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January, 2005

REPEAL THE "BYRD AMENDMENT"

Background:

Formally known as the Continued Dumping and Subsidy Offset Act of 2000 (CDSOA), the Byrd Amendment annually funnels money collected from the imposition of antidumping (AD) and countervailing duties (CVD) from government coffers directly to companies that petitioned for those duties (more than $ 1 billion so far, with billions more waiting in the wings). The Byrd Amendment does not require that the funds be used for any particular purpose. The money is allocated based on a formula that includes ordinary business expenditures, assuring that large companies get more money than small ones.

The Byrd Amendment was inserted by Senator Robert Byrd (D-WV) in the Agriculture Appropriations Act of 2000 during Conference Committee action on the bill. The provision was not included in either the House or the Senate-passed versions of the bill. No committee of jurisdiction in either the House or the Senate reviewed it. President Clinton signed the bill on October 28, 2000, but protested the Byrd Amendment provision, recognizing that it violates common sense as well as U.S. international trade obligations.

The World Trade Organization (WTO) ruled the Byrd Amendment unlawful under the agreements on antidumping and subsidy measures. Repeal is the only method of fixing this violation; however, to date, Congress has not taken this step. The Bush Administration has called for repeal of the Byrd Amendment, describing it (accurately) as a corporate welfare program and bad economic policy. Canada, the European Union, Mexico and Japan have all retaliated against U.S. exports because of Congress's failure to repeal the Amendment.

Impact on Consuming Industries:

Many consuming industries rely on imports of raw materials or components to maintain global competitiveness. The Byrd Amendment provides a double hit on importers of products subject to antidumping and countervailing duties. They not only must pay these duties (which, because of the "retrospective" system of collection, are of uncertain amount) but also must see them transferred to their U.S. competitors. The Byrd Amendment encourages U.S. producers to file AD and CVD actions knowing full well they will be eligible for monetary distributions. U.S. companies in line to receive these payments have a clear incentive to include more products within the scope of cases, including products not even made in the United States. Consumers see cases filed because of the promise of Byrd money (such as the infamous shrimp case). Other cases include within their scope products not produced here, such as certain antifriction bearings (e.g., certain metric sizes and metallurgical requirements); and steel wire rod for "cold-heading" and manufacture of wire for tire cord.

The CITAC Solution:

Congress should repeal the Byrd Amendment in 2005. Repeal would do away with one of the most egregious current examples of corporate welfare, totaling more than $1 billion to date with no strings attached. Repeal would not affect the operation of the antidumping and countervailing duty laws, but would keep the revenue collected from such actions where it belongs — in the government's hands, to be spent on more urgent needs.

 

Byrd Amendment Distributions of $1 Million or More
Fiscal Year 2004

By Company:      
The Timken Company Bearings $52,673,229
  Lancaster Colony Corp. Candles   26,225,555  
  MPB Corporation Bearings   13,190,858  
  Micron Technology DRAMS   11,959,014  
  Emerson Power Transmission Corp. Bearings   11,644,319  
  International Steel Group Steel products   10,374,465  
  Home Fragrance Holdings Candles    8,424,904  
  Wellman Polyester staple fibers    7,885,970  
  United States Steel Corp. Steel products    7,123,402  
  AK Steel Steel products    6,835,892  
  Holcim US Inc. Cement    4,725,685  
  North American Stainless Steel products    4,703,744  
  Lafarge North America Cement    4,633,793  
  USEC, Inc. Uranium    4,401,004  
  Sanford Corporation Pencils    4,189,674  
  Meunch Creuzer Candle Co. Candles    4,029,537  
  Carpenter Technology Steel products    3,676,773  
  Maverick Tube Corp. Steel products    3,632,582  
  A. I. Root Company Candles    3,098,689  
  Reed Candle Candles    2,885,737  
  Goodyear Tire and Rubber Industrial belts    2,859,797  
  Ash Grove Cement Cement    2,822,221  
  Allegheny Ludlum Steel products    2,529,731  
  Gates Corporation Industrial belts    2,538,305  
  Lehigh Cement Cement    2,094,534  
  Wheatland Tube Steel products    1,873,823  
  Riverside Cement Cement    1,794,895  
  Lumi-Lite Candle Co. Candles    1,698,887  
  Maui Pineapple Canned pineapple    1,658,695  
  J&L Specialty Steel Steel products    1,513,297  
  Nucor Steel products    1,635,971  
  Columbian Home Products Cooking ware    1,487,194  
  Allied Tube and Conduit Steel products    1,395,333  
  ISPAT Inland Steel Steel products    1,635,971  
  Invista, SARL Polyester staple fiber    1,267,217  
  Dixon Ticonderoga Co. Pencils    1,113,853  
  McGill Manufacturing Co. Bearings    1,098,066  
  American Pasta Co Pasta    1,043,616  
  Candle and Baumer Candles    1,088,983  
  Cathedral Candle Candles    1,072,749  
  Sioux Honey Association Honey    1,068,405  
  New World Pasta Pasta    1,050,611  
  Meco Corporation Folding metal tables    1,050,611  
  Gerdau USA Inc. Steel products    1,027,833  
     

Total, Million Dollar Club by Company

$234,501,528
 
  Share of Total Distributions ($284,124,933)
82.6%
 

 

By Sector:  
Steel-containing products $80,509,017  
              of which, bearings                                                                               79,147,978
  Steel products   58,055,728  
  Candles   51,391,920  
  Cement   21,293,059  
  Food products   16,663,996  
  Computer chips   11,964,989  
  Polyester staple fiber     9,611,569  
  Pencils     6,731,272  
  Industrial belts     5,398,103  
  Softwood lumber     5,378,613  
  Uranium     4,401,004  
  Chemicals     2,239,671  
  Cooking ware     2,100,359  
  Axes and adzes     1,662,661  
  Automotive replacement glass     1,300,757  
  Iron-containing products     1,155,999  
  Folding metal tables     1,050,611  
       

Total, Million Dollar Club by Sector

$280,909,326
  Share of Total Distributions ($284,124,933)
98.9%
 

Source: The Trade Partnership from Customs and Border Protection data.

 

Total Byrd Amendment Disbursements to Date

Fiscal Year 2004
$284,124,933
Fiscal Year 2003
190,247,425
Fiscal Year 2002
329,871,464
Fiscal Year 2001
231,201,891
TOTAL, Year to date
$1,035,445,713

Source: Customs and Border Protection