As
the budget reconciliation package works its way through
Congress, the Continued Dumping and Subsidy Offset Act (known
as the Byrd amendment) may be repealed. While most experts
gave the repeal little chance of getting out of committee,
the provision has been approved by the full House as attached
to a sweeping budget package. The budget bill now comes
before the Senate, where the Byrd Amendment has more support,
including that of its original author, Robert Byrd of West
Virginia. While there is a good chance that the repeal will
be stripped from the budget by the Senate, the fact that
it progressed this far demonstrates the problems that have
arisen with this program.
This
law has been extremely controversial in the Louisiana crawfish
industry and in international marketing in general. The
Byrd Amendment provides that duties on certain products
(such as crawfish tail meat) that are imported at less-than-market
value go directly to U.S. companies. In 1997, stakeholders
in the Louisiana crawfish industry were encouraged that
the new Byrd Amendment would compensate Americans for the
impacts of low-priced imports. But in many cases, encouragement
has turned to disappointment as the expected revitalization
of the in-state processing industry failed to occur.
The
payment of duties directly to affected companies, as mandated
by the Byrd Amendment, is unprecedented. In 2002, the World
Trade Organization (WTO) determined this process violates
international trade agreements. Countries whose products
have had Byrd duties assessed (Canada, Japan, Mexico and
the European Union) retaliated with WTO-approved duties
on U.S. products. Retaliatory tariffs against certain U.S.
imports in those countries total some $114 million.
Consumer
advocacy groups and free-trade coalitions have criticized
the effects of the Byrd amendment, saying that the law impedes
commerce and gives large amounts of money to a very few
U.S. producers. Our own Government Accountability Office
found the Byrd Amendment “undermines the effectiveness
of trade remedies” and that there is no way to accurately
determine the validity of nearly $2 trillion in claims from
U.S. companies.
At the
same time, many industries (like the Louisiana crawfish
industry) have been devastated by the flood of extremely
cheap imports. While the Byrd Amendment has been the only
relief in sight, it has also been fraught with problems.
Only 27 crawfish processors are eligible for payments. Crawfish
farmers, fishermen, distributors and retailers are not eligible
for compensation, even though depressed prices due to imports
have hit them as hard as anyone. Additionally, around 100
crawfish processors that closed largely due to the effects
of low priced imports before the Byrd Amendment (1997) are
also ineligible.
And
yet another problem is the inability of our Customs and
Border Protection to collect many of the imposed tariffs.
In 2004, $170 million in crawfish tariffs went unpaid. Customs
has found that tracking down some of the importers has been
like hitting a moving target: companies disappear, change
names, declare bankruptcy or contest the duties.
What
will happen if the repeal effort succeeds? Tariffs on imported
crawfish tail meat, and the other imported commodities which
have tariffs, will still be collected, but the money will
be deposited in the general fund of the U.S. Treasury. Relief
for the Louisiana crawfish industry will then have to be
sought through other avenues.
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