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Hastings International and Comparative Law Review

Authors

Claire Hervey

Abstract

The Byrd Amendment has been controversial in both domestic U.S. politics and in international trade law since its enactment. In the international sphere, the controversy surrounds its validity under the WTO, the world's strongest supranational legal regime. In the largest joint dispute resolution action in the history of the WTO, thirty countries challenged the Byrd Amendment as a violation of the ban on governmental subsidies, and won. The U.S. Congress failed to comply with this ruling by its implementation deadline (December 27, 2003) as well as with several other decisions of the WTO, deepening the rift between America and its largest trading partners, and threatening the U.S. economy by creating the specter of authorized economic retaliation in the billions of dollars. America's non-compliance with WTO decisions, based on domestic political considerations, threatens the international trading system and the legitimacy of its crowning achievement-the Dispute Settlement Understanding. Creative use of authorized sanctions, however, will allow aggrieved trading partners to beat the U.S. at their own political game.

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