World Trade Organization
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- Category: Politics: Economics
- Date Submitted: 08/14/2013 05:42 AM
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Bellerbys College
Higher Education Center
Assignment 1
ECONOMIC INSTITUTIONS
WORLD TRADE ORGANIZATION
Nguyen Thi Lan Anh (Angela)
MQP
Brighton
2012
According to Vietfish.org, on 11th June 2011, World Trade Organization (WTO) refused anti-dumping tariffs of the United States on Vietnam’s shrimp. In particular, the US was said to break the global trade rules because of using “Zeroing” method to impose anti-dumping tariffs on shrimp of Vietnam.
Dumping occurs when a company exports a product at a price lower than the price it normally charges in its own home market, or in a third-country market, or at less than its production costs.
Zeroing is a method that is used to calculate the dumping margin by getting the average of the differences between export prices and the prices of home market of the product. It is the process of calculating the dumping margin which puts all the transactions with negative dumping margins to the value 0. For example, if an exporter under investigation made 5 export transactions, including 2 export transactions with dumping margins is 20%, a transaction dumping margins is 0 and 2 transactions have -25% margin. If we do not use Zeroing method, the average margin of dumping would be: (20% + 20% + 0% - 25% - 25%): 5 = -7%. With a negative dumping margin, there is no dumping, so the exporter will not pay anti-dumping tax). On the other hand, if using Zeroing, the average dumping margin would be: (20% + 20% +0% + 0% + 0%): 5 = 8%. As a result, the exporters will have to pay tax 8%). This method makes the tax rate becomes very high, and has repeatedly been condemned by the judges of the WTO.
The leading committee which consists of three members drew a decision that Zeroing method was supposed to be illegal under WTO agreements. The reason that this method is unreasonable is that it put a value of zero on instances when the export price is higher than the home market price, so this leads to the inflation of dumping...
Higher Education Center
Assignment 1
ECONOMIC INSTITUTIONS
WORLD TRADE ORGANIZATION
Nguyen Thi Lan Anh (Angela)
MQP
Brighton
2012
According to Vietfish.org, on 11th June 2011, World Trade Organization (WTO) refused anti-dumping tariffs of the United States on Vietnam’s shrimp. In particular, the US was said to break the global trade rules because of using “Zeroing” method to impose anti-dumping tariffs on shrimp of Vietnam.
Dumping occurs when a company exports a product at a price lower than the price it normally charges in its own home market, or in a third-country market, or at less than its production costs.
Zeroing is a method that is used to calculate the dumping margin by getting the average of the differences between export prices and the prices of home market of the product. It is the process of calculating the dumping margin which puts all the transactions with negative dumping margins to the value 0. For example, if an exporter under investigation made 5 export transactions, including 2 export transactions with dumping margins is 20%, a transaction dumping margins is 0 and 2 transactions have -25% margin. If we do not use Zeroing method, the average margin of dumping would be: (20% + 20% + 0% - 25% - 25%): 5 = -7%. With a negative dumping margin, there is no dumping, so the exporter will not pay anti-dumping tax). On the other hand, if using Zeroing, the average dumping margin would be: (20% + 20% +0% + 0% + 0%): 5 = 8%. As a result, the exporters will have to pay tax 8%). This method makes the tax rate becomes very high, and has repeatedly been condemned by the judges of the WTO.
The leading committee which consists of three members drew a decision that Zeroing method was supposed to be illegal under WTO agreements. The reason that this method is unreasonable is that it put a value of zero on instances when the export price is higher than the home market price, so this leads to the inflation of dumping...