WT/DS282/R 
 Page B-1 
 
 
 
  
 
ANNEX B 
  
THIRD PARTIES' SUBMISSIONS  OR EXECUTIVE SUMMARIES 
THEREOF 
 
 
Contents Page 
Annex B-1 Third Party Submission of Argentina B-2 
Annex B-2 Third Party Submission of China B-17 
Annex B-3 Third Party Submission of the European Communities B-29 
Annex B-4 Third Party Submission of Japan B-36 
Annex B-5 Third Party Submission of the Separate Customs Territory of 
Taiwan, Penghu, Kinmen and Matsu B-41 
 
 WT/DS282/R 
Page B-2 
 
   
ANNEX B-1 
  
THIRD PARTY SUBMISSION OF ARGENTINA 
 
(28 April 2004) 
 
 
 
TABLE OF CASES REFERRED TO IN THIS SUBMISSION 
 
 
Short Title Full Title 
US - DRAMS United States – Anti-dumpi ng duty on dynamic random access memory 
semiconductors (DRAMS) of one mega byte or above originating from 
Korea, Report of the Panel, WT/DS 99/R 
US – Hot Rolled Steel United States – Anti-dumping measures on certain hot-rolled steel products 
from Japan. Report of the Panel, WT/DS 184/R 
US – Hot Rolled Steel United States – Anti-dumping measures on certain hot-rolled steel products 
from Japan. Report of the Appellate Body, WT/184/AB/R 
US – Carbon Steel United States – Countervailing Duties on Certain Corrosion-Resistant 
Carbon Steel Flat Products from Germany, Report of the Panel, WT/DS213/R 
US – Carbon Steel United States – Countervailing Duties on Certain Corrosion-Resistant 
Carbon Steel Flat Products from German y, Report of the Appellate Body, 
WT/DS213/AB/R 
Japan – Sunset United States – Sunset review of anti-dumping duties on corrosion-resistant 
carbon steel flat products from Japan. Report of the Panel, WT/DS 244/R 
Japan – Sunset United States – Sunset review of anti-dumping duties on corrosion-resistant 
carbon steel flat products from Japan. Report of the Appellate Body, WT/DS 244/AB/R 
  WT/DS282/R 
 Page B-3 
 
 
 I. INTRODUCTION 
 
 Argentina welcomes this opportunity to present its views to the panel in United States – Anti-
Dumping Measures on OCTG from Mexico  (DS 282).  Mexico's case brings into question once again 
the United States' implementation of the obligations  established by Article 11 of the Agreement on 
Implementation of Article VI of the General Ag reement on Tariffs and Trade 1994 ("Anti-Dumping 
Agreement").   Article 11.1 directs 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."  The significant limitations 
established by Article 11.1 – on the duration of an  anti-dumping measure, the permissible magnitude 
of the duty, and the purpose for which an anti-dumping measure can be imposed – are implemented in Articles 11.2 and 11.3 of the Anti-Dumping Agreement.   Article 11.2 requires the termination of anti-
dumping duties where it is shown that the imposition of anti-dumping duties is no longer necessary to offset dumping.  Article 11.3 requires that anti-dumping duties be terminated within five years of their 
imposition in the absence of strict compliance w ith the conditions for maintaining the duties. 
  Mexico has demonstrated that the United States has failed to (1) properly implement its Article 11 obligations, and (2) satisfy the requis ite conditions for maintaining anti-dumping duties on 
OCTG from Mexico.  In the end, as Mexico's First Submission shows and as Argentina can attest based on its own experience (particularly in revi ews conducted by the US Department of Commerce 
("Department")), there is effectively no possib ility of a negative likely dumping determination when 
shipment volumes have declined following the imposition of the measure.   Section II of this submission sets forth the re levant WTO jurisprudence regarding Members' 
obligations in reviews conducted un der Article 11.  Section III describes US violations of Article 
11.3, both "as such" and "as applie d" in this case.  Section IV compares the experience of Argentina 
and Mexico with respect to Article 11 reviews conducte d by the United States.  Finally, in section V, 
Argentina endorses the specific request by Mexico for suggestions by the Panel on the manner in 
which the United States should implement the Panel's recommendations.  
II. ARTICLE 11 OF THE ANTI-DUMPING AGREEMENT PLACES SIGNIFICANT 
LIMITATIONS ON THE USE OF ANTI-DUMPING DUTIES 
 
