Order Code RL32810
CRS Report for Congress
Received through the CRS Web
WTO: Antidumping Issues in the Doha
Development Agenda
March 15, 2005
Vivian C. Jones
Analyst in International Trade and Finance
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

WTO: Antidumping in the Doha Development Agenda
Summary
At the November 2001 Ministerial meeting of the World Trade Organization
(WTO) in Doha, Qatar, WTO member countries launched a new round of trade talks
known as the Doha Development Agenda (DDA). One of the negotiating objectives
called for “clarifying and improving disciplines” under the WTO Antidumping and
Subsidies Agreements. Since antidumping is the most frequently used trade remedy
action worldwide, most of the discussion focused on changing ways that WTO
members administer antidumping (AD) actions.
WTO negotiations in the DDA directly involve Congress since any trade
agreement made by the United States must be implemented by legislation. In
addition, Congress has an important oversight role in trade negotiations as provided
in legislation granting presidential Trade Promotion Authority in the Trade Act of
2002 (P.L. 107-210).
The frequent use of antidumping actions by the United States and other
developed nations has come under criticism by other WTO members as being
protectionist. Many Members of Congress defend the use of U.S. antidumping
actions brought as necessary to protect U.S. firms and workers from unfair
competition. However, because the United States is also a leading target of
antidumping actions by other countries, some U.S. export-oriented firms may support
changes to the Antidumping Agreement.
The positions of major players in trade remedy talks are well-documented by
position papers circulated through the WTO Negotiating Group on Rules, and some
countries have recently called for accelerating the pace of negotiations in this area.
Most of the proposals on trade remedies focus on changing the Antidumping
Agreement, currently a somewhat ambiguous document that gives broad guidelines
for conducting AD investigations, in order to provide more specific definitions and
stricter procedures. The goal of many of the WTO members seems to be to lower the
level of antidumping duties provided per investigation and/or to provide more
restrictions on the ability of officials to grant relief to domestic industries.
The gap between the U.S. position, where there is strong support in Congress
to preserve the rights of WTO members to provide AD relief to domestic industries,
and the viewpoints of other countries appears to be wide and may be difficult to
narrow, but some countries see revision of the Antidumping Agreement and other
WTO disciplines on trade remedies as a “make or break” issue if the DDA is to
succeed.
This report examines antidumping issues in DDA negotiations by analyzing the
issue in three parts. The first provides background information and contextual
analysis for understanding why the issue is so controversial. The second section
focuses on how antidumping issues fit into the DDA, and the third section provides
a more specific overview of major reform proposals that are being considered. This
report will be updated as events warrant.

Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Background and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
WTO Antidumping Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
U.S. AD Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
International AD Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Antidumping Negotiations in Doha . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Major Issues in Negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Antidumping Duty Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Ban on Zeroing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Mandatory Lesser Duty Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
“Price Undertakings” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Proposed Changes in Injury Determinations . . . . . . . . . . . . . . . . . . . . . . . . 13
Mandatory Sunset of AD Orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Possible Effects of Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Conclusion and Options for Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
List of Figures
Figure 1. Worldwide Antidumping Initiations, 1981-2003 . . . . . . . . . . . . . . . . . 6
Figure 2. Leading Targets of Worldwide AD Initiations, 1981 - 2003 . . . . . . . . . 7
Figure 3. Combined Antidumping Initiations by WTO Member, 1981-2003 . . . 7

WTO: Antidumping in the Doha
Development Agenda
Introduction
At the November 2001 Ministerial meeting of the World Trade Organization
(WTO) in Doha, Qatar, WTO member countries launched a new round of trade talks
known as the Doha Development Agenda (DDA). One of the negotiating objectives
members agreed to address, in spite of opposition from U.S. negotiators, called for
“clarifying and improving disciplines” on trade remedies.
Trade remedies are laws used by countries to mitigate the adverse impact of
various trade practices on domestic industries and workers. Antidumping (AD) laws
provide relief to domestic industries that have suffered material injury or are
threatened with material injury resulting from imports originating in any country that
are sold in the importing market at prices shown to be less than their fair market
value (LTFV). AD laws and actions are often controversial because many trade
experts view them as protectionist. Others believe that they are an essential means
of mitigating the adverse impact of unfair trade on domestic companies, workers,
and the communities in which they are located.
Historically, multilateral negotiations on antidumping have been extremely
contentious; in fact, some analysts claim that a failure to reach consensus on the
Agreement on Implementation of Article VI of the General Agreement on Tariffs and
Trade 1994 (Antidumping Agreement) was largely responsible for delaying the
completion of the Uruguay Round negotiations by as long as two years.1 In the DDA,
a coalition of developed and developing nations known as the “Friends of
Antidumping” are pushing for reforms that many in Congress oppose and U.S.
negotiators are resisting. However, many WTO members regard trade remedy —
especially antidumping — reform as a “make or break” issue in terms of their
acceptance of any final DDA agreement. The gap between the U.S. position and that
of other countries is large and may be difficult to bridge.
Present negotiations on antidumping in the DDA are taking place within the
framework of the WTO Negotiating Group on Rules. In the initial phase of Rules
negotiations, the major issues on antidumping and the positions of interested parties
were established through position papers written by WTO members.2 Recently, some
1 Dunn, Alan M. “Antidumping.” In Stewart, Terence P., ed., The World Trade
Organization: The Multilateral Trade Framework for the 21st Century and U.S.
Implementing Legislation
, Washington, DC: American Bar Association, 1996, p. 246.
2 See World Trade Organization, Negotiating Group on Rules, Compilation of Issues and
(continued...)

