The Byrd That Won't Fly The Coop
WTO imposes penalties on US exports as Congress drags its feet on repealing the Byrd Amendment
GENEVA, Switzerland - 11/29/04 - In another broadside in an ongoing trade dispute between the US and the European Union, Japan and several other countries, the World Trade Organization (WTO) has levied punitive tariffs on a variety of US exports ranging from beer to heavy equipment in response to Congress' failure to repeal a four-year old law aimed at protecting US steel producers and other exporting companies.
Known as the Byrd Amendment for its backer, Sen. Robert Byrd (D-West Virginia), the 2000 law gives the US government the authority to redistribute anti-dumping duties to the US companies that allege dumping, or the selling abroad at less than the market price in the domestic market.
According to Washington, US companies gained about $561 million as a result of the law in 2001 and 2002.
But, the countries that brought the complaint to the 148-member WTO - Brazil, Canada, Mexico, South Korea, India and Chile, in addition to the EU and Japan - have challenged the US estimate saying that more than $800 million had been collected on foreign imports since the Byrd Amendment kicked in became law.
The complainant countries involved in the WTO decision have indicated that they would not enforce the tariffs immediately, though the European Commission did set a deadline of sorts.
"If the US does not bring its legislation into conformity with its international obligations the Brussels-headquartered EU would impose retaliatory measures early in 2005," the EU's executive arm said in a statement issued in Brussels.
The value of the sanctions hasn't been determined, but trade officials estimated them at more than $150 million a year. That compares with the $2 billion in sanctions the EU threatened in its successful bid to force the US to repeal the amendment last year.
Other products on the strategic target list include US-produced cod, whiskey, glassware, cigarettes, beer, mobile homes, heavy construction equipment, and industrial machinery.
Two years ago, the WTO ruled the Byrd Amendment violated international trade law saying that it punishes exporters to the US - first they are fined, then those fines are given to their competitors, said EU Trade Commissioner Pascal Lamy, when the EU first brought the issue to the WTO several years ago.
Washington was targeted by the sanctions request because the US Congress had not repealed the controversial amendment that the WTO had earlier condemned as incompatible with its rules - before a deadline of December 27, 2003.
The Bush Administration signaled it would accept the penalties short term, but also warned that the US would aggressively protect its own trading interests and expects fair treatment from the WTO.
"We've worked hard to comply with the WTO," President Bush said, speaking to reporters in Crawford, Texas. "It's important that all nations comply with WTO rulings."
The president said he has worked with Congress "to get in compliance," and "we expect the WTO as well to treat our trading partners as they treat us."
EU trade official Raimund Raith said Brussels wants the Bush Administration to "transmit this message to Congress" and defend "US credibility in the WTO."
But overwhelming Senate support for the Byrd Amendment makes changes unlikely.
Senate Finance Committee Chairman Charles Grassley (R-Iowa) said he was "disappointed but not surprised by the WTO ruling," criticizing how action on the amendment was implemented - by being inserted in an appropriations bill instead of going through the authorizing committee process.
"The fact that we are now subject to sanctions only underscores the need for quick congressional action," said Grassley, whose committee overseas international trade issues. "I intend to consult closely with my colleagues in determining the next steps."
The Consuming Industries Trade Action Committee, a Washington-based group representing manufacturers, farmers, retailers, and other businesses, has long been critical of the Byrd Amendment, saying it is "the equivalent of a tax on American consumers."
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