Jean-François BRAKELAND Tel: , fax:
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1 EUROPEAN COMMISSION Directorate-General for Trade Directorate F - Co-ordination of WTO and OECD matters. Dispute settlement and Trade Barriers Regulation Dispute settlement and Trade Barriers Regulation Brussels, 19 August 2005 Trade F.2/MN/de D(2005) NOTE FOR THE ATTENTION OF THE MEMBERS OF THE 133 COMMITTEE SUBJECT: USA / Continued Dumping and Subsidy Offset Act of 2000 ( Byrd amendment ) Request to submit comments on the inclusion of a repealing bill in a miscellaneous trade bill Origin: DG Trade F.2 Contacts: Jean-François BRAKELAND Tel: , fax: Jean-Francois.Brakeland@cec.eu.int Marjorie NIFFE Tel: , fax: marjorie.niffe@cec.eu.int Objective: For information / action On 25 July 2005, the Trade Subcommittee of the Ways and Means Committee in the House of Representatives made public a list of bills that could be included in a miscellaneous trade bill. This list contains a bill introduced in March 2005 and which proposes to repeal the Byrd Amendment (Bill H.R repealing Section 754 of the Tariff Act of 1930). The Trade Subcommittee has invited all interested parties to submit comments by 2 September 2005 and will decide which bills will be part of the miscellaneous trade package in light of the comments received. Opponents to the repeal of the Byrd Amendment will undoubtedly oppose the inclusion of this bill. It is therefore of major importance that the subcommittee receives as many comments in favour of its inclusion as possible. Commission européenne, B-1049 Bruxelles / Europese Commissie, B-1049 Brussel - Belgium. Telephone: (32-2) Office: CHAR 9/74. Telephone: direct line (32-2) Fax: (32-2)
2 We have already prepared a letter supporting such inclusion that will be submitted on behalf of the European Union (a copy of the draft letter is attached annex I). But, following information received from Congress staff, it appears that the Committee will also attach great importance to receiving comments from the private sector supporting repeal of the Byrd Amendment. Obviously, the Committee will attach most importance to comments received from domestic industries but submissions from foreign companies will not be considered as irrelevant or counter-productive. We would therefore be most grateful if you could try via your respective national networks to contact industries or industries' associations which could have an interest in the repeal of the Byrd Amendment. We are thinking of: 1. Exporters to the United States of products affected by the Byrd Amendment. A list of products from the EC that have contributed so far to payments under the Byrd Amendment is attached (Annex II). This list is not an exhaustive list of EC companies affected. Actually, all companies subject to anti-dumping or anti-subsidy duties or likely to be subject to such duties are concerned even if they do not appear on this list. Collection of duties takes indeed some years in the United States and distribution of duties collected on their products under the Byrd Amendment may not have started yet. As indicated above, comments from importers and/or customers in the United States would also be very valuable. 2. Importers from the United States of products subject to the retaliatory measures that the EC has applied since 1 May 2005 (list attached as annex III). Again, comments for the United States' exporters and/or producers of those products would be most helpful as well. To assist companies wishing to submit comments, we provide in annex sample arguments that they could use in all or in part to support the repeal of the Byrd Amendment (Annex IV). Comments must be filed by 2 September 2005 and following a specific procedure. The instructions for filing the comments with the Committee are attached (Annex V) and can also be consulted on the website of the House of Representatives at If you have any further questions, do not hesitate to contact the persons referenced in contacts. 2