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countries have indicated that they want to accelerate the pace of negotiations on
Rules and are ready to begin text-based negotiations.
This report analyzes the issue in three parts. Section one provides background
information and contextual analysis for understanding why the issue is regarded as
controversial. It briefly discusses the Antidumping Agreement, U.S. antidumping
laws and how they have worked in practice. Some U.S. stakeholders, including many
U.S. industries and workers, believe that U.S. laws are effective and should not be
changed or weakened. Others, including many foreign exporters to the U.S. market,
U.S. exporters to international markets, U.S. manufacturers dependent on lower-cost
inputs for their products, and other domestic importers of goods subject to AD
actions, want to change the allegedly arbitrary way in which they are implemented.
The second section focuses on how antidumping issues fit into the DDA. The
mandate to negotiate is explained and negotiating activity to date summarized. The
nature of the reforms being considered is described in general terms.
Section three provides a more specific overview of major reform proposals that
are being considered. Many proposals attempt to regulate the manner by which
countries assess dumping margins. Other submissions call for tightening rules or
providing more specific definitions for terminology used in the WTO Antidumping
Agreement. These proposals, if implemented, could significantly reduce the number
of permissible AD investigations and/or the amount of duty margins assessed, thus
reducing significantly the protective impact of the remedies.
Background and Analysis
“Dumping” is defined in U.S. law as the actual or likely sale of merchandise
imported into the United States at “less than its fair value” (LTFV) when these sales
cause or threaten material injury to a U.S. industry manufacturing similar goods, or
materially retard the establishment of a U.S. industry.3 This practice is condemned
in WTO rules as an unfair trade practice that can cause market disruption and injure
producers of like products in the receiving market.4 Antidumping laws are used by
the United States and many U.S. trading partners in an effort to lessen the adverse
impact of unfairly traded imports on domestic industries, producers and workers.
Trade remedy actions, particularly AD actions, continue to be a subject of
intense debate within Congress, the WTO, and the international business community.
Stakeholders in favor of preserving and strengthening AD laws include many U.S.
import-competing industries vulnerable to the effects of increased trade
liberalization. The steel and chemical industries have used antidumping measures
2 (...continued)
Proposals Identified by Participants in the Negotiating Group on Rules, Note by the
Chairman, TN/RL/W/143, August 22, 2003.
3 19 U.S.C. 1673.
4 General Agreement on Tariffs and Trade (GATT) 1994, Article VI (1).

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frequently, but smaller industries (such as honey and crawfish) have also initiated
successful AD petitions. Many in Congress have expressed a compelling interest in
ensuring that the firms and workers they represent are able to compete on a “level
playing field” in the face of increased global competition from firms that use unfair
trade practices to gain greater U.S. market share, and believe that AD laws and
actions are essential tools to that end.
Stakeholders in favor of eliminating or scaling back these actions include
domestic retailers and U.S. consuming sectors, such as the automobile or
construction industries, that import raw materials or other inputs to include in their
downstream products. U.S. exporters have also expressed support for relaxing AD
laws because they face similar actions in other countries, and could bear the
immediate effects of any trade retaliation if any U.S. laws are determined not to
conform to WTO disciplines. Many multinational corporations also favor AD reform
because they might have greater freedom to ship products at various stages of
development across national boundaries for further transformation. These
stakeholders, concerned about selling or producing goods at the lowest cost so that
their end-use goods are also competitive, often accuse users of AD action of being
protectionist and administrative officials of making arbitrary and politically
motivated decisions.
WTO Antidumping Agreement
The General Agreement on Tariffs and Trade 1994 (GATT 1994) and the
Antidumping Agreement set forth general governing principles applicable between
WTO members, including the “most-favored-nation” principle and guidelines for
market access and treatment of imported goods. Article VI of GATT 1994 authorizes
WTO members to impose AD duties in addition to other tariffs if domestic officials
find that (1) imports of a specific product are sold at less than normal value, and (2)
the imports cause or threaten injury to a domestic industry, or materially retard its
establishment.
The Antidumping Agreement clarifies and expands Article VI by laying out
guidelines for determining if dumping has occurred, identifying the “normal value”
of the targeted product, and assessing the dumping margin. The Agreement also
provides specific rules for administrative authorities responsible for conducting
injury investigations. Detailed methodology is set out for initiating anti-dumping
cases, conducting investigations, and ensuring that all interested parties are given an
opportunity to present evidence. Specific criteria are set for investigations, including
a requirement that investigations must be dropped if authorities determine that the
volume of the dumped imports is negligible (less than 3% of total product imports
from any one country, or less than 7% for investigations involving several countries).
Antidumping measures must expire five years after the date of imposition, unless an
investigation shows that ending the measure would continue to result in injury.

