WT/DS244/R
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ANNEX B
Third Party Submissions
Contents Page
Annex B-1 Third Party Submission of Brazil B-2
Annex B-2 Third Party Submission of Chile B-12
Annex B-3 Third Party Submission of the European Communities B-17
Annex B-4 Third Party Submission of Korea B-27
Annex B-5 Third Party Submission of Norway B-35WT/DS244/R
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ANNEX B-1
THIRD PARTY SUBMISSION OF BRAZIL
I. INTRODUCTION
1. The Government of Japan (“Japan”) challenges the consistencies of the US law and practice,
which allow the continued imposition of antidumping duties in perpetuity, with the obligations under
the General Agreement on Tariffs and Trade 1994 (“GATT 1994”), the Agreement on
Implementation of Article VI of the GATT 1994 (“AD Agreement”) and Marrakesh Agreement
Establishing the World Trade Organization (“WTO Agreement”).  The Government of Brazil(“Brazil”) fully concurs with the arguments raised by Japan and share its concerns that the US law and
practice involving sunset reviews is in violation of the obligations under these agreements.
2. Brazil makes this third party submission to comment on two of the claims asserted by Japan
and discuss their systematic application to all antidumping duty proceedings conducted by the United
States.  Specifically, Brazil addresses the application of the de minimis  margin standard of 0.5 per cent
and the use of the “zeroing” methodology.
3. Brazil has recently participated in consultations with the United States on these two issues in
the context of the continued imposition of the antidumping duty on silicon metal from Brazil.
1  The
consultations failed to resolve the dispute.  Brazil has not yet requested the establishment of a panel
with respect to its challenge.2
4. Brazil believes that in maintaining de minimis  margin of 0.5 per cent and the zeroing
methodology, the United States violates Articles 2.4, 2.4.2, 5.8, 11 and 18.3:
• The US regulation and application of the de minimis  standard of 0.5 per cent to
administrative reviews violate Articles 5.8, 11 and 18.3 of the AD Agreementbecause the definition of de minimis  established in Article 5.8 is applicable to the
consideration of whether the continued imposition of the antidumping duty is
necessary.
• The US law and practice which fails to take into account any margin comparison that
do not result in a positive margin, i.e., zeroing, violates Articles 2.4 and 2.4.2 of the
AD Agreement.
II. STANDARD OF REVIEW
5. Pursuant to Article 17.6(ii) of the AD Agreement, the Panel’s approach in this dispute should
be to interpret the relevant provisions of the AD Agreement in accordance with customary rules of
interpretation of public international law.  In the context of the practice developed by the Appellate
Body and panels, the “customary rules of interpretation of public international law” has meant the
application of  Articles 31 and 32 of the Vienna Convention on the Law of Treaties (“Vienna
                                                     
1 See WT/DS239/1/Rev.1.
2 Specifically, Brazil’s challenge was based on the continued imposition of the antidumping duty on
Silicon Metal from Brazil with respect to one producer , Companhia Brasileira Carbureto de Cálcio. (“CBCC”).
The decision of the United States to maintain the antidumping duty with respect to CBCC was based, in part, onthe application of the application of the de minimis  standard of 0.5 per cent to administrative reviews and the use
of the zeroing methodology.WT/DS244/R
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Convention”).3  This use of the Vienna Convention applies both under Article 11 of the DSU and
Article 17.6 of the Antidumping Agreement.4  ‘
6. Article 31 of the Vienna Convention provides that the words of a treaty must form the starting
point of interpreting a treaty, according to th eir “ordinary meaning,” taking into account their
“context” and the “object and purpose” of the treaty.  The “context” for this purpose includes otherparts of the treaty under review, as well as other instruments related to the treaty at issue, any
subsequent agreement, any subsequent practice, and any relevant rules of international law.  Where
the ordinary meaning is clear, the context,  the object and purpose of the treaty, do not override the
text of the treaty.
5  At the same time, the interpretation of a given text must not result in reducing
whole clauses or paragraphs of the treaty to redundancy or inutility.6
7. Where the Panel finds that a relevant provision of the AD Agreement permits more than one
possible interpretation, the Panel must find the authorities’ measure to be in conformity with the ADAgreement if it rests upon one of those permissible interpretations.  In the typical case, a panel or the
Appellate Body has used the Vienna Convention as  a tool for determining a single meaning for a
particular WTO text.
7  However, “the second sentence of Article 17.6(ii) presupposes that application
of the rules of treaty interpretation in Articles 31 and 32 of the Vienna Convention could give rise to,
at least, two interpretations of some provisions of the Antidumping Agreement, which, under theConvention, would both be ‘permissible interpretations.’   In that event, a measure is deemed to be in
conformity with the Antidumping Agreement ‘if it rests upon one of those permissible
interpretations.’”
8
8. Where the authorities argue that there is more than one permissible interpretation of the AD
Agreement provision, the Panel must not accord any deference to the interpretation advocated by the
agencies.  Instead, the Panel must, as commanded by the first sentence of Article 17.6(ii), apply the
interpretive rules of the Vienna Convention to th e legal interpretations involved in the dispute.9  For
this reason, the Panel in this case must not give any deference to the United States Department of
Commerce’s (“USDOC”) interpretation of the AD Agreement and must interpret the provisions
according to customary rules of interpretation of p ublic international law as embodied in the Vienna
Convention.10
III. ARGUMENT
A. THE APPLICATION OF THE 0.5 PER CENT DE MINIMIS  STANDARD TO ALL REVIEWS OF
ANTIDUMPING MEASURES VIOLATE THE AD A GREEMENT
                                                     
3 Id. at para. 57.
4 Id.
5 Japan – Taxes on Alcoholic Beverages , WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, p. 12
n. 20.
6 Gasoline, WT/DS23/AB/R, adopted May 20, 1996, p. 23.
7 United States – Anti-Dumping Duty on Dynamic Random Access Memory Semiconductors (DRAMS)
of One Megabit or Above from Korea , Panel Report, WT/DS99/R (January 29, 1999), para.4.44 (submission by
United States).
8 United States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan , Appellate
Body Report, AB-2001-2, WT/DS184/AB/R (July 24, 2001), para. 59.
9 United States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan , Appellate
Body Report, AB-2001-2, WT/DS184/AB/R (July 24, 2001), para. 60.
10 United States – Anti-Dumping Duty on Dynamic Random Access Memory Semiconductors (DRAMS)
of One Megabit or Above from Korea , Panel Report, WT/DS99/R (January 29, 1999), para.4.44 (submission by
United States).  para. 4.63-4.70.WT/DS244/R
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1. The Definition of the De Minimis  Margin Standard Provided in Article 5.8 of the AD
Agreement Applies to the Entire AD Agreement
9. In broad terms, the AD Agreement defines the obligations of a Member with respect to three
different aspects of an antidumping measure.  First, Article 5 provides the rules related to the
investigative phase and the decision whether to impose an antidumping duty.  Once a decision toimpose antidumping duty is made, Article 9 defines the requirements pertaining to the assessment and
collection of the antidumping duty, while Article 11 pertains to the duration and revocation of the
duty.  Due to the differences in purpose, certain procedural differences exist in the three phases;
however, the basic principles of the AD Agreement serve as the thread between these Articles.
10. Article 5 of the AD Agreement pertains to the investigative phase of an antidumping
proceeding and sets forth the requirements needed to support an investigation and to impose
antidumping measures.  Specifically, Article 5.5, Article 5.7, and Article 5.8 require that the decisionto continue an investigation and to impose an antidumping measure be supported by sufficient
evidence of (1) dumping, (2) injury and (3) a caus al link between the dumped imports and the alleged
injury.
11. Article 5.8 provides in relevant part:
An application under paragraph 1 shall be rejected and an investigation shall be
terminated promptly as soon as the authorities are satisfied that there is not sufficient
evidence of either dumping or of injury to  justify proceeding with the case.  There
shall be immediate termination in cases where the authorities determine that the
margin of dumping is de minimis , or that the volume of dumped imports, actual or
potential, or the injury is negligible.  The margin of dumping shall be considered tobe de minimis  if this margin is less than 2 per cent, expressed as a percentage of the
export price.
12. In accordance with the rules of interpretation set forth above, the terms of Article 5.8 must
first be interpreted in their ordinary meaning.  The first two sentences of Article 5.8 require an
affirmative action, i.e., termination of the investigation, by a Member, if a condition, i.e., existence ofa de minimis  margin, is met.  The third sentence defines the condition that triggers the obligation as a
margin of less than 2 per cent of the export price.  As such, the first two sentences impose affirmative
obligations upon a Member, while the third sentence articulates a general principle.  The fact that the
definition contained in the third sentence serves as a condition for an obligation in the preceding
clause does not mean that the condition itself is confined to the obligation.
13. The third sentence of Article 5.8 defines that a margin of less than 2 per cent is “ de minimis ,”
and does not state that the definition is limited to the termination of investigations, although,admittedly, it is contained in the same paragraph.  According to the plain language of the sentence, it
is not conditioned upon the rest of Article 5.8 and the United States cannot attach a condition that
does not exist.  Article 31.4 of the Vienna Convention provides that “[a] special meaning shall be
given to a term if it is established that the parties so intended.”  Here, the parties intended to give a
special definition to the term “ de minimis .”  There is no other definition of “ de minimis ” contained
anywhere else in the AD Agreement..  Because this sentence is clear in its ordinary meaning, it does
not require a contextual analysis and is not subject to various interpretations.
14. Read in its ordinary meaning, Article 5.8 unambiguously establishes that a margin of less than
2 per cent is “ de minimis ,” which, by operation of the first and second sentences, does not justify
imposition of antidumping measures.  Thus, by definition, a margin of less than 2 per cent does notcause actionable injury under the terms of the AD Agreement.  This definition must apply to other
types of proceeding contemplated under the AD Agreement.WT/DS244/R
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2. The Panel’s Decision in DRAMS Interpreting Article 5.8 is Not Dispositive to the
Current Proceeding
15. An interpretation of the Article 5.8 de minimis  standard was recently undertaken in United
States – Anti- Dumping  Duty on Dynamic Random Access Memory  Semiconductors (DRAMS) of One
Megabit or Above From Korea  (“DRAMS”).11  In DRAMS, the Panel rejected Korea’s claim that the
United States violated Article 5.8 by applying a 0.5 per cent de minimis  standard in the context of
Article 9.3 duty assessment procedures.  This finding, however, does not affect the interpretation of
the issue in the present proceeding.
16. The disputed issue in DRAMS, as interpreted by the panel, was as follows12:
Essentially, the parties disagree as to whether the second sentence  (and therefore the
de minimis  standard contained in the third sentence) of Article 5.8 applies to both
anti-dumping investigations and Article 9.3 duty assessment procedures (referred toin US parlance as “administrative reviews”), or only to anti-dumping investigations.
(Emphasis added)
17. Thus, the Panel focused its analysis to interpreting the obligation imposed by the second
sentence of Article 5.8, vis-à-vis Article 9.3, rather than on the AD Agreement’s definition of “ de
minimis .”  After concluding that the term “cases” used in the second sentence did not include
Article 9.3 duty assessment proceedings, the Panel considered the implication of note 22 of the AD
Agreement to Article 5.8:
[N]ote 22 of the AD Agreement effectively provides that a finding in a US duty
assessment procedures that no duty is to be levied “shall not by itself require the
authorities to terminate the definitive duty .”  According to note 22, therefore, a
finding that an Article 9.3 duty assessment procedure of a zero margin of dumping,
which is de minimis  under both the US 0.5 per cent standard and the 2 per cent
standard advocated by Korea on the basis of Article 5.8, shall not by itself lead to
termination of the duty.  Nevertheless, by arguing that Article 5.8, including the
second sentence thereof, applies in the context of Article 9.3 duty assessments, Koreais effectively arguing that a zero per cent, i.e., de minimis , margin of dumping shall
lead to “immediate termination” of the duty.
13
18. The Panel found that the interpretation advocated by Korea was inconsistent with note 22, to
the extent that note 22 explicitly provides that a finding of no duty in the Article 9.3 duty assessment
procedures “shall not” require a termination of the duty.14  Based on this context, the Panel concluded
that “Article 5.8, second sentence, does not apply in the context of Article 9.3 duty assessment
procedures.”15
19. The Panel also reasoned that the differences between investigations and Article 9.3 duty
assessment procedures supported the application of a different de minimis  standard.  First, the
function of the de minimis  standard in investigation, in the context of Article 5.8, is “to determine
whether or not an exporter is subject to an anti-dumping order.”  In comparison, a de minimis  test in
Article 9.3 duty assessment proceedings only determines whether or not an exporter should pay aduty, and does not exempt the exporter from the order.
                                                     
