USTR Seeks Comments on Mexico WTO Panel Request on U.S. Compliance with Zeroing Ruling
The Office of the U.S. Trade Representative is seeking comments on the establishment of a World Trade Organization compliance panel, as requested by Mexico, concerning U.S. compliance with Dispute Settlement Body (DSB) rulings in the dispute U.S. - Final Antidumping Measures on Stainless Steel from Mexico (DS344), which involved the U.S.’ use of AD “zeroing.”
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Comments are due by November 12, 2010.
Mexico Says U.S. Has Not Eliminated AD Zeroing in Administrative Reviews
Mexico states that the U.S. has not fully implemented the DSB’s 2007 and 2008 recommendations and rulings. In particular, Mexico alleges the U.S. has failed to eliminate simple zeroing1 in:
Administrative reviews in general. Mexico states that the U.S. has taken no steps to eliminate simple zeroing in administrative reviews, thereby failing to implement the DSB’s recommendations and rulings that the U.S.’ use of simple zeroing in administrative reviews is “as such” inconsistent with certain of its WTO obligations.
5 specific administrative reviews. Mexico adds that the U.S. has failed to adopt any measures to implement the DSB’s recommendations and rulings with regard to the use of simple zeroing in five specific administrative reviews at issue in the dispute, inconsistent with certain other WTO obligations.
Says Noncompliance Affected Reviews & Related Measures, Increased AD Duties
Furthermore, Mexico states that the dumping margins calculated in these five specific administrative reviews continue to have legal effects and have been relied upon by the Department of Commerce in several subsequent closely connected measures, including in the 2005 and 2010 “sunset” reviews and in revocation decisions made in the context of subsequent AD administrative reviews, including the 7th and 9th administrative reviews.
Therefore, Mexico also alleges that by failing to take action to bring these “closely connected measures” into compliance, the U.S. has also imposed, assessed, and/or collected AD duties in excess of the proper margin of dumping, inconsistent with various U.S. WTO obligations. (See notice for complete description of allegations and U.S. measures at issue.)
WTO Report Expected 90 Days After Panel Composed
According to USTR sources, compliance panels are generally expected to issue a report on their findings and recommendations within 90 days after they are composed. The sources note that while a compliance panel has already been established, its members have not yet been composed.
1The USTR has previously explained that when Commerce calculates a weighted average dumping margin for a given company, it is not uncommon for it to find that some comparisons reveal dumping (e.g., the price in the U.S. is lower than the calculated “home market price”), while others reveal no dumping. Where a comparison reveals no dumping, the agency’s practice has been to assign 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.” This practice is commonly referred to as "zeroing" or "denial of offsets." Simple zeroing refers to the zeroing practice adopted under weighted average-to-transaction or transaction-to-transaction comparisons between export price and normal value. Simple zeroing is often conducted in the administrative review, though Commerce officials have previously stated that it can also occur in investigations.
(See ITT’s Online Archives or 09/21/09 news, 09092155, for BP summary of Mexico’s request for WTO consultations on this issue.
See ITT’s Online Archives or 06/03/09 news, 09060330, for BP summary of the U.S. and Mexico agreeing to steps to implement the DSB rulings and recommendations in the dispute.
See ITT’s Online Archives or 05/18/08 news, 08051525, for BP summary of the 2008 Appellate Body ruling, with links to other summaries.)
WTO summary of dispute (DS344) available here.
USTR contact - María Pagán (202) 395-7305
(D/N USTR-2010-0025, FR Pub 10/12/10)