A World Trade Organisation (WTO) dispute panel said on Friday that the United States had not complied with an earlier ruling in a case brought by Japan over US treatment of unfairly priced imports. Friday's ruling clears the way for Japan to seek up to $250 million a year in retaliation against US imports. The original case centred on US measures against Japan's bearings industry but Japan has said it reserves the right to retaliate against the full range of US goods.
Washington had objected to the amount of retaliation sought by Japan and the question had gone to arbitration, which was suspended during the compliance case. The United States still has the option of appealing the latest finding. "We are very happy with the finding and hope it will be adopted," Koji Saito, first secretary at Japan's WTO mission, told Reuters.
"Once the panel report, or if the US appeals the panel finding, once the Appellate Body report is adopted, there is the possibility that arbitration proceedings will be resumed," he said. US officials were not immediately available for comment. The case turns on a US method of setting compensatory duties on imports that it finds have been dumped - sold for less than they cost in the exporting country.
Critics say this method, known as zeroing, inflates such anti-dumping duties by ignoring in the calculation cases where the imported goods actually cost more than they do at home. The United States has lost about a dozen cases at the WTO involving zeroing, and the WTO's top court, the Appellate Body, has consistently found against it.
Many US politicians believe the Appellate Body has exceeded its mandate in doing so and are pushing for zeroing to be expressly permitted in the WTO's Doha round of trade negotiations, even though all other WTO members oppose it. The United States is currently embroiled in another appeal and counter-appeal with the European Union over a similar zeroing case.