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WTO finds for Vietnam in U.S. shrimp dumping case

The decision is the latest in which 'zeroing' — a framework used by the U.S. for calculating duties on goods sold at less than their price on the exporter's home market — has been found illegal.

July 11, 2011|Reuters
  • In zeroing, U.S. officials do not take into account cases in which the imported goods are cheaper on their home market. Instead, they apply across the board a duty rate based only on those that are more expensive at home. Other shrimp producers argue that this is unfair.
In zeroing, U.S. officials do not take into account cases in which the imported… (Emily Michot, Miami Herald )

GENEVA — World Trade Organization judges on Monday ruled that the United States is violating global trade rules in using its controversial "zeroing" method to impose anti-dumping tariffs on shrimp from Vietnam.

The decision by a three-member panel was the latest of a series in which zeroing — a framework for calculating duties on goods sold at less than their price on the exporter's home market — has been found illegal under WTO agreements.

The panel said the United States "has acted inconsistently with provisions of the Anti-Dumping Agreement and the GATT" — key WTO accords — and said the U.S. should bring its calculation method into line with the two agreements.

Zeroing, which is used by the U.S. Department of Commerce and can be applied to a variety of goods, has been widely condemned by other countries.

The European Union, China, India, Japan and Mexico declared an interest in Vietnam's case — taken to the WTO in February 2010 — and China launched its own case over shrimp in February of this year.

WTO rules allow countries to impose duties on imports that they determine to be dumped, but the calculation of how much the duties should be involves comparing batches of goods.

In zeroing, U.S. officials do not take into account cases in which the imported goods are cheaper on their home market but apply across the board a duty rate based only on those that are more expensive at home.

Other shrimp producers argue that this is unfair.

Argentina, Brazil, Canada, Ecuador, the EU, Japan, Mexico, South Korea and Thailand have all won zeroing cases at the WTO, and in January the United States promised its trading partners that it would change the method.

In the interim, it has reduced its use of zeroing.

But in March, the U.S. International Trade Commission voted to continue import duties for five more years on shrimp from Thailand, the U.S. main supplier, as well as from China, Vietnam, Brazil and India.

That came after strong lobbying from U.S. shrimpers in the Gulf of Mexico, reeling from last year's huge oil spill and from devastating hurricanes, who want zeroing to be continued to shield them while their industry recovers.

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