RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/DSB/M/175 
24 September 2004 
 (04-4006) 
Dispute Settlement Body 
31 August 2004  
 
 
 
MINUTES OF MEETING 
 
Held in the Centre William Rappard  
on 31 August 2004  
 
Acting Chairperson:  Mrs. P uangrat Asavapisit (Thailand) 
 
  Prior to the adoption of the agenda
, the item concerning the Panel Report in the case on 
"United States – Sunset Reviews of Anti-Dump ing Measures on Oil Country Tubular Goods from 
Argentina" was removed from the proposed agenda following the US decision to appeal the Panel 
Report.   Subjects discussed
: Page  
1. Surveillance of implementation of recommendations adopted by the DSB.........................2  
(a) United States – Anti-Dumping Act of 1916:  Status report by the United States.......................2  
(b) United States – Section 211 Omnibus Appropr iations Act of 1998:  Status report by 
the United States .............................................................................................................. ...........3  
(c) United States – Anti-dumping measures on certain hot-rolled steel products from 
Japan:  Status report by  the United States...................................................................................4  
(d) United States – Continued Dumping and Subsidy Offset Act of 2000:  Status report 
by the Unite d States ........................................................................................................... .........5  
2. United States – Anti-dumping measures on certain hot-rolled steel products 
from Japan..................................................................................................................... ............6  
(a) Request for modification of the reasonable period of time.........................................................6  
3. Korea – Anti-dumping duties on imports of certain paper from Indonesia........................7  
(a) Request for the establishment of a panel by Indonesia...............................................................7  
4. United States – Final dumping determin ation on softwood lumber from Canada.............7  
(a) Report of the Appellate Body and Report of the Panel...............................................................7  
5. Proposed nomination for the indicative list of governmental and 
non-governmental panelists ...................................................................................................10  
6. Mexico – Measures affecting telecommunications services.................................................10  
(a) Statement by  Mexico ............................................................................................................ ....10  
 WT/DSB/M/175 
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1. Surveillance of implementation of recommendations adopted by the DSB 
(a) United States – Anti-Dumping Act of 1916:   Status report by the United States 
(WT/DS136/14/Add.29 - WT/DS162/17/Add.29) 
 (b) United States – Section 211 Omnibus Appropr iations Act of 1998:  Status report by the 
United States (WT/DS176/11/Add.22) 
 (c) United States – Anti-dumping measures on certain hot-rolled steel products from Japan:  
Status report by the United States (WT/DS184/15/Add.22) 
 
(d) United States – Continued Dumping and Subsid y Offset Act of 2000:  Status report by the 
United States (WT/DS217/16/Add.7 – WT/DS234/24/Add.7) 
 1. The Chairperson
 recalled that Article 21.6 of the DSU required that "unless the DSB decides 
otherwise, the issue of implementation of the re commendations or rulings shall be placed on the 
agenda of the DSB meeting after six months follo wing the date of establishment of the reasonable 
period of time pursuant to paragraph 3 and shall remain on the DSB's agenda until the issue is 
resolved".  She proposed that the four sub-items  to which she had just referred be considered 
separately. 
(a) United States – Anti-Dumping Act of 1916:  Status report by the United States 
(WT/DS136/14/Add.29 - WT/DS162/17/Add.29) 
2. The Chairperson  drew attention to document WT/D S136/14/Add.29 – WT/DS162/17/Add.29, 
which contained the status report by the United St ates on progress in the implementation of the DSB's 
recommendations in the case concerning the US Anti-Dumping Act of 1916. 
3. The representative of the United States  said that his country had provided an additional status 
report in these disputes on 19 August 2004, in accordance with Article 21.6 of the DSU.  As noted in 
the report, legislation repealing the 1916 Act was pending in both the US Senate and US House of 
Representatives.  On 29 January 2004, HR 1073, whic h would repeal the 1916 Act, had been reported 
favorably out of the Committee on the Judiciar y of the US House of Representatives.  On 
30 June 2004, Ambassador Zoellick had written a letter to the leadership of the US House of 
Representatives urging the passage of repeal legislation "at the earliest opportunity."  He noted that Congress had been in recess since 23 July.  The US administration would continue to work with 
Congress when it returned in September to achieve further progress in resolving these disputes with 
the EC and Japan. 
