GENEVA—The U.S. Department of Commerce erred when it levied both antidumping and countervailing duties on off-the-road tires imported from China, the World Trade Organization Appellate Body has ruled.
The Appellate Body reversed a WTO panel report from October 2010 rejecting nearly all of China's protests against the antidumping and countervailing duties Commerce placed on Chinese OTR tires and several other products in 2008.
Instead, the Appellate Body accepted the arguments China advanced, that Commerce's concurrently levying antidumping duties based on a non-market-economy methodology and countervailing duties on the same products violated WTO rules.
The Appellate Body's ruling seems to be in keeping with the September 2009 ruling of Judge Jane Restani of the U.S. Court of International Trade. “These methodologies … result in a high likelihood of double counting because they effectively counteract the same behavior twice,” Restani wrote in her August 2010 decision reconfirming her earlier decision. Commerce appealed the ruling.
U.S. Trade Representative Ron Kirk said he was deeply troubled by the Appellate Body Report. “It appears to be a clear case of overreaching by the Appellate Body,” Kirk said in a press release. “We are reviewing the findings closely in order to understand fully their implications.”
The WTO Dispute Settlement Body is expected to adopt the Appellate Body report by mid-April, a USTR spokeswoman said. USTR and Commerce are working together to determine what measures should be taken to comply with the report, she said, but it's too early to discuss those options.
Titan International Inc. and the United Steelworkers union petitioned the International Trade Commission in June 2007, requesting antidumping and countervailing duties against OTR tires on grounds of material injury.
In August 2008 the ITC voted 5-1 that the U.S. OTR tire industry was suffering material injury because of Chinese imports, and Commerce levied duties that in some cases went as high as 210.48 percent.
Officials of Titan and the USTR could not be reached for comment. However, Paul Fiore, director of government and business relations for the Tire Industry Association, said he didn't understand the USTR's priorities.
“It's funny how much attention the USTR pays to this segment of the tire industry, which pales in size compared with the passenger and light truck segments,” Fiore said. For at least the past year, TIA has called for a USTR review of the effects of Section 421 tariffs against passenger and light truck tires imported from China.