DR.

RAM MANOHAR LOHIYA NATIONAL LAW UNIVERSITY

LUCKNOW

SEMESTER VII
(2016-17)
INTERNATIONAL TRADE LAW

THE BYRD AMENDMENT: A STUDY OF ITS INCONSISTENCIES WITH

TRADE AGREEMENTS
(FOR THE PARTIAL FULFILLMENT OF THE DEGREE OF B.A. LLB (HON))

SUBMITTED BY

S UBMITTED TO

GARIMA PARAKH
SINGH

M S. KIRTI

ROLL NO. 57
PROFESSOR (LAW)

A SST.

ACKNOWLEDGEMENT

I would like to extend my sincere thanks to

My teacher and my mentor Ms. Kirti Singh for giving me this wonderful opportunity to work on
this project and for her able guidance and advice,
Vice Chancellor, Dr. Gurdeep Singh Sir and Dean (Academics), Professor C.M. Jariwala for their
encouragement and Enthusiasm;
My seniors for sharing their valuable tips;
And my classmates for their constant support.

TABLE OF CONTENTS

1.

INTRODUCTION..............................................................................................................3

2.

BACKGROUND................................................................................................................4

3.

ARGUMENTS....................................................................................................................6
3.1.

CDSOA PROVIDES FINANCIAL INDUCEMENT.................................................6

3.2.

AMERICA DID NOT ACT IN GOOD FAITH.........................................................10

3.3.

CDSOA UNDERMINES ARTICLE 8.3 OF AD AND ARTICLE 18.3 OF SCM....11

3.4.

CDSOA IS INCONSISTENT WITH ARTICLE X:3(A) OF GATT.........................12

3.5.

CDSOA IS INCONSISTENT WITH THE WTO AGREEMENT............................13

4.

OTHER ARGUMENTS & COUNTER - ARGUMENTS...............................................14

5.

CONCLUSION.................................................................................................................15

6.

BIBLIOGRAPHY.............................................................................................................16

INTRODUCTION
Dumping is, in general, a situation of international price discrimination, where the price of a
product when sold to the importing country is less than the price of the same product when sold in
the market of the exporting country.1 Or, dumping is said to occur when the goods are exported by a
country to another country at a price lower than its normal (market) value. 2 Dumping per se is not
against GATT obligations. This practice is condemned only when it causes injury to the domestic
industry.
The CDSOA, as mentioned in the preliminary draft, provided for the distribution of collected antidumping and countervailing duty revenues to affected domestic producers, i.e., those who support
the petition for investigation. The total receipts under this account in 2005 itself were $2.35 billion.
The complaining parties alleged that the offsets provide a strong incentive to the domestic
producers to file or support petitions for anti-dumping or anti-subsidy measures, thereby distorting
the application of the standing requirements provided in the ADA and SCM Agreement. It was also
argued that the CDSOA makes it more difficult for exporters to secure an undertaking with the
authorities, since the affected domestic producers have a vested interest in opposing such
undertakings in favour of collection of anti-dumping or countervailing duties, 3 again violating the
above agreements. The US thus gave arguments in its defence against the issues raised by the
complaining parties.
The project will be a study of the arguments given by the complaining countries and thus trying to
establish the CDSOA to be inconsistent with international trade law principles and agreements as
the authors stance is in favour of the complainants.
A DETAILED BACKGROUND OF THE CASE
The United States of America is a federal presidential constitutional republic having a capitalist
mixed economy. It is the largest importer of goods and second largest exporter. USA became a
member of WTO in 1995 and is also a party to the Agreement on Implementation of Article VI of
GATT 1994 which allows member states to enact measures designed to counter the dumping or

Judith Czako, Johann Human and Jorge Miranda, A Handbook on Anti-Dumping Investigations (Cambridge: UK:
Cambridge University Press, 2003), 1.
2
Ministry of Commerce and Industry, Department of Commerce, Government of India, Anti-Dumping & Anti-subsidy
measures: FAQs, http://commerce.nic.in/traderemedies/ad_measures_3.asp (accessed October 10, 2016).
3
K.D. Raju, World Trade Organization Agreement on Anti-Dumping: A GATT/WTO and Indian Legal Jurisprudence
(The Netherlands: Kluwer Law International, 2008), 145.

