The U.S. Drops Dumping Duty Calculations Opposed by EU, Japan

The U.S. resolved a longstanding World Trade Organization dispute, agreeing to end an anti-dumping practice that exporters from the European Union and Japan said unfairly penalized their products.

The U.S. will stop "zeroing" prices on imports that domestic producers contend are illegally dumped, and in exchange the EU, which sought consultations in 2003, and Japan dropped requests to impose retaliatory tariffs, the U.S. Trade Representative's office said. The EU and Japan had said the U.S. failed to comply with WTO decisions against the practice.

"We have finally put these burdensome and potentially damaging trade disputes behind us," U.S. Trade Representative Ron Kirk said today in a statement.

In a series of WTO complaints, Canada, Japan, Thailand and other U.S. trading partners said the U.S. method of calculating duties on their products was unfairly inflated. When the price on a product is lower in the exporting country, the U.S. set the cost at zero rather than the actual amount. This "zeroing out" makes the average margin in a dumping case higher.

Dumping occurs when companies export goods to the U.S. at a loss, or at prices below what the products fetch in their domestic market. In most investigations, the Commerce Department averages prices for each product under review and the comparable goods in the U.S. It then compares the prices, and sets duties based on the difference.

As a result of the accord, "no EU exporter should be subject to an anti-dumping duty affected by zeroing in the future," the European Commission said in an e-mailed statement from Brussels.