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This brief article is a report of an international decision of the World Trade Organization Appellate Body on January 16, 2003, concerning the United States’ Continued Dumping and Subsidy Offset Act of 2000 (WT/DS217 & 234/AB/R). Eleven WTO members—Australia, Brazil, Canada, Chile, the European Communities, India, Indonesia, Japan, Korea, Mexico, and Thailand—filed a challenge to the Byrd Amendment in the summer of 2001. A WTO dispute settlement panel, agreeing with the complaining parties, made two major findings. First, the panel concluded that the Byrd Amendment constitutes an impermissible specific action against dumping and subsidization under the Antidumping and SCM Agreements. 9 Second, the panel concluded that the Byrd Amendment is inconsistent with the Agreements' requirement that investigations of dumping and subsidization have the support of a domestic industry. The panel reasoned that many firms might file or support applications for relief from dumping and subsidization, even if they were not really affected by import competition, simply in order to qualify for Byrd Amendment distributions. The United States might thus initiate an investigation even though actual support in domestic industry was lacking.

On appeal, the Appellate Body upheld the panel's holding that the Byrd Amendment constitutes an impermissible action against dumping or subsidization, but reversed the panel's holding on the industry-support question. With respect to the first issue, the Appellate Body noted that the Antidumping and SCM Agreements provide that "[n]o specific action against" dumping or subsidization may be taken by a member except as authorized by WTO rules. The Appellate Body easily concluded that the Byrd Amendment constitutes a "specific action" for these purposes. Payments under the Byrd Amendment, it explained, "are inextricably linked to, and strongly correlated with," a determination of dumping or subsidization. Without a determination of dumping or subsidization, there would be no antidumping or countervailing duties to distribute.



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