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According to the Antidumping Agreement, all WTO Member countries must
inform the Committee on Antidumping Practices about anti-dumping actions,
promptly and in detail, and must also report on all ongoing investigations.5
U.S. AD Laws
Although U.S. laws generally conform to the current WTO Antidumping
Agreement, some U.S. laws and investigations have been successfully challenged
through the WTO dispute settlement process. Recently, in response to an adverse
WTO ruling, Congress repealed the Antidumping Act of 1916, which provided for
criminal and civil penalties for any person importing goods in the U.S. market with
the intent of destroying a domestic industry in the United States.6 WTO dispute
settlement panels and the WTO Appellate Body have also ruled against the
Continued Dumping and Subsidy Offset Act (CDSOA), or “Byrd Amendment,”
which requires that all duties collected pursuant to antidumping and countervailing
investigations must be redistributed to qualified petitioners and interested parties that
have been injured by the subject imports.7 Due to strong congressional support for
the law, there is resistance to repealing it. It is also possible that a U.S.
administrative practice known as “zeroing” will face a WTO challenge in the near
future. This practice is discussed in a later section.
In the United States, AD investigations generally begin with the filing of a
petition by a domestic industry or representative (e.g. labor group, industry
association) alleging that certain products are being imported into the country at less
than fair value, thus causing material injury, or threat of material injury, to the
petitioners.8 Investigations are carried out by two agencies: the International Trade
Administration (ITA) of the Department of Commerce, which investigates
allegations of sales at less than fair value (LTFV); and the International Trade
Commission (ITC), which investigates injury allegations. These agencies conduct
preliminary and final investigations in a detailed administrative process with specific
time lines.9
If affirmative final determinations are made by both agencies, an “AD duty
order”imposing a duty equivalent to the “dumping margin”10 is issued for the targeted
product. This duty is intended to offset the effects of dumping by creating a “level
5 World Trade Organization. “Introduction to Antidumping in the WTO,”
[http://www.wto.org].
6 15 U.S.C. 72. The Antidumping Act of 1916 was repealed in the Miscellaneous Tariff and
Technical Corrections Act of 2004 (P.L. 108-429). Cases currently pending under the act
were permitted to go forward.
7 19 U.S.C. 1675c.
8 19 U.S.C. 1673. The ITA may also self-initiate an investigation (19 U.S.C. 1673a(a)).
9 For a more thorough discussion of U.S. antidumping laws and administrative procedures,
please see CRS Report RL32371, Trade Remedies: A Primer.
10 The “dumping margin” is the ITA-calculated percentage difference between the price (or
cost) of the good in the foreign market and the price at which it is sold in the U.S. market.

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playing field” for the domestic producer. According to current U.S. law, all duties
collected as a result of AD duty orders are distributed to the petitioners and interested
parties as provided by the CDSOA.11
U.S. law also allows the ITA to suspend an investigation at any point in favor
of an alternative agreement to: (1) eliminate completely sales at less than fair value
or to cease exports of the subject merchandise; (2) eliminate the injurious effect of
the subject merchandise or; (3) limit the volume of imports of the subject
merchandise into the United States, provided the foreign exporters agree to certain
specific conditions.12 In each case, the ITA must be satisfied that the agreement is
in the public interest and that effective monitoring by the United States is
practicable.13
All AD duty orders and suspension agreements are subject to annual review if
requested by any interested party to an investigation or deemed necessary by the
ITA.14 “Changed circumstances” reviews may also be requested at any time, but the
ITA must determine whether there is sufficient cause to conduct the review.15 During
the review process, the ITA recalculates the dumping margin for each exporter, thus
the AD duties assessed on the subject merchandise may be raised or lowered
depending on the price of sales transactions during the period of review (POR). In
a changed circumstances review, the ITC also reviews whether a revocation of the
order is likely to lead to continuation or recurrence of material injury, or whether a
suspension agreement continues to eliminate completely the injurious effects of the
imports of subject merchandise.16
“Sunset” reviews must be conducted on each AD order no later than once every
five years.17 The ITA determines whether dumping would be likely to continue or
resume if an order were to be revoked or a suspension agreement terminated, and the
ITC conducts a similar review to determine whether injury to the domestic industry
would be likely to continue or resume. If both determinations are affirmative, the
duty or suspension agreement remains in place. If either determination is negative,
the order is revoked, or the suspension agreement is terminated.18 In practice, sunset
reviews of AD orders resulted in continuations about 53% of the time, according to
11 19 U.S.C. 1675c.
12 19 U.S.C. 1673c(b) and (c).
13 19 U.S.C. 1673c(a)(2) applies to quantitative restrictions. 19 U.S.C. 1673c(d) applies to
other alternative agreements.
14 19 U.S.C. 1675(a).
15 19 U.S.C. 1675(b).
16 19 U.S.C. 1675(b)(2).
17 19 U.S.C. 1675(c).
18 19 U.S.C. 1675(d).

