WTO Approves Punitive Penalties against U.S. Goods

Eight major U.S. trading partners may collect millions of dollars' worth of punitive tariffs on U.S. goods each year, the World Trade Organization ruled last week.

Like many other governments, the U.S. collects duties from foreign firms that it deems to be dumping--selling goods at artificially low prices. A U.S. law, the Byrd amendment, directs the government to hand over this money to U.S. companies that complained about the low prices, rather than depositing the funds into the Treasury. The controversial Byrd amendment--which WTO has twice ruled against--is named for its sponsor, Sen. Robert C. Byrd (D-W.Va.).

Now, WTO arbiters have authorized the European Union, Brazil, Canada, Chile, India, Japan, Mexico, and South Korea each to impose retaliatory tariffs. The duties are worth 72% of the disbursements made to U.S. companies under the Byrd amendment--about $140 million a year. The retaliatory duties can be imposed on any U.S. import.

Seven chemical firms collected about $1 million of the roughly $190 million distributed in 2003 under the Byrd amendment. In the previous two years, chemical makers received a total of $21 million (C&EN, March 29, page 19).

Though they can slap sanctions on U.S. goods at any time, the eight trading partners are likely to wait for several months to see if Congress changes or rescinds the Byrd amendment. EU Trade Commissioner Pascal Lamy says, "I hope the U.S. will now take action to remove this measure."