WTO sides with U.S. in “zeroing” dispute with Mexico
A World Trade Organization panel has again sided with the United States in a dispute with Mexico involving the “zeroing” method for calculating antidumping duties.This marks the third time a WTO panel has found that zeroing in assessment proceedings is not prohibited by the WTO Antidumping Agreement, and it’s the second time a WTO panel has considered and rejected the trade organization’s Appellate Body findings to the contrary.
The practice of zeroing occurs when the U.S. Commerce Department calculates a weighted average dumping margin for a given company. It typically takes into account numerous comparisons between sales in the United States and sales in the home market or third-country market.
According to the Office of the U.S. Trade Representative, when a comparison finds no dumping, the department assigns a zero to that comparison, rather than a negative number equal to the amount by which the U.S. price exceeds the home market price.
Mexico challenged the Commerce Department’s use of zeroing in both the investigation phase and in assessment proceedings, which determine the actual amount of antidumping duties owed. Mexico still has the option to appeal the latest panel report to the WTO Appellate Body.
Since February 2007, however, the Commerce Department no longer uses zeroing in investigations where using weighted average calculations are performed.
The USTR said in a statement Thursday that the WTO’s latest decision on the zeroing dispute “underscores the U.S. view that WTO members need to address this issue in the Doha Round rules negotiations and adopt clear, precise rules in the Antidumping Agreement expressly permitting the use of zeroing.”
