. /.  WORLD TRADE  
ORGANIZATION  TN/RL/GEN/8 
14 July 2004 
 (04-3028) 
Negotiating Group on Rules Original:   English 
  
 
PROHIBITION OF ZEROING
1 
 
Communication from Brazil;  Chile;  Colombia;  Costa Rica;  Hong Kong, China;  Israel;  
Japan;  Korea;  Mexico;  Norway;  Singa pore;  Switzerland;  Separate Customs  
Territory of Taiwan, Penghu, Kinmen and Matsu;  and Thailand  
 
 The following communication, dated 24 May 2004, is being circulated at the request of the Delegations of Brazil;  Chile;  Colombia;  Costa Rica;   Hong Kong, China;  Israel;  Japan;  Korea;  
Mexico;  Norway;  Singapore;  Switzerland;  Sepa rate Customs Territory of Taiwan, Penghu, Kinmen 
and Matsu;  and Thailand. 
 
 The submitting delegations have requested that this paper, which was submitted to the Rules 
Negotiating Group as an informal document (JOB(04)/57), also be circulated as a formal document.  
_______________ 
 
I.  BASIC PRINCIPLE  
• An AD investigation shall determine whether imports from an exporter or producer of a 
product as a whole  have been dumped  in the importing market, NOT  whether there are 
individual sales  of that product or models  of that product, which ha ve been sold below normal 
value. 
• A “fair comparison ” should be done between export pr ices of all comparable transactions  and 
normal value. 
• Thus, "Zeroing" must be prohibited  in all methods of comparison and in all AD proceedings, 
and a single dumping margin should be calculated for the entire period of investigation. 
 
II.  PROBLEM OF THE CURRENT AD AGREEMENT 
 
• Although the above-mentioned basic principle is  embodied in the current AD Agreement, 
there exist disagreements among Members over th e scope and extent of the prohibition of 
"zeroing ". 
 
III.  AMENDMENT 
 
1. Prohibit the Practice of “Zeroing” in the Calculation of Dumping Margins in All AD 
Proceedings 
  Proposal: 
 
 Amend Article 2.4.2 to explicitly provide that  regardless of the basis of the comparison of 
export prices to normal value (i.e. weighted av erage-to-weighted average or transaction-to-
                                                     
 
1 This issue has been referred to by Members in documents TN/RL/W/6, 20, 22, 25, 26, 28, 45, 66, 72, 
113, 119 and 141. TN/RL/GEN/8 
Page 2  
 
 transaction, or weighted average-to-transacti on), all positive margins of dumping and negative 
margins of dumping found on imports from an exporter or producer of the product subject to investigation or review must be added up.   Further amend the first sentence of Article 2.4. 2 to clarify that the Article applies to initial 
investigations and all subsequent  reviews under Articles 9 and 11.
2 
 
 Explanation: 
 
 These proposals are intended to clarify that regardless of the basis of the comparison 
methodology used by particular authorities, pos itive margins of dumping and negative margins of 
dumping must be added up in the determination of  the margin of dumping for the imports of the 
product as a whole in both the initial inv estigations and subsequent reviews. 
 
2. Clarify That A Single Margin of Dumping Must Be Calculated for the Entire Period of 
Investigation or Review. 
  Proposal: 
 
 Add a provision to Article 2.4 clarifying that , regardless of the comparison methodology, if 
margins of dumping are determined separately fo r imports during multiple portions of the entire 
period of an investigation or review, the margin of  dumping to be determined in the investigation or 
review must be a single margin of dumping for all imports during the entire period of investigation or 
review.  
 Explanation: 
 
 It is possible to effect “zeroing” by subdivi ding the period of investigation or review and 
calculating separate margins for each such period (e .g. month, quarter, semi-annual).  Calculating 
margins for subdivided periods separately and not  offsetting the positive margins with negative 
margins for the entire period of investigation or revi ew can have the same effect as zeroing.  The fact 
that an exporter is dumping in some portion of th e period of investigation or review, but has no 
margin of dumping on exports as a whole during the full period of investigation or review, does not 
justify finding margins of dumping.     
__________ 
 
  
                                                     
 
2 This proposal is also related to our previous proposal on reviews, WT/RL/W/83 (25 April 2003).