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Trade Law's Implementation Invalidated

April 08, 2006|From Bloomberg News

A federal court ruled Friday that the Bush administration erred in how it applied the so-called Byrd amendment to Canada and Mexico.

Under the controversial measure, U.S. Customs and Border Protection collects duties on lumber, steel and other imports that it deems to have been "dumped" into the U.S. at below-market prices and distributes the money to American companies.

"Customs has violated U.S. law," Judge Donald Pogue of the U.S. Court of International Trade said in a 117-page decision released today.

It "is not authorized to apply the Byrd amendment to goods from Canada or Mexico." Pogue asked lawyers to negotiate a remedy before May 8.

Under the U.S. law that implemented the North American Free Trade Agreement, any trade measure that targets imports must specifically mention Canada and Mexico to be legally valid for those nations.

When Congress enacted the Byrd law in 2000, it didn't do that, so the agency should not have distributed the payments, the court ruled.

The case, brought by Canadian lumber producers, argued that U.S. tariffs on timber imports were an unfair trade barrier.

In that case alone, the U.S. has collected more than $4 billion in duties and is holding them for disbursement.

The U.S. repealed the Byrd amendment, which was signed by President Clinton, early this year after separate rulings against it before the World Trade Organization and a NAFTA panel.

The repeal, however, doesn't take effect until Sept. 30, 2007, allowing collections under the law to continue.

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