DIVISIONS PERSIST ON ANTI-DUMPING DRAFT TEXT

Longstanding divisions appear to be persisting in the Doha Round negotiations to modify WTO rules on the use of anti-dumping measures, following discussions last week on a set of potential amendments tabled in November by the chair of the negotiating group.

Uruguayan Ambassador Guillermo Valles Games, who chairs the negotiating group on rules, told delegates on 25 January that his consultations with groups of Members earlier in the week had yielded few signs of convergence.

Particularly controversial is the issue of 'zeroing', a methodology used principally by the US to calculate anti-dumping duties. Although WTO dispute panels have repeatedly found zeroing to be incompatible with multilateral trade rules, Washington argues that their reasoning has been faulty, and wants to see zeroing allowed.

Many other countries are equally adamant that the Anti-Dumping Agreement should be modified to explicitly prohibit zeroing under all circumstances. Some 21 of them last week co-signed a paper (TN/RL/W/214/Rev.3) to this effect, including Taiwan, China, South Africa, Colombia, Indonesia, Korea Hong Kong, Switzerland, Chile, India, and Japan.

The paper openly criticised the draft text issued by Valles Games, which had sought to find a middle ground between the US and the other camp (see BRIDGES Weekly, 19 December 2007). "We are obliged to say that the chair's text lacks balance," the sponsors said. "The chair's text, as it now stands, permits the practice of zeroing." This, they claim, runs counter to the Doha mandate for "clarifying and improving disciplines" on anti-dumping, as well as to the broader goals of enhancing the predictability of international trade.

US trade authorities, when calculating the extent to which imports are being 'dumped' - that is, exported at artificially low prices - simply ignore ('zero out') instances where goods command higher prices in the US than at home. They only take into account cases where prices in the US are lower. Critics say that zeroing inflates 'dumping margins', allowing injured US companies to secure inappropriately high levels of anti-dumping duties on competing imports.

WTO anti-dumping rules currently specify that government anti-dumping authorities can compare home market costs and export prices either in terms of weighted averages, or across a range of individual transactions.

Valles Games' text would ban zeroing when averages are used to calculate dumping margins, but specifically permit zeroing for transaction-to-transaction calculations, or when individual export transactions are compared to a weighted average 'normal' value. It also permits zeroing in multiple-comparison calculations for the purposes of reviews to examine whether anti-dumping duties should be phased out or reduced.

The US was unhappy with the text's proposal to ban zeroing in 'average-to-average' comparisons, a position that sources say has not changed.

The EU, though it did not sign onto the paper criticising Valles Games' text, had in December derided zeroing as a minority sport.

Egypt, which has previously proposed explicitly allowing zeroing under certain circumstances, called for using Valles Games' as a basis for moving forward.

Division continued on other issues, such as the draft text's proposal for anti-dumping duties to be automatically terminated after ten years, and 'anti-circumvention' provisions that would allow countries to extend anti-dumping duties on one good to related products, if they found that imports of the latter were being used to get around the extra tariffs.

ACP countries highlight technical problems

Kenya, the African Group, and the group of African, Caribbean, and Pacific (ACP) countries all pointed to their need for additional technical assistance to enable them to actually carry out anti-dumping investigations. They noted that the complex legal requirements of WTO anti-dumping provisions made it difficult for them to exercise their right to impose extra duties on dumped goods.

Ghana, speaking on behalf of the African Group, warned that making anti-dumping rules even more technical would further complicate implementation for developing countries.

Sources said that Valles Galmes told delegates that concerns specific to developing countries would be dealt with in greater detail in future discussions. The negotiating group on rules is next slated to discuss anti-dumping in the week starting 11 February.

Speaking to Bridges, one official questioned whether the glaring differences could be resolved in the negotiating group on rules. The source suggested that a solution - if there is one - might only be found in a 'horizontal' negotiating process that would involve cross-sector tradeoffs across other areas of the Doha Round talks, principally agriculture and non-agricultural market access.

ICTSD reporting.