US Trade Representative Ron Kirk announced on Monday that the US has signed an agreement with the European Union (EU) and Japan that ends disputes between the nations over "zeroing." The disputes started almost nine years ago when the EU requested the World Trade Organization (WTO) consult over the use of zeroing. In the disputes--both with Japan and the EU--the WTO found that the US had not brought its antidumping methodologies into compliance. After the WTO's findings, the EU and Japan wanted authorization to impose hundreds of millions of dollars of trade retaliation.
The signing of the agreement today has saved the US from being closed out of EU and Japanese markets--which would cause job and financial loss for the US. Starting immediately, the US will complete the process of ending the zeroing practices found in these disputes to be inconsistent with WTO rules. In return, the EU and Japan will drop their claims for trade retaliation.
Soon after the agreement had been reached, the American Iron and Steel Institute (AISI) President and CEO Thomas J. Gibson issued the following statement: "The American Iron and Steel Institute (AISI) condemns the several rulings by the World Trade Organization (WTO) against zeroing, a method of calculating antidumping duties that has long been applied in the United States and other countries. The practice of zeroing is nowhere prohibited in the WTO agreements, and the WTO rulings on this subject are a classic example of overreach by the WTO Appellate Body. Elimination of zeroing will make it easier for foreign producers to dump their products in the U.S. market and injure U.S. workers and businesses.
This is a case where the WTO Appellate Body got it wrong. United States Trade Representative Ron Kirk has emphasized that the Administration will continue to work to obtain a clarification that the WTO rules permit zeroing, which is critical to making our trade laws work. We strongly support this position by the Administration, and will continue to work with USTR and the Commerce Department to correct these errant decisions by the WTO."
The American Institute for International Steel (AIIS) also added commentary on the matter with President of AIIS, David Phelps stating: "AIIS is pleased that the USTR has finally agreed to eliminate a practice that has now been duly confirmed as unfair within the global trading community. The elimination of zeroing, which illogically calculates anti-dumping duties by not taking higher priced imports fully into consideration, has been deemed in over a dozen WTO cases not to be consistent with WTO rules. The practice of zeroing has long been one of the top concerns of AIIS and we believe that the USTR has acted correctly and wisely in complying with the WTO decisions for the overall benefit of American industry and the jobs it creates."