3 Annex I: Draft letter to the Trade Subcommittee that will be submitted on behalf of the European Union The European Union welcomes the opportunity to comment on, and supports the inclusion into a miscellaneous trade legislation of the bill H.R repealing Section 754 of the Tariff Act of Section 754 was enacted by the Continued Dumping and Subsidy Offset Act of 2000 ("CDSOA" or "Byrd Amendment"). This act is at the heart of a major dispute in the World Trade Organisation ("WTO") opposing the United States and its main trading partners, including the European Union. Its repeal would remove a serious trade irritant that prejudices the United States' trade relations and its credibility as a reliable partner in the WTO. The CDSOA is a blatant breach of the letter and spirit of the WTO rules The enactment of the CDSOA raised immediate and widespread concerns not only in the European Union but in the whole WTO membership. 11 members (Australia, Brazil, Canada, Chile, the EU, India, Indonesia, Japan, Korea, Mexico and Thailand) brought a complaint under the dispute settlement proceeding and were supported by 5 other members (Argentina, Costa Rica, Hong Kong (China), Israel, Norway). It was the first time in the history of the Organisation that so many members joined forces to challenge a measure taken by another member. There was no doubt that the CDSOA was contrary to the basic obligation to limit action against dumping or subsidisation to the remedies specifically available under the antidumping and anti-subsidy agreements (i.e. duties on imports of the dumped or subsidised goods, undertakings on minimum import prices or, in the case of a subsidy, multilaterally sanctioned countermeasures). The CDSOA distributes the collected anti-dumping and anti-subsidy duties to the companies that brought or supported those trade remedy cases. Thereby, the CDSOA imposes a second hit on dumped or subsidised products: domestic producers are, first, protected by anti-dumping and anti-subsidy duties and, second they receive subsidies paid from these duties at the expense of their competitors. This overcompensates the dumping or subsidisation and upsets the fair competition previously restored by the imposition of duties to the detriment of exporters, US importers, US consuming industries and US producers that are not eligible to the CDSOA payments. The Dispute Settlement Body of the WTO fully confirmed this legal assessment in a widely expected decision in January The limitation of the remedies available against dumping or subsidisation is a cornerstone obligation of the WTO and must remain The European Union is aware of requests to negotiate rules in the WTO that would "legalize" the CDSOA and wishes to express its total opposition to such negotiations. 3
4 Such a change of the WTO rule-book would be fundamentally misguided and against the interests of all WTO members including of the United States'. The limitation of the remedies available is one of the obligations that maintain the delicate balance between trade liberalisation and a legitimate protection of national industries against unfair competition. The inevitable consequence of authorizing multilaterally the disbursement of the antidumping and anti-subsidy duties to subsidize the national competitors of the exporters would be a proliferation of anti-dumping and anti-subsidy duty actions, which would have a major negative impact on world trade, including on US exports. The European Union wishes to draw the attention of the Committee to statistics published by the WTO on the anti-dumping activity over the last 10 years ( ) ( 1 ). They show that the United States has been over that period the third most targeted WTO member in terms of initiation of anti-dumping investigations and the fourth most targeted member in terms of anti-dumping measures imposed. A legalization of a redistribution mechanism such as the CDSOA would therefore not be in the interest of the US producers as they would be hit next in their export markets. The repeal of the CDSOA does not affect the ability of the United States to protect its industry from unfair competition The CDSOA is an added piece to the United States system of protection against dumping or subsidisation. Repealing it would leave this system unaffected and would therefore not affect the United States ability to provide to its companies and workers a legitimate protection against unfair competition. The imposition of anti-dumping and anti-subsidy duties (or other remedies specifically authorised by the relevant WTO agreements) ensures the required protection. The CDSOA was also presented as the adequate way to respond to continued dumping and subsidisation which prevents market prices from returning to fair levels and frustrates the remedial purpose of the anti-dumping and anti-subsidy duties. It may happen that dumping or subsidisation increases over time and that the duty initially