US loses significant antidumping case against Japan
By Jon Fernquest
The intricacies of international
trade law
make for some pretty dull
reading. Hidden in the intricacies one can still discover some pretty interesting things.
The controversial way that the US calculates punitive duties on export goods from other countries that it deems to be unfairly underpriced (known as "zeroing") is one good example.
US "antidumping" policy, as this practice is called, is definitely relevant to Thailand.
Thailand's shrimp sector was affected for several years by US antidumping policy (Read article).
In the case that just decided by the WTO, the US imposed heavy duties on Japanese ball bearings which it claimed were unfairly underpriced.
Japan retaliated by imposing trade sanctions against the US.
The case started in 2004 and has dragged on until today.
With the final WTO court ruling Japan finally has permission from the WTO to impose trade sanctions against the US.
(Map on right of WTO member states around the world. Dark green are the founding members. Light green are the states that joined afterwards.)
Today's article begins after the vocabulary:
intricacies -
complicated details
international trade law - the rules, regulations and customs for handling trade between countries or between private companies across borders (See Wikipedia)
pretty dull reading - boring to read
punitive - done as punishment
punitive duties - taxes on imports as punishment (for the exporting country)
imposed heavy duties - forced to pay heavy taxes on imports
deems to be X - judges to be X, decides to be X
dumping - unfair pricing of export goods, when a manufacturer exports a product to another country at a price which is below its costs of production or below the price it charges in its home market (See Wikipedia)
antidumping, antidumping measures - actions taken by a government to stop (what it thinks is) dumping from another country
anti-dumping sanctions - when one country punishes another country for dumping
zeroing - a controversial methodology used by the United States for calculating antidumping duties against foreign products (See Wikipedia)
practice - something that people do regularly
definitely - for sure, certainly
relevant to Y - important for Y
ball bearings - small round metal balls used to make machinery run smoothly (See Wikipedia)
X claimed Y - X said that Y was true but has not been proven yet
retaliated - punished them for damage they caused to him
trade sanctions - punishments that affect trade between the two countries (reduced trade opportunities for a country)
dragged on - continued for a very long period of time
court ruling - a decision by a court of law
international trade law - the rules, regulations and customs for handling trade between countries or between private companies across borders (See Wikipedia)
pretty dull reading - boring to read
punitive - done as punishment
punitive duties - taxes on imports as punishment (for the exporting country)
imposed heavy duties - forced to pay heavy taxes on imports
deems to be X - judges to be X, decides to be X
dumping - unfair pricing of export goods, when a manufacturer exports a product to another country at a price which is below its costs of production or below the price it charges in its home market (See Wikipedia)
antidumping, antidumping measures - actions taken by a government to stop (what it thinks is) dumping from another country
anti-dumping sanctions - when one country punishes another country for dumping
zeroing - a controversial methodology used by the United States for calculating antidumping duties against foreign products (See Wikipedia)
practice - something that people do regularly
definitely - for sure, certainly
relevant to Y - important for Y
ball bearings - small round metal balls used to make machinery run smoothly (See Wikipedia)
X claimed Y - X said that Y was true but has not been proven yet
retaliated - punished them for damage they caused to him
trade sanctions - punishments that affect trade between the two countries (reduced trade opportunities for a country)
dragged on - continued for a very long period of time
court ruling - a decision by a court of law
W.T.O. Rules Against U.S. in Dumping Case
REUTERSAugust 18, 2009
GENEVA (Reuters) — The World Trade Organization’s top court rejected on Tuesday an American appeal in a long-running case on antidumping measures, clearing the way for Japan to threaten trade sanctions against Washington.
The final ruling by the Appellate Body of the W.T.O. in the case, which Japan started in 2004, dealt another setback to a controversial American method of dealing with unfairly priced imports.
But it also highlighted sensitivity about antidumping measures. The measures impose additional duties on imports that are sold for less abroad than they cost at home, but can be abused for protectionist purposes.
Japan won the case
”The Appellate Body has upheld our position,” said a Japanese diplomat, who asked not to be identified. “Basically, I think we won.”Japan had previously sought permission to impose up to $248.5 million a year in trade sanctions against the United States in the case, which originally turned on American duties on Japanese ball bearings.
But the United States objected to that amount, and the question went to arbitration. The two sides then asked for arbitration to be suspended while the W.T.O. examined whether or not the United States had complied with the original ruling.
Tuesday’s 114-page decision, ruling against the United States on every count, upheld a judgment in April that the United States had failed to comply.
Once the W.T.O. adopts the findings and April’s ruling, which it is likely to do at a meeting on Aug. 31, the arbitration process on the size of Japan’s retaliation can resume.
US "zeroing" approach to anti-dumping duties
The case turned on a controversial method known as “zeroing” used by the United States to calculate duties on goods imported for less than they cost in the originating country.The way the United States handles its antidumping measures was also at issue. Washington argued that it could continue to levy duties on goods that entered the country before a W.T.O. ruling finding such duties illegal — a stance rejected by the court.
The United States is the only one of the W.T.O.’s 153 members to back zeroing, which the Appellate Body has ruled against consistently.
(Source: Bangkok Post, Reuters, W.T.O. Rules Against U.S. in Dumping Case, August 18, 2009, link)
Vocabulary:
World Trade Organization (WTO) - an international organisation founded in 1995 to supervise and liberalize international trade (See Wikipedia)
liberalize international trade - make it easier for business people to do business between countries, remove restrictions and regulations and most important: import duties
appeal, legal appeal - when after losing a legal case you ask a higher court to check the case
Appellate Body - a court that makes a decision about a legal appeal
a setback - a problem or difficulty that delays a project
dealt another setback - another delay occurred
controversial - a topic that people disagree about, fight, argue, or debate about
highlighted - emphasized, made more noticeable
sensitivity - people very concerned about this issue and get angry easily (so issue must be dealt with carefully)
duties, duties on imports - taxes paid on imported goods
impose duties - force people to pay duties
levy taxes - add a tax to the price of goods
levy duties - add a duty to the price of import goods
impose additional duties on imports - force people to pay even more duty on import goods
protectionist - policies, ideas, or laws that reduce imports into a country from other countries ("protecting" the country's industries) (See glossary)
a position, a stance - an opinion about an issue
upheld our position - agreed with position
reject a stance - do not agree with position
ball bearings - small round metals used in machinery (See Wikipedia)
arbitration - the judging and settling of a dispute or disagreement by a neutral party (not involved in dispute)
suspended - stopped for a period of time
comply - follow, obey
complied with a ruling - follow and do what a court of law tells you to do
a count - an act of breaking the law that someone is accused of
ruling against on every count - court decides that a person actually broke the law in every instance they were accused
an instance - one case, act, or event (among many)
findings, a court's findings - the facts that the court is able to establish or prove true
rulings, a court's rulings - the decision that a court makes in a legal case (which will affect what parties in the can or must do in the future)
parties, parties in a legal case - the people or companies or countries involved in a legal case
retaliation - punishing someone for damage they caused you
resume - begin again
the case turned on Y - what happened in the case would depend on Y
consistently - always done in the same way
