WTO Issues Compliance Report On EC-US Zeroing Dispute

by Ulrika Lomas, Tax-News.com, Brussels

18 May 2009

A World Trade Organization (WTO) appeals panel, the Appellate Body, has confirmed an earlier finding that the US should stop using a method of calculating antidumping duties called 'zeroing' on imports of steel from Europe.

The ruling did not entirely support the European Union but it reaffirmed most of the findings made by a WTO panel in December 2008, including the US failure to comply with the 2005 ruling and subsequent 2006 appeal against the use of this controversial US method of assessing anti-dumping duties on imports.

The WTO Appellate Body recommended in a 204 page ruling that the Dispute Settlement Body (DSB) request the US to implement fully the recommendations and rulings of the DSB. The US had wrongly continued to base its assessment of anti-dumping duties on imports of steel products from the Netherlands and Sweden on zeroing after the reasonable period of time it was given to comply.

'Zeroing' is opposed by all of the WTO's 153 members except the US. Calculating anti-dumping duties usually involves averaging the prices of batches of goods. In zeroing the United States ignores, treats as zero, examples where the imports actually cost more than at home. This is said to exaggerate the extent of dumping and artificially inflates the duties. The US still considers the method to be fair, and is pressing to have zeroing recognized in the new Doha trade round.

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