USTR Seeks Comments on WTO Talks with China on U.S. Zeroing for Shrimp

March 31, 2011 by Karen Marzullo|Other U.S.

The U.S. Trade Representative is seeking comments on China’s February 28, 2011 request for World Trade Organization consultations with the U.S. concerning antidumping measures regarding certain frozen warmwater shrimp from China, in particular its use of “zeroing.”^1,2

Comments should be submitted by May 2, 2011, to be assured of timely consideration.

(The U.S. is in the midst of its domestic legal and administrative process to come into compliance with WTO rulings on zeroing, including consultations with Congress. See ITT’s Online Archives or 12/29/10 and 01/25/11 news, 10122918 and 11012528, for BP summary of ITA’s proposed rule to normally use non-zeroing methodology in AD duty administrative, new shipper, and expedited reviews, and the extension of the comment period on the rule.)

China Challenging Use of Zeroing in Commerce Dept AD Admin, Sunset Reviews

China requested consultations regarding the AD duty investigation, a number of antidumping administrative reviews, and the sunset review conducted by the Commerce Department on certain frozen warmwater shrimp from China, referring in particular to the use of what it describes as “zeroing” in those proceedings.

Specifically, China requested consultations regarding the determinations by the Commerce Department:

Notice of Final Determination of Sales at Less Than Fair Value: Certain Frozen and Canned Warmwater Shrimp from China (December 8, 2004), and the accompanying November 29, 2004, Issues and Decision Memorandum, as well as any amendments, replacements and/or implementing measures issued pursuant thereto
Certain Frozen Warmwater Shrimp from China: Notice of Final Results and Rescission, in Part, of 2004/2006 AD Duty Administrative and New Shipper Reviews (September 12, 2007)
Third Administrative Review of Frozen Warmwater Shrimp from China: Final Results and Partial Rescission of AD Duty Administrative Review (September 10, 2009)
Administrative Review of Certain Frozen Warmwater Shrimp from China: Final Results and Partial Rescission of AD Duty Administrative Review (August 13, 2010)
Certain Frozen Warmwater Shrimp from China: Preliminary Results and Preliminary Partial Rescission of Fifth AD Duty Administrative Review (February 14, 2011)
The final results of the fifth AD duty administrative review on Certain Frozen Warmwater Shrimp from China published in the Federal Register after the date of the request for consultations, as well as any amendments, replacements, and/or implementing measures, including, inter alia, any assessment instructions and cash deposit requirements issued pursuant to each of the identified administrative reviews
Certain Frozen Warmwater Shrimp from Brazil, India, China and Thailand: Final Results of the Expedited Sunset Reviews of the AD Duty Orders (May 14, 2010), as well as any amendments, replacements, and/or implementing measures issued pursuant thereto.

China also Challenging ITC Affirmative Injury Determination

China also requested consultations regarding any affirmative injury determination under sunset review made by the International Trade Commission after February 28, 2011 (the date of China's consultation request), where injury was determined based upon AD margins calculated using zeroing.³

China Says that Zeroing Is Inconsistent with GATT

China states that so-called zeroing is inconsistent with certain Articles of the General

Agreement on Tariffs and Trade 1994 and certain Articles of the Agreement on Implementation of Article VI of the GATT.

WTO Panel May be Established if Consultations Fail

Consultations are the first step in a WTO dispute. Under WTO rules, parties that do not resolve a matter through consultations within 60 days may request the establishment of a WTO dispute settlement panel. If such a panel is established, it would be expected to issue a report on its findings and recommendations within nine months after establishment.

¹The USTR has previously explained that when Commerce calculates a weighted average dumping margin for a given company, it is not uncommon for it to find that some comparisons reveal dumping (e.g., the price in the U.S. is lower than the calculated “home market price”), while others reveal no dumping. Where a comparison reveals no dumping, the agency’s practice has been to assign a zero to that comparison, rather than a negative number equal to the amount by which the U.S. price exceeds the “home market price.” This practice is commonly referred to as "zeroing" or "denial of offsets."

²See ITT’s Online Archives or 08/13/10 news, 10081315, for the ITA's most recent final results of AD duty administrative review for the subject shrimp from China (A-570-893).

³See ITT's Online Archives or 12/15/10 news, 10121558, for BP summary of the ITA's affirmative determination in the most recent sunset review of the subject shrimp.

(Note that In cases brought by the European Union, Japan, Brazil, Thailand, Vietnam and others, the WTO has already ruled against certain U.S. “zeroing” procedures in AD: (1) investigations; (2) administrative reviews; (3) new shipper reviews; and (4) sunset reviews. There are also other several ongoing “zeroing” disputes.)

(See ITT’s Online Archives or 03/01/11 news, 11030116, for BP summary of USTR issuing a statement on China’s request.)

USTR contact- Jared Wessel (202) 395-3150