subsidisation of imported products; it also specifies the means through which states can thwart
unfair trade practices such as price discrimination.
In this case, USA used to provide subsidies to its domestic producers to produce certain goods. It
was felt that the maximum retail price of foreign products in USA was lower than for USAs own
products, thus affecting the domestic producers in USA. The USA Countervailing and
Antidumping Duties law provided protection to domestic industries from import competition by
penalising certain pricing and subsidy practices of foreign producers and governments. The duties
forced foreign producers to either increase their selling price in USA, to incorporate the
countervailing and antidumping duties tariff, or to withdraw from the market entirely, to avoid
payment, thus reducing import competition faced by USA. In order to further restore the conditions
of fair trade and aid, USA enacted the CDSOA as part of the Agriculture, Rural Development, Food
and Drug Administration and Related Agencies Appropriations Act, 2001.
The CDSOA provides that the USA Commissioner of Customs ("Customs") shall distribute, on an
annual basis, duties assessed pursuant to a countervailing duty order, an anti-dumping duty order, or
a finding under the USA Antidumping Act of 1921, to "affected domestic producers" for "qualifying
expenditures."4 An "affected domestic producer" is defined as a domestic producer who: (a) was a
petitioner or interested party in support of the petition with respect to which an anti-dumping duty
order, a finding under the Antidumping Act of 1921, or a countervailing duty order has been
entered; and (b) remains in operation.5 The term "qualifying expenditures" refers to expenditures on
specific items identified in the CDSOA, which were incurred after the issuance of the anti-dumping
duty finding, order or countervailing duty order.6 Those expenditures must relate to the production
of the same product that is subject to the anti-dumping or countervailing duty order, with the
4

The CDSOA provides that: "duties assessed pursuant to a countervailing duty order, an antidumping duty order, or a
finding under the Antidumping Act of 1921 shall be distributed on an annual basis under this section to the affected
domestic producers for qualifying expenditures. Such distribution shall be known as 'the continued dumping and
subsidy offset'."
5
"affected domestic producer" is defined as:
any manufacturer, producer, farmer, rancher, or worker representative (including associations of such persons) that
(A) was a petitioner or interested party in support of the petition with respect to which an anti-dumping duty order, a
finding under the Antidumping Act of 1921, or a countervailing duty order has been entered, and
(B) Remains in operation.
Companies, businesses, or persons that have ceased the production of the product covered by the order or finding or
who have been acquired by a company or business that is related to a company that opposed the investigation shall not
be an affected domestic producer.
6
The term "qualifying expenditure" is defined as "an expenditure incurred after the issuance of the antidumping duty
finding or order or countervailing duty order in any of the following categories: (A) Manufacturing facilities; (B)
Equipment; (C) Research and development; (D) Personnel training; (E) Acquisition of technology; (F) Health care
benefits to employees paid for by the employer; (G) Pension benefits to employees paid for by the employer; (H)
Environmental equipment, training, or technology; (I) Acquisition of raw materials and other inputs; (J) Working capital
or other funds needed to maintain production."

exception of expenses incurred by associations which must relate to the same case. On 21
December 2000, Australia, Brazil, Chile, the European Communities, India, Indonesia, Japan,
Korea and Thailand, made a joint request for consultations with the United States of America under
Article 4 of the DSU (Dispute Settlement Understanding), Article XXII:1 of the GATT, Articles
17.2 and 17.3 of the AD (Anti-Dumping) Agreement, and Articles 7.1 and 30 of the SCM
(Subsidies and Countervailing Measures) Agreement regarding the amendment to the Tariff Act of
1930 signed into law by the President. On 6 February 2001, consultations were held in Geneva, but
failed to resolve the dispute. On 12 July 2001, Australia, Brazil, Chile, the European Communities,
India, Indonesia, Japan, Korea and Thailand requested the establishment of a panel pursuant to
Articles 4.7 and 6 of the DSU, Article XXIII of the GATT 1994, Article 17 of the AD (AntiDumping) Agreement and Article 30 of the SCM Agreement, in accordance with the standard terms
of reference provided for in Article 7.1 of the DSU (WT/DS217/5). At its meeting of 23 August
2001, the DSB established the Panel.
Thus, the terms of reference of the Panel were:
To examine, in the light of the relevant provisions in the covered agreements cited by Australia,
Brazil, Chile, the European Communities, India, Indonesia, Japan, Korea and Thailand in document
WT/DS217/5, by Canada in document WT/DS234/12 and by Mexico in document WT/DS234/13,
the matters referred by Australia, Brazil, Canada, Chile, the European Communities, India,
Indonesia, Japan, Korea, Mexico and Thailand to the DSB in those documents and to make such
findings as will assist the DSB in making the recommendations or in giving the rulings provided for
in those agreements.
The following pages will argue one by one as to why CDSOA is inconsistent with international
trade agreements based on the issues raised in the actual case.
ARGUMENTS
1.1.