imposed becomes insufficient to neutralise it but other adequate legal recourses are and will continue to be available. Thus, WTO rules allow for the review of the level of the duty and the retroactive application of the revised duty rate, thereby cancelling out any unfair competitive advantage that could result from increasing the level of dumping or subsidisation. These rules are implemented in US legislation by Section 751(a) of the Tariff Act of 1930 which allows United States' companies to require every year a review of the duty, which result will be applied retroactively. Ignoring the DSB ruling and recommendation fundamentally affects the United States' interests 1 Available on the WTO website at: 4
5 The United States had 11 months (until 27 December 2003) to bring its legislation into conformity with the WTO rules, but the deadline expired without any concrete signs of forthcoming compliance with the WTO ruling. This has been even more disturbing that messages were repeatedly heard that the United States would consider respecting its obligations only if subject to substantial sanctions or would even choose to neglect international law. In such circumstances, the European Union saw no other option than to request the authorisation to retaliate against the United States. Brazil, Canada, Chile, India, Japan, Korea and Mexico came to the same conclusion. The European Union started the application of retaliatory measures on 1 May 2005 in the form of a 15% additional import duty on a range of US products including paper and textile products, machinery and sweet corn. In accordance with the arbitration award, the level of retaliation will be revised annually and new products may then become subject to retaliation. Canada has also applied a 15% additional import duty on live swine, tobacco, oysters, specialty fish originating in the United States since 1 May Japan recently announced that it would apply a 15% additional duty on certain US products as from 1 September 2005 and Mexico has just published a decree applying retaliatory measures on certain US products as from 18 August. The other complainants are taking preparatory steps to exercise their retaliation rights in the WTO. Domestic requirements impose different calendars, but all may apply retaliation at any time they deem appropriate as all required steps in the WTO have now been completed. Again, this is the first time in the history of the WTO that so many members are authorised to impose retaliatory measures. More tellingly, these eight members represent the major trading partners of the United States with 71% of total US exports and 64% of total US imports. This illustrates again the reality of the Byrd amendment dispute: a US/rest of the world problem. By contrast, the legislation at the root of this dispute only benefits a handful of companies. Two companies have received more than one third of the money distributed so far (i.e. more than US $ 366 million out of the roughly US $ 1 billion disbursed in the first four distributions) and every year half of the payments went to a very limited number of companies (4 in 2001, 3 in 2002, 2 in 2003 and 9 in 2004). On a systemic point of view, the dispute settlement system is a fundamental pillar of the WTO. It provides security and predictability to the multilateral trading system. Its credibility depends on its strict observance by the members. The failure of the United States, one of the world s leading trading nations, to comply fully in timely manner with its WTO obligations is damaging to the credibility and effective functioning of the rulebased trading system. Undermining WTO disciplines harms the interests of all Members, including those of the United States. The European Union trusts that the Committee will appreciate the utmost importance for the United States to abide by its WTO obligations and repeal the CDSOA without further delay. 5
