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WTO Rules Against U.S. AD/CV Duties on Korean Clothes Washers

Wednesday, March 16, 2016
Sandler, Travis & Rosenberg Trade Report

A World Trade Organization panel has ruled against the U.S. in a dispute concerning antidumping and countervailing measures on large residential washers from Korea. The dispute 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.

While the panel rejected many of the claims made by Korea, it also ruled that the U.S. acted inconsistently with Article 2.4.2 of the Anti-Dumping Agreement by, among other things, inconsistently applying the comparison methodology provided in the second sentence of that article and using zeroing when applying such methodology. The panel also determined that the U.S. acted inconsistently with Article 2.1(c) of the Agreement on Subsidies and Countervailing Measures by failing to take account of certain mandatory factors and issuing inconsistent original and remand determinations of disproportionality.

United Steelworkers International President Leo Gerard called on the U.S. government to immediately file an appeal, describing the panel decision as “another example of how the WTO has repeatedly sought to limit, contrary to the explicit rules of the WTO itself, what the members themselves negotiated and limit the effectiveness of U.S. trade law.”

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