CDSOA PROVIDES FINANCIAL INDUCEMENT

Article 5.4 of AD and Article 11.4 of SCM provide that An investigation shall not be initiated
unless the authorities have determined, on the basis of an examination of the degree of support for,
or opposition to, the application expressed by domestic producers of the like product, that the
application has been made by or on behalf of the domestic industry. The application shall be
considered to have been made "by or on behalf of the domestic industry" if it is supported by those
domestic producers whose collective output constitutes more than 50 per cent of the total
5

production of the like product produced by that portion of the domestic industry expressing either
support for or opposition to the application. However, no investigation shall be initiated when
domestic producers expressly supporting the application account for less than 25 per cent of total
production of the like product produced by the domestic industry.
AD Article 5.4 and SCM Article 11.4 deal with the procedure of investigation to determine the
existence, degree and effect of any alleged dumping. As per the CDSOA, the USA Commissioner of
Customs shall distribute duties assessed pursuant to a countervailing duty order, an anti-dumping
duty order, or a finding under the USA Antidumping Act of 1921, to "affected domestic producers"
for "qualifying expenditures." In this context, Articles 5.4 of AD and 11.4 of SCM require a
Member to conduct an objective and good faith examination of the level of support for the
application/petition. However, such objective examination is not possible if CDSOA provides
financial inducement to domestic producers for making or supporting anti-dumping applications as
such support would be not be genuine. Due to such financial inducement, majority of petitions will
achieve the levels of quantitative support required under these articles than would have been the
case without CDSOA and producers would rather support applications than genuinely oppose them.
Such a formal declaration of support is not always evidence of support within the meaning of
these provisions. Rather, it is support for the offset payments. There is a risk that the offset
payments will influence the decision of the domestic producers in an indeterminate number of
cases. A WTO Member can initiate an investigation ex officio; doing so, it does not need, by virtue
of legal compulsion, any input from the private sector and since governments have the institutional
possibility to act ex officio, the upon request (i.e., via petitions) route must indeed be the outcome
of an autonomous private decision to this effect, and not a government-mandated/influenced
decision.7
It was held in relation to Article 3.1 of the Anti-Dumping Agreement in United States Antidumping Measures on Certain Hot-Rolled Steel Products from Japan 8 that investigating
authorities are not entitled to conduct their investigation in such a way that it becomes more likely
that, as a result of the fact-finding or evaluation process, they will determine that the domestic
industry is injured. The situation in the current dispute is analogous, i.e., USA cannot be entitled to
enact a legislation that makes it more likely that the needed levels of domestic industry support will
be reached in any investigation. A literal reading of the texts of Article 5.4 of AD and Article 11.4 of
7

Henrik Horn and Petros C. Mavroidis, United States - Continued Dumping and Subsidy Offset Act of 2000, World
Trade Review 4(3) (2005), 525 550.
8
Appellate Body Report, United States Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan,
WT/DS184/AB/R, adopted 23 August 2001, DSR 2001:X, 4697 .

