U.S. Lets Pass WTO Deadline to End Tariffs
The United States has missed a deadline from the World Trade Organization to repeal a law that gives millions of dollars in tariff revenue to companies, exposing the U.S. to sanctions from the European Union, Canada and Japan.
International Paper Co., Temple-Inland Inc. and Potlatch Corp. are among U.S. timber companies that stand to gain at least $800 million from preservation of the so-called Byrd amendment, because of duties on Canadian softwood.
The Byrd amendment, enacted in 2000, is designed to help steel producers, farmers and other companies that say they are being hurt by illegal government subsidies or unfair pricing by foreign competitors. The law requires that anti-dumping tariffs go to companies rather than the Treasury.
The European Union has said it is preparing to retaliate against U.S. products unless Congress repeals the legislation, named after Sen. Robert C. Byrd (D-W.Va). A WTO ruling last year opened the way for sanctions from the European Union, Canada, Japan and other governments.
Those governments will detail how or whether they plan to retaliate as soon as next month. The 15-nation EU already has announced penalties beginning in March unless Congress ends tax breaks worth $5 billion a year to U.S. exporters such as Boeing Co.
“We had agreed that Dec. 27 would be the date when the U.S. had to comply, and they haven’t done so,” said Arancha Gonzalez, a European Commission spokeswoman in Brussels. “Now we’ll have to go to Geneva and take it from there in the new year.”
Last year more than $300 million was distributed to companies including U.S. Steel Corp., Hershey Foods Corp., Ingersoll-Rand Co.’s bearing division and candle maker Lancaster Colony Corp. That distribution may skyrocket because of tariffs on $5.5 billion of Canadian lumber.
The Bush administration, which has urged that the law be changed, may lack sufficient support in Congress. After the ruling in January 2003 by the WTO, the global trade arbiter, 68 of the 100 U.S. senators put their names on a letter opposing repeal.
Because of the amount collected so far -- $1.6 billion -- distributions from U.S. tariffs on Canadian lumber would dwarf other payouts. Those collections have not been passed along to companies because of disputes between the Canadian and U.S. industries on the size and scope of the levies.
