RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/DSB/M/162 
16 February 2004 
 (04-0626) 
Dispute Settlement Body 
9 January 2004  
 
 
 
MINUTES OF MEETING 
 
Held in the Centre William Rappard  
on 9 January 2004  
 
Chairman:  Mr. Shotaro Oshima (Japan) 
 
  Prior to the adoption of the agenda, the item concerning the adoption of the Panel Report in 
the case on "European Communities – Conditions for the Granting of Tariff Preferences to 
Developing Countries" had been removed from the proposed agenda, following the decision by the 
European Communities to appeal the Panel Report.   Subjects discussed
: Page  
1. Japan – Measures affecting th e importation of apples..........................................................1  
(a) Implementation of the recommendations of the DSB.................................................................1  
2. Dominican Republic – Measures affecting the importation and internal sale of 
cigarettes ..................................................................................................................... ...............2  
(a) Request for the establishment of a panel by Honduras...............................................................2  
3. United States – Sunset review of anti-dumping duties on corrosion-resistant 
carbon steel flat products from Japan ....................................................................................3  
(a) Report of the Appellate Body and Report of the Panel...............................................................3  
 
 
1. Japan – Measures affecting the importation of apples 
(a) Implementation of the recommendations of the DSB 
1. The Chairman  recalled that, in accordance with the DS U provisions, the DSB was required to 
keep under surveillance the implementation of reco mmendations and rulings of the DSB in order to 
ensure effective resolution of disputes to the benefit of all Members.  In this respect, Article 21.3 of 
the DSU provided that the Member concerned shall inform the DSB, within 30 days after the adoption 
of the panel or Appellate Body report, of its intentions in r espect of implementation of the 
recommendations and rulings of the DSB.  He recalle d that at its meeting on 10 December 2003, the 
DSB had adopted the Appellate Body Report and th e Panel Report, as upheld by the Appellate Body 
Report, in the case on:  "Japan – Measures Affecting the Importation of Apples". 
2. The representative of Japan  said that his country wished to reiterate its deep regret and 
concerns regarding the Reports of the Panel and th e Appellate Body in this proceeding, which had 
been adopted by the DSB on 10 December 2003.  Japan  noted, however, that neither the Panel nor the 
Appellate Body had ruled against Japan taki ng necessary measures on apple fruit from the United WT/DSB/M/162 
Page 2  
 
 States in order to prevent entry of fire blight in to Japan, in accordance with the appropriate level of 
protection for Japan.  Pursuant to Article 21.3 of the DSU, Japan wished to inform the DSB of its 
intention to implement the DSB's recommendations and rulings in a manner consistent with its 
obligations under the SPS Agreement.   In this regard, Japan would n eed a reasonable period of time to 
design an appropriate measure to ensure the appropr iate level of protection for itself.  Japan looked 
forward to consulting with the United States in order to reach an agreement on such a period of time, 
pursuant to Article 21.3(b) of the DSU. 
3. The representative of the United States
 said that her country welcomed the statement of Japan 
that it intended to implement the DSB's recommenda tions and rulings in this dispute.  The United 
States hoped that, with the benefit of the clear gui dance contained in the Panel and the Appellate 
Body Reports, Japan would remove its WTO-inconsistent measures promptly. 
4. The representative of the European Communities  said that this dispute concerned the import 
conditions applied by Japan on apple fruit importe d from the United States, as a response to a specific 
risk factor:  i.e. fire blight disease.  The EC had pa rticipated as a third party in  this dispute because of 
its systemic interest regarding the interpretation of  the provisions of the SPS Agreement.  The EC had 
already expressed its reservations about the Appellate  Body Report in this case.  The EC noted with 
interest that even the beneficiary of the inappropria te application of the burden of proof in this case, 
the United States, had expressed, at the DSB meetin g in December 2003, its disagreement with the 
approach taken.  However, as a major fruit exporter, the EC was also interested in the broader lessons 
that Japan should draw from this dispute, especially in relation to the principles of risk assessment.  
Therefore, the EC would closely watch Japan's reacti on to this ruling in that broader sense.  The EC 
would request Japan to implement the findings of th e Reports by adopting appr opriate regulations for 
the importation of apples from all sources and not just from the United States. 
5. The DSB took note  of the statements, and of the inform ation provided by Japan regarding its 
intentions in respect of implementation of the DSB's recommendations in this case. 
2. Dominican Republic – Measures affecting the importation and internal sale of cigarettes 
(a) Request for the establishment of a panel by Honduras (WT/DS302/5) 
6. The Chairman  recalled that the DSB had considered this matter at its meeting on 
19 December 2003 and had agreed to revert to it .  He drew attention to the communication from 
Honduras contained in document WT/DS302/5. 
7. The representative of Honduras  said that this was his country's second request for the 
establishment of a panel in the dispute under consid eration.  His delegation had given the reasons for 
requesting the establishment of a panel on this matter at the 19 December 2003 DSB meeting.  
Honduras was of the view that the cigarettes it e xported to the Dominican Republic were granted less 
favourable treatment, contrary to the obligations  of the Dominican Republic under the GATT 1994.  
In particular, Honduras considered that:  (i) th ere was discrimination between like domestic and 
imported cigarettes in respect of the Selective Cons umption Tax, in violation of Articles III:2, III:4 
and X:3(a) of the GATT;  (ii) there was no tran sparency or predictability for the government and 
traders regarding trade (tax) requirements affecti ng the marketing of cigarettes in the Dominican 
Republic, in violation of Article X:1 of the GAT T;  (iii) there was discrimination between like 
domestic and imported cigarettes in respect of the st amping requirement solely in the territory of the 
Dominican Republic, in violation of Article III:4 of  the GATT;  (iv) throug h the bonds to be posted 
for engaging in the importation of cigarettes, barriers were imposed on access to the Dominican 
market, in violation of Articles II:1(a) and (b ) and Article XI:1 of the GATT, or there was 
discrimination against imported cigarettes, in violation of Articles III:2 and III:4 of the GATT;  (v) charges or fees other than ordinary customs duties had been imposed that did not meet the  WT/DSB/M/162 
 Page 3 
 
