Zeroing methodology in the united states anti dumping law and implications for vietnam

Research contents and research purposes The dissertation focuses on the research of zeroing methodology applied by The United States of America Department of Commerce DOC in the determi

VŨ NGỌC QUỲNH

ZEROING METHODOLOGY IN THE UNITED STATES ANTI-DUMPING LAW AND IMPLICATIONS FOR

VIETNAM

BACHELOR OF LAW GRADUATION DISSERTATION

Department: International Law Academic year: 2012 - 2016

HO CHI MINH CITY

2016

VŨ NGỌC QUỲNH

ZEROING METHODOLOGY IN THE UNITED STATES ANTI-DUMPING LAW AND IMPLICATIONS FOR

VIETNAM

BACHELOR OF LAW GRADUATION DISSERTATION

Department: International Law Academic year: 2012 - 2016

Supervisor: Doctor Lê Thị Ánh Nguyệt Student in charge: Vũ Ngọc Quỳnh Student ID: 1253801012256

Class: CLC 37A

HO CHI MINH CITY

2016

This dissertation has been created solely and independently by Vu Ngoc Quynh, student studying Bachelor of Law under scientific supervision of Doctor Le Thi Anh Nguyet The researching results were built upon the concrete background including the careful research from other reliable projects, paperwork and articles of prestigious scholars, law school and authorities under the compliance with rules of citation I take full responsibility for this reassurances

Vu Ngoc Quynh

_

ACKNOWLEDGMENTS

I hereby deliver the sincerest appreciation to the dedicated supervision and thorough direction of Doctor Le Thi Anh Nguyet, without which the completion of this Dissertation would not be successful She has been a supportive supervisor from the beginning with the exceptional knowledge on the US anti-dumping law, researching skills and the inspirational advice despite all difficulties Without her supervision, this Dissertation would not be successfully completed

Secondly, it is my family who I want to express my gratitude for They have been very first persons to encourage me through every hardship, every ups and downs in this journey Thanks to their divine love and constant inspiration, I have the ability to fully contribute to this final challenge and also complete the program with flying colors

Vu Ngoc Quynh

Agreement on Implementation of

Article VI of the General Agreement on

Tariffs and Trade 1994

The American Seafood Distributors

The Consuming Industries Trade

The United States of America US/ United States

Appeals for the Federal Circuit

CAFC

The United States of America

International Trade Commission

Understanding on rules and procedures

governing the settlement of disputes

DSU

Vietnam Association of Seafood

Exporters and Producers

VASEP

Vietnamese Chamber of Commerce and

Industry

VCCI

Vietnamese Competition Authority VCA

VIETNAM

TABLE OF CONTENT

DECLARATION

ACKNOWLEDGMENTS

LIST OF ABBREVIATION

PREAMBLE 1

i A brief introduction and the necessity of the dissertation 1

ii Literature review regarding zeroing methodology in the United States Anti-dumping law 2

iii Research contents and research purposes 4

iv Research methodologies 5

CHAPTER 1: OVERVIEW OF ZEROING METHODOLOGIES UNDER THE UNITED STATES ANTI-DUMPING REGULATIONS 7

1.1 Zeroing methodology: Definition and its characteristics 7

1.1.1 Zeroing methodologies under the dumping determination 7

1.1.2 Characteristics of zeroing methodology 17

1.1.3 Types of zeroing methodology 19

1.1.4 Disputes over the fairness characteristic of zeroing methodology 22

1.2 Legislative history of zeroing methodology in Anti-dumping regulations

1.2.3 The change in anti-dumping policy regarding the application of zeroing methodology of the United States 28

Conclusion 34 CHAPTER 2: ZEROING METHODOLOGY IN ANTI-DUMPING

DISPUTES: CASES STUDIES IN THE UNITED STATES TERRITORY AND THE WTO DISPUTE SETTLEMENT BODY FORUM 35 2.1 The application of zeroing methodology by the Department of

Commerce 35

2.1.1 The practical application of zeroing methodology by the United States Department of Commerce 35 2.1.2 The practical effects of zeroing methodology applied by the United States Department of Commerce 37

2.2 Disputes over zeroing methodology involving United States authorities

2.2.1 Remarkable dispute affecting the application of zeroing methodology

of the United States Department of Commerce 43 2.2.2 Remarkable dispute over zeroing methodology application of the United States involving Vietnam 49

Conslusion 55 CHAPTER 3: PETITIONS FOR VIETNAM REGARDING A BETTER

PREPARATION IN INTERNATIONAL TRADE 57

3.1.2 Petitions for Vietnamese government 60 3.1.3 Petitions for industry representatives and commercial associations 63

3.2 Petitions in facing unwanted disputes in international trade 64

3.2.1 Petitions for Vietnamese companies 64 3.2.2 Petitions for Vietnamese government 67 3.2.3 Petitions for industry representatives and commercial associations 70

Conclusion 71 CONCLUSION 72 ANNEX 1: ANTI-DUMPING DISPUTES ON THE UNITED STATES

ZEROING METHODOLOGY CLAIMED BY OTHER WTO MEMBERS ANNEX 2: TIMELINE OF THE UNITED STATES ANTI-DUMPING

INVESTIGATION

BIBLIOGRAPHY

PREAMBLE

i A brief introduction and the necessity of the dissertation

Up until these days, nine years after the milestone change in Vietnamese economics which would be named as the membership of World Trade Organization (WTO), Vietnam has been claimed to be a 33rd largest export economy in the world

in 2013 by Economic Complexity Index (ECI).1 The exportation of Vietnam has increased dramatically, ―Exports in Vietnam increased to 14200 USD Million in March from 10099 USD Million in February of 2016 Exports in Vietnam averaged 4821.33 USD Million from 1990 until 2016, reaching an all-time high of 14481 USD Million in August of 2015 and a record low of 537 USD Million in February

As one of the most valued trading partners of Vietnam, United States has been applying its discretionary zeroing methodology in determining dumping margins of the subject merchandises which are being imported into the US Interestingly, the zeroing methodology has been decided to be inconsistent measures

in the light of Anti-dumping Agreement of the WTO (ADA) And, the US has been requested to bring the measure into conformity with the US obligations under the ADA Needless to say, in practice, under the dispute settlement mechanism in the

