Case Study 4: US Antidumping Measures on Vietnamese Shrimps and WTO Responses | Tài chính quốc tế | Trường Học Viện nông nghiệp Việt Nam
Even though the United States is considered as one of the widely open markets globally, the country is one of the major users of anti-dumping measures through its International Trade Commission (ITC). A notable example is the 2004 anti-dumping measures imposed on the import of shrimps from Vietnam and five other countries, which include China, Brazil, India, Ecuador and Thailand. Many complaints have, however, been raised and efforts made by these countries to eliminate the US anti-dumping duty by making a petition to the WTO. Tài liệu được sưu tầm và soạn thảo dưới dạng file PDF để gửi tới các bạn cùng tham khảo, ôn tập đầy đủ kiến thức, chuẩn bị cho các buổi học thật tốt. Mời bạn đọc đón xem!
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Case study 4
US Anti-dumping Measures on Shrimps in Vietnam
(Oloyede, Bukola, US Anti-Dumping Measures on Shrimps in Vietnam (November 30, 2021). Available at
SSRN: https://ssrn.com/abstract=5075358 or http://dx.doi.org/10.2139/ssrn.5075358) Introduction
Even though the United States is considered as one of the widely open markets globally, the
country is one of the major users of anti-dumping measures through its International Trade
Commission (ITC). A notable example is the 2004 anti-dumping measures imposed on the
import of shrimps from Vietnam and five other countries, which include China, Brazil, India,
Ecuador and Thailand. Many complaints have, however, been raised and efforts made by these
countries to eliminate the US anti-dumping duty by making a petition to the WTO. Vietnam
has the largest seafood industry and is one of the major exporters of shrimps globally. In the
first quarter of 2018, Vietnam exported shrimps and prawns to the global market, amounting
to approximately 464 million US dollars. the basis for the US anti-dumping measures on
shrimps, particularly in Vietnam, the complaints put forward by Vietnam, as well as the
response of the WTO to rein in the situation.
Imports & Exports of Shrimps
In 2012, the shrimp industry was the largest seafood industry globally, which represented
approximately 15% of the value of fish products transacted in the international
market.Developing countries are the main producers of shrimps and a significant portion of the
shrimps produced in some of these countries are exported. The largest shrimp producer
globally in 2012 was China, although, at the time, it was only the third-largest in the shrimp
exporting business; Thailand was the second-largest producer and largest exporter, while
Vietnam was the third-largest producer and second-largest shrimp exporter. The majority of
the shrimp harvests are exported to developed countries such as the United States and Japan,
among others. The US and Japan are two countries that dominate the shrimp import market,
accounting for over 50% of shrimps imported by value globally.
In the 1980s, Central America was the main producer and importer of shrimps to the US
markets with one-half of the total imports into the United States, while Asia and South America
accounted for the remaining parts. Subsequently, the U.S shrimp imports began to reflect
Ecuador and Asian shrimp products, imported from India, Vietnam and Thailand. As of 2018,
the United States was identified as the world’s top importer of shrimps. In 2017 only, the US
accounted for an import of shrimps worth USD 5183 million, a significant increase compared
to the previous year. Subsequently in the year 2018, a total of 202729 metric tons of shrimps
was imported into the United States from various countries. The major shrimp exporters into
the US include India, Indonesia, Vietnam, China, Ecuador, Mexico, Peru, among others.
US Antidumping Duty Order on Certain Shrimp from Vietnam
In 2003, the US Southern Shrimp Alliance (SSA), a coalition of shrimp harvesters in eight
coastal states in the southeast, filed a petition with the United States Department of Commerce
(USDOC) as well as the US International Trade Commission (ITC) for relief from unfair trade
practices and dumping of shrimps in the US, perpetrated by six countries that are producers of
the subject merchandise. These countries include India, Brazil, Thailand, Vietnam, China, and Ecuador.
In the petition filed by the SSA, specific products were excluded from the scope of the anti-
dumping order and investigations, which includes shrimp and prawns that are usually referred
to as cold water shrimps, breaded shrimp and prawns, fresh shrimp and prawns, either peeled
or having their shells on, a specific category of dusted shrimp, dried shrimp and prawns and
those in prepared meals. The products included within the scope of investigations were certain
frozen, canned and warm water shrimps, although the USITC later considered that canned
shrimps caused no injury to the domestic industry and were not included in the order, and
therefore not subject to anti-dumping duty.
