GENEVA: A World Trade Organization panel ruled on Thursday against some U.S. anti-dumping measures to combat imports of Mexican stainless steel, in another rebuff for a U.S. trade policy.

But the panel said the method of calculating penalty duties on imports sold at unfairly low prices - known as "zeroing" - was permissible in some circumstances.

The ruling will give comfort to both the United States and a host countries that are challenging the way Washington sets anti-dumping margins in a series of trade disputes and in the long-running Doha round trade talks.

"This is further proof of what the United States has been saying all along - that WTO rules do not prohibit 'zeroing' and that WTO Appellate Body reports to the contrary have overreached," Susan Schwab, the U.S. trade representative, said.

She said in a statement that the panel had found in favor of the United States.

But a senior diplomat in Mexico's WTO mission said that the panel's report was a victory for Mexico, even though the panel did not agree with all his country's claims.

"We see it as a victory for the Mexican claim, as they find that zeroing is prohibited in original investigations," said Carlos Véjar Borrego, an expert on trade disputes.

Mexico was considering whether to appeal against the panel's ruling to try to clarify the rules on anti-dumping, as the panel had backed some of the U.S. measures, he said. Both Mexico and the United States have 60 days to decide whether to appeal.

The panel took a nuanced position, ruling against the U.S. practice in investigations of new dumping complaints, while saying it was not inconsistent with WTO rules in reviews of existing cases.

It recommended that the WTO ask the United States to bring the inconsistent measures in line with WTO rules.

But it said a country should not be forced to take into account the prices of imports that had not been dumped while reviewing an existing set of anti-dumping measures designed to protect domestic industry from dumping.

"The fact that some imports are made at non-dumped prices would not, in our view, change the fact that the domestic industry in the importing country is injured by dumped imports," the panel said.

WTO rules allow a country to impose duties on imports that are sold at less than their price in the home market. To calculate this "anti-dumping margin," the importing country looks at the difference in prices between the two markets.

Under zeroing, the United States ignores goods that actually cost less in the home market when it is making this calculation for a range of similar products.