U.S. wants WTO to stamp out evasion of antidumping duties

By Tom Miles

GENEVA (Reuters) - The United States wants members of the World Trade Organization to support a crackdown on schemes which help companies evade "antidumping duties" - punitive import tariffs levied on unfair foreign competition.

"Over the years, the United States has witnessed a dramatic increase in activities expressly designed to evade the application of antidumping duties," the United States said in a communication to other WTO members.

"Websites marketing such services have been on the rise, and aggressive outreach is luring exporters and/or importers into a false sense of security by offering so-called 'legitimate' services to evade the application of antidumping duties to subject merchandise."

Dumping happens when producers in one country export into a competitor's market at prices that are lower than in their own market.

Dumping is often alleged in markets for low added-value goods and basic materials such as steel products, chemicals, textiles, fertiliser or farm produce, and accusations often arise when global oversupply threatens producers with losses.

The United States has been the second biggest user of antidumping measures since the founding of the WTO in 1995. Only India has taken antidumping steps more often - 715 times compared to the U.S. total of 521, up to the end of June 2014.

The most frequent target of antidumping measures is China. But China is not only a target: like all big trading powers it is a frequent user of antidumping measures, with 215 instances over the same period.

The U.S. communication did not mention which countries were involved, but said the evasion schemes involved shipping goods to an intermediary third country, where they would be reloaded into new containers and provided with false documents to disguise them as goods originating in that country.

They could then be shipped to the final destination without incurring any penalty, it said.

"This problem has been going on for many years. However, it has become more pervasive and the parties have become more brazen in their activities."

It did not put a value on the evasion but said it threatened to undermine the world trade rules and nullify the effect of antidumping duties.

"Silence or inactivity by the host country may also too easily be construed as tacit approval of, or complicity with, such illicit activities."

(Editing by Dominic Evans)