Seattle— Jonathan Train, president, Alliance for Free Choice and Jobs in Flooring (AFCJF), said, although the organization has not yet received the text of the allegations made to the Department of Commerce (DOC) about “targeted dumping,” certain things are clear:
- The Petitioners are alleging “targeted dumping” as a backdoor loophole to permit the DOC to use the discredited “zeroing” methodology that is otherwise forbidden. Several WTO rulings have explicitly declared the US practice of “zeroing” to be illegal.
- “Zeroing” is the previous methodology the DOC used that does not give a foreign company credit for non-dumped sales in their dumping calculation and instead “zeros” out non-dumped sales. Under this practice, now unlawful under the WTO, Commerce calculates the margin of dumping based only on the dumped sales, ignoring the non-“dumped sales” and excluding “non-dumped sales” from its averages. Thus, if a Chinese company on an individual transaction is calculated to have a negative 10% dumping margin and another individual transaction a positive 10% dumping margin, the average dumping margin is not 0 but 5%. Commerce, in effect, zeroes out the negative dumping margin.
- In attempts to evade the WTO’s direct prohibition on “zeroing,” petitioners in new antidumping cases have started to allege what they call “targeted dumping.” Targeted dumping means that an exporter is accused of not dumping to all of their customers or not during all time periods, but is instead practicing limited or “targeted” dumping to a specific region in the United States, a specific time period, or specific customers. If the DOC agrees with the allegations, it can use a methodology of comparing a calculated cost of production for the Chinese companies to prices for individual sales transactions without giving Chinese companies credit for negative dumping margins. This “zeroing” out those non-dumped sales has the effect of inflating the antidumping margin.
- AFCJF notes that under U.S. law, the DOC has discretion in how it calculates the amount of dumping or “margin” of dumping, including whether or not to accept allegations of “targeted dumping.” The group will engage with the Commerce Department on this matter to assist them in employing the proper discretion.
More information regarding this case is available at afcjf.com.