Over the years, several complaints and reliefs have also been sought by other components of
the seafood industry in the United States such as salmon, crawfish and catfish in relation to the
rapid growth of imports of seafood, considering that the US is a major producer of different
kinds of seafood itself. However, the requests of the other seafood industry could be regarded
to be limited in scope in comparison to the petitions filed by the US shrimp industry. One of
the reasons that can be pointed out for the lack of success of the anti-dumping petitions of other
US seafood industries is that their petitions were targeted specifically to one country, compared
to the petitions brought against six countries by the US shrimp industry. Moreover, in the
previous petitions submitted by the other seafood industries, the identified dumped products
were limited in scope, compared to that of the shrimp industry. It must also be considered that
compared to shrimp, the number of countries that can compete with the United States in the
production of the other three products is limited, hence the probable reason for their lack of
success in imposing an anti-dumping duty on their products.
US Anti-dumping of Shrimps Investigation
The main reason an anti-dumping investigation is held mandatory is in order to determine
whether a particular country or industry is involved in dumping. A comparison of the price set
by the firm over a period of time is carried out alongside the normal value of the product being
sold. This would be used to ascertain whether the price of the firm’s product is less than fair
value or coincides with the normal value of such product. However, a significant challenge that
has surfaced over time is the fluctuation in prices and exchange rates as a result of situations
that are beyond control, as well as changes in the demand and supply of products. The difficulty
in ascertaining the dumping margin of a firm is what leads to the practice of zeroing. This
method is adopted rather than the use of average prices to determine dumping, by setting the
value to zero when the export price of a product is discovered to be higher or lower than its
normal value. However, several issues have been raised with respect to the zeroing policy on
the basis that it is capable of altering the process of investigation and making it more probable
for dumping to be discovered, as well as causing the dumping margin to increase than normal.
The petition filed by the coalition of US shrimp harvesters was subjected to a thorough
investigation which was carried out in 2004 and the result of the investigation led to an
affirmation of dumping through the sale of shrimp in the US market at a less than fair value
compared to that of the home markets and causing material injury to the domestic shrimp
industry in the US. The anti-dumping investigation was carried out by the US on certain frozen,
canned and warm water shrimps imported into the US. The preliminary determination on the
investigations was given in August 2004, and the final determination in December 2004. The
dumping margin for the petitioned countries was recorded in the US Federal Register, and for
Vietnam, a weighted average margin percentage between 4.13% and 25.76%. was established
in the investigation. At the end of the anti-dumping investigation and based on the finding, an
anti-dumping duty was imposed by the US International Trade Commission (ITC) on the six
countries in 2004 in order to facilitate an increase in the prices of shrimps in the US and prevent
the dumping of shrimps by foreign exporters, which would thereby cause an increase in the
profit-making of domestic shrimp producers. However, the anti-dumping measures imposed
by the US have been observed to have a negative impact on the export performance of the countries petitioned.
Effects of US Anti-dumping duties on Shrimp Exports in Vietnam
In order to impose its anti-dumping duty rates on shrimps imports on the countries, the US
considered China and Vietnam separately. This was on the basis that both countries were non-
market economies and assuming that the information provided by them was unreliable because
the prices of products were controlled by their governments, the United States Department of
Commerce decided to create value indices on their dumping margin. In achieving this, the US
used a surrogate country to determine their value indices, using India for China and Bangladesh
for Vietnam. Hence, this led to the estimated dumping margin of 4.13% to 25.8% for Vietnam
among identified exporters and 4.4% or 25.8% among unidentified ones, a method which
received several criticisms from the petitioners.
Prior to the imposition of the US anti-dumping duty on the six countries, shrimp imports in the
US amounted to 800 million pounds in 2003, a significant increase from the 1999 450 million
pounds.However, after the anti-dumping duty was imposed on these countries, imports into the
US reduced in 2004 to 700 million pounds, and specifically in the case of Vietnam, export of
Shrimps to the US reduced by approximately 45 million pounds (35%) but increased in
cultured production by approximately 65 million pounds. The anti-dumping actions against
Vietnam also negatively affected the exports from Vietnam to the US market. This also led to
a significant increase in shrimp exports of these countries to Japan as well as the European
Union between the period of 2003 and 2004, in the course of the anti-dumping investigations. WTO Dispute Settlement
The first ‘zeroing’ dispute brought before the WTO for settlement was by India in 1999, a case
referred to as the EC-Bed Linen (DS141). Subsequently, a number of cases and petitions have
been filed before the WTO with respect to the zeroing methodology adopted in dumping
calculations. Notably, the majority of these disputes are brought against the United States. The
retrospective anti-dumping system adopted by the US and its complicated mode of
implementation in relation to the WTO rulings, compared to that of the European Union, has
led to several redundant complaints from other members of the WTO to remedy the prejudicial
US anti-dumping calculation methods by means of the zeroing policy.
