WTO Appellate Body upholds Panel findings that U.S.'s Continued Dumping and Subsidy Offset Act of 2000 is inconsistent with WTO trading rules as specific action against dumping or subsidy
On January 16, 2003, the Appellate Body of the World Trade Organization (WTO) issued its report in the matter of the U.S.'s Continued Dumping and Subsidy Offset Act of 2000 (CDSOA) (the so-called Byrd Amendment), enacted in October 2000 as part of a Fiscal Year 2001 Rural Development, Food and Drug Administration and Related Agencies Appropriations Act of 2001 [Pub.L. No. 106-387, 114 Stat. 1549, sections 1001-1003]. The CDSOA essentially requires that the anti-dumping duties collected from foreign competitors of U.S. companies be distributed to the affected U.S. companies.
On September 10, 2001, the WTO established a Dispute Settlement Panel at the request of, among others, Australia, Brazil, Canada, the European Union, and Japan, to examine the CDSOA's consistency with WTO trading rules.
In a Report circulated on September 16, 2002, the Panel ruled against the U.S. on three out of the five principal claims. See 2002 International Law Update 156. The U.S. appealed on October 18, 2002, and the Appellate Body now largely affirms the Panel Report.
It confirms that the Act is inconsistent with certain WTO trading rules of the Antidumping Agreement and the Subsidies and Countervailing Measures Agreements (SCM) because it is a specific action against dumping or a subsidy. In particular, the Appellate Body upholds the following:
(A) the finding of the Panel in ¶¶ 7.51 and 8.1 that the CDSOA is a non-permissible specific action against dumping or a subsidy, contrary to Article 18.1 of the Anti-Dumping Agreement and Article 32.1 of the SCM Agreement;
(B) the conclusions of the Panel in ¶¶ 7.93 and 8.1 that the CDSOA is inconsistent with certain provisions of the Anti-Dumping Agreement and the SCM Agreement and, therefore, that the U.S. has failed to comply with Article 32.5 of the SCM Agreement and Article XVI:4 o the WTO Agreement.
(C) the Panel's finding in ¶ 8.4 that, pursuant to Article 3.8 of the DSU, to the extent that the CDSOA is inconsistent with provisions of the Anti-Dumping Agreement and the SCM Agreement, the CDSOA nullifies or impairs benefits accruing to the Complaining Parties under those Agreements. Finally, the Appellate Body repudiates the U.S. claim that the Panel acted inconsistently with Article 9.2 of the DSU by failing to issue a separate panel report in the branch of the dispute brought by Mexico.
On the other hand, the Appellate Body reverses the Panel's findings in ¶¶ 7.66 and 8.1 that the CDSOA is inconsistent with Article 5.4 of the Anti-Dumping Agreement and Article 11.4 of the SCM Agreement. It also rejects the Panel's conclusion in ¶ 7.63 that the U.S. has not acted in good faith with respect to its obligations under Article 5.4 of the Anti-Dumping Agreement and Article 11.4 of the SCM Agreement.
The Appellate Body therefore recommends that the DSU request the U.S. to bring the CDSOA into conformity with its duties under the Anti-Dumping Agreement, the SCM Agreement, and GATT 1994. In the past two years, the U.S., under the Byrd Amendment, has reportedly given out $470 million in anti-dumping duties to U.S. companies.
Citation: United States - Continued Dumping and Subsidy Offset Act of 2000 (WT/DS217/AB/R & WT/DS234/AB/R) (16 January 2003); Washington Post, January 17, 2003, page E2; U.S. Trade Representative press release of January 16, 2003. The Appellate Report is available on the WTO website “www.wto.org.”
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