Additional Duty on Imports into EC from USA

In 2000, the US Government passed the Agriculture Spending Bill, Public Law 106-387. This included an amendment called the Continued Dumping and Subsidy Offset Act of 2000 (abbreviated to CDSOA) but also known as the “Bryd Amendment” because it was initiated by Senator Robert Bryd from West Virginia to support the ailing steel industry in his area.

The CDSOA instructed US Customs to put all antidumping tariffs collected into special accounts on a case-to-case basis, instead of paying these funds direct to the General Treasury. At the end of the fiscal year, the money collected in these accounts would be paid out directly to the companies successfully participating in each case.

This proposal had been around for some time, but originally failed because of questions about its legality under the World Trade Organization (WTO) and NAFTA rules, but Senator Bryd added it under Title X to the Agriculture Appropriations Bill and it passed almost unnoticed.

The CDSOA took effect in 2001 and in that year paid out US$ 230 million to 900 claimants. In 2002 the amount paid out increased to USD 329 million paid to 1200 claimants. The worries about its legality were well founded. The trading partners of the US accused it of using the CDSOA as an unfair government-funded subsidy in violation of WTO rules.

Consequently, on 1st February 2006 the US Congress passed the Deficit Reduction Omnibus Reconciliation Act, which included a provision repealing CDSOA. This technically becomes active in October 2007, but because the underlying mechanisms of trade duty and collections has not been changed, there is a belief that the CDSOA could continue to be a revenue stream for US manufacturers for several more years.

The WTO Arbitrator determined that the European Union (EU) should be entitled to retaliate by up to an amount equal to 72% of the US subsidy. This means that the amount of retaliation will vary year to year based on the amount of money paid out to US companies.

Since May 2005 a number of items imported from the US (determined by their tariff headings and known as the affected goods) attract an additional 15% import duty on top of their existing duty rates. On 1st May 2007 a further 32 codes were added to the list to balance the amount of retaliation funding required. The full list of goods affected by the retaliatory action is available at http//tinyurl.com/37mwek (pdf) but include various types of creped paper, tablecloths, paper serviettes, handkerchiefs and facial tissues and other paper products such as diaries, writing pads, binders, albums and blotting pads. A number of textiles including types of jerseys, pullovers, cardigans, waistcoats, shirts, blouses, trousers, blankets and travelling rugs are additionally taxed as well as miscellaneous items such as sports footwear, mobile homes, electrostatic photocopying items, drills and frozen sweet corn.

Maria Narancic from Point to Point Export Services is an independent international trade adviser who assists organisations world wide with their international trade projects, documentation, Documentary Credits and import/export training.  She is based in the United Kingdom.  If you require any further assistance with the matters mentioned below, please do contact us by e-mail on info@point-point.com or check out our other international trade articles on the Point to Point Export Services website at www.point-point.com
 

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