1 OEC, http://atlas.media.mit.edu/en/profile/country/vnm/ (Last visit at 13:30, April 2nd 2016)

WTO – The Dispute Settlement Body (DSB), there have been many complicated disputes on whether zeroing methodology applied by the United States is fair enough and how could the other countries compete against such determination.4Therefore, Vietnamese exported products still be struggling with the unfair zeroing methodology from US Anti-dumping law Touching upon this, student tends to dig into the US zeroing methodology, its practice applied by the US government to anti-dumping cases and recommend the solution to the better preparation for our exports

in the anti-dumping disputes with the US authorities

ii Literature review regarding zeroing methodology in the United

States Anti-dumping law

In Vietnam, there have not been so many Vietnamese legal related books and research specifically into this subject Mostly, they just provide on the basis of economic aspects with numerical summary and petitions for the development of international trade competitiveness of Vietnamese exporters However, they did provide insights of the functions of dumping determination in the United States and

by doing that, it indirectly helps other authorities realize the basic procedure of the

US anti-dumping investigation for better preparations Nevertheless, they do not analyze the consistency of the zeroing methodologies in the process of dumping determination Some foreign books relating to US anti-dumping cases that were reliable would be named as A Handbook on Anti-Dumping Investigations by Judith Czako, Johann Human and Jorge Miranda or World Trade Review published by the World Trade Organization in 2014, which combines a variety of legal scholars‘ works regarding model disputes regarding zeroing methodology and academic comments Such books have not provided the petitions helping other countries such

4

See Annex 1

as Vietnam in terms of preparing and compete against zeroing methodology in the United States

In Vietnam, there are books on the topic of anti-dumping investigation written by well-known researchers bringing a brighter look to the US anti-dumping law with respect to Vietnamese participation such as Pháp luật chống bán phá giá Hoa Kỳ và tác động đối với Việt Nam (US Anti-dumping law and its effect to Vietnam) by Doctor Lê Thị Ánh Nguyệt; Pháp luật về chống bán phá giá trong thương mại quốc tế và những vấn đề đặt ra đối với Việt Nam (Anti-dumping law in international trade and problems facing to that Vietnam) by Vũ Thị Phương Lan or Cẩm nang kháng kiện chống bán phá giá và chống trợ cấp tại Hoa Kỳ (Handbook for competition in anti-dumping lawsuit and anti-subsidy in the United States) by Phòng thương mại và Công nghiệp Việt Nam; Giới thiệu về luật chống bán phá giá của EU và Mỹ áp dụng cho mặt hàng thủy sản (Introduction about Anti-dumping law of EU and the US applied for seafood products) by John Hambrey and David Blandford and Hỏi đáp pháp luật về chống bán phá giá WTO - Hoa kỳ - EU (Questions and answers about anti-dumping law of WTO – The US – EU) by Phòng thương mại và Công nghiệp Việt Nam The books provide an overview of anti-dumping procedures and some solutions to Vietnamese exports, again not much on the consistency of zeroing methodology

In addition, other articles can be named as Giải quyết tranh chấp tại WTO – Thực tiễn và kinh nghiệm (Dispute Settlement at WTO – Reality and experience) by Việt Hà, Phân tích vụ giải quyết tranh chấp đầu tiên của Việt Nam tại WTO – Bài học rút ra cho Việt Nam (Analyzing Vietnamese first dispute settlement at WTO – Lessons for Vietnam) published by Phòng thương mại và Công nghiệp Việt Nam; Cẩm nang phòng ngừa & đối phó với các vụ kiện chống bán phá giá đối với hàng

xuất khẩu Việt Nam: Dành cho các doanh nghiệp xuất nhập khẩu (Handbook for prevention and competition against anti-dumping lawsuit regarding Vietnamese exports: For import/export companies) by Võ Thanh Thu, Đoàn Thu Hồng Vân, Nguyễn Đông Phong These books raise many of petitions with a hope to arm Vietnamese import/export companies with enough experience withdrawn from previous lawsuits so that they will have a better resolution for the thread of being applied anti-dumping measures

iii Research contents and research purposes

The dissertation focuses on the research of zeroing methodology applied by The United States of America Department of Commerce (DOC) in the determination

of dumping margin conducted in anti-dumping investigation zeroing methodology

is applied during the determination of dumping margin towards the final decision of whether there is dumping activity existing In the past, zeroing methodology used to

be applied in original investigation However, after a chain of loss in front of WTO DSB, the US ceased to use this methodology at this stage Meanwhile, it has been continuously applied in administrative review, sunset review and new shipper review despite being held inconsistent with WTO anti-dumping law In the notion of zeroing methodology evaluation, most of the cases are assumed to satisfy the procedural requirements of anti-dumping investigation, student only focuses on clarifying the zeroing methodology, its characteristics and application by the DOC

in the US anti-dumping law Other aspects of the dumping determination such as normal value determination, procedural requirements will not be discussed thoroughly Petitions proposed by student also concern the problems faced by Vietnamese companies and have been built on the ground of Vietnamese application and benefits

The research also looks into the provisions of WTO Anti-dumping law specifically regarding zeroing methodology as the references to evaluate such application in many aspects Vietnamese Anti-dumping law also contributed as a substitute sources of evaluation and research However, those legislations will not be considered and analyzed as the main concern of the dissertation As the zeroing methodology has been applied in many stages of anti-dumping duty determination, this dissertation explains the general application in the original investigation, annual administrative review, new shipper review and sunset review Among them, it pays

a special attention to the original investigation and administrative review to reveal the core nature of zeroing methodology and establish relevant proposals This Dissertation contents 3 chapters The first chapter concerns the zeroing methodology and anti-dumping in general through the view of US and WTO anti-dumping law In this chapter, zeroing methodology will be explained through the provisions in main WTO agreements, US written law and explanations of various authorities The next chapter analyzes mostly the practical application of zeroing methodology The comments will be made upon the evaluation of remarkable zeroing cases Finally, the third chapter summarizes the lessons learned from previous chapters, then proposes several implications for Vietnamese entities for a better trading experience

iv Research methodologies

The dissertation is built upon a concrete background of statistics analysis methodology, collective methodology in order to acquire a wide range of points of view relating to the topic mentioned Afterward, student uses critical analysis, comparison and other relevant researching methodologies to evaluate such information collected with a balance with Vietnamese and US legal regulations Evaluation is conducted under historic-specific and synthetic methodology The

dissertation then makes several petitions for Vietnamese preparation in international trade using integrate methodology on the basis of previous findings

CHAPTER 1: OVERVIEW OF ZEROING METHODOLOGIES UNDER

THE UNITED STATES ANTI-DUMPING REGULATIONS

To research into the insights of zeroing methodology, there is a need of understanding a basic legal concept that covers the nature, characteristics and practical application of zeroing methodology Since zeroing methodology is used within the investigation and review process of dumping activity, it is crucial to realize the meaning of such concept, the relevant legal provisions as well as the general legal policy governing the application of zeroing methodology in the US anti-dumping law

