- WTO Appellate Body Rejects Vietnam’s Appeal of US Antidumping Duties on Shrimp
- April 30, 2015 | Authors: Duane W. Layton; Paulette Vander Schueren
- Law Firms: Mayer Brown LLP - Washington Office ; Mayer Brown LLP - Brussels Office
The Appellate Body of the World Trade Organization (WTO) has circulated its report in the dispute (reference DS429) brought by Vietnam challenging the imposition of antidumping duties by the United States on imports of frozen warm-water shrimp. The Appellate Body’s report also addressed claims by Vietnam with respect to certain US laws, methodologies and practices of the US Department of Commerce (USDOC).
WTO Panel Ruling Under Review
The original dispute concerned claims made by Vietnam with respect to the USDOC’s final determinations in various administrative “reviews” of the antidumping duty order. Additionally, Vietnam made claims with respect to the USDOC’s likelihood-of-dumping determination within the expiry review affecting the same product. Other claims brought by Vietnam before the WTO panel included the USDOC’s “zeroing” methodology; the USDOC’s practice with respect to the so-called non-market economy (NME) wide entity rate; and Section 129(c)(1) of the Uruguay Round Agreements Act (URAA).
Section 129 of the URAA creates a mechanism governing the implementation of WTO rulings in relation to trade defense investigations. In particular, Section 129(c)(1) provides that Section 129 determinations apply to entries made on or after the date when the US Trade Representative directs the USDOC to revoke or implement a Section 129 determination.
The WTO panel found, inter alia, that (i) Vietnam had failed to establish that the USDOC’s simple zeroing methodology in administrative reviews is “a measure of general and prospective application that can be challenged ‘as such’”; (ii) the USDOC’s application of its simple zeroing methodology to calculate dumping “margins” for Vietnam’s shrimp exporters was inconsistent with Article 9.3 of the WTO Anti-dumping Agreement (AD Agreement); (iii) the USDOC’s practice of assuming that all producers in an NME country belong to a single country-wide entity and assigning a single rate to these producers/exporters is inconsistent with Articles 6.10 and 9.2 of the AD Agreement; (iv) Vietnam had failed to establish that Section 129(c)(1) of the URAA is inconsistent “as such” with Articles 1, 9.2, 9.3, 11.1, and 18.1 of the AD Agreement; and (v) the US acted inconsistently with Articles 11.2 and 11.3 of the AD Agreement as a result of the USDOC’s reliance on WTO-inconsistent margins of dumping in its likelihood-of-dumping determination as well as its treatment of requests for revocation made by certain Vietnamese exporters not being individually examined.
Appellate Body Ruling
On January 6, 2015, Vietnam notified the WTO Dispute Settlement Body (DSB) of its intention to appeal the WTO panel ruling. In its appeal Vietnam claimed that the panel had acted inconsistently with Article 11 of the WTO Dispute Settlement Understanding (DSU) by finding that Vietnam had failed to establish that Section 129(c)(1) of URAA precluded implementation of recommendations and rulings of the DSB with respect to prior unliquidated entries. Vietnam also appealed the WTO panel’s finding that Vietnam had not established that Section 129(c)(1) is inconsistent “as such” with Articles 1, 9.2, 9.3, 11.1, and 18.1 of the AD Agreement.
The Appellate Body upheld the panel’s analytical framework when examining that Vietnam had failed to establish that Section 129(c)(1) did not, in and of itself, preclude the implementation of WTO recommendations and rulings with respect to prior unliquidated entries.
The Appellate Body also rejected Vietnam’s claim that the panel had not properly relied on the various elements that it examined to inform its understanding of the meaning and effect of Section 129(c)(1). As a result, the Appellate Body found that Vietnam had not established that the panel acted inconsistently with Article 11 of the DSU. Consequently, the Appellate Body did not need to address Vietnam’s request that Section 129(c)(1) was inconsistent “as such” with Articles 1, 9.2, 9.3, 11.1, and 18.1 of the WTO AD Agreement.