- The Washington Times - Friday, June 13, 2003

The World Trade Organization yesterday gave the United States until the end of the year to revise a popular law that directs money to American companies from their foreign competitors.

The law, known as the Byrd Amendment for Sen. Robert C. Byrd, the West Virginia Democrat who wrote the measure, transferred $329 million to about 1,200 U.S. companies last year.

The WTO ruled in January that the act violates international trade rules and urged the United States to revise it. If the United States does not comply with the ruling by Dec. 27, the 15-nation European Union and the 10 other countries that brought the complaint could start the process to retaliate with trade sanctions after 30 days.

“We are currently working closely with Congress to bring the United States into compliance with WTO obligations,” said Richard Mills, spokesman for the U.S. Trade Representative’s Office.

“Under WTO rules it is up to the country involved to decide how to bring its laws into compliance,” Mr. Mills said. President Bush in his fiscal 2004 budget called for repeal of the act.

But Mr. Byrd and 67 of his colleagues in February sent a letter to Mr. Bush calling on him to support the Continued Dumping and Subsidy Offset Act of 2000, as it is formally known, despite the WTO ruling.

“In our view, the WTO has acted beyond the scope of its mandate by finding violations where none exists and where no obligations were negotiated,” said the letter, which was signed by 23 Republicans, 44 Democrats and one independent.

Mr. Byrd’s office had no comment yesterday on the latest WTO decision.

The act affects a wide array of companies, with the biggest winners being steel manufacturers such as National Steel Corp. and the former Bethlehem Steel Corp., bearing makers such as Torrington and Timken Co., candle makers, and seafood companies, according to figures from the Bureau of Customs and Border Protection.

Foreign-made pencils, aspirin, polyester fibers, stainless-steel cookware and food products, such as packaged mushrooms, were also singled out by U.S. companies, the bureau said.

Companies that were paid through the act will not have to give back this year’s awards, Mr. Mills said.

Although vigorously defended by beneficiaries, the system is not universally popular among U.S. companies.

The Consuming Industries Trade Action Coalition, which represents companies that import components to manufacture goods, formed a coalition last month to oppose the Byrd Amendment. The group said the act distorts trade, creates a subsidy and harms American consumers.

Mr. Byrd inserted the provision into the agriculture appropriation in 2000.

His amendment kicks in when a U.S. company complains that a foreign-made product is unfairly sold below cost, or dumped, in the United States, often because of government subsidies.

If the U.S. government agrees with the complaint, the foreign product is taxed at the border and the funds go to the company or companies that complained. Those companies do not have to account for how they spend the money.

Before the Byrd Amendment was written into law, that money would go to the U.S. Treasury and the U.S. industry would benefit because that foreign good would have to be sold at a higher price.

It is not clear how the law would be rewritten to comply with the WTO decision. A Republican aide said Congress is discussing and working out details of a revision or repeal for the act.

“We do have until the end of the year. It’s something we will work with the administration on,” said the aide, who asked not to be named.

Mr. Bush’s budget for fiscal 2004, which starts Oct. 1, calls for repeal, not a revision, of the act.

“While the administration does not believe that these payments are inconsistent with U. S. treaty obligations, repeal of the provision would allow the funds to be directed to higher priority uses,” the budget said.

The U.S. government had asked for more time to comply, until March 2004, while the complainants wanted the law repealed by the end of next month, according to yesterday’s WTO ruling.

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