11 WT/DS99/R (19 January 1999).
12 Id. at 148 (emphasis added).
13 Id. at 150.
14 Id.
15 Id. (emphasis added).WT/DS244/R
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20. The Panel’s reasoning shows that its decision was narrow and limited to the applicability of
the second sentence of Article 5.8 to Article 9.3 duty assessment proceedings.  The only issue
considered in DRAMS was whether the obligation contained in the second sentence was applicable to
duty assessment reviews.  The parties in DRAMS di d not argue, and the Panel did not consider, the
applicability of the definition of the term “ de minimis ” contained in the third sentence of Article 5.8 to
contexts other than investigations.  As discussed a bove, the plain meaning of Article 5.8 does not limit
the definition of de minimis  to any particular context.
3. The 2 Per Cent De Minimis  Standard Applies in the Context of Article 11 Proceedings
(a) Article 11 reviews differ in purpose and procedure from Article 9.3 reviews
21. As noted above, the AD Agreement contemplates two different types of post-investigation
proceedings, or reviews.  The first type of proceeding, described under Article 9.3, is the review
required to assess the actual amount of antidumping duty and to collect such duty.  Distinct andseparate from the Article 9.3 proceeding is the review required to determine the continued necessity
of the duty, provided in Article 11.
22. Article 11.1 provides that an antidumping measure “shall remain in force only as long as and
to the extent necessary to counteract dumping which is causing injury.”  In accordance with
Article 11.1, Article 11.2 directs the authorities to “review the need for the continued imposition ofthe duty by “{examining}whether the continued imposition of the duty is necessary to offset
dumping, whether the injury would be likely to continue or recur if the duty were removed or varied,
or both” and to terminate immediately the duty if  the review shows that the duty is no longer
warranted.  Similarly, Article 11.3 obligates the authorities to terminate the duty after five years,
unless it is determined in a review that “the expiry of the duty would be likely to lead to continuationor recurrence of dumping and injury.”
23. As shown above, a “review” for Article 11 purposes is defined as a review for “the need for
the imposition of the duty” and to determine whether dumping or injury is likely to continue or recur.
Thus, according to the AD Agreement, a “review” for Article 11 purpose, i.e., the revocation of the
duty, is to be distinguished from a “review” solely for Article 9 duty assessment purposes.  Theantidumping duty order can be removed, in whole or in part, following an Article 11 review, while an
Article 9.3 review would not do so.  Moreover, the continued imposition of duties under Article 11
requires “dumping which is causing injury,” while a single Article 9 review does not, by itself,
address the injury issue.  Note 21 of the AD Ag reement reinforces the difference between the two
types of reviews:  “A determination of final liab ility for payment of anti-dumping duties as provided
for in paragraph 3 of Article 9 does not by itself constitute a review within the meaning of
[Article 11].”
24. In this regard, an Article 11 review bears a close connection to Article 5.  In contrast to
Article 9 duty assessment reviews, both Article 5 and Article 11 are concerned with whether an order
should apply at all.  In contrast to Article 9, bo th Article 5 and Article 11 apply tests for dumping and
injury .
(b) A dumping margin of less than 2 per cent does not constitute “dumping which is causing
injury.”
25. To apply the principle of Article 11.1 that “[a]n anti-dumping duty shall remain in force only
as long as and to the extent necessary to counteract dumping which is causing injury,” one must first
determine the meaning of the term “dumping which is causing injury.”  Because Article 11 does not
contain a separate definition of “dumping which is causing injury,” the definitions establishedelsewhere in the AD Agreement are applicable in this context.WT/DS244/R
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26. The only place in the AD Agreement that addresses the sufficiency of dumping and injury is
Article 5.  As noted above, Article 5.8 requires an “immediate termination” of cases where the
dumping margin is less than 2 per cent.  Thus, the AD Agreement establishes that a dumping margin
of less than 2 per cent, by definition, cannot cause injury.  Given that injury is necessary to both
impose antidumping measures and to maintain such measures, a dumping margin that is insufficient tojustify the imposition of antidumping measures in the first place cannot be considered sufficient to
maintain such measures.  Accordingly, the 2 per cent de minimis  threshold is applicable in the context
of determining the necessity of the continued imposition of the duty under Article 11.  In other words,
“dumping which is causing injury” must exceed 2 per cent of export price.
(c) The US regulation and practice violate Article 5.8, Article 11 of the AD Agreement
27. Pursuant to section 351.106(c) of the USDOC’s regulations and by practice, the USDOC
equates no dumping as less than 0.5 per cent margin of dumping, the threshold that it applies to all“reviews” of the antidumping duty order, irrespective  of the purpose of the review.  Thus, the United
States equates “dumping which is causing injury” as less than 0.5 per cent margin when determining
the continued necessity of the antidumping measures.  The United States effectively maintains
antidumping duties for periods during which there is no dumping which is causing injury, in violation
of Article 11.1.  Accordingly, Section 351.106 of the USDOC’s regulations, on its face, violatesArticle 5.8 and Article 11 of the AD Agreement.
4. Article 18.3 Also Supports the Application of the De Minimis  Standard to
Administrative and Sunset Reviews
28. The application of a de minimis  standard to administrative review that is different from
investigations also violates Article 18.3 of the Agreement.  Article 18.3 states:
Subject to sub-paragraphs 1 and 2, the provisions of this Agreement shall apply to
investigations, and reviews of existing measures,  initiated pursuant to applications
which have been made on or after the date of entry into force for a Member of WTO
Agreement.
29. Read in its ordinary meaning, this paragraph does not distinguish which “provisions” are
applicable to reviews or investigations.  The lack of differentiation indicates the Agreement was not
intended to set up different rules for reviews and investigations.  Therefore, Article 18.3 further
supports the conclusion that the de minimis  standard defined in Article 5.8 is applicable to all
segments of an antidumping proceeding.
B. Z
EROING
30. In European Communities – Anti-Dumping Duties  on Imports of Cotton-Type Bed Linen
From India  (“Bed Linen”)16, the Panel ruled that that the practice of “zeroing” when establishing the
margin of dumping as applied by the European Communities in antidumping investigations was
inconsistent with Article 2.4.2 of the Agreement.  This decision was recently upheld by the Appellate
Body.17  The United States employs the same methodol ogy of zeroing in its practice and, thus,
violates Article 2.4.2 of the Agreement.
                                                     
16 WT/DS141/R (30 October 2000).
17 WT/DS141/AB/R (1 March 2001).WT/DS244/R
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1. The US Law and Methodology
31. The practice of “zeroing,” as addressed in Bed Linen , arises in situations where the
investigating authority makes multiple comparisons of export price and normal value, and then
aggregates the results of these individual comparisons to calculate an overall dumping margin for the
specific exporter or producer under investigation.  Specifically, the US methodology of dumpingmargin calculation can be summarized as follows:
(i) The USDOC first identifies the product under investigation or review into a
certain number of different “models” or types of that product, based on
certain characteristics of that product.  For example, in the silicon metal
proceeding, silicon metal with 100% silicon content may be considered one
“model,” while silicon metal with 95% silicon content may be considered
another “model.”
(ii) Next, the USDOC compares the export price of each model sold in the
United States to the normal value of a like model.   In an investigation, the
USDOC compares the weighted-average normal value with the weighted-
average export price.  In an administrative review, the USDOC generally
compares the weighted average normal value with the export price for eachsale transaction.
(iii) To calculate the dumping margin for each type or model, the USDOC
subtracts export price from normal value for each model.  If, for some
models, normal value is higher than export price, the USDOC determines a
“positive dumping margin” for those models.  If, for other models, normalvalue is lower than export price, the result is a “negative dumping margin”
for those models.  Thus, the model-specific dumping margin indicates
precisely how much the export price is above or below the normal value.
(iv) The USDOC then sums all model-specific dumping margins to determine the
overall dumping margin the product under investigation as a whole.  In doingso, any “negative dumping margins” are treated as zero, and only adds up the
“positive dumping margins.”  This practice is generally referred to as
“zeroing.”
(v) Finally, the USDOC divides the sum of all positive dumping margins by the
total value of the all export transactions involving all types or models of that
product, resulting in the weighted average dumping margin rate for that
respondent.
32. The US methodology, which is also descri bed in the USDOC’s Antidumping Manual, is
identical to the practice of the European Communities (“EC”) addressed in Bed Linens.
18
2. The Bed Linen Decision
33. Article 2.4.2 states:
Subject to the provisions governing fair comparison in paragraph 4, the existence of
margins of dumping during the investigative phase shall normally be established on
                                                     
18 European Communities – Anti-Dumping Duties on Imports of Cotton-Type Bed Linen From India ,
WT/DS141/R (30 October 2000), WT/DS141/AB/R (1 March 2001) (“ Bed Linen” ).WT/DS244/R
Page B-9
the basis of a comparison of a weighted average normal value with a weighted
average of prices of all comparable export transactions or by a comparison of normal
value and export prices on a transaction-to-transaction basis.  A normal value
established on a weighted average basis may be compared to prices of individual
export transactions if the  authorities find a pattern of export prices which differsignificantly among different purchasers, region or time periods, and if an explanation
is provided as to why such differences cannot be taken into account appropriately by
the use of a weighted average-to-weighted average or transaction-to-transaction
comparison.
34. In Bed Linen , India challenged, among other claims, that the use of the zeroing methodology
by the European Communities was not consistent with Article 2 obligations.  The Panel agreed with
India that the zeroing practice of the European Communities violated Article 2.4.2 of the ADAgreement.
19  Following an appeal by the European Communities, the Appellate Body undertook an
analysis of the zeroing practice vis-à-vis the obligations under Article 2.
35. On appeal, the European Communities argued that, where the product under investigation
consisted of various “non-comparable” types or models, such investigation entailed two stages in
calculating margins of dumping, wherein the dumping margin was first calculated for each type ormodel, and, then, at the second stage, combined to calculate an overall margin of dumping for the
product under investigation.  The European Communities contended that Article 2.4.2 was not
applicable to the second stage of calculating the overall margin of dumping for the product under
investigation.
36. The Appellate Body rejected European Communities’ arguments that the AD Agreement
contemplated two different stages of calculating the margin of dumping.  First, it began with an
analysis of the ordinary meaning of Article 2.1, which states:
For the purposes of this Agreement, a product is to be considered as being dumped,
i.e., introduced into the commerce of another country at less than normal, if the
export price of the product exported from one country to another is less than thecomparable price, in the ordinary course of  trade, for the like product when destined
for consumption in the exporting country.
37. Inferring from the phrase “product is to be considered to be dumped” of Article 2.1, the
Appellate Body found that the AD Agreement “concerns the dumping of a product, and that,
therefore, the margins of dumping to which Article 2.4.2 refers are the margins of dumping for a
product .”  Having defined the product  at issue as certain cotton-type bed linen, “notwithstanding
different possible product types,” the Appellate Body ruled that the European Communities wasbound to establish “the existence of margins of dumping” for the product as it defined – cotton-type
bed linen – and not for the various types or models of that product.  Accordingly,  “[w]hatever the
method used to calculate the margins of dumping, ... these margins must be, and can only be,
established for the product  under investigation as a whole.”
38. The Appellate Body then reviewed the methodology used by the European Communities to
calculate the dumping margin in the investigati on at issue.  Under the methodology provided under
Article 2.4.2, the European Communities was required to compare the weighted average normal value
with the weighted average of prices of “ all comparable export transactions.”  However, by using the
“zeroing” methodology – i.e., counting negative margins as zero, the European Communities treated
the prices of those transactions involving models of merchandise with negative dumping margins “to
                                                     
19 European Communities – Anti-Dumping Duties on Imports of Cotton-Type Bed Linen From India ,
WT/DS141/R (30 October 2000) (“Bed Linen Panel Report”).WT/DS244/R
Page B-10
be equal to the weighted average normal value . . . despite the fact that it was, in reality, higher than
the weighted average normal value.”  This practice “inflated the result from the calculation of
dumping.”20  The Appellate Body thus concluded:
[T]he European Communities did not establish “the existence of margins of
dumping” for cotton-type bed linen on the basis of a comparison of the weightedaverage normal value with the weighted average of prices of all comparable export
transactions – that is, for all transactions involving all models or types of the product
under investigation.  Furthermore, we are al so of the view that a comparison between
export price and normal value that does not take fully into account the prices of all
comparable export transactions – such as the practice of “zeroing” at issue in this
dispute – is not a “fair comparison” between export price and normal value, as
required by Article 2.4 and by Article 2.4.2.
21
39. For these reasons, the Appellate Body upheld  the Panel’s conclusion that the zeroing
methodology used by the European Communities was inconsistent with the obligations under the AD
Agreement.
3. In accordance with the Reasoning and th e Decision of the Bed Linen Case, the US
Statute, on Its Face, Violates Articles  2.4 and 2.4.2 of the AD Agreement by Not
Conducting a “Fair Comparison” between Export Price and Normal Value
40. As discussed above, the United States employs the identical practice of “zeroing” when
determining the margin of dumping in both investig ations and reviews.  Furthermore, the USDOC has
asserted that “zeroing” is required by the US law.22  Specifically, Section 771(35)(A) of the Tariff Act
of 1930 defines “dumping margin” as “the amount by which the normal value exceeds the exportprice or constructed export price of the subject merchandise.”  Section 771(35)(B) provides that
“weighted average dumping margin” is “the per centage determined by dividing the aggregate
dumping margins determined for a specific exporter or producer by the aggregate export prices and
constructed export prices of such exporter and producer.”  The USDOC has recently explained in a
review proceeding:
These sections, taken together, direct the Department to aggregate all individual
dumping margins, each of which is determined by the amount by which normal value
exceeds export price or constructed export price, and to divide this amount by the
value of all sales.  The directive to de termine the “aggregate dumping margins” in
section 771(35)(B) makes clear that the singular “dumping margin” in section
771(35)(A) applies on a comparison-specific level, and does not itself apply on an
aggregate basis.  At no stage in this process is the amount by which export price orconstructed export price exceeds normal value on non-dumped sales permitted to
cancel out the dumping margins found on other sales.
23
41. The reasoning of the United States that the definition of the “singular dumping margin” does
not apply to the calculation of the “aggregate dumping margin” essentially echoes the arguments
made by the European Communities in the Bed Linen case.  The Appellate Body, as detailed above,rejected the European Communities’ argument that the calculation of dumping margin entails a two-
                                                     