4. The representative of th e European Communities
 said that it was with great disappointment 
that the EC noted that, once again, the US status report did not show any progress.  For almost four 
years, the United States had totally ignored its dut y to comply promptly with the DSB's ruling and 
recommendations.  The EC strongly hoped that the US administration would continue to convey to 
Congress the urgency of complying with the WTO decision and would report to the DSB any new steps undertaken in this respect.  The EC recalled that it might adopt anytime a specific anti-dumping legislation applicable to US products pursuant to its  right to suspend the application to the US of its 
obligations under the GATT 1994 and the Anti-Dumping Agreement. 
5. The representative of Japan
 said that the continued lack of implementation by the United 
States of the DSB's recommendations and rulings in this proceeding over three years and 11 months 
remained to be a great and ongoing concern to Japan.  From a systemic point of view, this was also 
highly problematic for the credibility of the WTO di spute settlement system.  On the positive side, 
Japan had taken note of a couple of recent developmen ts referred to in the US status report, namely, 
the administration's explicit support to the legisla tion repealing the 1916 Act in the 2004 Report to the  WT/DSB/M/175 
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Leaders on the "US – Japan Regulatory Reform a nd Competition Policy" and Ambassador Zoellick's 
letter to the leadership of the US House of Repres entatives.  Japan urged the US administration to re-
double its effort in urging the Congress so that the re pealing legislations were to be passed during the 
current session of the 108th Congress.  In the intere st of specific Japanese companies involved in the 
lawsuits filed under the 1916 Act, Japan had been appealing for legislation repealing the 1916 Act 
with proper retroactive effect.  Against such background, the Federal District Court had passed 
judgment in May upholding the order imposing on a Japanese company a payment of damages amounting to US$30 million, much to Japan's regret.  In  this light the top priority for Japan remained 
that the US Congress pass legislation repealing the 1916 Act with proper retr oactive effect.  Pending 
the passage of any such legislation, Japan urged th e US administration to take actions which would 
prevent damages being inflicted upon Japanese co mpanies under the 1916 Act.  In this regard, 
however, Japan regretted that, thus far, no such ac tion had been taken by the administration.  Once 
again, Japan urged the United States to secure the implementation by way of repealing the 1916 Act 
with proper retroactive effect.  Japan further requ ested the United States to be more specific when 
reporting on any further developments regarding the status of all the bills repealing the 1916 Act.  
Should the United States fail to implement the DSB's recommendations and rulings, Japan had no 
other option than to proceed to reactivation of th e arbitration under Article 22 of the DSU, and to 
exercise its right to suspend concessions or other obligations. 
6. The DSB took note
 of the statements and agreed  to revert to this matter at its next regular 
meeting. 
(b) United States – Section 211 Omnibus Appropria tions Act of 1998:  Status report by the 
United States (WT/DS176/11/Add.22) 
7. The Chairperson  drew attention to document WT/D S176/11/Add.22 which contained the 
status report by the United States on progress in th e implementation of the DSB's recommendations in 
the case concerning US Section 211 Om nibus Appropriations Act of 1998. 
8. The representative of the United States  said that his country had provided a status report in 
this dispute on 19 August 2004, in accordance with Ar ticle 21.6 of the DSU.  As noted in the report, 
legislation amending or repealing Section 211 was pending in the US Senate and the US House of 
Representatives, and the Senate had held hearings  on this legislation last month.  The US 
administration would continue to work with the US Congress concerning appropriate statutory 
measures that would resolve this matter. 
9. The representative of the European Communities  said that, as indicated in the US status 
report, two bills were pending respectively in the Se nate and the House of Representatives to enact the 
"US – Cuba Trademark Protection Act".  This legisl ation purported to provide enhanced and effective 
protection of intellectual property rights both in Cuba  and in the United States and, in this framework, 
to repeal Section 211.  The adoption of this Act would allow to solve this dispute to the benefit of all.  
The EC expected that the US administration w ould support the "US – Cuba Trademark Protection 
Act" as an appropriate solution to this dispute in  conformity with the United States' long advocated 
objective to guarantee in each country effective a nd non-discriminatory protection of intellectual 
property rights. 
