Antidumping Proceedings and ‘Zeroing’ Practices: Have We Entered the Endgame?

Abstract

'Zeroing', the practice of setting to zero negative dumping margins in antidumping investigations, has been a contentious issue in the WTO for well over a decade. Members including the United States argued that GATT 1994 and the WTO Agreement on Antidumping did not outlaw such a practice. The WTO panels in certain cases have accepted this point of view, but the WTO Appellate Body was unambiguous in holding that the zeroing practice was untenable in most of its current manifestations. The differences of opinion of the panels and Appellate Body on zeroing have tempted many to believe that this issue could potentially escalate to affect the WTO system. That zeroing has moved beyond the realm of a complicated mathematical calculation or interpretation of a few provisions of the GATT and the WTO Antidumping Agreement has been accepted by many. However, will it snowball into a major crisis? It seems unlikely, argues this article, as the principal user of 'zeroing', that is, the United States has almost exhausted its defence in support of continuing with this practice and the Appellate Body has clearly indicated that there is no real gain in rehearsing the fine points of treaty provisions. This article argues that it will be virtually impossible for members such as the United States to re-agitate the issues in future disputes although they can argue that it strikes at the root of the retrospective system of duty collection in the way in which such countries administer such systems. The United States can, at best, use the panel and the Appellate Body process to buy some more time to make necessary reforms in their domestic law to conform to the zeroing prohibition. However, the future zeroing disputes will be 'lame duck' disputes and are unlikely to involve much discussion of any substantive arguments. It seems that the long drawn out controversy on zeroing is coming to a close.