20 Id. at para. 55.
21 Id.
22 Final Results of the Antidumping Duty Administrative Review: Canned Pineapple Fruit from
Thailand,  66 Fed. Reg. 52744 (Oct. 17, 2001), Issues and Decision Memorandum at Comment 10.
23 Id.WT/DS244/R
Page B-11
stage process.  Thus, the US contentions based on the supposed distinction between “singular” and
“aggregate” dumping margins are not justified under the AD Agreement.
42. To the extent that section 771(35) of the Tariff Act of 1930 requires zeroing of negative
margins, the statute leads to an overall dumping margin that is not based on “all comparable
transactions” as required by Article 2.4.2 of the AD Agreement, nor based on a “fair comparison”between export price and normal value, as required  by Article 2.4.  Thus, section 771(35) of the Tariff
Act of 1930, on its face, violates Articles 2.4 and 2.4.2 of the AD Agreement, as determined by the
Appellate Body.
4. The Application of the Zeroing Practice in Administrative Reviews Also Violates the AD
Agreement
43. As noted above, the United States, in a review for purposes of duty assessment (or revocation)
uses a different methodology to determine the margin of dumping.  Instead of comparing the weightedaverage normal value with the weighted average export price, the margin of dumping in an
administrative review, in general, is determined by comparing the price of individual export
transactions with weighted-average normal value.  This difference in the comparison methodology,
however, does not exempt the United States from the obligations imposed by Article 2 in the context
of administrative reviews.
44. First, the provisions of Article 2, which is entitled “Determination of Dumping,” set forth
principles and obligations to be followed in establishing the existence of dumping.  The AD
Agreement does not contain a separate set of provisions applicable to the determination of dumping in
administrative reviews. As such, Article 2 obligations extend to the determination of dumping in all
aspects of antidumping measures, irrespective of the segment of the proceeding.
45. The principle of “fair comparison” established under Article 2.4 does not distinguish whether
the comparison is made on an average of all transactions basis or on a transaction-to-transaction basis.
Therefore, this principle applies equally to a review as well as to an investigation, no matter what
comparison methodology is used.  A methodology, on a transaction basis, that assigns to an export
transaction a value lower than its actual value violates this principle whether this methodology is usedin an investigation or in a review.
46. In a review, the US government compares individual export transactions with normal value
and aggregates the results of these multiple comparisons to determine the weighted-average dumping
margin.  In doing so, the US government disregards  those export transactions that yield a negative
margin.  In effect, the US government assigns to those transactions a value equal to normal value
despite the fact that, in reality, such transactions have a value higher than normal value.  This
methodology is identical to that used by the European Communities which the Appellate Body foundto violate Article 2.4 in the Bed Linen decision.  Accordingly, the US methodology of “zeroing,”
whether it involves an average of all transactions and transaction-to-transaction comparison basis in
the context of an administrative review, violates Article 2.4 of the Agreement.
IV. CONCLUSION
47. Brazil respectfully urges the Panel to analyze the issues raised by Japan in light of the legal
reasoning contained in this submission, in addition to the reasoning detailed in Japan’s submission.  In
particular, Brazil requests the Panel to take notice of the fact that the effects of WTO-inconsistent
methodologies maintained by the United States affect all administrative reviews conducted by the
USDOC and not just the sunset review proceedings addressed by Japan.WT/DS244/R
Page B-12
ANNEX B-2
THIRD PARTY SUBMISSION OF CHILE
I. INTRODUCTION
1. Chile is grateful for this opportunity which the Panel has given it to present its views on this
dispute in accordance with Article 10.2 of the Dispute Settlement Understanding.  Chile has a
systemic interest in the correct interpretation and application of the anti-dumping disciplines laid
down in the GATT 1994 and the Agreement on Implementation of Article VI of the GATT 1994
("Anti-Dumping Agreement" or "AD"), in order to avoid abuse of anti-dumping measures as trade
barriers, contrary to the letter and spirit of the above-mentioned disciplines.
2. In this dispute Japan challenges the compatibility of United States policy, legislation,
regulations and practice in the area of sunset review with its WTO obligations;  or as Japan puts it, the
United States legislation and practice that allow US anti-dumping duty orders to continue in
perpetuity, rather than "sunsetting" after five years.1
3. Chile supports many of the arguments put forw ard by Japan in its first written submission.
However, in this third party submission Chile does not wish to address the issue of the application of
these policies, legislation, regulations and practices to the specific case of the review of anti-dumping
duties on corrosion-resistant carbon steel flat products from Japan, as that would have involved a
more detailed study of the original investigation and the contested review.  In this submission, Chile
wishes to raise a number of issues which it believes the Panel should take into account in settling the
claim brought by Japan.  These issues fall into four sections.
(i) Article 11.3 of the Anti-Dumping Agreement establishes that anti-dumping
duties have a maximum duration of five years.
(ii) The review provided for in Article 11.3 is not the same as the investigation to
be carried out by the national authority to determine the existence of dumping
and level of injury, even when the effect or consequences of both is the same.
(iii) Without prejudice to the above, the standards applied by the authorities in the
review cannot be lower than the standards applied during the investigation;
in other words, the reference point in both cases must be the disciplines of the
Anti-Dumping Agreement.
(iv) The lack of explicit disciplines in this respect has been a matter of concern to
WTO Members, who have identified this as one of the provisions that need to
be "clarified and improved" within the negotiating process currently under
way.
A. ANTI-DUMPING DUTIES EXPIRE AFTER FIVE YEARS
4. Pursuant to AD Article 11.3, any definitive anti -dumping duty shall be terminated on a date
not later than five years from its imposition.  The use of the imperative "shall" indicates that this is a
binding provision.  In other words, any anti-dumping duty expires or is terminated within five years at
most from its application.  This is further confirmed in the second part of the provision, which
                                                     
1 First written submission of Japan, paragraph 1.WT/DS244/R
Page B-13
establishes that the authority may decide that the measure should remain in force if it determines that
the expiry of the duty would be likely to lead to continuation or recurrence of dumping and injury.
5. Article 11.3 authorizes, as an exception to the general rule ("unless"), the authority to
maintain the measure if, prior to its expiry, it dete rmines that the termination of the measure would be
likely to lead to continuation or recurrence of dumping and injury.  This determination must be theresult of a review.
6. The language used by the AD is very different from that used in other WTO agreements.  For
example, Article 7 of the Agreement on Safeguards refers to the extension of the period of application
of a safeguard measure;  while Article 5.3 of the Agreement on Trade-Related  Investment Measuresprovides that the Council for Trade in Goods may extend the transition period for the elimination of
TRIMS.  Only the  Agreement on Subsidies uses wording similar to that of the  AD (Article 21).
7. This is particularly important for defining the nature of the review provided for in AD
Article 11.3.  It certainly does not establish a right to an extension or prolongation, whether automatic
or not.  If that had been the case, the negotiators would have used similar language to that of other
agreements.
B. THE REVIEW PROVIDED FOR IN ARTICLE 11.3 I S NOT THE SAME AS THE INVESTIGATION TO
BE CARRIED OUT BY THE NATIONAL AUTHORITY TO DETERMINE THE EXISTENCE OF
DUMPING AND LEVEL OF INJURY .  N EVERTHELESS THE EFFECT COULD BE THE SAME AS
THAT OF THE ORIGINAL INVESTIGATION
8. As Japan points out, Article 11.3 reviews are not exactly the same as original investigations,
but they are analogous.2  Both the title of Article 11 and the text of its paragraph 3 refer to a review,
and not to an investigation as occurs throughout the AD, for example in Articles 1 and 5.  Theconclusion that may be drawn from this is that these are two different processes which serve different
objectives.  Nevertheless, it should be borne in mind that the effect could be the same, in other words,
application of an anti-dumping measure.
9. In the case of investigations, the objective is to determine the existence and amount of
dumping, level of injury and causal relationship between the two.  Its consequences are theapplication, or not, of anti-dumping duties (or price undertakings).  On the other hand, the review
provided for in Article 11.3 is aimed at determining whether the termination of an anti-dumping duty
upon its expiry would give rise to continuation or recurrence of dumping and injury;  and its
consequences are the termination, or not, of the anti-dumping duty.
10. Perhaps the most important difference is that the sunset review presupposes the prior
existence of an investigation.  For without such a prior investigation determining that dumping
effectively exists (above de minimis  levels) and that it is causing injury to the domestic industry, there
could be no anti-dumping duty.  Without such a duty, there is nothing to expire after five years and
nothing to be the object of a sunset review.
11. Furthermore, Article 11.4 had to explicitly stat e that the provisions of Article 6 regarding
evidence and procedure apply to any review carried out under Article 11.3.
12. Unlike an investigation, Article 11.3 calls for a prospective analysis enabling the authority to
determine whether the expiry of the duty would l ead to continuation or recurrence of dumping and
injury.  In other words, the authority has to analyse on the basis of concrete evidence whether the
importer, after the duty has been terminated, will continue or resume dumping.  To carry out this
                                                     
2 First written submission of Japan, paragraph 178.WT/DS244/R
Page B-14
analysis, it is not enough to engage in mere conjecture or analyse past events, or still less consider
only the information in the original investigati on.  The imposition of an anti-dumping duty for five
years will certainly have produced some effects on the market and on producers.  In other words, it
has changed reality.  These elements cannot be disregarded by the investigating authority.
13. In United States legislation and practice, what matters for the analysis (except in very specific
and rarely applied circumstances) is (1) whether dumping still exists or not, and (2) the evolution of
imports.  Furthermore, only if the former has been eliminated and the latter have been maintained or
increased will the authority in principle be convinced that expiry of the anti-dumping duty would not
lead to recurrence of the dumping.  We wonder, fo r example, how the United States authority takes
into account the fact that a dockworkers' strike at major United States ports leads to a fall in imports,
which would make it impossible to fulfil the second requirement for determining whether or not an
anti-dumping duty should be terminated?
14. The standard applied by the United States authorities is so absurd as to be contrary to the text
of AD Article 11.3.  Article 11.3 provides that the purpose of the sunset review is to determine
whether the expiry would lead to continuation or recu rrence of dumping and injury.  In other words, it
provides for two scenarios, a first in which dumpi ng still exists (and may continue) and a second in
which dumping no longer exists (but may recur).  In  both cases the duty should be terminated unless it
is determined that dumping may continue or recur.  On the other hand, the United States legislation
and regulation does not provide for the first possibility, i.e. that dumping exists and the review will
determine whether or not it will continue.  The only possibility contemplated by the legislation and
regulations is that dumping must have ceased (so that the review is confined to determining whether it
will recur).
15. In addition to this prospective analysis, the practice of the authority establishes a presumption
that dumping will continue or recur and it is up to the importers to prove that this will not happen.
This violates the pro-active, good-faith approach which any objective and impartial investigating
authority should adopt, in accordance with the letter and spirit of the Anti-Dumping Agreement.
16. Even though the legislation and practice permits importers to submit information and show
there is good cause for the authority to take other factors into consideration, the precedents show that
what exists on paper is not always reflected in reality.  As indicated in the case Cut-to-Length Carbon
Steel Plate from Canada3, the Department of Commerce found that other factors did not need to be
taken into account when dumping still exists after the order has been issued, as this is evidence of the
possible continuation or recurrence of dumping.  This is borne out in the case Grey Portland Cement
and Cement Clinker from Venezuela4, where the  Department of Commerce was clearer still in
concluding that, except in very isolated cases, it did not find good cause for examining other factorsexcept in the case of agreements on price undertakings.  Consequently, our question is:  if termination
is only appropriate where dumping no longer exists (in addition to imports having been maintained or
increased), in what circumstances would the Department of Commerce agree to analyse other factors?
Or, in other words, when does the Department of Commerce consider that good cause exists?
17. The reply to these questions appears to be given in the case Sugar and Syrups from Canada.
5
In this case, the USDOC not only considered that there was not "good cause" for accepting other
factors submitted by the domestic industry, but then, having seen that the conditions were fulfilled for
terminating the measure, in its final determinatio n it did examine other factors to conclude that
dumping had not been eliminated and therefore the anti-dumping measure should be maintained.  In
other words, the authority considers whether or not good cause exists and uses or does not use other
                                                     
3 Annex JPN-24b.
4 Annex JPN-25k.
5 Annex JPN-25m.WT/DS244/R
Page B-15
factors when doing so or not doing so would always allow it to reach the same conclusion:  that the
anti-dumping duty should not be terminated.  The au thority thus not only violates its obligations under
the  WTO but also its own legislation and regulations.
C. THE STANDARDS APPLIED BY THE AUTHORITIES IN THE REVIEW CANNOT BE LOWER THAN
THE STANDARDS APPLIED DURING THE INVESTIGATION
18. Considering that the effect of the investigation and of the review is the same - in other words,
application/continuation or removal of the anti-dumping duty - the fact that the review is not exactly
the same as the investigation does not entail disregarding the implications of using, in the review,
standards lower than those used in the investigation.  This is particularly true in the case of aspects
previously identified in the AD and which are applied in a manner that is incompatible with the WTO.
The likely consequence is that in the majority of cases there are abuses.
19. To illustrate the above, we shall mention some of the inconsistencies mentioned by Japan in
its first written submission.
20. De minimis .  There is no justification or logic for maintaining that the use of de minimis
margins of less than 2 per cent is authorized in th e case of reviews.  Accepting this leads to cases
where for the purposes of a review margins which, in  the original determination, were not taken into
account because the threshold is higher, are taken into account or included for the review.  The resultis that exporters previously not subject to AD duties because of the de minimis  margins would be
subject to them following the review.  The establishment of the 2 per cent  de minimis  threshold is the
result of negotiation, as reflected in the AD.  The idea is that dumping margins below 2 per cent do
not cause injury and hence do not need to be subject to an AD duty whose purpose is to counter
dumping causing injury to the domestic industry.  A similar reasoning applies to negligible imports .
21. Order wide basis.   The sunset review must be carried out on the basis of specific firms.  As in
the case of the original measure, and all the more so in the case of a sunset review, it is not
appropriate to apply or continue applying an AD duty to enterprises which are not engaging in
dumping.  Although this is not explicitly stated in Article 11.3, in principle the AD measure should be
terminated after five years for all firms, with the exception to the rule being that the duty should be
maintained solely for enterprises where the termin ation of the duty "would lead to continuation or
recurrence of dumping and injury".
22. Sending the USITC the originally calculated dumping margins .  If imports have not taken
place during the established period, the practice of the Department of Commerce is to send the USITC
the original margins.  After five or more years of application of an AD measure, the reality has
changed.  How does the investigating authority ensure  that the anti-dumping duty will remain in force
only to the extent necessary to counteract dumping which is causing injury?  For the purposes of theArticle 11.3 Review, the authority cannot have resource once again to the original margins.
23. The above comment is all the more valid where the original margins were calculated using
obsolete methodologies (i.e. that pre-date the entry into force of the Anti-Dumping Agreement) or
which are incompatible with the WTO.  This can lead to the absurd case where the USDOC transmits
to the USITC margins calculated on bases which a WTO panel or the Appellate Body have found tobe inconsistent with the WTO (such as zeroing or other de minimis  percentages).
D. T
HE TOPIC OF SUNSET REVIEW IS PART OF THE NEGOTIATING PROCESS CURRENTLY UNDER
WAY, REFLECTING MEMBERS ' INTEREST IN THIS ISSUE
24. Paragraph 28 of the Doha Ministerial Declaration provides for the holding of "negotiations
aimed at clarifying and improving disciplines" under the AD.  It also states that "in the initial phase ofWT/DS244/R
Page B-16
the negotiations, participants will indicate the provisions, including disciplines on trade distorting
practices, that they seek to clarify and improve in the subsequent phase".
25. Two of the contributions submitted to the Negotiating Group on Rules refer to the issue of
sunset reviews.  Document TN/RL/W/10 indicates that the lack of explicit rules cannot lead to the
arbitrary introduction by the authorities of procedures and methodologies that differ substantiallyfrom those used in initial investigations.  In other words, although there are no explicit rules, in the
provisions relating to reviews in general and sunset reviews in particular, this does not mean that each
investigating authority can establish its own procedures  in this respect.  When the provisions of the
initial investigation under the AD are applicable to reviews, the authorities should take such
provisions as a benchmark.  When they are not, they should seek new standards which, on the grounds
set out above, should be higher than those used in  the initial investigation.   Further guidelines will
probably emerge from the negotiations on this latter aspect.
26. Document TN/RL/W/6 refers explicitly to suns et reviews, asking the following questions:
"Should such an AD duty be continued?  How can the absence of exports be deemed to establish the
likelihood that injurious exports will resume in the future?  Is mere allegation or remote possibility
enough?  Under these facts, when would the order ever be terminated?  If the order is never
terminated, what is the meaning of a sunset procedure?"  It is precisely the answers to these questionswhich we wish to clarify during the negotiations on rules.
II. CONCLUSION
27. In light of the foregoing, Chile respectfully requests the Panel to take into consideration the
elements set out above and rule that the sunset review provided for in Article 11.3 of the Anti-
Dumping Agreement is an exceptional review which allows authorities to maintain an anti-dumpingduty in very specific circumstances.  Otherwise, th e duty shall expire in any case within five years at
most of its imposition.  The lack of precise rules does not entitle an investigating authority to impose
or apply standards which differ from those existing in the AD and in no case lower standards than
those used during the initial investigation, since whil e the sunset review and the initial investigation
are not exactly the same, their effects are.WT/DS244/R
Page B-17
ANNEX B-3
THIRD PARTY SUBMISSION OF THE EUROPEAN COMMUNITIES
I. INTRODUCTION
1. The European Communities (hereinafter "the EC") welcomes this opportunity to present its
views in the proceeding brought by Japan over the consistency with Articles VI and X of the GeneralAgreement on Tariffs and Trade (hereinafter, the "GATT 1994"), and with Articles 2, 3, 5, 6, 11, 12
and 18 of the Agreement on Implementation of Article VI of the GATT (hereinafter, the "AD
Agreement"), as well as with Article XVI:4 of the Marrakech Agreement establishing the World
Trade Organization (hereinafter, the "WTO Agreement") of both the decision by the United States
(hereinafter, the "US") not to terminate the imposition of the anti-dumping duties on imports ofcorrosion-resistant steel from Japan, and the provisions, procedures and practices of the US on which
the decision was based.
2. The EC has decided to intervene as third party in this case because of its systemic interest in
the correct interpretation of the AD Agreement. The interest of this case, in fact, goes well beyond
this single measure and covers the interpretation and application by the US of the AD Agreement withregard to sunset reviews.  The lines of similar cases brought by the EC against the US shows the high
concern that the relevant US laws
1, regulations2 and administrative procedures and practice3 on sunset
reviews of anti-dumping and countervailing duties, as well as the way in which they have been
applied, violate several provisions of the WTO Agreements.
3. Many of the issues in dispute relate to questions of fact on which the EC is not in a position to
comment.  Accordingly, the EC will limit its subm ission to a number of issues of legal interpretation
raised by some of the claims submitted by Japan and which are of particular interest to the EC.  Indoing so, the EC will follow the sequencing of claims of the submission by Japan.
A. T
HE EVIDENTIARY STANDARDS REQUIRED BY ARTICLE 5.6 FOR SELF-INITIATION OF SUNSET
REVIEWS APPLY ALSO TO SUNSET REVIEWS (JAPAN 'S CLAIM 1)
4. Japan has submitted to the Panel that the US law and Sunset Regulations, in particular
Sections 751(c)(1) and (2) of the Act and Sections 351.218(a) and (c)(1) of the Sunset Regulations,are inconsistent with Articles 11.1, 11.3, 12.1, 12.3 and 5.6 of the AD Agreement because they
mandate that USDOC automatically initiate sunset reviews without any evidence.  In particular, Japan
has argued that the ordinary meaning of the text of Article 11.3, read in its context, that is
Articles 11.1, 12.1, 12.3 and 5.6 of the AD Agreement, a nd in light of its object and purpose, requires
sufficient evidence to justify the initiation of a sunset review.
4
5. In US law and practice, sunset reviews are always automatically initiated five years after the
date of publication of an anti-dumping duty order; of a notice of suspension of an investigation; of a
determination of injury in an administrative review; or of a sunset review determination to continue an
                                                     