6 Annex II : List of EC products affected by the offset payments under the Byrd Amendment - Aramid fiber - Ball bearings - Brass sheet and strip - Carbon and certain alloy steel wire rod - Certain cut to length carbon steel plate - certain mallable iron pipe fittings - Cold-rolled carbon steel flat products - Corrosion-resistant carbon steel flat products - Corrosion-resistant carbon steel products - Cut-to-length carbon steel plate - Cylindrical roller bearings - Folding metal tables and chairs - Grain-oriented silicon electrical steel - Granular polytetrafluoroethylene - Hot rolled lead & bismuth carbon steel products - Hot rolled lead & bisuth carbon steel products - Hot-rolled steel products - Industrial belts - Industrial nitrocellulose - Industrial phosphoric acid - Large newspaper printing presses - Low enriched uranium - Oil country tubular goods - Pasta - Pressure-sensitive plastic tape - Seamless pipe - Small-diameter carbon steel seamless pipe - Spherical plain bearings - Stainless steel angle - Stainless steel bar - Stainless steel butt-weld pipe fittings - Stainless steel plate in coils - Stainless steel sheet and strip - Stainless steel wire rod - Steel concrete reinforcing bar - Sugar - Tapered roller bearings 6
7 Annex III : List of products selected for the application of retaliatory measures against the United States 1. Products on which an additional import duty has been applied since 1 May 2005 (Annex I of Council Regulation (EC) No 673/2005, OJ L 110, , p. 1) CN codes Description of products Writing pads and the like, of paper or paperboard Albums for samples or collections, of paper or paperboard Blotting pads and similar articles of stationery, of paper and paperboard, and book covers of paper or paperboard (excl. registers, account books, Note books, order books, receipt books, letter pads, memorandum pads, diaries, exercise books, binders, folders, file covers, manifold business forms and interleaved carbon sets, and albums for samples or for collections) Binders (other than book covers), folders and file covers, of paper or paperboard Diaries with calendars, of paper or paperboard Women's or girls' trousers and breeches, of synthetic fibres, industrial and occupational (excl. knitted or crocheted and bib and brace overalls) Women's or girls' trousers and breeches, of artificial fibres (not of cut corduroy, of denim or knitted or crocheted and excl. industrial and occupational clothing, bib and brace overalls, briefs and track suit bottoms) Women's or girls' shorts of synthetic fibres (excl. knitted or crocheted, panties and swimwear) Women's or girls' trousers, bib and brace overalls, breeches and shorts (other than swimwear), knitted or crocheted, of synthetic fibres Men's or boys' trousers and breeches of synthetic fibres, industrial and occupational (excl. knitted or crocheted and bib and brace overalls) Men's or boys' trousers, bib and brace overalls, breeches and shorts (other 7
8 than swimwear), knitted or crocheted, of synthetic fibres Women's or girls' trousers and breeches, of synthetic fibres (not of cut corduroy, of denim or knitted or crocheted and excl. industrial and occupational clothing, bib and brace overalls, briefs and track suit bottoms) Men's or boys' trousers and breeches of synthetic fibres (excl. knitted or crocheted, industrial and occupational, bib and brace overalls and underpants) Women's or girls' trousers, bib and brace overalls, breeches and shorts of textile materials (excl. of wool, fine animal hair, cotton or artificial fibres, knitted or crocheted, panties and swimwear) Men's or boys' shorts of synthetic fibres (excl. knitted or crocheted, underpants and swimwear) Sweetcorn, uncooked or cooked by steaming or by boiling in water, frozen Frames and mountings for spectacles, goggles or the like, of base metal Crane lorries (excl. breakdown lorries) 2. Products on which retaliatory measures may be applied in subsequent years (Annex II of Council Regulation (EC) No 673/2005, OJ L 110, , p. 1) The products listed hereunder may become subject to retaliatory measures in the coming years if the Byrd Amendment remains in force. The Arbitration award requires an annual revision of the level of retaliation to adjust it to the amount disbursed in the latest distribution made under the Byrd Amendment. If the level of retaliation increases, new products will become subject to an additional import duty and will be selected from the list hereunder. CN codes Description of products Blankets and travelling rugs of synthetic fibres, knitted or crocheted (excl. electric, table covers, bedspreads and articles of bedding and similar furnishing of heading 9404) Blankets and travelling rugs of cotton, knitted or crocheted (excl. electric, table covers, bedspreads and articles of bedding and similar furnishing of heading 9404) 8
