International Trade Law News

Published by Jacobson Burton Kelley PLLC

Today a World Trade Organization (WTO) arbitration panel announced the level of retaliatory measures that Brazil, Canada, Chile, the European Communities, India, Japan, Korea, and Mexico may apply on U.S. products as a result of the U.S. failure to repeal the Continued Dumping and Subsidy Offset Act of 2000, commonly known as the Byrd Amendment.

Following a lengthy legal and economic analysis, the three-member arbitration panel stated that Brazil, Canada, Chile, the European Communities, India, Japan, Korea, Mexico were each authorized to impose additional import duties on a list of U.S.-origin products, on a yearly basis, as long as the total value of trade does not exceed, in US dollars, the amount resulting from the following equation:

Amount of disbursements under [the Byrd Amendment] for the most recent year for which data are available relating to anti-dumping or countervailing duties paid on imports from the [complaining country] at that time, as published by the United States' authorities multiplied by 0.72.

The WTO's DSB determined on January 27, 2003 that the Byrd Amendment, which provides cash payments to U.S. companies that are petitioners in antidumping and countervailing duty cases, was a non-permissible action that was contrary to several articles of the GATT 1994, the WTO Anti-Dumping Agreement and the WTO Agreement on Subsidies and Countervailing Measures. The DSB stated that the U.S. must implement the recommendations of the DSB within "a reasonable period of time."

On June 13, 2003, a WTO arbitrator ruled that the "reasonable period of time" for the U.S. to implement the recommendations and rulings of the WTO Dispute Settlement Body (DSB) in this case was 11 months from the date of adoption of the Panel and Appellate Body Reports by the DSB. The U.S. was given until December 27, 2003 to bring the Byrd Amendment into conformity with its WTO obligations. Because the U.S. failed to modify or repeal the Byrd Amendment, on January 16, 2004 the complaining countries requested the authority to impose retaliatory tariffs greater than or equal to the amount of Byrd Amendment payments. On January 26, 2004, the U.S. advised the WTO that it objected to the level of propose retaliatory duties and the matter was referred to arbitration.

To date, the U.S. Congress has failed to modify or repeal the Byrd Amendment. In response to today's ruling, the Office of the U.S. Trade Representative stated that "the United States remains committed to resolving this issue in a way that promotes the competitiveness of American workers."

The text of the arbitrator's decisions can be found at the following Web site: www.wto.org/english/news_e/news_e.htm.