| | Cascade Steel Rolling Mills, Inc.
McMinnville, Oregon 97128
February 7, 2007 Committee on Ways and Means
The United States House of Representatives
Washington, D.C. 20515
To Whom it May Concern:
On behalf of Cascade Steel
Rolling Mills, Inc, and in response to the Committee’s January 31, 2007
advisory, we hereby offer comments regarding modifications to the methodology
currently used by the Department of Commerce (“the Department”) in calculating
dumping margins in antidumping investigations. Specifically, the Department
proposes to abandon its long-standing “zeroing” methodology. Congress and the
Committee should oppose this change, for three simple reasons. First, the law
itself, as written by Congress, does not permit the change. Second, the
Department’s proposal would not act to protect vulnerable U.S. industries from the effects of dumping. Third, the change is neither a necessary nor
an appropriate response to recent decisions of the Appellate Body of the World
Trade Organization (“WTO”).
Since long before the existence
of the WTO, the Department has calculated dumping margins using a methodology
known as “zeroing” methodology. Using this methodology, the dumping margin on
individual, non-dumped sales is set to zero. The WTO has recently concluded
that this methodology is not compliant with the WTO Agreements. In response,
the Department proposes to use the negative margins on non-dumped sales to
offset the positive margins on those individual sales in which merchandise is
dumped on the U.S. market.
However, it is clear that the
Department cannot legally abandon its zeroing methodology. Zeroing is inherent
in the text of the Tariff Act of 1930. Without it, certain provisions of the
law are rendered meaningless. Thus, if zeroing is to be abandoned, the only
legal method of doing so is through amendment of the statute. The Department’s
proposal to abandon zeroing without a concurrent change in the statutory
language impinges on Congressional authority, and flies in the face of years of
court cases acknowledging the appropriateness of zeroing under the statute.
Further, if zeroing is abandoned,
the Department’s antidumping calculations will necessarily understate the
effects and extent of dumping. Every dumped sale is harmful to United States industry, regardless of whether foreign producers also sell merchandise at
non-dumped prices. Given a finite number of sales that any market may bear,
dumping over even a few of such sales poses harm to U.S. industry, placing them
at a competitive disadvantage to those who would unfairly price their sales. By
offsetting dumped sales with the negative dumping margins on non-dumped sales,
Congress and the Department of Commerce send the message that dumping is
permitted, and that U.S. industry cannot expect reasonable protection against
unfair competition.
Finally, there is simply no
reason to change the Department’s longstanding practice to accommodate the
views of the WTO Appellate Body. The Appellate Body’s decisions are not binding
on the U.S., and are not part of U.S. law. Further, the Appellate Body’s
decisions on zeroing are a particularly egregious example of overreaching.
Zeroing existed before the WTO Agreements, and before the Uruguay Round Agreements Act (“URAA”) put those agreements into effect. Despite this,
zeroing was not addressed by either the WTO Agreements or the URAA. In fact, as
the Administration noted in comments filed at the WTO, the Appellate Body’s
recent holdings in this regard improperly renders superfluous the negotiated
language of the WTO Antidumping Agreement, as well as overturning almost 50
years of international jurisprudence on the calculation of dumping margins.
In conclusion, the Committee and
Congress as a whole should oppose the changes proposed by the Department of
Commerce. The proposal would violate the plain language of the Tariff Act,
would fail to protect U.S. industry from dumping, and would unnecessarily
impose the views of the WTO Appellate Body on operation of the United States’
antidumping duty laws. Accordingly, Congress should reject this change, and
indicate to the Department of Commerce that zeroing must be continued.
Sincerely,
Lacene Orvis
Controller
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