WTO Rules Against US Anti-Dumping Payouts

by Justin Gorringe, Tax-News.com, London

21 January 2003

Last week, a World Trade Organization panel rejected a US appeal against a ruling striking down a law - known as the Byrd amendment - which allows the US administration to pass on money collected through anti-dumping duties to the organisations that had demanded the duties be imposed.

The WTO said the law "is inconsistent with certain provisions of the WTO agreements on anti-dumping and on subsidies."

The Byrd Amendment was passed in October 2000. In its first annual distribution in January 2002, about $200m was paid out, mostly to steel producers. It is understood that about $270m is available for distribution this year, again mostly to steel producers.

Although the ruling does not impugn the legality of the anti-dumping duties themselves, those imposed on steel imports, which have presumably generated the money being paid out, are being attacked through the WTO by a number of nations.

A large number of countries had complained to the WTO about the Byrd Amendment, including the European Union, Australia, Brazil, Chile, India, Indonesia, Japan, South Korea, Thailand, Canada and Mexico. The complainants said that the law punishes exporters to the US twice because first they are fined and then those fines are handed to their competitors.

The European Commission welcomed the ruling. "The EU and 10 other countries had maintained that this measure clearly flies in the face of the letter and the spirit of WTO law," said European Trade Commissioner Pascal Lamy. "This was our conviction from the outset and I am glad that the WTO experts have now clearly and definitely condemned this measure," he said. "We now expect the US to act quickly in order to repeal the Byrd amendment."

The Japanese government also called for the US to comply swiftly with the ruling. Japanese trade minister Takeo Hiranuma said: "The Ministry of Economy, Trade and Industry strongly expects the US to implement the recommendation early."

The office of US Trade Representative Robert Zoellick said U.S. authorities were disappointed with the WTO decision but would continue to apply anti-dumping duties. "The United States will continue to vigorously enforce those laws to ensure that US industries, farmers, and workers are not forced to compete with unfairly traded imports," it said.

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