From today's Federal Register (PDF version here), a proposed rule by the U.S. Department of Commerce to stop zeroing in administrative reviews:
Proposal for Calculating the Weighted Average Dumping Margin and
Assessment Rate in Certain Antidumping Duty Proceedings and Request for
Comment
Pursuant to section 123(g)(1) of the Uruguay Round Agreements Act
(``the URAA''), ``[i]n any case in which a dispute settlement panel or
the Appellate Body finds in its report that a regulation or practice of
a department or agency of the United States is inconsistent with any of
the Uruguay Round Agreements,'' certain requirements must be met before
``that regulation or practice'' may be ``amended, rescinded, or
otherwise modified * * * .'' Section 123(g)(1)(C) of the URAA requires
that the Department provide opportunity for public comment by
publishing ``the proposed modifications and the explanation of the
modification'' in the Federal Register.
Pursuant to section 123(g)(1) of the URAA, by this notice the
Department is proposing modifications to its practice in response to
the following WTO dispute settlement findings. The WTO Appellate Body
in US-Zeroing (EC), US-Zeroing (Japan), US-Stainless Steel (Mexico),
US-Continued Zeroing (EC) found denial of offsets for non-dumped
comparisons in antidumping duty administrative reviews to be
inconsistent with Article 9.3 of the Antidumping Agreement and Article
VI:2 of the GATT 1994, either ``as such,'' or ``as applied'' in certain
administrative reviews, or both.\6\ In US-Zeroing (Japan), the WTO
Appellate Body also found denial of offsets for non-dumped comparisons
in antidumping duty original investigations using transaction-to-
transaction comparisons was inconsistent with Articles 2.4 and 2.4.2 of
the Antidumping Agreement.\7\ In addition, in US-Zeroing (Japan), the
WTO Appellate Body found denial of offsets for non-dumped comparisons
in antidumping duty new shipper reviews was inconsistent with Articles
2.4 and 9.5 of the Antidumping Agreement.\8\ Finally, in US-Zeroing
(EC), US-Zeroing (Japan), and US-Continued Zeroing (EC), the WTO
Appellate Body found reliance on weighted average margins of dumping
calculated without granting offsets for non-dumped comparisons as the
basis for determinations made in certain five-year (sunset) reviews was
inconsistent with Article 11.3 of the Antidumping Agreement.\9\
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\6\ US-Zeroing (EC), WT/DS294/R, WT/DS294/AB/R, para. 263
(a)(i); US-Zeroing (Japan), WT/DS322/R, WT/DS322/AB/R, para. 190 (c)
& 190(e); US-Stainless Steel (Mexico), WT/DS344/R, WT/DS344/AB/R,
paras. 165 (a) & 165 (b); US-Continued Zeroing (EC), WT/DS350/R,
para. 8.1(e), WT/DS350/AB/R, paras. 395 (a)(v), 395 (d) & 395
(e)(ii).
\7\ US-Zeroing (Japan), WT/DS322/AB/R, para. 190(b).
\8\ Id., para. 190(d).
\9\ US-Zeroing (EC), WT/DS294/AB/RW, para. 469(h)(iv) & (vi);
US-Zeroing (Japan), WT/DS322/AB/R, para. 190(f); US-Continued
Zeroing (EC), WT/DS350/R, para. 8.1(f), WT/DS350/AB/R, para. 395(f).
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In response to prior findings of inconsistency with respect to the
Department's calculation of weighted average margins of dumping in
original investigations, the Department previously modified its
methodology such that it now provides offsets for non-dumped
comparisons when using average-to-average comparisons in original
investigations.\10\ In response to the findings of inconsistency
identified above, the Department now proposes to modify its methodology
for calculating weighted average margins of dumping and assessment
rates to provide offsets for non-dumped comparisons while using monthly
average-to-average comparisons in reviews in a manner that parallels
the WTO-consistent methodology the Department currently applies in
original investigations. In particular, except where the Department
determines that application of a different comparison method is more
appropriate, in reviews, the Department proposes to compare monthly
weighted average export prices with monthly weighted average normal
values and to grant an offset for such comparisons that show export
price exceeds normal value in the calculation of the weighted average
margin of dumping and assessment rate. Where the weighted average
margin of dumping is zero or de minimis, no antidumping duties will be
assessed. In addition, to the extent that any prior original
antidumping duty investigations using transaction-to-transaction
comparisons could be considered as establishing a practice of the
Department with respect to the granting or denial of offsets for non-
dumped comparisons when calculating the weighted average margin of
dumping,\11\ the Department proposes to withdraw any such practice.
With respect to the findings of inconsistency in certain of the
Department's five-year (sunset) reviews, the Department notes that the
underlying issue is the methodology for calculating weighted average
dumping margins in investigations and reviews, which is addressed by
the modifications the Department has made with respect to
investigations and is proposing herein to make with respect to reviews.
Moreover, the Department recognizes that while section 752(c) of the
Act provides that the Department shall consider the weighted average
dumping margins determined in the investigation and subsequent reviews,
among other factors, the Act does not require the Department to rely on
the weighted average dumping margins, or any particular weighted
average dumping margin, as the basis for its determinations in five-
year (sunset) reviews where such reliance would render the
determination inconsistent with the United States' international
obligations.
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\10\ Antidumping Proceedings: Calculation of the Weighted-
Average Dumping Margin During an Antidumping Investigation; Final
Modification, 71 FR 77,722 (December 27, 2006).
\11\ US-Zeroing (Japan), WT/DS322/AB/R, paras. 88, 138.
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The modified methodology for reviews requires the Department to
revise certain provisions of the Department's regulations. In
particular, 19 CFR 351.414(a) and (c) indicate a preference for making
``average-to-transaction'' comparisons in administrative reviews. This
proposed rule would revise these provisions to permit application of
average-to-average comparisons in reviews in a manner that parallels
the comparison methods used in original investigations. In addition,
Sec. 351.414(d)(3) and (e) of the Department's regulations set forth
the time periods over which weighted
[[Page 81535]]
averages are calculated. Section 351.414(d)(3) provides that when
applying the ``average-to-average'' method, the weighted averages will
normally be calculated over the entire period of investigation or
review, unless another averaging period is deemed appropriate. Section
351.414(e) provides that when applying the preferred ``average-to
transaction'' method in a review, the Department will calculate
weighted average normal values on a monthly basis. The Department
proposes to modify Sec. 351.414(d)(3) to permit weighted averages to
normally be calculated on a monthly basis in reviews, regardless of the
comparison method used. Conforming changes to Sec. 351.414(e) will
ensure Sec. 351.414(d)(3) and (e) do not contain redundant language.
Proposed language for the modified provisions is set forth at the end
of this notice.
Comments are due January 27, 2011. I'm sure there will be many!
