U.S. zeros out ‘zeroing’

   The United States in Geneva on Monday signed agreements with the European Union and Japan that will bring an end to longstanding trade disputes over “zeroing.”
   Zeroing is a label sometimes used to describe a methodology used in antidumping calculations for aggregating unfairly-traded (“dumped”) transactions with other transactions.
   The disputes started nearly nine years ago, when the EU first requested World Trade Organization consultations over the use of zeroing. In April 2006 (in the EU dispute) and January 2007 (in the Japan dispute), the WTO found that the United States’ use of zeroing in certain antidumping proceedings is inconsistent with WTO rules. After the WTO found that the United States had not brought its antidumping methodologies into compliance, the EU and Japan requested authorization to impose ”hundreds of millions of dollars” of trade retaliation.
   The Office of the U.S. Trade Representative said if these agreements had not been reached substantial volumes of U.S. exports could have been shut out of markets in the EU and Japan, resulting in job loss for U.S. workers and financial loss for U.S. farms and businesses.
   “We have finally put these burdensome and potentially damaging trade disputes behind us,” said U.S. Trade Representative Ron Kirk in a statement. “The resolution of these longstanding disputes promotes our ability to focus on the administration’s priority of enforcing U.S. rights under our trade agreements to ensure a level playing field for American farmers, workers and businesses.”
   Under the agreements, the United States will complete the process – which began in December 2010 – of ending its zeroing practices. In return, the EU and Japan will drop their claims for trade retaliation.
   The United States has repeatedly explained that the WTO Appellate Body – in making its findings on zeroing – did not apply the text of the WTO Antidumping Agreement and, therefore, exceeded its mandate. The United States will continue to press in ongoing WTO negotiations for affirmation that zeroing is consistent with WTO rules.
   “The administration is committed to vigorous enforcement of U.S. antidumping and other trade remedy laws,” Kirk said. “I am confident that we will continue to enforce these laws effectively, as was shown, for example, in our successful defense of the president’s imposition of duties on tires from China.” 
   The American Institute for International Steel applauded the U.S. government’s action.
   “The elimination of zeroing, which illogically calculates anti-dumping duties by not taking higher priced imports fully into consideration, has been deemed in over a dozen WTO cases not to be consistent with WTO rules,” said David Phelps, the pro-free trade steel group’s president. “Trade disputes and retaliation are a threat to job growth at a time that the US economy is emerging from the Great Recession and so the decision to comply with the WTO rulings was timely.”
   Phelps noted that steel exports for 2011, once fully calculated, will return to within 4 to 5 percent of the record year of 2008. “Steel exports are an increasingly important part of the landscape of our members,” he said.