MEXICO TO IMPOSE $21 MILLION IN RETALIATORY TARIFFS AGAINST
U.S. EXPORTS; CITAC SAYS BYRD AMENDMENT MUST BE REPEALED

Washington , DC – The Consuming Industries Trade Action Coalition (CITAC) today renewed its call on Congress to repeal the Byrd Amendment upon return from August recess after the announcement that Mexico will impose retaliatory duties on U.S. exports because of the failure of Congress to repeal this law. Mexico will impose retaliatory tariffs on $20.9 million in three product categories effective August 18.

In 2002, the World Trade Organization (WTO) ruled that the Byrd Amendment (formally known as the Continued Dumping and Subsidy Offset Act of 2000) violates U.S. trade obligations, clearing the way for retaliatory sanctions by eight WTO member countries. The WTO later authorized eight countries to retaliate based on the amount of Byrd Amendment distributions by the U.S.

Mexico will impose a 30% duty on dairy products, including baby formula; a 20% duty on wine; and, 9% duty on candy and chewing gum. Mexico's action follows that of Japan, the European Union and the Canada in imposing duties on the U.S. this year because of the Byrd Amendment. Total retaliatory tariffs from these countries now amount to nearly $114 million.

“Mexico's imposition of retaliatory tariffs adds fuel to the fire,” said Steve Alexander, CITAC Executive Director and President of lobbying firm The CMR Group. “Mexico is the fourth WTO member, after the European Union, Canada and Japan, to impose retaliatory tariffs because of the failure to repeal the Byrd Amendment. In addition to hurting U.S. exporters, American manufacturers and retailers are seriously harmed from the Byrd Amendment – they must pay the duties and then see these payments transferred to their U.S. competitors because of Byrd. How could a rational system of trade laws allow a few American companies to be subsidized at the expense of others?”

He continued, “More than half of the Byrd Amendment payments in 2004 went to only nine companies, and more than 80 percent of the payments went to only 44 companies. This special interest legislation must be repealed and CITAC will continue working to educate our lawmakers and the public on the damage this Amendment is causing.”

The U.S. Dairy Export Council has said Mexico's 30% tariffs on dairy products will harm exporters of $160.4 million in business the U.S. conducted with Mexico in 2004. Already in the first five months in 2005, U.S. dairy exports to Mexico were valued at $103.2 million.

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, ball bearings, lumber, candles, pasta, seafood 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 of recipients available here).

Earlier this year, CITAC launched the Byrd Amendment Working Group, a multi-industry cooperative effort led by U.S. companies impacted by the Byrd Amendment duties and by foreign retaliation against U.S. exports. The Group is supporting HR 1121, a bill sponsored by Reps. Jim Ramstad (R-MN) and Clay Shaw (R-FL) that would repeal the Byrd amendment.

CITAC is 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.