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WTO strikes down US move

New Delhi, Jan. 17: The World Trade Organisation (WTO) has ruled that the US governmentís decision, based on the controversial Byrd amendment, to pass on anti-dumping duties collected from foreign companies to American firms constitutes a violation of trade laws.

The appellate body of the WTO has upheld the earlier judgement of the three-member dispute settlement panel which had ruled that the US had unfairly passed on penal duties of around $ 500 million collected from foreign competitors to indigenous companies such as US Steel Corp, Hershey Foods and Timken Co.

Indian steel majors SAIL and Tisco were among those made to pay these anti-dumping duties. India, along with the 15-member European Union and some Asean countries, had moved the dispute settlement panel of the WTO over the issue.

The contention of the US trading partners was that governments must keep in their own coffers the anti-dumping duties imposed on foreign companies, instead of passing them on to competing firms. They were also of the view that the receipt of such easy money encourages these companies to file trade complaints.

The ruling in September last year had gone against the US which had appealed against it.

In a further setback to the US, the Geneva-based appellate body has upheld the earlier decision. However, the ruling was softer than the earlier one insofar as it did not accept the panelís conclusion that the US may be regarded as not having acted in good faith with respect to its obligations.

It now remains to be seen what action the US takes to repeal this law.

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