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The Zeroing Issue: a critical analysis of Softwood V

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  • BOWN, CHAD P.
  • SYKES, ALAN O.

Abstract

This paper addresses the issues that came before the Appellate Body in the Softwood V dispute, concerning an affirmative antidumping determination by the US Department of Commerce. The paper addresses both the original Appellate Body opinion in the dispute, and the later opinion reviewing the compliance panel findings. We focus primarily on the ‘zeroing’ issue in ‘transaction-to-transaction (T–T)’ calculations of dumping, and briefly on two other cost-allocation issues. In general, we are ambivalent about the Appellate Body's approach to the zeroing issue. On the one hand, zeroing inflates dumping margins without any sound economic rationale for doing so. On the other hand, zeroing has been a standard administrative practice for many years and the ADA does not clearly prohibit it. The Appellate Body's legal analysis of the matter in T–T cases, in particular, rests on shaky premises. We also consider the wisdom of addressing the zeroing issue in piecemeal fashion through what has proven to be a lengthy sequence of narrow decisions.

Suggested Citation

  • Bown, Chad P. & Sykes, Alan O., 2008. "The Zeroing Issue: a critical analysis of Softwood V," World Trade Review, Cambridge University Press, vol. 7(1), pages 121-142, January.
    • Handle: RePEc:cup:wotrrv:v:7:y:2008:i:01:p:121-142_00
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    Citations

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    Cited by:

    1. Kyle Bagwell & Chad P. Bown & Robert W. Staiger, 2016. "Is the WTO Passé?," Journal of Economic Literature, American Economic Association, vol. 54(4), pages 1125-1231, December.
    2. Thomas J. Prusa, 2013. "The Use of Economics in WTO Appellate Body Decisions," EUI-RSCAS Working Papers 12, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
    3. Meredith A. Crowley & Jennifer A. Hillman, 2017. "Slamming the door on trade policy discretion? The WTO Appellate Body’s ruling on market distortions and production costs in EU—Biodiesel(Argentina)," RSCAS Working Papers 2017/61, European University Institute.
    4. Kamal Saggi & Mark Wu, 2018. "Yet Another Nail in the Coffin of Zeroing: United States – Anti-Dumping Administrative Reviews and Other Measures Related to Imports of Certain Orange Juice from Brazil," World Scientific Book Chapters, in: Kamal Saggi (ed.), Economic Analysis of the Rules and Regulations of the World Trade Organization, chapter 18, pages 401-432, World Scientific Publishing Co. Pte. Ltd..
    5. MUKUNOKI Hiroshi & OKOSHI Hirofumi, 2022. "Antidumping on Tax-induced Dumping," Discussion papers 22063, Research Institute of Economy, Trade and Industry (RIETI).
    6. Huynh, Pham Duy Anh, 2022. "Non-Market Economy Status In Anti-Dumping Investigations And Proceedings: A Case Study Of Vietnam," OSF Preprints 2twmp, Center for Open Science.
    7. Fouad Pervez, 2015. "Waiting for election season," The Review of International Organizations, Springer, vol. 10(2), pages 265-303, June.
    8. Huynh, Pham Duy Anh, 2023. "Non-market economy status in anti-dumping investigations and proceedings: A case study of Vietnam," OSF Preprints esw4b, Center for Open Science.
    9. Bown, Chad P. & McCulloch, Rachel, 2009. "U.S.-Japan and U.S.-China trade conflict: Export growth, reciprocity, and the international trading system," Journal of Asian Economics, Elsevier, vol. 20(6), pages 669-687, November.
    10. James C. Hartigan, 2015. "It’s baaaack— zeroing, the US Department of Commerce, and US — Shrimp II (Viet Nam)," RSCAS Working Papers 2015/67, European University Institute.
    11. Chad P. Bown & Thomas J. Prusa, 2021. "U.S. Anti-dumping: Much Ado about Zeroing," World Scientific Book Chapters, in: Thomas J Prusa (ed.), Economic Effects of Antidumping, chapter 10, pages 195-232, World Scientific Publishing Co. Pte. Ltd..

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