The United States squared off against other World Trade Organisationmembers on 12/12/2007 over its use of import penalties, an issuediplomats see as the latest obstacle to a new global trade deal.  

WTO judges have repeatedly struck down the U.S. method of calculatinganti-dumping duties -- known as "zeroing" -- as contrary tointernational trade rules, because it results in higher-than-meritedcharges on goods entering the United States.  

But Washington says the practice is allowable under current globaltrade rules, penned in the 1994 Uruguay Round accord, and has signalledthat any agreement emerging from the six-year-old Doha Round of talksmust recognise its validity.  

"It is a very serious issue," U.S. ambassador to the WTO PeterAllegeier said after a heated negotiating session at the trade body'sGeneva headquarters. He has previously said the United States "cannotenvisage an outcome to the negotiations without addressing zeroing."  A draft text circulated last month by Uruguayan ambassador GuillermoValles Galmes, who chairs the WTO's "rules" talks, made room for theuse of zeroing in some circumstances, in what was widely regarded as aconcession to Washington.

Diplomats from major economies including the European Union, China,Brazil and India denounced that text at Wednesday's meeting, saying the"biased and partial" U.S. method had no place in a WTO accord meant toremove global barriers to trade.

"If the use of such practice prevails in the future, it could nullifythe results of trade liberalisation efforts," said a joint statementfrom countries including Brazil, China, India and Japan and backed bythe European Union and Canada.   Diplomats involved in Wednesday'ssession said no country spoke in defence of zeroing other than theUnited States, but the WTO's 151 member states need consensus on allaspects of a Doha deal for it to be achieved.  

'PERPLEXED AND DISAPPOINTED'

The friction added to deep divisions in separate WTO talks onagriculture, industry and services, where developing and developedcountries have crossed swords over the size of the tariff and subsidycuts that are needed.

WTO rules allow countries to slap duties on imported goods that arebeing sold for less than their production cost in the exporting market,a practice known as dumping.   Under zeroing, some prices are ignoredfor the calculation, making it easier to conclude that dumping hasoccurred.

The Japanese WTO ambassador, Ichiro Fujisaki, told diplomats that hiscountry was "both perplexed and disappointed" with the rules text,stressing "the negative impact of zeroing on future world trade."

And China's ambassador Sun Zhenyu said that if all WTO members were touse zeroing, the level of protectionism worldwide would surely increase"which is clearly not the objective of this organisation."  

By Laura MacInnis
12/12/2007

Source: reuters