News Release

Pascal Lamy

No. 03/03
January 16, 2003

WTO APPELLATE BODY CONDEMNS THE “BYRD AMENDMENT”
THE MUST NOW REPEAL IT 

The WTO Appellate Body has just confirmed that the US "Byrd amendment," which directs the US government to distribute the collected anti-dumping and anti-subsidy duties to the US companies that brought the cases in the first place, is incompatible with WTO rules. EU Trade Commissioner Lamy welcomed the Appellate Body findings: "The EU and 10 other countries had maintained that this measure clearly flies in the face of the letter and the spirit of WTO law. This was our conviction from the outset and I am glad that the Appellate Body has now clearly and definitively condemned this measure. We now expect the to act quickly in order to repeal the Byrd amendment." 

Under the Continued Dumping and Subsidy Offset Act of 28 October 2000, (also known as the Byrd amendment), the US government distributes the anti-dumping and anti-subsidies duties to the US companies that brought forward the cases. Offset payments are paid to cover certain expenses (such as investment in manufacturing facilities and acquisition of technology) incurred after the imposition of the anti-dumping and anti-subsidy measures for the production of the product subject to the measures. In the first annual distribution in January 2002, almost US $207 million were distributed, mostly to steel producers. More than US $270 million are available for distribution this year.  

This law raised immediate and widespread concerns. It was a first time in the history of the WTO that so many Members contested the compatibility of a legislation to the WTO obligations: 11 members requested the establishment of a panel (Australia, Brazil, Canada, Chile, EU, India, Indonesia, Japan, Korea, Mexico and Thailand) and 6 others joined as third parties supporting the complainants (Argentina, Costa Rica, Hong Kong, China, Israel and Norway).  

Released on September 16, 2002, the panel report recommended the repeal of the Byrd amendment after upholding the key arguments presented by the 11 complainants. The law was held an illegal response against dumping and subsidisation. Offset payments constitute a remedy in addition to the imposition of an anti-dumping or anti-subsidy duty, and this remedy is not envisaged in the WTO legislation. Once dumping or subsidisation has been established, the offset payments flow automatically and confer a competitive advantage to the US industry, which may be eliminated only if dumping or subsidisation has first ceased.  

Following an appeal by the on October 18, 2002, the Appellate Body has today issued its report confirming the Panel's central finding that the Byrd amendment is WTO inconsistent because it is an illegal response to dumping or subsidisation.  

The decision of the Appellate Body is final, and the US now has to comply with it. Given the clear WTO inconsistency of the law itself and the very broad interests affected, the should repeal the Byrd amendment without delay.  

For more information:
http://www.wto.org/
http://europa.eu.int/comm/trade

Press Contacts:

Willy Hélin 202-862-9530

Wilfried Schneider 202-862-9523

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