GENEVA, June 14: A World Trade Organization arbitrator on Friday gave the United States until Dec 27 to amend a law that violates open trade rules by diverting some import duties to American companies.

The decision gives the United States four months less than it asked to implement the ruling, which could require members of Congress to repeal a popular provision that gives hundreds of millions of dollars each year to US companies.

The European Union, Japan and other countries in Asia and Latin America who brought the case had asked for a July 27 deadline, six months after an WTO appeals panel ruling against the so-called Byrd amendment.

The law, named after Sen. Robert Byrd, a West Virginia Democrat, requires the Bush administration to distribute anti-dumping duties collected on “unfairly” priced imports to US companies that sought the protection.

The complaining countries, the largest number ever to join in a single case, said the law compensated US firms twice, by making imports more expensive and by giving the firms cash.

If the United States fails to meet the Dec. 27 deadline, it could open the door to trade retaliation, but the WTO would have to determine how much damage the measure has caused.

The Bush administration has urged Congress to repeal the Byrd amendment and is working toward that goal, said a spokesman for the US Trade Representative’s office.

Meanwhile, the next round of Byrd amendment payments would go ahead as scheduled this fall, he said.

The government has paid about $550 million to US companies under the provision in the two years it has been in force.

A Democratic aide on the Senate Finance Committee said the Dec. 27 deadline was “unrealistic.” “You’ve got Byrd disbursements ... in almost every single state, which means you’ve got supporters and constituents of this provision in almost every single state. It’s going to be incredibly difficult, he said.

In February, a group of 70 senators urged the Bush administration to negotiate an agreement with trading partners that would allow it keep the measure.—Reuters