1 The Tariff Act of 1930 (hereinafter, the "Act"), as amended and codified in 19 USC. §1202 through
1677n.
2 The Implementing Regulations on anti-dumping and countervailing duties issued by US Department
of Commerce (hereinafter, "USDOC"), now Section 351 of Title 19 of the US CFR (hereinafter the " Sunset
Regulations ").
3 The USDOC Policies Regarding the Conduct of Five-year ("Sunset") Reviews of Antidumping and
Countervailing Duty Orders (hereinafter, the "Sunset Policy Bulletin").
4 Section A (para. 45 et seq.) of the First Written Submission by Japan.WT/DS244/R
Page B-18
anti-dumping duty5.  Section 751(c)(2) of the Act mandates DOC to publish a "notice of initiation" in
the Federal Register "no later than the 30 days before the fifth anniversary" of one of these dates.  The
same obligation is found in §351.218(c)(1) of the Sunset Regulations, which provides:
No later than 30 days before the fifth anniversary date of an order or suspension of an
investigation (see section 751(c)(1) of the Act), the Secretary will publish a notice ofinitiation of a sunset review (see section 751(c)(2) of the Act)
6. The EC agrees with the argument put forward by Japan that the US automatic self-initiation
of sunset reviews unavoidably leads to a violation of Article 11.3 of the AD Agreement.
7. It is well-established that the fundamental rules of treaty interpretation have received their
most authoritative and succinct expression in Articles 31 and 32 of the Vienna Convention which
have attained the status of rules of customary or general international law
6.  These imply the need for
a comprehensive interpretation of the text and context and object and purpose,7 and for the respect of
the principle of good faith interpretation, which flows directly from the principle of pacta sunt
servanda  embodied in Article 26 of the Vienna Convention and directs the interpreter to prefer the
interpretation that enables the treaty to fulfil its object and purpose, i.e. an effective interpretation8.
8. In this light, Japan is right in proceeding to an analysis of the text and context of Article 11.3,
as well as of the object and purpose of the AD Agreement.
9. In particular, the EC considers that, although Article 11.3 does not contain any explicit
reference to evidentiary requirements for the in itiation of sunset reviews, it mandates domestic
authorities to engage in a review to "determine" that the expiry of the anti-dumping duty would be
likely to lead to continuation or recurrence of dumping and injury.  The verb "to determine" is
commonly understood to mean to find out, to ascertain, to establish, or, in more articulated terms, tocarry out all those activities necessary to reach a decision, i.e. to investigate and decide.  Thus, in this
light, the very text of Article 11.3 already contains a clear and precious indication of the substantive
activities to be undertaken in a sunset review and therefore of the context which is relevant to it.
10. In particular, the immediate context of Article 11.3, i.e. Article 11.1 sets out a fundamental
obligation, i.e. that an anti-dumping duty must remain in force only as long as and to the extentnecessary to counteract dumping which is causing injury. Articles 11.2 and 11.3 are, in fact, further
articulations of the ongoing obligation contained in Article 11.1.  Article 11.2 provides the modalities
for compliance with this obligation during the period of application of an anti-dumping duty, while
Article 11.3 provides the modalities for compliance with this obligation upon expiry of that period.
Both provisions emphasise the basic object and purpose of the imposition of anti-dumping duties, i.e.
that they can only apply where dumping causes or is likely to cause injury.
11. The direct consequence of this is therefore that the omission in the text of Article 11.3 is
justified by the fact that it appears obvious from the overall context and architecture of the AD
Agreement that the guarantees so forcefully established for the initiation of an original investigation
for the imposition of an anti-dumping duty apply as well to the initiation of a sunset review, which, in
                                                     
5 19 USC §1675(c)(1)(A) and (B).
6 See Appellate Body Report, United States – Standards for Reformulated and Conventional Gasoline
("United States – Gasoline") , WT/DS2/AB/R, adopted 20 May 1996, page 15, and Appellate Body Report,
Japan – Taxes on Alcoholic Beverages ("Japan – Alcoholic Beverages") , WT/DS8/AB/R, WT/DS10/AB/R,
WT/DS11/AB/R, adopted 1 November 1996, page 9.
7 See ILC Commentary on the draft Articles 31 and 32 of the Vienna Convention  (then numbered as
Articles 69 and 70), YILC , 1966.
8 See Appellate Body Report, United States - Standards for Reformulated and Conventional Gasoline
("United States – Gasoline") , WT/DS2/AB/R, adopted 20 May 1996, page 21.WT/DS244/R
Page B-19
virtue of Article 11.1, takes place at a time when the presumption is that of termination of that anti-
dumping duty.
12. Furthermore, Japan rightly points out that suns et reviews and new investigations have the
same effect, i.e. they result in the imposition of anti-dumping duties for a period of five years9.  Both
new proceedings and sunsets, in fact, involve a large amount of investigation by the domesticauthorities with a view to determining whether anti- dumping duties should be put into effect.  And the
role that Articles 5.2 and 5.6 prescribe both for the domestic industry and the domestic authorities is a
proactive role marked by a precise evidentiary burden.  As this evidentiary burden is explicitly
recalled by Article 11.3 for the domestic industry, why should it be excluded for the domestic
authorities but only at sunset review stage?
13. Another textual element that should be considered is the combine reading of Articles 12.1
and 12.3.  Article 12.1 provides that:
When the authorities are satisfied that ther e is sufficient evidence to justify the
initiation of an investigation pursuant to Article 5, the … interested parties … shall be
notified and a public notice shall be given.
And Article 12.3 provides that:
The provisions of this Article apply mutatis mutandis to the initiation and completion
of reviews pursuant to Article 11 …
14. It is clear from the terms of Article 12.3 that the same guarantees that apply to the initiation of
an original investigation apply to the initiation of a sunset review.  In particular, when read in
conjunction with Article 12.1, it clearly disposes that even in a sunset review domestic authoritiesmust be satisfied to have sufficient evidence before they self-initiate sunset reviews.  In the contrary
case, and unless a valid request is made by the domestic industry, they should leave ADD orders to
expire.
15. In conclusion, a proper analysis of the text, context, and object and purpose of Article 11.3
reveals that all provisions of the AD Agreement are potentially applicable mutatis mutandis to it, tothe extent that they are relevant to sunset reviews and that their application to Article 11.3 does not
create a situation of conflict or is not specifically excluded.  The reasons why Article 11.3 does not
contain any detailed procedural rule, in fact, is rightly that these are established somewhere else in the
Agreement, for instance in Article 5.
B. T
HE AD A GREEMENT REQUIRES A "LIKELY " AND NOT AN "UNLIKELY " DETERMINATION OF
CONTINUATION AND RECURRENCE OF DUMPING AND INJURY (JAPAN 'S CLAIM 2)
16. Japan has submitted to the Panel that the Sunset Regulations, and in particular Section
351.222(i)(1)(ii), are not in conformity with Article 11.3 AD Agreement.10  In particular, Japan has
argued that whereas Article 11.3 AD Agreement requires that anti-dumping duties be terminated no
later than five years from their imposition "unless th e authorities determine [...] that the expiry of the
duty would be likely to lead to continuation or recurrence of dumping and injury"11, the Sunset
Regulations require USDOC to effectively apply a "not likely" standard.
                                                     
9 Para. 50 et seq. of the First Written Submission by Japan.
10 Section B.1 (para. 94 et seq.) of the First Written Submission by Japan.
11 Emphasis added.WT/DS244/R
Page B-20
17. The EC agrees with the legal views of Japan in this respect.  It may be recalled that the
pertinent Section of the Sunset Regulations is drafted as follows:
"[i]n the case of a sunset review under §351.218, the Secretary will revoke an order or
terminate a suspended investigation: [...] (ii) Under section 751(d)(2) of the Act,
where the Secretary determines that revocation or termination is not likely to lead tocontinuation or recurrence of a countervailable subsidy or dumping."
12
It may also be recalled that the "not likely" standard was introduced in 1998 by amendment of
Section 351.222(i)(1) of the Sunset Regulations which provided: "[i]n the case of a sunset review
under §351.218, the Secretary will revoke an order or terminate a suspended investigation, unless:
(i) the Secretary makes a determination that revocation or termination would be likely to lead to
continuation or recurrence of a countervailable subsidy or dumping (see section 752(b) and section
752(c) of the Act)" (emphasis added).
18. The US argues that "that provision, 19 CFR 351.222(i)(1)(ii), is ministerial in nature and
addresses the timing of revocation after Commerce has made a negative final sunset determination
under section 751(d)(2)."13  This statement contradicted by the Explanation of Particular Provisions,
which states in respect of the amendments to Section 351.222(i) : "These revisions are intended toclarify the circumstances under which the Department will revoke an order or terminate a suspended
investigation and the effective date of revocation." (emphasis added)14.
19. A textual comparison of Section 351.222(i)(1)(ii) with Article 11.3 AD Agreement shows that
the standard for revocation of an anti-dumping duty in a sunset review under the Sunset Regulations is
different from that required by Article 11.3.  Article 11.3 provides that the anti-dumping duty shall beterminated or revoked unless it is likely that this would lead to recurrence or continuation of dumping
and injury.  By contrast, under USDOC regulations, the anti-dumping duty will be revoked where it is
not likely that this would lead to continuation or recurrence of dumping.
20. In the view of the EC, these differences are by no means semantic only.  Rather, the Sunset
Regulations require USDOC to apply a standard which is patently more demanding than thatprescribed by Article 11.3 AD Agreement.  The requirement that continuation or recurrence of
dumping or injury must be "likely" implies a higher degree of probability than the requirement that
the duty be revoked "where it is not likely" that this would lead to continuation or recurrence of
dumping.  In the first case, a higher degree of certainty is required than in the second, where it is
necessary only for the continuation or recurrence of dumping not to be "unlikely".
21. That a "likely" standard implies a higher degree  of certainty than a "not likely" standard has
also been confirmed by the Panel in US DRAMs, as quoted in paragraph 96 of the first writtensubmission of Japan.  As the Panel stated in its report, there is a conceptual difference between
establishing something as a positive finding, and failing to establish something as a negative finding.
15
22. In other words, a finding that someone is likely to dump always implies that the same person
is not "unlikely" to dump.  However, the reverse conclusion does not hold true: the fact that someone
is "not unlikely" to dump does not necessarily imply that the same person is also "likely" to dump.
                                                     
