Bridges Weekly Trade News Digest • Volume 7 • Number 2 • 22nd January 2003

WTO Appellate Body Rules Against US On Antidumping

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On 16 January the WTO Appellate Body delivered its decision on a dispute relating to US legislation that allows American companies to claim money collected from antidumping or countervailing duty orders on foreign imports. In its decision, the Appellate Body upheld an earlier WTO panel ruling that found that the US Continued Dumping and Subsidy Offset Act of 2000 (CDSOA) — popularly known as the Byrd Amendment — constitutes an act against dumping and subsidisation, which is not allowed under WTO rules (see document WT/DS217/AB/R, available online at http://docsonline.wto.org).

The Appellate Body upheld the panel’s key finding that the Byrd Amendment "is a non-permissible specific action against dumping or a subsidy" contrary to Article 18.1 of the WTO’s Antidumping Agreement (ADA) and Article 32.1 of the Agreement on Subsidies and Countervailing Measures (SCM Agreement). The Appellate Body, however, did reverse the panel’s earlier finding that the Byrd Amendment would result in more applications for the initiation of antidumping and countervailing investigations by providing a financial incentive to US companies to file such applications. The Appellate Body declared that the panel had no evidence for making such an "overreaching conclusion."

The EU, one of eleven WTO Members that filed a joint complaint against the US legislation, said the US should repeal the Byrd amendment "without delay," given "the clear WTO inconsistency of the law itself and the very broad interests affected."

The three-member panel which ruled against the Byrd Amendment last September agreed with the complainants that the best way for the US to comply with its ruling was by rescinding the legislation altogether. The Appellate Body was not asked to rule on the panel’s suggestion, and merely recommended that the US "bring the CDSOA into conformity with its obligations" under the ADA and SCM Agreement. The US noted that the language of the Byrd Amendment does not refer to the constituent elements of dumping or subsidisation, nor is dumping and subsidisation the trigger for the application of the legislation and the redistribution of duties.

In its ruling, the Appellate Body agreed with the panel in rejecting the US arguments. "It is clear from the text…that the CDSOA offset payments are inextricably linked to, and strongly correlated with, a determination of dumping…or a determination of a subsidy," the Appellate Body declared.

The Appellate Body said it was not necessary that the Byrd Amendment make an explicit reference to dumping or subsidisation in order to constitute a specific action against dumping or subsidisation. In the 1916 Act ruling, "we required that the constituent elements of dumping (or of a subsidy) be "present," which in our view can include cases where the constituent elements of dumping and of a subsidy are implicit in the measure," the Appellate Body declared.

ICTSD Reporting; "WTO Appellate Body Condemns Byrd Law As U.S. Considers Repeal" INSIDE U.S TRADE, 17 January 2003; "Appellate Panel Upholds WTO Decision Against Byrd Amendment; EU Seeks Repeal" WTO REPORTER, 17 January 2003.