ANOTHER LOSS AT WTO FOR U. S. ZEROING POLICY;
CITAC CALLS ON GOVERNMENT TO END ANTI-CONSUMING
Washington, DC – The Consuming Industries Trade Action Coalition (CITAC) urged the
Obama Administration to end the use of “zeroing” in antidumping cases in the wake of the latest
World Trade Organization (WTO) panel report finding that the U.S. Commerce Department’s use
of the controversial methodology violates international trade obligations. The April 24 ruling –
the 20th WTO ruling to go against the U.S. – clears the way for Japan to initiate retaliation
against U.S. exports later this year if the U.S. continues to defy the WTO rulings.
Japan challenged the United States’ failure to implement an earlier WTO decision against
the U.S. use of zeroing that Japan had won in January 2007. Under the WTO decision, the U.S.
had until December 24, 2007 to comply with the ruling.
“In this latest case, the WTO panel ruled that the U.S. failed to implement earlier
decisions against the use of zeroing in assessing antidumping duties,” said CITAC Counsel Lewis
Leibowitz, a partner at the law firm of Hogan & Hartson, LLP. “The EU won a similar case in
December 2008, but the Japan ruling is significantly broader, because it found that U.S.
assessment of duties through Customs liquidation after the implementation date is a failure to
comply with the WTO ruling; by contrast, the EU ruling found that only Commerce
determinations after the implementation date are violations. The Appellate Body in the WTO will
make a decision on this issue next month.”
“The bottom line is that the Japan Panel ruling has expanded the number of transactions
that can form the basis for retaliation, and expanded the likely effect on U.S. exports if the United
States fails to abide by the WTO rules. Soon Mexico will have this authority as well, as the period
for U.S. compliance with the Mexico decision expires on April 30.”
Zeroing artificially inflates dumping margins by disregarding “negative” dumping
comparisons (where the U.S. sales price exceeds the foreign “normal value”) when calculating an
aggregate margin of dumping for a product. In effect, the negative comparisons are treated as
though export price and normal value were the same. The resulting antidumping duties tax
American consumers excessively by inflating not only the duties but domestic market prices.
“When the U.S. fails to comply with these rulings, U.S. consuming industries
(downstream manufacturers, distributors and retailers) and U.S. exporters will bear the brunt of
the consequences – from artificially inflated antidumping duties as well as retaliation against U.S.
exports,” said Leibowitz. “Three of our largest export markets will be subject to retaliation within
a few months, and others are likely to follow.”
“There is a strong likelihood of increased trade case activity during the current
downturn. If these cases impose antidumping duties, the use of zeroing will further harm U.S.
manufacturers and consumers and make economic recovery that much more difficult,” concluded
Leibowitz. “The cost of maintaining zeroing simply cannot be justified.”
For additional information, visit www.citac.info .