10. The representative of Cuba  said that it was now a matter of routine for Cuba to deplore, 
month after month, the failure of the United Stat es to comply with the DSB's recommendations and 
rulings, not only in relation to this dispute, but in relation to all those being examined under this 
agenda item, which was a truly disgraceful state of af fairs.  Her delegation had been instructed to read 
out at the present meeting a communication from Mr. Ricardo Cabrisas Ruiz, Minister of the Government of the Republic of Cuba, addressed to th e Director-General of the WTO, which had been 
circulated to Members as document WT/DSB/COM/7 and Corr.1.  She then read out the following:  
"The Government of Cuba has stated on many oc casions that the approval of Section 211 of the WT/DSB/M/175 
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Omnibus Appropriations Act of 1998 was the Unite d States' way to extend internationally the 
economic, commercial and financial bl ockade and its aggressive policy against Cuba to the area of 
intellectual property, in blatant violation of th e principles and multilateral rules established by the 
World Trade Organization.  The purpose of this comm unication is to draw your attention, as Director-
General of the WTO, to the urgent need for the United States to eliminate Section 211 once and for 
all, in conformity with international law and the principles upheld by the WTO .  Since the DSB's 
ruling 30 months ago, the Government of the United States has failed to comply with its obligations 
as a WTO Member to find a rapid and definitive soluti on to this issue.  Instead, its efforts have boiled 
down to requesting and obtai ning successive extensions of  the period of time granted for that purpose 
and to submitting repetitive reports containing only the slightest indication that the Administration is 
working with Congress.  This has been going on for two and a half years now, without any arguments 
by the United States to justify such a delay. At the same time, the Government of Cuba has 
continuously denounced this status quo imposed by  the United States, which casts doubt on the very 
viability of DSB rulings, and has reiterated the ne ed to repeal Section 211 because it violates basic 
WTO principles such as national treatment and most-favoured-nation treatment.  Allow me to draw 
your attention to the fact that, since it is the US Co ngress that is competent to decide on the repeal of 
this Law, the time remaining to comply with the DSB's mandate by the latest deadline of December 
2004 is merely a few weeks, given that the presidentia l elections are not far off.  This is the main 
reason why I am calling upon you to help act in orde r to ensure that the Un ited States complies with 
the principles of the WTO and repeals Section 21 1 of the Omnibus Appropriations Act of 1998, 
thereby meeting its obligations as a WTO Member. I would also ask you to circulate this 
communication to the Member countries as an official document from the Government of Cuba.  The 
Government of Cuba takes this opportunity to re iterate to you and to the WTO Secretariat the 
assurances of its highest consideration." 
11. The representative of the United States
 said that the United States would continue to work 
with the other party to this di spute in seeking to resolve it. 
12. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting. 
(c) United States – Anti-dumping measures on certain hot-rolled steel products from Japan:  
Status report by the United States (WT/DS184/15/Add.22) 
13. The Chairperson  drew attention to document WT/D S184/15/Add.22 which contained the 
status report by the United States on progress in th e implementation of the DSB's recommendations in 
the case concerning US anti-dumping measures on certain hot-rolled steel products from Japan. 
14. The representative of the United States  said that his country had provided a status report in 
this dispute on 19 August 2004, in accordance with  Article 21.6 of the DSU.  The administration 
would continue to work with the US Congress with  respect to the DSB's recommendations and rulings 
that had not been addressed by 23 November 2002.  Following consultations with Japan, the United 
States had proposed that the "reasonable period of time" for implementation of the remaining 
recommendations and rulings be extended.  That proposal would be considered under item 2 of the 
agenda of the present meeting. 
15. The representative of Japan  said that his country had to express its grave disappointment over 
the fact that the United States had missed the deadline for implementing the DSB's recommendations 
and rulings in this proceeding, which had been ex tended in December 2003 until 31 July 2004.  It was 
of serious concern to Japan that not even a bill to amend the relevant US anti-dumping statutes had 
been introduced to the US Congress for considerati on and passage.  As Japan had repeatedly stated, 
such a prolonged non-implementa tion undermined the credibility of the WTO dispute settlement 
system.  The United States and Japan had held cons ultations over the request made by the United 
States for the extension of the reasonable period of time, as indicated by the United States at the  WT/DSB/M/175 
 Page 5 
 
 
present meeting.  Since this issue would be dea lt with under agenda item 2 of the present meeting, 
Japan wished to make further comments in the context of that item. 
16. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting. 
(d) United States – Continued Dumping and Subsidy Offset Act of 2000:  Status report by the 
United States (WT/DS217/16/Add.7 – WT/DS234/24/Add.7) 
17. The Chairperson  drew attention to document WT/D S217/16/Add.7 – WT/DS234/24/Add.7 
which contained the status report by the United St ates on progress in the implementation of the DSB's 
recommendations in the case concerning the US Conti nued Dumping and Subsidy Offset Act of 2000. 
18. The representative of the United States  said that his country had provided a status report on 
19 August 2004, in accordance with Article 21.6 of the DSU.  As noted in the report, on 
19 June 2003, legislation to bring the Continue d Dumping and Subsidy Offset Act (CDSOA) into 
conformity with the US WTO obligations had b een introduced in the US Senate (S. 1299).  On 
10 March 2004, legislation repealing the CDSO A had been introduced in the US House of 
Representatives (H.R. 3933).  In addition, on 2 Februa ry 2004, the US administration had, once again, 
proposed repeal of the CDSOA, in its budget proposal  for fiscal year 2005.  The US administration 
would continue to work with Co ngress after it returned from recess in September to achieve further 
progress in resolving these disputes with the complaining parties. 
19. The representative of the European Communities  said that the introduction of bills was 
unconvincing since month after month the US Congr ess had not shown the slightest intention to act 
on those bills and thus to move towards full comp liance with the WTO rulings and recommendations.  
This was all the more serious that this scenario had recurred basically in all disputes involving a 
change of US legislation and the need to implemen t the WTO decision in this dispute had been openly 
and repeatedly questioned.  Prompt compliance was at the core of the dispute settlement mechanism 
and all Members, including the United States, shoul d be seriously concerned by the very damaging 
precedent that this set.  The EC called on the US administration to convey to Congress the importance 
for the US credibility in the WTO to respect other Members' rights without further delay. 
20. The representative of Chile  said that the lack of progress by the United States with regard to 
compliance with the DSB's recommendations in this dispute was, once again, to be regretted.  
Likewise, Chile regretted the failure of the United St ates to provide clarification of the consultations 
which the US administration claimed to be holding with Congress with a view to approving legislation repealing the Byrd Amendment, in sp ite of his delegation's request at the July DSB 
meeting for further details regarding the backgroun d of these consultations, in particular the next 
legislative steps to secure the earliest repeal of  the Continued Dumping and Subsidy Offset Act of 
2000.  Chile hoped that such a repeal would be appr oved in the remaining time before the end of the 
current legislative period, thereby avoiding the need  for recourse to the suspension of concessions or 
other equivalent obligations, in accordance with the Ar bitrator's decision to be circulated within the 
next few hours. 
21. The representative of Canada
 said that his country, once again, noted the status report of the 
United States and its continued failure to comply w ith its WTO obligations with regard to the Byrd 
Amendment.  The DSB had ruled on this dispute over one year ago.  The lack of any progress by the United States to bring itself into conformity with  the DSB's recommendations and rulings remained an 
ongoing concern to Canada.  He noted that the WT O Arbitrators were expected to render their 
decision regarding the level of retaliation that parti es to this arbitration might take against the United 
States.  It was unfortunate that the United States'  failure to comply with its international trade 
obligations had brought Canada to this stage in the process.  Canada has repeatedly stated that its WT/DSB/M/175 
Page 6  
 
objective was not retaliation, but the repeal of this  WTO-inconsistent measur e.  Canada called upon 
the United States, once again, to end this dispute and repeal the Byrd Amendment. 
22. The representative of Japan
 said that his country took note of the status report of the United 
States.  This month again, however, with a strong sense of disappointment that there had been no development in terms of the implementation of the DSB's recommendations and rulings.  While 
awaiting the award of the Arbitrator under Article  22.6 of the DSU, Japan wished to remind the 
United States that a top priority for Japan and the ot her complaining parties remained the repeal of the 
WTO-inconsistent CDSOA. 
23. The representative of India
 said that his country regretted that the United States had reported 
no progress at all in many previous DSB meetings.  As stated by the United States in the context of an 
earlier sub-item of this agenda item, the Unite d States had a window of opportunity in the 
reconvening of the US Congress in September.  I ndia urged the US administration to redouble its 
efforts to repeal the CDSO A within the window of opportunity available to it. 