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ITA statistics, and several U.S. AD orders have been in effect since the mid-to-late
1970s.19
International AD Activity
Many WTO members are concerned about an apparent escalation of AD activity
worldwide, especially since the implementation of the Antidumping Agreement in
1995. This is one of the reasons that led to the pressure for including WTO
disciplines on antidumping in DDA negotiations.
Supporters of antidumping measures acknowledge that AD activity has
increased (at least prior to 2003), but also point to a marked increase in the volume
of international trade as a whole, suggesting that as overall trade increases the
frequency of unfair trading practices, such as dumping, will also have a natural
tendency to increase.20
WTO
statistics
on
worldwide
Figure 1. Worldwide Antidumping
AD activity may help illustrate the
Initiations, 1981-2003
scope and magnitude of the
400
problem. According to antidumping
statistics for 1981-2003 (see Figure
350
1), the total number of AD
300
initiations rose steadily from 1990
250
to 1993, decreased sharply in 1994
200
and 1995 and peaked again in 1999,
before reaching an all-time high of
150
366 in 2001.21 However, AD
100
activity has been declining since
50
then. In fact, on November 1, 2004,
Source: GATT/WTO
the WTO Secretariat announced
0
'82
'84
'86
'88
'90
'92
'94
'96
'98
'00
'02
that from the period of January 1,
'81
'83
'85
'87
'89
'91
'93
'95
'97
'99
'01
'03
2004 to June 30, 2004 there were 52
final AD measures implemented
(duties imposed as well as suspension agreements), as opposed to 114 during the
same period in 2003.22 The rapid decline has led some more skeptical observers to
speculate that countries are curbing their appetite for antidumping activity due to the
19 ITA investigation statistics [http://www.ia.ita.doc.gov/stats/].
20 World Trade Organization. “Basic Concepts and Principles of the Trade Remedy Rules,”
Submission of the United States TN/RL/W/27, October 22, 2002.
21 All AD statistics in this section originate from the following sources, unless otherwise
indicated: World Trade Organization. Report of the Committee on Anti-Dumping Practices
to the General Council,
2003, and Report of the Committee on Anti-Dumping Practices
under Article 16.4 of the Agreement,
various years and countries. Tables reflecting AD
activity since 1995 are available at [http://www.wto.org/english/tratop_e/adp_e/adp_e.htm].
22 World Trade Organization. “WTO Secretariat Reports Significant Decline in New Final
Antidumping Measures.”Press Release, November 1, 2004, PRESS/387,
[http://www.wto.org/english/news_e/pres04_e/pr387_e.htm].

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ongoing DDA negotiations. Since international activity seems to vary widely from
year to year, it is unclear if the trend toward fewer measures will continue.
Figure 2. Leading Targets of Worldwide AD
Initiations, 1981 - 2003
European Union
China
Japan
United States
South Korea
Taiwan
Brazil
Russia
Thailand
India
Indonesia
Romania
Ukraine
Poland
Canada
South Africa
Singapore
Mexico
Malaysia
Turkey
GATT/WTO
0
100
200
300
400
500
Figure 3. Combined Antidumping Initiations by WTO
Member, 1981-2003
United States
Australia
European Community
Canada
India
Argentina
South Africa
Mexico
Brazil
Turkey
New Zealand
Korea, Rep. of
China, P.R.
Indonesia
Peru
Egypt
Venezuela
Thailand
Colombia
Malaysia
Israel
Chile
Philippines
Poland
Trinidad and Tobago
Chinese Taipei
Latvia
Lithuania
Japan
Uruguay
Costa Rica
Jamaica
Czech Republic
Nicaragua
Pakistan
Panama
Ecuador
Paraguay
Slovenia
Guatemala
Source: GATT/WTO
0
100
200
300
400
500
600
700
800
900 1000

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Figure 2 shows the number of AD initiations by country for the same time
period. According to WTO statistics, the United States initiated the most AD
petitions (955), followed by other “traditional” users — Australia (865), European
Communities (816), Canada (488). However, developing countries and newer users
of AD action follow, including India (388), Argentina (224), South Africa (213),
Mexico (196), Brazil (178), and Turkey (135). India, for example, has had
antidumping laws in place only since 1992, when it initiated five AD investigations.
Since then, it has made frequent use of its AD law, initiating 379 cases from 1995-
2003. China, a WTO member since December 2001, had already initiated 72 AD
investigations by the end of 2003. Figure 3 illustrates the leading targets of AD
initiations from 1981 - 2003. The European Union heads this list (446), followed by
China (369), Japan (240), United States (207), South Korea (198), and Taiwan (135).
Antidumping Negotiations in Doha
When the trade ministers of WTO member nations convened at the November
2001 Ministerial of the World Trade Organization in Doha, Qatar, many countries
placed launching a new round of trade negotiations high on the agenda. Some
observers believed that a new trade round would give the world economy a much-
needed stimulus. U.S. officials wanted to negotiate expanded market access for U.S.
exporters, especially in the agriculture and service sectors.23
As a result of mounting international concern on expanding trade remedy
activity in general; about antidumping in particular, a coalition of developed and
developing WTO member countries called the “Friends of Antidumping” — a group
consisting of the European Union, Brazil, Chile, China, Colombia, Costa Rica, Hong
Kong, India, Israel, Japan, Korea, Mexico, Norway, Singapore, Switzerland,
Thailand, and Turkey — believed that any new framework for negotiations should
include talks on improving WTO trade remedy rules.
The European Union may have joined the coalition of developing countries, in
part, because it is a leading target of antidumping measures. EU trade officials
expressed concern at Doha, primarily concerning major differences among countries
in their interpretation and application of WTO rules in their domestic trade remedy
procedures.24 Many of the developing nations in the “Friends of Antidumping” group
argued that trade remedy action disproportionately affects their economies, and that
the Antidumping Agreement should require that developed nations provide some
form of “special and differential treatment” when investigating products originating
in developing nations.25
23 See CRS Report RL32060, The World Trade Organization: The Doha Development
Agenda
by Lenore Sek.
24 World Trade Organization. Negotiating Group on Rules. Submission from the European
Communities Concerning the Agreement on Implementation of Article VI of GATT 1994
(Anti-Dumping Agreement).
TN/RL/W/13, July 8, 2002. [http://docsonline.wto.org ].
25 Ibid., p. 3.

