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Vietnam Challenges US Anti-Dumping Duties On Shrimp

by Ulrika Lomas,, Brussels

03 March 2013

The World Trade Organization's (WTO) Dispute Settlement Body, on February 27, 2013, agreed to establish a panel to examine the dispute brought by Vietnam against US anti-dumping duties on certain frozen warm-water shrimp.

Vietnam said it had failed to achieve a resolution during consultations launched on February 16, 2012, with the United States concerning several US laws, regulations, administrative proceedings and practices, including zeroing.

Following a previous ruling in 2011, the US rescinded anti-dumping duties imposed on Vietnamese shrimp but has subsequently reinstated anti-dumping duties at the behest of the US shrimp industry. The first case also focused on the use of zeroing, an anti-dumping duty calculation methodology outlawed by the World Trade Organization.

Under WTO rules, dumping is said not to occur if the average home market price is the same as the average export price. However, through the application of zeroing, the US disregards this by setting at zero all transactions in which the price of the product on the EU or Japanese market is lower than the price on the US market. This method increases, often substantially, the amount of anti-dumping duty that an exporter has to pay.

American shrimp producers allege that seven nations including Vietnam are unfairly subsidizing their domestic shrimping industries, allowing them to "dump" their produce at below the prevailing market price in the United States. The US industry has recently asked US authorities to pursue the imposition of countervailing duties to offset the impact of these alleged subsidies. Other nations involved include China, India, Ecuador, Indonesia, Malaysia and Thailand.

In a statement on March 1, 2013, the Vietnamese Embassy in the United States pointed out that the same issues under discussion were raised in its first petition to the World Trade Organization, in particular the use of zeroing.

Vietnam's Permanent Representative to the WTO Vu Dung stated: "The central issue involved in our request for a panel is the issue of zeroing and, specifically zeroing in periodic reviews under US law. In our view, this issue has been decided already by WTO panels and the Appellate Body on various occasions. Yet, the US has failed to implement the reports of the Appellate Body and has continued to apply zeroing in administrative reviews, including those applied to products of Vietnam.”

“Despite the fact that the US found no margins of dumping in the first, second or third review of the companies specifically investigated [out of a total of four reviews], it has continued to assign margins of dumping to companies not investigated despite their request to be investigated and, in at least one case, the submission of a full response."

“The US is clearly abusing the exceptions provided for in [WTO law] by refusing throughout this proceeding to allow companies that are not dumping to demonstrate this through being investigated.”

“The parties at consultations gained a better understanding of the issues under consideration, but did not reach a resolution of the matters. Consequently, Vietnam has no choice but to pursue these issues to a [WTO] panel."

TAGS: compliance | tax | business | tax compliance | India | fiscal policy | law | tariffs | anti-dumping | World Trade Organisation (WTO) | China | Ecuador | Thailand | food | trade disputes | Indonesia | Malaysia | United States | import duty | regulation | trade | Vietnam

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