India Imposes Zero Anti-dumping Duty on Shrimp Exports to the U.S.

Giving relief to India's seafood exports sector, the US Department of Commerce (DoC) has cut anti-dumping duty on frozen shrimp exports to nil. The decision will be effective from next year, when the seventh administrative review on anti-dumping duty completes in March 2013.

DoC is modifying its method of calculating the weighted-average dumping margins and anti-dumping duty assessment rate. Currently, it compares the transaction-specific export prices and average normal values to arrive at the value of dumping. However, DoC does not offset the amount of dumping.

Several World Trade Organisation (WTO) dispute settlement reports have found that the application of these methods by the US has been inconsistent with the world trade body's obligations. Now, DoC has decided to calculate the weighted-average margins of dumping and anti-dumping duty assessment rates in a manner that offsets non-dumped comparisons while using monthly average-to-average comparisons in reviews. This may lead to de-minimum duty (below 0.5 per cent), which in effect carries zero anti-dumping duty on exports to the US.

The department is also modifying its five-year (sunset) reviews so that they not rely on weighted-average dumping margins that were calculated using the inconsistent methods. The Indian government had not taken the issue seriously earlier. In fact, it could have been implemented three years back if India had lodged a complaint before with WTO.

In its judgment, WTO said the US was violating global trade rules by using its controversial 'zeroing' method to impose anti-dumping tariffs on shrimps from Vietnam. In effect, the duties on shrimp imports from Vietnam were removed in August 2004. Earlier, countries like Argentina, Brazil, Canada, Ecuador, EU, Japan, Mexico, South Korea and Thailand had also won their zeroing cases at WTO.

In the first week of March 2011, DoC announced the preliminary results of the fifth administrative review (AR) of anti-dumping duty. The average duty for India had been reduced to 1.69 per cent from 2.67 per cent. The anti-dumping duty on frozen shrimp imports from India into the US was imposed with effect from August 4, 2004 and the levy was confirmed through the anti-dumping duty order dated February 1, 2005.