1.1 Zeroing methodology: Definition and its characteristics

1.1.1 Zeroing methodologies under the dumping determination

1.1.1.1 Dumping and anti-dumping in the United States

regulation in comparison to WTO anti-dumping law

Defined by WTO, ―dumping‖ can be identified when ―a product is to be […]

introduced into the commerce of another country at less than its normal value, if the export price of the product exported from one country to another is less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country.‖5 This article is used to clarify the definition of dumping previously given by WTO in the GATT 1994 as

―Products of one country are introduced into the commerce of another country at less than the normal value of the products, is to be condemned if it causes or threatens material injury to an established industry in the territory of a contracting party or materially retards the establishment of a domestic industry […], a product

5

Article 2.1, Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994

is to be considered as being introduced into the commerce of an importing country

at less than its normal value, [….].‖6

By definition in the GATT 1994, the WTO determines that normal value can

be calculated following three methods including (1) its comparable home market price destined for consumption in the ordinary course of trade, or (2) the highest comparable export price to any third country in the ordinary course of trade or the constructed price, or (3) the constructed price (noting that the number (1) is priority meanwhile the others two are not) Accordingly, the constructed price can be calculated by combining the cost of production of the product in the country of origin and a reasonable addition to selling cost, profit (including but not limited to the workforce, technical fee, transportation fee, insurance fee…) etc With these provisions, WTO has developed the general approach to defining dumping, it means where the difference between normal value of the products and its price in the importing countries exceeds zero (0), in other words, if the subtraction of the export price from the normal value results in a positive number, the product will be found

to be dumped in importing countries, it is subject to the anti-dumping measures, where appropriated

Practically, because WTO loosely provides the framework for legal determination of constructed price, importing countries, not only the US but also other WTO members, are discretionarily designing their own regulations and methodologies in constructing normal value of an imported product The US has taken advantage of this privilege to establish very strict yet somehow unfair determination methodologies of dumping margin, the so-called zeroing methodology This situation has caused many disputes since the determination of

6

Article 6.1, General Agreement on Tariffs and Trade 1994

normal value is protectionism existing among trade liberalization of WTO where countries in general, particularly the US, try their best to create a free trading environment, encourage import – export balance, nevertheless, still cover the domestic trading policy with such regulations that prioritize domestic industries, investigate and impose strict procedural, Customs or domestic trade duties to other countries especially by the application of anti-dumping and countervailing policy.7

Under the US legislations, the definition of ―dumping‖ can be found within the provisions of many Acts, such as The US Tariff Act of 1930, §207.1-120,

§351.101-702, §1671-1677n Section 19 US Federal Code.8 The US government

makes it clear in its Federal Code that: ―The terms ―dumped‖ and ―dumping‖ refer

to the sale or likely sale of goods at less than fair value.‖9

As provided, US Code generally refers to the gap in prices to determine the product is dumped or not However, this regulation is found to be vague, unsuitably wide that needs to be more specifically visualized using the combination of necessary criteria This requirement has been somehow satisfied in Section 731 of The Tariff Act 1930 of the US:

―If

(1) the administering authority determines that a class or kind

of foreign merchandise is being, or is likely to be, sold in the United

States at less than its fair value, and

(2) the Commission determines that

(A) an industry in the United States

7 Thanh Hương, Bảo hộ thương mại trong khuôn khổ WTO – Nhân tố làm giảm cạnh tranh lành mạnh của

nền kinh tế thế giới, Bộ Công Thương – Cục quản lý cạnh tranh,

http://www.vca.gov.vn/NewsDetail.aspx?ID=1344&CateID=372 (Last visit at 00:38, July 5th 2016)

8 Phòng Thương mại và Công nghiệp Việt Nam (2009), Hỏi đáp pháp luật về chống bán phá WTO – Hoa Kỳ

– EU, Ha Noi, p.80

9

Line 34, Part IV, Subtitle IV, Chapter 4, Title 19, 19 US Code § 1677

(i) is materially injured, or

(ii) is threatened with material injury, or

(B) the establishment of an industry in the United States is materially retarded, by reason of imports of that merchandise or by

reason of sales (or the likelihood of sales) of that merchandise for

importation, then there shall be imposed upon such merchandise an

antidumping duty, in addition to any other duty imposed, in an amount

equal to the amount by which the normal value exceeds the export

price (or the constructed export price) for the merchandise […]‖ 10

The US authority tends to apply anti-dumping duties on products which are being sold less than fair value and injuring/ threatening to injure such industries in the US The US has complied with the mutual framework provided by the WTO in defining the dumping based on most important criterion: difference between normal value and export price into the importing country This methodology has been discretionally used by the US authorities that a group of comments found it to support the purpose of making the final dumping margin positive.11 As the dumping margin is calculated based on the subtraction of export price of the product in the importing country from its normal value, if the result turns out to be ―negative‖, meaning the export price in an individual transaction or weighted average of such prices for imported merchandise exceeds the normal value in each transaction, or in another case, a weighted average of normal values, the product will be free from anti-dumping duty This was explained by the theory that the product when being exported to other country, must carry the burden of other accrued expenses, which

10 Section 731, Subtitle B, Title VII, The Tariff Act 1930

11 William W Nye (2008), The Implications of ‗Zeroing‘ on Enforcement of U.S Antidumping Law,

Economic Analysis Group (EAG) of the Antitrust Division, US Department of Justice, BICN 10-000,

Washington, DC 20530, p 2

requests the exporters to increase the export price if they want to earn sufficient profit In the case where the product has the export price that is lower than its normal value, there must have been some sort of hidden unfair business strategies or financial support helping the exporters carry out the competitiveness upgrade In fact, there might have been a case where all the ―negative‖ dumping margins can be used to make up for the gap of the ―positive‖ ones and lead to the result of no dumping will be found In such calculation, the DOC sets aside the negative values and replaces them with zero (0).12 This is the background that zeroing methodology

is built upon

There has been no official regulation defining clearly what is zeroing methodology and its relevant aspects The mutual understanding of this methodology relies mostly on the arguments of the parties and the rulings of the DSB in previous cases that describe the function of zeroing methodology, this understanding is also acquired from legal research projects The examples can be found in many of WTO dispute settlements, such as US — Zeroing (EC), US — Continued Zeroing13, US – Softwood Lumber V14, US – Corrosion-Resistant Steel Sunset Review15, etc For instance, in the very first case regarding zeroing

