hammered out in several days of talks between EU and U.S. officials in Brussels, postpones - possibly until the middle of next year -- threatened EU sanctions in a dispute which could hit at least $4 billion of U.S. exports. EU Trade Commissioner Pascal Lamy said the agreement showed the wish of both sides to handle trade disputes ``in a pragmatic and non-confrontational manner.'' The agreement does not resolve the transatlantic dispute over the U.S. Foreign Sales Corporation (FSC) scheme. But it should put the politically sensitive issue on the backburner during the campaign for the U.S. presidential election on November 7. Under the FSC scheme, the United States gives billions of dollars a year in tax breaks to big exporters like Boeing Co.and Microsoft Corp. through offshore subsidiaries in tax havens such as the Virgin Islands, Barbados or Guam.The World Trade Organization ruled earlier this year that the program, which covers hundreds of billions of dollars of exports, was an illegal export subsidy and gave Washington until October 1 to change it.