News Release
Pascal Lamy
No.
6/04
January 15, 2004
US BYRD AMENDMENT DISPUTE: EU REQUESTS AUTHORISATION
TO APPLY SANCTIONS AGAINST US
The
deadline for the US to bring the
Byrd amendment into conformity with WTO rules expired on 27 December 2003.
Given the lack of compliance from the US, the EU has today requested WTO authorisation
to impose sanctions. The move is necessary to safeguard EU rights to retaliate,
thus defending the interests of EU exporters affected by this measure. The so-called
Byrd Amendment mandates the distribution of anti-dumping and anti-subsidy duties
to the companies that have brought the case in the first place and was ruled illegal
by the WTO's Appellate Body in January 2003. EU
Trade Commissioner
Pascal Lamy commented: "The Byrd amendment has raised widespread concerns
from the outset as evidenced by the large number of complainants in this case.
Trade defence instruments are a legitimate tool, but they have to follow WTO rules.
It is clear that the Byrd Amendment is a WTO-incompatible response to dumping
and subsidisation and must therefore go. I hope the US will now take action to
remove this measure, thus avoiding the risk of sanctions.
The
EU has requested to the WTO the authorisation to apply sanctions in the dispute
over the Continued Dumping and Subsidy Offset Act of 28 October 2000.
This
legislation, also known as the Byrd amendment, was definitively condemned
by the WTO in January 2003 and the United States was given until 27 December 2003
to bring its legislation into conformity with its obligations. This deadline passed
without action from Congress to repeal the measure.
So
the EU is now seeking the authorisation to "retaliate," i.e., to impose
an additional import duty on products originating in the US. The EU proposes that
the level of the duty should be linked to the disbursements made to US producers
under the Byrd amendment during the previous year. It would therefore vary
every year according to the level of payments made in the latest annual Byrd distribution.
The amount of the sanctions and the list of specific products targeted by the
sanctions, which will not be affected by the yearly adjustment of the additional
duty rate, will be defined at a later stage.
Brazil,
Canada, Chile, India, Japan, Korea and Mexico who are co-complainants in this
dispute are also requesting the authorisation to apply sanctions against the US.
All
requests are inscribed on the agenda of the meeting of the Dispute Settlement
Body on 26 January 2004. If the United States contests the validity of the requests,
the matter will be referred to arbitration which will normally be completed within
60 days.
Background
Presented
as an amendment to the Appropriation bill for agriculture by the US Senator Byrd
(so-called Byrd amendment), the Continued Dumping and Subsidy Act mandates
the distribution of the anti-dumping and anti-subsidy duties to the companies
that have brought the case in the first place. The payments reimburse certain
expenses (such as investment in manufacturing facilities and acquisition of technology)
incurred for the production of the product subject to the measures.
This
legislation drives exporters into financing their US competitors and provides
a direct financial reward from filing anti-dumping or anti-subsidy complaints.
A total $231 million was distributed in 2001 and around $330 million in 2002.
The main recipients have been in the ball bearing, steel and other metal, household
item and food (in particular, pasta) sectors. Though details are not yet available,
information published so far indicates that the new round of distribution, started
on 1 October 2003, would amount to about $240 million.
This
Byrd amendment raised immediate concerns among WTO members. For the first
time in the history of the organisation, 11 members (Australia, Brazil, Canada,
Chile, EU, India, Indonesia, Japan, Korea, Mexico and Thailand) joined up to challenge
the WTO compatibility of the legislation. The Panel in September 2002 and the
Appellate Body in January 2003 confirmed that the Byrd amendment is an
illegal response to dumping and subsidisation.
Despite
calls of the US administration to repeal the Byrd amendment, US Congress has not
yet implemented the WTO ruling.
For
more information:
http://europa.eu.int/comm/trade
http://www.wto.org/
