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FIRST AMENDMENT CRAWFISH BATTLE SHOWS "BYRD AMENDMENT"
CREATES INCENTIVES TO FILE DUMPING CASES

Washington, DC A first amendment legal battle raging in Cajun country doesn't involve the usual freedom of speech or religion issues but rather crawfish and a law that doles out millions of dollars to companies who file or support trade cases. While the case may not set Constitutional precedents, it does reveal the incentives created by the Continued Dumping and Subsidy Offset Act of 2000 ("CDSOA"), known informally as the "Byrd Amendment," for U.S. companies to file antidumping and countervailing duty cases because they can receive money down the road at the expense of customers.

The Byrd Amendment directs the U.S. Customs Service (now known as the Bureau of Customs and Border Protection) to distribute monies to companies that petitioned or supported antidumping and countervailing duty actions. In the last two years alone, the U.S. Government has paid approximately $560 million to U.S. companies under this law.

The Consuming Industries Trade Action Coalition (CITAC) recently established a CDSOA Reform Coalition calling for an end to the subsidization of trade cases through paying government money to trade case petitioners.

According to Inside U.S. Trade, PS Chez Sidney, a Louisiana crawfish processing company, filed a complaint with the U.S. Court of International Trade challenging the "Byrd Amendment." The complaint argues, "Industries affected by dumping should be able to collect Byrd funds even if they did not agree to support the industry petitions that led to antidumping and countervailing orders."

PS Chez Sidney is challenging the Byrd Amendment because it was not included in a $7.5 million payout by Customs as a result of a 1997 antidumping order on crawfish tailmeat imports from China. Inside U.S. Trade reports that, simply because PS Chez Sidney checked a box indicating the company "takes no position" on the petition, it was excluded from the payout. PS Chez Sidney filed a brief with the Court of International Trade arguing that "prior indications of support as a factor in determining who gets payment from Customs is a violation of the 'free speech' provision of the First Amendment."

"This is further proof that the Byrd Amendment distorts trade by creating incentives for companies to file trade cases," stated CITAC Executive Director Janet Kopenhaver. "If companies believe that they may lose out to their competitors in receiving Byrd Amendment cash disbursements if they do not support trade cases, it's obvious what they will do support trade cases. These disbursements are basically taxes paid by importers and passed along to U.S. consuming industries. This harms American consumers and violates this country's international obligations."

Following a ruling by the World Trade Organization (WTO) Appellate Body declaring the Byrd Amendment in violation of U.S. international commitments, the Bush Administration requested that Congress repeal the law, calling the payments "corporate subsidies [that] effectively provide a significant 'double-dip' benefit to industries that already gain protection from the increased import prices."

"The President has accurately described the Byrd Amendment. Crawfish, candles, pasta, bearings, and pencils are just some of the imported items that U.S. companies have filed trade cases against resulting in Byrd Amendment cash payouts in the millions of dollars by the U.S. government to these companies," stated Kopenhaver. "In the end, it's U.S. consuming industries and U.S. consumers who are paying more for these items as a result of this government handout."

CITAC is a coalition of companies and organizations committed to promoting a trade arena where U.S. consuming industries have access to global markets for imports that enhance the international competitiveness of American firms. The CITAC Steel Task Force is comprised of steel consumers working to achieve the termination of the 201 steel tariffs by mid-point review and reform U.S. trade laws and policies to benefit U.S. steel consumers.