 
 requirements laid down in Articles II:1(a) and (b) of  the GATT, and, in one case, one of these charges 
was inconsistent with Article XV:4 of the GATT.   These measures had distorted the conditions of 
competition for cigarettes of Honduran origin exporte d to the Dominican Republic and had altered the 
competitive advantages of Honduras in the producti on and exports of cigarettes.  At the present 
meeting, Honduras was requesting, for the second time , the establishment of a panel with standard 
terms of reference as set out in  Article 7.1 of the DSU.  
8. The representative of the Dominican Republic  said that her country continued to disagree 
with the decision of Honduras to request the estab lishment of a panel.  As her delegation had 
indicated at the 19 December DSB meeting, th e Dominican Republic considered the claim by 
Honduras to be unfounded in fact and in law.  Th e measures affecting the importation and internal 
sale of cigarettes identified by Honduras were cons istent with the provisions and principles of the 
GATT.  Contrary to the view of Honduras, th e measures did not discriminate between imported 
cigarettes and cigarettes produced in the territory of the Dominican Republic.  They did not afford 
imported cigarettes less favourable treatment than that accorded to domestic cigarettes.  The 
Dominican Republic had not imposed bans or restricti ons on imports of cigarettes that ran counter to 
Article XI or other provisions of the GATT.  Th e measures were, moreover, in keeping with the 
obligations of the Dominican Republic under Article  II of GATT, since the alleged other duties and 
charges imposed by the Dominican Republic were in conformity with its Schedule of concessions.  Likewise, the measures complied with the provisions of Articles X and XV of the GATT.  The claim brought by Honduras appeared rather to challenge th e sovereign right of countries to adopt internal 
measures ensuring that traders – whether domestic or foreign – satisfied the tax obligations laid down 
in national legislation.  Honduras also appeared to seek to restrict the right of the Dominican Republic 
effectively to determine the tax base applicable to imported cigarettes for the purpose of payment of 
the Selective Consumption Tax. 
9. Finally, she wished to note that in spite of  her country's objection, Honduras had failed to 
modify its panel request in order to satisfy the re quirements of Article 6.2 of the DSU.  Honduras had 
still not sufficiently identified some of the specific measures at issue.  The Dominican Republic would 
bring this shortcoming to the attention of the Pa nel and would request it to reject the claim of 
Honduras on this and other substantive grounds.  In view of all the above considerations, the 
Dominican Republic continued to disagree with the a llegations and interpretati ons made by Honduras.  
However, it recognized and respected the automati city of the WTO dispute settlement system.  
Therefore, although it deplored the decision of Hondu ras to request the establishment of a panel, her 
country would appear before the Panel in order to  defend its measures and would demonstrate that the 
claim of Honduras had no legal or factual basis. 
10. The DSB took note
 of the statements and agreed  to establish a panel in accordance with the 
provisions of Article 6 of the DSU w ith standard terms of reference. 
11. The representatives of Chile , China , the European Communities  and the United States  
reserved their third-party rights to par ticipate in the Panel's proceedings.  
3. United States – Sunset review of anti-dumping  duties on corrosion-resistant carbon steel 
flat products from Japan 
(a) Report of the Appellate Body (WT/DS244/AB /R) and Report of the Panel (WT/DS244/R) 
12. The Chairman  drew attention to the communication from the Appellate Body contained in 
document WT/DS244/9 transmitting the Appellate Body Report on "United States – Sunset Review of 
Anti-Dumping Duties on Corrosion-Resistant Carbon Steel Flat Products from Japan", which had 
been circulated on 15 December 2003 in document WT/DS244/AB/R, in accordance with Article 17.5 
of the DSU.  He reminded delegations that in accordance with the Decision on Procedures for the WT/DSB/M/162 
Page 4  
 