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Then-U.S. Trade Representative (USTR) Robert B. Zoellick, aware of
congressional interest in reserving the effectiveness of U.S. trade remedy laws,
initially resisted efforts to open negotiations on the Antidumping Agreement.26
However, U.S. negotiators relented when it seemed evident that the new round of
talks would not go forward without some concessions on antidumping. They were
able, however, to include language in the Doha negotiating documents that limited
radical change, and were also successful in injecting a certain amount of ambiguity
in terms of the mandate. The final language of the Doha Ministerial Declaration
regarding trade remedies read as follows:
In light of experience and of the increasing application of these instruments by
members, we agree to negotiations aimed at clarifying and improving disciplines
under the Agreements on Implementation of Article VI of the GATT 1994 and
on Subsidies and Countervailing Measures, while preserving the basic concepts,
principles and effectiveness of these Agreements and their instruments and
objectives, and taking into account the needs of developing and least-developed
participants. In the initial phase of the negotiations, participants will indicate the
provisions, including disciplines on trade distorting practices, that they seek to
clarify and improve in the subsequent phase. . .27
Ambassador Zoellick later defended the decision to compromise on negotiations
on trade remedies by stressing that the United States would push an “offensive
agenda” on trade remedies in order to address the increasing “misuse” of trade
remedy measures by other WTO Member countries against U.S. exporters.28 He also
said that since WTO dispute panels had gone against the United States in several
cases involving trade remedy cases, U.S. negotiators were especially interested in
tightening dispute panel and Appellate Body “standard of review” provisions so that
panels do not add to the obligations of, nor diminish the rights of, WTO Member
nations.29 Many congressional supporters of trade remedy laws believe that Zoellick
did not try hard enough to leave them off the table, and subsequently are concerned
about the ability of the USTR to negotiate in this area in a manner that is favorable
to their manufacturing constituents.30
26 See CRS Report RS21610, WTO: Trade Remedies in the Doha Round, for a description
of congressional activity.
27 World Trade Organization. Ministerial Declaration. WT/MIN(01)/DEC/1, November 14,
2001, paragraph 28.
28 “USTR Zoellick Says World Has Chosen Path of Hope, Openness, Development, and
Growth.” Office of the U.S. Trade Representative. Press Release, November 14, 2001.
[http://www.ustr.gov/].
29 Ibid, p. 5.
30 “Rockefeller Attacks Zoellick for Doha, Failure to Appear at Markup.” Inside U.S. Trade,
December 13, 2001. [http://www.insidetrade.com].

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Major Issues in Negotiations
The Antidumping Agreement, perhaps by design, is somewhat ambiguous.
Many countries, especially the “Friends of Antidumping,” would like to see more
specific definitions and guidelines in order to provide some type of harmony in
nations’ implementation of trade remedy laws. However, most of the proposals, if
implemented, could also lessen the ability of petitioners to obtain relief. Because the
Agreement, in essence, is designed to provide general rules for various administrative
officials in WTO Member countries to follow when calculating dumping margins,
determining injury, and granting relief, many of the proposals involve highly
technical changes that are beyond the scope of this report. However, there are some
specific discussion threads in presentations to date that can be explained in a very
general way.
It is important to note that the DDA mandate specifies that negotiations on trade
remedies are intended to “clarify and improve” the WTO Agreements rather than to
eliminate them. With this in mind, many WTO members have identified key
provisions they seek to address in future negotiations through proposals formally
submitted to the WTO Negotiating Group on Rules.31 No active negotiations have
actually occurred on trade remedies to date, and many observers speculate that talks
on these controversial issues will actually begin toward the end of the round.
Because the United States is a large user, but also a large target, of AD actions,
there is a trade-off between the costs and benefits of modifications to the
Antidumping Agreement. The United States could benefit from some of the
suggested modifications, especially if they enhance the transparency of trade remedy
procedures in other WTO Member countries. However, other proposals could raise
the threshold for domestic petitioners’ ability to obtain relief, lower calculated
dumping margin levels, or mandatorily limit the duration of antidumping orders.
Many of the suggested changes to the Antidumping Agreement are highly
technical in nature; therefore, this discussion of DDA negotiations on antidumping
focuses on suggested changes (1) for which there seems to be broad support among
WTO members, and (2) which could potentially result in significant amendment to
U.S. laws or administrative procedures. Several of these recommendations could
affect ways in which authorities calculate dumping margins and determine injury.
Another proposal seeks mandatory termination of AD orders after a specified period.
Antidumping Duty Assessment
Many WTO members believe that the methodology used by some countries to
calculate dumping margins leads to highly inflated duties that are disproportionate
to the amount needed to mitigate the injury to the domestic industry, as well as the
level of dumping practiced by the exporters. Some Members have particularly
criticized U.S. methodology, where ITA-calculated dumping margins typically
31 World Trade Organization. Negotiating Group on Rules. Compilation of Issues and
Proposals Identified by Participants in the Negotiating Group on Rules.
Note by the
Chairman. August 22, 2003, TN/RL/W/143, [http://docsonline.wto.org].

