The Obama administration is looking to comply with World Trade Organization decisions on its zeroing issue administratively, rather than through legislative changes to U.S. trade law, according to Treasury Undersecretary Francisco Sanchez. He says the goal is for the United States to become WTO-compliant, while at the same time not putting U.S. industries at a disadvantage by damaging U.S. trade remedy laws.
The WTO has issued more than 20 rulings on the zeroing issue, nearly all of them involving Commerce's use of the methodology. The United States is facing the threat of WTO-authorized trade sanctions from the European Union and Japan over its failure to comply with previous trade body rulings against Commerce's use of zeroing in dumping cases.
Zeroing refers to the practice in which an investigating authority makes multiple comparisons of the export price and normal value (i.e. home market) price of an allegedly dumped good, and then aggregates the results of those comparisons to calculate a dumping margin for the product as a whole. However, when aggregating the prices, the authority ignores results where "negative" dumping occurs, i.e., where the product is being sold for more abroad than on the home market.
The effect of zeroing, critics charge, is to illegally inflate the margin of dumping, resulting in higher antidumping duties or a finding of dumping where it would normally not be found to exist.
