Analysis on Structural Issues of Targeted Dumping: Focusing on US - Washing Machines (DS464) Case

Abstract

In the Anti-Dumping Agreement (ADA) of the WTO, the margin of dumping is normally established by comparison of weighted-average normal value and weighted-average export price or by comparison of normal value and export price on a transaction-to-transaction basis. If targeted dumping occurs, the ADA permits comparison of weighted-average normal value and prices of individual export transactions, namely, asymmetric comparison methodology. Zeroing, which refers to the method of treatment by which any negative dumping margin set to zero in price comparison, has been repeatedly prohibited by the WTO jurisprudence. However, it is restricted to normal symmetric comparison methodologies, thereby providing no obligation to prohibit zeroing under targeted dumping. As a result, the US analysis of targeted dumping in many antidumping investigations currently raises new issues in terms of interpretation of targeted dumping provision and the possibility of zeroing. Based on this understanding, this paper analyzed structural issues of the ii targeted dumping provision. It understood the background and the intent in nature of the targeted dumping provision by reviewing the historical development of the provision. Then, while summarizing the evolution of laws and regulations for targeted dumping in the United States, it studies the USs approach to its analysis of targeted dumping in the Washers original investigation and its reviews. Finally, this paper presented the Panels findings of the US – Washing Machines case and analyzed structural problems of targeted dumping from both legal and practical perspectives. Despite that the Panel in US – Washing Machines provides major implications in interpreting and understanding the provision, the targeted dumping provision could be abused beyond its original intent due to its inherent lack of specificity and detail for targeted dumping. The Panels incoherent findings on two separate zeroing issues are found to be technical and textual flaws of the reasoning. Furthermore, they imply the possibility that can be opposed to the provisions own intent and function, considering the jurisprudence of the WTO and the historical development of the provision. This papers analysis on structural problems of the targeted dumping provision heralds both two possibilities: one pertains to the practical change of investigating authorities by allowing some form of zeroing which have been firmly disallowed, the other is the nullity of the provision by outright prohibition of zeroing. In conclusion, this paper provides suggestions in order for the provision to function properly based on its intent.