U.S. WILL END "ZEROING" IN CANADA LUMBER DUMPING CASE;
COMMERCE DEPARTMENT SHOULD END SAME WTO-ILLEGAL
PRACTICE IN SHRIMP TRADE CASE

Washington, DC — The CITAC/ASDA Shrimp Task Force today urged the U.S. Commerce Department to end its controversial, WTO-illegal "zeroing" methodology in the anti-dumping case against imported shrimp now that the U.S. government has agreed to end its use in a dumping case on softwood lumber from Canada.

When calculating a dumping margin, the Commerce Department compares foreign sales to U.S. sales. Commerce currently uses a "zeroing" methodology: When U.S. sales prices are higher than foreign market values, and no dumping has taken place, rather than giving companies credit for these sales, the Commerce Department eliminates, or "zeroes" them out. This means that only U.S. sales at prices lower than foreign values are counted in calculating dumping. This automatically creates or inflates dumping margins.

The World Trade Organization (WTO) has twice found zeroing to violate the WTO Agreement on Dumping and Subsidies, most recently in the Canadian lumber case. The use of zeroing in that case is identical to that in the shrimp case. Last week, the U.S. and Canada announced an agreement that terminates WTO arbitration proceedings initiated by Canada in the softwood lumber case in return for the U.S. dropping its use of the "zeroing" methodology in that case.

"By abandoning zeroing in the Canadian lumber case, the Commerce Department is admitting it is wrong," said CITAC/ASDA Shrimp Task Force Chairman Wally Stevens. "There is no longer any legal or economic justification for applying zeroing to the shrimp case. The European Union and Japan are now challenging the use of zeroing in 37 prior antidumping cases. This practice is going to be rejected wholesale by the WTO very soon. The United States is fighting a losing battle to keep applying a calculation that is unfair and that violates the rules of international trade."

Continued Stevens, "Zeroing wrongly creates or inflates dumping margins. The fact is that without applying the illegal zeroing methodology, nearly all of the dumping margins found by the Commerce Department in the shrimp case would disappear. Abandoning the practice now is the fair, WTO-consistent, and right thing to do."

The Commerce Department will announce final dumping duties for Thailand, India, Ecuador, and Brazil on December 20. In January 2005, the ITC will determine whether the imports from the six countries are a true cause of material injury to the domestic industry.

In response to the threat that these food taxes pose to consumers and the consuming industries that serve them, the Consuming Industries Trade Action Coalition (CITAC) and the American Seafood Distributors Association (ASDA) formed the CITAC/ASDA Shrimp Task Force, joining concerned grocers, restaurants, processors, distributors, business councils, and U.S. importers. The Shrimp Task Force seeks to assure that the U.S. government considers all the facts, applies the law, and exercises its discretion in the case fairly and objectively, with a full understanding of the national ramifications of any decision.

For more information on the Shrimp Task Force, contact George Felcyn at or .