Analysis Under WTO Regime: "Zeroin" Practice In American Anti-dumping Investigation

In anti-dumping investigation,"zeroing"methodology is a controversial technical issue in the calculation of dumping margin. It is applied in anti-dumping proceedings by several countries, especially the United States. Meanwhile, zeroing methodology has been challenged in WTO Dispute Settlement Body (DSB) and DSB has issued reports against it. However, in consideration of lacking of efficacy of WTO adjudication and the enforcement mechanism needs to be improved, it is hard to expect those countries to change zeroing practice in the near future. Particularly, the attitude of American judicial branch demonstrates that this unfair trade practice will continue in the U.S. The only possible way to thoroughly resolve this issue is to revise WTO Anti-dumping Agreement in the Doha Round. Yet, we are unable to see any positive sign from current negotiation process.As the country that the most anti-dumping investigations have been brought against, China suffers a lot from zeroing methodology, especially from American anti-dumping practice. The reason is that the U.S. applies zeroing to original investigation in almost every anti-dumping proceeding. But till now, China has never challenged zeroing methodology in DSB, merely participated as third-party in relevant cases.The issue of zeroing is not given sufficient emphasis. The research is not systematic. In view of this, this article tries to give thorough introduction to various types of zeroing methodology and analyze the illegality of American zeroing methodology. This article is divided into three parts:Part one is a basic introduction to dumping. This part first defines relevant concepts in dumping determination, then focuses on dumping margin calculation. Each type of zeroing methodology used in the comparison of normal value and export price is discussed in this part.Part two talks about the history of American zeroing practice. First, this part introduces American zeroing practice and courts'attitudes before the Uruguay Round. Second, through a series of cases, the opinions of WTO DSB on this issue are discussed. Then, we come to the conclusion that although it has been deemed a misunderstanding of international treaties under WTO dispute settlement mechanism, zeroing methodology has been upheld by American judicial branch.Part three analyzes the illegality of American anti-dumping zeroing practice, which is the key of this article. First, this part considers the issue from the aspect of American domestic law by first introducing two relevant important American administrative legal doctrines and arguing no foundations could be found under domestic laws. Then, this part discusses the illegality of zeroing methodology under WTO regime: the article first introduces DSB standard of review of anti-dumping cases and general rule of treaty interpretation, then makes clear the treaty provisions under dispute. Based on these, this part discusses the illegality of each type of zeroing methodology under WTO legal regime through analyzing relevant provisions of GATT 1994 and Anti-dumping Agreement. In the end, this article talks about the trend of zeroing controversy in the Doha Round.