TWN Info Service on WTO and Trade Issues (Jan11/08)
Doubts raised over US claims of compliance
Geneva, 27 Jan (Kanaga Raja) -- Both the European Union and Japan have cast some doubt over a recent proposal by the US Commerce Department to address the adverse findings in several disputes at the World Trade Organization (WTO) over its controversial practice of "zeroing" in the calculation of dumping margins in its anti-dumping investigations.
The US Commerce Department's proposal to address
these adverse findings on "zeroing" was questioned by both
the European Union and
"While this proposal by USDOC (US Department of Commerce) is a step in the right direction, it should be clear that the proposal - even if adopted and implemented correctly - will not bring about full implementation, unless it is supplemented by additional measures," the EU told the DSB meeting.
While welcoming this positive development,
The zeroing issue also figured on Wednesday at
an informal meeting of the Negotiating Group on Rules - where the
In a status report (WT/DS322/36/Add. 16), dated 13 January, the US said that on 28 December 2010, in part in response to the findings in this dispute with respect to administrative reviews, new shipper reviews, sunset reviews, and investigations using transaction-to-transaction comparisons, the US Department of Commerce (USDOC) announced a proposal to change the methodology for calculating weighted average dumping margins and assessment rates in certain anti-dumping proceedings, including administrative and new shipper reviews.
According to the status report, the Department proposes to compare monthly weighted average export prices with monthly weighted average normal values, and to grant an offset for comparisons that show an export price that exceeds normal value in the calculation of the weighted average margin of dumping and assessment rate.
The modifications the Department has made with
respect to investigations, and is proposing to make with respect to
reviews, address the underlying issue with respect to sunset reviews,
In addition, to the extent that any prior application of the transaction-to-transaction methodology in an investigation could be considered as establishing a practice with respect to offsets, the Department is proposing to withdraw any such practice.
The status report said that the proposal has been published in the Federal Register, and that under US law, there will be a period for public comment on this proposal and for consultations with appropriate committees in the US Congress.
The status report provided by the US concerned
implementation of the DSB recommendations and rulings in the dispute
US - Measures Relating to Zeroing and Sunset Reviews (brought by
In its statement at the DSB, the
"As we have stated many times in the DSB,
The US noted that in response to the findings in this (DS322) and other zeroing disputes, on 28 December 2010, the US Department of Commerce announced a proposal to change the calculation of weighted average dumping margins and assessment rates in certain antidumping proceedings, including administrative reviews, new shipper reviews, and original antidumping investigations using transaction-to-transaction comparisons, and to address the findings made in connection with sunset reviews.
First, said the
Second, with respect to the transaction-to-transaction
approach in original investigations, the
"However, in light of findings by the Appellate Body with respect to this approach in this dispute (DS322), to the extent that any prior application of the transaction-to-transaction approach in an investigation could be considered as establishing a practice with respect to the granting or denial of offsets for non-dumped comparisons, the Department proposes to withdraw any such practice."
Third, and finally, the modifications that the Department is proposing with respect to reviews, and the modifications that the Department has already made with respect to investigations, would address the findings in this dispute (DS322) with respect to sunset reviews.
"The proposal discussed today reflects that effort and, if successful, would address adverse findings on zeroing in reviews, sunset reviews, and transaction-to-transaction comparisons in investigations."
In its statement at the DSB,
While welcoming this positive development,
For example, said
For a number of these reviews, many entries remain
unliquidated today, and the
With that in mind,
In its statement at the DSB, the European Union said that it welcomed the publication on 28 December 2010 by the US Department of Commerce of a proposal, which should - if adopted and implemented correctly - contribute to ending the practice of zeroing in administrative reviews.
In the view of the EU, the proposed weighted average-to-weighted average methodology can satisfy WTO requirements only if: (i) the new methodology is used so as to establish one single dumping margin for the whole review period, for the purposes of both the duty assessment and the cash deposit rate; (ii) the US offsets "negative" monthly amounts of dumping (i. e., where the weighted-average export price exceeds normal value) against "positive monthly amounts of dumping", in all cases; (iii) the amount of duty collected from importers under the new methodology never exceeds the exporter's dumping margin.
The EU also noted that despite what seems like a move away from zeroing, the USDOC retains the possibility pursuant to the proposal to use a different approach in reviews besides the weighted average-to-weighted average approach in some instances ("except where the Department determines that applications of a different comparison method is more appropriate").
In this respect, the EU said that it would like to ask the US to clarify what criteria USDOC will use to vary from the "normal" method outlined in the proposal, and whether zeroing will be used in connection with any alternative methods.
"While this proposal by USDOC is a step in the right direction, it should be clear that the proposal - even if adopted and implemented correctly - will not bring about full implementation, unless it is supplemented by additional measures," said the EU.
Noting that the reasonable period of time for
implementation expired over a year ago in its dispute with the US (DS350)
and nearly four years ago in DS294, without the
The Appellate Body has made it clear that compliance in the context of zeroing implies not only cessation of zeroing in the assessment of duties, but also in consequent measures that, in the ordinary course of the imposition of anti-dumping duties, derive mechanically from the assessment of duties.
Consequently, said the EU, to the extent that
a measure of this kind remains based on zeroing, the
"To the EU's knowledge, the
The EU said that it would like to know how the
The EU urged the
In a second intervention, the
"We will continue to work with interested parties, including Japan, on a solution to this dispute as we move forward with what I think everyone would agree is a very challenging domestic implementation process," said the US.
With respect to the comments made by the EU, the
It however commented on two issues raised by the
EU. With respect to past reviews, the
Noting that the EU has also raised the issue of
duties "imposed and collected after the expiry of the reasonable
period of time", the
It said that it was not aware of any other instances
in which a Member has refunded duties in response to an adverse finding
in a WTO dispute. For example, the
However, the EU's statement today would appear
to indicate a different position. "We would therefore like to ask
the EU to explain how it refunded duties in Bananas where my understanding
is that the reasonable period of time expired in January 1999,"
In other actions, the
The four complainants requested that a single panel be established to hear the dispute. Panel establishment will be automatic once a second request is made by the four complainants before the DSB.
Meanwhile, in a related development, an informal
meeting of the Negotiating Group on Rules was convened on Wednesday
by the Chair, Ambassador Dennis Francis of
According to trade officials, the
The (Barack) Obama Administration has worked to come into compliance with the rulings, and on 28 December 2010, the US Department of Commerce took a significant step in that effort by publishing a proposed change in its methodologies to address the "zeroing findings".
According to trade officials, the
However, said trade officials, the
It recalled that 20 WTO Members have sought to prohibit zeroing in all anti-dumping proceedings.
According to trade officials, the European Union
said that it is ready to negotiate, and welcomed
It added that the end should be a situation in which nobody is completely destroyed and nobody is completely happy.
At the close of the meeting, said trade officials,
The Chair responded that he would gladly facilitate this conversation at the appropriate time, and closed the informal meeting. +