WTO Okays Tariffs against U.S. Goods

INTERNATIONAL TRADE

The World Trade Organization (WTO) on Nov. 26 cleared the way for seven major trading partners to begin collecting millions of dollars in punitive tariffs against the U.S.

If instituted, those tariffs will affect U.S.-made chemicals and plastics exported to Japan and detergents shipped to South Korea.

The action comes in a challenge to a U.S. law named the Byrd amendment after its sponsor, Sen. Robert C. Byrd (D-W.Va.). The U.S., like other governments, collects duties from foreign firms that it determines are dumping--selling goods at below-market prices. Most countries deposit this money into their national coffers, but the Byrd amendment requires the government to give the funds to the U.S. companies that complained about the dumping.

Chemical companies collected about $1 million of the $190 million distributed in 2003 under the Byrd amendment. U.S. manufacturers of chemicals received a total of $21 million of Byrd amendment disbursements in 2001 and 2002, according to U.S. Customs & Border Patrol.

WTO arbiters have twice ruled against the Byrd amendment. In September, WTO arbiters authorized the governments that challenged the U.S. law to impose duties worth 72% of the disbursements made under the Byrd amendment, about $140 million annually.

In its latest move, WTO formally gave Brazil, Canada, the European Union, India, Japan, Mexico, and South Korea permission to collect retaliatory tariffs on U.S. exports. Canada, the EU, India, Japan, and South Korea have lists of goods that would be subject to the penalties, while Brazil and Mexico do not as yet. Japan's list includes chemicals and plastics, while South Korea's has detergents.

The EU announced it will impose tariffs in early 2005 if Congress does not alter the Byrd amendment.