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March 11, 2005

HR 1121: Repeal of the Byrd Amendment

From Yahoo News
WASHINGTON, March 10 /PRNewswire/ -- Members of the Consuming Industries Trade Action Coalition (CITAC) applauded Reps. Jim Ramstad (R-MN) and Clay Shaw (R-FL) for their introduction of HR 1121 that would repeal the "Continued Dumping and Subsidy Offset Act," commonly referred to as the "Byrd Amendment."
The Byrd Amendment has been used as a protectionist tariff against foreign products, most notably Canadian lumber. Besides its failure to justify the duties under NAFTA and to the WTO, a CBO report from last year found that the Byrd Amendment "has an overall negative effect on the U.S. economy by encouraging the filing of dumping and countervailing duty cases and discouraging settlements". (21 ITR 452, 3/11/04)

President Bush has also included a request to repeal the amendment in his 2005 Budget submitted to Congress.

Aside from ending a true case of corporate welfare (which in the case of soft lumber imports "essentially amounts to a 20 percent federal tax on consumers") ending the Dumping and Subsidy Offset Act will go a long way to easing the trade tensions between the US and Canada which led to this outburst by Canadian MP Marlene Jennings:
" Let's embarrass the hell out of the Americans in front of other countries that they are attempting to negotiate with on new binational trade agreements," she said then. Later, she added that the United States might find it difficult if Canada lets it be known that it is having trouble with the Americans on a number of trade fronts. "They want to expand their markets and other countries are going to be leery if they see that America's best trading partner, closest neighbour, is saying, 'We're having problems getting the United States to respect this [free-trade] agreement.'"
While inflammatory, her comments are not without merit. How can the US promote itself as a nation of free trade when laws such as the Byrd Amendment are allowed to continue in direct opposition to NAFTA?

But don't expect the person whose name is attached to this law to support the repeal if the Senator's response to last year's CBO report is any indication:
"I take strong exception to the CBO report's implication that, in the face of unfair trade practices, American companies should give foreign competitors the keys to their U.S. shops, kick U.S. workers to the curb, and wave goodbye with a wistful sigh."

...Byrd asked that the entire report be formally withdrawn.
It's sad that Senator Byrd apparently views Canada as the "Great Satan" of trade.

I wonder what the chances of the Byrd Amendment being repealed would be if Byrd's fellow Democratic Senator, John Kerry, had been elected to the Presidency? Consider Kerry's statement when the WTO ruling on the Byrd Amendment was handed down in August, 2004:
Once again, the Bush administration failed to stand up for American companies and workers at the WTO, and as a result, unfair trade practices are hurting our economy and middle-class families.
I'd have put the odds for repeal under President Kerry at roughly diddly/squat. And yet, Kerry was the hoped-for candidate in Canada. Go figure.

I'm sure that despite the fact the bill to repeal the Byrd Amendment was introduced by Republicans and that Democrats, such as Kerry and Byrd, will line up to oppose it, some will still place the blame for the trade woes with Canada on the Republicans in general and President Bush specifically.

Update: Here's an article reprinting a March 7th Chicago Tribune column. This concentrates on the pork industry rather than lumber and American companies cashing in on the Byrd Amendment:
Last year the Commerce Department rejected the notion that Canada illegally subsidizes its hog farmers, but nevertheless set preliminary duties on live hogs from Canada at 13 percent to 15 Percent. Commerce promised to review that decision this week.
And just look at the terrible hardship it's suffering because of those evil Canadians:
Consider this: Smithfield Foods, the nation's top U.S. hog and pork producer, reported Tuesday that its latest quarterly profit had doubled compared with the previous year because hog prices and exports have surged. If that constitutes being harmed by Canada, maybe Smithfield should ask for a second helping, please.
Quite.

Posted by Skayhan at March 11, 2005 10:30 AM

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