Escolar Documentos
Profissional Documentos
Cultura Documentos
Daniel Olds
J.D., University of Georgia, 2013; B.A., The University of Texas at Austin, 2010.
1
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
II.
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
A. The Uruguay Rounds Agreement and its U.S. Implementing Legislation the
Uruguay Round Agreements Act (URAA)
...............................................................7
B. The Antidumping Issue and the U.S. Methodology of Zeroing in Calculating
Antidumping Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
C. The U.S. System of Duty Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
D. WTO Jurisprudence on Zeroing and the Three Cases at Issue . . . . . . . . . . . . . . 17
E. The Department of Commerces Initial Proposal and Surrounding Issues . . . . . 19
III.
The Legal Problem: Does Section 129(c)(1) Allow for Retroactive Application of
Alternative Methodologies? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
A. The Legal Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
B. The URAAs Statement of Administrative Action Simple Legislative History or
Binding Domestic Law? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
C. Analysis Under the Chevron Doctrine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
1.Step One of the Chevron Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
2.Step Two of the Chevron Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
D. Recent Developments: The Consequences of Dongbu Steel. . . . . . . . . . . . . . . . 44
IV.
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46
Introduction
Over the last few years, the Appellate Body of the World Trade Organization (WTO) has
ruled that one of the United States methodologies for calculating antidumping (AD) duties,
known as zeroing, violates relevant WTO member treaty obligations.1 The zeroing
methodology is a practice in which [the Department of] Commerce ignores negative dumping
margins - instances when no dumping is found - when comparing export prices and normal
prices of a given product to calculate an overall dumping margin. 2 After a series of adverse
rulings with regard to its zeroing practices at the WTO, the United States finally began taking the
first steps toward complying with the WTOs rulings by convincing the European Union to
suspend arbitration proceedings to determine the retaliation to which it was entitled against the
United States for not complying with the rulings.3 The United States announced that it had
reached a similar deal with Japan a few months later.4
1
Body Report, US Zeroing (Japan), WT/DS322/AB/R (Jan. 9, 2007); Appellate Body Report,
US Zeroing (EC), WT/DS294/AB/R (April 18, 2006); Appellate Body Report, US Stainless
Steel (Mexico), WT/DS344/AB/R (April 30, 2008).
2
Commerce Still Mulling Whether it Will Use Zeroing in Some AD Reviews, Inside US Trade,
Jan. 7, 2011 WLNR 396943. For a good example of the zeroing methodology, see Brief for
Petitioners at 8 Koyo Seiko Co., Ltd. v. United States, 543 U.S. 976 (2004) (No. 04-87). See
also infra note 37 for a more qualitative example of zeroing.
3
U.S., EU Reach Deal to Suspend Arbitration Proceedings in Zeroing Case, Inside US Trade,
Informal Deadline Looms for U.S. to Start Complying with Zeroing Case, Inside US Trade,
Assessment Rate in Certain Antidumping Proceedings, 75 Fed. Reg. 81,533 (Dec. 28, 2010)
(proposed rule).
6
U.S. Still Examining Whether It Will Adjust Past Reviews in Zeroing Cases, Inside US Trade,
Id.
See Commerce Still Mulling Whether it Will Use Zeroing in Some AD Reviews, supra note 2
Uruguay Round Agreements Act, Pub. L. No. 103-465, 108 Stat. 4808 (1994).
10
U.S. Still Examining Whether It Will Adjust Past Reviews in Zeroing Cases, supra note 6.
11
Id.
12
See U.S., EU Reach Deal to Suspend Arbitration Proceedings in Zeroing Case, supra note 3
(noting Commerce Undersecretary for International Trade Francisco Sanchez signaled last week
that the U.S. would likely not need legislation to comply with the decision. In a Sept. 3
5
interview, he said he did not anticipate that the U.S. method of compliance would require
legislation . . .).
6
II.
Background
A. The Uruguay Round Agreements and its U.S. Implementing Legislation the
Uruguay Round Agreements Act (URAA)
13
Douglas A. Irwin, Petros C. Mavroidis & Alan O. Sykes, The Genesis of the GATT 197
(2008).
14
John H. Jackson, The Jurisprudence of GATT and the WTO: Insights on Treaty Law
Id.
