Zombie Protectionism

After being ruled illegal by the WTO in 2001, the highly controversial Continued Dumping and Subsidy Offset Act (aka "the Byrd Amendment") was officially repealed in 2006. The Act diverted duties collected under US antidumping and countervailing duty (CVD) laws from the US Treasury to the domestic firms that petitioned for the relief, and was secretly stashed in a 2000 appropriations bill during conference committee. From its inception, the CDSOA was highly controversial - seen by our trading partners as encouraging AD/CVD cases and unfairly benefiting domestic firms at the expense of their international competition (the ones paying the duties). This opposition led to the WTO complaint and the eventual repeal in 2006 after lots of WTO-sanctioned retaliation by US trading partners, but the act's provisions didn't die immediately. Instead, they applied to all imports that entered the US before October 1, 2007.

Amazingly, however, the Byrd Amendment still isn't dead. Its corpse roams the earth because duties on those pre-10/2007 imports - caught up in administrative litigation and so forth - are still being collected and then distributed to US companies. And we're not talking chump change here, either. For example, Furniture Today reports that "La-Z-Boy has received $3 million from the U.S. government in antidumping duties and will report the income on its fiscal third quarter statement, the company said in a filing with the Securities and Exchange Commission.... This year's payment is sharply lower than the $8.1 million La-Z-Boy reported receiving a year ago and the $7.1 million it got the year before that."

So that's over $18 million in "illegal" Byrd money since the law providing the loot was repealed! Who says protectionism doesn't pay?

Unfortunately, it's not just La-Z Boy swimming in that dirty Byrd cash. For this year alone, US Customs has authorized (PDF) the disbursement of around $100 million worth of collected AD/CVD duties on a wide range of imported products. That's down a lot from previous years, but I'm quite sure there will be many millions more next year, even though the CDSOA was "repealed" years ago. Meanwhile, the Japanese are still retaliating against US exports - authorized to do so by the WTO - to the tune of another several million dollars. Fantastic.

Fortunately, the Byrd Amendment will eventually die - related litigation will end, and the final Byrd monies will be collected and distributed. Unfortunately, we're obviously not there yet and won't be anytime soon.

Protectionism is one tough mother.....