November 18, 2005

House votes to repeal Byrd trade law

By Doug Palmer

WASHINGTON (Reuters) - The U.S. House of Representatives
voted early on Friday to kill a 5-year-old trade program that
has paid U.S. companies more than $1 billion and been declared
illegal by the World Trade Organization.

The House voted to repeal the Continued Dumping and Subsidy
Offset Act as part of a broader package of budget cuts intended
to save $49.9 billion over five years.

The program takes duties collected on imports the U.S.
government has determined are unfairly priced or subsidized and
distributes them to competing American companies.

That money went into the general U.S. Treasury before the
law was passed in 2000.

The House vote sets the stage for a tough fight with Senate
supporters over the fate of the program, also known as the Byrd
amendment after one of its chief sponsors, Sen. Robert Byrd, a
West Virginia Democrat.

The Senate has passed a $35 billion package of budget cuts
that does not include a repeal of the program.

More than two dozen senators signed a letter this month
urging Senate Majority Leader Bill Frist not to give into House
demands to kill the measure.

"We do not believe the budget reconciliation process should
be used to substantively change U.S. trade law," they said.

Rep. Jim Ramstad, a Minnesota Republican, has called the
program "the ultimate combination of protectionism, corporate
welfare and government waste."

The Government Accountability Office released a report in
September showing that nearly $500 million in payments under
the dumping and subsidy offset 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
sneaked 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.

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.

They view the program as a valuable tool for helping
companies compete with unfair trade.