JAPAN IMPOSES $51 MILLION IN RETALIATORY
TARIFFS AGAINST U.S. EXPORTS; CITAC URGES CONGRESS
TO REPEAL THE BYRD AMENDMENT

Washington, DC — The Consuming Industries Trade Action Coalition (CITAC) urged Congress to take up repeal of the Byrd Amendment (formally known as the Continued Dumping and Subsidy Offset Act of 2000) when it returns from recess following the announcement today by the Japanese government that U.S. products will be subject to retaliatory tariffs beginning September 1, 2005 because of Congress' failure to repeal the law.

The World Trade Organization (WTO) ruled the Byrd Amendment in violation of U.S. trade obligations last year, clearing the way for retaliatory sanctions unless the U.S. repeals the law. Japan and seven other WTO member countries are authorized by the WTO to retaliate against the United States. Japan will impose a 15% duty on steel imports, targeting products such as ballbearings and airplane parts — which could amount to tariffs worth as much as $51 million. Japan's action follows the European Union's and Government of Canada's decision to impose duties, which began on May 1, 2005. The EU imposed a 15% duty on various types of paper, clothing fabrics, footwear, and machinery – amounting to tariffs worth approximately $28 million, and Canada imposed like duties on cigarettes, oysters and live swine worth $14 million.

"With Japan's announcement, the U.S. now faces a total of close to $100 million in retaliatory tariffs due to the Byrd Amendment," said Steve Alexander, CITAC Executive Director and President of lobbying firm The CMR Group. "While more and more U.S. exports will be hit by tariffs as a result of Congress' failure to repeal the law, CITAC is calling for Congressional action because this law is simply bad for the U.S. economy. The Byrd Amendment is a blatant subsidy to a very few companies that, far from assisting American manufacturing, actually undermines it. Most American manufacturers do not benefit from the Byrd Amendment. In fact, more than half the Byrd Amendment payments in 2004 went to only nine companies, and more than 80 percent of the payments went to only 44 companies."

"The Byrd Amendment provides a double hit to American manufacturers who use products subject to antidumping and countervailing duties,” said CITAC Counsel Lewis Leibowitz. "American companies are the ones that pay these duties, and because of the Byrd Amendment, they have these duty payments transferred to their U.S. competitors. Therefore, part of an industry is taxed to subsidize another part of that industry."

The Byrd Amendment doles out monies to companies that petitioned or supported antidumping and countervailing duty actions, while other duties are distributed to the U.S. Treasury. American producers of steel, lumber, candles, pasta, seafood, ball bearings and other products have reaped hundreds of millions of dollars in Byrd handouts from the federal government at the expense of American consuming industries over the past several years. Last year alone, $284 million was doled out in Byrd monies (list available here).

CITAC is urging support for HR 1121, a bill sponsored by Reps. Jim Ramstad (R-MN) and Clay Shaw (R-FL) that would repeal the Byrd amendment. CITAC launched a Byrd Amendment Working Group, a multi-industry cooperative effort by U.S. companies impacted by the higher duties and by potentially significant retaliation against U.S. exports. The Group is focusing on repealing the Byrd Amendment as soon as possible.

CITAC is a trade organization headquartered in Washington , D.C. with the primary objective of ensuring that manufacturers in America have access to reliable supplies of globally-priced materials necessary for those industries to compete in the world economy.