Jan. 15, 2004 – Less than a month after missing a deadline to repeal a controversial anti-dumping law, the United States is now facing the possibility of massive retaliatory action from its major trading partners.
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On January 15, the European Union (EU), together with seven other nations, asked the World Trade Organization (WTO) for authorization to impose trade sanctions against the US. According to Reuters, the threat of penalties, which could run up to hundreds of millions of dollars per year, is designed to compel the US to revoke the Continued Dumping and Subsidy Offset Act of 2000.
The provision, also known as the Byrd Amendment, allows American companies to pocket anti-dumping duties from foreign competitors and has been ruled illegal under WTO standards.
Early last year, the WTO gave the US until December 27 to revise the Byrd Amendment following a September 2002 decision favoring the complaint of 11 member nations: the EU, Canada, Australia, Brazil, Chile, India, Indonesia, Japan, Mexico, South Korea and Thailand. According to a briefer from the Canadian government, the plaintiffs said the payments provided under the Byrd Amendment were incompatible with US obligations under WTO Agreements on Anti-Dumping and Subsidies and Countervailing Measures.
In a press release published on January 16, 2003 on a website hosted by the US State Department's Office of International Information Programs’ (usinfo.state.gov), the Bush administration said that despite its disappointment with the ruling it would seek to comply with its WTO obligations. Another press release dated February 3, 2003 put out on the same Web site disclosed that the budget proposal for fiscal year 2004 included a section calling for the repeal of the Byrd Amendment, which, it said, "provided a significant 'double-dip' benefit to industries that already gain protection from the increased import prices provided by countervailing tariffs."
The US Senate refused the proposal and handed a letter to the Bush administration signed by 68 of 100 senators stating support for the law, Bloomberg News reports.
The WTO disputes settlement body will hold a special session on January 26 to hear the retaliation request of the plaintiffs, three less than the number of original complainants. A WTO insider told Agence France-Presse that Australia, Indonesia and Thailand reached a separate agreement giving the US another year to cancel the measure. Canada said in a press release by its foreign affairs and international trade department that the group is seeking retaliation action most likely in the form of tariffs or the suspension of certain obligations under the WTO anti-dumping and subsidies and countervailing agreements.
US Trade representative John Veroneau says the government will fight the proposed sanctions, saying that the demand "does not appear to be based on actual harm to their exports." He says the US intends to send the case to arbitration, which could delay a decision for another 60 days. He added that the Bush administration will continue to work with the legislature to fulfill the WTO directive this year, Reuters reports.
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According to Reuters, steel producers, candle manufacturers, and ball bearing companies, among others have received about $710 million collectively from the past three years’ implementation of the Byrd Amendment. Bloomberg News reveals that ball bearing maker Timkin was the biggest winner in 2002 with a total of $126 million out of the $330 million payout.
