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Congress axes controversial Byrd Amendment tariff pay-out mechanism

WASHINGTON, DC - 02/02/06 - Congress repealed the Continued Dumping and Subsidy Offset Act - also known as the Byrd Amendment - on a close vote of 216-214 late yesterday.

Repeal of the Byrd Amendment was a provision of the Deficit Reduction Act of 2005 passed by the House of Representatives, which had already passed by the Senate.

Named for its primary sponsor, Sen. Robert Byrd (D-West Virginia), the amendment called for antidumping and countervailing duties to be distributed directly to US companies which were found to have suffered harm from "dumped" imports and supported a petition for import relief.

Prior to the Byrd Amendment, those duties were paid into the US Treasury. 

In January 2003, in a challenge brought by 11 WTO members and the European Union (EU), the WTO found that the Byrd Amendment breached the WTO Antidumping and Subsidies Agreements and its predecessor, the Generalized Agreement on Tariffs & Trade (GATT).  

The WTO granted the US until the end of 2003 to comply.

President Bush says he will sign the bill, which contains a delayed repeal of the amendment under a compromise reached between House and Senate conferees. Under that agreement, the repeal will be delayed for two years with Byrd Amendment distributions continuing for applications made prior to October 1, 2007.

According to sources, repeal will restore the affected duties to the Treasury, but will not affect the assessment of the duties against unfairly traded imports or will it affect the US vigorous enforcement of the underlying US trade remedy laws.

Since 2001, the Byrd Amendment paid out more than $1.26 billion to US companies affected by low-cost imports.

The total amount authorized varied year to year in proportion to the amount of duties distributed and, at present, is $110 million for the WTO member countries that brought the original complaint.

To date, three of those countries - Canada, Japan, and Mexico - and the EU have imposed retaliation on selected US exports.

Last week, the Government Accountability Office (GAO) reported nearly half the tariffs collected under the amendment went to just five US companies with more than $476 million of that amount going to just one corporation - the Timken Co., an Ohio-based ball bearing manufacturer, and several of its subsidiaries.

Several US business groups including the Washington, DC-headquartered Consuming Industries Trade Action Coalition (CITAC) are applauded the repeal of the amendment. 

"As recently as last month, many experts were saying we would never obtain congressional repeal of the Byrd Amendment during the current session," said CITAC Executive Director Steven Alexander.

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