9 Blankets and travelling rugs of cotton (excl. knitted or crocheted, electric, table covers, bedspreads and articles of bedding and similar furnishing of heading 9404) Blankets and travelling rugs of synthetic fibres (excl. knitted or crocheted, electric, table covers, bedspreads and articles of bedding and similar furnishing of heading 9404) Articles of apparel and clothing accessories, of paper pulp, paper, cellulose wadding or webs of cellulose fibres (excl. footware and parts thereof, incl. insoles, heel pieces and similar removable products, gaiters and similar products, headgear and part Electrostatic photocopying apparatus, operating by reproducing the original image directly onto the copy [direct process] Electrostatic photocopying apparatus, operating by reproducing the original image via an intermediate onto the copy [indirect process] Drills of all kinds for working in the hand, with self-contained electric motor operating with an external source of power (excl. electropneumatic drills) Creped paper for household or sanitary purposes and webs of cellulose fibres 'tissues', in rolls of a width > 36 cm or in square or rectangular sheets with one side > 36 cm and the other side > 15 cm in the unfolded state, weighing <= 25 g/m per ply Tablecloths and serviettes of paper pulp, paper, cellulose wadding or webs of cellulose fibres Handkerchiefs, cleansing or facial tissues and towels, of paper pulp, paper, cellulose wadding or webs of cellulose fibres Furniture of plastic (excl. for civil aircraft, medical, dental, surgical or veterinary, and seats) Jerseys, pullovers, cardigans, waistcoats and similar articles, of flax or ramie, knitted or crocheted (excl. wadded waistcoats) Jerseys, pullovers, cardigans, waistcoats and similar articles, of fine animal hair, knitted or crocheted, for men or boys (excl. from hair of Kashmir 'cashmere' goats and quilted articles) Jerseys, pullovers, cardigans, waistcoats and similar articles, of fine animal hair, knitted or crocheted, for women or girls (excl. from hair of Kashmir 'cashmere' goats and quilted articles) Jerseys, pullovers, cardigans, waistcoats and similar articles, of hair of Kashmir 'cashmere' goats, knitted or crocheted, for men or boys (excl. quilted articles) 9
10 Jerseys and pullovers containing >= 50% by weight of wool and weighing >= 600 g/article, knitted or crocheted Lightweight fine knit roll, polo or turtle neck jumpers and pullovers of man-made fibres, knitted or crocheted Jerseys, pullovers, cardigans, waistcoats and similar articles, of hair of Kashmir 'cashmere' goats, knitted or crocheted, for women or girls (excl. quilted articles) Lightweight fine knit roll, polo or turtle neck jumpers and pullovers of cotton, knitted or crocheted Men's or boys' jerseys, pullovers, cardigans, waistcoats and similar articles, of wool, knitted or crocheted (excl. jerseys and pullovers containing >= 50% by weight of wool and weighing >= 600 g/article, amd wadded waistcoats) Women's or girls' jerseys, pullovers, cardigans, waistcoats and similar articles, of wool, knitted or crocheted (excl. jerseys and pullovers containing >= 50% by weight of wool and weighing >= 600 g/article, and wadded waistcoats) Jerseys, pullovers, cardigans, waistcoats and similar articles, of textile materials, knitted or crocheted (excl. of man-made fibres, wool, fine animal hair, cotton, flax or ramie, and wadded waistcoats) Men's or boys' jerseys, pullovers, cardigans, waistcoats and similar articles, of man-made fibres, knitted or crocheted (excl. lightweight fine knit roll, polo or turtle neck jumpers and pullovers and wadded waistcoats) Women's or girls' jerseys, pullovers, cardigans, waistcoats and similar articles, of man-made fibres, knitted or crocheted (excl. lightweight fine knit roll, polo or turtle neck jumpers and pullovers and wadded waistcoats) Women's or girls' jerseys, pullovers, cardigans, waistcoats and similar articles, of cotton, knitted or crocheted (excl. lightweight fine knit roll, polo or turtle neck jumpers and pullovers and wadded waistcoats) Men's or boys' jerseys, pullovers, cardigans, waistcoats and similar articles, of cotton, knitted or crocheted (excl. lightweight fine knit roll, polo or turtle neck jumpers and pullovers and wadded waistcoats) Ball-point pens with liquid ink Sports footwear with outer soles and uppers of rubber or plastics (excl. waterproof footwear of heading 6401, ski-boots, cross-country ski footwear, snowboard boots and skating boots with ice or roller skates attached) 10
