October 24, 2005

House panel targets U.S. Byrd law for repeal

WASHINGTON (Reuters) - A U.S. House of Representatives
committee will vote this week on legislation repealing a
5-year-old trade law that has paid U.S. companies more than $1
billion and been declared illegal by the World Trade
Organization, congressional aides said on Monday.

The law distributes duties the U.S. government collects on
imports it says are subsidized or unfairly priced to competing
companies within the United States. That money used to go into
the general treasury before the Continued Dumping and Subsidy
Offset Act was passed in 2000.

Republican leaders on the House Ways and Means Committee
have proposed repealing the measure to save $3.5 billion over
five years. The provision also is known as the Byrd amendment
after one of its chief sponsors, Sen. Robert Byrd, a West
Virginia Democrat.

Last month, the Government Accountability Office released a
report showing that nearly $500 million in payments under the
dumping and subsidy act went to just five companies and
two-thirds of total payments went to only three industries:
bearings, candles and steel.

Congress passed the Byrd amendment in 2000 as part of an
agricultural appropriations bill. Opponents complained it was
snuck into the legislation without review by the House Ways and
Means Committee and the Senate Finance Committee, which have
jurisdiction over taxes and trade.

Eleven U.S. trading partners challenged the provision at
the WTO. Canada, the European Union, Japan and Mexico have
imposed about $115 million in retaliation on U.S. exports after
the United States failed to a meet a December 2003 WTO deadline
for repealing the measure.

The Bush administration has proposed repealing the program,
which remains popular with many lawmakers.

Byrd and other program supporters have repeatedly urged the
White House to negotiate the right for the United States to
keep the program as part of world trade talks.

The House Ways and Means Committee will vote on Wednesday
on repealing the act as part of a package of spending cuts
being considered by the panel.

The Republican-controlled Congress voted earlier this year
to cut mandatory spending by $35 billion over five years and
conservatives concerned about the mounting cost of hurricane
recovery efforts want to raise the total to $50 billion.

House conservatives also want across-board spending cuts on
domestic programs along with some recisions for some already
appropriated funds. Democrats opposed the $35 billion in cuts
approved in the spring and are expected to resist any
additional cuts.