APRIL 2004

Byrd Amendment Dealt a Blow

Rep. Jim Ramstad (R-MN) introduced a bill (HR 3933) that would repeal the Continued Dumping and Subsidy Offset Act - more commonly known as the Byrd Amendment. Ramstad - a member of the House Ways and Means Trade Subcommittee - said he introduced the legislation in response to a Congressional Budget Office (CBO) report and the WTO ruling that the provision was an illegal subsidy. Ways and Means Trade Subcommittee Chairman Phil Crane (R-IL) is an original co-sponsor of the bill.

The CBO report stated that the law is harming the US economy and that it encourages more antidumping and countervailing duty trade cases. The report was drafted in response to a request from House Ways and Means Committee Chairman Bill Thomas (R-CA).

The report cites the following three reasons why the Byrd Amendment distorts trade and harms the US economy:

1. CDSOA distributions encourage the filing of more antidumping and countervailing duty cases, resulting in more duties that on balance harm the economy;

2. CDSOA distributions subsidize firms receiving them, preventing resources from flowing to higher-value activities in other firms and industries; and

3. CDSOA distributions increase the private and public cost associated with the operations and implementation of the laws. They also discourage settlement of cases by US firms, which has mixed effects on the economy.

In a hearing before the House Ways and Means Committee USTR Robert Zoellick responded to Mr. Ramstad's question of whether the Administration supported repeal of the Byrd Amendment as follows:

"The answer is yes, Mr. Ramstad. And as I mentioned, I'm glad you're drawing this to people's attention because there's going to be a hearing to arbitrate the amount that will be completed by about June, and shortly after that about nine countries will be able to start to retaliate against American exports...I will say one other thing, Mr. Ramstad, that may also help you and Mr. Crane on this. Mrs. Snowe on the Senate side also talked about perhaps having those revenue go to some of the issues related to worker issues and that's an issue that if the Congress finds it easier to pass, that's something that we could work with you on. I'd certainly be willing to try to talk to my colleagues about that as well."

Fiscal year 2003 disbursements as of March 1, 2004 are approximately $190 million. Currently US Customs is withholding disbursement of an additional $50 million pending the outcome of a court case. Customs had processed more than 2200 claims during fiscal year 2003.

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