 Circulation and Derestriction of WTO Documents contained in document WT/L/452, the Appellate 
Body Report and the Panel Report pertaining to this case had been circulated as unrestricted 
documents.  He recalled that Article 17.14 of the DSU required that:  "An A ppellate Body report shall 
be adopted by the DSB and unconditionally accepte d by the parties to the dispute unless the DSB 
decides by consensus not to adopt the Appellate B ody report within 30 days following its circulation 
to Members.  This adoption procedure is without prejudice to the right of Members to express their 
views on an Appellate Body report". 
13. The representative of Japan
 said that her delegation wished to express its appreciation to the 
Appellate Body, the Panel and the Secretariat for exam ining this important case and for their efforts in 
issuing the Reports.  Before going into the substan ce of the Reports, Japan wished to draw Members' 
attention to the circumstances leading to the inscription of this agenda item by Japan on 
22 December 2003.  After the circulation of the Appellate Body Report, Japan had been asking the 
United States whether it intended to request the adop tion of the Reports by the DSB, partly because of 
the particular nature of the findings in the Appella te Body Report. The United States had not indicated 
at all what its intention was until to the very dead line for inscription of agenda items of the present 
DSB meeting.  Therefore, based on thorough review  of the Appellate Body Report, Japan had decided 
to inscribe this item on the agenda of the present m eeting.  From a sceptic's perspective, one could 
argue that the United States had not replied to Jap an's numerous inquiries hoping to let the 30-day 
deadline under Article 17.14 of the DSU pass without either side requesting the adoption.  Of course, 
Japan would not wish to presume that the United States had not acted in good faith.  Yet, the lack of transparency on the US side concerning its intention was very regrettable. 
14. Japan was disappointed that the Appellate Body  had made no recommendations to the DSB in 
relation to this case.  Nevertheless, Japan welcomed  some of the Appellate Body's findings that bore 
systemic importance.  First, the Appellate Body had found that the Sunset Policy Bulletin, established 
by the US Department of Commerce, as such, was a measure challengeable in WTO dispute 
settlement proceedings.  Second, it had found th at Article 2 of the Anti-Dumping Agreement 
regarding the definition of dumping and dumping marg in calculation applied to sunset reviews, and 
that it was inconsistent with the WTO Agreement to base an affirmative likelihood determination 
under Article 11.3 of the Anti-Dumping Agr eement on positive dumping margins previously 
calculated in a WTO-inconsistent manner using "zeroing". 
15. The very fact that the United States had opted not to request the adoption of the Reports 
implied that it was fully aware of the conseque nces of these important findings by the Appellate 
Body.  In other words, the United States appeared to be acutely cognizant of the real possibilities of 
findings of inconsistency of the US sunset revi ew procedure with the WTO Agreement in other on-
going proceedings.  Japan very much looked forwar d to actual application of these findings to these 
other dispute settlement proceedings, to which Japan  was a third party, so that the disciplines on 
sunset reviews be strengthened.  The United St ates had been applying many anti-dumping measures 
against steel products from Japan.  As a result, ther e were many more sunset  reviews concerning these 
products to come.  Japan would, taking into consid eration the findings by the Appellate Body in this 
proceeding, continue to closely monitor US sunset re view determinations in terms of their consistency 
with the WTO Agreement. 
16. Taking advantage of this occasion, Japan wished to express its sincerest gratitude to many of 
the third parties to this dispute that had suppor ted Japan's claims and had contributed to the 
substantive discussions.  Finally, Japan noted with grea t regret that the Appellate Body had chosen not 
to complete its analysis on two issues while revers ing the Panel's findings, stating that there was not a 
sufficient factual basis to do so, although Japan had proven the facts of this case and the United States 
had not contested the facts in question.  WT/DSB/M/162 
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 17. The representative of the United States  thanked the Panel, the Appellate Body and the 
Secretariat for their hard work on this dispute.  The United States was pleased that the Reports of the 
Panel and Appellate Body had confirmed that US laws and regul ations governing sunset reviews, as 
well as the particular sunset review at issue in this dispute, complied with the Anti-Dumping 
Agreement.  In particular, the United States was gr atified that both the Panel and the Appellate Body 
had agreed that the US Department of Commerc e had sufficient evidence upon which to base its 
decision to keep in place the anti-dumping duty or der on corrosion-resistant steel from Japan.  The 
United States was also pleased that the Appellate Body had not disturbed the Panel's finding that 
Commerce had conducted this particular sunset review consistent with the WTO Agreements. 
18. However, the United States wanted to make a few points with respect to the Appellate Body's 
discussion of Commerce's Sunset Policy Bulletin, which was a transparency tool to provide the public 
with guidance on Commerce's conduct of sunset review s.  The Panel had found that the Sunset Policy 
Bulletin was not a mandatory measure that could be challenged in WTO dispute settlement.  The 
Appellate Body had reversed that finding because it believed that the Panel had not fully considered 
the relevant arguments.  The United States was confid ent, however, that any future panel that properly 
considered all the relevant factors would reach the sa me conclusion as this Panel.  Under US law, the 
Sunset Policy Bulletin had no independent legal stat us.  It mandated no behavior whatsoever.  This 
was true as a matter of fact, and any conclusion to the contrary would simply mischaracterize US law. 
19. Indeed, any contrary result would be extraord inarily counterproductive to the objective of 
greater transparency in government decision-maki ng.  The Anti-Dumping Agreement left authorities 
with broad discretion in conducting antidumping sunset  reviews.  The US authorities considered that 
the public benefited from guidance on how they might  conduct these reviews.  It was difficult to see 
why WTO Members would wish antidumping authoriti es to provide less guidance to the interested 
public rather than more, for indeed that would be the consequence of any successful challenge to the 
Sunset Policy Bulletin.  A decision to challenge useful tools like the Sunset Policy Bulletin was 
deeply misguided. 
20. The United States also wished to comment on certain aspects of the Appellate Body's 
reasoning.  Paragraph 168 of the Appellate Body Re port stated that, "When a measure is challenged 
'as such', the starting point for an analysis must be the measure on its face."  Paragraph 168, however, 
must be read in the context of th e proper approach to the factual question of the meaning of a measure 
under a Member's municipal law.  The United States noted, for example, that the Appellate Body had referred to its statement in its recent report on US  – Carbon Steel that a party asserting that another 
party's municipal law was inconsistent with a WTO obligation must intr oduce evidence as to the 
scope and meaning of that municipal law.  Furtherm ore, as the panels in the US – Section 301 and US 
– Export Restraints had  correctly pointed out, municipal law consisted not only of the provisions 
being examined, but also domestic legal princi ples that governed the interpretation of those 
provisions.  Thus, while it might in many instances be  true that domestic legal principles called for the 
examination of a measure on its face, this woul d depend on the specific interpretive principles of 
municipal law.  Indeed, the Appellate Body had also pointed out in US – Carbon Steel that the text of 
a measure might not, in all cases, be sufficient evidence to prove the scope and meaning of a municipal law. 
21. The United States also wished to comment on th e Appellate Body's discussion of what might 
constitute a measure.  While there was much in this  analysis with which the United States agreed, it 
considered that the discussion had gone beyond the task with which the Appellate Body was 
presented.  WTO dispute settlement, like other forms of dispute resolution, operated most effectively 
when it concerned itself with the particular disput e before it.  Broad statements made out of the 
context of the facts and claims in that dispute should  be avoided, in particular because such statements 
might turn out to be inapplicable or inappropriate in  the context of other disputes.  Further, in specific 
respects, broad conclusions of the Appellate Body in this Report were not supported by the materials WT/DSB/M/162 
Page 6  
 
