Report slams lack of accountability in diversion of dumping duties to US firms A landmark vote by United States lawmakers to scrap the Byrd Amendment dealing with anti-dumping duties could take the heat off Chinese exporters of low-cost goods to the US, say experts. On February 1, the US Congress passed the Deficit Reduction Act 2005, repealing the Continued Dumping and Subsidy Offset Act, better known as the Byrd Amendment, named after its sponsor, Democratic Senator Robert Byrd. Under the Byrd Amendment, which became law in October 2000, all the revenues collected from anti-dumping duties went to the companies that petitioned for the action to prevent what they alleged was unfair competition from imports they said were being sold on the US market below cost. Under a transition clause agreed by lawmakers last month, anti-dumping duties on goods imported into the US up to September 30, 2007, will still be distributed to the US petitioning firms. But after that date they will be paid into the US Treasury as before. 'In the short term, the repeal will have little impact because of the transition period,' said Edmund Sim, a partner at law firm White & Case. 'But in the longer term, it will remove the incentive on anti-dumping complaints that had been introduced by the Byrd Amendment. 'All things being equal, US anti-dumping cases against China will decrease because the amendment did create a strong incentive for US firms to pursue anti-dumping cases because of the large amount of money involved.' Since the enactment of the Byrd Amendment, US authorities have distributed anti-dumping revenues of more than US$1.2 billion, mostly to a few US firms. One US ball-bearing firm alone, Timken, received US$395 million in duties, according to a report by the US General Accountability Office (GAO) in September last year. The GAO report noted also that those US firms that made the largest claims for anti-dumping duties generally received the largest payments, and that accountability for the accuracy of the claims was 'virtually non-existent'. For these reasons the Byrd Amendment had been 'a persistent source of tension' between the US and its trading partners, according to the European Union. The biggest victims of US anti-dumping tariffs from 1995 to 2004 were China, the EU, Japan, South Korea, Taiwan, India, Indonesia, South Africa, Mexico, Russia and Thailand, in that order, according to EU data. China was hit by 27 per cent of US anti-dumping duties between 1995 and 2004, while the EU was the second worst-affected trading partner, with 19 per cent. In January 2003, the World Trade Organisation found that the Byrd Amendment breached the WTO Anti-dumping and Subsidies Agreements and the GATT, and gave the US until the end of 2003 to repeal the amendment. The US failed to comply with that deadline and with the WTO's approval, Canada, the EU, Japan and Mexico imposed retaliatory measures. In May last year, the EU applied for a 15 per cent additional import duty on a range of US products including paper and textile products, machinery and sweetcorn. The US delay was due to the reluctance of US Congress and Senate to give up the Byrd Amendment, while the Bush Administration lobbied hard for its repeal, said Mr Sim.