CRS-11
average between 60 and 70 percent.32 Consequently, revisions in the Antidumping
Agreement that could lower dumping margins are expected to be a major focus in
the DDA.
Some proposals that have drawn broad support include a ban on “zeroing,” a
mandatory “lesser duty” rule, and increased use of “price undertakings.” Some of the
proposed changes would affect primarily ITA administrative rules for calculating
dumping margins. However, other proposals in this area may require amendments
to U.S. antidumping law.
Ban on Zeroing. In U.S. law, AD orders imposed on targeted merchandise
must be equal to the dumping margin or “the amount by which the normal value
exceeds the export price or constructed export price of the subject merchandise.”33
The ITA typically calculates the margin by first identifying, to the extent possible,
all U.S. transactions, sale prices, and levels of trade for each model or type of
targeted merchandise sold by each company in the exporting country. These model
types are then aggregated into a subcategories, known as “averaging groups,” which
are used to calculate the “weighted average export price.” The export prices for each
subgroup are then compared to the corresponding agency-calculated “weighted
average normal value.” Finally, the results of all of these comparisons are added up
to establish the overall dumping margin of the targeted product.34
When authorities add up the dumping margins of each of the subgroups to
establish an overall dumping margin for the subject merchandise, they sometimes
encounter negative margins in a subgroup, an indicator that the items in that category
are not being dumped. However, rather than including the negative margin in their
calculations, which might result in a lower overall dumping margin, ITA officials
factor in the results of that subgroup as a zero.35 Officials use a similar practice when
re-calculating dumping margins in administrative reviews of AD orders or
suspension agreements. One justification for the zeroing practice is that the dumping
margin could be skewed if, when determining the weighted average dumping margin,
the subgroup that has the negative dumping margin represents a substantial
percentage of export sales.
The U.S. practice is currently being challenged in the WTO on a number of
fronts. On February 6, 2004, the European Union formally requested the
establishment of a dispute settlement panel on zeroing, citing 31 U.S. AD cases
targeting products of the EU. The EU claims that in these cases the dumping margin
32 Prusa, Thomas J. “Anticompetitive Effects of Antidumping.” Presentation at American
Enterprise Institute, March 18, 2004.
33 19 U.S.C. 1677 (35)(A).
34 See Department of Commerce, Import Administration. Antidumping Manual, Chapter 6,
“Fair Value Comparisons.” 1997 edition. [http://ia.ita.doc.gov/admanual/index.html].
35 19 U.S.C. 1677f-1(d)(A)(i) and (ii).

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would have been minimal, or even negative, if U.S. officials had not used zeroing.
A panel was established on March 19, 2004.36
On November 24, 2004, Japan requested consultations with the United States
on zeroing, citing 15 cases that the practice was used when calculating dumping
margins on Japanese merchandise.37 Mexico requested consultations on zeroing on
January 10, 2005, as it related specifically to a dumping determination on stainless
steel products.38 A dispute settlement panel has been established on one other
complaint by Mexico, involving U.S. zeroing practices on oil country tubular goods
from Mexico.39 On December 10, 2004, Thailand also requested WTO consultations
on zeroing, challenging use of U.S. practice when establishing provisional duties on
shrimp exports.40
Since the European Union’s practice of zeroing has already been found to
violate the Antidumping Agreement in a dispute settlement case brought by India,
many observers speculate that any dispute proceeding against the United States on
the practice will produce a similar result.41 Therefore, in order to come in compliance
with U.S. obligations, the ITA may have to abandon the practice even before the
DDA is concluded.
The U.S. practice of zeroing is neither required, nor prohibited, by U.S. law;
therefore it is not clear if congressional action would be required if the United States
loses one of these disputes or if the DDA changes the rules.42
36 World Trade Organization. Dispute Settlement Body. United States — Laws, Regulations,
and Methodology for Calculating Dumping Margins (“Zeroing”).
Request for the
establishment of a panel by the European Communities, WT/DS294/7, February 6, 2004.
Available at [http://docsonline.wto.org].
37 World Trade Organization. Dispute Settlement Body. United States — Measures
Relating to Zeroing and Sunset Reviews.
Request for Consultations by Japan, WT/DS322/1,
G/L/720, G/ADP/D58/1, November 29, 2004.
38 World Trade Organization. Dispute Settlement Body. United States — Anti-dumping
Determination Regarding Stainless Steel from Mexico.
Request for Consultations by
Mexico, WT/DS325/1, G/L/727, G/ADP/D60/1, January 10, 2005.
39 World Trade Organization. United States — Anti-dumping Measures on Oil Country
Tubular Goods from Mexico
. Request for the Establishment of a Panel by Mexico.
WT/DS282/2, February 26, 2003. World Trade Organization. United States — Anti-
Dumping Determinations Regarding Stainless Steel from Mexico.
Request for Consultations
by Mexico WT/DS325/1, January 10, 2005.
40 World Trade Organization. Dispute Settlement Body. United States — Provisional Anti-
Dumping Measures on Shrimp from Thailand.
WT/DS324/1, G/L/726, G/ADP/D59/1,
December 14, 2004.
41 World Trade Organization. Appellate Body. European Communities — Anti-Dumping
Duties on Imports of Cotton-Type Bed Linen from India,
WT/DS141/AB/R, March 1, 2001.
42 See Serampore Industries Pvt. Ltd. v. U.S. Department of Commerce, 696 F. Supp. 665
(1988).

