- The Washington Times - Monday, September 26, 2005

Five U.S. companies are collecting almost half the payments generated by a law meant to protect all American producers from unfair foreign competition, a government report said yesterday.

Despite the uneven distribution of about $1 billion and a ruling by the World Trade Organization (WTO) that it is illegal, the law remains popular with lawmakers.

The law, formally called the Continued Dumping and Subsidy Offset Act (CDSOA) but better known as the Byrd amendment, funneled $395 million in three years to the Timken Co., a Canton, Ohio, manufacturer of industrial bearings, and its wholly owned subsidiaries Torrington and MPB, according to the report by the Government Accountability Office (GAO).

Candle-light, a Cincinnati candle maker, received $57 million. Zenith Electronics Corp., the Indianapolis subsidiary of South Korea’s LG Electronics, received $33 million. The GAO, Congress’ investigative watchdog, said 765 other companies split the remaining $540 million paid out from 2001 through 2004.

“The GAO report reveals that the CDSOA has created a millionaires’ club of very few corporations which receive tens to hundreds of millions of dollars. The report recognizes that domestic competitors of these lucky recipients are harmed by this unfair and unwarranted subsidy,” said Rep. E. Clay Shaw Jr., Florida Republican.

The Byrd amendment allows U.S. companies to complain that foreign competitors are selling their products below cost in the United States. If they convince the U.S. government that is the case, duties are slapped on the foreign goods and the revenue is handed over to the firms that brought the complaint.

Timken said it merely punishes foreigners who are not complying with U.S. law.

“The focus here, Timken’s focus, is that the dumping should cease. That’s the intended benefit of this legislation,” said Jeff Dafler, a company spokesman.

Before the law, named for Sen. Robert C. Byrd, the West Virginia Democrat who attached it to a broader bill in 2000, the money would go to the U.S. Treasury rather than the companies that filed a complaint.

The Bush administration; Mr. Shaw; Sen. Charles E. Grassley, Iowa Republican; and a handful of other lawmakers want to repeal the law, but they are in the minority.

More than two-thirds of the Senate wrote a letter to President Bush in 2003 defending the law as a way to allow domestic producers injured by unfair foreign trade to invest in their own companies and workers.

“There is no support for repealing or modifying CDSOA in the U.S. Congress,” Mr. Byrd and Sen. Mike DeWine, Ohio Republican, wrote to colleagues in April.

Since then, the WTO ruling that the law violates international rules has started to bite as trade partners retaliate. Opponents of the Byrd amendment are trying to gather support for a repeal.

Canada, the European Union, Mexico and Japan have imposed duties on U.S. products, including oysters, wine, dairy products and candy. Brazil, Chile, India and South Korea are authorized to imposed punitive tariffs but have not done so.

The WTO has authorized the eight parties to impose $134 million in duties on U.S. exports.

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