The Seafood Exporters Association of India (SEAI) has demanded that the Government take the US to the World Trade Organisation over continued zeroing in on Indian shrimp exports.

Indian shrimp exports continue to be battered by anti-dumping duty imposed by the US. The WTO had, in a recent judgement, ruled that the US is violating global trade rules in using the method of zeroing to impose anti-dumping duties on shrimp imports from Vietnam.

Practice of ‘Zeroing'

Zeroing is a manner in which the US government imposes anti-dumping duty on select shrimp consignments because they fetch lower prices in the US market. According to an exporter, while almost 90 per cent of shrimp export consignments would fetch fair value prevalent in competing countries, the remaining 10 per cent might have to go for distress sale for a variety of reasons, fetching significantly lower rates.

The US government zeroes in on these 10 per cent consignments and imposes anti-dumping duty, much to the detriment of the exporter who has already had to sell his consignment at distress rates. But for the practice of zeroing, Indian shrimp exports would have been entitled to de-minimum duty — that is duty of less than 0.5 per cent — which would have resulted in Indian shrimp exports getting out of the US' anti-dumping purview.

Favourable ruling for other countries

Several other shrimp exporting countries, including Brazil, Ecuador and Thailand, had taken the US to WTO and received favourable ruling. China is the latest country to have taken the US to the global trade body, as recently as February this year. It is high time India followed the footsteps of the other global shrimp exporting countries. With the favourable judgement, these countries would also be eligible for duty refund with retrospective effect, exporters pointed out.

With an array of preceding judgements stating that zeroing is illegal, the Indian petition would be relatively easier, Mr Anwar Hashim, President of SEAI, said. “It is high time the Government of India woke up to this central need of the fishing industry,” he added. Going by past experience, it would take around two years for the final ruling to come from the WTO.

With this favourable judgement, Vietnam has got rid of the anti-dumping duty, which had been effective since August 2004. A three-member WTO panel had found zeroing illegal under WTO agreements. The panel held that the US “has acted inconsistently with the provisions of the anti-dumping duty and the GATT'” and said that the US should bring its calculation method in line with the two agreements. The ruling comes even as the US Department of Commerce has consistently rejected the Indian submission that zeroing should not be applied.

Anti-dumping duty on Indian shrimp exports for 2011 is at 1.69 per cent. In 2010, anti-dumping duty was at 2.27 per cent while for 2009 it was at 0.79 per cent. If the practice of zeroing was not resorted to by the US Department of Commerce, Indian shrimp exports would have been out of the purview of anti-dumping duty several years earlier, SEAI said.

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