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China scores victories against US at the WTO in anti-dumping disputes

China won the bulk of a World Trade Organisation complaint against some US methods of determining anti-dumping duties on Chinese products in a WTO dispute panel ruling released on Wednesday.

China brought the complaint in December 2013, one of a string of disputes challenging Washington’s way of assessing “dumping,” or exporting at unfairly cheap prices.

The panel found fault with the US practices of determining dumping margins in certain cases of “targeted dumping,” in which foreign firms cut prices on goods aimed at specific US regions, customer groups or time periods.

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Dumping is normally found when a foreign producer’s US prices are lower than its home market prices for the same or similar goods or when the imports are sold at prices below production costs.

The panel ruled against the US Commerce Department’s practice of “zeroing” in cases involving targeted dumping. In zeroing, the department typically assigns a value of zero any time a producer’s export price is above that producer’s normal home market price, partly to account for freight and customs charges.

In practice, the zeroing methodology tends to increase the level of US anti-dumping duties on foreign producers.

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Some points of China’s argument were rejected by the WTO panel, including a claim that the Commerce Department systematically punishes Chinese state enterprises by assigning them high anti-dumping rates.

Either side can appeal against the ruling within 60 days.

China’s Ministry of Commerce welcomed the ruling saying the WTO panel had “upheld China’s principal claims” on the unlawfulness of targeted dumping and the separate rate applied in certain US anti-dumping measures.

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The dispute related to several industries including machinery and electronics, light industry, metals and minerals, with an annual export value of up to US$8.4 billion, it said.

“The United States is disappointed by these findings,” a spokesman for the US Trade Representative’s office said in a statement.

“We will carefully review the report and consider next steps. Nothing in the report will undermine the commitment of the United States to impose anti-dumping duties to address injurious dumping,” the spokesman added.