SCM "expressly require an authority to examine (enquire into the nature, look closely or
analytically) the evidence as to those thresholds and determine (establish precisely) industry support
and not to merely tally up numbers presented by applicants, as argued by USA. Thus, for the
thresholds set out in Article 5.4 of the AD and Article 11.4 of SCM to be meaningful, a WTO
Member is not to distort the degree of support for, or opposition to, any particular application.
Moreover, there is the possibility that when only petitioning companies receive offset payments,
they obtain a competitive advantage over non-petitioning domestic companies, as a kind of
selective subsidy which will encourage all domestic producers of a petitioned product to support the
petition, so as not to be at a competitive disadvantage if and when offset payments are doled out. 9
An objective examination requires that the relevant facts be investigated in an unbiased manner,
without favouring the interests of any interested party, or group of interested parties in the
investigation. In the US, as a result of their enacted CDSOA, company claims under the
approached $2 trillion in fiscal year 2004,10 thus giving clear evidence as to the effects such
financial inducement can have. In the present case, USA is favouring the interests of certain parties
(producers who support genuinely the imposition of measures) over those of other interested parties
(including not only the exporters but also the domestic producers who oppose the initiation). This
contravenes the fundamental principle that the legal framework of a rules based system must be
established in an impartial and objective manner.
CDSOA payments may also reduce the receiving industrys incentive to take the necessary steps to
remain competitive, such as changing the product mix or developing more efficient methods of
production and since the affected industry only qualifies for disbursements as long as it
manufactures a particular product, firms may decide to produce the good longer than it is efficient
to do so, rather than allocating resources to producing alternative products that could help firms
return to competitiveness.11 In the US, far from meeting its goal of restoring conditions of fair
trade, the Byrd Amendment turned out to be little more than a wasteful drain on the federal budget
and a windfall for industries because from fiscal year 2001 to fiscal year 2004, Customs distributed
over $1 billion in Byrd Amendment payments to a seemingly broad array of U.S. producers - 770
companies; but despite this apparent breadth, almost half of the payments went to only five

Claire Hervey, The Byrd Amendment Battle: American Trade Politics at the WTO, Hastings International and
Comparative Law Review 27 (2003), 131.
10
Tudor N. Rus, The Short, Unhappy Life of the Byrd Amendment, NYU Journal of Legislation and Public Policy 10
(2006 2007), 427.
11
Economic Analysis of the Continued Dumping and Subsidy Act of 2000. Congressional Budget Office, March 2, 2004.
[http://www.cbo.gov].

companies.12 Additionally, rather than benefiting from the Byrd Amendment, U.S. exporters
suffered the brunt of its negative economic consequences as after the amendment was declared
WTO-incompatible, several nations began retaliating against U.S. exports under WTO-mandated
guidelines.13 Moreover, American taxpayers would have to fund the government personnel increases
needed to process any additional administrative investigations. Also, the CDSOA conspicuously
lacks a requirement that the money received as an offset be spent in a certain worthwhile manner by
domestic companies and the absence of a specific requirement for what is to be done with the
money collected through the duties can be said to violate the intent of the antidumping statutes
which is to correct trading injustices, rather than punish offenders.14 Furthermore, foreign and
domestic firms must divert their resources from generating wealth to hiring lawyers and economic
experts to advocate their positions before the government agencies conducting AD/CVD
investigations again resulting in much harm to America itself.
It was highlighted in the Panels decision in United States - Continued Dumping And Subsidy Offset
Act Of 200015 that CDSOA enacted in the United States in fact implies a return to the situation
which existed before the Uruguay Round Agreement and which led to the introduction of AD
Article 5.4 and SCM Article 11.4 in their current form, i.e., to ensure that support was not just
assumed to exist but actually existed, and that the support expressed by domestic producers was
evidence of the industry-wide concern of injury being caused by dumped or subsidized imports.
1.2.

AMERICA DID NOT ACT IN GOOD FAITH

Article 31.1 of the Vienna Convention on Law of Treaties provides that a treaty shall be interpreted
in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their
context and in the light of its object and purpose; and Article 3.2 of the DSU requires that the
provisions of the covered agreements, including the Anti-Dumping and the SCM Agreements, are to
be interpreted in good faith and in accordance with the customary principles of public international
law, one of them being the principle of good faith. Adhering to the WTO Agreements does not mean
simply that the Members should take the text literally, although generally that is what is favoured,
however, there are also numerous circumstances which at the time the negotiators could not have
12

