Vietnam shrimp exporters hope WTO will overturn US tariffs

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Last week, the US Department of Commerce instituted another punitive, five-year, anti-dumping tariff on Vietnamese shrimp.

The announcement came following a sunset review of duties imposed in 2005, in which the US expressed concerns that "dumping" would resume if the tariffs ended. For the past five years, the US has levied duties ranging from 2.5 to 25.76 percent on frozen shrimp imported from Vietnam.

Frozen, warm water shrimp exporters in Asian countries like India, China, Thailand and Vietnam would continue to pay the tariffs until 2015, if the US had its way.

However, Vietnam is mounting a challenge to the rule with the World Trade Organization (WTO) next year.

The WTO could overturn the US decision, some time next year.

Existing trade rules allow WTO members to impose extra duties on goods that are dumped - imported for less than they cost in the exporting country - if that hurts businesses in the importing country.

Calculating these antidumping duties typically involves comparisons of prices of different batches of imported goods to work out the average difference in price. In the case of "zeroing," US authorities ignore examples where the imported goods actually cost more than at home, pushing up the value of the duty.

Truong Dinh Hoe, secretary general of the Vietnam Association of Seafood Exporters and Processors or VASEP, said local exporters opposed the re-instatement though they were not surprised to hear the results.

In February, Vietnam filed a complaint with the WTO pertaining to the US shrimp duties. The complaint represents Vietnam's official dispute since it joined the organization, three years ago.

Vietnam asked WTO to rule about the controversial US method of calculating antidumping duties known as "zeroing." The method has been condemned repeatedly by WTO courts and rejected by all other WTO members.

Pascal Lamy, the organization's Director General, has appointed a three-member panel to rule on the complaint.

The case will be heard by Mohammad Saeed, counselor at Pakistan Mission to the WTO Geneva, Deborah Milstein from the Israel's Ministry of Industry, Trade and Labor and Ian Sandford, special counsel & director, International Trade Group of Australia

"We hope the WTO court will issue a fair verdict as it did with previous cases," said Hoe who claims that the panel is scheduled to issue its determination in mid-2011. He said Vietnam is still supplying the body with information and evidence about the tariffs.

Hoe told Thanh Nien Weekly that the court ruled against the US in complaints brought by Thailand and India in 2008. The developing countries had called on the organization to reject the zeroing method in calculating duties.

Hoe said, if Vietnam prevails in the hearing, the US tariffs would be reduced to little or nothing.

In the first ten months of 2010, Vietnam exported about 200,000 tons of shrimp, worth US$1.7 billion. The amount represents a 12.9 percent growth in volume and 22.5 percent growth in value year-on-year, according to VASEP.

The organization claimed that shrimp comprised 41.7 percent of the country's combined seafood export of $4 billion from January to October.

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