The U.S. measure is known as the Byrd Amendment after its main sponsor, West Virginia senator Robert Byrd. It places punitive tariffs on imported products that Washington claims are “dumped” on the U.S. market—that is, sold below prices U.S. manufacturers say they can compete with. The funds collected from these penalties are then handed over to U.S. companies that Washington deems to be harmed by competition from abroad. The measure was primarily aimed at defending the profits of the U.S. steel barons in response to a worldwide crisis of overproduction in the steel industry.

At a November 26 news conference in Crawford, Texas, U.S. president George Bush said Washington would comply with the ruling from the 148-nation trade body. He added, however, that the U.S. government plans to use the WTO to go after Airbus, the Europe-based aircraft-producer that is Boeing’s main rival.

“I think it’s important that all nations comply with WTO rulings. I worked with Congress to get in compliance,” Bush said. “We expect the WTO as well to treat our trading partners as they treat us. And that’s why, for example, I filed a complaint on the Airbus situation. We believe the subsidies for Airbus are unfair for a U.S. company such as Boeing.”

In October Washington filed a complaint with the trade body charging that Airbus had received $15 billion in subsidies from several European governments. The European Commission countered that the U.S. government has subsidized Boeing to the tune of $23 billion.

Since the Byrd Amendment went into effect in 2001, Washington has paid out more than $700 million in subsidies, primarily to companies in the steel industry. While most of the funds came from levies on Japanese and European goods, semicolonial countries like Brazil are disproportionately impacted by such protectionist measures, being in a far weaker position to retaliate against the imperialist power with the largest economy in the world.

The United States accounts for 12 percent of the world’s exports and 19 percent of the world’s imports. These figures dwarf its closest rival, Germany, at 9 percent and 8 percent, respectively. That gives U.S. imperialism far greater weight than any single country to enforce its will through the club of tariffs.

While Tokyo is claiming $80 million in damages and the EU is claiming $50 million, none of the nations that filed the claim with the WTO have yet decided to impose the sanctions.

“If the U.S. does not bring its legislation into conformity with international obligations the EU would impose retaliatory measures in early 2005,” read a statement issued from Brussels. These measures “will take the form of additional import duties on a wide variety of U.S. products from an indicative list approved by the WTO that includes machinery, foodstuffs, textiles and paper products.”

According to the International Herald Tribune, Japan’s government is planning to aim its fire at imported U.S. steel products. Tokyo has not yet announced a timetable for when tariffs would be applied, or the scope of penalties it would impose.  
 
War sharpens trade conflicts
“Retaliation is not Canada’s preferred option,” said Canadian minister for international trade Jim Peterson November 23. “But the U.S. has failed to live up to its international trade obligations and repeal the Byrd Amendment.” Canadian officials threatened to slap 100 percent tariffs on a range of U.S. goods. They are authorized by the WTO ruling to collect $10 million in retaliatory tariffs.

Washington has used trade measures to kick the Canadian ruling class in the teeth for refusing to join the “coalition of the willing” in the war against Iraq. Ottawa fears it might face even sharper measures from Washington if it decides to use the WTO measure to retaliate against its neighbor. Washington has collected $2.5 billion from Canadian capitalists by slapping 27 percent tariffs on Canadian lumber. Under the Byrd Amendment, those funds could be turned over to U.S. lumber bosses to give them a further edge over their Canadian competitors.

This trade conflict, sharpened by Ottawa’s stance on the imperialist war in Iraq, provoked a crisis in the Canadian ruling class. The government was forced to call early elections last June as the division deepened. The incumbent prime minister, Paul Martin, hung on to his post, but his government emerged weaker from the elections.

The Byrd Amendment was Washington’s answer to a deepening crisis of overproduction in the worldwide steel industry. Throughout the last decade, as more steel producers emerged and joined the competition, the market reached a point where more steel was being produced than could be sold profitably. In the United States, two of the largest steel companies, Bethlehem Steel and LTV, went belly-up and were bought out by competitors. Scores of smaller firms followed suit and a trend towards greater consolidation of steel production in fewer and fewer hands developed worldwide.

In November, for example, the firm that bought up Bethlehem and LTV, the International Steel Group, was bought out by the large UK-based concern Ispat, forming a $32 billion monopoly.  
 
Blows to the unions
At the same time, the ruling classes in the competing imperialist states have been propelled to drive for deeper concessions from working people to shore up the employers’ declining profit rates.

The steel mergers in the United States, and particularly the emergence of Wilbur Ross’s International Steel Group, were marked by a wholesale gutting of union contracts, ending of company pension obligations, and deep blows to the Steelworkers union. The union officialdom helped the employers by championing the bosses’ nationalist “Save American Steel” campaign, which supports increased tariffs on steel imports and changes to the steel industry to make “our companies” more competitive.

A similar picture emerges from Canada. Capitalists there have also used nationalism to go after lumber workers without much resistance.

“When the tariffs were first levied, I was the first guy to say, ‘This is the end,’” John Allan, president of the British Columbia Lumber Trade Council, told the New York Times. “But the American lumber litigation drove a new cost paradigm in Canada.”

“An industry consolidation helped reduce costs by allowing Canadian producers to build larger mills,” the Times said. “Investments in new machinery, including computerized cutting equipment, have…increased the amount of lumber extracted from each log by 16 percent since about 1991. And to raise efficiency further, most mills in British Columbia now operate around the clock.”

The lumber bosses in Canada have used these moves to increase labor productivity and reduce costs. Through layoffs of thousands and changes in work rules, the capitalists made sure that increased costs came out of the workers’ earnings, not their profits.

As a result of these measures, Allan told the Times, “the duties didn’t make much difference” in the profit rates of the Canadian lumber bosses.  
 
 
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