A.  A
RTICLE 11.2  REQUIRES THAT ANTI-DUMPING DUTIES BE TERMINATED IF THEY ARE NO 
LONGER NECESSARY TO OFFSET DUMPING  
 Article 11.2 implements the general rule provi ded in Article 11.1.  Specifically, Article 11.2 
requires the administering authority to "review the need for the continued imposition" of an anti-
dumping duty, and to terminate the duty if it is "n o longer warranted."  The authority must conduct 
this revocation review on its own initiative "where warranted," or upon the request of an interested 
party that has submitted "positive informa tion" supporting the need for a review. 
  Where an interested party requests an Artic le 11.2 review, the authority must – at the 
interested party's request – examine "whether the continued imposition of the duty is necessary to 
offset dumping."  The panel in DRAMS from Korea  explained that the "need for the continued 
imposition of the duty must be demonstrable on the basis of [positive] evidence."
 1  Thus, in order to 
justify the maintenance of a duty, the authority mu st demonstrate through positive evidence that the 
continued imposition of the duty is necessary to offset dumping. 
                                                      
1 Panel Report, United States – Anti-Dumping Duty on Dynamic Random Access Memory 
Semiconductors (DRAMS) of One Megabit or Above from Korea , WT/DS99/R, adopted 19 March 1999, 
para. 6.42 (“ DRAMS from Korea ”). WT/DS282/R 
Page B-4  
 
  
B.  A
RTICLE 11.3  REQUIRES TERMINATION OF ANTI-DUMPING DUTIES AFTER FIVE YEARS 
ABSENT STRICT COMPLIANCE WITH THE LIMITED EXCEPTION  
 The Appellate Body in Japan Sunset  confirmed that the obligation of Article 11.3 is 
termination of anti-dumping duties after five years.  The Appellate Body thus reaffirmed the principle 
it first articulated in Steel from Germany .2  Continuation of the measure is the exception, and is only 
permissible if the authorities conduct a "review," undert ake a "rigorous examination" of the facts, and 
"determine" that termination of the anti-dumping me asure would be likely to lead to continuation or 
recurrence of injury  and dumping.3  The Appellate Body reaffirmed forcefully that, "[i]f any one of 
these conditions is not satisfied, the duty must be terminated."4 
 
 Under Article 11.3, the authority cannot p assively assume that dumping and injury would 
likely continue or recur,5 but rather must take action and grou nd its determination on a "sufficient 
factual basis" to allow it to "draw reasoned and adequate conclusions con cerning the likelihood" of 
continuation or recurrence.6  In this regard, the authority's de termination cannot be based solely on 
outdated information, but rather "should rest on th e evaluation of the evidence that it has gathered 
during the original investigation, the interv ening reviews and finally the sunset review."7  T h e  
authority must make a "fresh determination" that is forward-looking  and "based on credible 
evidence."8 
  In interpreting the meaning of the words "r eview" and "determine" in Article 11.3, the 
Appellate Body highlighted the "investigatory a nd adjudicatory aspects" of Article 11.3 reviews: 
 
This language in Article 11.3 makes clear that it envisages a process combining both 
investigatory and adjudicatory aspects.  In other words, Article 11.3 assigns an active 
rather than a passive decision-making role to  the authorities.  The words "review" and 
"determine" in Article 11.3 suggest that authorities conducting a sunset review must 
act with an appropriate degree of diligence and arrive at a reas oned conclusion on the 
basis of information gathered as part  of a process of reconsideration and 
examination.
9 
 The Appellate Body in Japan Sunset  made clear that the conduct of a review and the 
determination of the likelihood of dumping and inju ry in order to invoke the exception require a 
"rigorous examination" that comports with th e "exacting nature" of obligations imposed by 
Article 11.3.10 
  Moreover, the authority must satisfy itself that dumping and injury would be "probable" in the 
event of termination.  The ordinary meaning of the term "likely" as used in Article 11.3 is "probable" 
                                                     
