Europe and Canada to impose extra 15% import duty

The European Union and Canada plans to slap an extra 15 percent import duty on a range of U.S. goods over Washington’s failure to apply an international trade ruling against an anti-dumping law, that has handed companies including Timken Co. and U.S. Steel Corp. more than $1 billion in tariffs collected from foreign rivals.

The duty would hit imports including paper, agricultural, textile and machinery products from May 1, and affect slightly less than $28 million in trade, the European Commission said.

The Byrd Amendment, ruled illegal by the World Trade Organization, is designed to compensate U.S. industries hurt by foreign goods “dumped'’ at below-market prices. President George W. Bush has said the U.S. plans to abide by the WTO judgment.

The new European tariffs, worth about $28 million, add to trans-Atlantic trade tensions as the EU and U.S. battle over aid for aircraft makers Airbus SAS and Boeing Co., the EU challenges tax breaks for U.S. exporters worth $4 billion a year and the U.S. is fighting European resistance to new gene-engineered crops.

In his budget proposal to the U.S. Congress on Feb. 7, Bush called for repeal of the Byrd amendment and said changing the law could save the U.S. Treasury $1.6 billion in the next fiscal year.

Canada will impose a 15 percent surtax on U.S. live swine, cigarettes, oysters, and some fish beginning May 1, according to a Trade Ministry statement. The surtaxes combined will total C$14 million ($11.6 million) this year, it said.

“For the last four years, Canada and a number of other countries have repeatedly urged the United States to repeal the Byrd Amendment,'’ Trade Minister Jim Peterson said in the statement. “Retaliation is not our preferred option, but it is a necessary action.'’

U.S. makers of steel, ball bearings, honey and candles are the main beneficiaries of the Byrd Amendment, in force since 2000. Total payouts to the U.S. companies would rise as high as $1.6 billion this fiscal year unless the law is repealed, the EU says.

“We’re disappointed that this step is being taken,'’ said Richard Mills, spokesman for the U.S. Trade Representative. “The U.S. is working to comply with the WTO decision.'’

The Geneva-based WTO gave the EU, Canada, Brazil, Japan, India, South Korea and Mexico the right to retaliate against the U.S. law Nov. 27. Chile also won the right to strike back on Dec. 17. To avoid penalizing European importers, the 25-nation EU is singling out products where the U.S. share of imports into the bloc is 20 percent or less.

In their complaints, the governments said the Byrd law enables the U.S. to punish exporters twice — first by imposing a duty and then by giving the money collected to the exporter’s rivals. The WTO ruled that the governments may impose retaliatory duties on U.S. goods equal to 72 percent of the total paid by their companies.

“The Congress has got to act, we know it’s got to act and the Bush administration is doing the best it can to persuade Congress to act,'’ said Gary Campkin, head of international trade at the Confederation of British Industry in London. “The trouble is, business gets caught in the crossfire, and that often means businesses with no direct relevance to the dispute in hand.'’