 it cited.  For example, in footnote 80, in respondi ng to the Panel's findings that the Sunset Policy 
Bulletin was not a mandatory legal instrument that could give rise to a WTO breach and was not, as such, a challengeable measure, the Appellate Body had listed a number of GATT and WTO panel 
reports as supporting the general proposition that "i nstruments containing rules or norms could 
constitute a 'measure'".  However,  with the exception of one of the disputes cited by the Appellate 
Body, the instruments at issue had independent legal effect within the responding party's legal system.  
The exception was US – Export Restraints , where the panel had concluded that the "Preamble" to the 
US countervailing duty regulations, Commerce "practi ce," and the US "Statement of Administrative 
Action" were not challengeable because they did not have independent lega l effect.  Thus, these 
reports did not support the conclusion that panels had considered instrume nts with no independent 
legal effect to be "measures" subject to dispute settle ment.  In any event, none of this changed the fact 
that the Sunset Policy Bulletin mandated no action wh atsoever, and that a proper analysis would reach 
this conclusion. 
22. The United States noted that Japan had made some comments concerning the placement of 
these Reports on the agenda of the present meeting.  It  was puzzled that Japan had raised this point.  
There was nothing in the DSU that said which pa rty to a dispute was to propose the adoption of a 
report or when.  The United States wanted to point out that Japan, likewise, had not responded to US 
inquiries about its plans for putting the Reports up for adoption.  The United States also noted that in 
any event Japan had been able to put th is item on the agenda without difficulty. 
23. The representative of Korea
 said that his country had a keen interest in the way the United 
States had conducted its sunset reviews under Artic le 11.3 of the Anti-Dumping Agreement, Korea 
had participated as a third party in this dispute.  Korea wished to express its gratitude to the Appellate 
Body for coming up with the important findings on i ssues of systemic interest to the WTO.  In 
particular, Korea welcomed the finding of the Appe llate Body that the Sunset Policy Bulletin had 
published in 1998, and had been guiding the US Depa rtment of Commerce sinc e, it was challengeable 
as such.  It had been a source of serious concern that the US Department of Commerce had applied 
the Sunset Policy Bulletin in such a way that the review under Article 11.3 of the Anti-Dumping 
Agreement had always resulted in a finding that dumpi ng would be likely to continue or recur, if the 
order were to be revoked.  This practice of th e US Department of Commerce based on the Sunset 
Policy Bulletin effectively deprived Article 11.3 of  the Anti-Dumping Agreement of its meaning and 
Korea was pleased to note that the Appellate Body ha d made it possible for the standards provided for 
in the Bulletin to be subject to th e WTO dispute settlement mechanism. 
24. Korea was also satisfied with the Appellate Body's conclusion that the use of the zeroing 
methodology, which had already been found to be  WTO-inconsistent in the context of dumping 
margin calculations under Article 2 of the Anti-Dump ing Agreement, constituted a defect tainting the 
likelihood determination under Article 11.3 of the An ti-Dumping Agreement as well.  This finding of 
the Appellate Body was  important in the sense that  the Appellate Body had reaffirmed the existence 
of an inherent bias in the zeroing methodology, wh ich inevitably distorted not only the amount of the 
dumping margin, but also the very existence of dum ping.  As these findings of the Appellate Body 
illustrated, the Appellate Body had confirmed th at Article 11.3 of the Anti-Dumping had imposed 
strict disciplines on the WTO Members wishing to extend anti-dumping orders beyond the five-year period, and Korea appreciated the Appellate Body for this. 
25. It was regrettable that the Appellate Body ha d stopped short of finding the US measures at 
issue in this dispute to be WTO-inconsistent due  to insufficient factual findings by the Panel.  
Nonetheless, the Appellate Body had made clear that Article 11.3 of the Anti-Dumping Agreement 
required the investigating authorities to conduct a rigorous examination in determining whether the 
expiry of the anti-dumping duty within five years of its imposition would be likely to lead to a 
continuation or recurrence of dumping and injury.  Korea would closely monitor any future sunset 
review determinations by the United States on products from Korea.  WT/DSB/M/162 
 Page 7 
 
