DEPARTMENT OF FOREIGN AFFAIRS AND INTERNATIONAL TRADE - GENERAL

March 31, 2005

Byrd Amendment:  Canada to Retaliate against United States

The following is excerpted from a news release  issued by International Trade Canada, and is available on their web site at:

http://webapps.dfait-maeci.gc.ca/MinPub/Publication.asp?Language=E&publication_id=382342

The Government of Canada announced today that it will retaliate against the United States in light of its failure to comply with the World Trade Organization (WTO) ruling on the Byrd Amendment. Following extensive consultations with domestic stakeholders, Canada will impose a 15 percent surtax on U.S. live swine, cigarettes, oysters and certain specialty
fish, starting May 1, 2005.

Today, the Commission of the European Union has proposed imposing retaliatory measures as trade sanctions on certain products from the United States. Canada continues to cooperate closely with all seven WTO Members that have received authorization to retaliate. These countries may also exercise their retaliatory rights over the next few months.

“For the last four years, Canada and a number of other countries have repeatedly urged the United States to repeal the Byrd Amendment,” said International Trade Minister Jim Peterson. “Retaliation is not our preferred option, but it is a necessary action. International trade rules must be respected.”

Over two years ago, the Byrd Amendment, which allows U.S.  producers to receive anti-dumping and countervailing duties from foreign competitors, was found by the WTO to be inconsistent with U.S. trade obligations. In November 2004, the WTO gave Canada and the other co-complainants the authority to retaliate….

The Minister emphasized that the Canada-U.S. overall trade relationship is as strong as ever. “Ninety-six percent of it works and works well and should be celebrated, but both sides lose from such disputes. We must put an end to them,” he added.

Through consultations, Canada has made efforts to focus on products with alternative supply sources and to avoid products that are inputs to Canadian manufacturing.

Canada’s current retaliation level is $14 million. The Government will review the products each year against the fluctuating nature of Byrd disbursements.