International Trade Issues And Effects Of Implementing The Continued Dumping And Subsidy Offset Act Report To Congressional Requesters

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Download or read book The Continued Dumping and Subsidy Offset Act ("Byrd Amendment"). written by and published by . This book was released on 2005 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Continued Dumping and Subsidy Offset Act (CDSOA), commonly known as the "Byrd Amendment," is a U.S. law providing for the distribution of import duties collected as a result of antidumping (AD) or countervailing duty (CVD) orders to petitioners and other interested parties in the investigations that resulted in the orders. CDSOA disbursements amounted to $231 million in FY2001, $330 million in FY2002, $190 million in FY2003 (with an additional $50 million held in reserve pending the outcome of a legal challenge), and $284 million in FY2004. The CDSOA was successfully challenged in a World Trade Organization (WTO) dispute proceeding brought by 11 WTO Members including Canada, the European Union, and Japan; and in late 2004 most of the complaining parties were authorized to "suspend concessions" (retaliate) until the United States complies, most readily by repealing the law. Three WTO Members have entered into agreements with the United States in which they are reserving their right to pursue retaliation in the future. Canada and the European Union began retaliating on May 2, 2005, by placing a 15% additional import duty on selected U.S. exports. Mexico imposed higher tariffs on U.S. milk products, wine, and chewing gum as of August 18 and Japan has announced that it will place an additional tariff of 15% on 15 steel and industrial products effective September 1, 2005. Canada is particularly concerned that over $3 billion in duty deposits on softwood lumber may eventually be available for distribution to U.S. lumber producers under the CDSOA. While legislation has been introduced to repeal the CDSOA, the current law has strong congressional support in both chambers. H.R. 1121 (Ramstad), a bill seeking to repeal the measure, has been introduced in the House. In the United States, controversy over the CDSOA is part of a larger ongoing debate in Congress, and in the country as a whole, on the future direction of U.S. trade policy. Proponents of the CDSOA argue that U.S. producers are facing an uneven playing field due to price discrimination and artificial competitive advantage brought about by unfairly dumped or subsidized imports. Continued dumping of the targeted merchandise causes U.S. products to remain less competitive, despite the additional AD or CV duties assessed. Opponents believe that the CDSOA may encourage additional AD or CVD actions, thus introducing a greater level of economic inefficiency into the trading system. They also maintain that other U.S. industries could be damaged by higher prices for intermediate goods used in production, and that exporters could be adversely affected by retaliatory sanctions on their products. The CDSOA and other international trade issues are expected to receive continued attention in the 109th Congress. This report deals with the CDSOA issue in three parts. First, it discusses briefly the background of the law, its implementation and effects, and the WTO dispute settlement proceeding. Second, it addresses the pros and cons of repealing the measure. Third, options for Congress are presented. This report will be updated as events warrant.