... as I was in the last post, a number of prior NAFTA Chapter 19 panels have addressed the permissibility of zeroing under U.S. law. In yesterday's panel report in LWR Pipe and Tube, the panel addressed a different question: Is the Department of Commerce allowed to stop zeroing in anti-dumping investigations?
In a nutshell, the domestic industry (the petitioners) argued that DOC's decision to offset “positive” dumping margins with “negative” margins -- that is, to stop treating the negative margins as zero -- in calculating the dumping margins was inconsistent with the relevant statute, which requires zeroing. Specifically, here's what DOC did:
To determine the weighted-average dumping margin of LWR pipe and tube from Mexico the Department subtracted the so-called “negative margins,” on transactions where there were negative margins, from the positive margins on the remaining transactions.
Here's what the petitioners argued:
Petitioners contend that 19 U.S.C. § 1677(35)(A) precludes “Commerce from considering a negative margin as a dumping margin, and requires thus that Commerce exclude negative margins from the calculation of the [] weighted-average dumping margin ratio.”
They also argued:
... Petitioners contend that the Department’s consideration of negative margins is inconsistent because Commerce has limited its offsetting methodology to antidumping investigations, while continuing to apply zeroing in the context of antidumping administrative reviews.
The panel rejected these arguments, agreeing with the view of several U.S. court decisions finding the DOC approach to be permissible under U.S. law:
In sum, we conclude that the antidumping statute is “unclear as to the use of positive and negative value dumping margins in weighted-average dumping margin calculations,” U.S. Steel, 637 F. Supp. 2d at 1212, and that Commerce’s use of the “offset” methodology manifests a reasonable interpretation of the statute.
See pp. 27-35 of the panel's opinion for all the details.
