REPEAL THE "BYRD AMENDMENT"

Background:

Formally known as the Continued Dumping and Subsidy Offset Act of 2000 (CDSOA), the Byrd Amendment annually funnels money collected from the imposition of antidumping (AD) and countervailing duties (CVD) from government coffers directly to companies that petitioned for those duties (more than $ 1 billion so far, with billions more waiting in the wings). The Byrd Amendment does not require that the funds be used for any particular purpose. The money is allocated based on a formula that includes ordinary business expenditures, assuring that large companies get more money than small ones.

The Byrd Amendment was inserted by Senator Robert Byrd (D-WV) in the Agriculture Appropriations Act of 2000 during Conference Committee action on the bill. The provision was not included in either the House or the Senate-passed versions of the bill. No committee of jurisdiction in either the House or the Senate reviewed it. President Clinton signed the bill on October 28, 2000, but protested the Byrd Amendment provision, recognizing that it violates common sense as well as U.S. international trade obligations.

The World Trade Organization (WTO) ruled the Byrd Amendment unlawful under the agreements on antidumping and subsidy measures. Repeal is the only method of fixing this violation; however, to date, Congress has not taken this step. The Bush Administration has called for repeal of the Byrd Amendment, describing it (accurately) as a corporate welfare program and bad economic policy. If repeal is not forthcoming soon, retaliation against US exports is assured.

Impact on Consuming Industries:

Many consuming industries rely on imports of raw materials or components to maintain global competitiveness. The Byrd Amendment provides a double hit on importers of products subject to antidumping and countervailing duties. They not only must pay these duties (which, because of the "retrospective" system of collection, are of uncertain amount) but also must see them transferred to their U.S. competitors. The Byrd Amendment encourages U.S. producers to file AD and CVD actions knowing full well they will be eligible for monetary distributions. U.S. companies in line to receive these payments have a clear incentive to include more products within the scope of cases, including products not even made in the United States. Consumers see cases filed because of the promise of Byrd money (such as the infamous shrimp case). Other cases include within their scope products not produced here, such as certain antifriction bearings (e.g., certain metric sizes and metallurgical requirements); and steel wire rod for "cold-heading" and manufacture of wire for tire cord.

The CITAC Solution:

Congress should repeal the Byrd Amendment in 2005. Repeal would do away with one of the most egregious current examples of corporate welfare, totaling more than $1 billion to date with no strings attached. Repeal would not affect the operation of the antidumping and countervailing duty laws, but would keep the revenue collected from such actions where it belongs-in the government's hands, to be spent on more urgent needs.

Byrd Amendment Distributions of $1 Million or More
Fiscal Year 2004

Byrd Amendment Distributions of $1 Million or More
Fiscal Year 2004

Source: The Trade Partnership from Customs and Border Protection data.

Total Byrd Amendment Disbursements to Date