GENEVA - The World Trade Organization's top court issued a mixed ruling on Thursday in a case involving U.S. treatment of unfairly priced imports but urged the United States to comply with previous WTO rulings in the dispute.
Both the United States and European Union had appealed against a verdict, also mixed, by a WTO compliance panel in December last year.
The ruling was a further setback for the controversial U.S. method, known as zeroing, of levying anti-dumping duties on imports that are sold for less than they cost at home.
December's panel had found the United States had failed to comply with an original dispute ruling in 2005 and a subsequent appeal in 2006 involving duties on imports of steel products, adopted by the WTO's dispute settlement body (DSB).
To the extent that the United States has failed to comply with recommendations and rulings of the DSB in the original proceedings, they remain operative, the WTO's top court, the Appellate Body, said in the 204-page ruling.
The Appellate Body recommends that the DSB request the United States to implement fully the recommendations and rulings of the DSB, it said.
The appeal court has consistently ruled against zeroing, which is opposed by all the WTO's 153 members except the United States. But Thursday's ruling was nuanced.
It upheld the original compliance panel finding that the United States had wrongly continued to base its assessment of anti-dumping duties on imports of steel products from the Netherlands and Sweden on zeroing after the reasonable period of time it was given to comply with the rulings.
It also supported EU claims about assessments of duties made during the reasonable period of time, and said the United States was in breach of the rules in those cases.
But the court backed the previous panel's rejection of some other EU claims.
International trade rules allow countries to levy compensatory duties on imports that are dumped -- sold for less than they cost in the exporter -- if they hurt business in the importing country.
Calculating these duties usually involves comparing batches of goods. In zeroing the United States ignores -- treats as zero -- examples where the imports actually cost more than at home.
Other countries say this artificially inflates the duties, but Washington argues the method is fair, and is pushing hard to get zeroing recognized in the new Doha trade deal that has been under negotiation for more than seven years.