May 7, 2004 The PBN Company


CITAC Responds to Desperate Defense of Byrd Law by Petitioner Group

Washington, DC - The Consuming Industries Trade Action Coalition (CITAC) today again called for the United States to repeal or modify the "Continued Dumping and Subsidy Offset Act" (CDSOA) - known informally as the "Byrd Amendment" - in order to eliminate the trade-distorting subsidy and bring the U.S. into compliance with a 2003 World Trade Organization (WTO) finding. CITAC also responded to the "Committee to Support U.S. Trade Laws" (CSUSTL's) bogus attempt to defend the hundreds of millions of dollars of Byrd Amendment payouts to companies that support the filing of trade remedy petitions.

The Byrd Amendment mandates distribution of antidumping and countervailing duties to companies that have petitioned for trade protection, rather than to the U.S. Treasury, where such money should go. To date, the U.S. Government has paid more than $700 million to such companies. Sixty percent of the most recent pot of money went to one company; more than 80 percent was spread over just 17 companies.

In 2003, the World Trade Organization (WTO) declared the Byrd Amendment violated U.S. international trade obligations and is now considering retaliation measures to authorize. Additionally, a Congressional Budget Office report recently found that the Byrd Amendment harms the U.S. economy and encourages the filing of more antidumping and countervailing duty trade cases (which forces up the cost of affected imported products to consuming industries). CBO estimates that Byrd distributions to U.S. companies who file successful trade cases will total more than $3.8 billion by 2014.

"It is not surprising that CSUSTL's trade lawyers are desperately trying to preserve the huge payouts their clients receive from the Byrd Amendment through hyperbole because they simply don't have the facts to support their case," stated Jon Jenson, CITAC President.

"American consuming industries and their customers are the ones who pay the enormous windfall from Byrd Amendment payouts. The economics are simple: if you place an import tax on a product, the price of the product is likely to increase and those who buy the product take the hit. In this case, it is U.S. consuming industries and the American consumer who pays the tax which, thanks to the Byrd Amendment, goes directly to the petitioners," continued Jenson.

"CSUSTL's claim that the Byrd Amendment does not create an incentive to file trade cases is simply against all logic," added Jenson. "If you create a big cash incentive for something, people are more likely to do it. As one example, the recent shrimp lawsuit was motivated purely and simply by the desire to be eligible for money under CDSOA."

Last week, the Louisiana Shrimp Association (LSA) filed a lawsuit against the Southern Shrimp Alliance (SSA) to determine whether LSA members are eligible for any monies that would result from duties collected under the Byrd Amendment.

Jenson continued, "All one needs to do is read the quote in The Wave, a seafood trade publication, attributed to LSA's attorney Steven Cox to determine if the Byrd Amendment is creating additional incentives to file trade cases: The [SSA] made representations to the shrimping community that if they would contribute funds to the antidumping petition and participate for purposes of qualifying for standing, that shrimpers would be included for all purposes, including monetary recovery. It is our position that the shrimpers are entitled to their fair share of any monetary proceeds that may result from the anti-dumping petition."

CITAC Counsel Lewis Leibowitz added: "CSUSTL is also wrong in its claim that Byrd money is paid out to producers who expressed the need for relief to 'remain in business, continue to produce the product, and continue to invest in production-related activities.' In reality, a producer need only check the 'support' box on an International Trade Commission questionnaire. The ITC does not conduct any investigation on whether the producer needs this relief to stay in business. The company is free to spend the money as it wishes. The bigger the company, the more money they will likely receive because the formula for distributing money rewards big expenditures rather than job creating or strategic expenditures."

CITAC is a coalition of companies and organizations committed to promoting a trade arena where U.S. consuming industries and their workers have access to global markets for imports that enhance the international competitiveness of American firms.

Click here for addition information, or to view a list of industries that have received Byrd Amendment payouts to date.





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