LEAD: Japan eyes taking new action against U.S. over WTO trade rules

TOKYO, Jan. 10, 2008 (AP) - (Kyodo)
Japan is considering taking fresh action against the United States in a bid to resolve a longstanding dispute over World Trade Organization trade rules, Japanese government officials said Thursday.
At issue is the legality of the U.S. method of calculating foreign exporters' dumping margins, known in trade jargon as "zeroing."
The government may decide to ask the WTO to set up a dispute settlement panel as early as next month if the United States continues to show no signs of scrapping the calculation formula, said the officials, who declined to be named.
The formula ignores the products of exporters that actually cost less in their home markets when calculating the extent to which similar products are being "dumped."
Japan, the European Union, China and most other WTO members are critical of the U.S. practice, saying it makes it easier to conclude that dumping -- exporting goods at unfairly low prices -- has taken place and that it inflates the size of antidumping duties on competing imports.
The calculation formula is only currently used by the United States.
On Jan. 9 last year, the WTO appeal body ruled in favor of Japan, stating that the U.S. antidumping practice is inconsistent with the trade rules of the international organization, overruling a decision issued in 2006 that largely sided with Washington's position.
Tokyo and Washington have been engaged in consultations over the issue since the Appellate Body recommended that the United States correct the method, but so far no tangible progress has been made, the officials said.
"We will have to take new action unless the United States provides enough information to prove that the zeroing method has been abolished completely," one of the officials said.
As well as preparing for the panel, the officials said the government is considering requesting that the WTO authorize Tokyo to carry out retaliatory measures if Washington continues not to abide by the appeal body's ruling.
At a regular news conference on Thursday, Takao Kitabata, vice minister of economy, trade and industry, also said preparations are under way for the request.
But Kitabata, the ministry's top bureaucrat, stressed that the request is only for Japan to reserve the right to carry out retaliatory steps.
"We will consider whether to take countermeasures based on the degree to which the United States has implemented (the correction)," he said. "So it is not that we have decided to take countermeasures now."
Kitabata also said Japan is keeping close tabs on the progress of discussions over a similar case between the European Union and the United States being adjudicated by a WTO dispute settlement panel.
In a related development, a draft text, circulated in late November by Guillermo Valles Galmes, the Uruguayan ambassador to the WTO who chairs the Doha Round of trade liberalization negotiations on rules, allows the use of zeroing. The draft has triggered strong protests from both industrialized and developing countries, including Japan, the European Union, India and Brazil.
The countries argue that protectionism will increase worldwide if zeroing is allowed among WTO members.