GENEVA (Reuters) - The World Trade Organisation's top court backed the European Union on Wednesday in its challenge of a U.S. method for dealing with unfairly priced imports, confirming a series of previous rulings.

The European Union launched the appeal even though it won the original case in October, because the original panel refused to rule on some instances challenged by Brussels. The United States subsequently also appealed.

The case had attracted attention as an example of a growing rift between the WTO's dispute panels and its Appellate Body over the extent to which zeroing can be permitted under international trade rules.

And with the economic crisis fuelling fears of protectionism which could deepen the world's recession, trade remedies such as anti-dumping measures to tackle cheap imports are coming under added scrutiny by both governments and trade lawyers.

In a 166-page report, the Appellate Body overturned many reservations of the original dispute panel, and recommended that the United States bring the measures into line with trade law.

International trade rules allow countries to impose duties on imports that are sold for less than they cost at home, if they are found to damage businesses in the importing country.

These anti-dumping duties are based on the difference between the price in the exporting and importing markets.

The United States ignores, or treats as zero, examples where the price is actually higher in the United States than in the exporting country. Critics say this artificially inflates the anti-dumping duty, putting up a higher barrier to trade.

The present case, launched in October 2006, involves U.S. anti-dumping measures against imports of European ball bearings, steel products, pasta and chemicals.

The United States now accepts that zeroing is inadmissible in new anti-dumping investigations, and did not contest EU arguments involving investigations into imports of chemicals from Finland, Netherlands, Spain and Sweden.

But it argues that zeroing should be allowed in reviews of its existing anti-dumping measures, and is pushing in the WTO's Doha round to have zeroing explicitly recognized as permissible.