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Mandatory Lesser Duty Rule. Article 9.1 of the Antidumping Agreement
encourages the imposition of an AD duty lower than the full dumping margin if
investigating authorities determine that the lesser amount is sufficient to offset the
injury suffered or threatened to the domestic industry. Many WTO members favor
amending the Antidumping Agreement to require a mandatory, rather than
discretionary, “lesser duty rule.” Developing countries are especially interested in
seeing a mandatory rule applied to exports from their countries, and have proposed
this measure as part of a “special and differential treatment” package of trade
concessions offered by developed nations to developing countries.43 There is
currently no “lesser duty rule” in U.S. law or practice, and enactment of a mandatory
rule might require congressional action.
“Price Undertakings”. Article 8 of the Antidumping Agreement allows the
use of “voluntary undertakings from any exporter to revise its prices or to cease
exports to the area in question at dumped prices” provided that investigating
authorities are satisfied that the injurious effect of the dumping is eliminated. Many
WTO members favor increased use of “price undertakings,” because they believe that
the practice is less damaging to exporters, while also mitigating the injury to
domestic producers.44 Some developing countries favor mandatory use of price
undertakings by developed country members in AD cases involving developing countries.
U.S. antidumping law allows for similar alternative arrangements, known in
U.S. law as suspension agreements,45 but in practice, the ITA does not use them very
often. At present, there are only six U.S. suspension agreements and one quantitative
restriction agreement in place, in comparison to more than 260 active AD orders.46
Proposed Changes in Injury Determinations
Another major focus of proposals for amending the Antidumping Agreement is
redefining and streamlining the methodology by which administrative authorities
determine injury. Some WTO members believe that the guidelines and definitions
in the Agreement are too subjective and that procedures lack transparency in many
countries.47 Some proposals in this area involve designing new rules that provide
more precise guidance or objective criteria when making injury determinations, while
others favor more precise definitions for the terms in Agreement such as “material
injury,” “material retardation,” or “threat of material injury.” Some negotiators
believe that factors other than dumping are often to blame for industry declines and
43 World Trade Organization. Negotiating Group on Rules. Note by the Chairman.
Compilation of Issues and Proposals Identified by Participants in the Negotiating Group
on Rules,
TN/RL/W/143, August 22, 2003, p. 49.
44 Ibid., page 46.
45 See 19 U.S.C. 1671c.
46 ITA statistics [http://www.ia.ita.doc.gov/stats/]. Quantitative restriction agreement is on
15 steel products from Russia. See also CRS Report RL32371, Trade Remedies: A Primer.
47 See World Trade Organization. Negotiating Group on Rules. Compilation of Issues and
Proposals Identified by Participants in the Negotiating Group on Rules.
Note by the
Chairman. August 22, 2003, TN/RL/W/143, [http://docsonline.wto.org], pp. 15-20.

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consequently favor objective criteria for establishing the existence of a clear and
substantial link to dumping before determining injury.48
Mandatory Sunset of AD Orders
The current Antidumping Agreement specifies that each antidumping order must
be terminated after five years unless authorities determine in a review that its
expiration would be likely to lead to a recurrence of dumping and subsequent injury
to the domestic producer.
Some WTO members are critical of the use of sunset and administrative reviews
that determine if relief is still needed. In particular, many have complained that U.S.
authorities base sunset review determinations inordinately on submissions by the
domestic industry. They claim that, consequently, U.S. AD orders are likely to
remain in place as long as the domestic industry opposes their removal.49
There seems to be strong support among WTO members for a mandatory
termination of AD orders within five years. Other Members favor a more moderate
approach that would list specific circumstances or definitive factors that authorities
must consider before extending AD orders. Others criticize the length of time that
sunset review procedures take to complete and favor a mandatory twelve- month time
limit.50
Possible Effects of Changes
Most of the proposed changes in the Antidumping Agreement, if adopted, would
further restrict the ability of all WTO members to grant relief to import-competing
industries. Import-competing industries in the United States that face adverse effects
from dumping may find it more difficult to obtain relief, could have lower dumping
margins assessed on targeted merchandise, or could be authorized to receive relief
for a shorter time period. Other countries would face the same restrictions, however,
which could benefit U.S. exporters. U.S. consuming industries, and ultimately
consumers, could also benefit.
More specifically, proposals to change dumping margin calculations likely
would require changes in the way in which the ITA calculates the level of relief that
48 World Trade Organization. Negotiating Group on Rules. Antidumping: Illustrative Major
Issues.
Submission by Brazil, Chile, Colombia, Costa Rica, Hong Kong, China, Israel,
Japan, Korea, Mexico, Norway, Singapore, Switzerland, Thailand, and Turkey. April 26,
2002, p. 3.
49 One representative example of this view is World Trade Organization. Negotiating Group
on Rules. “Proposal on Reviews.” Paper from Brazil; Chile; Colombia; Costa Rica; Hong
Kong; China; Israel; Japan; Korea; Norway; Singapore; Switzerland; the Separate Customs
Territory of Taiwan, Penghu, Kinmen and Matsu; and Thailand. TN/RL/W/83, April 25,
2003 [http://docsonline.wto.org].
50 World Trade Organization. Negotiating Group on Rules. Compilation of Issues and
Proposals Identified by Participants in the Negotiating Group on Rules.
Note by the
Chairman. August 22, 2003, TN/RL/W/143, pp. 58, 143 [http://docsonline.wto.org ].