1219 C.F.R. §351.222(i)(1)(ii) (emphasis added).
13 Para. 101 of the First Written Submission by the US.
14 Procedures for Conducting Five-year ("Sunset") Reviews of Antidumping and Countervailing Duty
Orders, Interim final rules, 20 March 1998, Federal Register No. 63 FR 13519
15 See Panel Report, United States - Anti-Dumping Duty on Dynamic Random Access Memory
Semiconductors (DRAMS) of One Megabit or Above from Korea (“United States – DRAMS”) , WT/DS99/R,
adopted 19 March 1999, para. 6.45.WT/DS244/R
Page B-21
23. The European Community submits that this reas oning, which the Panel applied in interpreting
Article 11.2 AD Agreement, is perfectly transposable to Articles 11.3. Article 11.2 governs the review
of the continued necessity of an anti-dumping duty on the own initiative of the authorities or upon
request by any interested party during the normal lifetime of a duty in place.  In contrast, the sunset
provision of Article 11.3 stipulates that any definitive anti-dumping duty shall be terminated at thelatest after five year from its imposition, and only exceptionally authorises the authorities to maintain
them where the requirements of Article 11.3 are fulfilled.
24. In other words, whereas under Article 11.3 the expiry of the duty is the rule and its
maintenance the exception, this is not the case under Article 11.2.  Given this systematic relationship
between Articles 11.2 and 11.3, it is not conceivable that a stricter standard for the revocation of
duties would apply under Article 11.2 than in the context of a sunset review under Article 11.3.
25. For these reasons, the European Community considers that as under Article 11.2, a "not
likely" standard is incompatible with Article 11.3.  Accordingly, Section 351.222(i)(1)(ii) of the
Sunset Regulations  is not compatible with the US obligations under the AD Agreement .
C. T
HE SUNSET REVIEW DETERMINATION HAS TO BE BASED ON A "PROSPECTIVE " ANALYSIS
(JAPAN 'S CLAIM 3)
26. Japan has submitted that USDOC in its practice in sunset reviews fails to "determine" whether
dumping is "likely" to occur.16  In particular, Japan has argued that USDOC determinations are not
based on a prospective analysis of positive evidence ascertaining that continuation or recurrence will
be probable.
27. The EC agrees with Japan's argument that Article 11.3 requires that the "likelihood" of the
continuation or recurrence of dumping must be established on a prospective basis.17  By definition, an
assessment of the "likelihood" of continuation or recurrence of dumping requires the authorities to
make a judgement about events in the future.  Such a judgement about future events cannot be carried
out by merely assuming that the current situation will continue unchanged or that the pre-AD order
situation will recur.  Rather, it will be necessary to establish, on the basis of all current information
available, what the likely course of future events might be.
28. The need for a prospective, rather than a retrospective, analysis has been confirmed by the
Panel in US-DRAMs.18  Even though the Panel reached this finding in the context of Article 11.2 AD
Agreement, as the EC has already stated, it is not conceivable that the standards for the maintenance
of anti-dumping duties in sunset reviews would be  any less strict than those for a review under
Article 11.2, which is completed during the original lifetime of an anti-dumping duty.
29. The EC also agrees in principle with Japan that a "determination" of the likelihood of
continuation or recurrence of dumping and injury must be based on positive evidence.19  Of course,
the EC recognises that given the "prospective" character of the likelihood determination, which
concerns events in the future, evidence for such a determination can never be fully conclusive, and
will not lead to complete certainty.  Article 11.3 therefore does not require absolute certainty about
the continuation or recurrence of dumping.  However, it does require the authorities to take into
account all available evidence in order to determine whether continuation or recurrence of dumping is"likely".  An authority would fail to meet this standard if, in a determination in a sunset review, it
                                                     
16 Section B.2 (para. 107 et seq.) of the First Written Submission by Japan.
17 Para. 108 of the First Written Submission by Japan.
18 Panel Report in US DRAMs , cited above, para. 6.28; quoted in para. 110 of the First Written
Submission of Japan.
19 Para. 112 of the First Written Submission of Japan.WT/DS244/R
Page B-22
based itself purely on the fact that dumping had occurred in the past, without addressing the question
of whether dumping is likely to also recur or continue in the future.
30. The EC is not in a position to comment on the USDOC's determinations regarding the
Japanese producers concerned.  However, the Community is of the view that the US law with respect
to likelihood determinations in sunset reviews of anti-dumping orders, as well as the USDOC'sgeneral practice based on it, as described in its Sunset Policy Bulletin,
20 falls short of the requirements
of Article 11.3 AD Agreement.
31. As set out by Japan, according to Section II.A.3 of the Sunset Policy Bulletin, USDOC
normally will determine that revocation of an an tidumping order or termination of a suspended
dumping investigation is likely to lead to continuation or recurrence of dumping where:
(a) dumping continued at any level above de minimis  after the issuance of the order or
the suspension agreement, as applicable;
(b) imports of the subject merchandise ceased after issuance of the order or the
suspension agreement, as applicable; or
(c) dumping was eliminated after the issuance of the order or the suspension agreement,
as applicable, and import volumes for the subject merchandise declined significantly.
32. According to Section II.A.4 of the Sunset Poli cy Bulletin, USDOC will normally determine
that revocation of an anti-dumping order or termination of a suspended investigation is not likely to
lead to continuation or recurrence of dumping "where dumping was eliminated after issuance of the
order or the suspension agreement, as applicable, and import volumes remained steady or increased".
33. Finally, Section II.C of the Sunset Policy Bulletin states that USDOC will consider "other
factors" only if "good cause" is shown.  With reference to the SAA, the Sunset Policy Bulletinindicates that such other factors might include "the market share of foreign producers subject to the
antidumping proceeding; changes in exchange rates, inventory levels, production capacity, and
capacity utilisation; any history of sales below cost of production; changes in manufacturing
technology in the third country; and prevailing prices in relevant markets".  The Sunset Policy
Bulletin goes on to state that the burden is on an interested party to provide information or evidence
that would warrant consideration of the other factors in question.
34. Incidentally, the EC considers that these factors are already predetermined by US law, in
particular by Section 752(c)(1) and (2) of the Act, which read:
(1) In general – In a review conducted under section 751(c) of this title, the
administering authority shall determine whether revocation of an antidumping duty
order or termination of a suspended investigation under section 734 of this title would
be likely to lead to continuation or recurrence of sales of the subject merchandise atless than fair value. The administering authority shall consider (A) the weighted
average dumping margins determined in th e investigation and subsequent reviews,
and (B) the volume of imports of the subject merchandise for the period before and
the period after the issuance of the antidumping duty order or acceptance of the
suspension agreement.
                                                     
20 63 Fed. Reg. 18871 (16 April 1996) (Exhibit JPN-6).WT/DS244/R
Page B-23
(2) Consideration of other factors – If good cause is shown, the administering
authority shall also consider such other price, cost, market, or economic factors as it
deems relevant.
35. The European Community agrees with Japan that this general policy of USDOC as set out in
the Sunset Policy Bulletin falls foul of the standard for likelihood determinations in Article 11.3 ADAgreement.  Of the three cases in which USDOC normally will determine that a likelihood of
continuation or recurrence of dumping exists, the second and the third clearly do not appear adequate
to establish such likelihood.  The fact that imports of the subject merchandise ceased after issuance of
the order or the suspension agreement as such is in no way indicative of whether the producers of the
product concerned will again begin dumping after the duty is terminated.  Similarly, it is not clear
why the fact that dumping was eliminated after the issuance of the order, and import volumes for the
subject merchandise declined significantly, as such should indicate that the producers will again startdumping after the duty is removed.
36. This inadequacy of the standard applied by USDOC becomes even more obvious in the
positive formulation of the same standard.  The requirement that "dumping was eliminated after
issuance of the order or the suspension agreement, as applicable, and import volumes remained steady
or increased", defies all economic theory.  It is clear that if an anti-dumping duty is imposed, this willnecessarily have an anti-competitive effect for the products concerned.  If, notwithstanding the
imposition of an anti-dumping order, imports remain stable or increase and dumping ceases, then this
must be due to factors unrelated to dumping.  However, in this case, the scenario is in no way
different from scenario (c), in which dumping also ceases, and from scenario (b), for which the
continuation of dumping is irrelevant.
37. It is interesting to note that with respect to sunset reviews in countervailing duty proceedings,
the Sunset Policy Bulletin does not refer to the import volumes during the period the CVD is in place,
but rather to the question of the continuation of the subsidy programme.
21  It is not clear why trends in
import volumes should have a decisive importance for antidumping duties, but not for countervailing
duties.  It therefore appears that US practice in this respect is not only incompatible with the AD
Agreement, but also inherently inconsistent.
38. In the view of the EC, USDOC, by giving prim ary importance to trends in import volumes, is
basing itself on a factor which is not primarily related to dumping, and which therefore cannot be
conclusive for establishing the likelihood of continuation or recurrence of dumping.  In exchange,
USDOC makes no attempt to inquire into the economic and other incentives for producers to make
renewed recourse to dumping practice likely or unlikely.  On the contrary, by requiring "good cause"
for the examination of all other factors, US DOC shuts the door to a meaningful likelihood
determination.
39. By conditioning the determination concerning the likelihood of continuation or recurrence of
dumping on what Japan has rightly referred to as "a commercially impractical scenario",22 USDOC is
presenting producers with a nearly impossible task. The practical effect of this policy is to perpetuate
anti-dumping orders. In short, the policy of USDOC can be described by "once a dumper, always adumper".  However, this is not compatible with the sunset provisions of Article 11.3 AD Agreement,
which specifically provide that antidumping duties are not perpetual, and must in principle not be
extended beyond five years.
40. Overall, USDOC practice as set out in the Sunset Policy Bulletin does not appear compatible
with the "likely" standard in Article 11.3.
                                                     
21 Section III.A.3.a.
22 Para. 124 of the first written submission of Japan.WT/DS244/R
Page B-24
D. THE DE MINIMIS  REQUIREMENT OF ARTICLE 5.8 A LSO APPLIES IN THE CONTEXT OF A
SUNSET REVIEW (JAPAN 'S CLAIM 7)
41. Japan has claimed that the US requirement to treat as de minimis  in sunset reviews only those
margins that are less than 0.5 per cent is inconsistent with the 2 per cent  de minimis  rule contained in
Articles 5.8 and 11.3 AD Agreement.
42. The EC agrees with Japan's claim.  However, it considers that this WTO-inconsistent
behaviour is already mandated by US law.
43. In making a preliminary or final anti-dumping duty determination in an initial investigation,
the US authorities will apply the de minimis standard which is set forth in section 1673b(b)(3) of the
Act.23  This standard provides that:
In making a determination under this subsection, the administering authority shall
disregard any weighted average dumping margin that is de minimis . For purposes of
the preceding sentence, a weighted average dumping margin is de minimis if the
administering authority determines that it is less than 2 per cent ad valorem or the
equivalent specific rate for the subject merchandise.
44. In sunset reviews, section 1675a(c)(4)(B) of the Act provides that:
For purpose of this paragraph, the administering authority shall apply the de minimis
standards applicable to reviews conducted under subsections (a) and (b) of
Section 751. (emphasis added)
Section 751(a) of the Act provides for periodi c review of the amount of any antidumping duty
and Section 751(b) for the review of the final determination or suspension agreement for change in
circumstances.
45. Section 351.106(c)(1) of the Sunset Regulations provides that:
In making any determination other than a preliminary or final … anti-dumping duty
determination in an investigation …, the Secretary will treat as de minimis  any
weighted average dumping margin … that is less than 0.5 per cent ad valorem , or the
equivalent specific rate.
46. Section II.A.5 of the Sunset Policy Bulletin provides that:
In accordance with section 752(c)(4)(B) of the Act and 19 CFR 351.106(c)(1), the
Department will treat as de minimis  any weighted average dumping margin that is
less than 0.5 per cent ad valorem  or the equivalent specific rate.
47. It follows from the above description that the relevant US laws and administrative practice is
to apply a 2 per cent de minimis rule in the initial determination of a dumping margin and to apply, as
a general rule, a 0.5 per cent de minimis  rule in all reviews, including sunset reviews.  The SAA
accompanying the URAA24 explained that:
The requirements of Article 5.8 apply only to investigations, not to reviews of anti-
dumping duty orders or suspended investigations.
                                                     
23 See 19 USC §1673b(b)(3) and 1673d(a)(4).
24 At pg. 845.WT/DS244/R
Page B-25
The SAA also explained that:
The Administration intends that Commerce will continue its present practice in
reviews of waiving the collection of estimated cash deposits if the deposit rate is
below 0.5 per cent ad valorem , the existing regulatory standard for de minimis .25
48. With regard to the parallel provisions in the field sunset reviews for countervailing duties, the
Panel in US – Corrosion-resistant carbon steel from Germany  confirmed that the US law in itself is
contrary to the WTO Agreements26.
E. THE REQUIREMENTS OF ARTICLE 3.3 AND 5.8 FOR THE CUMULATION OF EXPORTS IN AN
INJURY DETERMINATION ALSO APPLY WITHIN THE CONTEXT OF A SUNSET REVIEW (JAPAN 'S
CLAIM 10)
49. Japan has submitted to the Panel that the USITC's decision to cumulate imports from various
countries in this sunset review is inconsistent with Article 3.3, 5.8 and 11.3 AD Agreement.
50. The EC does not consider itself in a position to comment on the appropriateness of the
inclusion of imports from Japan into the cumulation.
51. However, the EC agrees with the view expressed by Japan that the requirements of
Articles 3.3 and 5.8 for the cumulation of exports in an injury determination also apply within thecontext of a sunset review under Article 11.3 AD Agreement.
52. Article 11.3 mandates that antidumping duties shall be terminated unless the authorities
determine that this would be likely to lead to continuation or recurrence of dumping and injury.  The
continuation or recurrence of injury is therefore part of the preconditions for the continuation of an
antidumping duty.
53. As Japan has already set out in its submission, the term injury is defined, for the purposes of
the entire Agreement, in Article 3 AD Agreement.  Paragraph 3 of Article 3 sets out the conditions
under which the effects from imports from more than one country may be cumulatively assessed, and
requires, among others, that the volume of imports from each country must not be negligible. The
only place where a definition of when the volume of dumped imports shall be considered "negligible"is Article 5.8.
54. The European Community sees no reason why these provisions should not apply in the
context of sunset reviews. The Panel findings in US DRAMs  has no relevance to the present case
27.
This Panel addressed the question of whether a de minimis  standard applied in a duty assessment
procedure under Article 9.3 of the AD Agreement.  Whether a de minimis  standard applies in a sunset
review was answered positively by US – Corrosion-resistant carbon steel from Germany (see above
at 46). The same panel also expressly considered that a literal reading would limit provisions such asArticle 15.3 "in ways that would negatively affect the operation of the Agreement, particularly in
respect of sunset reviews, something that cannot have been intended by the drafters"
28. Article 15.3 is
the parallel provision of Article 3.3 AD Agreement in the SCM Agreement.
                                                     
