Can someone explain why the Byrd Amendment should not be repealed?

[BurtWorm]

My poor understanding is this: The US collects duties on certain imports and redistributes them to US corporations that claim to suffer from the "dumping" of these imports. The WTO has ruled that this is an illegal barrier to free trade, and the US will face retaliation and fines if it doesn't lift the duties.

The positive of the Byrd Amendment: It's designed to offset the harm of free markets on American manufacturing.

The negatives?: Is it a form of corporate welfare? Do workers benefit from it? Do Democrats benefit from protecting these corporations, or do these corps turn around and pump money into Republican coffers?


http://www.nytimes.com/reuters/politics/politics-trade-byrd-usa.html

Bush Budget Again Proposes Repealing Byrd Law
By REUTERS

Published: February 7, 2005


Filed at 12:31 p.m. ET

WASHINGTON (Reuters) -

...


In its annual budget recommendations to Congress, the White House said repealing the Continued Dumping and Subsidy Offset Act, also known as the Byrd amendment, would save an estimated $1.608 billion in the 2006 budget year.

The United States faces about $150 million in possible trade retaliation from Japan, the European Union and six other trading partners if it does not repeal the Byrd amendment.

The measure, named after U.S. Sen. Robert Byrd, a West Virginia Democrat, distributes money collected from anti-dumping duties on imports to companies that initially requested the anti-dumping protection.

The program has paid out more than $1 billion in subsidies to ball bearing, steel, candle, pasta and other companies over the past four years

[On the Road]

1. The Concept of Protecting Companies

from dumping is not bad. However, government subsidies allow other governments to claim, with some justification, that US companies are being illegally subsidized by the government.

In the current free trade environment, it's the wrong way to solve the problem. I believe the WTO allows countries to impose tariffs on products which are receiving government subsidies and are priced below cost. That's the way to address it. It also has the benefit of raising tax revenue (via import tariffs) rather than spending it on payments to corporations.

[BurtWorm]

2. Isn't that what the Byrd Amendment is supposedly designed to do?

Or is it really designed to prop up weak American companies being legitimately outmuscled by foreign competitors?

[On the Road]

3. That's a Matter of Perception

Being "legitimately outmuscled" can simply mean they pay shit for wages.

That's true in the textile industry, for example. Most American companies are efficient, automated, and use inexpensive labor. However, they are unable to compete against less efficient third world companies who pay their employees next to nothing.

Personally, I would favor a system under which import tariffs may be applied based on half the wage differential between the countries. It would allow more efficient third-world companies to compete while softening the blow for the developed importing countries.