US Anti-dumping Cases under WTO Scanner as China Complains

The US-China row over the use of trade remedies escalated another notch on Wednesday, after a WTO panel was established to review whether a series of US anti-dumping measures is in line with Washington’s international obligations.

This particular complaint (DS471) involves 13 separate anti-dumping measures imposed by the US on Chinese products, such as oil-well pipes. Beijing initially requested consultations on the matter in December.

In its panel request, China alleges that the US Department of Commerce inappropriately used “targeted dumping” methodology - including the controversial practice of “zeroing”- in calculating dumping margins. In trade law jargon, targeted dumping refers to a situation where dumping - the practice of selling products overseas at prices lower than their domestic value - is targeted to a specific region, period, or purchaser.

If targeted dumping is found, an importing country can use an alternative method of calculating dumping margins that determines normal value using an average of market prices, which is permissible under WTO rules as long as certain conditions are met. Beijing alleges that Washington has not complied with these requirements.

Under the practice of zeroing, the US then ignores certain data when calculating anti-dumping duties. Specifically, it “zeroes out,” or ignores, instances where the good in question is actually being sold at a higher price in the US than in its home market. Washington’s practice of zeroing has been subject to a large number of WTO disputes, with members hoping that the dispute settlement system can help clarify whether this practice is indeed in line with international trade rules, in the absence of progress in the Doha Round talks.

Beijing also disputes the validity of the US Commerce Department’s “single rate presumption” for countries designated as “non-market economies” (NMEs) - which itself is another long-standing sticking point between the two sides. China charges that presuming all producers and exporters are one single entity under state control- as the NME designation does - and then assigning them a single dumping rate unfairly ignores relevant information from producers and exporters.

An earlier panel request was made in February, which was blocked at the time by Washington. Under WTO rules, respondents to a complaint are allowed to block an initial request for a panel. However, when a second request is made, a panel is automatically established.