24. The DSB took note  of the statements and agreed  to revert to this matter at its next regular 
meeting. 
2. United States – Anti-dumping measures on certain hot-rolled steel products from Japan 
(a) Request for modification of the reasonable period of time (WT/DS184/18) 
25. The Chairperson  drew attention to the communication from the United States contained in 
document WT/DS184/18. 
26. The representative of the United States  said that, as mentioned under a previous agenda item, 
the US administration would continue to work  with the US Congress with respect to the 
recommendations and rulings of the DSB that had not been addressed by 23 November 2002.  After 
consultations with Japan, the United States was re questing that the reasonable period of time for 
implementation of the remaining recommendations and ru lings in this dispute be modified so as to 
expire on 31 July 2005.  The United States believed th at such an extension of time would promote a 
principal aim of the dispute settlement system, which was to provide mutually satisfactory solutions to 
disputes.  The United States understood from Japan th at Japan would not oppose this proposal.  The 
United States intended to continue discussions  with Japan on implementation of the DSB's 
recommendations and rulings. 
27. The representative of Japan  said that, as his delegation had stated under the previous agenda 
item, to Japan's great regret, the reasonable peri od of time, which had been extended twice, had 
already lapsed without any sign of implementation by the United States of the DSB's 
recommendations and rulings. To Japan's dism ay, the situation had little changed since 
December 2003, when the DSB had previously agreed  to the modification of the reasonable period of 
time.  Since then, the United States had not even been able to introduce any specific legislative 
amendments necessary for complianc e, despite the US administration's pledge to support such 
amendments.  Following the bilateral consultati ons, Japan had decided not to object to the 
modification of the reasonable period of time proposed by the United States.  This decision by Japan, 
in no way, meant to condone the prolonged inactio n on the part of the United States.  Rather, Japan 
strongly urged the United States to expeditiously ta ke necessary legislative actions so as to secure 
definitive solution of this long-standing dispute.  Should the United States fail to secure fully-fledged 
implementation by 31 July 2005, Japan was entitled to have recourse to the rights accruing to it under 
the DSU.  Japan looked forward to further consultati ons with the United States on its concrete plan for 
implementation.  WT/DSB/M/175 
 Page 7 
 
 
28. The DSB took note  of the statements and agreed  to the request of the United States contained 
in document WT/DS184/18. 
3. Korea – Anti-dumping duties on imports of certain paper from Indonesia 
(a) Request for the establishment of a panel by Indonesia (WT/DS312/2) 
29. The Chairperson  drew attention to the communicati on from Indonesia contained in document 
WT/DS312/2. 
30. The representative of Indonesia  said that on 4 June 2004, Indonesia had requested 
consultations concerning the imposition of defin itive anti-dumping duties by Korea on imports of 
business information paper and unc oated wood-free printing paper from Indonesia and certain aspects 
of the investigation leading to the imposition of such  duties.  This request had been circulated as 
document WT/DS312/1.  In Indonesia's view, th e imposition of definitive anti-dumping duties was 
inconsistent with the obligations of Korea under Article VI of GATT 1994 and several provisions of 
the Agreement on Implementation of Article VI  of GATT 1994.  Furthermore, such imposition 
frustrated the efforts taken by Indonesia to prom ote exports at a crucial stage in the economic 
development of Indonesia.  Consultations had been  held on 7 July 2004.  Unfortunately, no mutually 
agreed solution had been found.  Accordingly, cons idering that a period of more than 60 days had 
lapsed since the request for consu ltations had been received by Korea, pursuant to Article 4.7 of the 
DSU, Indonesia, therefore, requested the establishment of a panel. 
31. The representative of Korea  said that his country found it regrettable that Indonesia had 
decided to pursue this matter by requesting the est ablishment of a panel for several reasons.  First, 
Korea has exercised its utmost efforts to resolve th e dispute in a mutually satisfactory manner.  Korea 
had held consultation with Indonesia on 7 July 20 04 to discuss Indonesia's concerns with respect to 
Korea's anti-dumping measures imposed on certain pape rs from Indonesia.  In the consultation, Korea 
had provided its full explanation of  various aspects of its anti-dumping investigation and the basis of 
the determination.  Following the consultation, Korea had expressed its willingness to have further 
consultations.  Second, a domestic proceeding on  this issue was still pending in the Korean 
administrative court and the court was expected to  come up with a ruling in the near future.  
