TWN Info Service on WTO and Trade Issues (May10/12)
27 May 2010
Third World Network

Two panels set to examine US "zeroing" practice
Published in SUNS #6926 dated 19 May 2010

Geneva, 18 May (Kanaga Raja) -- The WTO Dispute Settlement Body (DSB) on Tuesday agreed to establish two separate panels, one at the request of Korea and the other by Vietnam, to rule on the controversial practice of "zeroing" used by the United States in its determination of dumping margins in anti-dumping investigations.

Both requests by Korea and Vietnam were second-time requests and panel establishment was automatic in each case.

Mexico, China, the European Union, Thailand, Japan and Vietnam reserved their third party rights in the Korean dispute against the US.

Mexico, Japan, the European Union, Korea and Thailand reserved their third party rights in the Vietnam-US dispute.

In other actions, the DSB also agreed to establish a panel, at the request of China, to rule on anti-dumping measures imposed by the European Union on certain footwear from China.

Turkey, the United States, Australia, Japan and Vietnam reserved their third party rights in this dispute.

The Korea-US dispute concerned the use by the US of the "zeroing" methodology in imposing certain anti-dumping measures on imports of stainless steel plate in coils, stainless steel sheet and strip in coils, and diamond saw-blades and parts thereof from Korea.

The Vietnamese dispute against the US concerned anti-dumping measures imposed by the US on certain frozen and canned warm-water shrimp from Vietnam.

Apart from challenging the "zeroing" practice, Vietnam's complaint also addressed two other actions employed by the US in its anti-dumping investigations. (See SUNS #6909 dated 22 April 2010 for full details on both the Korean and Vietnamese disputes.)

The US has been involved in a series of disputes over its use of the "zeroing" methodology, with panels and the Appellate Body, in various disputes, repeatedly ruling against the US.

In its statement at the DSB, Korea said that the US' practice of "zeroing" in anti-dumping investigations is a long-standing issue that has been discussed on numerous occasions in previous DSB meetings.

Korea considered the measures by the US to be inconsistent with Article 2.4.2 of the Anti-dumping Agreement. It said that zeroing in anti-dumping investigations has been found to be inconsistent with the Anti-dumping Agreement by numerous panels whose decisions it said were not appealed by the US.

According to Korea, the US itself has announced that it will no longer utilize zeroing in investigations that were pending as of 22 February 2007.

But this change in US practice has not remedied the problem with the above-mentioned measures on products from Korea, it said.

Voicing disappointment at Korea's decision to pursue its request for a panel in this matter, the US nonetheless expressed hope that both it and Korea will be able to continue their dialogue on this matter.

In respect of the Vietnam-US dispute, in a statement at the DSB, Vietnam believed that it is fully justified in proceeding with this second request and pursuing the relevant issues through the panel and Appellate Body process.

Again voicing disappointment, the US said that it has serious concerns about the panel request by Vietnam.

In particular, said the US, the panel request includes:

-- items that were not identified in Vietnam's request for consultations, and thus were not the subject of consultations;

-- proceedings that were initiated pursuant to applications received prior to Vietnam's Accession to the WTO, which are not subject to the Anti-dumping Agreement and are not properly a subject of review by a WTO dispute settlement panel;

-- proceedings that have not yet been completed, and thus are not measures that a panel can review; and

-- a measure described by Vietnam as the "initiation" of the sunset review, though without a summary of the legal basis of Vietnam's complaint sufficient to present clearly the alleged problem with the initiation of the sunset review.

According to the US, Vietnam has not addressed these concerns, which the US said it had identified at the meeting of the DSB on 20 April (when Vietnam first tabled its panel request).

In the dispute raised by China against anti-dumping measures imposed by the EU on certain footwear from China, in a statement at the DSB, China emphasized that the EU's anti-dumping measures have a very serious impairment on the interests of Chinese industries.

Providing one example, China said that it has negatively affected the jobs and livelihood of around 150,000 workers employed in the production of leather footwear.

China said that although it has repeatedly expressed its serious concerns to the EU on several occasions, both bilaterally and multilaterally, this matter has not been resolved thus far.

Expressing regret over the step taken by China (in its second request for the establishment of a panel), the EU recalled that the anti-dumping measures, for which China was now seeking a panel, are not about protectionism, but about fighting unfair trade.

The EU said that it strictly follows the applicable WTO rules in all its anti-dumping cases, adding that it is strongly convinced of the strength of its case. "We stand ready to defend our measures that we consider to be fully consistent with WTO law." +