WTO to adopt dumping report, retaliation on U.S. looms

By Jonathan Lynn

GENEVA (Reuters) - The World Trade Organization is due on August 31 to adopt a ruling by its top court condemning U.S. anti-dumping measures, allowing Japan to seek retaliation against Washington, a WTO agenda showed on Friday.

The move is one of several under which various U.S. trade policies are coming under pressure at the end of the month.

The WTO's Appellate Body rejected a U.S. appeal on Tuesday and upheld earlier rulings in favor of Japan condemning zeroing, a controversial U.S. method of calculating duties on imports sold for less than they cost at home.

Under WTO rules an appeal ruling must be adopted within 30 days. Since this was the final ruling in the case launched in 2004, Japan will now be able to request compensation.

Japan had previously said it wanted permission to impose up to $248.5 million in annual sanctions because of the case, which originally targeted imports of Japanese ball bearings.

The two sides had sought WTO arbitration over the amount of compensation after the United States questioned the Japanese figure, but they suspended it pending the final rulings.

The August 31 meeting of the WTO's Dispute Settlement Body will also hear a request by Brazil for a panel to examine U.S. zeroing on imports of orange juice.

Brazil, the world's largest exporter of orange juice, is requesting the panel after consultations with the United States under a dispute it launched in December last year failed to resolve the issue.

WTO courts have repeatedly condemned zeroing, and the United States is now the only one of the WTO's 153 members to use it.

Anti-dumping duties are based on comparisons of costs, but in zeroing the U.S. authorities ignore examples where the imported goods actually cost more than they do in the exporting country, which critics say unfairly inflates the duties.

Under WTO rules, the defendant in a dispute can reject the first request for a panel. If Washington does that, Brazil can put it on the agenda of the next meeting, set for September 25, when it would go ahead.

Another dispute between Brazil and the United States will come to a head on August 31 when WTO arbitrators announce compensation for Brazil in its dispute with Washington over U.S. cotton subsidies.

Brazil has asked for about $2.5 billion a year in compensation, in which it could "cross-retaliate" by raising tariffs on other goods or lifting copyright on intellectual property like films or software as its imports of U.S. cotton are negligible. The United States says Brazil is only entitled to about $30 million a year.

The August 31 meeting will also set up a panel requested by Canada to examine its dispute over South Korea's ban on imports of Canadian beef, imposed after a series of cases of bovine spongiform encephalopathy (BSE), or "mad cow disease," in Canada.

One item not on the agenda of the August 31 meeting is last week's ruling by a dispute panel against China's regime for importing and distributing audiovisual material.