WTO largely backs Vietnam in shrimp dispute with US

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The Panel upheld Vietnam's claim that the United States' “zeroing methodology”, as it relates to the use of simple zeroing in administrative reviews, is inconsistent with the Anti-Dumping Agreement and the GATT 1994.

It was the key complaint filed by Vietnam as this method had generated a large anti-dumping margin, resulting in higher tariff on frozen shrimps from Vietnam. The anti-dumping tariffs levied by the US on most of Vietnam’s shrimp exporters are as high as between 4.13 per cent and 25.76 per cent.

The Panel also upheld Vietnam's claim that the US Department of Commerce’s use of zeroing to calculate the dumping margins of selected respondents in the second and third administrative reviews was inconsistent with the Anti-Dumping Agreement and the GATT 1994.

The tariffs imposed on exporters from non-market economies such as Vietnam and China are often much higher than the normal level under the general calculation set by the WTO rule.

The Panel upheld a claim by Vietnam that the USDOC had acted inconsistently with the Anti-Dumping Agreement when it failed to apply to the Vietnam-wide entity the “all others” rate applied to respondents not selected for individual examination.

The Panel found that the USDOC's application of a facts-available rate to the Vietnam-wide entity in the second administrative review, and a rate that was in substance a facts available rate in the third administrative review, were inconsistent with the Anti-Dumping Agreement.

However, the Panel considered that Vietnam's claims of violations of the Anti-Dumping Agreement with respect to the “all others” rate and to the rate assigned to the Vietnam-wide entity were outside its terms of reference.

The decision will allow the measures which are in dispute, to continue applicable after the fourth and fifth and final reviews. It is an unfavourable decision for Vietnam as the results of the fourth, fifth and final reviews will not be changed.

According to WTO rules, that the two parties have 60 days to appeal after the Panel releases the verdict.

The Vietnam Association of Seafood Exporters and Producers (VACEP) and consultants said if Vietnam wins the case, frozen shrimp exports will enjoy immunity from paying advances related to anti-dumping scheme and exporters will be fully exempt from anti-dumping tariffs due to results zero from the three consecutive reviews.

VACEP reported that Vietnam has planned to earn $2.1 billion from exports of shrimp in 2011. Last year, shrimp export revenues reached $2 billion with the US being the second largest market after Japan.

Major milestones in Vietnam’s shrimp lawsuit against the US:

February 1, 2010: Vietnam requests for consultations with the US
March    23, 2010: Vietnam and the US hold consultations in Geneva
April       20, 2010: Vietnam requests for the establishment of a Panel
July        26, 2010: WTO Director General names a three-member Panel for the case
August   20, 2010: Vietnam submits its lawsuit documents
October  20, 2010: The Panel holds its first hearing
December 14, 2010: The second hearing
April        7, 2011: The Panel issues its interim report
July       11, 2011: The final report.