In comments submitted to the Department of Commerce today, the Southern Shrimp Alliance strongly opposed the weakening of U.S. trade laws that will result from recently proposed revisions to how dumping is measured and antidumping duty rates are calculated.
Commerce proposed changes to its regulations in response to rulings by the Appellate Body of the World Trade Organization that condemn an established U.S. practice of calculating dumping margins by measuring sales that are less than fair value without granting offsets for other fairly traded products.
The practice of not granting offsets, generally referred to as “zeroing,” allows governments to effectively address dumped sales in their market. Without offsets, sales that are made at less than fair value are fully accounted for and subject to the discipline of a trade remedy. With offsets, sales that are made at less than fair value are ignored if an exporter can show that other sales were made at above fair value.
For exporters of shrimp, offsets mean that a company could sell frozen raw shrimp into the U.S. market at dumped prices (causing prices throughout the market to decline), so long as the company also sold other shrimp exports (cooked shrimp in rings, for example) in the U.S. market at prices above “fair value.” Other than as a tool to weaken trade remedies, offsets have no logical or legal justification, and the U.S. government has repeatedly stated that offsets are not required under the WTO’s Anti-Dumping Agreement. Such a requirement was neither negotiated nor agreed to by the parties to the Agreement.
SSA’s comments ask Commerce to avoid further weakening U.S. trade law. Earlier efforts to appease the Appellate Body resulted in trade relief being removed on shrimp imports from Ecuador and from two large Thai exporters. As a result, dumped imports have increased in the U.S. marketplace in the absence of antidumping duties. Total shrimp imports from Ecuador and Thailand in 2010 (556.6 million pounds) were the highest that they have ever been. At the same time, foreign exporters have brought even more challenges to even more aspects of Commerce’s administration of the dumping laws.