Notwithstanding several of the rulings that have been made to rectify the inconsistencies of the
WTO zeroing methodology through a number of proceedings, the US has proven reluctant and
made no attempts to rectify its zeroing calculation methodology, which has been observed to
have several implications on the future of the global trading system.
The current dispute is an example of one of these disputes which reveals several non-
compliance issues in the WTO dispute settlement system. Following immediately after it
acceded to the WTO in 2007, the US anti-dumping order on shrimps was one of the initial
complaints raised by Vietnam before the WTO dispute settlement system. In relation to this,
some commentators have regarded the complaints filed by Vietnam as a strong indication that
the country considers the WTO dispute settlement system a legitimate means for the
enforcement of its rights as well as to promote its interests concerning international trade.
Moreover, other commentators also considered that the US – AD Shrimp case would have
consequences regarding how Vietnam will be treated by other trade partners as a non-market economy within the WTO. US-Vietnam Shrimp dispute
Several complaints have been raised over the years by the WTO members against the US anti-
dumping measures and in response, a number of rules have been laid down by the WTO that
the weighted average margins of dumping should be calculated without applying the method
of zeroing, without compliance. With respect to this, a similar complaint was brought before
the WTO panel by Vietnam against the US anti-dumping duty, particularly the US zeroing
practice which allocated to it a higher dumping margin, using a different country (Bangladesh)
as a surrogate for the calculation. This complaint addressed the consistency of the USDOC
final determinations with the WTO rules in its second and third administrative reviews with
respect to certain frozen and canned warm water shrimps exported from Vietnam.
In relation to the US Anti-dumping Shrimp dispute, four sets of claims were made by Vietnam.
These include the use of the US zeroing policy, the limited examination of the mandatory
respondents that were selected, the application of the “all others” rate to firms that were not
included in the sample selection, and finally the Vietnam-wide entity rate. Each of these claims
will be examined in detail in the following sections as well as the responses and decisions of the WTO panel in return.
The US “zeroing” methodology in administrative reviews
The first claim brought against the US by Vietnam was the ‘continued use of challenged
practices’ in its anti-dumping determinations through the use of the zeroing method. The Panel
refuted this claim to be considered as a preliminary matter based on the request of the USDOC,
stating that Vietnam had not been able to identify the ‘continued’ ongoing action of the US
which is sufficient to be considered as an issue for its need of a panel. Complaints were also
raised by Vietnam as regards the use of “applied” and “as such” in the process of investigation,
including the WTO's inconsistent zeroing methods in its administrative reviews. In relation to
this, the Panel adopted previous jurisprudence and supported the claim of Vietnam as well as
other complainants such as Korea and India, positing that the zeroing method employed by the
US Department of Commerce in its administrative reviews constitute an abuse of the
requirement of ‘fair comparison’ as laid down under Article 2.4 of the Anti-dumping
Agreement. It was further added by the Panel that this would still apply in situations where all
the dumping margins calculated individually turned out to be zero or what is regarded as de
minimis, and no anti-dumping duties are subject to assessment. In opposition, the USDOC
contested that if the dumping margins were zero or de minimis, it could not be considered that
the value had been inflated. In response, the Panel submitted that applying the practice of
zeroing even where anti-dumping duties are not assessed leads to a distortion of prices set for
specific export transactions, considering that export transactions that are set at prices that are
beyond the normal value are not regarded in relation to their real value.
The Panel considered that the WTO inconsistency is not determined by the effects of zeroing
on the duties levied, and associated the practice when subject to a challenge ‘as applied’ to a
‘per se’ character. Moreso, based on Vietnam’s claim that the zeroing method adopted by the
US in its administrative review is a rule of general and prospective application that is not
consistent with the ‘as such’ in the Anti-dumping Agreement, the Panel depended on the
evidence of the application of the zeroing methodology by the US in practice to confirm this
allegation.54 Based on the analysis of evidence, the Panel stated that the USDOC will continue
to apply the method of zeroing and the application in its administrative reviews goes beyond
the repeated application of the practice in different cases but based on Vietnam’s claim, it shows
that the USDOC embraces a deliberate policy in that regard.
On this first cause of dispute based on the various issues considered, the WTO panel report
stated that the United States Department of Commerce (USDOC) had not acted in consistence
with the Anti-dumping Agreement by considering the inconsistent dumping margins in
determining the possibility of dumping through the policy of zeroing.
