Walker
Corporation
Ontario, California 91761
February
6, 2007
The Honorable Charles B. Rangel
Chairman
Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Mr. Chairman:
On behalf of steel consuming industries, I am
writing to encourage support for implementing the Department of Commerce’s
recent decision to abandon the WTO-illegal practice of zeroing, in which
negative price comparisons are inaccurately treated as though they were zero.
Abandoning zeroing will result in significant benefits to U.S. manufacturers and the economy as a whole.
In antidumping proceedings the Commerce
Department compares all U.S. sales of an imported product to a normal value
(usually the home market selling price) to determine whether, and the extent to
which, dumping (sales at less than normal value of the product as a whole) has
taken place. Zeroing refers to the practice employed by the Commerce
Department of considering only those U.S. sales where normal value is greater
than the U.S. price, and ignoring transactions where the reverse occurs,
instead setting such negative comparison transactions equal to zero.
Under this practice, the weighted average margin
of dumping is calculated without taking into account negative comparison
sales. Zeroing is currently used in investigations and administrative reviews,
as well as other proceedings under the antidumping law. The Department’s
current practice of zeroing has been ruled inconsistent with U.S. WTO
obligations several times.
The effect of zeroing is not only contrary to WTO agreements that the United States has signed, but it also runs contrary to
the best interest of the United States. The appropriate measure of the effect
of dumping on the U.S. economy is to treat all sales equally. A sale in the United States of an imported product at a price greater than its home market selling prices
is not accurately assessed by zeroing. Rather, the law must recognize that it
counterbalances sales at less than the normal value for that product.
U.S. manufacturers need and deserve an accurate
calculation of dumping duties. Both consumers and producers are entitled to
it. Manufacturers rely on vigorous competition in securing their supplies of
raw materials and components, and face tremendous competition from global
suppliers of their products. Zeroing inflates the duty (tax) paid by importers
raising costs of U.S. manufacturers, including industrial consumers of steel
and other industrial products used in the manufacture of component parts and
end products making it that much harder to compete in the United States. The
unintended consequence of zeroing is that it encourages manufacturers to look
to other countries as a base for manufacturing the entire product.
The WTO decisions on zeroing are in keeping with
the letter of the WTO Antidumping Agreement, properly concluding that a product
“as a whole” under investigation or review is the subject of a dumping margin
calculation, and not the individual sales transactions. These decisions
represent the law of the WTO, and PMA urges the U.S. authorities not to defy
the law established in these cases, but rather seek changes—if indeed such
changes are in the national interest—through the established processes of the
WTO.
The time has come for zeroing to be abandoned. Zeroing
imposes a tax higher than permitted by international rules and harms U.S. manufacturers that rely on competitive international markets for their raw materials
and other production input.
Sincerely,
Bruce
Walker
Walker Corporation began in 1954 as a small manufacturer.
Today, Walker Corporation is a respected leader in the metal forming industry,
employing more than 180 associates. We are proud to serve the automotive
market and to cooperate with the local schools to train the next generation of
manufacturing associates.
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