Tudor N. Rus, The Short, Unhappy Life of the Byrd Amendment, NYU Journal of Legislation and Public Policy 10
(2006 2007), 427.
13
Ibid.
14
Meredith Schutzman, Antidumping And The Continued Dumping And Subsidy Offset Act Of 2000: A Renewed
Debate, Cardozo Journal of International and Comparative Law 11 (2004), 1069.
15
Panel Report, United States Continued Dumping and Subsidy Offset Act of 2000, WT/DS217/R, WT/DS234/R,
adopted 27 January 2003, as modified by Appellate Body Report WT/DS217/AB/R, WT/DS234/AB/R, DSR 2003:II,
489.

foreseen.16 The Appellate Body has stated in United States - Antidumping Measures on Certain HotRolled Steel Products from Japan17 that the rules of treaty interpretation in Articles 31 and 32 of the
Vienna Convention apply to any treaty, in any field of public international law, and not just to the
WTO agreements. These rules of treaty interpretation impose certain common disciplines on treaty
interpreters, irrespective of the content of the treaty provision being examined and irrespective of
the field of international law concerned. It was also decided in United States - Standards for
Reformulated and Conventional Gasoline18 that one of the corollaries of the general rule of
interpretation in the Vienna Convention is that interpretation must give meaning and effect to all
the terms of a treaty. An interpreter is not free to adopt a reading that would result in reducing
whole clauses or paragraphs of a treaty to redundancy or in-utility. Thus, in the present case, the
Article 5.4 of AD and 11.4 of SCM cannot be read so as to render the requirement of the prescribed
quantitative benchmark as meaningless without going into their real objects.
In US - Section 301,19 the Panel found that the good faith requirement in the Vienna Convention
suggests, thus, that a promise to have recourse to and abide by the rules and procedures of the DSU,
also in one's legislation, includes the undertaking to refrain from adopting national laws which
threaten prohibited conduct. This finding is equally applicable to the current dispute. The principle
of good faith that informs the provisions of the Anti-Dumping Agreement, as well as the other
covered agreements suggests that a promise to apply antidumping measures only under the
circumstances provided for in Article VI of GATT 1994 and pursuant to investigations initiated and
conducted in accordance with the provisions of the AD Agreement includes the undertaking to
refrain from adopting national laws which threaten prohibited conduct.
1.3.

CDSOA UNDERMINES ARTICLE 8.3 OF AD AND ARTICLE 18.3 OF SCM

Article 8.3 of AD and article 18.3 of SCM provide that Undertakings offered need not be accepted
if the authorities consider their acceptance impractical, for example, if the number of actual or
potential exporters is too great, or for other reasons, including reasons of general policy. Should
the case arise and where practicable, the authorities shall provide to the exporter the reasons

16

Youngjin Jung Sun Hyeong Lee, The Legacy of the Byrd Amendment Controversies: Rethinking the Principle of
Good Faith. Journal of World Trade (2003), 54.
17
Appellate Body Report, United States Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan,
WT/DS184/AB/R, adopted 23 August 2001, DSR 2001:X, 4697 .
18
Appellate Body Report, United States Standards for Reformulated and Conventional Gasoline, WT/DS2/AB/R,
adopted 20 May 1996, DSR 1996:I, 3
19
Panel Report, United States Sections 301-310 of the Trade Act of 1974, WT/DS152/R, adopted 27 January 2000,
DSR 2000:II, 815.

