House Panel Approves Repeal of Byrd Amendment After WTO Ruling

By Bruce Odessey, Washington File

Elimination of dumping law provision uncertain; both House and Senate must pass

Washington -- A House of Representatives committee has approved repeal of the so-called Byrd amendment on distribution of anti-dumping duties money, a practice the World Trade Organization (WTO) has ruled violates an international trade agreement.

By 22-17 the committee voted October 26 to forward its package of recommendations for reducing "wasteful and unnecessary administrative spending," including repeal of the Byrd amendment, to the House Budget Committee, which is crafting a larger package for consideration by the whole House aimed at reducing the federal government budget deficit.

The Byrd amendment, named after sponsor Democratic Senator Robert Byrd, is officially called the Continued Dumping and Subsidy Offset Act. Passed as part of an agriculture spending bill in 2000, it authorizes payment of anti-dumping duties revenue to the companies that petitioned the government to investigate the anti-dumping cases.

A 2003 WTO ruling determined that the Byrd amendment violates the WTO agreement on anti-dumping, which does not allow such payments as part of a trade remedy for dumping.

Dumping is the import of goods at a price below the home-market or a third-country price or below the cost of production. A dumping margin represents how much the fair-value price exceeds the dumped price.

BUSH ADMINISTRATION SUPPPORTS REPEAL

The Bush administration has long requested repeal of the Byrd amendment, but opposition to its repeal remains strong in Congress, especially in the Senate. Repeal would require passage of the legislation by the full House and Senate and signature by the president.

Before passage of the Byrd amendment, the U.S. Treasury received all anti-dumping duties revenue. Repeal of the amendment would restore that practice, reducing the federal deficit by about $3.2 billion over five years.

The WTO has authorized imposition of retaliatory tariffs on U.S. imports by 11 U.S. trading partners, including the European Union (EU), Canada and Mexico -- up to about $134 million in duties for 2005.

Democrats opposed to repeal argue that maintaining the Byrd amendment would provide the United States with leverage in ongoing WTO negotiations, which are formally called the Doha Development Agenda.

Representative Bill Thomas, Republican chairman of the House Committee on Ways and Means, countered that not complying with international obligations undercuts the U.S. position in the negotiations by giving other countries "cheap excuses" not to make adequate offers.

CORPORATE WELFARE?

Citing an investigation by Congress' Government Accountability Office (GAO), Thomas said the Byrd amendment is a wasteful government corporate welfare program that gives hundreds of millions of dollars to a small number of corporations.

"This law's inconsistent with U.S. international trade obligations," Thomas said, "and a recent GAO report shows that nearly half of the $1 billion of the payments under this law have gone to only five companies, three of which are related."

Republican Representative Jim Ramstad called the Byrd amendment "the ultimate combination of protectionism, corporate welfare and government waste."

"The Byrd amendment is bad trade policy, bad fiscal policy and a huge taxpayer ripoff," Ramstad said.

House Republican leaders have indicated they intend to vote in November on the package of measures to reduce the budget deficit including Byrd amendment repeal. The companion Senate package does not include the repeal.

Senator Chuck Grassley, Republican chairman of the Senate Finance Committee and a strong supporter of repeal, has been reported as saying that the outcome on Byrd repeal is uncertain given the influence of Byrd, who after 45 years is the senior senator.

Yet because the measure is part of budget legislation, passage in the Senate requires only a simple majority, not the two-thirds' majority needed to defeat the parliamentary delaying tactic called a filibuster.

For additional information on U.S. trade policy, see Trade and Economics.

Source: U.S. Department of State