Indian shrimp exporters to the US are hoping to get out of the anti-dumping duty net. In a notification dated February 14, the International Trade Administration coming under the US Department of Commerce said that they will be doing away with zeroing methodology on imports. This, the Seafood Exporters Association of India (SEAI) said, could be first step in getting out of the US anti-dumping duty for Indian shrimp exports.
The US Department of Commerce's move comes in the wake of several adverse rulings from the World Trade Organisation. Countries including Argentina, Brazil, Canada, Ecuador, EU, Japan, Mexico, South Korea and Thailand had taken the process of zeroing to the WTO and were relieved of the need to pay anti-dumping duty for their exports to the US. The Government of India was yet to take the issue to the WTO and Indian shrimp exporters had been paying anti-dumping duties on their shrimp consignments all this while, SEAI sources said.
Zeroing is the practice under which a very small percentage of the country's exports are sold at sub-fair value prices because of some extraneous consideration or other - often under distress conditions. Under the previous practice, the US Customs used to zero in on these consignments and charge all consignments from that exporter with anti-dumping duty. This practice was deemed unfair by the WTO and countries which had approached it earlier were granted relief.
In earlier judgments, the WTO had ruled that the US was violating global trade rules in using its controversial “zeroing” method to impose anti-dumping tariffs on shrimp from Vietnam. The decision by a three-member panel of WTO was one among several such rulings in which zeroing had been found illegal under WTO agreement. The panel said the US had acted inconsistently with provisions of the Anti-Dumping Agreement and the GATT and said the US should bring its calculation method in line with the two agreements.
Now the US Department of Commerce has recommended revocation of the practice, SEAI said. They said that India would have got relief earlier if the Government had taken the matter to the WTO. Successive administrative review of Indian shrimp imports to the US was found to carry sub-minimus status; the anti-dumping duty level would be 0.5 per cent or less. Indian shrimp exports to the US would not have carried the anti-dumping duty burden in the absence of zeroing, SEAI sources said.
But for the current move of the US Department of Commerce to abide the WTO ruling, India would have had to pay anti-dumping until March 2014 when the results of the Seventh Administrative Review would have been published, SEAI said. We are currently paying anti-dumping duty of 1.69 per cent on shrimp exports to the US.