EU Retaliation

The Issue:

The European Union (EU) recently expanded retaliatory duties of 15 percent (on top of normal duties) on European imports of certain U.S.-made footwear, apparel and textile exports in connection with a dispute settlement case on the Byrd Amendment, which provided for distribution of anti-dumping and countervailing duties to trade remedy petitioners (U.S. manufacturers)—an action the WTO ruled was in violation of international trade agreements. Although the Byrd Amendment was repealed in 2005, that repeal did not take effect until October 2007. Because of the delayed repeal, the EU has successfully petitioned the WTO to keep retaliatory duties in place. This situation is a perfect example of how an action that is supposedly meant to protect U.S. manufacturers (i.e. petitioners in an anti-dumping case) actually hurt U.S. manufacturers (i.e. the U.S. apparel, footwear and textile products manufacturers whose exports to Europe, their biggest export market, are now subject to sanctions in the form of 15 percent punitive duties).

AAFA on the Issue:

AAFA has been working to help remove members’ products from retaliation lists and supports legislation to remove the underlying trade disputes.

The Latest News:

10.09.07

October 1 marked the end of the corporate welfare program called the Byrd Amendment. The Byrd Amendment, formally known as the Continued Dumping and Subsidy Offset Act of 2000 (CDSOA), funneled money collected from the imposition of antidumping (AD) and countervailing duties (CVD) from government coffers directly to companies that petitioned for those duties. This money -- amounting to billions of dollars over the past five years -- acted as a huge incentive for companies to bring antidumping and countervailing duty cases against US imports. In response to the law, the European Union (EU) took the United States to the World Trade Organization (WTO) due to the law's clear violation of global trading rules. The EU won the case, whereupon it imposed punitive duties of 15 percent on EU imports of US-made clothes and shoes, which remain in place to this day. While Congress finally overturned the Byrd Amendment at the beginning of 2006, the program's proponents successfully included a phase-out period for the law, which ended October 1.