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The BBC's Emma Jane Kirby
"The largest number of co-complainants in any disagreement ever brought before the WTO"
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Tuesday, 24 July, 2001, 19:27 GMT 20:27 UK
US trade policy sparks complaint
A steel worker
The steel industry is at the heart of the WTO complaint
By Emma Jane Kirby, the BBC's Geneva correspondent

Nine countries have lodged a complaint with the World Trade Organisation (WTO) over the United States' anti-dumping policy.

Anti-dumping laws aim to prevent companies from exporting products at a price lower than what they normally charge on their home market, thereby putting unfair competition on domestic producers.

Australia, Brazil, Chile, the EU, India, Indonesia, Japan, South Korea and Thailand have all asked the WTO`s dispute settlement body to rule on a new US law, which they claim encourages US firms to block imports from foreign competitors.

At issue is the controversial Byrd amendment, passed in Congress last autumn.

It changed the way that anti-dumping fines are levied by US Customs authorities, diverting them away from the Treasury and straight to the companies that filed the complaints against overseas competitors.

Common complaint

The nine co-complainants, which together make up the largest number of complainants in any disagreement brought before the WTO's dispute settlement body, argue the Byrd amendment gives US companies an incentive to complain and is therefore against WTO anti-dumping agreements.

They also fear that the law could lead to copycat legislation in other countries where home firms feel themselves under pressure from foreign competitors.

Bill Clinton, who was president at the time the Byrd amendment was being considered, also condemned the law and appealed to Congress not to pass it.

But the new Bush administration refutes the claim that it contravenes WTO rules.

Byrd beneficiaries

More than 2,000 American companies are in line to receive fines levied under the Byrd agreement, and 46% of those companies that have won dumping complaints are steel firms.

President George W Bush has already launched an inquiry into steel to see if increased imports cause serious difficulties for the US steel industry.

If the inquiry proves they do, Washington could impose high tariffs on the imports, which would rattle overseas allies and competitors.

Their concern would be that such measures would portend growing US protectionism and the restriction of international trade.

Fresh tensions

This new dispute over anti dumping laws opens up a fresh area of trade tensions between Washington and Brussels ahead of the proposed new round of market opening global trade talks due to take place in Doha, Qatar in November.

One of the most difficult outstanding EU-US disputes concerns an EU challenge of a multi-billion-dollar tax break for US exporters, which WTO experts are thought to have found to be in violation of global trade rules, claiming the breaks act as an illegal export subsidy.

The US and the EU have already settled one prolonged dispute over banana imports in Europe.

The nine co complainants today called for an independent legal panel to be set up to rule on the US amendment.

It is likely that the request will be resubmitted at the next formal meeting of the trade dispute body in September, at which point Canada and Mexico may also join the complaint.

If the request is resubmitted, under the rules of the WTO, the legal panel will be automatically established, whether the US objects or not.

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