FT:

A method known as “zeroing” used by the US in anti-dumping investigations and reviews was slapped down on Wednesday by the top court of the World Trade Organisation.

In a case brought by Mexico against punitive US duties on imports of Mexican steel, the WTO’s appellate body ruled that zeroing was illegal in all types of anti-dumping action. It was the latest in a series of similar rulings against Washington.

The issue has set the US against the rest of the 151-strong WTO membership in the Doha global trade talks, where Washington is pushing for zeroing to be legitimised in changes to anti-dumping rules.

It has also sparked a debate over the role of the appellate body, which the US claims is making rather than interpreting WTO rules. Thus the dispute panel that first considered Mexico’s complaint argued that current rules did permit zeroing in some circumstances, flouting an earlier appeals ruling. The panel’s decision has now been struck down.

Washington on Tuesday responded angrily, accusing the appellate body of over-reach “by inventing new obligations” and of undermining the proper functioning of the dispute settlement system.