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United States Trade Representative Ron Kirk Announces Solution to Years-Old Zeroing Disputes, Demonstrating Commitment to Export Growth and Job Creation

02/06/2012

Washington, D.C. – United States Trade Representative Ron Kirk announced that today in Geneva the United States signed agreements with the European Union (EU) and Japan that will bring to an end longstanding disputes with these important trade partners over “zeroing.” Zeroing is a label sometimes used to describe a methodology employed in antidumping calculations for aggregating unfairly-traded (“dumped”) transactions with other transactions. The disputes started nearly nine years ago, when the EU first requested WTO consultations over the use of zeroing. In April 2006 (in the EU dispute) and January 2007 (in the Japan dispute), the World Trade Organization (WTO) found that the U.S. use of zeroing in certain antidumping proceedings is inconsistent with WTO rules. After the WTO found that the United States had not brought its antidumping methodologies into compliance, the EU and Japan requested authorization to impose hundreds of millions of dollars of trade retaliation. Had these agreements not been reached today, substantial volumes of U.S. exports could have been closed out of markets in the EU and Japan, resulting in job loss for U.S. workers and financial loss for U.S. farms and businesses.

“I am proud to announce today that we have finally put these burdensome and potentially damaging trade disputes behind us,” said Ambassador Kirk. “What this means for the American people and the country as a whole is that American farmers and businesses can invest in job-creating export markets without the uncertainty of possible trade retaliation. And the resolution of these longstanding disputes promotes our ability to focus on the Administration’s priority of enforcing U.S. rights under our trade agreements to ensure a level playing field for American farmers, workers and businesses.”

Under the agreements signed today, the United States will complete the process – which began in December 2010 – of ending the zeroing practices found in these disputes to be inconsistent with WTO rules. In return, the EU and Japan will drop their claims for trade retaliation.

The United States has repeatedly explained that the WTO Appellate Body – in making its findings on zeroing – did not apply the text of the Antidumping Agreement and, therefore, exceeded its mandate. The United States will continue to press in ongoing WTO negotiations for affirmation that zeroing is consistent with WTO rules. Nonetheless, in these circumstances and at this time, the compliance actions announced today are important in confirming U.S. support for the rules-based system that the WTO provides. Moreover, as Ambassador Kirk explained, “the Administration is committed to vigorous enforcement of U.S. antidumping and other trade remedy laws. I am confident that we will continue to enforce these laws effectively, as was shown, for example, in our successful defense of the President’s imposition of duties on tires from China.”

Background:

The EU first requested WTO consultations with respect to zeroing in June 2003, and Japan requested WTO consultations in November 2004. In October 2006, the EU initiated a second zeroing dispute covering additional proceedings. In each of these disputes, the WTO Dispute Settlement Body (DSB) found that the use of zeroing in certain antidumping proceedings was inconsistent with WTO rules. Detailed information may be found at www.wto.org, under dispute numbers DS294, DS322, and DS350.

After the DSB found that the United States had not come into compliance with the DSB findings, the EU and Japan made separate requests for authorizations to impose trade retaliation against the United States. These requests were referred to WTO arbitrators. The parties subsequently agreed to suspend the arbitrations to allow additional time for discussions.

Under the terms of today’s agreements, the U.S.-Japan and U.S.-EU trade arbitrations will remain suspended and will be terminated – without the issuance of awards – after the United States completes its implementation of the agreements.