Bridges Trade BioRes • Volume 6 • Number 14 • 28th July 2006

WTO Panel to Examine Ecuador’s Challenge of US Shrimp Duties

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Following Ecuador’s second request for a panel submitted to the WTO’s Dispute Settlement Body (DSB) at its 19 July meeting, the WTO will set up a panel to examine Ecuador’s challenge of the US safeguard measures on shrimp imports imposed in January 2005 (see Bridges Trade BioRes, 11 November 2005; WT/DS335/*). Shrimp constitute Ecuador’s largest private sector export to the US and the second largest export industry, representing 10 percent of total exports in 2005 with a value of over US$450 million. Specifically, Ecuador is taking issue with the US Commerce Department’s use of “zeroing” to calculate the anti-dumping duties imposed on certain frozen warmwater shrimp from Ecuador and other countries. Under this methodology, investigators treat transactions with negative dumping margins as having margins equal to zero in determining weighted average antidumping margins, allegedly resulting in artificial and inflated anti-dumping margins. A number of cases have already been brought against the US over its use of zeroing in which the DSB has consistently ruled against the US (see e.g. WT/DS294/*). Under dispute settlement rules, a panel will be established within ca. 45 days with the panel report expected by mid-2007. Thailand, India, Brazil, China, Japan, the EU and Korea have reserved their rights as third parties.

Other countries have also requested consultations with the US over its shrimp duties. India has focused its challenge on the bonds that importers of Indian shrimp have to deposit with US customs authorities (see Bridges Trade BioRes, 16 June 2006; WF/DS345/*). Thailand has challenged both the use of zeroing and the bonds (see Bridges Trade BioRes, 28 April 2006; WT/DS343/*).

WTO documents are available at online.

ICTSD reporting; “DSB establishes panels in reference to shrimp and gambling services disputes,” WTO, 19 July 2006.