Considering all this, Korea believed that Indonesia's current request for the establishment of a panel 
was premature.  Third, it was regrettable that some issues that Korea believed had been cleared 
through the consultation were still included in th e panel request.  For example, Indonesia had accused 
Korea in paragraph 6 of its panel request of violating Article 12.1.1(iv) of the Anti-Dumping 
Agreement by failing to provide information on injury  factors in the Notice of Initiation.  Korea had 
clarified in the consultation that the information on injury factors was readily available to the public 
on the Korean investigation authority's website indi cated in the Notice of Initiation.  Korea found it 
hard to imagine how the failure of notice accusation c ould stand in spite of this plain fact.  Finally, 
despite Indonesia's blanket accusations listed in its panel request regarding Korea's anti-dumping 
measures on certain papers from Indonesia, Korea w as confident that its anti-dumping measures were 
consistent with the relevant provisions of Article VI of GATT 1994 and the Anti-Dumping 
Agreement.  In light of the above, Korea was not in a position to accept the establishment of a panel at 
this present meeting. 
32. The DSB took note  of the statements and agreed  to revert to this matter. 
4. United States – Final dumping determin ation on softwood lumber from Canada 
(a) Report of the Appellate Body (WT/DS264/AB /R) and Report of the Panel (WT/DS264/R) 
33. The Chairperson  drew attention to the communication from the Appellate Body contained in 
document WT/DS264/8 transmitting the Appellate Bo dy Report on "United States – Final Dumping WT/DSB/M/175 
Page 8  
 
Determination on Softwood Lumber from Canada", which had been circulated on 11 August 2004 in 
document WT/DS264/AB/R, in accordance with Article  17.5 of the DSU.  In accordance with the 
Decision on Procedures for the Circulation and De restriction of WTO Documents contained in 
document WT/L/452, the Appellate Body Report an d the Panel Report pertaining to this case had 
been circulated as unrestricted documents.  She reca lled that Article 17.14 of the DSU required that:  
"An Appellate Body report shall be adopted by the DSB and uncond itionally accepted by the parties 
to the dispute unless the DSB decide s by consensus not to adopt the Appellate Body report within 
30 days following its circulation to Members.  Th is adoption procedure is without prejudice to the 
right of Members to express their views on an Appellate Body report". 
34. The representative of Canada
 said that his country wished to thank the Panel and the 
Appellate Body as well as the respective Secretariats for their work on this matter.  Canada welcomed 
these Reports and the additional clarity they brought to the disciplines of the Anti-Dumping Agreement.  The Panel and the Appe llate Body had found that the Unite d States had failed to evaluate 
accurately all Canadian softwood lumber exports and had thereby failed to establish a single margin 
of dumping in a manner consistent with the Anti-Du mping Agreement.  Canada also welcomed the 
Appellate Body's clarification of the Panel's legal in terpretation of the obligation with respect to cost 
allocation methodologies in the Anti-Dumping Agreemen t.  Canada requested that the DSB adopt the 
Panel and the Appellate Body Reports in this matt er and that it recommend that the United States 
bring its measures into conformity with the WTO rules as soon as possible. 
35. The representative of the United States
 said that with the exception of one issue to be 
discussed shortly, the United States supported the co nclusions of the Panel and the Appellate Body, a 
number of which it wished to highlight.  This was an enormously complex dispute, in which Canada 
had asserted no fewer than 13 discrete claims c oncerning the initiation and conduct of an anti-
dumping duty investigation by the US Department of  Commerce.  Except for the issue of "zeroing," 
the Panel had properly rejected each of those claims.  With respect to initiation of an investigation, the 
Panel had properly found that as long as an applicat ion for anti-dumping relief contained the type of 
information on dumping, injury, and causation id entified in Article 5.2 of the Anti-Dumping 
Agreement, it needed not contain all of the informa tion on these issues available to the applicant.  
Thus, the Panel had confirmed that Article 5.2 was,  among other things, "inten ded to avoid putting an 
undue burden on the applicant".  With respect to the scope of an anti-dumping i nvestigation, the Panel 
had found that the definition of the product under inv estigation was up to the investigating authority.  
