EU wants penalties on U.S. exports
Fri Jan 16, 6:17 AM ET Add Business - USATODAY.com to My Yahoo!
By James Cox, USA TODAY
The European Union (news - web sites) and several other countries said Thursday that they want penalties on U.S. exports because the United States has illegally made payments to companies hurt by foreign goods sold at artificially low prices.
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The EU, Canada, Japan and others are asking the World Trade Organization (news - web sites) to authorize punitive duties on hundreds of millions of dollars worth of unspecified U.S. goods.
At issue is the so-called Byrd amendment, passed by Congress in 2000. It directs the federal government to disburse anti-dumping duties collected on imports to American companies that successfully bring dumping complaints. U.S. firms that make ball bearings, candles, pasta and steel have collected roughly $700 million in payments since the amendment took effect.
The payments prompted WTO complaints by the 15-nation EU, Japan, Australia, Canada, Mexico, Brazil, Chile, Thailand, South Korea (news - web sites), India and Indonesia. All except Australia, Thailand and Indonesia are asking to sanction U.S. goods.
By WTO rules, countries are allowed to levy duties against products dumped - sold at prices below cost - in their markets. But the WTO ruled last year that the money should go into government coffers.
It said that by disbursing the penalties to injured companies, the U.S. gave them illegal subsidies.
In December, Timken, a Canton, Ohio, bearing maker, said it expected $70 million in Byrd amendment payouts. Thursday, Timken spokeswoman Carol Titus defended the payments.
"Dumping laws help restore a level playing field following periods of unfair pricing," she said. The amendment "only addresses situations where dumping continued. Under-pricing can eventually drive firms out of business."
The WTO had given the U.S. until Dec. 27 to repeal the law. The Bush administration, which opposes the Byrd amendment, has failed to win congressional support for a repeal.
John Veroneau, general counsel for the U.S. Trade Representative's office, said the administration will continue to try to get Congress to change the law.
That could be difficult in an election year when U.S. industry is flooding Capitol Hill with complaints about unfair trade.
The U.S. already faces a spring WTO deadline for overhauling a complex tax break it gives exporters. The EU has threatened to impose penalties on $4 billion in U.S. goods unless Washington does away with the tax break.
If the WTO approves sanctions on U.S. goods because of the Byrd amendment, it is unlikely they would go into effect until late March at the earliest.
The U.S. will challenge the request for penalties because it "does not appear to be based on actual harm to their exports," Veroneau said. |
