U.S. MAY END THE WAY IT CALCULATES DUMPING DUTY

DUTY TARIFF

 

The U.S. Commerce Department proposed ending the way it calculates dumping duties after Japan, the European Union and Thailand said their exports were being penalized.

In an effort to comply with decisions by the World Trade Organization during the past four years, the agency issued regulations that would end a process known as zeroing the prices of imports in dumping cases.

“While it has taken a very long time, the Commerce Department has finally acted to remove a serious distortion from antidumping calculations,” Lewis Leibowitz, a lawyer at Hogan Lovells in Washington who represents U.S. companies that use imported products, said in a statement.

The decision, which was issued in a Dec. 28 Federal Register notice, may lower or eliminate duties on products such as steel or furniture. The regulation expands a decision that took effect in 2007, which discontinued the practice for initial calculations of duties.

WORLD TRADE ORGANIZATION LOGO

 

Company representatives and the public have a month to respond to the proposal before the agency decides on its final action.

In a series of WTO complaints, Canada, Japan, Thailand and other U.S. trading partners said the U.S. method of calculating duties on their products were unfairly inflated.

Dumping occurs when companies export goods to the U.S. at a loss, or at prices below what the products fetch in their domestic market. In most investigations, the Commerce Department averages prices for each product under review and the comparable goods in the U.S. It then compares the prices, and sets duties based on the difference.

When the price in the exporting country on a product is lower, the U.S. has been setting the cost at zero, and not the actual amount. This “zeroing out” makes the average margin in a dumping case higher.

Averaging the actual amount might offset the dumping margins, lowering the duties in some cases.

To contact the reporter on this story: Mark Drajem in Washington at mdrajem@bloomberg.net

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