WTO authorizes retaliation on US Exports by seven countries and European Union
The Consuming Industries Trade Action Coalition (CITAC) said today that it is imperative that the US repeal the Byrd Amendment before US exporters face imminent retaliation on goods estimated at more than $150 million a year by the European Union, Canada, Japan, and five other countries.
The move comes as a result of Nov. 26th’s World Trade Organization (WTO) Dispute Settlement Body decision authorizing the imposition of sanctions by US trading partners for the US’s failure to repeal the “Continued Dumping and Subsidy Offset Act” (CDSOA)—known as the “Byrd Amendment”—which mandates distribution of antidumping and countervailing duties to companies that have petitioned for trade protection and other supporters of the petition. Two years ago, the WTO declared that the Byrd Amendment violated US international trade obligations.
The European Union has listed 78 US products to be slapped with duties. Canada has announced 100% duties on US products ranging from dried peas, mittens and pearls, to softwood lumber products such as particle board, plywood and chemical wood pulp. Japan has also submitted a retaliation list to the WTO where steel, textile and some agricultural products predominate. Korea and India have named agricultural and seafood to their lists. Brazil has not published a list. Duties from most or all of the countries are expected to go into effect early next year.
“Congress must take swift action to end the Byrd Amendment to bring the US in line with global trade rules and stop the retaliation on hundreds of US goods,” said Jon Jenson, CITAC President. “The Byrd Amendment forces American consumers to foot the bill for American companies who file trade cases. The amounts of money given to undeserving recipients is staggering, and clearly encourages too many of these cases that go on too long. We hope Congress fully complies with the WTO ruling soon, both to help American consumers and to protect US exporters from retaliation.”
“CITAC’s goal is to secure conformity of US law with WTO requirements in 2005,” said CITAC Counsel Lewis Leibowitz, who is also a partner at Hogan & Hartson. Some in Congress have said that any nation is ‘free’ to distribute revenues as it sees fit [referring to Byrd Amendment distributions]. This simply isn’t true. The Subsidies Agreement restricts the ability of WTO members to distribute government revenues if they distort trade. And the WTO found—correctly, we believe—that the Byrd Amendment distorts trade.”
“For four years, the Byrd Amendment has distorted trade, provided an incentive for filing trade petitions and perpetuated trade restrictions on products that are in short supply in the US or not made here at all,” continued Leibowitz.
He explained that American producers of steel, lumber, candles, pasta, seafood, ball bearings and other products have reaped hundreds of millions of dollars in Byrd handouts from the federal government at the expense of American consuming industries over the past several years. “The government is rewarding companies for not competing in the global marketplace. What’s worse, the Byrd funds are going from the pockets of American consuming industries willing to compete in the global marketplace to those companies who seek federal protection from competition.”
The Congressional Budget Office (CBO) earlier this year found that the Byrd Amendment harms the U.S. economy and encourages more antidumping and countervailing duty trade cases. CBO estimates that Byrd distributions to US companies who file successful trade cases will total more than $3.8 billion by 2014—all paid for by other US companies that must pay the import duties.
Duties from most or all of the countries are expected to go into effect early next year if the amendment is not repealed by the US Congress.
“This retaliation is the direct result of the unwillingness of some in Congress to consider the welfare of the entire nation as well as the global trading system,