Canton Repository

September 27, 2005

Agency: Law aids Timken at others’ expense

By Paul M. Krawzak
Copley News Service

WASHINGTON — An already-controversial anti-dumping law that has meant almost $400 million to the Timken Co. and its subsidiaries since 2001 and which benefits the Canton company more than any other manufacturer came under fresh fire Monday in a report from the Government Accountability Office.

The Government Accountability Office, an investigative arm of Congress, said the law, commonly known as the Byrd amendment, has provided financial benefits for certain companies such as Timken while ignoring others that have been hurt by unfair trade.

Timken alone has received almost 40 percent of the money made available for all U.S. companies.

With the report highlighting the disparity, the law also came under attack from two powerful lawmakers, with Senate Finance Committee Chairman Charles Grassley, R-Iowa, leading the charge for its repeal. President Bush earlier had called for repeal after the law was ruled illegal by the World Trade Organization.

But Timken has mounted a counterattack, supported by leading Ohio members of Congress.

A Timken spokesman praised the law despite the new Government Accountability Office report, which he said the company is “reviewing.”

In that report the Government Accountability Office contended that the law — officially named the Continued Dumping and Subsidy Offset Act — “has, in some cases, created advantages for those U.S. producers that are eligible and receive the bulk of disbursements over those U.S. producers that receive little relief or are ineligible, by choice or circumstance.”

The 110-page Government Accountability Office study also faulted problems in processing claims and payments to recipients, verifying claims and collecting punitive tariffs that support the program.

Bearing manufacturers such as Timken, as well as wax candle makers and steel mills, have been the primary beneficiaries of the revenue transfer program, which informally bears the name of one of its authors, Sen. Robert Byrd, D-W.Va.

Under the law, U.S. companies that have suffered from unfair trade practices receive payments from the federal government, which are derived from punitive import taxes imposed on foreign exporters accused of dumping or selling their products below cost in the United States.

To receive a payment, a U.S. company must initiate or support an unfair trade complaint filed against a foreign competitor.

Since 2001, Timken and two other firms that are part of Timken have received $395 million, or 38 percent of the $1.035 billion that has been distributed to U.S. companies.

Timken received $205 million in payments from 2001 to 2004. The Torrington Co., acquired by Timken in February 2003, received $135 million during that period. MPB Corp., a subsidiary of Timken, collected $55 million.

As the report was released, two of the most powerful lawmakers in the area of trade — Grassley and House Ways and Means Committee Chairman Bill Thomas, R-Calif. — denounced the law.

Grassley, who favors repeal, said the law distorts competition by rewarding companies that file trade complaints and receive payments through the law, while denying those payments to other companies that did not participate in the complaints.

He said other U.S. exporters that face retaliatory tariffs on their products, imposed by foreign countries as payback for the Byrd amendment, also are suffering.

The president also called for overturning the law after the World Trade Organization ruling. But several attempts to repeal the law in Congress have failed in the face of strong bipartisan support for the Byrd amendment.

Sen. Mike DeWine, R-Cedarville, one of the sponsors of the legislation, continues to strongly support it, a spokesman said.

Reps. Ralph Regula, R-Bethlehem Township, and Bob Ney, R-Heath, also have supported the law in the past. A spokesman for Ney said he still strongly backs the law. Regula was unavailable to react to the Government Accountability Office report.

The support is unwavering at Timken headquarters.

“Our general position on the legislation has been for some time that dumping should cease after an anti-dumping order has been issued,” Timken spokesman Jeff Dafler said. “In so far as (the law) is conducive to eliminating that kind of behavior in the marketplace, then we’re in favor of it.”