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WTO Case Challenging AD/CV Duties on Korean Clothes Washers Subject of USTR Inquiry

Monday, September 23, 2013
Sandler, Travis & Rosenberg Trade Report

The Office of the U.S. Trade Representative is requesting no later than Oct. 11 comments on the issues raised in a World Trade Organization dispute concerning U.S. antidumping and countervailing measures against large residential washers from Korea. This dispute was launched Aug. 29 with a request for consultations and centers on the use of zeroing, in which instances of sales of subject merchandise below normal value are not offset by sales at or above normal value, generally resulting in higher AD and CV duties.

The U.S. has lost virtually all of the WTO cases brought against zeroing, which have struck down its use in original AD/CV duty investigations as well as administrative, new shipper and sunset reviews. According to USTR, Korea is challenging the use of this practice in the completed AD/CV investigations as well as in future administrative reviews, new shipper reviews, sunset reviews and changed circumstances reviews. Korea is also challenging what it describes as “[t]he United States’ methodology of ‘zeroing’ as such when using the weighted average-to-transaction comparison methodology in antidumping investigations, administrative reviews and other segments of antidumping proceedings.”

With respect to the CV duty measures, Korea is challenging (a) the determination that article 10(1)(3) of Korea’s Restriction of Special Taxation Act is a prohibited subsidy under WTO rules and the determination of the amount of subsidy benefit received by a respondent, (b) the determination that Article 26 of the RSTA is a regionally specific subsidy and the imposition of CV duties on one respondent that were attributable to tax credits received for investments made under Article 26, and (c) the treatment of the Korea Development Bank and the Industrial Bank of Korea as public bodies as well as the determination that the financing provided by these institutions was commercially unreasonable and thus conferred benefit.

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