On behalf of the Association, comments were submitted last week to the House Ways and Means Committee in support of a bill, H.R. 1121, to repeal the Continued Dumping and Subsidy Offset Act, otherwise know as the “Byrd Amendment.” This bill, with many others, has been grouped together for consideration of a “miscellaneous tariff bill” (MTB) in the 109th Congress. The several provisions of miscellaneous tariff bills are generally to be considered “non-controversial,” which is certainly not a typical characterization for legislation involving the Byrd Amendment. Therefore, its ultimate inclusion in an MTB, should one be passed by this Congress, is doubtful. Nonetheless, the proposed repeal of the Byrd Amendment is a matter of continuing debate and could occur outside of an MTB, for example, in separate legislation. In any case, it is important the Association take every available opportunity to “go on the record” in support of repeal of the Byrd Amendment. In the next several weeks and months, we will be taking several steps to move this process forward.
The several points made in our submission are as follows:
■ The Byrd Amendment has been ruled illegal by the World Trade Organization. Because of this country’s failure to repeal the provision today, the WTO has authorized several of our major trading partners to institute retaliatory measures against U.S. exports. Indeed, Canada, the European Union and Japan have already established retaliatory tariffs. Several other major trading partners – including Brazil, Chile, India, Mexico and South Korea have gained authorization from the WTO to impose retaliatory duties of their own.
Obviously, it is highly unjust for certain select domestic producers to reap the benefits of Byrd Amendment payouts, while a much larger group of U.S. exporters – most of whom have not received a dime of “Byrd money” – are laden with punitive tariffs.
As the largest and most influential member of the WTO, the United States has an inherent obligation to abide by – not ignore – WTO rulings, even when those rulings may displease certain private sectors of our economy or interests within the legislative branch. If not, we can not realistically expect our trading partners around the globe to respect or adhere to WTO rulings that favor the position of the United States.
■ The Byrd Amendment is unfairly punitive as to U.S. importers. These companies must operate under the weight of antidumping/countervailing duty measures regarding their trade in food products covered by such orders. While AFI respectfully submits that there are substantial flaws in the implementation of such orders – including frequent and inexcusable delays in the liquidation of entries to which AD/CVD duties apply – they understand that these measures are legally sanctioned by the WTO and U.S. law. When AD/CVD duties are imposed, they are paid.
However, there is no sound or just national or economic policy to justify remission of these duties to the U.S. companies that filed or supported the AD/CVD petitions. The purpose of AD/CVD orders is to equalize pricing in the U.S. and “home” markets; it is not to provide a windfall for U.S. producers.
■ The clear inequity and demonstrable illegality of the Byrd Amendment is a direct consequence of the fact that it was approved by Congress through “back door” channels as a last minute amendment to an appropriations bill. It was NOT reviewed by the Subcommittees and Committees of jurisdiction, the very bodies to which such measures should be and typically are routinely referred so as to benefit from a knowledgeable and dispassionate review in light of existing law, international obligations and sound national and economic policy.
■ Every dollar of Byrd Amendment money that does to a domestic petitioner/supporter is a dollar that no longer goes to the general fund of the U.S. Treasury. In other words, the Byrd Amendment operates as a drain on the budget of the United States which, at the very least, exacerbates the already dire budgetary shortfall in this country. It is, purely and simply, a “deficit enabler.”
As a result of the diversion of AD/CVD duties from the U.S. Treasury to the pockets of domestic petitioners/supporters, government agencies and programs must make do with less, or the revenue lost would need to be otherwise re-generated through some form of tax hike or new fees. In either case, the American public loses.
There should be nothing controversial about the repeal of an illegal and ill-considered statutory provision. As this country aims in the current Doha Round of multilateral negotiations under the WTO to eliminate government subsidies provided abroad, we should not be fostering an illegal subsidy on our own shores. The time for repeal of the Byrd Amendment is now.
We will keep the Association closely informed as this process continues.
