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CITAC, international trade, imports, exports CITAC CALLS ON UNITED STATES TO COMPLY WITH LATEST WTO DECISION AGAINST USE OF “ZEROING”
     
FOR IMMEDIATE RELEASE Contact: George Felcyn
August 18, 2009   Tel. (202) 828-1715
   

george.felcyn@bgllp.com

CITAC CALLS ON UNITED STATES TO COMPLY WITH LATEST WTO DECISION AGAINST USE OF “ZEROING"

Washington, DC -The Consuming Industries Trade Action Coalition (CITAC) today called on the Obama Administration and Congress to comply immediately with WTO decisions condemning the use of “zeroing” in antidumping proceedings.  The World Trade Organization’s Appellate Body today reaffirmed that zeroing violates the international trade obligations of the United States.  U.S. failure to comply with the WTO ruling will leave U.S. exports subject to millions of dollars of retaliation. 

Japan brought the compliance case that led to today’s decision, which successfully argued that the United States has failed to comply with past WTO rulings against zeroing.  The violation applies to all actions to assess or collect antidumping duties after the original deadline for compliance, which was December 24, 2007 in the case of Japan, April 9, 2007 in the case of EC imports and April 30, 2009 in the case of Mexico.  The decision sets the stage for punitive tariffs to be applied against U.S. exports later this year.

“If the U.S. fails to meet its WTO obligations and eliminate zeroing from antidumping calculations, U.S. exports stand to be hit,” said CITAC Counsel Lewis E. Leibowitz, a partner at the Washington-based law firm of Hogan & Hartson.  “There is simply no justification for the U.S. to invite retaliatory tariffs by continuing the practice of zeroing, which in many cases only inflates the amount of duties collected and distorts markets in the United States.”

“Downstream U.S. industries are particularly hard hit by the loss of competitiveness that follows from excess duties on key inputs,” continued Leibowitz. “This decision is actually in the interest of the vast majority of U.S. manufacturers, who ultimately pay for these duties through higher prices and reduced availability of production inputs in the United States.  It is high time for the U.S. Administration to comply with the clear rulings of the WTO and to act in the interests of U.S. manufacturers.  Failure to act now will undermine our ability to persuade our trading partners to comply with their own trade obligations.”  

Zeroing refers to the treatment of export sales to the U.S. when they are compared to “normal value” -- or the foreign value -- of similar goods in antidumping proceedings.  Goods that are sold for less than their normal value have “positive” comparisons.  However, when the Commerce Department finds transactions in the U.S. that occur at prices higher than normal value, it chooses to ignore those sales (“zeroing” them) rather than averaging them into the final calculations as the WTO requires.  By reducing the impact of those transactions on the final calculations, the DOC’s zeroing practice leads to artificially inflated dumping margins.  While so far refusing to end the practice, the Department has never studied the economic impact of zeroing on U.S. industry. 


For additional information, visit www.citac.info or contact George Felcyn at (202) 828-1715 or george.felcyn@bgllp.com.

 

 

 

 

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