GENEVA: US measures requiring India and Thailand to post bonds to cover anti-dumping duties on imports of shrimp violate international trade rules, a World Trade Organisation (WTO) panel said in the past week.

The WTO rulings are the latest in a series of setbacks to US efforts to control what it sees as unfairly priced imports.

The dispute settlement panel, confirming preliminary rulings from October, also backed a Thai complaint against a controversial US method of calculating anti-dumping duties, known as zeroing, which has come increasingly under attack at the WTO.

The panel found that the application of the bond to cover the full duties was inconsistent with anti-dumping rules, as was the US use of zeroing to calculate anti-dumping margins.

“We therefore recommend that the US bring its measures into conformity with its obligations under the Anti-Dumping Agreement,” it said in reports on the cases.

US Customs introduced a requirement in 2004 that exporters subject to paying anti-dumping duties had to post a bond covering the full amount if there was a risk that they would default on the duties. Previously affected countries had to post a bond equivalent to only 10% of the duties.

India and Thailand argued that the requirement to post the full amount was an excessive financial burden on exporters paying the anti-dumping duties.

WTO rules allow a country to levy duties on goods that are ‘dumped’, or imported at a price below what they are sold for in the exporting country, if that hurts competitors in the importing country. But there is much controversy about how such anti-dumping duties are calculated and implemented.

The full bond requirement was illegal because WTO rules do not allow an importer to counter dumping with specific measures besides anti-dumping duties.

4 Mar, 2008, 0000 hrs IST, REUTERS

Source: economictimes.indiatimes.com