US Faces WTO Pressure to Repeal Trade Measure Thu January 16, 2003 04:43 PM ET By Doug Palmer
WASHINGTON (Reuters) - The United States faced pressure on Thursday from the World Trade Organization to repeal a controversial trade protection program that has paid out more than $500 million to American steel companies and other firms over the past two years. The WTO appeals body in Geneva ruled that the United States was in violation of world trading rules with the so-called Byrd amendment that requires the Customs Service to distribute the anti-dumping duties it collects to the U.S. companies that complained of unfair trade practices. U.S. steel and ball bearing companies are among the biggest beneficiaries. Although the U.S. Trade Representative's office said the United States would comply with the ruling, it stopped short of saying it would ask Congress to repeal the popular program -- as demanded by European Union Trade Commissioner Pascal Lamy. "We are reviewing the report to assess the best compliance options and will discuss these with the (House) Ways and Means Committee and the (Senate) Finance Committee and all other interested members of Congress," USTR said in a statement. Senate Finance Committee Chairman Charles Grassley, an Iowa Republican, issued a similarly couched statement, while expressing disappointment with the ruling. "I'll work with the administration and my colleagues before deciding next steps," Grassley said. "Of course, we need to comply with our WTO commitments, win or lose." Democrats, including the senior West Virginia senator for whom the provision is named, said the WTO had no right to tell the United States how to use the money raised by the anti-dumping duties. "Contrary to the WTO's findings, the Byrd Amendment is fully consistent with our international obligations," Sen. Robert Byrd said. "It does not violate any agreement; rather, it is based on a concept that is not addressed by WTO agreements." Congress passed the Byrd amendment -- officially known as the Continued Dumping and Subsidy Offset Act -- in 2000 over the advice the former Clinton administration, which warned it would increase tensions with the EU and other trading partners. The measure allows companies that have persuaded the federal government to impose anti-dumping or countervailing duties on "unfairly" priced imports to receive the money raised by those duties. Customs paid out $329 million to companies under the program in 2002, up from $207 million in 2001. Previously, funds raised by duties went into the general treasury. Congressional and industry sources have said the Bush administration could propose a repeal of the Byrd amendment in its upcoming 2004 budget. That would please the EU and other countries including Australia, Brazil, Canada, India, Japan, South Korea and Mexico that brought the case to the WTO. "In the end, this (WTO panel) decision may not matter much -- as I suspect there is little support in Congress for implementing it," said Montana Sen. Max Baucus, who is the top Democrat on the Senate Finance Committee. Rep. Sander Levin, a Michigan Democrat who serves on the Ways and Means panel, said he would oppose any effort to repeal the Byrd amendment. Instead, the United States should pursue negotiations on the issue in the WTO, he said. A spate of unfavorable WTO rulings -- including a multibillion-dollar case brought by the EU over U.S. tax breaks for exporters -- are eroding U.S. support for the WTO, Levin said.
