WTO: Sanction U.S. Trade

This is potentially a huge story, although a complex one. I’m not sure I understand it as well as I might, but here goes. Use the comment buttons at the end of the story if you want to correct my understanding or otherwise comment on the story.

This is important to metal stampers because metals (I’m not sure yet which ones) are effected.

The Byrd ammendment “overcompensates” for any adjudicated trade imbalances (“dumping”). Since the awards are set so that import duties will fully correct the imbalance, the awards are quite large and the WTO sees the situation as already corrected. Since, in the US, the awards flow to the reporting company, it is rewarded twice, once when the tarifs do their job and fully correct the imbalance, and once again when all that reward money becomes a bonanza for the reporting company.

This creates 2 trade problems – not just the overcompensation but also the dogged determination of some companies to keep appealing forever even when they have a weak case, because the chance that they might win on appeal (or just wearing down the other side) carries such a large monetary award.

Yahoo! News – WTO to EU, Japan: Sanction U.S. Trade: “The World Trade Organization (WTO) gave final approval on Friday to the European Union, Japan and others to hit the United States with some $150 million in trade sanctions in a dispute over an illegal anti-dumping law.

The case, one of a number pitting Brussels against Washington, involves the so-called Byrd amendment, which the Geneva body has repeatedly said breaks trade rules by handing out duties raised in anti-dumping cases to U.S. firms.

The lion’s share of the right to retaliate goes to the EU and Japan, because their companies are the most affected. Brussels has warned it could slap additional duties on U.S. goods early in 2005, if Washington does not repeal the measure.

Both the EU and Japan, given the right to additional levies of $50 million and $80 million, respectively, by the arbitrators, have already presented the WTO with a list of products they plan to hit — ranging from sweetcorn to metals and textiles.

Canada, which along with Brazil, South Korea, India, Mexico and Chile is also involved in the complaint, said on Tuesday that it was studying whether to impose sanctions and on what.

The administration of President Bush has called on Congress to repeal the law. But it enjoys wide support among legislators, who see it as a way of punishing foreign companies accused of dumping, or exporting goods at below the cost of production. “

Canadian reaction is summarized in another story from the Detroit News: Canada may impose retaliatory duties on U.S. imports for the first time since 1986, exposing strains in the world’s largest trading relationship.

Prime Minister Paul Martin’s government published a list of about 128 imports, ranging from live swine to downhill skis, that it may tag with punitive levies totaling about C$10 million ($8 million) next year. Canada is responding to the U.S. failure to comply with a World Trade Organization decision.

From the some people never learn department … Another senator is busy trying to do the same thing with an end run around the WTO ruling that will probably take another 2 years to sort out …

U.S. senator’s bill would give lumber duties to American companies

A powerful U.S. senator is set to introduce legislation next week to pay American lumber companies the more than $3 billion in softwood lumber duties the Americans have collected […]

The money has been held until the outcome of the various trade litigations. If Canada wins on all fronts, the money is supposed be returned to the Canadian companies that paid it.

Under Baucus’ bill, the collected tariffs would remain in U.S. Customs’ escrow accounts and the cash to pay American lumber producers presumably would come out of the U.S. government’s own funds.

B.C. Forests Minister Mike de Jong warned the bill could trigger a “full-scale crisis in the bilateral relationship between Canada and the U.S.”

Meanwhile, this is what the WTO tarrif authorization could mean for Canadians:

Tactic could double cost of U.S. goodsCanadians could end up paying double the price for U.S. peanut butter, whisky, perfume, pearls, yachts, skis or dozens of other American imports if a high-level trade spat between Ottawa and Washington really heats up.

And in the ultimate Canadian insult, Ottawa is even threatening to penalize U.S. maple syrup imports.

Here’s Canada’s electronic consultation web page on the Byrd ammendment. Lots of good information and a feedback form. Here’s a condensed list of potentially effected products (the real one is quite long and detailed).

Live Swine

various fish and seafood products

various dried peas and beans

selected hybrid citrus crops

pizza & quiche

various kinds of pickled vegetables and olives

maple syrup and maple sugar

peanut butter

condiments like mustard and mixed seasonings, salad dressings, mayonnaise

all sorts of bottled waters

beer made from malt (is there such a thing as beer not made from malt?)

various wines, whiskies, rums and vodkas

cigarettes and many other tobacco products

perfumes, toilet waters, manicure and pedicure products, hair products

suitcases and other carrying cases

selected clothing and foodwear

selected wood and paper products

air conditioners

selected office equipment

selected sound reproduction equipment like CD players

selected video equipment, including TVs



pleasure boats



exercise equipment

golf clubs

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