ISLAMABAD, Jan 17: Pakistan has voiced concern over introduction of zeroing, and deletion of lesser duty provisions in the proposed text of anti-dumping agreement (ADA) of the World Trade Organisation, saying this will benefit some companies from the rich states.

This zeroing means calculation of the margin to which imports are being dumped that is exported at artificially low prices.

US trade authorities ignore ‘zero out’ instances where goods command higher prices in the US than at home. They only take into account cases where prices in the US are lower.

Analysts say this inflates ‘dumping margins’, allowing injured US companies to secure inappropriately high levels of anti-dumping duties on competing imports.

An official in the commerce ministry said Pakistan is not alone but many developing countries, including India, are in clash with the US on proposed changes in the WTO trade remedy rules, principally on the issue of ‘zeroing’, a controversial practice that Washington uses to calculate anti-dumping duties.

Several other countries heavily criticised the text’s provisions for explicitly opening the door to zeroing, the official added.

A draft text was circulated late last month by Chair Ambassador Guillermo Valles Games, who sought comments from the 150 member countries over the proposed changes in the remedy laws.

Pakistan’s permanent Ambassador to WTO, Dr Manzoor Ahmad, in his country statement on the draft remedy laws said the text is highly imbalanced and does not reflect the views of a very vast majority.

By legalising ‘zeroing’, the envoy said this will increase opportunities for imposing barriers to trade. There is no doubt whatsoever that ‘zeroing’ is a biased and partial method for calculating the margin of dumping, he added.

“We were looking forward to clarifying it once for all so that the multilateral trading system is not undermined through such partial and discretionary practices.

“We are, therefore, disappointed that after years of discussions, we are unable to move forward, and have rather ended up stepping backward,” he said.

“We are also puzzled why lesser duty rule has been deleted. This not only needs to be reinserted, but also made mandatory”.

Dr Manzoor said some improvements in a large number of areas have been made. These include provisions relating to data disclosure, exporter’s confidence, price undertakings, back-to-back investigations, and a specially designed peer review mechanism of top investigating members.

On fisheries subsidies, he said Pakistan would have preferred a clearer language on broad prohibition and enforcement of fisheries subsidies.

“But overall we do feel that it is a good effort and the draft text can serve as a basis for further work,” he said.

An analyst said zeroing is a biased and partial method for calculating the margin of dumping and inflates anti-dumping duties.

If the use of such practice prevails in the future, it could nullify the results of trade liberalisation efforts.