US to fight EU trade sanctions threat

WASHINGTON/GENEVA (Reuters) - The United States said Thursday it would fight efforts by the European Union and other major U.S. trading partners to slap sanctions on U.S. exports potentially worth hundreds of millions of dollars.

The new move to seek sanctions by the EU, Canada, Japan, India, Brazil, Mexico, Chile and South Korea was aimed at a controversial U.S. trade law -- known as the Byrd amendment -- which the World Trade Organization declared illegal one year ago.

The United States missed a Dec. 27 deadline to repeal the law or face possible retaliation. U.S. trade officials said they would continue urging Congress to take the measure off the books, while fighting the sanctions threat at the WTO.

The spat is the latest in a series of disputes involving the government of President Bush, an avowed free trader who critics accuse of being reluctant to bow to WTO rules when they go against the United States.

In the case of the Byrd amendment, Bush proposed repealing the provision last year, saying revenues it generated could be put to better use. But he ran into strong opposition from both Republican and Democrats in Congress, who said the WTO overstepped its authority in striking down the measure.

The provision was signed into law by former President Clinton as part of a 2000 budget year spending bill. It changed how funds raised by anti-dumping duties on allegedly unfair imports are distributed.

Previously those duties went into the general U.S. Treasury. But since 2001, the funds have been distributed to companies that brought anti-dumping cases.

Over the past three years, the United States has paid $710 million to U.S. ball bearing, steel, candle, pasta, seafood and other companies under the measure, named for Sen. Robert Byrd, a West Virginia Democrat who helped it become law.

In future years, American lumber companies could receive billions of dollars annually under the program if disputed U.S. anti-dumping duties on Canadian wood are included.

"The Byrd amendment has raised widespread concerns ... as evidenced by the large number of complainants in this case," European Trade Commissioner Pascal Lamy said in statement announcing the EU's plan to seek retaliation.

"I hope the U.S. will now take action to remove this measure, thus avoiding the risk of sanctions, he added.

But even critics of the Byrd amendment said the EU and other trading partners might have a tough time persuading the WTO to approve substantial sanctions in the dispute.

"I don't think they're going to get a big enough number from the arbitrator to make the administration and the Congress jump," said Daniel Ikenson, a Cato Institute trade policy analyst who has urged the provision be repealed.

The retaliation request will be heard by the WTO's disputes settlement body at a special session called for Jan. 26. EU and other officials have stressed that having the go-ahead does not mean sanctions will be immediately enforced.

As yet, the EU and its allies have put no figure on the sanctions sought. But they said it should be in line with sums handed out by Washington to local firms.

Congressional supporters said the WTO should approve only a very low level of retaliation, if any at all.

They argued the EU and other trading partners would be hard pressed to show they have lost any trade because of the Byrd amendment. And unless they can prove that, they are not entitled to retaliation under WTO rules -- even if the Byrd amendment is illegal, congressional aides said.

John Veroneau, general counsel for the U.S. Trade Representative's office, echoed that sentiment in a statement announcing the United States would fight the sanctions move.

"The retaliation being sought by the other complaining parties does not appear to be based on actual harm to their exports," Veroneau said.

OMG! INDIA!!!
Tell ya what - they can go ahead with their plans, and maybe someone in our government will grow a set and cancel all H1-B visas and drive the India Caucus out of the Senate.

So let's see if I've got this straight.

EU companies illegally dump goods in the US, and are fined for it. The money collected from the fines goes to the companies harmed by the dumping. The EU is pissed, and wants the money to go into the US treasury instead.

Hey, EU. Take a flying leap! Once the fine has been imposed we can do whatever we damn well please with the money. Get over it.

How long will we stand for the EU dictating internal policy?

I actually agreed with EU position on The Infamous Panderation Steel Tariff. However, I think they are now attempting to unfairly press an advantage. If the WTO does not reject their bogus and unfair demands, the US needs to act unilaterally and devise retaliation as necessary.

Perhaps we can do some electioneering against key leaders in the EU. After their rather despicable threats to tariff Florida Orange Juice in an effort to swing 25 Electoral Votes, the EU has lowered the bar to the point where they deserve condign punishment.

4 posted on 01/15/2004 3:31:30 PM PST by .cnI redruM (Dean, Clark, Deadwards, Kerry - If were an Iowan, I'd vote Opis in '04.)

What, you mean the EU can't manage it's own budget, so figures the US ought to help it out a little?

Why do we deal with these people?

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