25 The 0.5 per cent ad valorem was the DOC’s previous de minimis threshold for new investigations
26 Panel Report, United States - Countervailing Duties on Certain Corrosion-resistant Carbon Steel
Flat products from Germany , WT/DS213/R, published on 14 June 2002, para. 8.80.
27 Para. 185 of the First Written Submission of the US
28 Ibid note 27, paras. 8.16 and 9.20WT/DS244/R
Page B-26
55. Therefore, the Community is of the opinion that negligible imports must not be included into
a cumulative assessment of injury unless the authorities have determined that these imports are likely
to become non-negligible upon revocation of the duty.
LIST OF EXHIBITS
Exhibit EC-1 Uruguay Round Agreement Act – Statement of Administrative Action (“SAA”) –
extractsWT/DS244/R
Page B-27
ANNEX B-4
THIRD PARTY SUBMISSION OF KOREA
I. INTRODUCTION
1. At the conclusion of the Uruguay Round, the adoption of Article 11.3 of the AD Agreement,
which provided for the termination of anti-dumping measures after 5 years absent a finding that
termination would lead to continuation or recurr ence of dumping and injury was widely welcomed.
This “sunset” provision was hailed as a major step towards preventing abuse of the anti-dumping
remedy which allowed measures to remain in effect long after they had ceased to serve their intendedpurpose.  However, the implementation of the sunset provision over the past seven years has not lived
up to the original expectations, leading to widesp read cynicism that sunset termination of anti-
dumping measures has turned out to be the exception rather than the rule.
2. A review of the USDOC’s record in this regard is very revealing. Korea notes that 305 sunset
reviews were initiated in the United States.  Out of these 305 cases, the USDOC revoked the measurein 73 cases on the ground that the domestic industry did not respond to USDOC’s notice of initiation.
1
For all of the remaining 232 cases, the USDOC f ound that the termination of the measure would be
likely to lead to continuation or recurrence of dumping.  In other words, the USDOC ruled against
revocation of the measure in every single case that was contested by the domestic industry.
3. In Korea’s view, the USDOC’s blatantly lop-sided record in these reviews establishes clearly
that either the US sunset rules per se  or the manner in which they are applied in particular cases, or
both, are inconsistent with the AD Agreement.  While Korea agrees generally with the points made byJapan in its first submission, Korea will in this submission elaborate on the following four points,
which are discussed below in chronological order:
• First, the USDOC’s initiation of sunset reviews is automatic, and does not comply
with the evidentiary requirements of the Agreement.
• Second, the USDOC applies a ‘not likely’ st andard to the sunset termination of a
dumping order, in contrast to the ‘likely’ standard of Article 11.3;
• Third, the USDOC’s presumption of likelihood of dumping is made on the basis of
insufficient facts and through the application of arbitrarily pre-determined rules and
assumptions; and
• Fourth, the USDOC maintains the presumption and reach a determination by
imposing an arbitrary and impossibly high ‘good cause’ burden upon respondents’
presenting facts adverse to the presumption.
4. As Korea will elaborate below, the rules and procedures governing each of the above four
steps in US sunset reviews are heavily biased in favor of continuation of the anti-dumping measure.
When combined together, these rules and practices have imposed an insurmountable barrier on allinterested parties that have sought a USDOC findi ng that termination of a dumping measure would
not lead to continued dumping.  The failure of the USDOC ever in 233 cases to find that revocation of
an order would not lead to recurrence of dumping is, in itself, prima facie  evidence that the USDOC’s
rules and practices are not consistent with its WTO obligations.  It is worth noting, in this regard, that
                                                     
1 See Data Compilation of All Sunset Reviews Conducted by USDOC (Ex. JPN-31).WT/DS244/R
Page B-28
USDOC made these 233 determinations at a time of unprecedented strength and high consumer
spending in the US economy.
5. Finally, Korea will argue below that disciplines applying to initial anti-dumping
investigations must apply mutatis mutandis  to sunset reviews.  In particular, the disciplines on the
prevention of zeroing of negative margins, stipulated in Article 2.4, and on de minimis  standards,
stipulated in Article 5.8, apply to sunset reviews with equal force as they do to initial investigations.
II. AUTOMATIC INITIATION OF SUNSET REVIEW WITHOUT SUFFICIENT
EVIDENCE
6. Section 751(c)(1) of the Tariff Act of 1930, as amended (the “Act”),2 mandates that the US
authorities “ shall” conduct a sunset review in every instance and mandates automatic initiation of
such a review without requiring any evidentiary finding that the review is justified or necessary.
Moreover, the Statement of Administrative Action (“SAA”) expressly states that this “automaticinitiation will avoid placing an unnecessary burden on the domestic industry and promote efficiency
of administration.”
3  As a textual matter, this provision for automatic initiation reverses the
presumption contained in Article 11 that anti-dumping measures normally expire after 5 years.
Moreover, the practical effects of automatic init iation further undermine this presumption in two
ways.  First, automatic initiation removes, at least in part, the burden on parties favoring continuationof the measure to show that termination would result in continued dumping and injury by removing
the threshold step of showing evidence supporti ng such a likelihood.  Second, automatic initiation
increases the burden on parties seeking termination of a measure by forcing them to participate in
reviews that might not otherwise be initiated.  In this section, Korea will argue that the automatic
initiation is contrary to the United States’ obligations under Articles 11.3 and 12.1 of the ADAgreement.
A. T
EXTUAL ANALYSIS OF ARTICLE 11.3
7. The text of Article 11.3 provides two different means through which a sunset review can be
initiated; first, “on their [the authorities’] own initiative” or, second, “upon a duly substantiated
request made by or on behalf of the domestic industry (…).”  With respect to a review initiated at theauthorities’ own initiative, Article 11.3 is silent a bout the threshold of evidence that should be met
before a review is initiated.  As noted above, the United States has interpreted this silence to mean
that there is no threshold at all, and, as noted, its interpretation is reflected in section 751(c)(1) of the
Tariff Act and in the SAA.
4
8. Article 11.3 does not provide that there must be a review in every case.  To the contrary, the
primary clause of the first sentence of Article 11.3 provides that measures “shall be terminated” after
five years . . . “unless” the appropriate finding is made. (emphasis added).  The correct interpretationof this sentence is that measures will normally terminate, except when an alternative determination is
made.
5  Thus, Article 11.3 contemplates that measures may terminate without any review being
conducted.  By providing for automatic initiation of reviews in every case, US law makes the conduct
of a review a sine qua non of termination and precludes the possibility of a measure terminating under
the normal operation of the Article 11.3.
                                                     
2 19 USC. §1675a(c)(1).
3 Statement of Administrative Action Accompanying the Uruguay Round Agreements Act, page 879.
4 SAA at 879
5 Webster’s dictionary offers as the following primary definitions of “unless”:  “if it be not that, were it
not the fact that; if not; except when; except that.”  See Webster’s New Universal Unabridged Dictionary, 2nd
Ed. (1983), p. 2001.WT/DS244/R
Page B-29
9. Moreover, nothing in the text of Article 11.3 supports the US position that a review may be
initiated automatically  in every case.  Contrary to the arbitrary interpretation of the US, the text does
not provide that “the authorities shall conduct a review every five years.”  In this sense, Article 11.2
may be contrasted with Article 11.2, which states that the authority “ shall ” conduct a review “where
warranted.”  Thus, Article 11.2 imposes an affirmative burden to conduct a review in certaincircumstances, while Article 11.3 contains no such mandatory burden. By claiming the right to
conduct a review, which it initiates automatically in every case, the United States’ law goes well
beyond any reasonable construction of the language and meaning of Article 11.3.
B. T
EXTUAL ANALYSIS OF ARTICLE 12.1, W HICH PROVIDES A CONTEXT FOR THE
INTERPRETATION OF ARTICLE 11.3
10. Further support for Korea’s interpretation of Article 11.3 is found in the text of Article 12.3,
which stipulates that “the provisions of the Article shall apply mutatis mutandis  to the initiation  and
completion of reviews pursuant to Article 11”. (emphasis added).
11. With respect to the disciplines governing the initiation of reviews, Article 12.1 provides that
“when the authorities are satisfied that there is sufficient evidence  to justify the initiation of an anti-
dumping investigation pursuant to Article 5, the Member or Members […] shall be notified and a
public notice shall be given.” (emphases added)  It should be noted here that Article 12.1 does notattempt to differentiate in any way between review s initiated at the authorities’ own initiative or by or
on behalf of the domestic industry.  Thus, the obligation to have “sufficient evidence” before initiating
a review must be construed to apply in either case.
12. US law is not consistent with Article 12.1 in this respect.  Under section 751(c)(1) of the US
law, the USDOC shall publish  in the Federal Register a notice of initiation of a sunset review not later
than 30 days before the fifth anniversary of a dumping order.  This requirement to publish a notice of
initiation without any supporting evidence is clearly inconsistent with Article 12.1, which provides
that public notice may only be given, “when the authorities are satisfied that there is sufficient
evidence  to justify the initiation of an anti-dumping investigation pursuant to Article 5.”
13. Furthermore, since Article 12.1 applies to the initiation of reviews under Article 11, the
absence of a reference to “sufficient evidence” in Article 11.3 itself cannot be interpreted to mean that
authorities may automatically initiate the review process without any evidence.  Thus, the US law is
inconsistent with Article 11.3 as well as Article 12.1.
14. Article 12.1.1 also provides helpful context for the interpretation of Articles 11.3. and 12.1.
Article 12.1.1 provides that “a public notice of the initiation of an investigation shall contain (…)
adequate information  on the following:”. (emphasis added)  The items on which adequate information
is required include:  ‘the basis on which dumping is alleged in the application” and “a summary of thefactors on which the allegation of injury is based”.  If an authority were permitted to initiate a sunset
review automatically without a prior determination of the sufficiency of the evidence, there would be
no reason for requirement that the authority provide in the public notice adequate information  on the
basis of the alleged dumping and injury.  Again, since Article 12.1.1 applies to the initiation of
reviews under Article 11, the absence of a reference to “sufficient evidence” in Article 11.3 cannot beinterpreted to mean that authorities can automatically initiate the review process without any
evidence.
C. T
HE OBJECTIVE AND PURPOSE OF THE AD A GREEMENT
15. The objective and purpose of the AD Agreement is to establish multilateral disciplines over
the application of anti-dumping measures.  Thus, Article 1 of the AD Agreement, titled ‘Principles’,WT/DS244/R
Page B-30
reads; “the following provisions govern  the application of Article VI of GATT 1994.” (emphasis
added)
16. The initial investigation can lead to the imposition of a dumping order, valid for five years.
The AD Agreement provides detailed and specific rules applying to the imposition of the order, in
order to establish multilateral disciplines over it.  The sunset review can lead to the imposition of adumping order, valid for another 5 years.  Since the objective and purpose of the AD Agreement is the
establishment of multilateral disciplines over the ap plication of Article VI of GATT, the absence from
Article 11.3 of particular rules for sunset reviews cannot be interpreted to mean that investigating
authorities are free to establish their own arbitrary rules for sunset reviews and to initiate such reviews
in every case without any showing of sufficient evidence.
17. Narrowing the focus, the objective and purpose of Article 11.3 is to establish multilateral
discipline over a sunset review.  The discipline is that a dumping order is normally to be terminated infive years, except when (n.4)  there is a good reason to believe that the termination of the measure is
likely to lead to continuation or recurrence of dumping and injury.
18. In the US – Byrd Amendment  case, a panel opined on the importance of the principle of good
faith as a general rule of conduct in international relations and stated that “good faith requires a party
to a treaty to refrain from acting in a manner which would defeat the objective and purpose of a treatyas a whole or the treaty provision in question.
6”  The automatic initiation of a sunset review, without
any evidence, defeats the objective and purpose of Article 11.3, because it imposes additional burden
upon the normal sunset termination, without any justif ication in the form of evidence to justify the
initiation of the review.
III. THE ‘NOT LIKELY’ STANDARD OF THE USDOC
19. USDOC’s regulation 19 C.F.R. 351.222(i)(1)(ii) sets forth a WTO-inconsistent “not likely”
standard for sunset reviews.  As a panel on US-DRAMS  found, a finding that an event is “likely”
implies a greater degree of certainty that the event will occur than a finding that the event is not “not
likely.”  As the same panel pointed out, the fact that an event is not “not probable” does not by itself
render that event “probable.”7  Since the USDOC regulation uses a standard of “not likely” rather than
the “likely” standard of Article 11.3, the USDOC’s st andard is biased in favor of the continuation of
the dumping order and therefore inconsistent with the WTO obligation of the US.
20. The United States may argue that the difference between “likely” and “not likely” is simply
an issue of mere semantic differences, and that in effect, a failure to find that continued dumping is
likely is the same thing as a finding that conti nued dumping is not “not likely”.  However, this
difference in terminology critically alters the burden of proof imposed on the parties in sunset
reviews.  The statement that measures “shall terminate” and “likely” standard of Article 11.3 bothrequire that the administering authority make an af firmative determination that dumping is likely to
continue.  By switching this to a “not likely” standard, the United States in effect flips the burden of
proof on its head and requires respondent to prove that termination of the measure will not result in
continued dumping.  This unjustified shift of burden can readily be seen in the practices of the
USDOC.  As will be illustrated in the following section, the DOC applies the arbitrarily pre-established test provided in the Sunset Policy Bulletin and unjustifiably shifts the burden arising from
Article 11.3 by presuming that dumping is likely  to continue.  Then, the DOC requires respondents to
demonstrate that dumping is not likely  to continue, imposing an impossibly high threshold.
                                                     
6  WT/DS217,234/R, para.7.64
7  US-DRAMS, at para 6.46WT/DS244/R
Page B-31
21. This impermissible burden placed on respondents is extremely unfair.  In this connection,
Korea recalls the admonition of the Appellate Body in the US – Hot Rolled Steel , where it stated that
“under Article 2.4, the obligation to ensure a ‘fair comparison’ lies on the investigating authorities,
and not the exporters.”8  By the same logic, the obligation under Article 11.3 to determine  whether
termination would be likely to lead to continued dumping also lies on the investigating authorities,
and should not be transferred to the exporters by means of unjustified presumption allowed under the
Sunset Policy Bulletin.
22. In the US – DRAMS  case, the United States accepted the panel’s finding that “not likely”
standard is not consistent with “likely” standard and amended its regulations in connection with
Article 11.2 of the AD Agreement9.  However, while amending the regulation, the United States did
not amend other rules and regulations related with the implementation of the amended regulation, thus
distorting the US implementation of the DSB ruling.  In the instant case, the US should be required toamend not only the ‘not likely’ standard enshrined in the USDOC regulation but also other relevant
rules and regulations, including the Sunset Policy Bulletin  cited above.
IV. THE USDOC PRESUMES “LIKELIHOOD” THROUGH THE APPLICATION OF
ARBITRARILY PRE-DETERMINED SCENARIOS
23. The Sunset Policy Bulletin directs the USDOC to examine whether the facts of the particular
sunset review fall into one of four factual scenarios.  If facts fall under one of the three factual
scenarios identified below, dumping is “likely” to continue or recur:
- there has been continued dumping at any level above de minimis  (i.e.,
0.5 per cent) after the imposition of the anti-dumping duty order;
- imports ceased after the imposition of the anti-dumping duty order; or
- dumping ceased thereafter, but import volumes declined significantly from
pre-order level.
10
A. USDOC’ S SCENARIOS CREATE AN IRREFUTABLE PRESUMPTION
24. As Japan has correctly argued, the commercial reality is that in practice these three scenarios
cover every case.11  The only scenario, under which dumping is presumed to be unlikely, is
commercially impractical – where  dumping was completely eliminated and import volumes remained
steady or even increased in terms of relative market share since the imposition of the order12.  Thus,
the Sunset Policy Bulletin invariably leads to an unjustified and effectively irrefutable presumption of
the likelihood of dumping.
25. Article 11.3 stipulates that dumping order shall be terminated, unless the authorities
determine  that the expiry of duty would be likely to le ad to continuation or recurrence of dumping and
injury.  As noted above, applying the statements of the Appellate Body stated in US –  Hot Rolled
Steel , this obligation to make this determination lies on the investigating authorities.  The authorities
cannot fulfill this obligation properly or fairly where they pre-judge the outcome by restricting the
circumstances that will be deemed to justify an af firmative determination to arbitrary, pre-determined
                                                     
