International Trade Law News

The U.S. Court of Appeals for the Federal Circuit (CAFC) has recently upheld the Commerce Department's zeroing methodology in antidumping investigations. In Corus Staal BV v. Dep't of Commerce, released by the court on January 21, 2005, the CAFC affirmed the decision by the U.S. Court of International Trade in Corus Staal BV v. Dep't of Commerce, 283 F. Supp. 2d 1357 (Ct. Int'l Trade 2003), which affirmed the Commerce Department's zeroing methodology to calculate the weighted-average dumping margin for imports of Corus' hot-rolled steel products from the Netherlands in an antidumping investigation.

The "zeroing methodology" refers to the Commerce Department's practice of using only positive dumping margins for purposes of calculating the weighted-average dumping margin and giving negative dumping margins a value of zero. The Cato Institute's Center for Trade Policy Studies calls the use of zeroing "a significant cause of the systemic overestimation of dumping margins and subsequent application of inflated antidumping duties."

Corus argued that the Commerce Department's zeroing methodology was: (1) inconsistent with the statutory scheme for conducting antidumping investigations; and (2) violated the United States' obligation to conform to World Trade Organization (WTO) decisions prohibiting zeroing. However, the CAFC upheld the CIT's decision by finding that zeroing in antidumping investigations is permitted under U.S. law and that the Commerce Department is not obligated to incorporate WTO decisions in its interpretation of U.S. law.

As a result of the CAFC's recent decision in Corus, and the CAFC's prior decision in Timken Co. v. United States, 354 F.3d 1334 (Fed. Cir. 2004) (which upheld the use of zeroing in antidumping administrative reviews), the Commerce Department's use of zeroing will continue unless Congress amends the antidumping statute to conform to the WTO's Antidumping Agreement.

The CAFC's opinion in Corus Staal BV v. Dep't of Commerce can be viewed at the following link: http://fedcir.gov/opinions/04-1107.pdf.