The World Trade Organization's top court backed Japan in a complaint against U.S. anti-dumping measures, overturning an earlier ruling that had largely sided with Washington.
In a case involving "zeroing," a method used to calculate whether dumping has taken place, the WTO's Appellate Body ruled that the U.S. was breaking international trade rules.
In Washington, a group representing U.S. importers hailed the decision and urged the U.S. to immediately comply. But a U.S. lawmaker said it was "another disturbing example" of the WTO
judiciary overstepping its bounds when it comes to U.S. anti-dumping procedures.
"The Appellate Body is required to apply obligations that the United States and other WTO members have negotiated -- not create obligations out of thin air," Rep. Sander Levin, a Michigan Democrat, said in a statement.
The WTO allows countries to impose duties on imported goods if they can show that they are being sold in their markets below the cost of production in the exporting countries, a practice defined as dumping.
But under so-called zeroing, which has already been ruled illegal by the WTO in other cases, examples of prices in the export market that are above domestic prices are ignored when making the dumping calculation.
In a published ruling, the Appellate Body, whose decision is final, said it reversed the findings of a WTO trade panel in September last year, which were largely favorable to Washington. Its verdict was sent to the WTO's Dispute Settlement Body with a recommendation that the U.S. be told to "bring its measures ... into conformity with its obligations."
Japanese Foreign Minister Taro Aso welcomed the ruling. "The Appellate Body makes it clear that restrictions on international trade by impermissible anti-dumping duty imposition cannot be tolerated," he said in a statement issued in Geneva.