- The Washington Times - Friday, December 19, 2003

The European Union is preparing to retaliate against the United States as the Bush administration tries to extend a deadline to comply with a World Trade Organization ruling against U.S. trade law.

The European Union, Canada, Japan and other governments in January won a case at the WTO that said the United States illegally gives money to American companies from their foreign competitors.

The deadline to comply expires Dec. 27 — “a deadline which will not be met since Congress has now closed down for the year,” the European Union said in a report released yesterday.

“We’ve discussed with the other participants extending that, and we are continuing to consult with Congress as we move forward. … That’s basically where we are,” said Richard Mills, spokesman for the U.S. Trade Representative’s office.

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.

Arancha Gonzalez, an EU spokeswoman, yesterday said the 15-nation bloc is preparing to retaliate against the U.S. trade law. She declined to say how much money the European Union intends to seek, and other nations involved in the complaint have not said whether they plan to seek damages.

The United States faces retaliation, usually tariffs that would block U.S. products from foreign markets, from several WTO disputes.

President Bush recently backed down on steel tariffs, but the administration and Congress still have not resolved the so-called foreign sales corporation dispute, which would lead to sanctions beginning in March, or another matter related to a 1916 trade law.

“The trend of U.S. non-compliance with the WTO … remains a priority area of concern for the EU,” the bloc said in a report.

The Byrd amendment is popular in Congress — 70 senators signed a letter to Mr. Bush urging him to maintain it.

The Byrd amendment kicks in when a U.S. company complains that a foreign-made product is unfairly sold below cost in the United States. 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.

Before the Byrd Amendment was written into law, that money would go to the U.S. Treasury.

The act affects a wide array of companies. Some of the biggest winners are steel manufacturers such as National Steel Corp., bearing makers such as Torrington and Timken Co., candle makers and seafood companies. Mr. Byrd has steadfastly defended the rule.

“If foreign trade partners play by rules they negotiated there is no penalty,” said Tom Gavin, a spokesman for Mr. Byrd.

This article is based in part on wire-service reports.

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