WASHINGTON — Averting potential trade retaliation from Japan and the European Union, the U.S. said Monday it had reached agreement with the two major trading partners, bringing an end to a long-standing dispute at the World Trade Organization over how the U.S. calculates antidumping duties.

This story first appeared in the February 7, 2012 issue of WWD. Subscribe Today.

The WTO had ruled in two separate decisions over the past nine years that the U.S. ran afoul of global trade rules in its use of “zeroing,” which is used to describe the methodology in calculating duties it imposes on goods that are found to be dumped into the U.S. market below fair market value. The U.S. said it will end the practice to come into compliance with two separate WTO rulings, one in April 2006 in the EU dispute and the other in January 2007 in the Japanese dispute that found the U.S. was inconsistent with WTO rules.

Countries calculate antidumping duties based on price comparisons on goods. The EU and Japan charged that the U.S. inflated the price of antidumping duties on their imported products in the way it calculated prices on goods in their own markets, and the WTO concurred.

“I am proud to announce today that we have finally put these burdensome and potentially damaging trade disputes behind us,” said U.S. Trade Representative Ron Kirk. “What this means for the American people and the country as a whole is that American farmers and businesses can invest in job-creating export markets without the uncertainty of possible trade retaliation. And the resolution of these long-standing disputes promotes our ability to focus on the administration’s priority of enforcing U.S. rights under our trade agreements to ensure a level playing field for American farmers, workers and businesses.”

EU Trade Commissioner Karel De Gucht said the resolution of the dispute “will bring immediate relief to EU exporters who will no longer have to pay excessive antidumping duties; some of them will not pay any antidumping duties at all.”

The EU and Japan had requested authorization to impose hundreds of millions of dollars in retaliatory duties on U.S. exports, which in separate, unrelated WTO cases in the past have been applied to apparel and textile exports. But the parties had agreed to suspend the arbitrations to allow time for discussions. Under Monday’s deal, the arbitration for sanctions will be terminated, a USTR official said.

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