12 Sidley Austin LLP (2010), The U.S Department of Commerce Proposes to Abandon ―Zeroing‖

Methodology in Administrative Reviews of Antidumping Duty Orders, p 1

13

In these cases, the WTO came to an acceptance of the function and the core nature of zeroing methodology when WTO rulings have confirmed that this methodology was used to increase substantial dumping margin

by replacing negative dumping margin by a zero one

14 In The Appellate Body Report, the AB stated: ―[z]eroing means, in effect, that at least in the case of some

export transactions, the export prices are treated as if they were less than what they actually are.‖ And the

applied method to reach such effect is to replace negative dumping margin with zero or in another word,

exempt those negative ones when calculating dumping margin The Appellate Body Report, United States –

Final Dumping Determination on Softwood Lumber from Canada, WT/DS264/AB/R (August 15th 2006), para 101

15 The Appellate Body underscored that: ―[…] such methodology could, […], turn a negative margin of

dumping into a positive margin of dumping.‖ The Appellate Body Report, United States – Sunset review of anti-dumping duties on corrosion-resistant carbon steel flat products from Japan, WT/DS244/AB/R

(December 15th 2003), para 135

methodology initiated by India in 1998 against European Community (EC), EC – Bed Linen, the Appellate Body described EC‘s zeroing application as:

―[…] three of the five Indian producers examined individually were dumping, and two were not It is undisputed between the parties

that the two Indian producers found not to be dumping accounted for

53 percent of all imports attributable to the five producers which

were examined individually Based on this recalculation, the

European Communities concluded that all imports attributable to all

other Indian producers or exporters—which were not examined

individually—were dumped For purposes of determining injury, the

investigating authorities excluded from the volume of dumped imports

the imports from the two producers that were

examined individually and found not to be dumping.‖16

To be more specific on this occasion, there is an example of dumping margin calculated with and without zeroing methodology

Table 1 – An Example of Zeroing

(1)

Sales date

(2) Export transaction

(3) Home Mkt transaction

(4) Difference:

No Zeroing

(5) Difference: Zeroing

16 The Appellate Body Report, European Communities - Anti-Dumping Duties on Imports of Cotton-type Bed

Linen from India, WT/DS141/AB/RW (April 8th 2003), para 103

to be dumped in US market and then will be imposed anti-dumping duty

17 Chad P Bown, Thomas J Prusa (2010), U.S Antidumping Much Ado about Zeroing, The World Bank -

Development Research Group - Trade and Integration Team, p 17

1.1.1.2 Anti-dumping duty determination: Authorities

involving and Dumping determination stages

The anti-dumping case undertaken by the DOC contents mainly the original investigation, annual administrative review and sunset review In some cases, there will be an occurrence of new shipper review The zeroing methodology, manifesting its flexibility, can be applied in anti-dumping case regardless of the stages concerned In the original investigation, there is another authority besides the DOC and The United States of America International Trade Commission (ITC) involving which is The United States of America Trade Representative (USTR) This authority

is responsible for the publishing of the Federal Register list of developing countries

―that have eliminated their export subsidies on an expedited basis‖ 18

, other list of developing and least developed countries concerned in anti-dumping and countervailing duty investigations.19 Occasionally, the USTR also plays an important part in the anti-dumping petitions of third countries.20 After the domestic industry issues a petition to the DOC and ITC requesting an investigation on suspected products from the foreign country, the DOC and ITC will carry out the separate works in order to ascertain whether the foreign country constituted dumping.21 While the ITC is only in charge of evaluating the injury/ thread of injury brought by the imported products, it is the DOC who applies the zeroing methodology in its determination of dumping margin in the preliminary and final determination The ITC will base on the calculation of the DOC to complete its record.22

18

Section 771 (34) (A) (B), The Tariff Act 1930

19 Section 771 (34), The Tariff Act 1930

20 Section 783, The Tariff Act 1930

21 See Annex 2

22

Section 771 (35) (C), The Tariff Act 1930; § 1677 (35) (C), 19 US Code

After 2007, the application of zeroing methodology in the original investigation was eliminated by the US as having been held inconsistent with WTO anti-dumping law Since then, the zeroing methodology has still been practiced in many review processes including annual administrative review, sunset review and

new shipper review The annual administrative review is carried out ―at least once

during each 12-month period beginning on the anniversary of the date of publication of anti-dumping duty‖ 23 In the administrative review, the final result based on previous dumping margin calculated by the DOC shall constitute the basis

for the assessment of ―anti-dumping duties on entries of merchandise covered by the

determination and for deposits of estimated duties‖24 Given that the result of administrative review contributes to the monetary anti-dumping duty that foreign firms have to fulfill, the DOC has been continuously practicing zeroing methodology in order to inflate the resulted dumping margin Since the US anti-dumping law follows the retrospective duty collection system, it is the annual administrative review that imposed the official monetary duty on the imports This forms the reluctance of the US to eliminate zeroing methodology in the administrative review The repetition of such practice also caused many controversial disputes in front of the WTO Appellate Body (AB) until recent years

It is noticeable that the international course of trade is not unalterable, therefore, the US has designed another review, new shipper review25, used for the new exports into the US in specific cases The new shipper under the review includes exporters or producers who, during the investigation, had not exported or

23 Section 751 (a) (1), The Tariff Act 1930

24 Section 751 (a) (2) (C), The Tariff Act 1930

25

Section 751 (b), The Tariff Act 1930

affiliated with an exporter or producer that did export to the US.26 In the review process, the affirmative final determination in the original investigation will be used

to determine ―the lead to continuation or recurrence of material injury‖ by the new

shipper.27 Accordingly, the zeroing methodology applied in the original investigation will affect the decisions of the ITC toward new exporters/ producers The final review process conducted by the DOC is the sunset review which will be conducted every 5 years after the original investigation.28 In this process, the ITC will be the entity authorized to determine the remaining or revocation of anti-

dumping duty The decision shall be made upon ―the likelihood to lead to

continuation or recurrence of material injury‖ to the US industry.29 Similar to new shipper review, the anti-dumping duty determined in sunset review also relies on the dumping margin previously calculated by the DOC Therefore, zeroing methodology seems to spread its reach to all stages in anti-dumping case In the case US – Measures Relating to Zeroing and Sunset Reviews (DS322), the Appellate Body held such application in sunset review, along with new shipper review, is inconsistent with WTO anti-dumping law on the ground that ITC‘s decisions in sunset review and new shipper review relied on dumping margin calculated by zeroing methodology Thus, it relatively violated Articles 2.4, 2.4.2, 9.3, 9.5 and Article 11 of the ADA.30

26 Legal Information Institute, 19 CFR 351.214 - New shipper reviews under Section 751(a) (2) (B) of the

Act., Cornell University Law school, https://www.law.cornell.edu/cfr/text/19/351.214 (Last visit at 20:02, Jul

9th 2016)