16
Id. at 373.
17
Id. at 375.
8
Id.
19
Id. at 375-376. The DSU includes both the formation of panels when disputes arise as well as
See id. at 377-379, 391-394 (detailing Congressional procedure for voting on trade
agreements, why the U.S. needed implementing legislation for the Marrakesh Agreement, and
the possibility of a WTO Dispute Settlement Review Commission).
21
William J. Aceves, Lost Sovereignty? The Implications of the Uruguay Round Agreements, 19
23
24
See, e.g., Jackson, supra note 14 (describing the fear of lost sovereignty); Aceves, supra
note 21 (describing the fear of lost sovereignty); Claudio Cocuzza & Andrea Forabosco, Are
States Relinquishing Their Sovereign Rights? The GATT Dispute Settlement Process in a
Globalized Economy, 4 Tul. J. Intl & Comp. L. 161 (1996) (discussing the extent to which, if
any, there is lost sovereignty); and Samuel C. Straight, Note, GATT and NAFTA: Marrying
Effective Dispute Settlement and the Sovereignty of the Fifty States, 45 Duke L.J. 216 (1995)
(discussing how to have the WTO and prevent lost sovereignty).
25
See Jeffrey L. Dunoff, Less Than Zero: The Effects of Giving Domestic Effect to WTO Law,
6 Loy. U. Chi. Intl L. Rev. 279, 283 (2008) (discussing how certain provisions of the URAA
were crafted in order to ease fears of many in the U.S. who feared loss of sovereignty, primarily
because of the creation of the WTO).
10
Dumping has been an identifiable potential problem in international trade for quite some
time, pre-dating even the GATT.26 Dumping has been defined as occurring when similar
products are sold by a firm in an export market for less than what is charged in the home market.
Alternatively, it may occur if the export price of the product is less than total average costs or
marginal costs.27 In other words, dumping occurs when a firm28 in one country exports
products into an importing country at a price less than the market price of the same product in the
exporters home country. This is perceived as harmful because the exporting firm can continue
to sell at below-market-value, price its competition in the importing country out of business, and
then raise prices without the fear of having any competitors to force prices down.
26
See Jacob Viner, Dumping: A Problem in International Trade (1923) (arguing that
29
General Agreement on Tariffs and Trade art. 6(1), Oct. 30, 1947, 61 Stat. A-11, 55 U.N.T.S.
194.
30
Id.
32
Id. at 35.
33
Id.
12
34
Jeanne J. Grimmett, Cong. Research Serv., RL 32014, WTO Dispute Settlement: Status of
U.S. Compliance in Pending Cases 51 (2011). See 19 U.S.C. 1673 for the full text.
35
19 U.S.C. 1673e(a).
36
Grimmett, supra note 34. See 19 U.S.C. 1677(35)(A) for the full text.
37
Commerce Still Mulling Whether it Will Use Zeroing in Some AD Reviews, supra note 2. A
simple qualitative explanation of zeroing is given as follows: [I]f a foreign manufacturer has
one sale that is ten percent above normal value (the product at issue is not being dumped) and
one sale that is ten percent below normal value (the product at issue is being dumped) . . . under
a zeroing methodology, the sale made above normal value is assigned a zero margin rather than a
margin of ten percent. The averaging process then yields a net dumping margin of five percent.
This positive margin triggers the imposition of antidumping duties . . . . Casey Reeder,
Comment, Zeroing in on Charming Betsy: How an Antidumping Controversy Threatens to Sink
the Schooner, 36 Stetson L. Rev. 255, 260 (2006).
38
See, e.g., Daniel J. Ikenson, Zeroing In: Antidumpings Flawed Methodology Under Fire,
The system the U.S. employs to assess AD duties on imports is a fairly intricate one. Just
one AD proceeding involves multiple stages, starting with an original investigation, followed
by annual administrative reviews and five-year sunset reviews.42 Additional reviews can
(arguing that its application is a significant cause of the systematic overestimation of dumping
margins and subsequent application of inflated dumping duties).
39
See generally SKF Inc. v. United States, 491 F. Supp. 1354 (Ct. Intl Trade 2007), affd, 537
F.3d 1373 (Fed. Cir. 2008); Corus Staal BV v. Dept of Commerce, 395 F.3d 1343 (Fed. Cir.
