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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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  • SAGGI, KAMAL
  • WU, MARK

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.

Suggested Citation

  • Saggi, Kamal & Wu, Mark, 2013. "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," World Trade Review, Cambridge University Press, vol. 12(2), pages 377-408, April.
    • Handle: RePEc:cup:wotrrv:v:12:y:2013:i:02:p:377-408_00
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    References listed on IDEAS

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    1. Crowley, Meredith & Howse, Robert, 2010. "US–Stainless Steel (Mexico)," World Trade Review, Cambridge University Press, vol. 9(1), pages 117-150, January.
    2. Sterns, James A. & Spreen, Thomas H., 2010. "Evaluating Sustainable Competitive Advantages in Brazilian and U.S. Processed Citrus Supply Chains: An Application of Porter’s Diamond Framework," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 1(2), pages 1-9.
    3. Prusa, Thomas J. & Vermulst, Edwin, 2011. "United States – Continued Existence and Application of Zeroing Methodology: the end of Zeroing?," World Trade Review, Cambridge University Press, vol. 10(1), pages 45-61, January.
    4. Bown, Chad P. & Sykes, Alan O., 2008. "The Zeroing Issue: a critical analysis of Softwood V," World Trade Review, Cambridge University Press, vol. 7(1), pages 121-142, January.
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    Cited by:

    1. Chen, Sijia & Steinbach, Sandro, 2020. "Measuring the Impact of Sunset Reviews on Agricultural and Food Trade," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304566, Agricultural and Applied Economics Association.
    2. James C. Hartigan, 2015. "It’s baaaack— zeroing, the US Department of Commerce, and US — Shrimp II (Viet Nam)," RSCAS Working Papers 2015/67, European University Institute.

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    JEL classification:

    • F3 - International Economics - - International Finance

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