The Hon. Mark Vaile, MP
The Hon. Mark Vaile, MP
FORMER MINISTER FOR TRADE

Media Release

Tuesday, 21 January 2003 - MVT02/2003

Australia's WTO Win Confirmed

The World Trade Organisation's Appellate Body has upheld Australia's earlier win against the United States subsidy program known as the "Byrd Amendment", Trade Minister Mark Vaile said today.

"The Appellate Body confirmed Australia's view that linking subsidy entitlements to the existence of dumping or subsidisation of goods by other countries was contrary to WTO rules," Mr Vaile said.

"The outcome of the Appellate Body's review of the WTO panel's findings last September is very pleasing. It demonstrates once again the value of the WTO rules in protecting Australia's broader trade interests and the importance of the WTO dispute settlement system in reinforcing those rules.

"This dispute also demonstrates once again the Government's resolve to protect the interests of Australian exporters using the avenue, whether bilateral or multilateral, which we believe will provide the best outcomes for Australia."

Further information is provided in the attached background. The Appellate Body's report was issued in Geneva on 16 January 2003. The Appellate Body's report is available at http://www.wto.org.

Media Contact: Robyn Bain +61 02 6277 7420

BACKGROUND

Under the "Byrd Amendment", or more properly the Continued Dumping and Subsidy Offset Act of 2000, anti-dumping and countervailing duties collected by the US are distributed to competing US manufacturers of the same product who supported the imposition of anti-dumping or countervailing duties.

In its first full year of operation, the Byrd Amendment affected only a few industries, including those involved in the manufacture of steel and pasta products, but $US206 million was paid to those industries. However, the legislation does not limit the potential beneficiary industries. The Byrd Amendment also unfairly disadvantages Australian exports which have not been found to be either dumped or subsidised in the US and third country markets.

Reflecting the widespread concern about the implications of the Byrd Amendment, the case involved the largest number of WTO Members in a dispute to date. Australia challenged the legislation in a joint action with ten other WTO Members: Brazil, Canada, Chile, the European Communities, India, Indonesia, Japan, Korea, Mexico and Thailand. In September 2002, a WTO dispute settlement panel found that the legislation was inconsistent with WTO rules.

The Appellate Body confirmed the panel's principal finding that making subsidy entitlements conditional on the existence of dumping or subsidisation by other countries was contrary to WTO rules. Anti-dumping or countervailing duties or price undertakings are the only permitted responses to dumping or subsidisation, unless a formal WTO dispute settlement process is initiated.

The Appellate Body, however, reversed the panel's secondary finding that the Byrd Amendment provided an incentive that distorted the expression of industry support for an anti-dumping or countervailing duty investigation, an essential pre-condition for the application of such duties. This outcome does not diminish the Appellate Body's main finding.

The US is expected to be allowed a period of time to implement the findings of the panel and the Appellate Body in this case. That period of time may be 12 months or more.

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