Tuesday, February 07, 2012

Trade: EU and U.S. Agree to Bring Excessive American Anti-dumping Duties Down to WTO Level

SOURCE Delegation of the European Union to the United States

The European Commission and the United States today solved one of their most longstanding WTO disputes concerning the U.S. calculation practice of so-called "zeroing" in anti-dumping investigations. They signed a roadmap which sets out the steps the U.S. will take to comply with WTO rulings in the future calculation of duties when the U.S. authorities find that some imported products from a particular exporter enter the U.S. market below the normal market price. As a result, no European Union exporter should be subject to an anti-dumping duty affected by zeroing in the future. The EU will closely monitor the U.S. application of this new practice.

"This understanding solves this longstanding dispute," said EU Trade Commissioner Karel De Gucht. "It will bring immediate relief to EU exporters who will no longer have to pay excessive anti-dumping duties; some of them will not pay any anti-dumping duties at all." Referring to intensive negotiations over the past months, he welcomed that the EU and U.S. were able to find a way forward. "We have now re-established a level playing field for our companies," he added.

"Zeroing" is a calculation method the U.S. authorities used when calculating duty rates for products that entered its market at dumped prices in review investigations. Anti-dumping duties are additional duties which are imposed on top of the normal customs duty to offset dumping. Until now, the current U.S. calculation practice led to higher duties for EU exporters, despite the fact that this methodology was found to be WTO-inconsistent in a series of dispute settlement cases.

With the roadmap signed today, the U.S. committed itself to apply a new methodology to calculate anti-dumping duty rates in all new review anti-dumping investigations launched as of mid-February 2012. In addition, the anti-dumping duty rates on goods imported into the U.S. after May 2010 will also be determined under the new methodology without zeroing. This will benefit about 30 EU exporters who are currently affected by ongoing U.S. anti-dumping administrative reviews for 10 different products.

Furthermore, 35 EU exporters in anti-dumping cases for 8 different products, some of which are currently not taking part in U.S. anti-dumping administrative reviews but are affected by zeroing, will have their anti-dumping duty rates determined without zeroing. Therefore, as of June 2012, no EU exporter should be subject to an anti-dumping duty affected by zeroing. At a very rough estimate, this could save EU exporters about USD 15 million a year.