2005), cert denied, 126 S.Ct. 1023 (2006); Timken Co. v. United States, 354 F.3d 1334 (Fed.
Cir.), cert denied sub nom.
40
41
See, e.g., Appellate Body Report, EC Bed Linen, WT/DS141/AB/R (March 1, 2001)
(detailing the first WTO case to rule the zeroing practice to be illegal).
42
43
Id.
44
Id. at 52.
45
19 C.F.R. 351.204(b)(1).
46
47
This cash deposit is kept until a final AD duty rate is determined; however, the DOC may
charge interest on the deposit. See 19 C.F.R. 351.212(e) (stating the Secretary [of the DOC]
will instruct the Customs Service to calculate interest for each entry on or after the publication of
the order from the date that a cash deposit is required to be deposited for the entry through the
date of liquidation of the entry).
15
19 C.F.R. 351.212(a).
49
50
19 C.F.R. 351.213(b)(1). The importer requests such a review in writing. Id. In terms of
the amount of money involved or how often these reviews are requested, the author had
difficulty locating any exact numbers, but the number of requests from importers for
administrative reviews is sporadically published by the government. See, e.g., Initiation of
Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in
Part, 76 Fed. Reg. 82,268 (Dec. 30, 2011) (detailing administrative review hearings granted for
over 300 companies from seven countries); Initiation of Antidumping and Countervailing Duty
Administrative
Reviews, Requests for Revocations in Part and Deferral of
Administrative Reviews, 76 Fed. Reg. 45,227 (July 28, 2011) (detailing administrative review
hearings granted for 28 companies from three countries).
51
The WTO cases54 which set the stage for the problem to be discussed in this Note did indeed
strike down the U.S.s use of zeroing, but they were not the first to strike down the practice
52
19 C.F.R. 351.212(c)(i).
53
Kyle Bagwell & Petros C. Mavroidis, Beating Around (The) Bush, American Law Institute
55
56
Kathleen W. Cannon, Trade Litigation Before the WTO, NAFTA, and U.S. Courts: A
58
Id. at 40.
59
Corus Staal BV v. U.S. Dept of Commerce, 259 F.Supp.2d 1253, 1263-1264 (Ct. Intl Trade
2003), affd upon remand, 395 F.3d 1343 (Fed. Cir. 2005).
60
61
Id.
62
63
64
65
U.S. Still Examining Whether It Will Adjust Past Reviews in Zeroing Cases, supra note 6.
66
U.S., EU Reach Deal to Suspend Arbitration Proceedings in Zeroing Case, supra note 3.
19
U.S. Still Examining Whether It Will Adjust Past Reviews in Zeroing Cases, supra note 6.
69
Id.
70
Id.
71
Id.
72
URAA, supra note 9. As a side note, but one that should be addressed to avoid possible
confusion, other countries employing prospective systems of duty assessment which have had
their zeroing practices struck down would not find themselves in the legal gray area in which the
U.S. currently finds itself. In countries that use a prospective system of duty assessment, duties
20
III.
The Legal Problem: Does Section 129(c)(1) Allow for Retroactive Application of
Alternative Methodologies?
EU, Japan Agree to Different Suspensions for Zeroing Arbitration Panels, Inside US Trade,
The origins of this issue of statutory interpretation and administrative law can be traced back
to a case75 Canada brought against the U.S. at the WTO back in 2001. In that case, Canada
explicitly challenged the language of Section 129(c)(1) of the URAA, arguing that when the
DOC makes a finding in an AD proceeding which is subsequently found by the WTO to violate a
WTO agreement, this section of the URAA prevents full compliance on the part of the U.S. with
the WTO decision by preventing the refund of estimated duties deposited with CBP before the
date that the Section 129 Determination is implemented. In other words, because the duty
deposits supported by the challenged determination would no longer have a WTO-consistent
basis, Canada argued that they must be returned.76 Although the WTO panel which decided the
case did not reach the merits of Canadas case in its decision because it concluded that Canada
had not met its evidentiary burden, the case is nevertheless important. In the case which is
worth quoting at length in order to fully illuminate the two sides interpretations of this issue
Canada, while paraphrasing arguments made by the U.S. in front of the panel, stated itself that
[T]he United States argues that Section 129(c)(1) would not
preclude the [DOC] from making final duty liability
determinations in an administrative review on a basis consistent
with a [DSU] ruling in methodology cases, even insofar as the
determinations would apply to prior unliquidated entries (emphasis
added). However, the US claim that the [DOC] has administrative
discretion to change its interpretation is inconsistent with US
75
76
77
As described in Part II, the URAA was approved by Congress using a fast track approach.
