USTR Seeks Comments on WTO Talks with Korea on U.S. Zeroing for Steel Products

March 2, 2011 by Karen Marzullo|Other U.S.

The U.S. Trade Representative is seeking comments on South Korea’s January 31, 2011 request for World Trade Organization consultations with the U.S. concerning antidumping measures regarding corrosion-resistant carbon steel flat products from Korea, in particular its use of “zeroing.”^1,2

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Comments should be submitted by April 1, 2011, to be assured of timely consideration.

(The U.S. is in the midst of its domestic legal and administrative process to come into compliance with WTO rulings on zeroing, including consultations with Congress. See ITT’s Online Archives or 12/29/10 news, 10122918, for BP summary of ITA’s proposed rule to normally use non-zeroing methodology in AD reviews. See ITT’s Online Archives or 01/25/11 news, 11012528, for BP summary of ITA extending the comment period on its proposed rule.)

Korea Challenging Use of Zeroing and Imposition of AD Cash Deposit Reqs, Etc.

Korea is challenging what it describes as the use of the practice of zeroing negative dumping margins in administrative reviews, sunset reviews, and liquidations of AD duties with and without reviews, concerning the case of corrosion-resistant carbon steel flat products from Korea. Korea is also challenging the imposition of cash deposit requirements and the final assessment of AD duties pursuant thereto and the ongoing conduct reflected by the use of the zeroing methodology in successive proceedings in that case. Korea also alleges inconsistencies with the General Agreement on Tariffs and Trade 1994 (GATT 1994).

Korea also states that it would like to raise the following “matters”:

the Tariff Act of 1930, in particular, sections 731, 751, 752, 771(35)(A) and (B), and 777A(c) and (d);
the Statement of Administrative Action that accompanied the Uruguay Round Agreements Act, H.R. Doc. No. 103-316, vol. I;
implementing regulations of the Department of Commerce, 19 CFR 351, in particular, sections 351.212(b) and (c), 351.218, and 351.414;
the Import Administration Antidumping Manual (1997 edition), including the computer program(s) to which it refers
the Department of Commerce Policy Bulletin 98.3, “Policies Regarding the Conduct of Five-year (‘Sunset’) Reviews of Antidumping and Countervailing Duty Orders” (“Sunset Policy Bulletin”), 63 Fed. Reg. 18871 (16 April 1998);
“the general procedures and methodology employed by the U.S. for determining dumping margins in administrative reviews, sunset reviews, and duty assessment determinations”;
“the general procedures and methodology employed by the United States, in sunset reviews, for determining whether revocation of antidumping orders would be likely to lead to continuation or recurrence of dumping within a reasonably foreseeable time.”

WTO Panel May be Established if Consultations Fail

Consultations are the first step in a WTO dispute. Under WTO rules, parties that do not resolve a matter through consultations within 60 days may request the establishment of a WTO dispute settlement panel. If such a panel is established, it would be expected to issue a report on its findings and recommendations within nine months after establishment.

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.

²See ITT’s Online Archives or 03/23/10 news, 10032340, for the ITA's most recent final results of administrative review for the subject steel products from Korea (A-580-816). See ITT’s Online Archives or 02/23/11 news, 11022322, for BP summary of CIT granting remand for subject steel products from Korea that were subject to the 2006-2007 AD review.

(Note that In cases brought by the European Union, Japan, Brazil, Thailand, Vietnam and others, the WTO has already ruled against certain U.S. “zeroing” procedures in AD: (1) investigations; (2) administrative reviews; (3) new shipper reviews; and (4) sunset reviews. There are also other several ongoing “zeroing” disputes.)

(See ITT’s Online Archives or 02/18/11 news, 11021806, for BP summary of Mexico asking to join these consultations. See ITT’s Online Archives or 02/15/11 news, 11021546, for Japan asking to join the consultations.)

USTR contact- Leigh Bacon (202) 395-5859