which have led them to consider acceptance of an undertaking as inappropriate, and shall, to the
extent possible, give the exporter an opportunity to make comments thereon.
Price undertaking refers to voluntary undertaking from any exporter to revise its prices or to cease
exports to the area in question at dumped prices so that the authorities are satisfied that the injurious
effect of the dumping is eliminated. 20 The Anti-Dumping and SCM Agreements provide the means
for the early resolution of anti-dumping and countervailing duty investigations through the
acceptance of undertakings. The provision of CDSOA providing financial inducement to domestic
producers is inconsistent with Article 8.3 of the Anti-Dumping Agreement and with Article 18.3 of
the SCM Agreement because it will lead to the rejection of undertakings without a proper reason;
and it is incompatible with the obligation of USA to conduct an objective examination of whether
the acceptance of an undertaking would be appropriate; and it undermines the object and purpose
of those two provisions, which is to provide an alternative remedy to the imposition of duties.
Importing member enjoys wide discretion in order to decide whether or not to accept an
undertaking. But such discretion is not unlimited as it is implicit in Article 8.3 of the Anti-Dumping
Agreement and Article 18.3 of the SCM Agreement that authorities cannot reject an undertaking
without examining first whether it would be appropriate to accept it and such examination must
be objective not arbitrary. Such good faith requirement was set out to be relevant for these articles
as well by the Appellate Body in United States - Antidumping Measures on Certain Hot-Rolled
Steel Products from Japan.21
Object and purpose of Article 8 of the Anti-Dumping Agreement and Article 18 of the SCM
Agreement is to provide an alternative remedy to injurious dumping and subsidisation which, while
giving equivalent protection to the domestic producers, is more beneficial for the exporters. In the
present case, if US authorities accept an undertaking, no anti-dumping or countervailing duties will
be assessed and, consequently, no offset will be distributed to the affected domestic producers.
Thus, through CDSOA, petitioners have a pecuniary interest in opposing the acceptance of
undertakings. Through the offset payments, CDSOA is unduly influencing the outcome of the
examination of the appropriateness of accepting an undertaking which is required to be made
under Article 8.3 of the Anti-Dumping Agreement and Article 18.3 of the SCM Agreement.
1.4.

CDSOA IS INCONSISTENT

WITH

ARTICLE X:3(A) OF GATT

20

Article 8.1 of the AD Agreement.

Appellate Body Report, United States Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan,
WT/DS184/AB/R, adopted 23 August 2001, DSR 2001:X, 4697.
21

10

Since CDSOA violates substantive obligations of the GATT 1994, the AD Agreement and the SCM
Agreement as set forth in the above arguments, CDSOA also leads to the violation of the procedural
and due process safeguards of Article X:3(a) of GATT 1994 which imposes an obligation on
Members to administer in a uniform, impartial and reasonable manner all its laws, regulations,
decisions and rulings.... In United States - Stainless Steel, the panel affirmed that anti-dumping
laws and regulations were laws and regulations within the meaning of Article X:1 of the GATT
1994 and, therefore, within the scope of the laws, regulations, decisions and rulings to which Article
X:3(a) applies.
In Argentina - Measures Affecting The Export Of Bovine Hides and The Import of Finished
Leather,22 the Panel was of the view that Article X:3(a) can involve an examination of whether there
is a possible impact on the competitive situation for traders due to alleged partiality,
unreasonableness or lack of uniformity in the application of customs rules, regulations, etc. In that
case, the Panel concluded, in particular, that an inherent danger created by a conflict of interest in
involving domestic industry in the customs clearance process of the hides its domestic suppliers
exported led to an administration of laws that was not impartial. In the present case, CDSOA
similarly creates incentives that distort the process by which the DOC establishes domestic industry
support, as well as the ability of the DOC to enter into undertakings. This has the potential to
exacerbate the number of investigations initiated and continued against imports where such
investigations may be without merit. By making it profitable to indicate support for petitions or
avoid undertakings, CDSOA also creates an inherent danger that American anti-dumping and
countervailing duty laws will be applied in a partial manner so as to permit persons with adverse
commercial interests to thwart the entry of imports. As a result, imports face treatment that is not
fair, reasonable or impartial. Accordingly, the CDSOA results in a violation of Article X:3(a) of
GATT 1994. Further, in Argentina - Leather,23 the measure at issue was a resolution that permitted
domestic industry to become involved with the custom clearance process of the goods of its
domestic suppliers. The issue examined by the panel was the effect the administrative measure had
on the administration of Customs laws. The administrative measure in the present case is CDSOA,
i.e., the Act itself which introduces financial incentives into the American system that are available
only where investigations are brought and end with the imposition of a duty, influencing the
decisions of parties of the industry to bring or support petitions and thwart undertakings by creating

22

Panel Report, Argentina Measures Affecting the Export of Bovine Hides and Import of Finished Leather,
WT/DS155/R and Corr.1, adopted 16 February 2001, DSR 2001:V, 1779.
23
Ibid.

