Tuesday, October 17, 2006

India to contest US duty on shrimps

US has imposed anti-dumping action which includes imposition of 9.45% anti-dumping duty on Indian shrimps and the requirement to furnish a continuous bond based on the anticipated anti-dumping duties for the next year. The provision requires an exporter to furnish dollar bond for the estimated anti-dumping duties on future exports for next year in addition to duties on present exports, it is monetarily devastating for the Indian exporters.

This is the second attempt made by US to put barriers on shrimp imports. In 1995, it tried to ban all shrimp imports except ones having a certificate signed by a delegated Indian government authority stating that the shrimps were caught in a way so as not to endanger sea turtles. The move was declared discriminatory and arbitrary by a WTO panel and the US was made to revoke the measure.

India and EU join hands in this issue:
US calculates the margin of dumping by comparing the average normal value of the investigated products and individual export prices. When adding up the comparisons to determine the total amount or margin of dumping of the product, it puts at zero any negative amounts of dumping (hence the name zeroing). As a result, the US calculates a margin of dumping and collects an amount of anti-dumping duty in excess of the actual margin of dumping practiced by the companies concerned.

The EU pointed out to WTO that on an earlier occasion the US’ use of zeroing in its administrative reviews was held by the WTO’s Appellate Body to be inconsistent with the antidumping agreement of the WTO. India, Thailand, Brazil and Japan have decided to back the EU argument.