 
 26. The representative of Chile  said that his country, as a third party to this dispute, wished to 
thank the Appellate Body and the Secretariat for the Report to be adopted at the present meeting at the 
request of Japan.  Chile wished to highlight a number of aspects of this Report which had set an 
important precedent and had reversed conclusions of  the Panel which Chile did not share, as it had 
pointed out during the appeal.  First, Chile welc omed and concurred with the Appellate Body's 
statement that Article 11.3 of the Anti-Dumping Agreement established an exception to the general 
rule that any anti-dumping duty had to be terminated w ithin five years at most.  The fact that this was 
an exception required national authorities conducting su ch reviews to take a pro-active and diligent 
approach that would enable them to arrive at  a reasoned conclusion on the basis of information 
gathered as part of a process of reconsideration a nd examination.  According to the Appellate Body, 
such evidence had to demonstrate that dumping woul d be probable, if the duty had been terminated, 
and not simply possible or plausible.  The Appella te Body had even added that this was a rigorous 
process that could take up to one year and involved  a number of procedural steps.  These conclusions 
were very closely related to paragraph 191 of the Appellate Body's Report, which reiterated that the 
use of presumptions might be inconsistent with an obligation to make a partic ular determination using 
positive evidence, since they predet ermined a result. Irrebuttable presu mptions were to Chile precisely 
what the Sunset Policy Bulletin est ablished, as applied in practice, it had shown that the Department 
of Commerce had never terminated an anti-dumpi ng duty within five years when the domestic 
industry had an interest in maintaining the duty.  Unfortunately, an insufficient factual basis prevented 
the Appellate Body from reaching that conclusion. 
27. Second, the Panel had erred in finding that Ar ticle 11.3 of the Anti-Dumping Agreement was 
separate from the other provisions of the Agreemen t as regards the definition of dumping.  Chile 
agreed, and had stated as much during the procee dings, that Article 11.3 neither prescribed nor 
prohibited a specific methodology for conducting sunset  reviews.  However, it was illogical to argue 
that where the investigating authorities decided to  use historical dumping margins to make their 
"likelihood determination", those margins could have  been calculated in a manner inconsistent with 
the Anti-Dumping Agreement.  In this connection, Chile noted the Appellate Body's conclusion that 
the definition of dumping set out in Article 2 of the Anti-Dumping Agreement applied throughout the Agreement, including Article 11.3, as stated at paragraphs 127 and 130 of  the Appellate Body's 
Report. 
28. In other words, the fact of US Departme nt of Commerce having based its "likelihood 
determination" on margins calcula ted in a manner inconsistent w ith the Anti-Dumping Agreement 
implied that the Department had acted in WTO-incons istent manner.  Once again, Chile deplored the 
fact that the lack of factual aspects prevented the Appellate Body from concluding that use of the 
"zeroing methodology" in this particular review wa s WTO-inconsistent.  This, in Chile's view, was 
the case, as was the fact of having relied on margin s calculated prior to the entry into force of the 
WTO or de minimis  margins, which were points that had not been addressed by Japan on appeal.  
Chile hoped that these points could be clarified in the proceedings of pending disputes. 
29. Finally, Chile shared and wished to highlight  the conclusion that the Sunset Policy Bulletin 
was a measure that was challengeable "as such".   Chile was concerned that, on the basis of 
preambular language or certain aspects of a legal or  regulatory provision, Members might be able to 
circumvent their WTO obligations by claiming that such provisions were non-binding.  Notwithstanding that in this case the measure at issue had been app lied in all sunset reviews without 
exception, Chile agreed with the Appellate Body that, first, nothing in the WTO precluded a non-
binding measure from being challenged and, second, the Panel should have followed the analytical 
approach detailed at paragraph 99 of the Appellate Body's Report.  The Report of the Appellate Body 
set an important precedent which bore out the fact  that sunset reviews were not mere routine 
investigations in which the authorities had applie d quasi-irrebuttable presumptions on the basis of a 
couple of considerations (some of  which were WTO-inconsistent 
per se ), without providing adequate 
opportunity for taking into account other facts, in particular those put forward by affected foreign WT/DSB/M/162 
Page 8  
 