27 Section 751 (b) (2) (C), The Tariff Act 1930

28 Section 751 (c), The Tariff Act 1930

29

United States International Trade Commission, Understanding Five-Year (Sunset) Reviews,

https://www.usitc.gov/press_room/us_sunset.htm (Last visit at 21:01, Jul 9th 2016)

30 World Trade Organization, Dispute Settlement: Dispute DS322, United States – Measures Relating to

Zeroing and Sunset Reviews, https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds322_e.htm (Last visit

at 21:15, Jul 9th 2016)

1.1.2 Characteristics of zeroing methodology

Zeroing methodology is a kind of dumping margin calculation that could, in most of the cases, artificially inflate the final dumping margin used for determination of anti-dumping duty.31 This is because of the process of zeroing when negative dumping margins which were meant to offset one, some or all positive ones and resulted in the overall dumping margin to be a negative number or zero (no dumping would be found), were actually disregarded from the calculating

by being replaced with zero and led to the overall dumping margin to be a positive number In cases where all kinds of comparisons between comparable export prices and comparable normal values resulted in negative dumping margins, zeroing methodology will only create a final dumping margin of zero and no anti-dumping duty will be applied.32 This is also the characteristic that has been causing a disputable situation for the application of zeroing methodology since the increase of overall dumping margin results in the rocket of anti-dumping duty that foreign firms has to comply. 33

The second characteristic is the discretionary application of zeroing methodology by the DOC as conceded by the US Court of Appeals for the Federal Circuit (CAFC) The acknowledgment was made upon the concern of DOC‘s zeroing methodology application in Dongbu Steel Co., Ltd v United States, 677 F

31 World Trade Organization (2006), Dispute Settlement: Dispute DS264, United States — Final Dumping

Determination on Softwood Lumber from Canada,

https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds264_e.htm (Last visit at 1:45, Jul 4th 2016)

32 Chad P Bown, Thomas J Prusa (2010), Supra Note 17, p 18

33 ―In the 18 actual DOC determinations that were examined, zeroing was the most significant cause of dumping margins It affected the outcomes in 17 of the 18 cases On average, eliminating the practice of zeroing caused the margins to decrease by 88.65 percent in these 18 cases27 (see Table 4) The margins would have been entirely eliminated in 5 of the 18 cases had zeroing not been practiced In a sixth case, the

margin was reduced by 96.84 percent‖ Brink Lindsey, Dan Ikenson (2002), Antidumping 101- The Devilish

Details of ‗Unfair Trade‘ Law, Center for Trade Policy Studies, p 22

Supp 2d 1353 (Ct Intl Trade 2010).34 The discretion can be found in the investigation phase it is applied, the case DOC is statutorily granted by the Congress

to choose to apply the appropriate calculating methodology where the words of law prove their ambiguity.35 It is because there has been no written provision in US anti-dumping legal system regulating the requirements that the DOC has to satisfy in order to apply zeroing methodology, the DOC then has the discretion in its express

of zeroing methodology in any phases of the original investigation.36 However, thanks to the rulings of the Appellate Body in the case US – Softwood Lumber V, the US eventually discontinued its discretionary application of zeroing methodology

in the original investigation.37 This launched a victory to the opponents of discretionary zeroing methodology in general and particularly US zeroing methodology in the original investigation, although the DOC, though also facing a lot of challenges from other foreign countries, still continue using zeroing in administrative review (with the noticeable application of simple zeroing), new shipper review and sunset review.38

The third significant characteristic of zeroing methodology is its flexible usage in dumping margin calculations It should be noticed that there are three main types of dumping margin calculations including the comparison between weighted average normal value and a weighted average of prices of all comparable export

34

Simon Lester (2011), The CAFC and Inconsistent Zeroing, Trade in Everything: Public School Students,

First Conference of the African International Economic Law Network, International Public Law and Policy Blog, http://worldtradelaw.typepad.com/ielpblog/2011/04/the-cafc-and-inconsistent-zeroing.html (Last visit at 17:44, Jul 16th 2016)

35

Simon Lester (2011), Does U.S Law Require Zeroing?, The Holocaust and High Speed Rail, Trade Rules

and Restrictions on Large Stores, International Public Law and Policy Blog,

http://worldtradelaw.typepad.com/ielpblog/2010/10/does-us-law-require-zeroing.html (Last visit at 17:44, Jul

16th 2016)

36

Daniel L Porter, Ross Bidlingmaier (2013), Targeted Dumping: The Next Frontier in Trade Remedy

Litigation, Tulane Journal of International and Comparative Law, p 27, 28

37 The Appellate Body Report, Supra Note 14, paras 147, 148

38 Kamal Saggi, Mark Wu, Yet Another Nail in the Coffin of Zeroing: United States – Anti-Dumping

Administrative Reviews and Other Measures Related to Imports of Certain Orange Juice from Brazil, p 7

transactions (W-W), normal value and export prices on a transaction-to-transaction

basis (T-T), or in case ―the authorities find a pattern of export prices which differ

significantly among different purchasers, regions or time periods, and if an explanation is provided as to why such differences cannot be taken into account appropriately by the use of a weighted average-to-weighted average or transaction- to-transaction comparison‖39, there would be the application of comparison between a normal value established on a weighted average basis and export prices of individual export transactions (W-T) As the function of zeroing methodology focuses mostly on the process of replacing negative dumping margin with zero (0),

it is easy to understand the flexibility of applying it in any types of comparison This also contributes to the tendency of DOC in overusing methodology for its somehow result-oriented investigation

1.1.3 Types of zeroing methodology

Zeroing methodology when being examined in its functions has also divided into some types with regards to the investigation phases, review process and types of calculation in which it is used There are two types of Zeroing methodology, simple zeroing used in annual administrative reviews and model zeroing used in original investigation stage.40 Model zeroing methodology is usually applied by the DOC in W-W comparison In this method, the DOC tends to divide the products into separate models based on its physical characteristics, purposes of usage, Customs Code, etc., then subtracts the weighted average export prices from the weighted average normal values for products lie within the model.41 In the next step, the DOC starts to replace the negative results with 0, or in another word, disregard them from

39

Article 2.4.2, Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade

1994

40 William W Nye (2008), Supra Note 11, p 2

41 First Written Submission before the World Trade Organization, United States – Measures Relating to

Zeroing and Sunset Reviews, WT/DS322, May 9th 2005

the final calculation of dumping margin to define dumping From the beginning of zeroing methodology application by the DOC, model zeroing has been applied in most of the cases in original investigation and caused a massive defense from the WTO members suffered from it In the early cases arguing over the fairness of model zeroing methodology42, the AB focused on analyzing Articles 2.4.2 defining

the nature of a ―fair comparison‖ in anti-dumping investigation, giving that: ―A fair

comparison shall be made between the export price and the normal value‖, applied

for ―all comparable export transactions‖ This analysis has been cited many times

in the latter cases to back up for the argument that model zeroing methodology is deemed to be unfair since it erases a number of comparable transactions from the

calculation, hardly express a true nature of the transactions ―as a whole‖ The AB in

the case US – Measures Relating to Zeroing and Sunset Reviews (DS322) asserted:

