TWN Info Service on WTO and Trade Issues (Feb09/06)
11 February 2009
Third World Network

Trade: Rules Group discusses Chair's text on anti-dumping
Published in SUNS #6635 dated 9 February 2009

Geneva, 6 Feb (Kanaga Raja) -- The WTO Negotiating Group on Rules on Thursday held a first discussion of the Chair's revised text on anti-dumping.

At the informal meeting, the Chair of the Group, Ambassador Guillermo Valles Galmes of Uruguay, introduced his text as a document that reflects reality -- the widely-conflicting views among delegations on a number of issues before the Group.

He said that these issues are between brackets in his text, and that he had tried to be even-handed in the selection of these issues.

According to trade officials, Japan, on behalf of the Friends of Anti-Dumping Negotiations (FANs), welcomed the new draft text on anti-dumping as a move in the right direction and as a necessary step to resume the negotiations.

(The FANs include Brazil, Chile, Colombia, Costa Rica, Hong Kong-China, Israel, Japan, Korea, Mexico, Norway, Singapore, Switzerland, Chinese Taipei, Thailand and Turkey.)

Japan said that given the economic crisis and a potential rise in protectionist sentiment, WTO members need to be aware of a possible increase in anti-dumping actions and to avoid the unwarranted use of such measures.

Japan noted that the Chair's first draft text lacked balance, and welcomed the new text for excluding provisions that would legalize the "zeroing" method in calculating anti-dumping duties.

(The Chair's new text on anti-dumping contains 11 bracketed issues, including on the controversial issue of "zeroing". On the zeroing issue, the new text says: ["ZEROING: Delegations remain profoundly divided on this issue. Positions range from insistence on a total prohibition of zeroing irrespective of the comparison methodology used and in respect of all proceedings to a demand that zeroing be specifically authorized in all contexts]".

(The new text from the Chair, and the square bracketed portion on "zeroing" has come even as the Appellate Body, in a dispute brought by the EC against the US over the latter's continued use of "zeroing", handed down on 4 February another ruling against the US practice, and reversing yet again another panel report -- allowing "zeroing"-- by favouring transaction-specific rather than product-specific and exporter-specific determinations, as the Appellate Body has consistently held.

(In the latest Appellate Body report, in a concurrent opinion, an unidentified member of the Appellate Body division has noted the efforts of successive panels to find dumping to be permissively determined at the level of individual transactions and thus permitting zeroing, as not lacking "hermeneutic ingenuity", and the Appellate Body reversing them, and speaking "definitively" on the issue of zeroing. The extensive debate over time (between panels and the Appellate Body), the unidentified member has said, demonstrates the "robustness" of the WTO's dispute settlement system and "its limits.")

According to trade officials, other members of the FANs also welcomed the new text, such as Hong Kong-China, which stressed the need to strengthen anti-dumping disciplines in the light of the economic crisis.

Switzerland said that members must improve the current rules, like having the umbrella repaired before the onset of bad weather.

Norway said that members should guard against protectionist measures, while Costa Rica supported the Chair's new "bottom-up" approach.

According to trade officials, Indonesia, on behalf of ASEAN, also underlined the importance of the anti-dumping negotiations in keeping protectionism at bay.

Ghana, on behalf of the African Group and the ACP Group, stressed the need to avoid overly complex and costly rules. It said that developing countries are finding it difficult to exercise their rights to assist local industry because of the complexity of current anti-dumping rules.

Tanzania, on behalf of the LDCs, called for more flexibility and more technical assistance to LDCs. It said that the lawyers of these countries must be trained to deal with anti-dumping cases.

According to trade officials, China said that the new bottom-up approach would pave the way for the resumption of negotiations. It said that two issues -- zeroing and anti-circumvention -- have been highly controversial in the Group. It urged that they be completely removed.

Brazil welcomed the deletion of text allowing zeroing, as this had been a source of discomfort for many members.

India pointed to several Appellate Body rulings against "zeroing".

The EU expressed support for the new approach. It stressed that it could not agree to a mini-package of just transparency provisions and leaving the bracketed issues out.

The EU also said that the Group has to have ambition, and that it needs to send the signal that it will improve rules to close loopholes for protectionist minds.

The US said that it has concerns about the new text, but recognized that the Chair was in a difficult position because of the different views of members.

The US expressed particular concern about putting the issue of zeroing in brackets, stressing its view that any final Rules agreement must address zeroing. It welcomed the transparency provisions, saying that they benefit all members.

The Chair said that the Golden Triangle -- ambition, realism and flexibility -- should guide members in moving forward and sustaining the bottom-up approach.

Ambassador Galmes said that the members bear the responsibility for showing flexibility, because the negotiations could not be just a "wish list".

He said that he would be consulting with delegations on the next steps forward. +