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The eBearing News
October 10, 2006
Japan Appealing WTO Zeroing Ruling
copyright © 2006 eBearing Inc.
Japan's Ministry of Economy, Trade and Industry (
website) today announced its vow to
appeal the recent World Trade Organization ruling,
partially in favor of U.S. use of "zeroing" in dumping determination calculations.
In a September 20 ruling, the WTO's Dispute Settlement Body (DSB)
found that "zeroing" cannot be used in the original investigations which
may find dumping has occurred. However, subsequent administrative reviews may
use zeroing.
The DSB's decision, however, seems to contradict an April decision in which the
WTO ruled against the U.S. and in favor of a European Union complaint over the U.S.
use of zeroing. In that decision,
the WTO determined zeroing cannot be used and violates WTO rules regarding dumping calculations.
article: the original EU complaint against U.S. use of zeroing
Some background may help explain the arguments. In order to determine if dumping (sales at less than
fair value) has occurred, individual product selling prices are compared: home country vs.
the U.S. If the selling price is lower in the U.S. than in the home country, the U.S. determines
dumping is likely to have occurred. Samples are calculated across a high volume of individual items,
and a weighted average selling price is calculated.
Normally, these calculations would also include items where the selling price in the U.S. is
found to be higher than the selling price in the originating country. Higher selling prices would
normally be offset against lower selling prices, for a grand total weighted average.
But when "zeroing" is employed, prices that are found to be higher in the U.S. are
removed from the calculation and changed to zero.
Critics have argued for many years that the zeroing method -- used and since abandoned by all but
the U.S. -- is an obvious mathematical artifice to inflate the differences, find dumping where
none exists, and calculate unfairly high punitive antidumping duties.
In an earlier complaint to the WTO, METI cited 13 specific sections of WTO and
international trade law which are violated by U.S. use of zeroing. Their claim is that zeroing
has repeatedly been found to violate WTO, GATT and Marrakesh Agreement trade provisions.
Japan request for WTO Dispute Settlement Body to address U.S. zeroing
Japan's opening statement to the WTO DSB
U.S. antidumping duties levied on Japanese bearings are a particularly difficult issue.
Of the 15 examples of faulty U.S. dumping calculations claimed by Japan, only two relate
to the expected steel products; 13 relate to bearings.
Zeroing calculations are built into two key software systems used by the U.S. to comb data
and perform a wide variety of trade-related determinations.
The U.S. has alternatively pledged to abandon zeroing, as the EU and other key trade
partners have done, then reversed itself and refused to abandon zeroing.
An METI official said: "We will appeal to the WTO's Appellate Body
on Wednesday, protesting against the report that zeroing, a U.S. antidumping
measure, is not against the WTO rules. Over the past five years, the Japanese steel industry has
been badly hurt by zeroing, particularly in exports of bearings."
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- by Bruce A. Carr
from individual research,
tips and commercial sources.
Bruce Carr edited this content.
Copyrighted material; unauthorized reproduction prohibited.
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Entire contents Copyright © 1999-2011, eBearing Inc. All rights reserved.
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