It had properly rejected Canada's argument that  an authority's definition of the product under 
investigation was limited by Article 2.6.  With r espect to the requirement in Article 2.4 that an 
investigating authority make "due allowance" fo r certain differences in two transactions being 
compared, the Panel had properly confirmed that – as an initial matter – a difference must be 
demonstrated to affect price comparability in or der for due allowance to be warranted.  Here, the 
proponents of a due allowance had failed even to make this demonstration.  The United States had 
also noted that the Panel had made several findings with regard to Canada's company-specific claims.  
In each case, the Panel had concluded that Co mmerce's methodology was consistent with the 
US obligations under the Anti-Dumping Agreement.  While Canada had cross-appealed with respect 
to two of those findings, the Appellate Body had correctly declined to reverse these conclusions. 
36. While the United States was pleased with virt ually all of the Panel and Appellate Body 
findings in this dispute, it regretted the finding on whether Article 2.4.2 of the Anti-Dumping 
Agreement required an investigating authority to  offset non-dumped transactions against dumped 
transactions in determining an aggregate margin of  dumping for a producer or exporter.  There was a 
widespread view among the GATT Contracting Parties – including Canada – that such offsetting had 
not been required in the years and decades before th e WTO Agreement, and they had continued in this 
view as WTO Members after 1995.  Thus, it was surprising to find now that the Anti-Dumping 
Agreement required it.  The United States noted that one member of the original panel had disagreed 
with this conclusion, finding that Article 2.4.2 c ontained no such requirement.  It was silent on the 
question of how an aggregate margin of dumpi ng was to be determined.  The dissenting panel  WT/DSB/M/175 
 Page 9 
 
 
member stated, "If Members consider that the i ssue of how to aggregate the results of multiple 
comparisons is a lacuna that needs to be filled, then  they should negotiate such  rules in the appropriate 
forum."  The United States agreed, and regretted bot h that Canada had chosen to litigate this issue 
despite its own on-going use of "zeroing," and that the Panel and the Appellate Body had agreed with 
Canada.  In light of this, the United States questi oned how Canada itself was ensuring "the conformity 
of its laws, regulations and admi nistrative procedures" with its WTO obligations, as required by 
Article XVI:4 of the Marrakesh Agreement.  In su m, while the United States was disappointed with 
the disposition of the "zeroing" issue, it was ple ased that the Panel and the Appellate Body had 
confirmed that Commerce's initiation and conduct of  its lumber anti-dumping investigation were, in 
every other respect, entirely consistent with  US obligations under the WTO Agreement. 
37. The representative of the European Communities  said that the EC was in full agreement with 
the Appellate Body's decision on "zeroing".  The EC had ceased to apply this practice following the 
finding in the "Bed Linen" case.  In order to ensure  a "level playing field" for exporters, the EC had 
now been obliged to challenge the practice of "zeroi ng" by the United States, with regard to both US 
law and 31 measures.  A request with regard to  more recent measures would probably follow.  
Although the Appellate Body's findings only pertaine d to the measure against softwood lumber, it was 
clear that the US practice of "zeroing" was funda mentally WTO-inconsistent.  The EC, therefore, 
asked the United States to carefully consider the wider implications of this important ruling.  Instead 
of wasting the time and resources of the WTO and it s Members by trying to defend further cases, it 
should do as the EC had done and abolish the practice of "zeroing" as soon as possible. 
38. The representative of Japan  said that his country had participated in this proceeding as a third 
party.  Japan welcomed both the Appellate Body and the Panel Reports, especially on the point that 
they both had found that the "zeroing" methodolog y was WTO-inconsistent.  Japan certainly hoped 
that the United States would now conduct its anti- dumping measures in a manner consistent with its 
obligations under the WTO Agreements and in acco rdance with the findings of the Appellate Body 
and the Panel. 
