The EU, alongside six WTO members – Brazil, Canada, India, Korea, Japan and Mexico – today received WTO authorisation to impose retaliatory measures against the US for failing to bring its legislation into line with its international trade obligations.
These measures will take the form of additional import duties on wide variety of US products from a list approved by the WTO that includes machinery, foodstuffs, textiles and paper products. The EU has urged the US to avoid retaliation by complying with its international obligations.
The Continued Dumping and Subsidy Offset Act of 2000 (the ‘Byrd Amendment’) mandates the distribution of anti-dumping and countervailing duties to US companies that brought or supported complaints against foreign companies that were accused of dumping cheap goods on US soil.
According to the EU, the Byrd Amendment creates an undue incentive for US industries to seek the imposition of duties on imported goods, improving their competitive position and assisting them in the form of cash payments. The WTO ruled that this constituted a double penalty on non-US competitors and ruled the Byrd Amendment illegal in January 2003.
A total of $231 million was distributed in 2001 and around US $330 million in 2002. Information published indicates that distribution for 2003 would amount to about US $240 million.
The EU said in a statement that if the US does not bring its legislation into line with its international obligations then the EU would impose retaliatory measures early in 2005.