Another like minded group is emerging within the WTO. This time it is against   legitimizing the practice of ‘zeroing’. India and fifteen others have joined forces to defeat an attempt made by the World Trade Organisa­tion (WTO)'s committee on rules to legitimize a process called zeroing. The practice of zeroing will al­low the US to impose high anti-dumping duties on oth­er countries. Many LDCs argue that zeroing will ignite neo-protectionism.

 The countries against this practice submitted a joint repre­sentation to the WTO.  The coalition against the zeroing includes Brazil, China, Japan, Hong Kong, New Zealand, Norway etc.

 The dumping margin is the difference between the normal price of a product in the market of the exporting country and the export price. According to the US, the margin gets inflated through the process of zeroing. As a result, the antidumping duties imposed on the exporter also become higher. Previously, the WTO’s Appellate Body has struck down   applica­tions of zeroing methodology by the EU and the US. But the Appellate body, itself has mentioned that zeroing is relevant in several occasions and this initiated the attempts of legitimization by the US and the EU. 

 The US move for zeroing is aimed especially against the surging Chinese manufacturing exports. The increasing imports from China have widened the trade deficits continuously in bilateral trade besides job losses in the US.

Tags : imf,wto,zeroing