The World Trade Organization on Tuesday ruled the U.S. had applied unfair antidumping duties on a number of goods, overturning an earlier decision that its tariff rates on some carbon steel products and ball bearings were in line with international trade rules.
The decision was a victory for Japan, which challenged the U.S. over the way it sets dumping fees.
In an unusually high-level reaction, Japan's Foreign Minister Taro Aso praised the WTO appeals body for the decision, which he said would help strengthen the system of rules guiding international trade.
The office of the U.S. Trade Representative in Washington said it was still studying the decision and could not immediately comment.
Governments investigate dumping when they suspect that producers are exporting products at below the market price in their own country — usually because exports have been subsidized or when it is believed there is an attempt to corner the market.
The Geneva-based WTO has previously chided the U.S. in disputes with the EU and Canada for how it determines what corrective fees to apply, known in trade jargon as "zeroing."
Despite the legal setbacks, Washington stuck to its policy and appeared to have won an important test case when the WTO rejected most of Japan's arguments in September.
But Tuesday's decision reversed all findings from the ruling, and urged the U.S. to bring its antidumping measures into line with WTO obligations.
"The zeroing procedures adopted by the US in any type of antidumping procedures violate its obligations under the WTO agreement," Aso said in a statement.
The appeal body had made it clear such restrictions on international trade could not be tolerated. "Japan highly values the report as it will serve to maintain and promote the rule-based multilateral trading system," he added.
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