- The Washington Times - Friday, December 20, 2002

Hundreds of U.S. companies will receive notices of cash infusion just in time for Christmas, compliments of some of their toughest foreign competitors.

The U.S. Customs Service plans to send out letters today to 1,200 American firms notifying them of how much money they can pocket from tariffs on foreign companies that sell their products in the United States.

These tariffs, a kind of tax, are imposed on goods from overseas when companies here complain, and the U.S. government agrees, they face unfair foreign competition.

Now in its second year, the "continued dumping and subsidy offset" program will allocate $329 million to most of the U.S. companies that filed claims with customs. Before 2001, the money went into the Treasury, not directly to the private sector.

"I think it's positive for the industry. We demonstrate that we've been injured by foreign companies. It's not 100 percent restitution, but it offsets some of the damage," said Ray Selle, chief financial officer of Monterey Mushrooms, a Watsonville, Calif.-based company that sells fresh and processed fungus.

Monterey Mushrooms filed a claim last year, the program's first, and got about $90,000 in compensation for unfair competition from Indonesian, Indian, Chilean and Chinese companies. It's not a make-or-break amount, but the company hopes to get about the same again this year, Mr. Selle said.

Before the program became law, Monterey Mushrooms had not bothered to complain officially about foreign competition. But the incentive cold, hard cash "absolutely" made the company more likely to file a claim, Mr. Selle said.

The money has a lot more companies filing. The number of claims rose to 1,200 in 2002 from 900 the previous year, and the award money increased from $329 million from $230 million, according to Jeff Laxague, the program's director at U.S. Customs.

The awards for the companies this year will range from hundreds of dollars to more than $60 million. It's quite an incentive, and therein lies a problem for the program.

The increase in claims and award money caused the agency some technical trouble and forced a delay in making final calculations and sending out the notifications , Mr. Laxague said.

And the Continued Dumping and Subsidy Offset Act of 2000 also known as the Byrd amendment for Sen. Robert C. Byrd, West Virginia Democrat, who steered it into law annoys foreign companies and governments because it goads Americans into filing claims against foreign products and rewards them directly.

In December 2000, the European Union and eight countries complained about this to the World Trade Organization. In September 2002, the WTO said that the act was not permissible and, in an unusually strong move, recommended that it be repealed.

The United States appealed the decision; the WTO's response is expected in January. In the meantime, Congress is sitting tight.

"The Byrd amendment is serving the purpose for which it was created, namely, to help injured U.S. industries recover from the harmful effects of dumping and unfair subsidies," Mr. Byrd said earlier this month. He blasted the WTO recommendation, saying it was meddling with Congress' authority to determine how U.S. tax dollars are spent.

Congress is not expected to consider the amendment again until after the WTO responds to the appeal, according to a source in the House of Representatives.

In the meantime, customs will dole out the cash.

Individual awards will not be made public until mid-January, after companies receive award notices, but Mr. Laxague said that the biggest industry beneficiary for 2002 will be ball-bearing manufacturers, and the biggest single company to benefit is a candle maker.

Bearing makers also won the heftiest industrywide awards last year.

"We thought the process was the appropriate result of enforcing U.S. trade laws," said Mike Johnson, vice president for communications at the Timken Co., a Canton, Ohio-based company that makes special alloy steels and bearings.

The company, which has manufacturing operations in 25 countries, got about $31 million from foreign competitors last year, Mr. Johnson said.

The large and small sums don't necessarily make their way to consumers. In the first place, tariffs help keep prices higher than they otherwise would be. In the second place, companies use the proceeds as they deem fit.

Timken, for example, used the money for research and development and to pay off debt. The decision keeps the company competitive and, in the long term, workers employed, Mr. Johnson said.

Customs said that Timken will win an award again, as will numerous steelmakers, agricultural firms, food companies and other manufacturers. And if the two-year trend continues, more companies are likely to look for financial relief with the program.

"It's not that difficult a process," Mr. Selle said.

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