What Next for the Byrd Amendment?
October 4, 2004
The Continued Dumping and Subsidies Offset Act of 2000, or Byrd Amendment,
mandates the payment of tariffs collected at the border to U.S. producers
who bring or support trade remedy petitions. There are many problems with
this law. First, the Byrd Amendment was sneaked onto an appropriations bill
at the last possible moment without being fully 
debated
in the Senate. The Senate Finance Committee, which had jurisdiction, never
had a chance to review the amendment. If it had, it no doubt would have been
struck from the bill as being in violation of WTO trade rules. From an economic
view point, it is bad for Americans because it siphons tariff revenues out
of the general treasury at a time when our deficits are enormous and growing.
The money is distributed to a handful of corporations regardless of their
economic need and without any strings attached. In theory, these companies
are using the money to improve their competitiveness, but in reality we have
no idea where the money is going because there is no oversight.
Other problems have arisen as well. The Bureau of Customs and Border Control
was tasked with the collection and distribution of these duties before they
had the opportunity to get organized. As a result, the Bureau made overpayments
of $25 million. It takes time and money to establish the infrastructure to
administer a program like the Byrd Amendment, and then more time and money
to correct administrative mistakes.
When the WTO ruled the Byrd Amendment inconsistent with our international
trade obligations in 2002, we had until December 2003 to repeal the law. Congress
still has not done this and is indicating that it won't do it any time soon.
Instead it is encouraging the Administration to "negotiate" a solution
at the WTO. What that means is that our legislators want the WTO to change
its rules so that the Byrd Amendment becomes legal and can remain on the books.
This would undermine us in two ways. First, from the perspective of an American
taxpayer, it is a rip-off. The taxes paid at the border by importers are passed
along to consumers in the form of higher prices. It's simply unacceptable
for these duties--largely paid by consumers--to be diverted from the Federal
Treasury where they might be used to pay for useful public programs that benefit
a large number of Americans and instead be given to a few large corporations
without strings attached.
Secondly, asking the WTO to change its rules to accommodate a misguided American
law sets a very bad precedent. Not only does it represent an abdication of
leadership on the part of the United States, but it opens the door to other
countries insisting that the international trade rules be changed to accommodate
their illegal practices. If that's what we're going to do, then the WTO becomes
completely irrelevant. The case against the Byrd Amendment is a crucial test
of the WTO's credibility as well as that of the United States. Will the U.S.
comply with international trade laws it helped draft itself? Or are we now
going to say that those laws are an imposition on our sovereignty and ignore
them?
Finally, of course, if we fail to do anything, some of our trading partners
will take it out on the very American businesses which are making a contribution
to our economy--namely our exporters. Why should the U.S. Senate decide that
some American companies -- those looking for a big, fat handout without strings
attached-are more important than other companies that are producing goods
and commodities, selling them competitively on the world market, and creating
good jobs in the process? That just makes no sense at all.
CWT urges you to weigh in with your Representative in Washington and urge
him/her to repeal the Byrd Amendment. We have drafted an email message for
you to send. All you have to do is click here.