 companies.  On the contrary, the Appellate Body confirmed the expiry of anti-dumping duties within 
five years at most.  Only after extensive inves tigation based on positive evidence could the authorities 
conclude that termination of the duty was likely to entail continuation or recurrence of dumping.  
Failure to proceed in this manner might give rise to discretionary action and arbitrariness, both of which had been categorically rejected by Memb ers, Panels and the Appellate Body alike. 
30. The representative of Canada
 said that his country did not have any comments on the 
substantive issues decided by the Appellate Body.  At  the same time, the statements by Japan and the 
United States had given rise to two procedural issues  on which Canada wished to make a statement.  
First, Canada noted the observation by Japan con cerning the 30-day time limit for the adoption of the 
report of the Appellate Body by the DSB.  The impl ication of Japan's statement was that a failure on 
the part of the parties to a dispute to place the ma tter on the agenda would prejudice the validity or the 
binding nature of the findings.  Canada did not cons ider, however, that if a report had not been placed 
by either party on the agenda of the DSB within th e given time-frame, the report would vanish out of 
existence.  On this issue, the words of the DSU were clear.  The DSU provided that the report of the 
Appellate Body "shall be adopted".  There was no suggestion in the DSU that a report would become 
invalid after  the expiry of the time limit.  Second, Canada expressed some concern about the US 
criticism of the Appellate Body's findings, and espec ially in respect of the suggestion by the United 
States that the Appellate Body should not make findi ngs of a "broad" nature.  Canada noted that in 
various cases in which the United States and Canada  had been involved, the United States had made 
similar points, and in each instance the answer had b een the same:  there was a distinction between the 
interpretation of a law and its application to specific f acts.  Interpretation, by definition, must be broad 
and general; it must give meaning to a legal provi sion outside of the specific context and apart from 
the specific facts of a case.  The interpretation must then be applied to the specific facts of each case 
to determine whether the measures at issue were c onsistent with the obligations of the challenged 
Member.  Canada recalled that in the Steel case th e United States itself had asked for "guidance" from 
the Appellate Body.  Canada welcomed this sin ce general interpretations of the WTO Agreement 
helped to preserve and advance the objectives of di spute settlement, as set out in Article 3.2 of the 
DSU. 
31. The representative of Brazil  said that his country had participated as a third party in this 
dispute.  Brazil's main concern was with regard to Article 11.3 of the Anti-Dumping Agreement and 
the inappropriate use by the United States of past  administrative reviews based on a "zeroing" 
methodology as evidence in sunset reviews.  Brazil w as, therefore, satisfied to see that the Appellate 
Body had found in paragraph 130 of its Report tha t:  "if a likelihood determination is based on a 
dumping margin calculated using a methodology inconsiste nt with Article 2.4, then this defect taints 
the likelihood determination too.  Thus, the cons istency with Article 2.4 of the methodology that 
USDOC used to calculate the dumping margins in th e administrative reviews bears on the consistency 
with Article 11.3 of the USDOC's likelihood determin ation in the CRS sunset review".  He reiterated 
that Brazil was satisfied with the Appellate Body's confirmation of this interpretation. 
32. The representative of the European Communities  said that on several occasions, the EC had 
expressed its position that the conditions for imposi ng an anti-dumping measure should also naturally 
be bound to be present when deciding to maintain that measure for another five years.  The EC 
considered the introduction of sunset review s as a key achievement of the Uruguay Round 
negotiations to avoid never-ending measures.  Leaving excessive margin of manoeuvre to 
investigating authorities in conducting sunset reviews risked to reduce them to a formalistic exercise, 
which did not correspond to the object and purpose.  In this regard, the EC welcomed the affirmation 
by the Appellate Body that:  (i) the continuation of  the duty was the exception;  (ii) the investigating 
authorities had to base their decision on a firm eviden tiary foundation;  (iii) past dumping margins and 
import volumes were not always "highly probative" fo r the likelihood of continuation of dumping in a 
sunset review, and a case-specific analysis of the factors behind the import trends remained necessary;  
and (iv) the calculation of a dumping margin relied on in a sunset review the calculation of that  WT/DSB/M/162 
 Page 9 
 
