OTTAWA, July 17: The World Trade Organization has issued an interim ruling against the United States over an anti-dumping law giving US firms cash from punitive duties applied on foreign companies, Canada said on Wednesday.

Canadian International Trade Minister Pierre Pettigrew said he was “very pleased” by the ruling against the so-called Byrd Amendment which he said encouraged US firms to seek damages from foreign companies.

Canada was one of several countries to challenge the amendment, which allowed the US Customs Service to distribute revenues from anti-dumping and countervailing duties to those US firms that originally filed for import protection.

The WTO’s final ruling will be issued some time in September and the United States said that if necessary, it would launch an appeal. In that case a definitive decision would be announced sometime early next year.

Last November the US Customs Service distributed more than $200 million to companies under the first year of the programme. The US Congress passed the amendment — formally known as the Continued Dumping and Subsidy Offset Act (CDSOA) — in 2000 as part of an annual spending bill.

Other challengers at the WTO included Australia, Brazil, Chile, the European Union, Japan, Thailand, Indonesia, India, Mexico and South Korea.

The WTO panel said that while there were a number of ways in which the United States could make the Byrd amendment conform with international trading rules, scrapping it altogether would make most sense.

The ruling is likely to increase tension between the United States and other WTO members over anti-dumping rules.

The WTO is now studying a challenge by the European Union, Japan, South Korea and China against a US decision to impose “safeguard” tariffs of up to 30 per cent on overseas steel imports for three years to give the struggling domestic industry time to rebuild.

US TO APPEAL: The United States is prepared, if necessary, to appeal a preliminary World Trade Organization ruling regarding a controversial provision that allows anti-dumping duties to be distributed to US companies, a US official in Washington said on Wednesday.