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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

  • KAMAL SAGGI (a1) and MARK WU (a2)
Abstract

This paper analyzes Brazil's WTO challenge to the methods undertaken by the United States in calculating anti-dumping duties in administrative reviews and other investigations of Brazilian orange juice. The dispute resulted in a Panel ruling that conforms with earlier Appellate Body decisions outlawing the use of ‘weighted average to transaction’ zeroing in such reviews. However, we note that the Panel's stance was driven largely from a desire to preserve ‘stability and predictability’ within the system, suggesting a practical recognition of the shadow of past Appellate Body decisions on the same legal question. In addition, we argue that to understand fully the effects of zeroing, it is important to account for the underlying reasons behind observed price changes in the market. We show that zeroing is more likely to convert a negative dumping determination into a positive one when price changes are driven by variations in demand relative to when they are driven by variations in the cost of exporting. In the present case, Brazilian exporters of orange juice experienced an increase in (residual) demand for their product since, by reducing the local supply of round oranges, adverse weather conditions in the United States made it difficult for US orange-juice producers to meet local demand.

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      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
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Copyright
Corresponding author
*Email: k.saggi@vanderbilt.edu
**Email: mwu@law.harvard.edu
References
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Bown, C. P. and Sykes, A. O. (2008), ‘The Zeroing Issue: A Critical Analysis of Softwood V’, World Trade Review, 7(1): 121–42.
Bown, C. P. and Prusa, T. J. (2011), ‘US Anti-dumping: Much Ado About Zeroing’, in Martin, W. J. and Mattoo, A. (eds.), Unfinished Business? The WTO's Doha Agenda, London: CEPR and World Bank, pp. 355–92.
Carter, C. and Mohapatra, S. (2006), ‘The Sunshine State versus Brazil: Economics of Orange Juice Trade’, Department of Agricultural and Resource Economics, University of California.
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Hispanically Speaking News (2011), ‘Brazil Will Allow Merger of Orange Juice Companies’, 15 December 2011, available at http://www.hispanicallyspeakingnews.com/notitas-de-noticias/details/brazil-will-allow-merger-of-orange-juice-companies/12583/.
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Prusa, T. J. and Vermulst, E. (2009), ‘A One-Two Punch on Zeroing: US–Zeroing (EC) and US–Zeroing (Japan)’, World Trade Review, 8(1): 187241.
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US International Trade Commission (USITC) (2006), ‘Certain Orange Juice From Brazil’, Publication 3838, Washington, DC.
Wexler, A. (2012), ‘Orange Juice Feels Supply–Demand Squeeze’, Wall Street Journal, 18 May: B4.
White, A. and Kassai, L. (2011), ‘Citrovita, Citrosuco Win EU Approval For Orange-Juice Deal’, May 4, available at http://www.bloomberg.com/news/2011-05-04/citrovita-citrosuco-win-eu-approval-for-orange-juice-deal.html.
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World Trade Review
  • ISSN: 1474-7456
  • EISSN: 1475-3138
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