―The Appellate Body held that dumping and margins of dumping can be found to exist only for the product under investigation

as a whole […] The comparisons at the sub-group level are not

margins of dumping within the meaning of Article 2.4.2 […] The

Appellate Body, therefore, found that the model zeroing was

inconsistent with Article 2.4.2 of the Anti-Dumping Agreement.‖43

For example, in a pack including 10 transactions divided into 3 models of 2 transactions (A) – 3 transactions (B) – 5 transactions (C) respectively, when model zeroing methodology is applied and model A and C are found not dumped (negative dumping margins), 3 out of 10 transactions (model B) will be used to determine that the whole pack was dumped This is why the unfairness is obviously found in model

42

Such as EC – Bed Linen, US – Softwood Lumber V, US – Zeroing (EC), US – Zeroing (Japan), etc Tania

Voon (2007), The End of Zeroing? Reflections Following The WTO Appellate Body‘s Latest Missive, Legal

Studies Research Paper No 378, The University of Melbourne, p 214 - 221

43 The Appellate Body Report, United States – Measures Relating to Zeroing and Sunset Reviews,

WT/DS322/AB/R (January 9th 2007), para 122

zeroing methodology and continuously ruled inconsistent with WTO rules After a long dispute chain under the light of The WTO AB, DOC finally put an official end

on the application of model zeroing methodology in original investigation in 22ndFebruary 200744

Unlike model zeroing methodology, in the simple zeroing methodology, the

DOC applies zeroing process in the W-T45 comparison After comparing the weighted average of the normal value the products of all transactions with the export price of each transaction, the negative results from the comparisons will be zeroed (or disregarded) from the final dumping margin calculation In this methodology, the weighted average of home prices plays a part as the mutual normal value can is used for comparison for its firm.46 Sometimes, the T-T calculation is also accepted as a kind of simple zeroing even though there is no averaging process of the export prices and normal values before zeroing the dumping margins The Appellate Body has ruled this kind of zeroing is consistent with WTO rules in consideration of the disrespectfulness of all transactions investigated as a whole It relates to the interpretation of words expressed in the regulation of the ADA although the Appellate Body generally found that this zeroing methodology as applied in the administrative reviews at issue violated Article 9.3 of the ADA, as well as Article VI:2 of the GATT 1994.47 Much like model zeroing methodology, this kind of comparison has been recently held inconsistent with WTO rules though the rulings

of Appellate Body still relied much on the case – by – case basis and highly

―textual‖.48

This is because while it is clear that Article 2.4 of the ADA is applied to determine the compliance of zeroing methodology in original investigation, it is up

44 Tania Voon (2007), Supra Note 42, p 217, 218

45

Section III A, Chapter 6, The United States Antidumping Manual

46 Chad P Bown, Thomas J Prusa (2010), Supra Note 17, p 14

William W Nye (2008), Supra Note 11, p 3

47 Tania Voon (2007), Supra Note 42, p 225

48

Ibid, p 221

to the Appellate Body to find if it also regulates the application and fairness of simple zeroing methodology in review processes However, in the US – Zeroing (Japan), Article 2.4.2 was declared to be applied in both periodic and new shipper review.49 As the results, the US has been found violated Articles 2.4 and 9.3 in 11 specific period reviews by the Appellate Body The US later revealed its intention to comply with the recommendation and rulings from the WTO DSB despite its dissatisfaction with such rulings.50

1.1.4 Disputes over the fairness characteristic of zeroing

methodology

There has been as a nonstop argument among legal scholars besides arguments within the arbitration room of WTO on how to judge the zeroing methodology The majority of opinions favors the dispense of zeroing methodology for it reflects the discretion and results-oriented purpose of the DOC Inversely, there are also some remarkable aspects of zeroing methodology that may be used to defense it justness As explained in the above part, with the application of zeroing methodology, many of the non-dumped transactions have been treated different from its true nature and partially determined on the basis of few transactions By such performance, the DOC manipulated the final dumping margin to fulfill the temptation of protectionism The other argument widened the scope of evaluation when they claimed that zeroing methodology could partially drive the variation of export prices from the foreign firm.51 Since the DOC has overused this kind or methodology in anti-dumping investigations and review processes, it is likely that foreign countries will try to increase the export prices in order to minimize the chance to be investigated on anti-dumping duty Generally, this will gradually

49 The Appellate Body Report, Supra Note 43, para 168

50 Tania Voon (2007), Supra Note 42, p 226

51

Kamal Saggi, Mark Wu, Supra Note 38, p 24

destroy the competitiveness of other foreign companies which have the ability to provide quality products By the zeroing methodology, albeit having acted ethically

in most of the transactions, the foreign firms still stand on the edge of being imposed anti-dumping duty based solely on a few dumped ones These arguments are also backed up by the AB both in the economics and policy perceptions:

―[…] The fact that a particular export transaction is made at a price that is below the price of a comparable transaction in the home

market of the exporting country (or is below cost) does not necessarily

mean that dumping has occurred, if another export transaction is made

at a price which is higher than the home market price.‖52

Raised among a general unacceptance of zeroing methodology were the supporters of zeroing methodology in anti-dumping cases They analyze that the loss

to the domestic industries and harm caused to the establishment of a new industry by the dumped imports will have to be taken into consideration seriously It cannot be simply disregarded by the offset of other non-dumped ones The US has been using this argument to defense its criticized application of zeroing methodology in many cases before the WTO DSB Besides the notions of how bias the zeroing methodology may seem when it removes negative or non-dumped transactions from the final calculation, this perception separates and analyzes, in view of US authorities, the true nature of dumping lies under the calculation of dumping margin.53 If the transaction happened with the export price was much higher or equal

to the normal value, no requirement of the anti-dumping duty has been satisfied

52 The Panel Report, United States – Final Dumping Determination on Softwood Lumber from Canada,

WT/DS264/R (August 11th 2004), para 9.19

53

Section 771 (35), The Tariff Act 1930: ―The term "dumping margin" means the amount by which the

normal value exceeds the export price or constructed export price of the subject merchandise.‖ This

argument had been practiced by the DOC since they noted that the term ―exceeds‖ implied the stage in which the normal value has to be higher than the export price, resulting that the dumping margin will have to be calculated into a positive number