Thus, in order to pass implementing legislation in the U.S., President Clinton had to submit a
statement of administrative action (SAA).78 According to the Senate Committee on Finance, the
78
See 19 U.S.C. 2112(d), (e)(2)(a) (1994) (stating [w]henever the President enters into a trade
agreement under this section providing for the harmonization, reduction, or elimination of a
barrier to trade, he shall submit such agreement, together with a draft of an implementing bill . . .
and a statement of administrative action proposed to eliminate such agreement, to the Congress .
. .).
24
Uruguay Round Agreements, Statement of Administrative Action, H.R. Doc. No. 103-316(I)
81
Id. at 82-83. See 19 U.S.C. 3512(d) (2000) (stating [t]he statement of administrative action
84
Buys & Isasi, supra note 81, at 86. The authors justify their conclusion by noting that
Congress did not codify the SAA into statute; Congress asks a court to look to the SAA only
when a question of interpretation of application arises under the law, indicating that the statute is
superior to the SAA; and, Congress approves the SAA in the same section in which it approves
the WTO Agreements, but Congress clearly does not intend the WTO agreements per se to be
part of U.S. law. Id.
86
87
88
AK Steel Corp. v. United States, 226 F.3d 1361 (Fed. Cir. 2000).
89
Id. at 1026 ([c]onsistent with the principle that GATT panel recommendations apply only
Id. (Under 129(c)(1), if implementation of a WTO report should result in the revocation of an
antidumping or countervailing duty order, entries made prior to the date of Trade
Representatives direction would remain subject to potential duty liability).
92
93
Andaman Seafood Co., Ltd. v. United States, 675 F.Supp.2d 1363 (Ct. Intl Trade 2010), cert.
Id. at 1369.
95
Id. ([w]hether the agency may reasonably interpret the statute to apply to all unliquidated
entries of subject merchandise [is] a question the court need not and does not decide here . . .
(emphasis added)).
96
NSK Bearings Europe Ltd. v. United States, No. 10-00289, slip op. at 4, n.3 (Ct. Intl Trade
Oct. 15, 2010) (citations omitted). Note, however, that the court based this determination on the
plain language of the statute, without reference to the SAA.
97
Id. at 4, n.2 (Ct. Intl Trade Oct. 15, 2010) (citations omitted).
28
99
Corus Staal BV v. United States, 593 F.Supp.2d 1373, 1379 n.14 (Ct. Intl Trade 2008).
29
The best approach for analyzing whether the DOC could legally retroactively calculate past
AD duties for prior unliquidated entries and provide refunds to importers under Section
129(c)(1) is to analyze it under the Chevron doctrine. The analytical framework derives from an
opinion of the U.S. Supreme Court of the same name, Chevron v. Natural Resources Defense
Council. 100 In that case, the Court developed a formula for determining whether a federal
administrative agencys interpretation of a statute was permissible. The first step under this
framework is to determine whether Congress has directly spoken to the precise question at
issue. If the intent of Congress is clear . . . the court, as well as the agency, must give effect to the
unambiguously expressed intent of Congress. 101 If this is not the case however, if the statute is
silent or ambiguous with respect to the specific issue, the question for the court is whether the
agencys answer is based on a permissible construction of the statute.102
1. Step One of the Chevron Analysis
When conducting step one of a Chevron analysis, it is important to remember that Chevron
does not require courts to use a specific method of statutory interpretation, but simply dictates
100
Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984) [hereinafter
Chevron].
101
Id. at 842-843.
102
Id. at 843.
30
Elizabeth Garrett, Step One of Chevron V. Natural Resources Defense Council, in A Guide
to Judicial and Political Review of Federal Agencies 55, 57 (John F. Duffy & Michael Herz
eds., 2005).