11 Sports footwear, incl. tennis shoes, basketball shoes, gym shoes, training shoes and the like, with outer soles of rubber or plastics and uppers of textile materials Sports footwear, with outer soles of rubber, plastics, leather or composition leather and uppers of leather (excl. ski-boots, cross-country ski footwear, snowboard boots and skating boots with ice or roller skates attached) Men's or boys' shirts of artificial fibres, knitted or crocheted (excl. nightshirts, T-shirts, singlets and other vests) Men's or boys' shirts of synthetic fibres, knitted or crocheted (excl. nightshirts, T-shirts, singlets and other vests) Women's or girls' blouses, shirts and shirt-blouses of cotton, knitted or crocheted (excl. T-shirts and vests) Women's or girls' blouses, shirts and shirt-blouses of man-made fibres (excl. knitted or crocheted and vests) Men's or boys' shirts of man-made fibres (excl. knitted or crocheted, nightshirts, singlets and other vests) Women's or girls' blouses, shirts and shirt-blouses of cotton (excl. knitted or crocheted and vests) Men's or boys' shirts of cotton, knitted or crocheted (excl. nightshirts, T- shirts, singlets and other vests) Men's or boys' shirts of cotton (excl. knitted or crocheted, nightshirts, singlets and other vests) Mobile homes Buildings, prefabricated, whether or not complete or already assembled, made entirely or mainly of iron or steel (excl. Mobile homes and greenhouses) Men's or boys' overcoats, car-coats, capes, cloaks and similar articles of man-made fibres, knitted or crocheted Women's or girls' overcoats, car-coats, capes, cloaks and similar articles of man-made fibres, knitted or crocheted Men's or boys' overcoats, raincoats, car-coats, capes, cloaks and similar articles, of cotton, of a weight per garment of <= 1 kg (excl. knitted or crocheted) Men's or boys' overcoats, raincoats, car-coats, capes, cloaks and similar articles, of man-made fibres, of a weight per garment of <= 1 kg (excl. knitted or crocheted) 11
12 Women's or girls' anoraks, incl. ski-jackets, wind-cheaters, wind-jackets and similar articles, of man-made fibres, knitted or crocheted (excl. suits, ensembles, jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls) Men s or boys anoraks, incl. ski-jackets, wind-cheaters, wind-jackets and similar articles, of cotton (excl. knitted or crocheted, suits, ensembles, jackets, blazers and trousers) Men's or boys' anoraks, incl. ski-jackets, wind-cheaters, wind-jackets and similar articles of man-made fibres, knitted or crocheted (excl. suits, ensembles, jackets, blazers, bib and brace overalls and trousers) Women s or girls anoraks, incl. ski-jackets, wind-cheaters, wind-jackets and similar articles, of man-made fibres (excl. knitted or crocheted, suits, ensembles, jackets, blazers and trousers) Women's or girls' overcoats, raincoats, car-coats, capes, cloaks and similar articles, of wool or fine animal hair (excl. knitted or crocheted) Men's or boys' overcoats, raincoats, car-coats, capes, cloaks and similar articles, of man-made fibres, of a weight per garment of > 1 kg (excl. knitted or crocheted) Men s or boys' anoraks, incl. ski-jackets, wind-cheaters, wind-jackets and similar articles, of man-made fibres (excl. knitted or crocheted, suits, ensembles, jackets, blazers and trousers) Men's or boys' overcoats, raincoats, car-coats, capes, cloaks and similar articles, of cotton, of a weight per garment of > 1 kg (excl. knitted or crocheted) Women's or girls' dresses of cotton (excl. knitted or crocheted and petticoats) Women's or girls' dresses of synthetic fibres, knitted or crocheted (excl. petticoats) Women's or girls' dresses of silk or waste silk (excl. knitted or crocheted and petticoats) Women's or girls' dresses of artificial fibres (excl. knitted or crocheted and petticoats) Women's or girls' dresses of synthetic fibres (excl. knitted or crocheted and petticoats) Men's or boys' trousers and breeches of cotton denim (excl. knitted or crocheted, industrial and occupational, bib and brace overalls and underpants) Women's or girls' cotton denim trousers and breeches (excl. industrial and 12
13 occupational, bib and brace overalls and panties) 13
