Canton Repository

December 22, 2005

Congress looks to end tariffs serving Timken

By Paul M. Krawzak
Copley News Service

WASHINGTON - A law that has funneled hundreds of millions of dollars in revenue from anti-dumping fees to the Timken Co. and other manufacturers hurt by unfair trade appears to be on the way out.

In a 51-50 vote, the Senate on Wednesday approved budget-cutting legislation that includes repeal of the Continued Dumping and Subsidy Offset Act. The law is better known as the “Byrd amendment” after its sponsor, Sen. Robert Byrd, D-W.Va.

Before the bill can be sent to President Bush for his signature and enactment into law, the House must concur with several minor changes made by the Senate. Those changes would not affect the repeal of the program.

“It’s gone. It’s got a phase-out,” said Rep. Ralph Regula, R-Bethlehem Township, a strong backer of the law. “That’s the best we could do.”

Sen. Mike DeWine, R-Cedarville, another supporter, called the repeal bad policy.

“We have been the biggest beneficiaries in Ohio of this act,” he said. “It has enabled companies to put money back into the companies to be used for job training and job creation.”

BYRD AMENDMENT

The five-year-old law allows the federal government to take the punitive duties or fees it collects from foreign importers that violate trade law and distribute the revenue to U.S. companies that suffered from the practices.

Bearing manufacturers such as Timken, wax candle makers and steel mills have been the primary beneficiaries of the revenue transfer program.

Both Regula and DeWine sponsored legislation several years ago to create the same kind of program that became law under Byrd’s amendment.

With the law repealed, the federal government would continue to collect duties for unfair practices such as “dumping,” or selling imports below their cost of production. But the U.S. Treasury would keep the revenues rather than distributing them to companies.

A bill passed by the House would have ended the program immediately. Congressional negotiators added a “phase-out” provision, which has the effect of extending the act until Oct. 1, 2007.

WHAT WOULD REPEAL DO?

The repeal would save the government $300 million in the next five years and $1.8 billion over 10 years in revenues that otherwise would be passed out to manufacturers.

Timken has collected almost $400 million through the act, making it the nation’s top beneficiary of the program.

“Whatever the outcome ... Timken’s focus has always been on stopping the dumping activity and that’s absolutely where our focus remains,” Timken spokesman Jeff Dafler said.

Since its passage in 2000, the Byrd amendment has enjoyed strong support in Congress. It took a hit two months ago when the General Accountability Office issued a report that found problems in administering the law. The GAO also said in some cases the program created advantages for some U.S. manufacturers such as Timken at the expense of others.

Under the act, U.S. companies that initiate and support challenges against unfair trade practices are the ones that benefit from the measure, even if they are not the only companies harmed.

Until recent months, Congress had resisted repealing the Byrd amendment even though Bush called for its elimination after the World Trade Organization ruled it violated international trade law.

Several Ohio lawmakers, including Regula, DeWine, Rep. Bob Ney, R-Heath, and Sen. George Voinovich, R-Cleveland, tried to persuade congressional leaders to scuttle the repeal provision but they were unsuccessful.

With the program almost certain to be axed, Regula called for intensified enforcement of trade laws.

“What we’ve got to do is put a lot of pressure against dumping,” he said.