WTO panel rules against U.S. in shrimp cases

By Jonathan Lynn

GENEVA (Reuters) - U.S. measures targeting cheap imports of shrimp from India and Thailand are illegal, the World Trade Organisation (WTO) ruled on Friday, in the latest setback to Washington's efforts to tackle unfairly priced imports.

A WTO dispute settlement panel said a requirement by the United States on India and Thailand to post bonds to cover full anti-dumping duties on imports of shrimp violated trade rules.

The panel, confirming preliminary rulings from October, also backed a Thai complaint against a controversial U.S. method of calculating anti-dumping duties, known as zeroing, which has come increasingly under attack at the WTO.

The panel found the application of the bond to cover the full duties was inconsistent with anti-dumping rules, as was the U.S. use of zeroing to calculate anti-dumping margins.

"We therefore recommend that the United States bring its measures into conformity with its obligations under the Anti-Dumping Agreement," it said in reports on the cases.

U.S. Customs introduced a requirement in 2004 that exporters subject to paying anti-dumping duties had to post a bond covering the full amount if there was a risk of default.

Previously affected countries had to post a bond equivalent to only 10 percent of the duties.

India and Thailand argued the requirement to post the full amount was an excessive financial burden on exporters paying the anti-dumping duties.