11

a potentially sizeable financial reward; therefore creating an inherent danger that imports will face
unnecessary anti-dumping and countervailing duty investigations.
1.5.

CDSOA IS INCONSISTENT

WITH THE

WTO AGREEMENT

WTO Members agreed to impose many limitations on their sovereign powers to promulgate and
enforce domestic laws and regulations, even in fiscal matters. For example, Article III of the GATT
1994 limits the power of Members with regard to taxation. Article VI of the GATT 1994 and the
SCM Agreement restrain the otherwise sovereign power of Members to provide subsidies. But here,
America has committed not to adopt measures that would constitute specific action against
dumping or subsidization except in accordance with the provisions of the GATT 1994, as
interpreted by the AD Agreement and the SCM Agreement.
Based on the inconsistencies of CDSOA with the GATT 1994, the AD Agreement and the SCM
Agreement, Arcadia is in violation of Article XVI:4 of the Marrakesh Agreement Establishing the
World Trade Organization (WTO Agreement) which requires each Member to ensure conformity
of its laws, regulations and administrative procedures with its obligations as provided in the
annexes to that agreement.
OTHER ARGUMENTS AND COUNTER ARGUMENTS
It has been argued that the CDSOA enabled U.S. firms many of them small, family-run
companies to purchase new machinery, hire more workers, and compete head-to-head with
unfairly traded imports from China.24 Supporters also believe that the CDSOA creates a disincentive
for foreign exporters to continue dumping and compensates domestic producers with financial
resources that can be used to maintain competitiveness. Proponents of this view believe that trade
remedies, combined with the added benefit provided by the CDSOA, are worth the cost of the
economic inefficiency because they promote trade fairness, restore competitive balance, and
preserve critical U.S. industries and jobs. However, to counter these arguments, the author wishes to
argue that although a few businesses have received millions of dollars in annual payments, the vast
percentage of companies received much less; and almost half the payments went to only five
companies.25 The author also argues that due to the considerable transaction costs involved in filing
and supporting trade remedy petitions (estimated to range from $500,000 for the simplest case to
millions of dollars for more complex ones), it is possible that more efficient firms in an industry
24

U.S.-China Economic and Security Review Commission. Hearing on China and the WTO: Assessing and Enforcing
Compliance. February 3-4, 2005, [http://www.uscc.gov/hearings/].
25
Rus, The Short, Unhappy Life of the Byrd Amendment, NYU Journal of Legislation and Public Policy, 427.

12

might be less likely to support a trade remedy petition and so the CDSOA mechanism could
adversely affect the more efficient firms in a domestic industry, while more inefficient firms receive
a benefit.26
CONCLUSION
The Appellate Body in United States Continued Dumping And Subsidy Offset Act Of 2000 27 said
that an "examination" of the "degree" of support, and not the "nature" of support is required, i.e., it
is the "quantity", rather than the "quality", of support that is the issue. But the author differs as
proved in the chapter on financial inducement because the practical scenario was evidently
different, i.e., there was support for the sake of money. Thus, this provision certainly was not used
as intended and thus changing circumstances require changing interpretations.
As observed by a scholar, repealing the Byrd Amendment will serve to reduce costs for consumers,
promote exports, and benefit the overall economy and it also reinforces the U.S. commitment to
trade liberalization and strengthens its leadership in the world trade industry; which could turn out
to be a victory for both US and the world's free trade system. 28 Hence, the truth in the authors
assertions can be inferred from the fact that the Appellate Body in the US-CDSOA case ruled
against USA on all the other points except the point regarding financial inducement. The
Appellate Body recommended that the United States bring the CDSOA into conformity with its
obligations under WTO agreements. However, it must be noted that USA failed to do so and by
2004, most of the complaining parties were authorized to suspend concessions (retaliate) until the
United States complied, most readily by repealing the law..and it was ultimately and rightly
repealed in 2005. As rightly stated, since its passage, CDSOA has proven to be one of the worst
pieces of trade legislation.29 Regarding the future consequences of CDSOA, it was rightly noted that
in case the Appellate Body overruled the Panel decision on some technicality and upheld the Byrd
Amendment, there would be a spurt of copycat legislation by other WTO members, sounding the
death knell for free trade and moreover, the imposition of the anti-dumping duty and the consequent
disbursement of this amount to the domestic industry in terms of the CDSOA, in effect constitutes a
26

