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UPDATE 2-Brazil challenges US orange juice imports at WTO

Published 08/19/2009, 04:27 PM
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* Brazil seeks dispute panel on U.S. anti-dumping policy

* Challenge aimed at U.S. use of "zeroing" on orange juice

* Exporters say commercial benefits uncertain (Adds WTO ruling paragraph 8, exporters reaction paragraphs 12-13)

SAO PAULO, Aug 19 (Reuters) - Brazil will request a dispute panel at the World Trade Organization to challenge U.S. anti-dumping measures against Brazilian orange juice imports, the Foreign Ministry said on Wednesday.

Brazil has said that the U.S. measures were hurting local producers. In 2008, Brazilian authorities called U.S. representatives for consultations over anti-dumping investigations, a first step to opening a WTO trade dispute.

"Brazil decided to present in Geneva ... a request to set up a panel on anti-dumping measures adopted by the United States on imports of Brazilian orange juice," the ministry said in a statement on Wednesday.

Brazil and Thailand have launched trade disputes over a method used by the United States in applying anti-dumping measures, which has been condemned by the WTO and challenged by at least three other countries.

Brazil's challenge is aimed at Washington's use of "zeroing" for assessing duties on goods that are allegedly "dumped," or imported for less than they cost at home.

In zeroing, the importing authorities ignore shipments where imported goods are actually higher than domestic market prices and could potentially offset separate below-market shipments from the country. Many countries argue that this practice skews the average price of goods from a given country.

All the WTO's 153 members, except the United States, object to the use of zeroing, which already has been the target of a dozen trade disputes.

On Tuesday, the WTO's top court rejected a U.S. appeal against a challenge opened by Japan in 2004 against the use of zeroing in assessing anti-dumping measures. [ID:nLI276682]

Brazil is the world's largest orange juice exporter, shipping 1.27 million tonnes in the 2007-2008 (Feb-Jan) season. More than 60 percent of the exported juice goes to Europe, while 20 percent heads to North America, according to Brazil's Citrus Exporters Industry.

Brazil has successfully challenged U.S. cotton subsidies and EU sugar subsidies in recent years at the WTO. Brazilian sugar producers and exporters have benefited from Brazil's victory at the WTO over European sugar subsidies.

But Brazilian cotton producers have not fared so well as a result of Brazil's victory against U.S. cotton subsidies. Brazil argues that U.S. producers of the fiber continue to receive trade distorting support from their government.

Brazilian orange juice exporters welcomed the government's decision to challenge U.S. measures but added it was still unclear whether commercial benefits would result from the case.

Although Brazil has launched and won several trade disputes at the WTO, not all of them have resulted in commercial benefit due to the lack of political follow-through, such as in the case of cotton, said Christian Lohbauer, the head of citrus exporters' group CitrusBR.

"Brazil has all the conditions to win this one (at the WTO), but whether this will mean elimination of the zeroing, that is something else," he said.

(Reporting by Camila Moreira and Inae Riveras; Editing by Cynthia Osterman)

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