U.S. to finally end practice of ‘zeroing’
In a Federal Register notice on Thursday, the U.S. Department of Commerce (DOC) announced that it is modifying its methodology of calculating weighted-average dumping margins and antidumping duty assessment rates, effectively discontinuing the practice of “zeroing,” which, according to many seafood importers and exporters, resulted in unreasonable high tariffs on shrimp and other seafood items.
The modification in the methodology will apply to preliminary determinations issued after 16 April.
The World Trade Organization had ruled that zeroing is illegal after numerous countries, including Thailand, India and China, challenged the controversial practice. The DOC had indicated that it would abandon zeroing, but it wasn’t until this week that it decided to calculate weighted-average dumping margins and antidumping duty assessment rates in a manner that offsets non-dumped comparisons while using monthly average-to-average comparisons in reviews.
Currently, the DOC determines dumping margins by comparing normal value with the export price of comparable merchandise. The agency compared normal value and export price using the average-to-transaction method, which involved a comparison of the weighted-average normal value to the export price of individual transactions for comparable merchandise.
When aggregating the results of these comparisons to determine the weighted-average margin of dumping in a review, the DOC did not offset the results of the comparisons for which export price was less than normal value by the results of comparisons for which export price exceeded normal value. When determining importer-specific assessment rates in a review, the DOC similarly aggregated the results of importer-specific comparison results and did not offset the comparison results for which export price was less than normal value by the comparison results for which export price exceeded normal value.
The DOC’s decision is good news for shrimp importers and exporters selling into the U.S. market, who are hopeful that the tariffs slapped on shrimp from six Asian and South America countries in 2005 will be reduced or even eliminate.