 
 margin had to comply with the disciplines of Ar ticle 2 of the Anti-Dumping Agreement, and in 
particular with Article 2.4 thereof.  On the last point, the EC noted with great interest the Appellate 
Body's finding that "zeroing" methodologies, whether in  original investigations or otherwise, distorted 
not only the magnitude of dumping, but also affected its very existence.  Therefore, such methodologies ran foul of the fair comparison re quirement of Article 2.4 of the Anti-Dumping 
Agreement.  The EC also welcomed the clarifica tion by the Appellate Body that there was no WTO 
principle according to which non-mandatory measures could not be challenged "as such".
1  The EC 
considered that the so-called mandatory/discretiona ry "doctrine" was not based on any provision in 
the WTO Agreements.  Whether or not discretionary legislation might be subject to challenge should 
depend on the specific obligations imposed by each pr ovision of the WTO Agreement.  Finally, this 
Report illustrated the need to introduce appropria te remand process.  On several occasions, the 
Appellate Body had come to general conclusions as to the applicable rules in sunset reviews.  
Unfortunately, the Appellate Body could not decide  whether the United States had respected those 
rules because the Panel Report did not contain unc ontested facts.  The present dispute settlement 
provisions would leave no other solution to the complainant than to restart the whole dispute 
settlement procedure.  This created an unnecessary burden on Members and on the dispute settlement 
process and would appear to be contrary to th e principle of prompt settlement of disputes. 
33. The representative of Norway  said that his country had participated in this dispute as a third 
party.  Norway expressed appreciation to the Appellate  Body and the Secretariat for their work in the 
proceedings.  It also wished to extend thanks to Jap an and the other third participants in this case for 
the good co-operation.  Norway disagreed with the implication of the Appellate Body's overall 
conclusion that the measures in question were not found to be in breach with the Anti-Dumping 
Agreement and with WTO law as such.  However, Norway welcomed the Appellate Body reversing 
some of the Panel's findings on certain important and central issues related to the sunset discipline.  First, that the Sunset Policy Bulletin was challe ngeable under WTO law.  Norway believed that the 
Appellate Body's ruling implied a clear warning that  provisions that created irrebuttable presumptions 
or predetermined a particular result no matter how th ey were called or how they had been developed 
or characterized in a domestic legal system might be  found inconsistent with the WTO law.  Second, 
that dumping margins when relied upon in a sunset  review must have been calculated in a WTO 
consistent manner.  Furthermore, Norway appreciat ed that the Appellate Body had spelled out some 
general observations concerning the sunset process by indicating that the process had imposed serious 
disciplines on WTO Members wishing to maintain anti-dumping orders beyond their scheduled 
expiration date.  This was a clarification of princi pal importance with regard to the interpretation of 
Article 11.3 of the Anti-Dumping Agreement.  Finally , he wished to associate his delegation with the 
remarks made by Canada in respect of adoption of panel and Appellate Body reports.  A report shall 
be adopted and, Norway believed, that the Chairm an had to ensure that a report was placed on the 
agenda of a DSB meeting, if the parties to the dis pute did not request the inclusion of such a report on 
the agenda. 
34. The representative of India
 said that his country wished to express its gratitude to the 
Appellate Body for the very useful findings, both on the nature of the US Sunset Policy Bulletin as 
well as its reiteration of incompatibility of the zeroing methodology with the Anti-Dumping Agreement.  India wished to endorse Japan’s concer n that the Appellate Body could not complete the 
analysis relating to the zeroing methodology adopted by  the United States in the light of the absence 
of adequate factual and legal basis.  However, India also wished to no te that the discretion available to 
the national investigating authorities was not rest ricted except where explicitly regulated by the 
provisions of the Anti-Dumping Agreement. 
35. The representative of Argentina
 said that although his country was neither a party nor a third 
party to this dispute, it wished to join previous  speakers who had emphasized the systemic importance 
                                                      