A limited examination of the mandatory respondents selected
The second issue identified was the limited examination of the mandatory respondents selected
based on the presumption of the USDOC that the Vietnam firms belonged to a single non-
market entity and received a single EWR. According to the terms provided in the first and
second sentence of Article 6.10 of the Anti-dumping Agreement, WTO members and
investigating authorities were permitted to limit their investigations to a relevant sample of
firms when confronted with a large number of producers, exporters, importers, or products that
are related to the market being investigated which can make such determination impracticable.
This is regarded as “limited examination” and serves as an exception to the general rule, which
establishes that an individual dumping margin should be determined by an investigating body
for each known producer or exporter in relation to the product under investigation. In
accordance with the Agreement, the examination can therefore be limited to either a reasonable
number of interested parties or to a reasonable selection of products or a reasonable percentage
(largest) of export volumes from the specific country capable of being investigated by utilising
statistically valid samples based on the information available to the investigating authorities when making the selection.
Before the WTO Panel, the argument was brought forward by Vietnam that the repeated use of
the term “limited examination” in Article 6.10 of the Anti-dumping Agreement to exporting
firms was a distortive practice, due to the discretion it affords to the United States Department
of Commerce, which ascribed to several of the firms higher dumping margins without a form
of recourse to administrative review. The argument raised by Vietnam was that the use of
“limited examination” by the USDOC in its investigations had turned the general rule in the
Agreement into an exception and the exception into a general rule.
The rationale for this rule laid down under Article 6.10 of the Anti-dumping Agreement is an
attempt to achieve a balance between the burden placed on investigating authorities in carrying
out their investigations in the exporting country and the probable consequence of limited
examinations considering the rights of the non-investigated firms. This it does by stipulating
that ‘limited examination’ must not be applied except in cases where a thorough examination
would be impracticable and that the examination should be carried out in relation to a selected
sample of exporting firms that comply with the statistical representative requirement or
maximal coverage on export volume requirement.
Vietnam’s claim would have been more aligned if a challenge concerning the adoption of the
limited examination by the USDOC had been founded on the basis that the United States
Department of Commerce had not satisfied the conditions under Article 6.10 of the Agreement.
For instance, by claiming that the limited examination on individual dumping margins carried
out by the USDOC on Vietnam firms was not impracticable and that the selected sample of
mandatory respondents was not statistically valid, and the largest export coverage requirement
was not satisfied. However, this was not the case in this dispute. As noted by the Panel:
“Vietnam is not challenging the USDOC’s determination that it was ‘impracticable’ to examine
all known exporters and producers, nor is Vietnam challenging the number of exporters or
producers which the USDOC included in its limited sample’. The Panel, therefore, moved to
evaluate the claims made by Vietnam on the basis that the limited examinations employed by
the USDOC in its second and third administrative reviews were in line with Article 6.10 of the
Agreement. This was based on the justification proffered by the USDOC that the limited
examination had been resorted to due to the ‘significant workload’ on it by a number of anti-
dumping proceedings with limited resources to go round. However, the Panel only noted
concerning the quality and size of the samples selected by the USDOC that two Vietnam
exporting firms, which accounted for 34% of total exports of significant firms had been
examined by the USDOC in the second administrative review, and three exporting firms with
their shares in total exports unspecified had been examined in the third administrative review.
However, arguments have been raised on this issue that the decision of the Panel that the sample
of firms selected by the USDOC for limited examination conformed with the requirement
under Article 6.10 was merely an assumption and was not based on merits. The rationale is that
if the sample size and quality of the firms selected had been thoroughly examined, the Panel
would have arrived at the conclusion that the selection was not representative and restrictive Vietnam wide entity rate
The last claim presented by Vietnam before the WTO Panel was that the rates of anti-dumping
duties that were imposed on shrimp exporters, considered as part of the Vietnam-wide entity
were very high (‘AFA’), compared to the ‘all others’ rate. In response to this, the USDOC
submitted that there were no restrictions placed on the maximum rate that countries were
permitted to be levied, hence it had not in any way violated the provision of Article 9.4 of the
AD Agreement. The Panel, however, rejected this argument and noted that there was no
provision of Article 9.4 of the AD Agreement that imposed a separate sanction or rate on non-
individually assessed firms that do not fall with the ambit of the ‘all others’ rate. Therefore, the
Panel held that the higher AFA rate had been applied unduly by the USDOC to other Vietnam
shrimp exporting firms. The Panel also rejected the argument of the USDOC that the higher
AFA rate was applied because the firms had failed to cooperate on the basis that the USDOC
would have notwithstanding imposed the AFA rate with their cooperation.
