The World Trade Organisation (WTO) is calling for the retraction of a US law called the Byrd Amendment, which sees millions of dollars given to American Italian Pasta and other US companies who are thought to be badly affected by certain imports.
Kansas City-based American Italian Pasta received US$7.6m from taxes that were charged on imports from foreign companies alleged to carry out unfair pricing. American Italian Pasta was thought to be suffering from allegedly unfair pricing of pasta imported from Turkey and Italy.
But the Geneva-based WTO was urged to examine the Byrd Amendment, which is also known as the Continued Dumping and Subsidy Offset Act, by the EU and ten other countries.
The WTO has found that its rules clash with the Byrd Amendment, because the WTO has anti-dumping provisions that disallow countries from creating funds to give the so-called victims of alleged unfair trade practices.
In reply, the US has said that it will appeal against the ruling in defence of its Byrd Amendment.
Chief financial officer of American Italian Pasta, Warren Schmidgall, said the company uses most of the extra money to invest in marketing and promotions.
“We’re happy to get it and have ways to use it and have invested it back in the marketplace,” Schmidgall told The Kansas City Star. “But if it goes away, it’s something we can deal with.”