By Gustavo Capdevila
GENEVA, Nov 26 2004 (IPS)

The WTO authorised trade sanctions Friday that could cost the United States 150 million dollars a year for failing to conform with the rules of the 147-member multilateral trade body.

The decision, which benefits Brazil, Canada, India, Japan, Mexico, South Korea and the European Union (EU), punishes the United States with the strictest possible sanctions under the World Trade Organisation (WTO) dispute settlement mechanism.

Under WTO rules, if the parties involved in a trade conflict fail to reach a mutually acceptable solution, “the ultimate objective of the dispute settlement mechanism is to secure the withdrawal of the measures concerned if these are found to be inconsistent with the provisions of any of the WTO agreements.”

The United States is now facing sanctions because it failed to repeal a law known as the Byrd Amendment, which was ruled illegal by the WTO in September 2002.

The law, which is named for West Virginia Democratic Senator Robert Byrd, amended U.S. anti-dumping legislation in 2000. (Dumping is the export of goods at prices that undercut production costs). The amendment was originally passed to protect the U.S. steel industry.

Under the Byrd Amendment, proceeds from anti-dumping fines collected by the United States from foreign companies were allowed to go to U.S. companies, rather than into state coffers.

The anti-dumping duties collected so far amount to more than one billion dollars, said the Brazilian representatives.

The EU delegation, meanwhile, said that since the Byrd Amendment went into effect, more than 800 million dollars in anti-dumping duties have been collected on foreign products, and the fourth distribution of the proceeds, which began on Oct. 1, could total more than 290 million dollars.

The DSM ruled that the sanctions against the United States could consist of authorisation for the countries that brought the complaint to suspend up to 150 million dollars a year in tariff concessions granted to the United States.

Since the DSM was created in 1995, the suspension of tariff concessions has only been authorised in eight cases, including the one in which the decision was handed down Friday.

The retaliatory sanctions approved by the DSM since 1995 have totalled five billion dollars.

In the first such case, involving trade in bananas, the DSM ruled in favour of the United States, giving it the right to impose 191.4 million dollars in sanctions on the EU. In the same dispute, Ecuador was authorised to withdraw 201.6 million dollars in concessions to the EU.

Other cases involved growth hormones in meat, in which the DSM allowed the United States and Canada to impose retaliatory tariffs amounting to 116.8 million dollars and 9.6 million dollars a year on the EU, respectively.

A dispute between Brazil and Canada over subsidies for regional jets manufactured by their Embraer and Bombardier aircraft makers ended in a ruling allowing 247.8 million dollars in retaliatory sanctions against Canada and 292.4 million dollars in sanctions against Brazil.

The largest compensation approved by the DSM involved four billion dollars worth of trade sanctions applied by the EU to retaliate for the U.S. failure to conform with a WTO ruling.

The punitive measure was aimed at dissuading the U.S. Congress from continuing to back a tax advantage given to U.S. exporters who sold to the EU. The WTO had ruled that the tax was an illegitimate export subsidy.

In the current case, the WTO had given the United States until December 2003 to overturn the Byrd Amendment. But U.S. President George W. Bush failed twice to get Congress to repeal the law.

The penalties arising from Friday’s DSM resolution will involve higher duties charged by Brazil, Canada, India, Japan, Mexico, South Korea and the EU on certain U.S. imports

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