Dispute Settlement
Questions and Answers
The Byrd Amendment
What are the recent developments in this file?
Canada's retaliatory measures affecting imports of U.S. live swine,
cigarettes, oysters and certain specialty fish expired on April
30, 2006. Canada has not renewed its retaliation.
On July 14, 2006, the U.S. Court of International Trade issued
its final judgement in the Canadian challenge of the Byrd Amendment.
The Court ordered U.S. Customs not to disburse anti-dumping and
countervailing duties collected on imports from Canada and Mexico
to U.S. companies.
The Byrd Amendment -
Prospective Repeal
Is it true that the Byrd Amendment has been repealed?
On February 8, 2006, the United States prospectively repealed the
Byrd Amendment. Under the terms of this repeal, duties collected
on or after October 1, 2007 will not qualify for disbursement.
Canada viewed this as a positive development. However, "prospective"
repeal means that duties collected up to the 2007 date could still
be disbursed to U.S. companies.
This development took place prior to the ruling by the U.S. Court
of International Trade that duties collected on imports from Canada
and Mexico cannot be disbursed.
Byrd Amendment Retaliation
As the United States remains in contravention of WTO obligations
until 2007, why has Canada not retaliated? Has Canada now lost retaliation
rights?
Action has been taken to address the impact of the Byrd Amendment
on Canada, through both the WTO and the U.S. Court of International
Trade.
The Government has not yet taken a decision on whether to implement
retaliation later this year.
Canada retains its right to retaliate.
Is Canada’s decision not to renew retaliation a result
of the Softwood Lumber Agreement initialled July 1, 2006?
No. The Softwood Lumber Agreement does not preclude Canada from
retaliating against the Byrd Amendment.
The Agreement does provide that duties collected on Canadian softwood
lumber will not be subject to Byrd disbursements.
What is Canada’s WTO authorized retaliation level
for 2006?
The WTO authorized Canada, Brazil, Chile, the European Union, India,
Japan, Korea, and Mexico to retaliate on up to 72% of the annual
disbursement of duties collected on their respective goods.
In 2005, the disbursements of duties collected on Canadian goods
amounted to approximately US$6 million.
This forms the basis for Canadian retaliation rights for 2006,
approximately C$5.2 million (which is down from C$14 million in
2005).
Are the other WTO Members that received WTO retaliatory
authorization renewing or initiating retaliation in 2006?
The European Union and Japan have decided to continue retaliating
against the United States. The retaliation intentions of Brazil,
Chile, India, Korea and Mexico are not known at this time.
The Byrd Amendment - CIT
Challenge
What is the status of Canada’s challenge at the U.S.
Court of International Trade (CIT), and what are the next steps?
On July 14, 2006, the U.S. Court of International Trade issued
its final ruling in the Canadian challenge of the Byrd Amendment.
It ruled that the United States violated U.S. law when it disbursed
duties collected on Canadian goods to U.S. companies.
The Court's decision has immediate effect. Rather than being disbursed
to U.S. companies, such duties will now be deposited in the U.S.
Treasury, as per standard practice.
Canada also requested that duties already disbursed to
U.S. companies be returned to the U.S. Government. What was the
CIT’s ruling on this?
The Court did not order that duties already disbursed to U.S. companies
be returned to the U.S. Government.
Will the CIT case against the Byrd Amendment be appealed?
This case is open to appeals by the Parties involved.
Parties have until September to appeal the case to the U.S. Federal
Circuit Court.
The ruling is being reviewed by all Parties. Any decision to appeal
the ruling must be exercised within the statutory time requirement.
Is there a link between Canada's challenge of the Byrd
Amendment and Canada's softwood lumber challenge in the U.S. Court
of International Trade?
No. The softwood lumber challenge in the U.S. Court of International
Trade is independent from the challenge of the Byrd Amendment in
the U.S. Court of International Trade.
The Byrd Amendment
- Background
What is the Byrd Amendment?
On October 28, 2000, President Bill Clinton signed the "Agriculture,
Rural Development, Food and Drug Administration, and Related Agencies
Appropriations Act, 2001". The "Continued Dumping
and Subsidy Offset Act of 2000" (Byrd Amendment) was part
of that Act.
Under the Byrd Amendment, anti-dumping and countervailing duties
are given to U.S. producers who supported those trade remedy actions.
These duties were previously deposited in the U.S. Treasury.
Now that the Byrd Amendment has been repealed prospectively, duties
collected after October 1, 2007 will once again be deposited in
the U.S. Treasury.
What is Canada's position on the Byrd Amendment?
The distribution of anti-dumping and countervailing duties under
the Byrd Amendment confers trade-distorting advantages to U.S. producers.
Moreover, this law encourages U.S. producers to file anti-dumping
and countervailing duty petitions and discourages the settlement
of trade disputes.
How much money has been disbursed and who are the top U.S.
recipients?
Since 2001, various U.S. producers have received over US$1.5 billion
dollars in anti-dumping and countervailing duties. The top recipients
are in the ball bearing, steel, candle and pasta sectors.
Disbursement of duties collected on Canadian exports amounted to:
US$5.2 million in 2001, US$2.5 million in 2002, US$9.5 million in
2003, US$15.5 million in 2004 and US$6 million in 2005.
To date the U.S. steel, magnesium and softwood industries have
received the lion’s share of disbursements of U.S. anti-dumping
and countervailing duties collected on Canadian goods.
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