WTO Sets U.S. Deadline In Mexico Steel Case

WTO rules allow a government to impose anti-dumping duties on dumped products to bring their price back to a fair level.

The United States must bring its method of dealing with unfairly priced imports into line with trade rules by April in a case involving Mexican stainless steel imports, the World Trade Organisation (WTO) said on Friday.

Mexico had asked for WTO arbitration to set a reasonable period of time for U.S. compliance after a WTO appeal court in April overturned an earlier ruling by a WTO dispute panel and said the U.S. practice was inconsistent with global trade rules.

A WTO arbitrator said a reasonable time was 11 months and 10 days from adoption of the report in May, setting a deadline of April 30, next year.

The case turned on Washington's practice of "zeroing" to deal with imports that are "dumped" or exported at a price lower than what is normally charged in the home market.

WTO rules allow a government to impose anti-dumping duties on dumped products to bring their price back to a fair level.

All other WTO members object to zeroing, which has been the target of a dozen trade disputes, and the WTO's highest court has repeatedly ruled against it.

But the Mexican case had been followed closely by trade lawyers as the original dispute panel in December last year had deliberately opted to ignore previous appeal court rulings and stated that zeroing was permissible in some circumstances.

The United States says that the WTO's appeal court has overreached itself and that current WTO rules do allow zeroing. Washington is pushing hard for it to be recognised in any new trade deal that emerges from the WTO's long-running Doha round.

Zeroing suffered another blow earlier this month when a WTO panel condemned it in a case brought by the European Union involving a range of exports from ball bearings to pasta.

These duties reflect the difference between the export, or dumped, price and the price at home.

But in many dumping cases, the importing country authorities need to compare a range of similar products over a period.

When calculating these comparisons, the United States ignores examples where the products concerned are actually exported at a higher price than at home.

Critics say this artificially inflates the anti-dumping margin, while Washington argues it is just ignoring cases where zero dumping has taken place.