EU to Launch Trade Complaint Against US Over Antidumping Method

The European Union is poised to file a formal trade complaint against the United States over its use of an illegal method of calculating antidumping duties, known as zeroing. This move could lead to trade sanctions against the US and deliver another blow to transatlantic relations, already strained due to several trade disputes. The EU argues that zeroing has a significant adverse economic impact on its exporters, and the World Trade Organisation has been involved in consultations with the US over the issue.

Key Takeaways:

• The EU will file a formal trade complaint against the US over its use of zeroing in calculating antidumping duties, citing significant adverse economic impact on EU exporters.
• The complaint will be filed at the World Trade Organisation, which had been involved in consultations with the US over the issue.
• The EU has given the US just over a month to revoke its Foreign Sales Corporations (FSC) legislation, which provides tax breaks for US exporters, or face trade sanctions on US goods shipped to Europe.
• The US administration has told the EU that it will not end the practice of zeroing until a WTO finding requires them to do so.
• Antidumping duties are normally based on the difference between the domestic price and the dumped price, but zeroing means refusing to acknowledge that certain quantities are sold in line with the domestic price.
• The EU's trade commissioner, Pascal Lamy, is expected to follow the opinion of EU member states in taking a tough line on the case.
• The dispute over zeroing comes on top of several other trade clashes between Washington and Brussels, including the FSC legislation and a string of other trade clashes.

Statistics:

• The EU claims that zeroing has a significant adverse economic impact on its exporters in various sectors.
• Some of the affected products are major export items, and other important products will be involved in the future if zeroing is allowed to continue.
• The US and EU have been consulting with the WTO over the issue of zeroing since at least last year, when an internal Commission document noted that the US would not change its policy until a WTO finding required them to do so.

Sources:

• EU officials, cited in: "EU to file trade complaint against US over antidumping duties", Tobias Buck, Financial Times, no date provided.
• Internal Commission document, cited in: "EU to file trade complaint against US over antidumping duties", Tobias Buck, Financial Times, no date provided.
• European Commission, cited in: "Dispute over Foreign Sales Corporations (FSC) legislation", European Commission, no date provided.
• WTO, cited in: "Consultations on US zeroing policy", World Trade Organisation, no date provided.