Candlemakers, crawfish farmers and ball-bearing companies: Uncle Sam has a trade deal for you. Unfortunately, it flies in the face of international law and puts your special interests ahead of the country’s good.
The special deals in this instance flow from a notorious bit of legislation known as the Byrd amendment. It’s named for West Virginia Democratic Sen. Robert Byrd, who sneaked it into a must-pass appropriations bill in 2000. When then-President Clinton signed the measure, he pointed out that Congress would have to alter or eliminate Byrd’s dirty work to comply with the rules of the World Trade Organization.
Nothing was done, and in 2002 the WTO ruled against the U.S. Last week, America’s major trading partners won clearance to impose retaliatory sanctions.
Still, the Byrd amendment lives on.
Its longevity reflects Washington’s arrogant disregard for its obligations under longstanding trade agreements. At the same time the U.S. claims to support free trade within a framework of global rules, it has repeatedly refused to accept any authority but its own.
Such shortsighted intransigence undermines a system vital to promoting American-style capitalism overseas. Apparently, that imperative matters less than scoring a few points on the domestic front. Over time, the Bush administration’s steel tariffs, textile quotas and other trade distortions drag down the economy with higher prices and production inefficiencies. They leave U.S. exporters open to punitive action abroad.
The Byrd amendment is particularly offensive because it raids the Treasury to deliver windfall corporate subsidies–providing a huge incentive for companies to embrace protectionism.
As a result, the government is getting swamped with petitions claiming one competing product or another is being sold for less than a fair market value. If that can be established, under the Byrd measure, the domestic producers who bring the complaints become eligible for a cut of any duties and tariffs imposed. So far, they have collected an estimated $800 million. That’s an awful lot of candles, crawfish and bearings.
No question, the amendment has some superficial appeal. After all, if the companies were being victimized by predatory trade, why shouldn’t they get the money?
Well, for starters, every member of the WTO agrees to abide by the same rules for dealing with dumping. Kicking back tariffs is not among the accepted WTO remedies. It’s not fair for U.S. companies to attack their foreign rivals with sanctions at the same time they’re getting extra cash from the government to prop up operations.
Beyond that, the rush to bring antidumping cases imposes a significant cost. Before the Byrd amendment, many disputes were resolved when foreign exporters agreed to suspend the practices in question. These days, no one wants to settle a case for anything less than a payoff. It’s great for the lawyers, economists and lobbyists who fight these battles, and bad for world trade.
In the run-up to the presidential election, the odds of repealing the Byrd amendment seem remote. So let’s decide now that effective Nov. 3, we dump this antidumping fiasco.
