US Trade Representative Susan C. Schwab last week revealed that a World Trade Organisation panel had found in favor of the United States on Japan’s challenge to the US use in antidumping administrative reviews of 'zeroing' – a technique used in measuring alleged incidents of selling below fair value, or dumping.
When the US Department of Commerce calculates a weighted average dumping margin for a given company, it typically takes into account numerous comparisons between sales in the United States and sales in the home market or third country market (or costs in the home market).
It is not uncommon for the Department to find that some comparisons reveal dumping (e.g., the price in the United States is lower than the home market price), while others reveal no dumping (e.g., the price in the United States is higher than the home market price).
Where a comparison reveals no dumping, the Commerce Department assigns a zero to that comparison, rather than a negative number equal to the amount by which the US price exceeds the home market price. This practice is commonly referred to as "zeroing".
In a previous dispute, the Appellate Body found that the WTO Antidumping Agreement prohibits zeroing in such reviews. The panel also concluded that zeroing is permitted in some circumstances in antidumping investigations.
"We welcome the panel’s careful and reasoned analysis on the issue of ‘zeroing’ in administrative reviews," announced Ambassador Schwab, continuing:
"This marks the second report in which a panel of antidumping experts has found that the Antidumping Agreement does not prohibit ‘zeroing’ in that context. That analysis is a model for how WTO adjudicatory bodies should do their job, demonstrating a solid commitment to their responsibility first and foremost to apply the WTO agreements as written."
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