WTO rules against U.S. in Mexico dumping appeal

05/05/2008 12:00 - 847 Views

GENEVA, April 30 (Reuters) - The World Trade Organisation's top court delivered another blow on Wednesday to the controversial method the United States uses to deal with unfairly priced imports.

The Appellate Body overturned a previous ruling by a WTO dispute panel, saying the method known as "zeroing" was inconsistent with WTO rules on anti-dumping in all cases. The panel had said it was permissible in some circumstances.

The case has been closely followed by trade lawyers as the panel ruling had ignored previous Appellate Body reports, calling into question the legal system of the WTO, which umpires the world trading system.

Mexico had brought the appeal in response to U.S. anti-dumping duties on imports of Mexican stainless steel.

"We are confident that the U.S. will put its measures into conformity ... We trust that the result will be the elimination of the anti-dumping measures on Mexico," Carlos Vejar Borrego, a counsellor in Mexico's WTO mission, told Reuters.

But the United States said the ruling went beyond WTO agreements and undermined the WTO dispute settlement system.

"We are disappointed that the Appellate Body has continued to over-reach by inventing new obligations to limit the use of anti-dumping measures, when such obligations were never agreed to by the WTO Members," Gretchen Hamel, a spokeswoman for U.S. Trade Representative Susan Schwab, said in a statement.

CHALLENGE TO WTO SYSTEM

The Appellate Body has consistently ruled against zeroing, a method used by Washington but rejected by the rest of the WTO's 151 members. The United States wants the new trade deal under negotiation in the Doha round to allow zeroing.

But the dispute panel, in its original ruling last December, disagreed with previous findings of the Appellate Body.

In Wednesday's judgement, the Appellate Body said its reports were binding only with regard to the particular case at issue. But subsequent dispute panels were not free to ignore those rulings, as they provided guidance to WTO members.

"We are deeply concerned about the Panel's decision to depart from the well-established Appellate Body jurisprudence clarifying the interpretation of the same legal issues," it said.

The original panel had ruled against zeroing in investigations of new dumping complaints, but said it was not inconsistent with WTO rules in reviews of existing cases.

Under WTO rules, a country can impose duties on imports that are sold at less than their price in their home market, or "dumped", if they damage industry in the importing country.

To calculate the duty, the importing country looks at the difference in price between the two markets.

In some cases, for instance when a range of similar products is under review, the price may actually be less in the home market. The United States ignores this "negative dumping margin", or treats it as zero, instead of setting it off against the price of those goods that are cheaper in the export market.

This inflates the overall dumping margin or even results in duties being imposed or maintained where that would not arise in other countries.

 

By Jonathan Lynn

Reuters Wednesday April 30 2008

Source: www.guardian.co.uk

 

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