US Lose Anti-Dumping Battle

Thailand took their dispute over measures preventing frozen warm water prawns entering the US to the WTO Disputes Panel in 2006.

They were supported in their claim by Brazil, Chile, China, the European Communities, India, Japan, Korea, Mexico and Viet Nam , who reserved their rights to participate in the Panel proceedings as third parties.

The dispute concerned the use of "zeroing" and the application of the enhanced continuous bond requirement (EBR), by the United States on certain frozen warm water shrimp imported from Thailand.

The first measure at issue was the imposition of anti-dumping duties on imports of shrimp from Thailand.

In January 2004, the United States initiated an anti-dumping investigation of certain frozen and canned warm water shrimp imported from Thailand, Brazil, China, Ecuador, India, and Viet Nam. In July that year, the US Department of Commerce preliminarily determined that certain frozen and canned warm water shrimp from Thailand were being sold at less than fair value to the United States and imposed anti-dumping duties on the prawns.

However, now the WTO Disputes panel has upheld Thailand's claims that the application of the EBR to subject shrimp from Thailand is inconsistent with the Anti-Dumping Agreement, and they rejected the US argument that the application of the EBR was justified under GATT 1994.

" We further uphold Thailand's claim that the United States acted inconsistently with Article 2.4.2 of the Anti-Dumping Agreement by using zeroing to calculate margins of dumping in respect of the Anti-Dumping Measure," the panel found.

"We conclude that to the extent the United States has acted inconsistently with the provisions of the Anti-Dumping Agreement and the GATT 1994, it has nullified or impaired benefits accruing to Thailand.

"We therefore recommend that the United States bring its measures into conformity with its obligations under the Anti-Dumping Agreement and the GATT 1994," the panel said.

Now the measures have been lifted shrimp exporters in the affected countries believe markets will reopen.

Reports from India indicate that 71 companies that had responded to a US Department of Commerce questionnaire will now be eligible to the new duties, which have been cut from 7.22 per cent to 1.09 per cent.