WTO top court again condemns U.S. dumping measure

GENEVA (Reuters) - The World Trade Organization’s top court backed the European Union on Wednesday in its challenge of a U.S. method for dealing with unfairly priced imports, confirming a series of previous rulings.

The European Union launched the appeal even though it won the original case in October, because the original panel refused to rule on some instances challenged by Brussels. The United States subsequently also appealed.

“Given the repeated WTO findings against the use of zeroing by the U.S., the (European) Commission hopes that the U.S. will abandon this practice and fall into line with other WTO members,” EU trade spokesman Peter Power said in a statement.

An official with the U.S. Trade Representative’s Office said the United States was “highly disappointed” with many points of the ruling, but also noted the panel did not accept all the European Union’s claims in the appeal.

“The United States has previously expressed its concerns about the Appellate Body’s findings on zeroing in statements made to the WTO in ... other disputes. We will continue to consult with members of Congress and interested members of the public as we move forward with next steps,” the U.S. trade official said.

The case had attracted attention as an example of a growing rift between the WTO’s dispute panels and its Appellate Body over the extent to which zeroing can be permitted under international trade rules.

With the economic crisis fueling fears of protectionism that could deepen the world’s recession, trade remedies such as anti-dumping measures to tackle cheap imports are coming under added scrutiny by governments and trade lawyers.

In a 166-page report, the Appellate Body overturned many reservations of the original dispute panel, and recommended the United States bring the measures into line with trade law.

International trade rules allow countries to impose duties on imports that are sold for less than they cost at home, if they are found to damage businesses in the importing country.

The anti-dumping duties are based on the difference between the price in the exporting and importing markets.

The United States ignores, or treats as zero, examples where the price is actually higher in the United States than in the exporting country. Critics say that artificially inflates the anti-dumping duty, putting up a higher barrier to trade.

The present case, launched in October 2006, involves U.S. anti-dumping measures against imports of European ball bearings, steel products, pasta and chemicals.

The United States now accepts that zeroing is inadmissible in new anti-dumping investigations, and did not contest EU arguments involving investigations into imports of chemicals from Finland, Netherlands, Spain and Sweden.

But it argues that zeroing should be allowed in reviews of its existing anti-dumping measures, and is pushing in the WTO’s Doha round to have zeroing explicitly recognized as permissible.

(For the full appellate body report, click on: http:/ )

Editing by Elizabeth Piper and Peter Cooney