Manufacturers Call for End to "Zeroing"

The Consuming Industries Trade Action Coalition (CITAC) called on the Obama Administration and Congress Thursday to comply immediately with World Trade Organization decisions condemning the use of "zeroing" in anti-dumping proceedings.

The World Trade Organization's Appellate Body on Friday reaffirmed that the process violates the international trade obligations of the United States. Zeroing eliminates negative dumping margins from dumping calculations. It allows officials to disregard instances in which foreign firms charge prices over fair value, thus offsetting supposed instances of undercharging.

U.S. failure to comply with the WTO ruling will leave U.S. exports subject to millions of dollars of retaliatory tariffs, CITAC said in a statement.

The decision responded to a complaint brought by Japan, which successfully argued that the United States has failed to comply with past WTO rulings against zeroing. "If the U.S. fails to uphold its WTO obligations and eliminate zeroing from antidumping calculations, U.S. exports stand to be hit," said CITAC Counsel Lewis E. Leibowitz, a partner at the Washington-based law firm of Hogan & Hartson. "There is simply no justification for the U.S. to invite retaliatory tariffs by continuing the practice of zeroing, which in many cases only inflates the amount of duties collected and distorts markets in the United States."

"Downstream U.S. industries are particularly hard hit by the loss of competitiveness that accompanies excessive duties on key inputs," added Leibowitz. "This decision is actually in the interest of the vast majority of U.S. manufacturers, who ultimately pay for these duties through higher prices and reduced availability of production inputs in the United States. It is high time for the U.S. Administration to comply with the clear rulings of the WTO and heed the interests of U.S. industries. Failure to act now will undermine our ability to persuade our trading partners to comply with their own trade obligations

Contact Alan M. Field at afield@joc.com.