8  US-Hot Rolled Steel, WT/DS184/AB/R, para.178
9  Ex. JPN-7
10  Ex. JPN-6
11  Japan’s first submission to the panel, para 120
12  Ibidem, para 124WT/DS244/R
Page B-32
and commercially implausible scenarios, and by limiting their determination to a narrow analysis of
circumscribed facts ( i.e., the margin of dumping and the trends in import volumes.)
26. The Appellate Body, with respect to the obli gation arising from Article 4.2 of the Safeguards
Agreement, has stated that a panel’s assessment has two aspects.  First, a panel must review whether
the competent authorities have, as a formal matter, evaluated all relevant factors and, second, a panel
must review whether those authorities have, as a substantive  matter, provided a reasoned and adequate
explanation of how the facts support their determinations.13  Article 17.6(i) of the AD Agreement,
which governs the standard of review applicable to the review of a dumping order, contains both
formal and substantive  requirements as well.
27. The US laws and practices fail to meet these standards. They limit authorities’ obligation to
gather positive facts to just two of those facts – the changes in dumping margins and the trends in the
import volumes.  They replace the process of making unbiased and objective assessment of facts withthe consideration of these limited facts that must satisfy arbitrarily pre-determined scenarios in order
to support an affirmative determination.  Thus, the US laws and practices fail to meet either the formal
or the substantive  standards by which they must be reviewed.
28. The United States might argue that the respondents can rebut the presumption of likelihood of
dumping by placing other evidence on the record.  This does not cure the inconsistency withArticle 11.3.  First of all, as we have seen, this requirement turns the burden of proof on its head:
while Article 11.3 provides explicitly that it is the authorities that should determine  the likelihood of
continued dumping, the USDOC’s rules articulated in the Sunset Policy Bulletin  transfers this burden
to the respondents.  Second, even if the respondents may place other evidence on the record, the
USDOC’s policies make clear that two facts – the ma rgins of dumping and trends in import volumes –
will be accorded greater weight in the analysis  than any other facts the respondents may produce.
Finally, and more importantly, as will be elaborat ed in the following section, the USDOC places an
arbitrarily high “good cause” barrier upon respondents, making it practically impossible for the
respondents to cross the barrier to rebut the presumption.
B. T
HE “GOOD CAUSE ” BARRIER REINFORCES USDOC’ S IRREFUTABLE PRESUMPTION
29. The depth of the bias of US laws and regulations in favor of finding of continuation of
dumping, elaborated above in the chronological order of a US sunset review, is completed by the
arbitrary and impossibly high burden placed upon respondents to show “good cause” in order to rebut
the irrefutable presumption against termination esta blished by the pre-determined scenarios in the
Sunset Policy Bulletin.
30. Section II.C of the Sunset Policy Bulletin stat es that “the Department will consider other
factors in AD sunset reviews if the Department determines that good cause to consider such otherfactors exists.  The burden is on an interested party to provide information or evidence that would
warrant consideration of the other factors in question.”
14 (emphasis added)
31. In this quotation, other factors refers to fact ors other than the USDOC’s preferred two facts,
i.e., the changes in the margin of dumping and the import volume.  Given its obligation under
Article 11.3 to determine the likelihood of dumping, there is no reason why the USDOC should notconsider other – indeed, all relevant
15 – factors in its analysis from the beginning.  There is no basis in
the AD Agreement for the USDOC to limit arbitrarily the scope of its initial consideration of facts.
                                                     
13  US-Safeguards on Lamb Meat ,  WT/DS177,178/AB/R, para.141
14  Ex JPN-6
15  See, for example, Article 3.4, which calls fo r consideration of “all relevant economic factors”  in
determining injury.WT/DS244/R
Page B-33
This error is compounded by the fact that the USDOC does not simply accept evidence regarding
other factors later in the proceeding, but imposes an additional burden – also not supported by the text
of Article 11.3 – that respondents must make a showing of “good cause” before evidence on these
factors will be considered.  The failure of the USDOC simply to accept all relevant evidence
submitted by the parties constitutes a systematic failure to meet the formal conditions identified by the
Appellate Body for the investigating authority.  Th e US sunset rules are therefore inconsistent with
US obligations under Article 11.3.
32. Furthermore, practical experience shows that the burden of proof imposed by the “good
cause” requirement is impossibly high.  Of the 233 contested cases reviewed by the USDOC, it
considered whether “good cause” existed in only 15 cases.  And, of those 15 cases, the USDOC
actually found “good cause” to exist in only 5 cases.  Notwithstanding its consideration of “other
factors” in those 5 cases, the USDOC found the othe r facts insufficient to negate the presumptions
prescribed by the Sunset Policy Bulletin16.  This incorrigibly lop-sided record establishes beyond
doubt that the US standards, contained in the USDOC regulations and in the Sunset Policy Bulletin,
impose burdens of proof not found in the text of the AD Agreement, unjustifiably limit the evidence
that will be considered, and unfairly pre-judge the outcomes of sunset reviews.  These measures are
thus not consistent with US obligations under Article 11.3.
V. THE DISCIPLINES APPLYING TO AN INITIAL INVESTIGATION AND A
SUNSET REVIEW
33. In its first submission to the Panel, Japan has argued that disciplines applying to the initial
investigation of dumping should also apply with eq ual force to the sunset review of dumping.  In
particular, Japan argues that the practice of “zeroing,” prohibited under Article 2.4, is also prohibitedunder Article 11.3,
17 and that the use of a 2 per cent threshold for de minimis  margins, applied under
Article 5.8, also applies to Article 11.3.18
34. Korea supports Japan’s position on these points.  In this final section, Korea shall provide its
views on the objective and purpose of the AD Agreement and, in this connection, why the disciplines
applying to the initial investigation apply mutatis mutandis to sunset review as well.
35. The AD Agreement contains detailed and complex provisions on the rules applying to various
phases of anti-dumping proceedings.  The imposition of an anti-dumping measure depends on the
proper establishment, and unbiased and objective evaluation, of detailed facts and arguments
presented by petitioners and respondents.  Given that these facts are highly technical in nature, and are
normally presented in an adversarial manner, they must be assessed pursuant to detailed procedural
and substantive rules governing the imposition of anti-dumping measures.
36. If these detailed rules are biased in one way or the other, or lack sufficient clarity, it will be
difficult to expect the outcome of anti-dumping investigations, whether initial investigations or
subsequent reviews, to be fair and consistent.  Therefore, it was necessary for the drafters of the AD
Agreement to agree on the detailed provisions to prevent and cure any biases in the national rules and
to establish multilateral control over the anti-dumping measures.
37. Article11.3, per se,  does not contain detailed substantive provisions governing the conduct of
a sunset review.  To enable the investigating authorities to assess detailed facts and arguments
presented in a sunset review, therefore, either  the detailed provisions provided elsewhere in the AD
Agreement should be applied to the sunset review, or each investigating authority is free to develop
                                                     
16  Japan’s first submission, paras.131-133
17  Ibidem, para.175
18  Ibidem, para.187WT/DS244/R
Page B-34
its own detailed rules for these reviews. The second option would, of course, lead to a proliferation of
140 different rules governing a sunset review, resul ting in the complete loss of multilateral control
over these reviews.
38. Korea does not believe that the drafters of the AD Agreement intended the latter scenario.  In
Korea’s view, the detailed substantive provisions provided elsewhere in the AD Agreement shouldapply to a sunset review in the same manner as to the initial anti-dumping investigation.WT/DS244/R
Page B-35
ANNEX B-5
THIRD PARTY SUBMISSION OF NORWAY
I. INTRODUCTION
1. The present case concerns whether the US basic anti-dumping duty law, Tariff Act of 1930
(hereinafter the Act), Sunset regulations and policy practices, Sunset Policy Bulletin, and their
concrete application to imports of certain corrosion-resistant steel products from Japan are
inconsistent with the United States Government’s (hereinafter the USG’s) obligations under the
General Agreement on Tariffs and Trade 1994 (hereinafter “GATT 1994”) and the Agreement onImplementation of Article VI of GATT 1994 (her einafter the “AD Agreement”), and Marrakesh
Agreement Establishing the World Trade Organization (hereinafter the “WTO Agreement”).
Moreover, whether the US statutes and regulations implementing sunset reviews are on their face and
as applied, both as a general practice and in this case, inconsistent with numerous substantive
provisions of these agreements.
2. Norway has systemic interests in the interpretation and application of the “sunset provisions”
of the AD Agreement, and thus reserved its third party rights in this case during the Dispute
Settlement Body meeting on 22 May 2002.
1
3. As a third party, Norway would like to address, in our view, certain critical issues. They will
be presented below as follows:
- The US standard for initiation for sunset reviews (chapter II)
- The US standard for the subsequent investigation in sunset reviews
(chapter III)
- The US standard of dumping margins and de minimis  requirement in sunset
reviews (chapter IV)
- The US ensurance of the conformity of its laws with their WTO obligations
(chapter V)
II. THE UNITED STATES DEPARTMENT OF COMMERCE (USDOC) STANDARD
FOR INITIATION OF SUNSET REVIEWS – AUTOMATIC INITIATION AND THE
“SUFFICIENT EVIDENCE” STANDARD
4. Sections 751(c)(1) and (2) of the Act and Sections 351.218(a) and (c)(1) of USDOC
regulations mandates that USDOC automatically initiate all sunset reviews without requiring that
there be sufficient evidence to justify such initiation .  In accordance with the statute and its
regulations, USDOC automatically initiated the sunset review in this case.  These provisions of the
Act and regulations, and the applications by USDOC of these provisions to this sunset review, are
inconsistent with Articles 11.1, 11.3, 12.1, 12.3 and 5.6 of the AD Agreement on their face and as
applied in this case.
5. Below Norway will set forth its legal analysis of the abovementioned provisions of the AD
Agreement and the violations committed by the United States.
                                                     
1 WT/DS244/5.WT/DS244/R
Page B-36
A. 2.1 T HE REQUIREMENTS OF ARTICLE 11.3 OF THE AD A GREEMENT IN RESPECT OF
SUFFICIENT EVIDENCE TO INITIATE A SUNSET REVIEW .
6. Article 11.3 of the AD Agreement provides in pertinent parts:
“..any definitive anti-dumping duty shall be terminated on a date not later than five
years from its imposition (...), unless the authorities determine, in a review initiated
before that date on their own initiative or upon a duly substantiated request made by
or on behalf of the domestic industry within a reasonable period of time prior to that
date, that the expiry of the duty would be likely to lead to continuation or recurrence
of dumping”.  (emphasis added)
7. The question in this case is which evidentiary standard is applicable to sunset reviews, given
that Article 11.3 of the AD Agreement is silent on this point.  The United States maintains that there
are no requirements, as nothing is spelt out in the provision itself.  As Norway will demonstratebelow, this is not the case, and the standard in Article 5.6 applies equally to sunset reviews.  This is
because any provision must be interpreted according to recognized principles of public international
law on treaty interpretation, as found inter alia in the Vienna Convention on the Law of the Treaties.
8. Article 31 of the Vienna Convention on The Law of Treaties, requires treaty provisions to be
interpreted “in accordance with the ordinary meaning to be given to the terms of the treaty in theircontext and in the  light of its object and purpose ”.
1. The Object and Purpose of the Sunset Provisions in the AD Agreement
9. Article 11.1 provides the general objective applicable to all decisions to continue imposing an
anti-dumping duty – that the duty may remain in force only as long as necessary to counteract
injurious dumping.
10. Under Article 11.3 of the AD Agreement, WTO Members are required to terminate anti-
dumping duties on a date no later than five years from their imposition, unless it is determined in a
review, that the expiry of the duties would be like ly to lead to continuation or recurrence of dumping
and injury.  This corresponds to the purpose of Article 11.1 of the AD Agreement which provides that
an antidumping duty shall be maintained only as long as necessary and to the extent to counteractdumping which is causing injury.
11. It follows from Article 11.3 that as a main rule anti-dumping duties shall be terminated no
later than five years from their imposition – the presumption being that dumping is counteracted after
such  period.
12. A review is meant only to take place in exceptional circumstances when there is a clear
indication based on the situation existing at the time  of review that the expiry of the duty would be
likely to lead to continuation or recurrence of both dumping and injury.  The purpose of “initiating” asunset review, which as has been mentioned is an exceptional occurrence, is thus not only to begin
analyzing whether continuation of the order is necessary, but also to determine if “initiation” itself is
necessary.
13. Therefore, the object and purpose of Article 11.3 first requires that the administering authority
make a threshold decision as to whether to begin a sunset review at all. Initiation is not an empty orautomatic decision.WT/DS244/R
Page B-37
2. The Context in which Article 11.3 of the AD Agreement Applies
14. As stated above, the absence of the words “sufficient evidence” in article 11.3 in the AD
Agreement, does not mean that there are no standards for initiation of sunset reviews.  The absence of
any specific language in Article 11.3 with respect to how an administering authority is to initiate
sunset reviews is not conclusive; the absence simply confirms that one must look elsewhere in theAgreement for those specific rules.  This is evident from the object and purpose of the sunset
provision in the AD Agreement.
15. Furthermore the textual context of the provision mandates clearly what the evidentiary
standard is.
16. There is an abundance of textual context that confirms the existence of a “sufficient evidence”
standard before initiating a sunset review, as is the case for the initial investigation.  A proper analysis
of the context of Article 11.3 reveals that no provision of the AD Agreement can be read in isolation,and that all provisions are applicable mutatis mutandis to Article 11.3 to the extent that they are
relevant to sunset reviews. Moreover, each provision of the AD Agreement must be interpreted in the
context of all the other provisions of the Agreement.
17. There are in particular three textual links that the Government of Norway would like to
mention in support of the above interpretation of the provision based on its object and purpose andcontext..  Firstly, the textual link in Article 12.3 of the mutatis mutandis application of article 12 to
article 11, secondly the reference to Article 5 in Article 12.1. and thirdly the footnote 1 to the AD
Agreement.
18. Norway submits that the text and reference in Article 12.1 and Article 12.3 reflects the
contextual point that the “sufficient evidence” standard applies to all announcement to initiate by theauthorities, not just announcements of original investigations.
19. The text and context of Article 12 explicitly requires that the authorities have “sufficient
evidence” to initiate sunset reviews under Article 11.3.  The mutatis mutandis  application of
Article 12.1 in accordance with Article 12.3 to Article 11.3 establishes that, once the authorities are
satisfied that there is “sufficient evidence” to justify initiation, the authorities must provide publicnotice of the initiation of the sunset review.  To give Article 12 its proper meaning, therefore, the
authorities must satisfy the “sufficient evidence” standard to initiate sunset reviews.
20. Because of the mutatis mutandis  application of the Article 12 to Article 11.3, the language
“pursuant to Article 5” in Article 12.1 requires that Article 5.6 must also apply to sunset reviews.
Article 5.6 requires that the sufficient evidence standard defined in Article 5.2 must also apply to
instances where the administering authorities self-i nitiate.  In this way, the text and context of
Article 5.6 also requires that the administering auth orities have “sufficient evidence” to initiate sunset
reviews under Article 11.3.
21. In Article 5.6, the authorities do not have carte blanche to automatically initiate investigations
without first having “sufficient evidence.” It is illogical to imagine that the AD Agreement only limits
administering authorities’ ability to self-ini tiate in some instances but not in others.
22. Thirdly, we would also like to point to the fact  that footnote 1 to the AD Agreement, in which
it is stated that:
“The term “initiated” as used in this Agreement means the procedural action by
which a Member formally commences an investigation as provided in Article 5.”WT/DS244/R
Page B-38
23. The word “initiated” in Article 11 shall thus be understood as a procedural action in
accordance with Article 5.  This makes it, in our view, clear that Article 5.6 must apply to a sunset
review.
24. Therefore, the “sufficient evidence” rule, apply to all self-initiations by the authorities in both
original investigations and sunset reviews.
3. 2.1.3  The Prior Panel Decision on Article 21.3 of the SCM Agreement is Not Persuasive
25. With all due respect, Norway submits that the panel in United States – Countervailing Duties
on Certain Corrosion-Resistant Carbon Steel Flat Products From Germany ,2 erroneously interpreted
the consistency of the automatic initiation of suns et reviews with Article 21.3 of the SCM Agreement,
the corollary to Article 11.3 of the AD Agreement.  This Panel should not follow the prior panel’s
decision.
26. The CVD panel did not consider Article 21.3 in its proper context, and in light of its object
and purpose as mandated by the recognized principl es of Public International Law relating to treaty
interpretation.  Furthermore, the CVD panel never discussed or even mentioned Article 22.1 of the
SCM Agreement (the corollary to Article 12.1 of the AD Agreement), which provides for the
“sufficient evidence” standard, and also establishes a textual link to Articles 21.3 through 22.7 of the
SCM Agreement.  This point is now before the Appellate Body, which held its oral hearing on
11 October 2002.  Norway trusts that the Appellate B ody will correct this error by the Panel in that
case.
B. 2.2 C ONCLUSION
27. For the reasons stated above, the proper interpretation of Article 11.3 in accordance with its
context, object and purpose requires a sunset review initiated by the authorities to be based on“sufficient evidence.”  Although the standard of “sufficient evidence” may vary from case to case,
automatic self-initiation by the authorities without  any evidence cannot be within the scope of the
“sufficient evidence” standard.
28. The Act and regulations mandating automatic initiation of sunset reviews without any
evidence, therefore, are inconsistent with Articles 11.1, 11.3, 12.1, 12.3 and 5.6 on its face.  Further,USDOC’s automatic initiation of the sunset review in this case, on 1 September 1999, pursuant to the
Act and regulations is also inconsistent with these provisions of the AD Agreement.
III. THE UNITED STATES DEPARTMENT OF COMMERCE (USDOC) STANDARD OF
THE SUBSEQUENT INVESTIGATION IN SUNSET REVIEWS – THE “LIKELY”
STANDARD
A. 3.1 T
HE USDOC’ S REFUSAL IN SUNSET REVIEWS TO UNDERTAKE A SERIOUS
PROSPECTIVE EXAMINATION OF THE PROBABILITY OF FUTURE DUMPING BASED ON POSITIVE
EVIDENCE IS INCONSISTENT WITH ARTICLE 11.3, ON ITS FACE, AS A GENERAL PRACTICE AND
AS APPLIED IN THIS CASE.
29. Article 11.3 of the AD Agreement provides that:
“..any definitive anti-dumping duty shall be terminated on a date not later than five
years from its imposition...unless the authorities determine, in a review initiated
before that date on their own initiative or upon a duly substantiated request made by
                                                     
