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'Byrd Amendment' Payments Total $285 Million in 2004; Payments Reward US Furniture Companies For Filing Trade Lawsuits

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Members of the Consuming Industries Trade Action Coalition (CITAC) called the recently released FY2004 disbursements of Byrd Amendment payouts totaling $284 million "corporate welfare at its worst." CITAC called on Congress to repeal the Byrd Amendment for the benefit of U.S. consuming and other industries, and in order to comply with international trade rules and avoid retaliation by U.S. trading partners. The Byrd Amendment, formally known as the Continued Dumping and Subsidy Offset Act of 2000, requires the government to distribute antidumping and countervailing duties to U.S. companies that have petitioned the federal government for protection, rather than to the U.S. Treasury and on to U.S. taxpayers, as was the practice prior to the Act. To date, the U.S. Government has paid more than $1 billion directly to U.S. companies who file successful antidumping and countervailing duty petitions. Forty-four companies pocketed more than $1 million each in Byrd money last year, of more than 450 companies, individuals and unions in total that received payments. For the second year in a row, the Timken Company, a Canton, Ohio-based producer of ball bearings and steel tubing, captured the highest Byrd payout, receiving more than $52 million from duties assessed on imported bearings. The second highest recipient was Lancaster Colony Corporation, a candle company based in Columbus, OH that received more than $26 million. (See list of $1 million-plus recipients at http://citac.info/.) Companies in the steel and steel-containing products sectors captured over $138 million in Byrd payouts, and candle companies received more than $50 million in total in FY 2004. Other sectors that received substantial government payouts include food products (such as pasta), softwood lumber, chemicals and cement. "The Byrd Amendment rewards U.S. companies for doing nothing more than filing trade suits," said Michael Fanning, CITAC Chairman and Vice President for Corporate Affairs at Michelin North America. "The law creates a strong incentive to file unjustified trade cases that harm American consumers and the consuming industries that serve them. Moreover, it violates our international trade agreements, leaving U.S. exporters open to retaliatory sanctions while a select few companies enjoy a government handout." In 2002, a World Trade Organization (WTO) dispute settlement panel ruled the Byrd Amendment in violation of U.S. trade obligations, a decision later upheld by the WTO Appellate Body, clearing the way for retaliatory sanctions unless the U.S. repeals the law. The U.S. has already missed the WTO's December 27, 2003 deadline for compliance. Said Steve Alexander, the new Executive Director of CITAC, "Even a small duty can reap millions of dollars for companies who join in trade petitions. With distributions totaling more than $1 billion to date, U.S. producers have every incentive to keep throwing money into filing, expanding and perpetuating antidumping cases. Often these are more lucrative than competing in the open marketplace. With new dumping and countervailing duties placed on popular consumer-oriented products such as bedroom furniture and shrimp, Byrd payouts are expected to skyrocket in the coming years. And the Byrd Amendment is making settlement of the softwood lumber dispute with Canada exceedingly difficult." "It is high time that Congress overcome the objections of a few coddled industries and put an end to this law once and for all," concluded Alexander. In March 2003, the Congressional Budget Office released a report that found the Byrd Amendment encourages the filing of more antidumping and countervailing duty trade cases (which force up the cost of affected imported products to consuming industries), and estimated that CDSOA distributions to U.S. companies who file successful trade cases will total more than $3.8 billion by 2014. CITAC is a coalition of companies and organizations committed to promoting a trade arena where U.S. consuming industries and their workers have access to global markets for imports that enhance the international competitiveness of American firms.

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