US to comply with WTO rulings on anti-dumping duties

By Erik Wasson - 02/06/12 11:03 AM ET

The Obama administration is bowing to World Trade Organization rulings and will change the way it guards against unfairly priced goods that are dumped in the U.S. market.

U.S Trade Representative (USTR) Ron Kirk on Monday announced the United States has signed a deal with the European Union and Japan for implementing WTO rulings on a controversial practice known as "zeroing."

“I am proud to announce today that we have finally put these burdensome and potentially damaging trade disputes behind us,” said Kirk.

“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,” Kirk said.

The Geneva-based WTO has repeatedly ruled that the United States improperly imposes antidumping duties on imports. Trade allies of the U.S. have for years challenged the zeroing practice at the WTO.

Under the agreement, the United States will abandon zeroing, though the Obama administration said it will try to negotiate a future deal at the WTO to permit the practice.

The method allows the United States to inflate “dumping margins” by zeroing out data that indicate an export price is actually higher than a home market price. Normally, dumping occurs when another country is found to be selling products here for less than they are sold at home. Inflating the dumping margins makes it easier for the Commerce Department to declare dumping has occurred and to protect key manufacturing industries like steel.

Congressional Democrats from manufacturing areas are unhappy with the administration's move to implement the WTO ruling.

In November, Rep. Sandy Levin (D-Mich.), the ranking member on the House Ways and Means Committee, Sen. Charles Schumer (D-N.Y.), the top Democratic messaging man in the Senate, Sen. Sherrod Brown (D-Ohio) and Rep. Jim McDermott (D-Wash.), the ranking member on the Ways and Means Trade subcommittee, wrote to the administration objecting to bowing to the WTO ruling.

Senate Finance Committee Chairman Max Baucus (D-Mont.), whose panel has jurisdiction over trade matters, did not sign that letter, however.

— This story was updated at 3:10 p.m.