Cyber Monday Deal: Up to 60% off InvestingProCLAIM SALE

UPDATE 3-EU seeks $311 mln sanctions from US in dumping row

Published 02/03/2010, 12:59 PM
Updated 02/03/2010, 01:03 PM

* Case is further attack on U.S. "zeroing" method

* Retaliation request likely to go to arbitration

(Adds U.S. reaction)

By Jonathan Lynn

GENEVA, Feb 3 (Reuters) - The European Union is seeking up to $311 million a year in sanctions from the United States in their dispute over a U.S. method for tackling unfairly priced imports.

The move by Brussels is another blow against the U.S. practice of "zeroing" when calculating duties on goods that have been dumped, or sold for less than they cost in the exporting country.

Every other member of the World Trade Organisation (WTO) rejects zeroing, which has been condemned by WTO judges. Only yesterday Vietnam launched its first WTO dispute with a complaint against the United States over zeroing on shrimp imports.

An EU official said the request was made "in response to the United States' persistent refusal to comply with WTO rulings on the anti-dumping practice of 'zeroing'".

ARBITRATION LIKELY

A document filed by the bloc this week said it was seeking WTO authority to retaliate against the United States in its dispute over Washington's "zeroing" method used in anti-dumping cases, dating back nearly seven years.

The EU request, to be submitted to the next meeting of the WTO's dispute settlement body (DSB) on Feb. 18, followed a WTO ruling last June that the United States had failed to comply with an original decision in a case launched by Brussels in 2003 over anti-dumping duties on steel products and other goods.

"The European Union hereby requests authorisation from the DSB to suspend the application to the United States of concessions or other obligations under the covered agreements," the EU filing said.

The EU cited a similar case where the WTO found in favour of Japan in a dispute over zeroing, and where Japan had previously sought permission to impose $250 million in sanctions.

The United States is almost certain to object to the EU's request, meaning it would go to arbitration, a process usually taking about two months.

The United States intends to comply fully with the WTO rulings and regrets the EU's decision to escalate the dispute, a spokeswoman for the U.S. Trade Representative said.

But she said some of the findings on zeroing by the appellate body, the WTO's top court, raised difficulties as even other WTO panels had stated.

"Not only has the WTO over-reached by inventing new obligations to limit the use of antidumping measures when such obligations were never agreed to by WTO members, but the Appellate Body reports in the zeroing cases raise serious systemic concerns for us that go beyond zeroing," she said.

The EU said it proposed imposing a prohibitive import tariff of 100 percent on U.S. exports worth $311 million, or a tariff of 13.8 percent on exports worth $477 million, and reserved the right to impose further sanctions related to zeroing.

WTO rules allow members to impose extra duties on goods that are dumped if that hurts businesses in the importing country.

Calculating these anti-dumping duties typically involves comparisons of the prices of different batches of imported goods to work out the average difference in price.

In zeroing the U.S. authorities ignore -- or treat as zero -- examples where the imported goods actually cost more than at home, which critics say unfairly inflates the duty. (Reporting by Jonathan Lynn; editing by Robert Evans and Philippa Fletcher)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.