In late 2000, one of the final acts of the outgoing 106th U.S. Congress was to pass the Agriculture Spending bill, Public Law 106-387.

Included in that bill, as amendment Title X, Sen. Robert Byrd inserted the Continued Dumping and Subsidy Offset Act of 2000 -- now known as the CDSOA or "Byrd Amendment."

Essentially, the CDSOA modifies the Tariff Act of 1930 and instructs Customs to put all antidumping tariffs it collects into special accounts, one for each case. Previously, that money went directly into the general Treasury. At the end of the fiscal year, the money collected in those case-by-case accounts is then paid out directly to the companies successfully participating in each case.

While the CDSOA, originally authored by Senator DeWine (Ohio), was around since early in the 106th Congress, it had failed to gather any significant support due to serious questions about its legality under World Trade Organization rules and NAFTA rules.

Senator Byrd, the influential senior Senator from West Virginia, picked up on the CDSOA as a way to support the ailing steel industry in his and neighboring areas. Senator Byrd added the CDSOA as an unrelated "rider," Title X, to that critical agriculture appropriations bill. Few congressmen say they realized it had been added, and it passed almost unnoticed, with no deliberation. After that maneuver, it became known as the "Byrd Amendment."

The CDSOA took effect for 2001 and the first payouts were made late in 2001. In the bearing industry, Timken and Torrington have been eligible for the largest payouts, more so since Timken acquired Torrington in 2003. In fact, Timken has been the single largest beneficiary of CDSOA payouts every year.

When Senator Byrd sponsored the legislation, he stated that the program would primarily benefit U.S. steel manufacturers; he also indicated the General Accounting Office had determined the program would cost no more than $38 million. In fact, however, the CDSOA program in 2001 paid out $230 million to 900 claimants. In 2002, the amount ballooned 43% to $329 million paid out to over 1,200 claimants. The two bearing manufacturers received $81 million, or 35% of the total paid out in 2001. By contrast, steel manufacturers have received "negligible" payouts, according to that industry's lobbying arm.

Once enacted, the CDSOA quickly attracted the expected backlash from trading partners around the world, charging it is nothing more than an unfair government-funded subsidy in violation of WTO rules. Some U.S. manufacturers have also complained, since they are not allowed to participate in CDSOA payouts unless they actively participated in the underlying trade complaint that resulted in the duties being levied.

The operating history and specifics relating to CDSOA collections, disbursements, enforcement, issues with the WTO and individual trading partners, is best left to more detailed coverage found on our sister site, http://www.CDSOA.com.

On 1 February 2006, the Congress passed the Deficit Reduction Omnibus Reconciliation Act, which includes a provision that repeals the CDSOA. The CDSOA repeal is effective October 2007. The underlying mechanisms of trade duty and collection finances, however, take many years to resolve -- meaning the CDSOA will continue to be a revenue stream for U.S. manufacturers for several more years.

Senate Bill 1932 Sec. 7601 Subtitle F
Repeal of the Continued Dumping and Subsidy Offset Act of 2000

SEC. 7601. REPEAL OF CONTINUED DUMPING AND SUBSIDY OFFSET.
(a) Repeal- Effective upon the date of enactment of this Act, section 754 of the Tariff Act of 1930 (19 U.S.C. 1675c), and the item relating to section 754 in the table of contents of title VII of that Act, are repealed.
(b) Distributions on Certain Entries- All duties on entries of goods made and filed before October 1, 2007, that would, but for subsection (a) of this section, be distributed under section 754 of the Tariff Act of 1930, shall be distributed as if section 754 of the Tariff Act of 1930 had not been repealed by subsection (a).