Have you had enough of U.S. zeroing litigation at the WTO? For a change of pace, perhaps there is a case related to Canadian zeroing on the horizon. Trade expert Peter Clark points me to a decision by the Canadian International Trade Tribunal (CITT), relating to the use of zeroing in duty assessment proceedings:
Did the CBSA Improperly Apply Zeroing?
Legal Framework
36. In the context of duty assessment, section 3 of SIMA requires that an anti-dumping duty equal themargin of dumping and, in turn, subsection 2(1) defines “margin of dumping” as “. . . the amount by whichthe normal value of the goods exceeds the export price of the goods”. By comparison, in the context of adumping investigation, subsection 30.2(1) provides that “. . . the margin of dumping in relation to any goodsof a particular exporter is zero or the amount determined by subtracting the weighted average export price ofthe goods from the weighted average normal value of the goods, whichever is greater.”
Positions of Parties
37. Aluminart complains that the CBSA improperly relied on zeroing to calculate the margins ofdumping, with the effect that the resultant anti-dumping duties were inflated. In particular, the CBSA took the transactions listed in the detailed adjustment statements, treated the non-dumped products as having a margin of dumping of zero and then established the duties payable on the basis of the dumped products only. Aluminart argues that the CBSA should have offset the dumped imports to the extent that the other imports were not dumped.
38. Aluminart claims that it was improper for the CBSA to rely on zeroing because the CBSA has stated that it has discontinued the practice of zeroing, that the practice has been criticized by the World Trade Organization (WTO) and that domestic aluminum extruders are not entitled to protection beyond what is necessary to offset injurious dumping.
39. In reply, CBSA says that it has discontinued the practice of zeroing when determining margins of dumping in dumping investigations, but not when assessing anti-dumping duties. The CBSA explains that it stopped zeroing in investigations because subsection 30.2(1) of SIMA specifies that the margin of dumping in an investigation is determined by subtracting the weighted average export price from the weighted average normal value. By contrast, for duty assessment purposes, subsection 2(1) and section 3 simply require that the margin of dumping be determined by subtracting the export price from the normal value. The CBSA says that this difference in language means that the CBSA need not offset import transactions when assessing anti-dumping duties.
40. Moreover, the CBSA contends that it would be unworkable to offset transactions for duty assessment purposes because there is no guidance in the legislation on whether the CBSA is to take into account each invoice or a particular period.
41. The CBSA also contends that the elimination of zeroing would undermine the primary purpose of SIMA, which, it says, is to protect Canadian producers. Importers could import dumped goods that injure domestic producers without attracting anti-dumping duties if they also import the same goods at prices that are not dumped.
Determination
42. It is evident that Aluminart’s position on zeroing is premised in large part on a misunderstanding that, while it does not apply this methodology in the course of dumping investigations any more, the CBSA did not say that it was completely abandoning zeroing.
43. Whereas the wording of subsection 30.2(1) of SIMA, insofar as it refers to weighted averages, reasonably lends itself to an interpretation that is consonant with Canada’s international obligations, as expressed in the zeroing decisions of the WTO Appellate Body, the wording of the provisions of SIMA that apply in the context of the enforcement of a resultant injury finding does not. Specifically, these provisions do not refer to weighted averages.
44. On a plain reading, the effect of subsection 2(1) and section 3 of SIMA is that the CBSA shall levy, before releasing a shipment of imported goods which are of the same description as goods in respect of which the Tribunal has made an order or finding, an anti-dumping duty equal to the extent by which the normal value of these goods exceeds the export price. Thus, when assessing duty, the customs official is obliged, by statute, to take into account the export price of the goods that are before him, not the prices ofthose goods and of earlier or future shipments of such goods.
45. There is no basis in Canadian legislation for allowing individual import transactions of goods that are covered by an order or finding of the Tribunal and valued at dumped prices to escape the imposition of anti-dumping duties.