Economic Analysis of the Continued Dumping and Subsidy Act of 2000. Congressional Budget Office, March 2, 2004.
[http://www.cbo.gov].
27
Appellate Body Report, United States Continued Dumping and Subsidy Offset Act of 2000, WT/DS217/AB/R,
WT/DS234/AB/R, adopted 27 January 2003, DSR 2003:I, 375.
28
Xuesong A. Yu, The Byrd's View Might Not Give You A Whole Picture -- The Battle In The World Trade
Organization On The Continued Dumping And Subsidy Offset Act Of 2000, Florida Journal of International Law 17
(2005) 417.
29
Committee on Ways and Means, Subcommittee on Trade, United States Congress, Written comments on technical
corrections to U.S. trade laws and Miscellaneous Duty Suspension Bills, 2005, Washington D.C.: United States of
America, 2005, 222.

13

"double jeopardy" to the exporters.30 Lastly, it is pertinent to mention that CDSOA is an extreme
form of protectionism that does not favour free trade and is thus not favoured in todays era of
liberalization and globalization.
BIBLIOGRAPHY
BOOKS
Judith Czako, Johann Human and Jorge Miranda, A Handbook on Anti-Dumping

Investigations (Cambridge: UK: Cambridge University Press, 2003), 1.

K.D. Raju, World Trade Organization Agreement on Anti-Dumping: A GATT/WTO and
Indian Legal Jurisprudence (The Netherlands: Kluwer Law International, 2008), 145.

JOURNALS

Henrik Horn and Petros C. Mavroidis, United States - Continued Dumping and Subsidy

Offset Act of 2000, World Trade Review 4(3) (2005), 525 550.
Claire Hervey, The Byrd Amendment Battle: American Trade Politics at the WTO,

Hastings International and Comparative Law Review 27 (2003), 131.

Meredith Schutzman, Antidumping And The Continued Dumping And Subsidy Offset Act
Of 2000: A Renewed Debate, Cardozo Journal of International and Comparative Law 11

(2004), 1069.
Tudor N. Rus, The Short, Unhappy Life of the Byrd Amendment, NYU Journal of

Legislation and Public Policy 10 (2006 2007), 427.

Youngjin Jung Sun Hyeong Lee, The Legacy of the Byrd Amendment Controversies:

Rethinking the Principle of Good Faith. Journal of World Trade (2003), 54.
Xuesong A. Yu, The Byrd's View Might Not Give You A Whole Picture -- The Battle In
The World Trade Organization On The Continued Dumping And Subsidy Offset Act Of
2000, Florida Journal of International Law 17 (2005) 417.

WEB RESOURCES/OTHER RESOURCES

Ministry of Commerce and Industry, Department of Commerce, Government of India, AntiDumping

&

Anti-subsidy

measures:

FAQs,

http://commerce.nic.in/traderemedies/ad_measures_3.asp (accessed October 15, 2015).

30

Naveen Goel, Creative Protectionism in the US, The Economic Times, November 30, 2002,
http://articles.economictimes.indiatimes.com/2002-11-30/news/27342950_1_anti-dumping-duty-domestic-industryanti-dumping-agreement (accessed October 5, 2013).

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Economic Analysis of the Continued Dumping and Subsidy Act of 2000. Congressional

Budget Office, March 2, 2004. [http://www.cbo.gov].

U.S.-China Economic and Security Review Commission. Hearing on China and the WTO:

Assessing and Enforcing Compliance. February 3-4, 2005, [http://www.uscc.gov/hearings/].

Naveen Goel, Creative Protectionism in the US, The Economic Times, November 30,
2002,

http://articles.economictimes.indiatimes.com/2002-11-30/news/27342950_1_anti-

dumping-duty-domestic-industry-anti-dumping-agreement (accessed October 15, 2015).

Committee on Ways and Means, Subcommittee on Trade, United States Congress, Written
comments on technical corrections to U.S. trade laws and Miscellaneous Duty Suspension
Bills, 2005, Washington D.C.: United States of America, 2005, 222.

15