However, in a case where the product was sold at lower prices than its normal value and injury caused, it is reasonable that it must be applied no matter how many non-dumped transactions occurred before it and moreover, its consciously harmful act cannot be hidden behind a shield of other innocent ones It could be implied in speeding case, if one man is found over-speeding, he cannot urge for the release because of his previous compliance and then off from the sanction himself.54 The other defense to the opponents of zeroing methodology relates to a so-called targeted dumping In this a type of dumping, there will be transaction(s) in which products are sold in a remarkably low and masked by others in which no dumping activity happened.55 In this kind of dumping activity, if there is no application of zeroing methodology, the foreign firms will take advantage of the loopholes in anti-dumping law in order to cover their intentional unfair trading scheme by a skin of ethical behaviors

1.2 Legislative history of zeroing methodology in Anti-dumping

regulations

1.2.1 Legislative history of zeroing methodology in WTO regulations

Since WTO was established in 1995, it has raised a system of mutual trading policy which was accepted and followed Regarding anti-dumping dumping law, there are two noticeable documents that provide a legal framework for the fair and liberal trading purpose Those documents are The General Agreement on Tariffs and Trade 1994 (GATT 1994) and The Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (ADA) These documents visualize the ideal anti-dumping investigation that WTO members should express in its domestic regulations, the purpose of this internalization is to form a mutual trade

54 Kamal Saggi, Mark Wu, Supre Note 38, p 25

55 Brink Lindsey, Dan Ikenson (2002), Reforming the Antidumping Agreement - A Road Map for WTO

Negotiations, Center for Trade Policy Studies, p 22

liberalization and fair treatment among other members within same trading conditions

Despite remarkable negotiation process to establish the multilateral agreements among WTO members, it is hard to find any document directly regulates the matter of zeroing methodology In both GATT 1994 and ADA, there is no provision concerning the definition of zeroing methodology and its ethical application In resolving cases before the Dispute Settlement Body, the WTO arbitrators usually cited the provisions of above agreements in order to clarify the aspects of zeroing methodology such as whether it can be applied in review processes as well as original investigation, whether its application must be used in the certain type of comparison to determine for product as a whole or in each individual transaction respectively56, can the price comparisons using zeroing methodology be accepted as ―fair comparison‖ and that zeroing methodology is consistent with WTO rule and so on Therefore, the most relevant source from the WTO to the evaluation of zeroing methodology should be undeniably the rulings from dispute settlements This is where the Panel and Appellate Body expressed their perceptions towards the application of zeroing methodology for the members to follow

Since there has been no regulation taken from the WTO agreements that prohibits the application of such methodology, the DSB have not rendered the restriction of using zeroing methodology in determining anti-dumping duty Yet the DSB still recommend the change of improper zeroing methodology that the parties should comply on case – by – case basis, which means the DSB will determine in which form does the zeroing methodology fall in a line of inconsistency with WTO

56 Annex F-2 Executive Summary of the Oral Opening Statement of the United State in US - Anti-Dumping

Administrative Reviews and Other Measures Related to Imports of Certain Orange Juice from Brazil

(DS382), para 8

rules and need to be amended The milestone cases such as EC – Bed Linen, US – Zeroing (EC), US – Zeroing (Japan) or US – Softwood Lumber V (Canada)57contributed to the interpretation of many terms such as ―fair comparison‖ or

―products as a whole‖, the ideal calculation of normal values of imported products, the ethical comparisons that could be applied in the determination of dumping margin, etc.58 Thanks to such interpretation, the DSB hold the power to develop the legal frameworks for the application of ethical zeroing methodology It is predictable that the rulings from the DSB affected much on the decision of other country members, which is about whether to stop zeroing methodology in all stages

of anti-dumping case or just continue applying it in a more suitable way.59 Taken into account the vagueness of zeroing-related regulations in WTO policy, there is a proposal that WTO should have for itself a plurilateral or multilateral agreement on the ethical application of zeroing methodology or at least, should there be a removal

of zeroing methodology in anti-dumping law The removal of zeroing should not be necessary since this kind of methodology is still in the debate of its pros and cons in anti-dumping duty determination process Therefore, the clear and fair framework of how to conduct it in an acceptable way could be very useful for countries to take advantage of the pros of zeroing, yet still comply with WTO trade policy and minimize costly disputes before WTO DSB

57

See Annex 1

58 Sungjoon Cho (2012), No More Zeroing?: The United States Changes its Antidumping Policy to Comply

with the WTO, American Society of International Law,

https://www.asil.org/insights/volume/16/issue/8/no-more-zeroing-united-states-changes-its-antidumping-policy-comply-wto (Last visit at 00:09, Jun 2nd 2016)

59

The US, after a chain of failures before WTO Appellate Body due to its debatable zeroing methodology applied in the anti-dumping duty investigation and review, has gradually come to the restriction of abusing such methodology In another case, EU also stopped using such methodology after WTO rulings in cases relating to zeroing methodology many years before US thanks to its different anti-dumping system in

comparison with that of the US

1.2.2 Zeroing methodology in the United States regulations:

historical and developmental discussions

In the US, the application of anti-dumping dumping follows a strict order of the federal provisions since it will affect the commercial transactions across the border of the whole country The first antidumping legislation passed by Congress was the Antidumping Act of 1916 This Act concerned the damages imposed on foreign firm dumping products into the US However, it was challenged before the WTO in the case US – Antidumping Act 1916 and has not been used as a guideline for anti-dumping duty investigation nowadays After realizing the ineffective of

1916 Act, the Congress moved to provide Antidumping Act 1921 which added the investigation guideline for US authorities in practicing Customs duties After the GATT Antidumping Code was revised in the occasion of Tokyo Round in the 1970s, the US Congress implemented the Agreements Act of 1979 repealing the Antidumping Act of 1921 and added a new Title VII to the Tariff Act of 1930 The latest revision of US anti-dumping legal system was in 1995 by Uruguay Round Agreements Act, this Act amended the regulations relating to anti-dumping investigation aspects such as material injury, threat of material injury, critical circumstances, regional industry, related parties, sunset review, etc.60

The later establishment of Tariff Act 1930 has contributed as a backbone of anti-dumping law system in the US It contains the introduction and explanation of various terms concerning countervailing and anti-dumping field In this legal document, there are quite clear regulations concerning the process of anti-dumping investigation and the review of anti-dumping duty.61 This built a strict legal hall