CRS-15
domestic companies will gain from AD action. Most of these changes can be
accomplished administratively, via regulations and procedural changes. However,
legislation may be necessary to enact some of the proposals, at least for the sake of
greater official transparency. Lower dumping margins would, in turn, reduce the
amount of CDSOA disbursements that U.S. petitioners and interested parties receive
as the result of AD action.
Suggestions for changes in procedures for determining injury could result in
fewer changes to U.S. laws and administrative procedures (which already provide
considerable quantitative guidance, narrow definitions, and specific timetables) than
they would in other WTO members. U.S. exporters might benefit from enhanced
transparency in AD investigations in receiving markets, while U.S. industries seeking
AD action might be only minimally affected. However, since the overall objective
of many WTO members seems to be to restrict the ability of domestic industries in
the importing countries to receive relief, it is still possible that modifications in this
area could lead to changes that could diminish the use and effectiveness of AD
actions.
Proposals for modifying the duration of AD orders, such as requiring mandatory
sunset after five years, could have a significant effect on U.S. domestic industries.
The United States currently has 192 AD orders51 that have been in effect longer than
five years (the oldest, on polychloroprene rubber from Japan dates from 1973).
Statistics on five-year reviews conducted from January 2000 to January 2005 indicate
in the 116 reviews initiated during the period, the ITA and ITC decided to revoke 37
AD orders, continued 52 orders, and an additional 27 investigations are still
pending.52 These statistics indicate that a number of U.S. AD orders do continue in
place beyond the five-year period. Therefore, adoption of a mandatory five-year
revocation of AD orders could have a substantial impact on U.S. trade remedy policy,
as well as on industries that have benefitted from the protection of these orders.
Conclusion and Options for Congress
When Congress granted presidential Trade Promotion Authority (TPA) in 2002
(P.L. 107-210), it agreed to consider legislation to implement a trade agreement
under special legislative procedures that limit debate and allow no amendment.
Therefore, any negotiated WTO agreement is subject to an “up or down” vote in both
Houses.
However, Congress also gave itself considerable oversight authority over trade
negotiations by requiring the President and other executive agencies (particularly the
USTR) to consult with Congress, to provide congressional committees with regular,
detailed briefings on the status of negotiations, and to coordinate closely with a
Congressional Oversight Group consisting of chairmen, ranking members, and other
51 ITC statistics, [http://www.usitc.gov/ trade_remedy/731_ad_701_cvd/index.htm].
52 Ibid.

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representatives from the House Ways and Means and Senate Finance committees.53
Since many members were particularly concerned about modifications to the
Antidumping Agreement, the TPA approval legislation required the President to
report within 180 days prior to acceptance of a trade agreement if any of the
proposals could require amendments to trade remedy laws.54 The law also provided
specific language for a procedural resolution of disapproval to be introduced in either
House if Congress determined that the proposed changes to the trade remedy laws in
any agreement are inconsistent with U.S. negotiating objectives on trade remedies.55
Although the disapproval resolution would not be binding on the President or on the
USTR, such a resolution, if passed, would send a clear message that Congress resists
any modifications to the WTO Agreements that would weaken U.S. trade remedy
laws.
It should be noted that TPA expires on June 1, 2005, although an additional
two-year extension is possible if the President submits such a request and the
Congress does not disapprove. Although almost all observers expect the President
to receive the extension, some believe that the TPA extension could be debated in
one or both Houses some time this spring.56 It is possible that DDA negotiations in
general, and antidumping issues in particular, will be one focus of this discussion.
This debate, along with debate on a resolution of disapproval on WTO membership
that is also expected to come up in the 109th Congress, are opportunities for
Members concerned with antidumping issues to voice those concerns on the floor.
The United States has already been found to be in violation of its WTO
obligations with regard to the CDSOA, and it is anticipated that the WTO challenge
on zeroing will result in a similar determination. Therefore, some observers claim
that it might be advantageous for the United States to concede on these issues in
DDA negotiations, especially if by doing so U.S. negotiators can avoid other changes
to the Agreement that might affect U.S. trade remedy laws.
Currently, the gap between the U.S. position on antidumping and that of our
WTO trading partners appears to be very wide and may be difficult to narrow.
However, trade negotiators from all countries must weigh concessions made against
gains in other areas in the WTO negotiations.
53 19 U.S.C. 3807. See CRS Report RL31974, Trade Agreements: Requirements for
Presidential Consultations, Notices, and Reports to Congress Regarding Negotiations
, by
Vladimir Pregelj.
54 19 U.S.C. 3804 (d)(3)(A).
55 19 U.S.C. 3804(d)(3)(C).
56 Meeting of the Washington International Trade Association.”2005 Congressional Trade
Agenda.” Remarks of Everett Eissenstatt, Brian Pomper, Angela Ellard, and Tim Reif,
January 26, 2005.