Millions of Dollars in U.S. Exports Hit with Tariff
Washington, DC — The Consuming Industries Trade Action Coalition (CITAC) today renewed its call for Congress to repeal the Byrd Amendment (formally known as the Continued Dumping and Subsidy Offset Act of 2000) following announcements by the European Union (EU) and the Government of Canada that U.S. products will be subject to retaliatory tariffs beginning May 1, 2005.
The EU will impose a 15% duty on various types of paper, clothing fabrics, footwear, and machinery amounting to tariffs worth approximately $28 million, and Canada will impose like duties on cigarettes, oysters and live swine worth $14 million because of the failure of Congress to repeal the WTO-illegal Byrd Amendment. Both governments will review the products each year against the fluctuating nature of Byrd disbursements.
In a statement, Canada 's International Trade Minister Jim Peterson said, For the last four years, Canada and a number of other countries have repeatedly urged the United States to repeal the Byrd Amendment. Retaliation is not our preferred option, but it is a necessary action. International trade rules must be respected.
The more than $40 million dollar retaliation announced today is yet another reason that now is the time to repeal the Byrd Amendment, said Steve Alexander, CITAC Executive Director and President of lobbying firm The CMR Group. The most important reason why the Byrd Amendment needs to be repealed is because it is hurting the U.S. economy and U.S. consumers. It encourages the abusive filing and perpetuation of trade cases. With other trading partners likely to soon join Canada and the EU in retaliating against U.S. exports, Congress should move swiftly to repeal the law.
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.
Alexander explained that American producers of steel, lumber, candles, pasta, seafood, ball bearings and other products have reaped over $1 billion 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 (see attached list). The Office of Management and Budget (OMB) estimated that the federal government would save $1.6 billion by repealing the Byrd Amendment and having funds stay in the U.S. treasury rather than be redistributed to a narrow group of U.S. companies.
In addition to monies already paid out because of the Byrd Amendment, the U.S. government is holding more than $3.5 billion in duties on softwood lumber imports from Canada . The Canadian government has initiated proceedings at the WTO seeking the right to retaliate against U.S. imports if bilateral negotiations fail. This will result in one of the largest trade disputes in WTO history, said Lewis Leibowitz, CITAC Counsel and a lawyer at Hogan & Hartson.
American companies who import products subject to these duties are hit twice. They not only must pay these duties, but must see them transferred to their U.S. competitors. The Byrd Amendment results in the government taxing part of an industry to subsidize another part of that industry, added Leibowitz.
CITAC has taken the lead in mobilizing support for repealing the Byrd Amendment," Alexander said. He added that CITAC has pledged its support to Reps. Jim Ramstad (R-MN) and Clay Shaw (R-FL) for their introduction of a bill (HR 1121) that would repeal the Byrd amendment. CITAC is also launching a Byrd Amendment Working Group, a multi-industry cooperative effort by U.S. companies impacted by the trade-distorting government handouts and by potentially significant retaliation against U.S. exports. The Group is focusing on repealing the Byrd Amendment as soon as possible.
Now that the threats of retaliation by our trading partners have become a reality, it's time for the Byrd Amendment to go, concluded Alexander.
CITAC's mission is to improve the position of downstream manufacturers, retailers and other companies that currently do not receive adequate consideration under U.S. trade laws; to provide legal standing for retailers, industrial users and consumers of goods in antidumping, countervailing duty and safeguard cases; to make trade remedy cases consider the needs of consuming industries, including retailers and manufacturers; and to provide a substantially stronger position before Congress for consuming industries when trade issues are debated, whether the issue is trade remedy laws, quotas, tariffs or other trade barriers.