Brazil, Canada, the European Union, India, South Korea, Japan and Mexico obtained formal authorization from the World Trade Organization to impose punitive tariffs on US exports until the US Congress repeals the Byrd Amendment. These sanctions would be relatively small in scale compared to other disputes - just over $100 million, compared to $4 billion the WTO authorized in the disputer over the foreign sales corporation law - and likely would be imposed early in 2005. The WTO backed claims that the amendment breaks trade laws by punishing exporters to the US twice because they are first fined, and then those fines are passed on to their competitors. The USTR response: "We have already notified the WTO that we intend to comply. We are currently working with Congress to bring the US into compliance, and we will continue to consult with our trading partners on these efforts. Complex issues like these often take time, for example, the EU has needed over three years to come into compliance with a separate dispute on bananas." Many on the Hill believe that the sanctions - which could be imposed on products ranging from corn to footwear to mobile homes - are not likely to create any great impetus in Congress for repeal, especially since 70 senators last year wrote the Administration in support of the Byrd Amendment. A Senate Democratic source said a repeal of the Byrd Amendment can pass only if it is paired with proposals to strengthen US trade law because some lawmakers would view repeal as a weakening of our trade laws. One frequently mentioned trade law change would allow the payment of duties to be counted as a cost to foreign producers when calculating dumping margins. That change would significantly inflate the eventual antidumping duties paid by foreign exporters who engage in unfair trade practices. Attempts in the 108th Congress to fix the problem never got off the ground. Rep. Jim Ramstad (R-MN) introduced legislation in the House that was a straight repeal of the Byrd law, but it failed to get much support from his colleagues. Sen. Olympia Snowe (R-ME) authored a bill that would repeal the law, but direct the duties to communities that suffer the impact of unfair trade, rather than pass them on to individual companies. That bill gained some interest, but did not move through the legislative process. The WTO ruled that the eight co-complainants could each hit the US with retaliatory measures equal to 72% of the total Byrd Law disbursements made on each country's exports. Exact values have yet to be determined, but trade officials have said they could amount to more than $150 million a year. More than $800 million has gone to US firms since 2000, and a new round of payouts which started Oct. 1 could total $290 million. One complicating factor is that US lumber producers are eager to pocket the proceeds from $2.5 billion in duty deposits that are being held pending the outcome of litigation in the US-Canada lumber dispute. In fiscal year 2003, the US reported the distribution of about $25 million in trade remedy duties to US companies that supported trade remedy cases against EU producers, which would mean the EU is able to implement retaliation worth some $18 million based on the WTO formula. Japan would come in second. Other countries would be authorized smaller levels of retaliation, including Brazil, which could impose about $1 million in tariffs on US imports. Mexico is looking at imposing $2.9 million in sanctions, while India could implement $1.44 million in new tariffs, and Chile would be able to impose $576,000 in retaliation measures.
 American Wire Producers Association |
