September 2, 2011

Indian seafood association reports US for shrimp anti-dumping duty

The Seafood Exporters Association of India (SEAI) has demanded that the Union Government bring the US to the World Trade Organisation over continued battering of anti-dumping duty to India's shrimp exports.

The WTO had, in a recent judgement, ruled that the US is violating global trade rules in using the method of zeroing to impose anti-dumping duties on shrimp imports from Vietnam.

Zeroing is a manner in which the US government imposes anti-dumping duty on select shrimp consignments because they fetch lower prices in the US market. According to an exporter, while almost 90% of shrimp export consignments would fetch fair value prevalent in competing countries, the remaining 10% might have to go for distress sale for a variety of reasons, fetching significantly lower rates.

The US government zeroes in on these 10% consignments and imposes anti-dumping duty, much to the detriment of the exporter who has already made a distress sale of his consignment. But for the practice of zeroing, Indian shrimp exports would have been entitled to de-minimus duty-that is duty of less than 0.5%-which would have resulted in Indian shrimp exports getting out of the US' anti-dumping purview.

Several other shrimp exporting countries, including Brazil, Ecuador and Thailand, had taken the US to WTO and received favourable ruling. China is the latest to have taken the US to the global trade body, as recently as February. It is high time India followed the footsteps of the other global shrimp exporting countries. With the favourable judgement, these countries would also be eligible for duty refund with retrospective effect, exporters pointed out.

With an array of preceding judgements stating that zeroing is illegal, the Indian petition would be relatively easier, Anwar Hashim, President of SEAI, said. "It is high time the Government woke up to this central need of the fishing industry," he added. Going by past experience, it would take around two years for the final ruling to come from the WTO.

With this favourable judgement, Vietnam has got rid of the anti-dumping duty, which had been effective since August 2004. A three-member WTO panel had found zeroing illegal under WTO agreements. The panel held that the US "has acted inconsistently with the provisions of the anti-dumping duty and the GATT'" and said that the US should bring its calculation method in line with the two agreements. The ruling comes even as the US Department of Commerce has consistently rejected the Indian submission that zeroing should not be applied.

Anti-dumping duty on Indian shrimp exports for 2011 is at 1.69%. In 2010, anti-dumping duty was at 2.27% while for 2009 it was at 0.79%. If the practice of zeroing was not resorted to by the US Department of Commerce, Indian shrimp exports would have been out of the purview of anti-dumping duty several years earlier, SEAI said.