1 Appellate Body Report, para.88. WT/DSB/M/162 
Page 10  
 
 of certain aspects of the Appellate Body Report befo re the DSB for adoption at the present meeting.  
Argentina welcomed the findings of the Appellate Bo dy in this case.  Indeed, these findings were of 
great significance in interpreting the obligations of Article 11.3 of the Anti-Dumping Agreement, 
which were incumbent upon all Members in the conduct of sunset reviews.  Among the many 
important issues on which the Appellate Body ha d ruled, Argentina wished to emphasize those 
relating to measures that might be challenged under the dispute settlement system and the definition 
of the standard implicit in the term "likely" with in the context of Article 11.3 of the Anti-Dumping 
Agreement.  With regard to the first point, Argen tina noted with satisfaction that the Appellate Body 
had adopted a comprehensive approach  in defining measures that might be challenged under the DSU.  
With regard to the interpretation of the term "lik ely", Argentina wished to underline that this was a 
necessary and long-awaited clarification.  The standard  to be applied in determining that termination 
of the duty would be likely to lead to the conti nuation of dumping and injury was the cornerstone of 
the sunset review process.  As the Appellate Body ha d clearly established, this standard required the 
investigating authority to demonstrate that con tinuation or recurrence of dumping and injury was 
likely – and not merely possible – in the event of termination of the duty.  Finally, Argentina 
welcomed the Appellate Body's confirmation that s unset reviews required substantive investigations 
based on positive evidence, as the only way of reachi ng a determination that termination of the duty 
would be likely to lead to continuation or recurre nce of dumping and injury.  In sum, Argentina 
considered that the Appellate Body's decision ha d made a significant contribution to the correct 
interpretation and application of Article  11.3 of the Anti-Dumping Agreement. 
36. The representative of Mexico
 said that his country also wished to thank the Appellate Body, 
the Panel and the Secretariat for the Reports.  Me xico supported the comments with regard to the 
substance made by Japan, Chile and other delegati ons, which had referred the systemic problems of 
the sunset reviews.  Mexico also ha d similar concerns in this regard. 
37. The representative of Chile  said that he wished to place on the record his country's position 
with regard to the point raised by Canada, which was subsequently supported by Norway.  In Chile's 
view, there was no DSU provision which provided that  the Secretariat or the DSB Chairman could 
place reports of panels or the Appellate Body on the DSB agenda for adoption. 
38. The DSB took note  of the statements, and adopted  the Appellate Body Report contained in 
WT/DS244/AB/R and the Panel Report contained in WT/DS244/R, as modified by the Appellate 
Body Report. 
 
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