14 Annex IV: Sample arguments supporting repeal of the Byrd Amendment Companies or associations acting on behalf of several companies willing to submit comments to the Trade subcommittee may find it useful to use all or part of the arguments below, as appropriate to their position. 1. For EC companies affected by the Byrd Amendment and/or the retaliatory measures taken by the EC We support the repeal of the Continued Dumping and Subsidy Offset Act (Byrd Amendment) by inclusion of the bill H.R 1121 into a miscellaneous trade bill because: U.S. producers are encouraged to file trade actions knowing full well that they will be eligible for subsidies under the Byrd Amendment. U.S. companies in line to receive these payments have a clear incentive to include more products within the scope of anti-dumping or anti-subsidy cases, including products not even made in the U.S. The Byrd Amendment provides a double hit to global companies: first, foreign companies are forced to pay these duties; and second, due to the Byrd Amendment, the duty payments are then transferred to our U.S. competitors. The World Trade Organization (WTO) found that the Byrd Amendment violates WTO agreements and distorts trade yet the U.S. has ignored this ruling. Failing to act on the WTO s ruling undermines the U.S. government s ability to take a leadership role on international trade issues. Products that are not produced in the U.S. are still included in the scope of products subject to Byrd Amendment duties due solely to the potential landfall of Byrd payments, which has totalled more than $1 billion to date, with billions more waiting in the wings. Allocation of Byrd Amendment money is based on qualified expenditures, which are not monitored or audited by Customs or any government agency. We rely on open trade for our export sales. The Byrd Amendment makes exporting raw materials for U.S. consuming industries and consumers more difficult and risky, increasing our costs and uncertainty. Or We rely on open trade for our import purchases. Due to the US failure to comply with the WTO ruling and retaliatory measures applied as a consequence, products that we import from the United States are subject to an additional import duty (or may become subject to an additional import duty). This makes trading with US companies more difficult and risky, increasing our costs and uncertainty. 14
15 2. For US companies affected by the Byrd Amendment and/or by the retaliatory measures taken by the EC We support the repeal of the Continued Dumping and Subsidy Offset Act (Byrd Amendment) by inclusion of the bill H.R 1121 into a miscellaneous trade bill because: The Byrd Amendment provides a double hit on American manufacturers who use products subject to antidumping and countervailing duties. American companies are the ones that pay these duties, and because of the Byrd Amendment, they have these duty payments transferred to their U.S. competitors. Therefore, part of an industry is taxed to subsidize another part of that industry. The Byrd Amendment is a blatant subsidy to a very few companies that, far from assisting American manufacturing, actually undermines it. Most American manufacturers do not benefit from the Byrd Amendment. More than half of the Byrd Amendment payments in 2004 went to only nine companies, and more than 80 percent of the payments went to only 44 companies. The Byrd Amendment does not restrict the recipients' use of Byrd Amendment money. Allocation of Byrd Amendment money is based on qualified expenditures, which are not monitored or audited by Customs or any government agency. The Byrd Amendment annually funnels money collected from the imposition of antidumping or anti-subsidy duties from government coffers to companies that petition for those duties. Such funnelling has totalled more than $1 billion to date, with billions more waiting in the wings. U.S. producers are encouraged to file trade actions knowing full well that they will be eligible for Byrd money. U.S. companies in line to receive these payments have a clear incentive to include more products within the scope of anti-dumping or anti-subsidy cases, including products not even made in the U.S. We rely on open trade for our export sales and our purchase of inputs. The Byrd Amendment makes importing raw materials more difficult and risky, increasing our costs and uncertainty. This law was passed without consideration by the appropriate committees of Congress and has done unforeseen injury to American companies. The antidumping and countervailing duty laws are more arbitrary, the duties are higher and orders are harder to revoke or change as a result of the Byrd Amendment. This harms consuming industries, but they have no ability to participate meaningfully in these cases. Repeal of the Byrd Amendment is an essential step in allowing consuming industries an opportunity to protect their interests as a matter of fundamental fairness. 15
