Brussels, 12/07/2001 (Agence Europe) - In association with eight third countries, the European Union is to ask the World Trade Organisation to set up a panel to check the legality of the American so-called "Byrd Amendment" provision, which provides for returning the product of anti-dumping and countervailing measures to companies that instigate such cases. Unprecedented to date, the joint action undertaken with Australia, Brazil, Chile, India, Indonesia, Japan, Korea and Thailand - to which Canada and Mexico should be added in September - is the reflection of the "systematic deep concerns that this legislation has aroused among members of the WTO, the proof that it is not a problem between the EU and the United States but a problem between the United States and the rest of the world". This is a "very clear signal to Washington for the need to abolish a legislation that so flagrantly flouts the letter and spirit of WTO law", commented Commissioner Pascal Lamy.
The draft Byrd Amendment, put forward by the Democratic Senator of the same name under pressure from the American steel industry, was made law on 28 October last in the framework of legislation on agricultural products that President Clinton decided to sign despite many protests, including that of the EU. The one who was then the host of the White House had placed in the balance the interest that presented agricultural appropriation legislation as a whole for "the American people", while calling on Congress to "neutralise" the controversial provision through later legislation. As for the Bush Administration it refused to backtrack over this law to try and convince Congress to abandoning it. The consultations lead under the auspices of the WTO, since last December, have since then come short and, on 26 June, the "proposed rules" appeared in the Federal register to implement the Byrd amendments. This is a clear confirmation of the decision by the United States to redistribute the first Byrd subsidies next autumn, felt Brussels.
This redistribution should enable companies that are at the source of the anti-dumping or anti-subsidy procedures to recover the spending agreed upon, among others, to invest in manufacturing plants and to acquire technologies. In fact, it is foreseen that the Administration deposit, on the specific bank accounts, the earnings from the surtax imposed on unfair competitors and that it pays, during the following fiscal year, this amount to the American companies that have filed the case. For the Europe as well as for its allies in this case, such a provision creates a system of perverse incentives to unleash trade defence procedures. It is a source of major concern because it clearly infringes the WTO rules and may potentially affect all the trading partners of the United States, feels Brussels, where they emphasis that:
1. The reimbursement of the costs incurred by the applicants is an illegal response to dumping and to subsidies, because it procures an additional anti-dumping and anti-subsidy remedy, which is not authorised under the WTO agreements; thus it is a two fold protection that the Byrd amendment brings the industry by compensating the injured parties, already protected by the imposition of surtaxes at the border;
2. The distribution of duties to petitioners is a clear incentive to bring cases and will result in an increase in trade litigation against companies exporting to the US.
3. The Byrd amendment "distorts the application of the standing requirements for filing a petition and makes it more difficult for exporters subject to an antidumping or countervailing duty order to secure an undertaking with US authorities".
Canada and Mexico, which opened dispute settlement procedure in Geneva on 21 May 2001, are still in the very first phase - the consulting phase - of the procedure. It is nonetheless likely that they will join the action of the other nine co-complainants next September, when the second request for establishment of a panel will be filed and the panel actually established.