U.S. Department of Commerce to Eliminate "Zeroing" Methodology in Antidumping Investigations
In a major development in U.S. antidumping law and practice, on December 27, 2006, the U.S. Department of Commerce (DOC) published a notice in the Federal Register announcing that it will no longer use the "zeroing" methodology in antidumping investigations, including the antidumping investigations that are currently underway.
DOC made this change as as a result of a decision made by a World Trade Organization (WTO) dispute settlement panel in the case entitled "United States - Laws, Regulations and Methodology for Calculating Dumping Margins ("Zeroing'') (WT/DS294). In that case, the WCO panel found, among other things, that the DOC's denial of offsets when using the average-to-average comparison methodology in certain antidumping investigations challenged by the European Union was inconsistent with Article 2.4.2 of the Antidumping Agreement.
The Cato Institutes's Center for Trade Policy Studies has called zeroing "probably the most distortive of a multitude of methodological tricks the DOC undertakes in the name of fighting unfair trade." In research conducted by the Cato Institute, they found that "zeroing was the most significant cause of dumping margins" and "affected the outcomes in 17 of the 18 cases analyzed." They found that on average "eliminating the practice of zeroing caused the margins to decrease by 88.65 percent" in the 18 cases that were reviewed.
It is important to note that this decision only applies to new and ongoing antidumping investigations and will not apply (at least for the time being) to antidumping administrative reviews conducted by DOC.
Labels: Antidumping
|posted by Douglas N. Jacobson| Permalink 