Hence, the US – AD Shrimps investigation concluded with the rejection of the US zeroing
methodology and other distortive practices adopted by investigative authorities as a means to
impose anti-dumping duties on exporting firms. Although all of the issues based on the claims
presented by Vietnam were not sufficiently addressed by the Panel and further complaints have
been made subsequently by Vietnam for settlements by the WTO, it is expected that other
issues relating to anti-dumping and trade barriers will be effectively addressed in future
disputes to provide a more efficient result for the world trading system.
Safeguarding measures as an alternative to Anti-dumping
Similar to the anti-dumping measures (AD), safeguard measures (SG) are also temporary forms
of trade barriers and can be used alternatively. While there are instances in which anti-dumping
measures are more applicable to be used as countervailing duties, there are also instances where
safeguarding measures are considered to be more appropriate, considering the situation. In
certain situations, safeguarding measures have been considered to be more “fairer” as well as
efficient, compared to the imposition of anti-dumping duties. One of the reasons brought
forward is that a safeguarding policy can lead to what is referred to as the “most-favored-
nation” (MFN) protection by means of non-discriminatory dealing with imports, regardless of
the country of source. On the other hand, anti-dumping duties result in the protection of imports
from a specific petitioned country which can result in the possible discriminatory treatment of
such country among other trading partners. Such discrimination under an anti-dumping order
can also subsequently result in trade diversion, thereby leading to importers diversifying into
other products from other foreign firms with higher costs, which can further negatively impact the domestic economy.
In relation to the US-AD Shrimp case, the anti-dumping measures adopted by the USDOC may
be considered inappropriate, taking into account the policy that a firm needs to have the power
to determine prices in the market before dumping. However, in relation to the Vietnamese
firms, this feature was lacking due to their expanded and smaller firms. Alternatively, the
safeguarding policy would have afforded a more effective measure of trade barrier to the anti-
dumping duties employed by the USDOC. One of the reasons is that the safeguarding policies
would have been applicable to all exporters into the US on the basis of MFN, unlike the anti-
dumping duty which was only applied in specific cases at a higher EWR. Although the anti-
dumping duty affords longer protection than the safeguarding policy, the latter could have
produced a more efficient outcome that would benefit both the US and Vietnam. Conclusion
In this article, the prevailing dispute between the United States and Vietnam (US-Shrimp II
case) is examined in detail, including the different findings of the WTO Anti-dumping Panel.
Two specific findings of the Panel were considered worthy of analysis. First, the WTO Panel
observed that the USDOC had not acted in accordance with the Anti-dumping agreement in
calculating the anti-dumping margins by exporting firms through the use of its zeroing method.
In the same vein, the presumption of the USDOC that every one of the producers and exporters
in Vietnam belonged to a single non-market unit, receiving an EWR was considered to be
contrary to the provisions of the Anti-dumping Agreement. The view was presented that the
anti-dumping measures adopted by the USDOC were inappropriate, considering that a firm
needed to have the power to determine prices in the market before dumping. This was a feature
lacking on the part of Vietnam firms due to their expanded and smaller firms, hence the
USDOC could have rather employed an alternative to the anti-dumping measures which would
have been more effective, such as the safeguard measures.
Discussion Questions (For all groups)
1. How does the United States' adoption of the zeroing methodology impact the fairness
of anti-dumping investigations? Do you think it aligns with the WTO's principles of fair trade? Why or why not?
2. What were the economic consequences for Vietnam's shrimp export industry as a result
of the US anti-dumping measures? How did the shift in Vietnam’s export focus to other
markets (e.g., Japan and the EU) mitigate or exacerbate these impacts?
3. The US classified Vietnam as a non-market economy (NME) and used surrogate values
to calculate dumping margins. How does this classification affect the accuracy of the
anti-dumping investigations? Should such practices continue in global trade?
4. Vietnam filed complaints with the WTO regarding the US zeroing practice and other
distortive methods. Based on the case study, how effective has the WTO dispute
settlement mechanism been in addressing these issues? What improvements can be suggested?
5. Safeguard measures are presented as an alternative to anti-dumping duties. In the
context of the US-Vietnam shrimp dispute, do you think safeguard measures would have
been a better approach? Why or why not?
6. How do disputes like the US-Vietnam shrimp case influence the dynamics of global
trade, particularly for developing countries? What lessons can other countries learn from
Vietnam’s experience in handling anti-dumping investigations?
Assignment for the presentation group (This task is for presentation groups only)
Provide an overview of the Vietnam economy and offer detailed insights into trade and
foreign investment. Summarize the case prior to addressing the discussion questions.
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