60 United States International Trade Commission (2015), Antidumping and Countervailing Duty Handbook

(Fourteenth Edition), Washington, DC 2201520436, p 89-91

61 Such as Section 731, 751 (a) (2) (A) (i) (ii), 771 (35) (A) (B), and 777A (d) of The Tariff Act 1930, Section

771 (35) (A) (B), 731 and 777 (A) (d) of The Tariff Act, etc

leading the DOC and ITC on the determination of dumping and imposing dumping duty on suspected imported products However, in this Act, hardly could

anti-we find any regulation directly concerns the application of zeroing methodology in calculating dumping margin The US DOC itself is also agreed by the Congress to properly interpret the regulations into a reasonable methodology of determining anti-dumping duty.62 In many disputes over the initiations of domestic industries proposing for the application of anti-dumping duties, it is obvious that somehow the protectionism still affects the DOC decision when zeroing methodology has been favored to be applied regardless of the previous rulings from the WTO

1.2.3 The change in anti-dumping policy regarding the application of

zeroing methodology of the United States 1.2.3.1 The elimination of zeroing methodology in original

investigation

Regarding the systematic non-compliance and being aware that the continuous application of zeroing methodology will lead to not only financial concern, import/ export balance and trade restriction but also put a dark mark on US reputation in international organization, the US authorities has work their way to the eventual amendment on anti-dumping policy in order to comply with WTO rulings

The first step of US government in changing their zeroing methodology would be the elimination of such application in original investigations This change resulted from the arbitration‘s decision made in several cases regarding the complaints of other members.63 Since the enactment of that amendment in early

2007, every case regarding the application of zeroing methodology in which the US

was the defendant initiated before the DSB, the US left the claims undisputed Nevertheless, the US has insisted that the WTO DSB rule in each case before it recalculates margins that were originally computed before the policy change.64 In the case US – Measures Relating to Zeroing and Sunset Reviews (DS322), the AB explained the inconsistency of original investigation that the DOC had constituted The conclusion applied for three comparisons namely W-W, T-T and W-T which were carried out under the cover of zeroing methodology The AB pointed out the nature of each comparison method and under the light of Article 2.4.2 of the ADA, ruled to ―reverse the Panel's finding […] that the United States does not act inconsistently with Article 2.4.2 of the Anti-dumping Agreement by maintaining zeroing procedures when calculating margins of dumping […].‖65 However, it should be mentioned that WTO rulings are not referred as legal regulations but more like a type of recommendation on the basis of ―positive dispute resolution‖ policy of WTO DSB The DOC had stated:

―[…] Congress did not intend for WTO dispute settlement reports to automatically trump the exercise of the Department‘s

discretion in applying the statute See 19 U.S.C 3538(b)(4)

(implementation of WTO reports is discretionary); see also, SAA

at 354 (―After considering the views of the Committees and the

agencies, the Trade Representative may require the agencies to

make a new determination that is ―not inconsistent‖ with the panel

or Appellate Body recommendations .‖ (emphasis added))

Furthermore, the Federal Circuit and the CIT have also

64 Thomas J Prusa, Luca Rubini (2013), United States – Use of Zeroing in Anti-Dumping Measures Involving

Products from Korea: It‘s de´ ja` vu all over again, World Trade Review, p 419, 420

65

The Appellate Body Report, Supra Note 43, para 138

consistently found that WTO rulings regarding this methodology

are not binding on the Department.‖66

After the winning in keeping the US into compliance with WTO trade policy

by the removal of zeroing methodology in original investigations, in later cases such

as US - Continued Zeroing (EC), US - Zeroing (Japan) and US - Zeroing (EC), the

AB concerned the specific claims of the complainants in the application of zeroing

in the review process These cases became significant when they got the AB to determine that zeroing methodology application in review process is also inconsistent with WTO rules except under exceptional circumstances.67 The WTO DSB in these cases, taken US – Zeroing as an example, only implied the idea that zeroing methodology applied in the administrative reviews in kind can be challenged as violation to WTO rules in the ADA, yet it had not made any official render to recommend a condemnation zeroing in administrative reviews.68 After the

EU and Japan won WTO challenges to US use of zeroing in administrative reviews, they started to pursuit for the compliance proceedings by the US government Understanding the reluctance of US authorities in changing their fruitful zeroing methodology, the EU and Japan had threatened to apply trade retaliation against US exports in return to the continuous use of zeroing in administrative reviews.69

1.2.3.2 The change in US application of zeroing

methodology in administrative review

66 United States Department of Commerce (2004), Issues and Decision Memorandum for the Antidumping

Duty Investigation of Certain Frozen and Canned Warmwater Shrimp From Thailand, 69 FR 76918,

December 23, 2004, p 8, 9

67 Chad P Bown, Thomas J Prusa (2010), Supra Note 17, p 28

68 Casey Reeder (2007), Zeroing in on Charming Besty: How an Antidumping controversy threatens to sink

the schooner, Stetson Law Review, Vol 36, p 280

69

Sungjoon Cho (2012), Supra Note 58

Recently, at the end of 2010, the DOC published a Federal Register Notice under Section 123(g) of the Uruguay Round Agreements Act, seeking various comments for its proposal of changing anti-dumping duty determination process After consistently losing all zeroing cases before WTO DSB70, the US authorities has to work on an amendment to its regulations and practice to bring the recommendation into conformity.71 In the future, the change of the Tariff Act 1930 will faces a lot of difficulties This is because of the legal system of the US permits the legislative branch, led by the Congress, to reform the anti-dumping law However, the Congress does not have the exclusive authority to complete such task,

it is restricted by the Constitution Law from enacting certain doctrine or legal document as the Federal Law, especially commercial law regarding the international trade from separate states with the foreign countries.72

There has been an explanation of why the US have not immediately stopped abusing its zeroing methodology in anti-dumping investigation in the first place right after the first loss in zeroing related dispute when their friend, the EC, started

to comply with the AB rulings shortly after their failures over the dispute As the matter of fact, changing the national commercial policy could be a very costly and complicated task, yet the EC still eliminated zeroing methodology in their system while the US only agreed, however not willingly it seemed, with the elimination of zeroing methodology in original investigation in 2007 and recently proceeded to eliminate of zeroing methodology in review process, long after the first case was settled Was it just about the matter of the willing of compliance or should it be any other factor causing the complicated compliance procedures of US despite all the

70 Ibid

71

Antidumping Proceedings: Calculation of the Weighted Average Dumping Margin and Assessment Rate in

Certain Antidumping Duty Proceedings, 75 Fed Reg 81533 (Dec 28, 2010)

72 Michael Jay Friedman, Giới thiệu hệ thống pháp luật Hoa Kỳ,

http://www.maxreading.com/sach-hay/khai-quat-he-thong-phap-luat-hoa-ky/gioi-thieu-he-thong-phap-luat-hoa-ky-3120.html (Last visit at 11:59, Jul 10th2016)