The Torrington Company (Torrington, Connecticut) has received a check from U.S. Customs for "significantly" more than $31 million under the Continued Dumping and Subsidy Offset Act of 2000.

eBearing has confirmed through several sources that the amount paid to Torrington exceeded the $31 million payout made to The Timken Company (Canton, Ohio). We have not yet been able to verify the exact amount, and Torrington has indicated it will not comment on that amount until it has been made public on the U.S. Customs website.

The two bearing manufacturers together have received at least 32% of the entire total paid out this year under the Continued Dumping and Subsidy Offset Act. Customs has indicated approximately 900 payments were made for a total of over $200 million to U.S. companies claiming business damage from unfair imports.

The Continued Dumping and Subsidy Offset Act (CDSOA), was enacted on October 28, 2000. Added by Senator Robert Byrd as a rider to the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriation Act, it passed without discussion. The legislation, as sponsored by Ohio Senator Mike DeWine, had previously failed to gather much support due to questions about its legality under World Trade Organization and NAFTA trade rules. The Act is usually referred to as the "Byrd Amendment" or CDSOA.

The CDSOA amends Title VII of the Tariff Act of 1930, adding a new section 754. The change affects how countervailing and dumping duties are paid.

Antidumping duties are imposed on imported merchandise that the U.S. Department of Commerce finds is sold in the U.S. at less than its fair market value. Countervailing and dumping duties are imposed if the imported goods cause material injury to a domestic industry. Products subject to the duties range from flat rolled steel to garlic and mushrooms to computer chips and bearings.

Previously, all countervailing and dumping duties collected were put into the Treasury's general fund. Under the CDSOA, those duties go into a separate fund that is then paid out each fiscal year to domestic companies who prove via litigation that they were injured by foreign dumping and subsidies.

Only U.S. manufacturers who successfully pursued legal action via the United States International Trade Commission are eligible to receive payouts under the CDSOA.

On August 3, 2001, the U.S. Customs Service published a list in the Federal Register (Vol. 66, No. 150) showing which cases and which companies were involved and entitled to collect fiscal year 2001 duties. Over 900 qualified companies submitted claims by October 2; they were reviewed and checks were cut 60 days later on December 2, 2001.

On November 30, U.S. Customs announced it would be disbursing almost USD $200 million in duties to the qualifying companies.

In 21 different bearing category cases, only Torrington, The Timken Company, and MPB (Timken Super Precision) were listed as parties eligible to collect. In order to be eligible, companies had to be involved parties in a USITC complaint which resulted in duties being assessed on imported goods.

Many small manufacturers simply could not afford the legal, financial and time involvement necessary to participate - hence, they are excluded from collecting any benefit under the Act.

Until very recently, many trade experts believed the CDSOA was going to be repealed. Several World Trade Organization dispute resolution panels and even a NAFTA dispute resolution panel are ongoing. The WTO dispute panels have the dubious distinction of involving the most complainants ever. The U.S. has already lost several preliminary disputes in the WTO over the CDSOA being an unfair domestic subsidy, also illegal under NAFTA. The U.S. Congress was expected to bow to WTO pressure and repeal the CDSOA by October.

However, after the September 11 terrorist attacks, the WTO and NAFTA put the CDSOA dispute on the back burner, and the U.S. Congress found itself with more pressing issues and a domestic manufacturing economy in dire need of help. Experts now believe a vote over repealing CDSOA might not come until late in 2002, just before the next payouts are due to be made.

Another difficulty facing the CDSOA is that Senator Byrd sold it to congressional colleagues as costing, at most, $39 million and benefiting primarily U.S. steel manufacturers - neither turned out to be true. At $200 million, in a time of budgetary and financial constraints, the U.S. Treasury has lost $161 million more than congress expected.