Japan, Mexico Prepare to Follow EU, Canada Sanctions on U.S. [View All]

[Robbien]

April 1 (Bloomberg) -- Japan and Mexico are preparing to follow the European Union and Canada in imposing extra import duties on U.S. goods after Congress failed to repeal a law that has handed companies such as Timken Co. more than $1 billion in tariffs paid by their competitors.

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Unless Congress repeals the law, the case may become the most damaging ever at the WTO when the U.S. begins distributing tariffs collected on Canadian lumber, worth $4 billion a year. Japan, the economy most affected by the Byrd Amendment, has the right to impose customs duties worth 125 billion yen ($116 million), the biggest sanctions awarded to Japan in a dispute. ``We have not yet decided when our retaliation measures will be invoked,'' said Kunihiko Kawazu, first counselor at Japan's mission to the WTO in Geneva. ``We have already been authorized to do so at any time, but we will make a judgment taking into account how the discussion in Congress goes on repealing the Byrd Amendment.''

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Mexico is deciding which U.S. products will be targeted, said Fernando de Mateo, the country's ambassador to the WTO. ``We're analyzing with what we're going to retaliate,'' he said. ``The problem is not revenge; the problem is you cannot have your cake and eat it. This amendment provides an incentive for producers to say `my neighbor is hurting me.'''


``Japan will move slowly, but ultimately it will move,'' said Lewis Leibowitz, a trade attorney with Hogan & Hartson LLP in Washington and legal counsel to Consuming Industries Trade Action Coalition, an organization lobbying for the Byrd Amendment's repeal that counts Caterpillar Inc., Procter & Gamble Co., Emerson Electric Co. and Nissan North America Inc. among its members.

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In their complaints, the governments said the 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. After the U.S. missed an end-2003 deadline for compliance, the WTO authorized governments to impose retaliatory duties on U.S. goods equal to 72 percent of the total paid by their companies.

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