WTO Approves Sanctions Against U.S.

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GENEVA (AP) - The World Trade Organization has authorized punitive sanctions against U.S. exports ranging from lobsters to crane trucks because Washington has failed to repeal the so-called Byrd amendment.

"It's been approved," Amina Mohamed, Kenyan ambassador to the WTO and head of the organization's dispute settlement body, said Friday.

Canada, the European Union and others were granted final WTO authorization to retaliate by imposing duties against American products. Among the potential targets are cod, cigarettes, textiles, glassware, mobile homes, apples and lentils.

The American law, formally known as the Continued Dumping and Subsidy Offset Act of 2000, was ruled illegal two years ago by the 148-country WTO, which referees global commerce.

That followed complaints by WTO members including Canada, the EU, Brazil, Mexico, South Korea, Japan, India and Chile.

The legislation, nicknamed for its congressional sponsor, West Virginia Senator Robert Byrd, gives American companies the proceeds of anti-dumping duties levied against foreign goods that those companies complain are sold in America at unfairly low prices.

The WTO found that the measure breaks trade laws by punishing exporters to the United States twice - because they are first fined and then those fines are given to their competitors.

"The United States cannot point to any progress for the repeal of the Byrd amendment," even though Washington "has received ample time to bring itself into compliance," said Canadian trade official Rambod Behboodi.

Canada's International Trade Minister, Jim Peterson, said this week that Ottawa is "launching consultations with Canadians" on the form retaliation should take.

However, U.S. trade official Steven Fabry told Friday's WTO meeting that America intends to comply with the WTO decision and "we do not believe that it will be necessary" to apply sanctions.

A spokeswoman for the U.S. mission in Geneva said the United States plans to obey the ruling in a way that protects American jobs.

Distributions to American companies under the Byrd amendment amounted to $240 million US last year, primarily to makers of steel, ball bearings and household items.

Canada has outlined two retaliatory options: tariffs against "certain imports" from the U.S., and easier imposition of anti-dumping and countervailing duties against American goods.

The EU has made clear that it intends to act against American goods from influential parts of the United States that "could help Congress focus its mind on compliance."

Among those products are heavy machinery made by companies like Caterpillar Inc., based in Illinois, the home state of U.S. House Speaker Dennis Hastert.

Other EU targets could include makers of pasta and candles.

Japan, meanwhile, "cannot overlook this disregard by United States of its obligations under the WTO," said Japanese trade diplomat Keiichi Higuchi.

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Source

Interesting. On one hand, I can see how American companies could be upset that foreign competitors are selling their product inexpensively in the States and driving down their profits. On the other, is it not the company's responsibility to become more competitive in the market, not the government's responsibility to step in?

My other question is, what happens to the millions, possibly billions of dollars that have been collected by the US illegally in fines over the past two years, since the WTO stated that the law was illegal? The sanctions have not been allowed so that international companies can recoup their losses in fines, but as a retaliation measure until the US complies with the WTO's ruling.

What they do is put in appeal after appeal while hording it for themselves.

:shuriken:

Sanctions on America, now I really would love to see that. But I doubt it'll ever happen :( . What they're doing do our lumber exports (Canada) is just pathetic. Anyways, love that sig of your magicnakor :lol: it's a keeper.

will china abide by the sanctions?


its all cuz of that POS of a president we have.

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Originally Posted by atiVidia

its all cuz of that POS of a president we have.

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In an unusal defense of Bush, it's not his fault entirely this time. he has tried to put through policy that would open our markets, not favour home grown industry. Congress are the ones that are more to blame, The idea being to protect industries from cheap imports.... it's a 2 way street, protect jobs at home on one side but incuring penalties on the other.

That said the buck always stops with the man in charge

The definition of "Dumping" is also established, and the US definition basically included a lot of imports that were not being Dumped, hence the legal action.

Something that is "Dumped" in the USA, must be available in the USA cheaper than the country of origin of the product.. this clearly wasnt that case, it was just cheaper than the US home grown products.

That is protectionism, not anti-dumping.

Even if a product is cheaper in the US than the country of origin does not mean it has necessarily been dumped. It may that in controlled economies such as China the price is deliberately kept high to keep domestic demand low in order to promote exports. True dumping is selling a product at a loss to either dispose of it or destroy the competition.

The US, as has many Western countries, concerns about the cost bases in countries like China undercutting home producers. However, if there is going to be a committment to free trade there considerable limits to the degree of protectionism that can be afforded domestic companies.

An alternative is to let the dollar slide and make imports expensive. This will help the trade deficit but like all things it will have a downside. One example of this is that oil is traded in dollars, so a weaker dollar will make oil cheaper for everybody else but not the US. As energy is one the major cost factors this benefit may help offset the losses for companies in places like China and further increase their competitiveness. Unfortunately, in the global economics there are no quick fixes and usually a problem has to be dealt with sooner or later by biting the bullet - as a rule it is those at the bottom of the heap that are asked to bite the hardest.