39. The representative of Hong Kong, China  said that her delegation wished to thank the Panel 
and the Appellate Body for their work on this cas e.  Hong Kong, China welcomed the decisions by 
the Appellate Body and the Panel especially on the issue of "zeroing".  The practice of "zeroing" had 
long been a problem causing grave concern to many Members including Hong Kong, China.  Such practice effectively distorted the price comparison under Article 2.4.2 of the Anti-Dumping Agreement by inflating the dumping margin, and severely undermined the objective of "fair 
comparison" required by the Agreement.  Although th e current case was limited to the consideration 
of "zeroing" in case of weighted average to weighted average comparisons, Hong Kong, China 
welcomed the decisions as useful in confirming, on ce again, the WTO-inconsistency of "zeroing" in 
this context.  Specifically, it welcomed clarificati on by the Appellate Body and the Panel that, in the 
course of dumping margin determination, the re sults of multiple comparisons reflected only 
intermediate calculations.  All these intermediate values must be aggregated in order to establish 
margins of dumping for the product under investigation as a whole .  It was inconsistent with 
Article 2.4.2 to exclude some of the intermedia te values which represent "negative margins".  The 
Appellate Body had succinctly recounted an impor tant principle of the Anti-Dumping Agreement, 
namely, that both dumping and dumping margin must be established for the product under 
investigation as a whole , and could not be found to exist for a pr oduct type, model or category of that 
product, and that this was in cons onance with the need for consistent  treatment of a product in an anti-
dumping investigation.  This statement was particular ly useful in showing that the Agreement did not 
perceive dumping on a piecemeal basis.  To find dump ing and dumping margin, one needed to look at 
the sale of the product under investigation in its en tirety.  Hong Kong, China urged the United States 
to take prompt action to implement the Appellate Body's decision, and to bring its practice into 
conformity with the Anti-Dumping Agreement. WT/DSB/M/175 
Page 10  
 
40. The representative of Mexico
 said that his country noted with interest the findings with regard 
to prohibition of the practice of "zeroing".  Mexico hoped that the United States would abide by this ruling in other investigations so as to avoid further disputes in this area. 
41. The representative of India
 said that his country was a third party in this dispute.  India was 
satisfied that the Appellate Body had ruled against the US practice of "zeroing" after due examination 
of all the arguments by all the parties.  India we lcomed the Appellate Body’s consistent interpretation 
of the issue of "zeroing". 
42. The DSB took note  of the statements, and adopted  the Appellate Body Report contained in 
WT/DS264/AB/R and the Panel Report contained in WT/DS264/R, as modified by the Appellate 
Body Report. 
5. Proposed nomination for the indicative list of governmental and non-governmental 
panelists (WT/DSB/W/264) 
43. The Chairperson  drew attention to document WT/DSB /W/264 which contained an additional 
name proposed for inclusion on the indicative list in accordance with Article 8.4 of the DSU.  She 
proposed that the DSB approve the name  contained in document WT/DSB/W/264. 
44. The DSB so agreed . 
6. Mexico – Measures affecting telecommunications services 
(a) Statement by Mexico 
45. The representative of Mexico , speaking under "Other Business", said that at the present 
meeting, his country wished to briefly refer to the agreement reached with the United States with a 
view to ensuring compliance with the DSB's recomm endations and rulings in the dispute "Mexico –  
Measures Affecting Telecommunications Services" (WT/DS204).  He said that Mexico had complied 
with the first phase of that agreement with the publi cation, on 11 August 2004, of its new international 
telecommunications rules.  These rules eliminated the uniform settlement rate system, the proportional return system and the right of the carri er with the greatest proportion of outgoing traffic 
to negotiate the related settlement rates.  The new system would enable all of Mexico's long-distance 
carriers to negotiate their rates freel y, not merely with US carriers, but with carriers worldwide.  There 
could be no doubt that this would make the Mexican telecommunications market yet more 
competitive.  Furthermore, Mexico was already drafting regulations for the establishment of 
commercial agencies.  Once these had been develope d, Mexico would have fully complied with the 
DSB's recommendations and rulings.  The publication of the above-mentioned rules served as further 
proof of Mexico's clear commitment to strengt hening the WTO dispute settlement mechanism.  
Mexico hoped that other Members would follow its example and would meet their obligations in a 
proper and timely fashion, regardl ess of whether or not they agreed with the findings of a particular 
panel or the Appellate Body report. 
46. The representative of the United States
 said that his country appreciated Mexico's statement 
regarding its compliance efforts and looked forwar d to continuing consultations with Mexico as 
Mexico worked to complete its implementa tion of the DSB's recommendations and rulings. 
47. The DSB took note  of the statements. 
 
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