WTO Formally Authorises Sanctions Against US Over Byrd Amendment

by Ulrika Lomas, for LawAndTax-News.com, Brussels

30 November 2004

The European Union and six other World Trade Organisation members (Brazil, Canada, India, Korea, Japan and Mexico) on Friday received authorisation from the WTO to impose retaliatory measures on the United States for failing to bring its legislation into conformity with its international trade obligations. This was a formal step, necessary before retaliatory measures could be imposed.

Under the disputed Byrd amendment, introduced in 2000, overseas firms which sell their products at below cost price in the US can be fined by the government, with the money going to the US firm or firms which initially made the anti-dumping complaint.

The EU and other aggrieved WTO members have argued for several years that such a regime permits illegal subsidies for the industries in question, and is therefore incompatible with WTO rules. The Organisation itself came out in support of this view in 2002, ruling the Byrd amendment illegal.

The sanctions to be imposed will take the form of additional import duties on wide variety of US products from an indicative list approved by the WTO. Affected items include machinery, foodstuffs, textiles and paper products.

If the US does not bring its legislation into conformity with its international obligations, the WTO member states intend to impose the retaliatory measures in early 2005.

Recommended