WTO Rules On Vietnam-US Anti-Dumping Dispute

25/11/2014 12:00 - 532 Views

The World Trade Organization (WTO) has ruled in favor of Vietnam in a dispute concerning US anti-dumping duties on certain frozen warm-water shrimp from Vietnam.

The duties in question were imposed in 2005 after the US International Trade Commission determined that the US shrimp industry was being materially injured by dumped imports of non-canned warm-water shrimp from Vietnam.

The US Department of Commerce (USDOC) imposed the anti-dumping duties at estimated rates ranging from 4.30 percent to 25.76 percent.

Vietnam disputed the measures and the methodology used to calculate the duties in 2012. In particular it said that the DOC's use of the "simple zeroing" methodology was "as such" and "as applied" in the fourth, fifth, and sixth administrative reviews under the anti-dumping order, inconsistent with Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the General Agreement on Tariffs and Trade (GATT) 1994.

Zeroing is a calculation method in anti-dumping investigations, which has been outlawed by the WTO. Multiple comparisons of the export price and the home market price of an allegedly dumped good are made.

However, when aggregating the results of such comparisons to calculate the level of dumping for the product as a whole, the investigating authority ignores results where "negative dumping" occurs (when the products is sold on the export market at above the home market price). The effect of this is that the margin of dumping is increased, often substantially, thereby inflating the amount of anti-dumping duty paid.

Vietnam requested consultations with the US concerning the duties on February 16, 2012. When consultations failed to resolve the dispute Vietnam requested adjudication by a WTO Panel on January 17, 2013.

The Panel released its report on November 17, 2014. It said that with respect to Vietnam's "as such" claim concerning zeroing in administrative reviews, taking into account the fact that, as of April 2012, the USDOC had modified its calculation methodology in administrative reviews, Vietnam had failed to establish the existence of the alleged measure as a rule or norm of general and prospective application.

Consequently, the Panel rejected Vietnam's claims of inconsistency under Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994.

With respect to Vietnam's "as applied" claims, the Panel found that the USDOC had used zeroing to calculate the dumping margins of individually examined Vietnamese producers/exporters in the three administrative reviews at issue and, by doing so, had acted inconsistently with Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994.

The Panel ordered the US to bring the relevant measures into conformity with its obligations under the GATT 1994 and the Anti-Dumping Agreement.

Source: Tax News