16 We export products that are actually or potentially subject to retaliation: our major trading partners will take action against U.S. exports as a result of the failure of Congress to repeal this WTO-illegal measure. 16
17 Annex V: Instructions for filing comments FROM THE COMMITTEE ON WAYS AND MEANS SUBCOMMITTEE ON TRADE DETAILS FOR SUBMISSION OF WRITTEN COMMENTS: July 25, 2005 No. TR-3 CONTACT: (202) Shaw Announces Request for Written Comments on Technical Corrections to U.S. Trade Laws and Miscellaneous Duty Suspension Bills Congressman E. Clay Shaw, Jr. (R FL), Chairman, Subcommittee on Trade of the Committee on Ways and Means, today announced that the Subcommittee is requesting written comments for the record from all parties interested in technical corrections to U.S. trade laws and miscellaneous duty suspension proposals. BACKGROUND: On March 10, 2005, Chairman Shaw requested that all Members who planned to introduce technical corrections and miscellaneous duty suspension legislation do so by April 28, Chairman Shaw is now requesting public comment on those bills listed below and is requesting budget scoring estimates from the Congressional Budget Office. The deadline for the public to submit written comments to the Committee is Friday, September 2, After the comment period, the Subcommittee will review all comments and determine which bills should be included in a miscellaneous trade package. The Subcommittee will consider the extent to which the bills create a revenue loss, operate retroactively, attract controversy, or are not administrable. DETAILS FOR SUBMISSION OF WRITTEN COMMENTS: Please Note: Any person(s) and/or organization(s) wishing to submit for the record must follow the appropriate link on the hearing page of the Committee website and complete the informational forms. From the Committee homepage, select 109th Congress from the menu entitled, Hearing Archives ( Select the request for written comments for which you would like to submit, and click on the link entitled, Click here to provide a submission for the record. Once you have followed the online instructions, completing all informational forms and clicking submit on the final page, an will be sent to the address which you supply confirming your interest in providing a submission for the record. You MUST REPLY to the and ATTACH your submission as a Word or WordPerfect document, in compliance with the formatting requirements listed below, by close of business Friday, September 2, Finally, please note that due to the change in House mail policy, the U.S. Capitol Police will refuse sealed-package 17
18 deliveries to all House Office Buildings. For questions, or if you encounter technical problems, please call (202) FORMATTING REQUIREMENTS: The Committee relies on electronic submissions for printing the official hearing record. As always, submissions will be included in the record according to the discretion of the Committee. The Committee will not alter the content of your submission, but we reserve the right to format it according to our guidelines. Any submission provided to the Committee by a witness, any supplementary materials submitted for the printed record, and any written comments in response to a request for written comments must conform to the guidelines listed below. Any submission or supplementary item not in compliance with these guidelines will not be printed, but will be maintained in the Committee files for review and use by the Committee. All submissions and supplementary materials must be provided in Word or WordPerfect format and MUST NOT exceed a total of 10 pages, including attachments. Witnesses and submitters are advised that the Committee relies on electronic submissions for printing the official hearing record. Copies of whole documents submitted as exhibit material will not be accepted for printing. Instead, exhibit material should be referenced and quoted or paraphrased. All exhibit material not meeting these specifications will be maintained in the Committee files for review and use by the Committee. All submissions must include a list of all clients, persons, and/or organizations on whose behalf the witness appears. A supplemental sheet must accompany each submission listing the name, company, address, telephone and fax numbers of each witness. 18
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