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Anti-dumping charges fly as WTO sets up panels to investigate

GENEVA, Switzerland – 06/08/07 – The World Trade Organization (WTO) has set-up a panel to investigate anti-dumping duties that the US applies on imports of more than 50 European products, from ball bearings to pasta, in the latest trans-Atlantic trade dispute.

The European Union says Washington’s continued use of a complicated procedure for determining dumping fees violates global trade rules.

US officials have responded, saying they’re already reconsidering how the duties are calculated and called the EU litigation unnecessary.

Washington blocked the EU’s first request for an investigation in May. 

Under WTO rules, a panel’s establishment can only be delayed once.

The WTO has sharply criticized the US in disputes with the EU, Canada and several other countries for how it determines anti-dumping fees, a method known as “zeroing” that some trade analysts say leads to artificial and inflated margins of dumping, and thus higher duties.

In a related development, India has successfully blocked a WTO investigation of its import duties on US-produced wines and spirits, temporarily delaying any action on Washington’s complaint over allegations that India discriminates against products such as Napa Valley wine and Jack Daniel's whiskey.

The trade panel is already reviewing a European legal challenge of wine and liquor restrictions in a number of Indian states.

India's basic import duties on wine are 100%, while the tariff on spirits is 150%, both within WTO limits. However, various government surcharges take the tariffs up to levels reaching as high as 550%, depending on the Indian state.
The state of Tamil Nadu goes further still, shutting out foreign alcohol and allowing shops to sell only Indian-made spirits and wines.

The US, the EU, and Japan, by contrast, allow nearly all spirits to enter their markets duty-free. China tacks on a 10% charge on foreign liquor.

India has criticized Washington's decision to bring the case to the WTO as "very unfortunate and disappointing."
India said it is considering changing its rules to resolve the dispute, a claim it also made in criticizing Brussels' move to bring its case to the WTO.

At the same time, the WTO has also set up an arbitration panel to assess Argentina's request to impose annual sanctions worth $44 million against the US because of illegal duties on steel tubes, drill pipes, castings and other Argentina-produced goods used in the oil and gas industries.

The trade body ruled in December 2004 that US anti-dumping duties on Argentinian oil industry goods violated global trade rules.

Subsequent decisions confirmed Washington’s non-compliance.Washington has officially challenged Argentina's request for authorization to apply sanctions, according to trade officials present at a recent closed-door meeting of the WTO's dispute settlement body.

US trade officials said that the US International Trade Commission (USITC) would probably revoke the charge, eliminating the need for Argentina to retaliate.

Argentina says the $44 million represents the amount of trade lost because of the US measure.It aims to retaliate by placing additional duties on American goods entering the country.

The South American country has yet to say which specific American products it would target.

Governments investigate dumping when they suspect that producers are exporting products at below-market price in their own country – usually because exports have been subsidized – or if it’s felt that there is an attempt to corner the market.

A WTO arbitration panel can only decide on the size of the penalty. The US would have to initiate separate proceedings if it seeks to claim that it has brought its fees into compliance with global trade rules.

A case with the global trade group can result in punitive sanctions, but panels are known to take many months and sometimes years to resolve a dispute.

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