WTO-Approved CDSOA Retaliatory Tariffs Include Bearings

The World Trade Organization has formally approved for retaliatory tariffs against the United States over its failure to repeal the Continued Dumping and Subsidy Offset Act (the "Byrd Amendment"). The CDSOA instructs Customs to pay out tariffs and duties directly to the U.S. companies involved in successful trade complaints, rather than have the funds go to the general fund. Although the CDSOA was originally intended to benefit U.S. steel manufacturers suffering from foreign competition, U.S. bearing manufacturers -- notably Timken and Torrington -- have been the primary beneficiaries. Steel manufacturers have received relatively little assistance via the CDSOA. Bearing producers Timken, Torrington, McGill and Pacamor have received far more than any steel manufacturer. • eBearing's legislation section dedicated to the CDSOA Ruled an illegal trade subsidy by the WTO on several occasions, the United States has so far failed to repeal the CDSOA, along the way exhausting every appeal, arbitration, and stalling tactic available. The WTO's Dispute Settlement Body, after a final delaying effort by the U.S., has now allowed the complaining countries to go forward and submit their lists of goods to be hit with retaliatory tariffs. The arbiter's decision of August 31, 2004 applies to the level of retaliatory tariffs available. • detailed article: WTO rules U.S. now open to CDSOA sanctions Total sanctions approved by the WTO are up to 72% of the amounts received by U.S. firms under the CDSOA. Every country is different, but for the EU, this means it could levy approximately $150 million in punitive duties on U.S. goods. Japan is another big winner, as U.S. imports match its own exports to where it could hit like products immediately with up to $81 million in penalties. After the August ruling, the U.S. reiterated its intention to deal with the CDSOA, saying it would not be necessary for the member nations to actually go through with the threatened sanctions. However, since that time, the U.S. has taken no action, which angered trade partners who now believe they were naive to give the U.S. so many opportunities. The U.S. is required to make regular reports to the DSB regarding the CDSOA. In this most recent DSB meeting, the U.S. said the administration was, "continuing to work with Congress to achieve further progress," but reported no progress. Eight WTO member countries, the 25-nation European Community, Brazil, Chile, India, Japan, Korea, Canada and Mexico, requested authorization to suspend the application of concessions to the United States. The eight argued that since the U.S. had made no progress toward implementing the Dispute Settlement Body recommendations -- the actual deadline had been December 31, 2003 -- trade sanctions were now the only route which might prompt the U.S. to take the necessary corrective action. The WTO granted the complainants' request and approved the trade sanctions. Each country then began submitting their lists of products to be hit with retaliatory tariffs. The EU, Canada, India, South Korea and Japan all have issued their lists of products which will be subject to the retaliatory tariffs. Brazil and Chile have not. Only Japan includes bearings. The basic product listing as submitted does not require each country to assess a specific tariff, and none have specified the exact tariff to be applied. European Union - Sweet corn, paper facial tissues, diaries with calendars, blotting pads, anoraks, overcoats, trousers, dresses, sweaters, rugs, athletic shoes, eyeglass frames, hand drills, photocopiers, plastic furniture, mobile homes, and lift trucks. Canada - Cigarettes, plywood, sawn lumber, peanut butter, maple syrup, Live pigs, ornamental fish, oysters, dried red kidney beans, papayas, mineral water, rum, perfume, vanity cases, wood pulp, wallpaper, writing paper, mittens, carpeting, pearls, air conditioning units, beverage vending machines, record players, cassette players, and skis. India - Fresh or dried unshelled almonds, pistachio nuts, raisins, soybean oil, and bulgur wheat. South Korea - Cod, monkfish, glass tableware, detergent. Japan, whose goods were hardest hit by competing with CDSOA-funded U.S. competitors, also issued the most aggressive list of retaliatory tariffs, and the only one to include bearings. Japan is entitled to levy at least $80 million in retaliatory tariffs against the U.S. in 2005. Japan - Ball and roller bearings and bearing housings, steel ingots, flat-rolled iron and steel, steel bars, copper plate and sheet, drill heads, piston engines, vacuum pumps, electric motors, calculators, televisions, bicycles, lens filters, sunglasses, microscopes, mattresses, salmon, lobster, chemicals, vitamins, cement, plastic utensils, petroleum spirits, jackets, blouses, pantyhose and suits. Japan's list includes every Harmonized Tariff Schedule of Japan classification that involves bearings: 848210000 ball bearings 848220000 Tapered roller bearings, including cone and tapered roller assemblies 848230000 Spherical roller bearings 848240000 Needle roller bearings 848250000 Other cylindrical roller bearings 848280000 Roller bearings, including combined ball/roller bearings, other than subheadings Nos. 8482.20 to 8482.50 848291000 Balls, needles and rollers of ball or roller bearings 848299000 Parts of ball or roller bearings, other than balls, needles and rollers 848320010 Bearing housings, incorporating ball or roller bearings for motor vehicles 848320090 Bearing housings, incorporating ball or roller bearings, other than those for motor vehicles 848330010 Bearing housings, not incorporating ball or roller bearings and plain shaft bearings for motor vehicles 848330090 Bearing housings, not incorporating ball or roller bearings and plain shaft bearings, other than those for motor vehicles