- The Washington Times - Thursday, July 18, 2002

The World Trade Organization has ruled against a U.S. law that creates a financial windfall for companies that successfully sue foreign businesses accused of dumping products in the United States at unfair prices.

A three-person WTO tribunal has concluded that the law violates nine provisions of trade agreements signed by the United States. Unusually, the panel urged the United States to repeal the law outright, rather than to modify it to be consistent with trade rules.

Sen. Robert C. Byrd, the West Virginia Democrat who authored the 20-month-old law that distributes tariff revenue to U.S. companies, reacted with outrage to WTO's decision, which is likely to bring Congress under intense pressure to reverse course.

"The WTO has decided that it and not the U.S. Congress has the authority to determine how American tax dollars are spent," Mr. Byrd said in a statement.

Canada, which, with nine other countries, brought the case against what became known as the "Byrd amendment," greeted the news enthusiastically.

"This is very good news," said Canadian Minister for International Trade Pierre Pettigrew. "It will mean that the U.S. government will have to conform to international law by eliminating this unfair practice."

A U.S. official, speaking on the condition of anonymity, promised the United States would appeal the decision to the WTO's review body.

"We vigorously defended the Byrd amendment and we disagree with the panel's conclusions," the official said.

Mr. Byrd secured passage of the provision in October 2000 by attaching it to the conference report of a $70 billion agriculture appropriations bill through deft after-hours parliamentary maneuvering. After several Republicans left the conference committee room, Mr. Byrd whisked it through by a one-vote margin.

After an effort by committee chairmen, the House leadership and the Clinton administration to excise the Byrd amendment from the bill, it became law with President Clinton's signature.

The Byrd amendment made a major change to the incentives U.S. companies had to file lawsuits that accuse foreign companies either of competing in the United States with unfair government subsidies or of dumping products at prices below the cost of production. If they win, U.S. companies get protection from imports in the form of often high tariffs.

The revenue from the tariffs went to the federal Treasury.

Mr. Byrd's provision, supported by steel companies and other industries that use the laws heavily, channeled that money back to the U.S. companies that filed the cases. Opponents of the Byrd amendment, mainly businesses that buy steel to make other products, compared it to product liability laws, saying Mr. Byrd was boosting the likelihood of further lawsuits.

"The Byrd amendment gives U.S. businesses a vested interest in having their government impose duties, because they would get a direct cut," Mr. Pettigrew said.

Even as the law was under attack at the WTO, the Treasury Department in December disbursed a total of $200 million to U.S. companies for 2001, the first year the Byrd program was in effect. They included ball-bearing manufacturers, computer chip makers, and garlic and mushroom growers.

Despite the loss at the WTO, the U.S. government still plans to distribute money under the program later this year, a U.S. official said.


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