World Trade Organization

AuthorInternational Law Group
Pages218-219

Page 218

A Dispute Settlement Panel of the World Trade Organization (WTO) has issued its Report on the U.S.-Mexico dispute over anti-dumping penalties on Mexican stainless steel in the form of steel sheet and strip in coils.

Mexico requested WTO consultations in May 2006, after the U.S. Department of Commerce (DOC) determined in 1999 that Mexico was dumping its stainless steel, and conducted fi ve subsequent reviews. Mexico claims that several U.S. measures are inconsistent with trading obligations, including (1) the U.S. Tariffa Act of 1930, (2) certain regulations of the U.S. DOC in Title 19 of the C.F.R., (3) the 1997 edition of the Import Administration Antidumping Manual, and (4) the DOC methodology to determine the overall margin of dumping for the products at issue, where the DOC disregarded ("zeroed") negative Page 219 dumping margins. According to Mexico, these U.S. measures violate Articles VI:1 and VI:2 of the GATT 1994; various articles of the Anti-Dumping (AD) Agreement; and Article XVI:4 of the WTO Agreement.

Particularly, Mexico argues that with the DOC "zeroing procedures," the margins of dumping calculated in investigations and periodic reviews do not fully refl ect export prices that are above the normal value. It does not include the numerator of the weighted average dumping margin calculations of the results of comparisons where the export price exceeds the normal value. Mexico challenges the DOC "zeroing procedures" in connection with investigations where the weighted average normal value is compared with the weighted average export price ("model zeroing in investigations"), and the periodic reviews where the weighted average normal value is compared with individual export transactions ("simple zeroing in periodic reviews").

Typically, the DOC calculates weighted- average net prices for the product at issue. It then compares these U.S. prices to the product's normal value, ideally in the form of a weighted-average net price. After comparing U.S. price and normal value, the DOC applies "zeroing." When the normal value is higher than the U.S. price, the resulting diffaerence is the dumping amount. However, when the U.S. price is higher, the dumping...

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