	Introduction

The Continued Dumping and Subsidy Offset Act (CDSOA, 19 U.S.C. 1675c), (1) commonly known as the "ByrdAmendment," requires that duties collected due to antidumping or countervailing duty orders mustbe distributed to petitioners and interested parties in the investigations that resulted in the impositionof the orders. Eight countries successfully challenged the CDSOA in a World Trade Organization (WTO)dispute settlement proceeding, and in August 2004 a WTO arbitrator determined the level of"suspension of concessions" (retaliation) that the co-complainants may claim until the United Statescomplies with the WTO ruling. In late November 2004, the European Union, Japan, Korea, India,Brazil, Mexico, Canada, and Chile received formal authorization to retaliate. Mostrecently, repeal of the CDSOA was included in S. 1932 , the Deficit Reduction Act of2005, which was passed by the Senate on November 3, 2005, and by the House on November 18. There have been three other efforts to repeal the CDSOA in the 109th Congress. Inmid-September 2005, two amendments offered by Senator Grassley to H.R. 1680 ) and removed a negotiationrequirement in the Senate-reported bill aimed at preserving the statute ( S.Amdt. In Congress, the controversy over the Byrd Amendment is one component of a larger debateover the future direction of U.S. trade policy. (16) 

	Analysis of Prior CDSOA Distributions

Pursuant to the act, CBP collected and distributed about $231 million in FY2001, $330million in FY2002, $190 million in FY2003 (an additional $50 million in FY2003 funds was heldin reserve pending resolution of a legal challenge), and $284 million in FY2004. a. (45) 
Request to Suspend Concessions. In addition, Mexico began imposing $20.9 million in retaliatory tariffs effective August 18,2005, placing a tariff of 30% on certain prepared milk products, 20% on wine, and 9% on chewinggum. (60) 

		The CDSOA and the U.S.-Canada Softwood Lumber Dispute

For Canada, the CDSOA is also tied to the longstanding U.S.-Canadian dispute over tradein softwood lumber, which itself has resulted in WTO and NAFTA complaints by Canadachallenging U.S. agency actions. (80) 
Congressional support for the CDSOA is not unanimous, however. S.Amdt. 1681 would have struck the CDSOA negotiation requirement in Senate-reported H.R. Despite a motion to instructSenate conferees to insist that CDSOA repeal not be included in the S. 1932 conferencereport, (89) House andSenate conferees agreed to include a CDSOA provision that would repeal the measure as of the dateof enactment of S. 1932, but would allow the disbursement of duties on all subjectmerchandise entering the United States before October 1, 2007. The House took final action approving the legislation on February 1, 2006, with a vote of216-214. AD or CVD petitions.
The Continued Dumping and Subsidy Offset Act (CDSOA), commonly known as the "ByrdAmendment," is a U.S. law providing for the distribution of import duties collected as a result ofantidumping (AD) or countervailing duty (CVD) orders to petitioners and other interested partiesin the investigations that resulted in the orders. CDSOA disbursements amounted to $231 millionin FY2001, $330 million in FY2002, $190 million in FY2003 (with an additional $50 million heldin reserve pending the outcome of a legal challenge), and $284 million in FY2004. The CDSOA wassuccessfully challenged in a World Trade Organization (WTO) dispute proceeding brought by 11WTO Members including Canada, the European Union, and Japan. In late 2004, eight of thecomplaining parties were authorized to "suspend concessions" (retaliate) until the United Statescomplies, most readily by repealing the law. Canada and the European Union began retaliating onMay 2, 2005, by placing a 15% additional import duty on selected U.S. exports. Mexico imposedhigher tariffs on U.S. milk products, wine, and chewing gum as of August 18, and Japan placed anadditional tariff of 15% on 15 steel and industrial products as of September 1. Canada is particularlyconcerned that more than $4 billion in AD and CV duty deposits on softwood lumber may eventuallybe available for distribution to U.S. lumber producers under the CDSOA.
Despite strong congressional support for the CDSOA in both chambers, a provision seekingto repeal the measure (while allowing distributions under the Act to continue on all subjectmerchandise entering the United States through October 1, 2007) was included the conference reportaccompanying S. 1932 , the Deficit Reduction Act of 2005. The legislation has passedboth Houses, with final House action having taken place on February 1, 2006.
Another bill seeking to repeal the statute H.R. 1121 (Ramstad), was suggestedfor possible inclusion in House miscellaneous duty suspension legislation. In addition, two proposalsrelated to the CDSOA were offered by Senator Grassley as amendments to Commerce and JusticeDepartment appropriations legislation. S.Amdt. 1680 would have limitedimplementation of the CDSOA, while S.Amdt 1681 would have struck a provision inthe Senate-reported bill requiring WTO negotiations aimed at preserving the CDSOA. Theseamendments were not considered on the floor.
Controversy over the CDSOA is part of a larger ongoing debate in Congress, and in thecountry as a whole, on the future direction of U.S. trade policy. As a result, trade remedy issues areexpected to receive continued attention in second session of the 109th Congress. This report willbe updated as events warrant.