The World Trade Organization (WTO) has ruled against a US law that creates a financial windfall for companies that successfully sue foreign businesses accused of dumping products in the US at unfair prices. A three-person WTO tribunal has concluded that the law violates nine provisions of trade agreements signed by the US. Further, the panel urged the US to repeal the law outright, rather than to modify it to be consistent with trade rules. The Bush Administration promised the US would appeal the decision to the WTO's review body. Sen. Robert Byrd (D-WV) authored the 20-month-old law. Otherwise known as the "Byrd Amendment," the provision made a major change to the incentives US companies had to file lawsuits that accuse foreign companies either of competing in the US with unfair government subsidies or of dumping products at prices below the cost of production. If they win, US companies get protection from imports often in the form of high tariffs. The revenue from the tariffs previously went to the federal Treasury. This provision channels that money back to the US companies that filed the cases. More than a dozen countries, including Brazil, Canada, Japan and those of the European Union, had challenged the law because they believed the practice amounted to an unfair subsidy. They argued that the amendment unfairly protected US companies by sheltering them behind tariffs and then letting them pocket the payments. Trade rules require governments to keep any duties collected, they argued. Even as the law was under attack at the WTO, the Treasury Department in December disbursed a total of $200 million to US companies for 2001, the first year the Byrd program was in effect. Despite this loss at the WTO, the US government still plans to distribute money under the program later this year to the tune of some $270 million.
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