2 WT/DS213/R, adopted 3 July 2002WT/DS244/R
Page B-39
or on behalf of the domestic industry within a reasonable period of time prior to that
date, that the expiry of the duty would be likely to lead to continuation or recurrence
of dumping”.   (emphasis added)
30. This represents a positive obligation upon the domestic authorities to ”determine” the
likelihood of continuation or recurrence of subsidisation.  The “likely” standard under Article 11.3requires a “determination” based on a prospective analysis of positive evidence that there is a
probability, not some remote possibility, that dumping will continue or recur in the future.
31. In the case United States – Imposition of Countervailing Duties on Certain Hot-Rolled Lead
Bismuth Carbon Steel Products Originating in the United Kingdom  the Appellate Body considered
that (in the context of a review under Article 21.2 of the SCM Agreement, the corollary to
Article 11.2 of the AD Agreement)
 3:
“In order to establish the continued need for countervailing duties, an investigating
authority will have to make a finding on subsidisation  i.e. whether or not the subsidy
continues to exist”.
32. When such requirements are applied to a review under Article 21.1 of the SCM Agreement –
and thus also to Article 11.2 of the AD Agreement – which is not obligatory and takes place during
the life time of the original duty, it should be clear that a positive finding on dumping is necessaryalso in the context of an Article 11.3 investigation.
33. In an Article 11.3 investigation the basic obligation is the termination of the original duty,
while  the possibility of continuing a duty followin g a sunset review constitutes the exception.  In the
opinion of the Norwegian government the latter requires an unbiased review independent of the
results of the original investigation to be undertak en in full conformity with all the procedural and
substantive requirements for an initial determination of dumping and injury set forth in Articles 1 et
sec.  There is no reason to understand the requirement of “determination” of dumping and injury
differently in Article 11.3 as compared to inter alia Articles 3 and 5.  This is also supported by
Article 11.1 and the purpose of the AD Agreement.
B. 3.2 T HE US R EGULATIONS
34. Section 351.222(i)(1)(ii) of the US regulations mandate explicit application of a “not likely”
standard, even though a prior panel in United States – Anti-dumping Duty on Dynamic Random
Access Memory Semiconductors (DRAMS) of one Megabit or Above from Korea,4, has made clear that
a “not likely” standard does not comply with the “likely” standard of Article 11.
35. Notwithstanding this previous panel decision and the US’s own acceptance of this decision,
the US continues to maintain the “not likely” standa rd in regulations with respect to sunset reviews.
Because the US regulation mandates termination of an anti-dumping duty based on the “not likely”standard, USDOC’s regulation is thus inconsistent with Article 11.3.
C. 3.3 T
HE SUNSET POLICY BULLETIN
36. The US ’s WTO-inconsistency on this issue does not stop at the provisions of the regulations.
The Sunset Policy Bulletin impermissibly restrict any real factual investigation to determine
prospectively whether dumping is “likely” to continue or recur, nonetheless the terms “likely” and
                                                     
3 See Panel Report  WT/DS138/R, adopted 7 June 2000, at para. 6.18, as upheld by the Appellate Body
Report, WT/DS138/AB/R, adopted 7 June 2000, at para. 51.
4 WT/DS99/R, adopted 29 January 1999WT/DS244/R
Page B-40
“determine” in Article 11.3 require that the authorities undertake a prospective analysis of positive
evidence to establish whether dumping is likely to co ntinue or recur. Instead of looking forward, as a
general practice the USDOC looks backwards.
37. The USDOC examines only historical dumping margins and import volumes.  The Sunset
Policy Bulletin thus impermissibly restricts the US DOC’s analysis to a retrospective analysis.  This
restrictive, static, and retrospective approach creates an irrefutable presumption that dumping will
continue or recur.
38. According to the written submission of Japan the USDOC applied this practice to the sunset
review to determine that dumping is likely to cont inue in this case.  In reaching its determination,
USDOC refused to consider any information submitted by the Japanese company Nippon Steel
Corporation (NSC). NSC presented facts showing that NSC would not export the subject product at
dumped price and submitted information showing that the export volume had been lowered due to theproduction of subject product at its joint-venture in the United States.
39. According to the Japanese submission the USDOC  had even known of the existence of these
facts since the original investigation and subsequent administrative reviews.
D. 3.4 C
ONCLUSION
40. For the reasons stated above, Norway considers that, USDOC does not take the proper
prospective approach to determine whether dumping is likely to continue in a sunset review and
therefore acts inconsistently with Article 11.3 as a general practice and in this case.
IV. THE USDOC STANDARD OF DUMPING MARGINS AND DE MINIMIS   RULE
A. 4.1 T HE USDOC’ S USE OF DUMPING MARGINS INCLUDING THE “ZEROING ”
METHODOLOGY IS INCONSISTENT WITH ARTICLES 2.2.1, 2.2.2, 2.4.2, 11.3 AND 18.3 B OTH AS
A GENERAL PRACTICE AND AS APPLIED IN THIS CASE
41. Article 2 sets forth the fundamental definiti on of “dumping,” which governs throughout the
rest of the AD Agreement.  At the same time, Article 18.3 requires that each Member conduct its
sunset reviews in accordance with the provisions of the AD Agreement.  Consequently, the US is
under an obligation to apply Article 2-consistent dumping margins in its sunset reviews.
42. In accordance with the Sunset Policy Bulletin, however, USDOC continues to apply to sunset
reviews, including this case, dumping margins calcula ted in the original investigations prior to the
WTO Agreement.  These margins were calculated pursuant to Article-2 inconsistent methodologies.
USDOC uses these WTO-inconstant dumping margins to determine the likelihood of dumping in
sunset reviews without any attempt to bring these margins into conformity with Article 2.
43. The Appellate Body in the case EC – Bed Linens,5 found that Articles 2.4 and 2.4.2 oblige the
authorities to make a dumping determination without “zeroing” negative dumping margins.  Yet, as ageneral practice USDOC has consistently calculated dumping margins in original investigations and
subsequent reviews using the zeroing methodology for more than fifteen years.  In accordance with
the Sunset Policy Bulletin, USDOC uses these dumping margins upon which it bases its likelihood
determination, contrary also to the requirement of Article 18.3 of the AD Agreement that requires that
the present Agreement be applied to all cases – including reviews – after the creation of the WTO.
                                                     
5 WT/DS141/AB/R 2001,WT/DS244/R
Page B-41
1. 4.1.1 Conclusion
44. By applying these WTO-inconsistent dumping margins, the US acts inconsistently with its
obligation under both Articles 2, and 11.3 and 18.3 as a general practice and as applied in this case.
B. USDOC’ S REGULATIONS APPLYING A 0.5 P ER CENT DE MINIMIS  STANDARD TO SUNSET
REVIEWS , RATHER THAN THE PROPER 2.0 P ER CENT DE MINIMIS  STANDARD AS PROVIDED
FOR IN ARTICLE 5.8, ARE BOTH ON THEIR FACE AND AS APPLIED IN THIS CASE
INCONSISTENT WITH THE US’ S OBLIGATIONS UNDER ARTICLES 5.8 AND 11.3.
45. As stated above Norway considers that Article 5 of the AD Agreement is applicable also for
sunset reviews. Article 5 is part of the context within which Article 11.3 operates.  A proper
interpretation of Article 11.3 in accordance with its context and its object and purpose, interpreted in
accordance with the general principles of  public international law as embodied inter alia  in Article 31
of the Vienna Convention on the Law of Treaties, leads to the natural interpretation that the same de
minimis  standard shall be applied to all cases.
46. Article 5.8 of the AD Agreement provides in the context of original investigations:
“[...] There shall be immediate termination in cases where the amount of dumping is
de minimis .[...] For the purpose of this paragraph, the amount of a subsidy shall be
considered to be de minimis  if the subsidy is less than 2 per cent ad valorem.”
47. The Member States of the WTO have agreed that dumping below this threshold does not
permit a countervailing action. There is no exception to this rule, and immediate termination shall be
the result in such cases.
48. The relevant US laws and administrative practice is to apply a 2 per cent de minimis  rule in
the initial determination of dumping as required by the AD Agreement, but to apply, as a general rule,a 0.5 per cent de minimis  rule in all reviews, including sunset reviews.
49. Reviewing the need for a duty to continue under Article 11.3, in conjunction with
Articles 11.1 and 5.8 has the same implications as determining whether the original substantive
conditions on the basis of which it was initially imposed continue to exist .
50. The de minimis  standard in the AD Agreement is based on the fact that a dumping margin of
less than 2 per cent is presumed incapable to cause injury.  If this dumping cannot cause injury in an
original investigation, it is logically and legally unavoidable to conclude that it cannot cause injury in
a sunset investigation.  Consequently the United States should have lifted the anti-dumping duties and
changed the de minimis  threshold to 2 per cent in all review processes.
51. The panel in US – German Steel CVD Sunset  supports this interpretation.  The panel found
that the same de minimis  standard under Article 11.9 of the SCM Agreement should apply to both
original investigations and to sunset reviews of countervailing duty orders under Article 21.3 of theSCM Agreement.  The same rationale applies in this case. Further, the panel in US – DRAM s also
supports that a de minimis standard of two per cent applies to sunset reviews.
52. According to the facts submitted by the Japan in its written submission in the present case, if
the proper de minimis  standard were applied to WTO-consistent dumping margins in this sunset
review respondents would be found to be de minimis , resulting in the termination of the anti-dumping
duty.WT/DS244/R
Page B-42
C. 4.2.1. C ONCLUSION
53. Based on the above, Norway submits that the 0,5per cent de minimis  standard used by the
United States for sunset reviews represents a clea r violation of Article 11.3 of the AD Agreement read
in conjunction with Article 5.8 of the AD Agreement both as a general practice and as applied in this
case.
V. US ANTI-DUMPING LEGISLATION IS  INCONSISTENT WITH ARTICLE 18.4 OF
THE AD AGREEMENT AND ARTICLE XVI:4 OF THE WTO AGREEMENT
54. Article 18.4 of the AD Agreement provides that:
“Each member shall ensure not later than the date of entry into force of the WTO
Agreement for it, the conformity of it laws, regulations and administrative procedures
with the provisions of this Agreement.”
55. Furthermore, Article XVI:4 of the WTO Agreement requires that Each Member shall ensure
the conformity of its laws, regulations and administrative procedures with its obligations as provided
in the annexed Agreements.
56. Thus, by being inconsistent with Article 11 and related articles of the AD Agreement as they
apply to a sunset review, the US law, regulations and practices as such, and as applied to the products
in question in this case, are also inconsistent with Article 18.4 of the AD Agreement andArticle XVI:4 WTO Agreement.
VI. CONCLUSION
57. For the reasons stated in the submission, Norway respectfully request the Panel to consider
the US law, regulations and practices inconsistent with the obligations of the United States under:
Article 11 and related articles of the AD Agreement as they apply to a sunset review, Article 18.4 ofthe AD Agreement and Article XVI:4 WTO Agreement.
58. Finally Norway respectfully requests the Panel to recommend that the United States bring its
legislation into conformity with the corresponding covered agreements.
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