Only a handful of companies got the majority of payments from a controversial US anti-dumping law that aims to compensate industries affected by unfair trade, a congressional report showed on Monday, prompting new calls for repeal.
The Government Accountability Report found a number of problems with the so-called Byrd Amendment, which was found in violation of global trade agreements by the WTO.
The report said two-thirds of the payments went to three industries -- ball bearings, iron and steel, and candles -- and that over a third went to bearing and steel maker Timken and a group it acquired, the Torrington Co.
The GAO report highlighted concerns about the US law, which has provoked ire from major trading partners, leading to a threat of retaliatory sanctions from Japan, the EU and Canada.
"The irony is that the program actually creates unfair competition," said Senator Charles Grassley, head of the finance committee, after the report was issued.
"Unlike our trade remedy laws, where all producers of an unfairly traded product get relief, [the Byrd Amendment] funnels money to a select few."
Grassley said the program "lines corporate coffers for a select few, and too many innocent companies and workers end up paying the tab. We need to end this unfair subsidization as soon as possible."
The National Retail Federation (NRF) said the report shows a need to urgently repeal the law, named for Senator Robert Byrd.
"This report confirms everything we've ever said about why the Byrd Amendment should be overturned," NRF vice president Erik Autor said.
"It's a violation of international trade rules that's drawing retaliation from our trade partners and undermines our ability to force other nations to play by the rules, it encourages the filing of frivolous anti-dumping cases, and it does nothing to create or protect US jobs," he said.
"The Byrd Amendment virtually defines corporate welfare," he said. "This is a massive payola scheme that takes money out of the US Treasury and uses it to line the pockets of private companies that have done nothing to earn it except sign on to anti-dumping petitions that drive up prices for American consumers."
The report said the law is saddled with other problems, including a lack of accountability from the firms and the Customs and Border Protection (CBP), which disburses the money.
"Most companies are not accountable for the claims they file because they do not have to support their claims and CBP does not systematically verify the claims," the report said.
As to the intended effect of compensating for unfair trade, the GAO said there were "mixed effects" reported by companies.
"Top recipients we surveyed said that [the Byrd Amendment] had beneficial effects, but the degree varied," it said.
"In four of seven industries we examined, recipients reported benefits, but some non-recipients noted ... payments gave their competitors an unfair advantage," it said.
Timken received 20 percent of the funds, or US$205 million, and Torrington was paid US$135 million.
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