In a major trade victory for India and several other countries, the World Trade Organisation has held as violation of global trade rules a controversial US law allowing American companies to collect more than $470 million in anti-dumping duties from the US government.
The ruling was given by an appellate body of the Geneva-based WTO while upholding a finding of a three-member Dispute Settlement Panel, which was challenged by the US.
The ruling is the latest in a spate of US defeats at the WTO after India, the 15-nation European Union, Australia, Brazil, Canada, Chile, Indonesia, Japan, Mexico, South Korea and Thailand brought the case before the world trade body.
"The US Continued Dumping and Subsidy Offset Act of 2000 is inconsistent with certain provisions of the WTO agreements on anti-dumping and on subsidies because it is a specific action against dumping or a subsidy," the ruling said.
The high profile case prompted more complaints than any other since the WTO was founded in 1995, with 11 governments challenging the so-called Byrd Amendment, named after an American Senator who sponsored their law. Six other countries were also parties to the case and supported their objections.
The three-member WTO panel had ruled in September that the US had unfairly awarded penal duties collected from foreign competitors to American companies including US Steel Corp, Hershey Foods Corp and Timken Co, which won trade complaints.
The WTO endorsed the views taken by India and other complainants that governments must keep with it the anti-dumping duties slapped on foreign companies and that distributing the funds to companies encourages them to file trade complaints.
"This measure clearly flies in the face of the letter and the spirit of WTO law,'' said European Trade Commissioner Pascal Lamy. "We now expect the US to act quickly in order to repeal the law."
The Appellate body, however, gave some consolation to the US when it overturned the panel's conclusion that the US may be regarded as not having acted in good faith with respect to its obligations.
