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As Congress prepared to head home for the holidays, one final act of 2005 was to repeal an anti-dumping law previously ruled illegal by the World Trade Organization (WTO). The Continued Dumping and Subsidy Offset Act (CDSOA), or â€˜Byrd Law,’ was designed to protect domestic industries disadvantaged by the dumping of foreign imported goods at below market prices.
While the sporting goods industry was not specifically targeted by retaliatory tariffs, it is likely many manufacturers would still have suffered. The Sporting Goods Manufacturers Association (SGMA) had been apprehensive about potential punitive measures by foreign countries if the Byrd Law was not repealed. SGMA members suffered similar consequences in 2003-2004 when the WTO ruled that the U.S. government was subsidizing domestic industries and authorized E.U. tariffs on U.S. products.
Tom Cove, SGMA President and CEO, lauded the Congressional move. â€œThis repeal is great news for the sporting goods and athletic apparel & footwear industries. SGMA recognized the possibility of continued retaliatory tariffs on sporting goods products as a result of the Byrd Law; we are relieved to have it repealed.â€
Under the Byrd Law, duties collected on foreign goods dumped in the U.S. may be applied to domestic companies harmed by the dumping. The WTO’s ruling interpreted these payments to be an unfair government subsidy and therefore illegal. As a result, foreign countries whose manufacturers compete with U.S. producers could impose retaliatory tariffs until the U.S. repealed the law. Affected industries include apparel, paper, and machinery.
The Congressional action calls for the gradual phase-out of duty-financed payments to disadvantaged domestic industries. All payments would end by October 2007. The gradual phase-out of tariffs is still of concern to major trading partners; in light of the phase-out plan, the European Union, Canada, Mexico, and Japan have not yet made a decision on retaliatory tariffs.
SGMA International is the global business trade association of manufacturers, retailers, and marketers in the sports products industry. SGMA International enhances industry vitality and fosters sports, fitness and active lifestyle participation. More information about SGMA International and SGMA’s Sports Research Partnership can be found at www.sgma.com.