104
Id.
105
106
Garrett, supra note 103, at 63. See, e.g., Convoy v. Aniskoff, 507 U.S. 511, 519 (1993)
(Scalia, J., concurring) (stating that use of legislative history when interpreting a statute
undermines the clarity of law, and condemns litigants . . . to subsidizing historical research by
lawyers).
31
108
Id.
32
Id.
110
Id. (while it was primarily drafted within the executive branch, its language was negotiated
with Congress and it was submitted to Congress for approval, thus becoming part of the
legislative process).
111
Id. at 112-113.
112
113
Id. at 113.
33
United States v. Geiser, 527 F.3d 288, 294 (3d Cir. 2008), cert. denied, 555 U.S. 1102 (2009).
34
115
Id.
116
117
Id. at 61-62.
118
See Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984), at 863
(stating the proposition that [a]n initial agency interpretation is not instantly carved in stone);
35
see also Smiley v. Citibank (South Dakota), N.A., 517 U.S. 735, 742 (1996) (stating change is
not invalidating).
119
120
121
Id. at 62.
37
122
See id. at 68 (stating [c]ourts have long used a set of rules of interpretation as a guide to
statutory meaning; these rules are referred to as the canons of statutory construction).
123
Id. at 71.
124
125
Alex O. Canizares, Is Charming Betsy Losing Her Charm? Interpreting U.S. Statutes
Consistently with International Trade Agreements and the Chevron Doctrine, 20 Emory Intl L.
Rev. 591 (2006).
126
Trans World Airlines, Inc. v. Franklin Mint Corp., 466 U.S. 243, 252 (1984).
127
See, e.g., id. (discussing ways of reconciling Charming Betsy and Chevron); Kevin P.
Cummins, Note, Trade Secrets: How the Charming Betsy Cannon May Do More to Weaken U.S.
Environmental Laws than the WTOs Rules, 12 Fordham Intl Envtl. L.J. 141 (2000)
(discussing the interplay of Charming Betsy and Chevron).
129
130
Hyundai Electronics Co., Ltd. v. U.S., 53 F.Supp.2d 1334, 1343 (Ct. Intl Trade 1999).
39
131
Filicia Davenport, Note, The Uruguay Round Agreements Act Supremacy Clause:
Congressional Preclusion of the Charming Betsy Standard with Respect to WTO Agreements, 15
Fed. Circuit B.J. 279, 302.
132
Id.
133
It should be noted that there is dispute among those in the academic community over whether
decisions of the DSU are in fact international obligations. See Canizares, supra note 125, at 617
(outlining the two sides of the debate, i.e., on the one hand that the decisions do constitute an
international obligation, and on the other hand that because there are alternatives to a country
accepting adverse DSU decisions (i.e., the right of other countries to retaliate in certain ways)
built into the Uruguay Round Agreements, an international obligation is not created).
40
Corus Staal BV v. U.S. Dept of Commerce, 395 F.3d 1343, 1347 (Fed. Cir. 2005), cert.
Id. at 1348-1349.
136
137
Id.
138
Turtle Island Restoration Network v. Evans, 284 F.3d 1282 (2002), cert. denied, 538 U.S. 960
(2003).
41
140
Guide to Judicial and Political Review of Federal Agencies 85, 86 (John F. Duffy & Michael
Herz eds., 2005).
142
Id.
143
Id.
144
Id. at 93. See 5 U.S.C. 706(2)(A) (2000) for the APAs statutory basis. Section 706 of the
APA requires that a court hold unlawful and set aside agency action that is arbitrary,
43
IV.
Conclusion
The DOC cannot rely on Congress to help it with this issue. Concerns over national
sovereignty will not allow members of Congress the freedom to do so. Thus, the DOC must be
able to formulate a legal argument under existing law that it can provide refunds for prior
unliquidated entries after a recalculation of AD duties using WTO-consistent methodologies.
While the URAAs Section 129(c)(1) may at first glance appear to prohibit the DOC from
retroactively calculating prior unliquidated entries using a WTO-consistent methodology and
capricious, an abuse of discretion, or otherwise not in accordance with law. Magill, supra note
141, at 93-94 (citation omitted).
44
45