 
2 See Appellate Body Report, United States – Countervailing Duties on Certain Corrosion-Resistant 
Carbon Steel Flat Products from Germany , WT/DS213/AB/R, adopted 19 December 2002, para. 63 (“ Steel 
from Germany ”) (interpreting Article 21.3 of  the Agreement on Subsidies and Countervailing Measures, which 
parallels Article 11.3 of the Anti-Dumping Agreement). 
3 See Appellate Body Report, United States – Sunset Review of Anti-Dumping Duties on Corrosion-
Resistant Carbon Steel Flat Products from Japan , WT/DS244/AB/R, adopted 9 January 2004, paras. 104, 113 
(“Japan Sunset ”). 
4 Appellate Body Report, Japan Sunset , para. 104. 
5 See Panel Report, Japan Sunset , para. 7.177. 
6 See Panel Report, Japan Sunset , para. 7.177. 
7 Panel Report, Steel from Germany , para. 8.95. 
8 Appellate Body Report, Steel from Germany , para. 88. 
9 Appellate Body Report, Japan Sunset , para. 111. 
10 Appellate Body Report, Japan Sunset , para. 113 (emphasis added).  WT/DS282/R 
 Page B-5 
 
 
 and not "possible" or any other standard less than likely (or "probable").  The Appellate Body ended 
any possible dispute as to the meaning of the term "l ikely" in Article 11.3, stating authoritatively that 
"likely" means "probable."    
  Article 2 of the Anti-Dumping Agreement de fines "dumping" "for the purposes of the Anti-
Dumping Agreement," including reviews under Article 11.  Article 2 sets forth the rules for 
determining whether a company is or is not dumping.   The Appellate Body ruled that when a Member 
relies on a dumping margin in making a likely dumping finding in an Article 11.3 review, that margin must be WTO-consistent.
11  The Appellate Body confirmed th at relying on a WTO-inconsistent 
margin in an Article 11.3 review woul d "taint the likelihood determination."12  Therefore, in 
determining whether dumping would be likely to con tinue or recur under Article 11.3, the authority 
cannot ignore the disciplines prescribed by Article 2.   Article 3 of the Anti-Dumping Agreement defi nes "injury" for purposes of the Anti-Dumping 
Agreement.  Thus, an authority's determination of  whether "injury" would likely continue or recur 
under Article 11.3 must meet the requirements of that provision.  Article 3.1 mandates that the 
authority's "determination of injury" be based on "positive evidence" and "an objective examination" 
of "(a) the volume of dumped imports and the effect of dumped imports on prices in the domestic market for like products, and (b) the consequent impact of these imports on domestic producers of 
such products."
13  Articles 3.4, 3.5, 3.7, and 3.8 impose furt her obligations related to consideration of 
specific economic factors and indices having a b earing on the state of the domestic industry, 
causation, and rules related to a ll future injury determinations. 
 
III. US SUNSET REVIEWS UNDER ARTICLE 11.3 OF THE ANTI-DUMPING 
AGREEMENT 
  Mexico's First Submission presents a compelling case.  As explained by Mexico, certain 
provisions of US law, and US practice, violate th e Article 11.3 obligations of the United States, and 
the US application of its law and regulations to Mexico in these specific "sunset" and "revocation" 
reviews reveals several violations of Articles 11.2 and 11.3.  A. B
Y ESTABLISHING A WTO-I NCONSISTENT PRESUMPTION OF LIKELY DUMPING , CERTAIN US 
SUNSET REVIEW LAWS, REGULATIONS , AND ADMINISTRATIVE PROCEDURES ARE 
INCONSISTENT WITH US WTO  OBLIGATIONS  
 19 U.S.C. § 1675a(c)(1), the Statement of Administrative Action  (SAA),14 and the Sunset 
Policy Bulletin ("SPB"),15 as such, as well as the Department's consistent practice in sunset review 
cases (as set forth in MEX-62), establish a WTO-inc onsistent presumption that termination of the 
anti-dumping duty would be likely to lead to continuation or recurrence of dumping.16 
  Under US law, declines in import volume and/or  the existence of historic dumping margins 
are given decisive weight.  The burden is placed on exporters to convince the Department even to 
consider any other factors.  With respect to the likelihood of dumping determination, the Department 
always treats dumping margins and/or declining import volumes as highly probative of the likelihood 
                                                     
 
11 See Appellate Body Report, Japan Sunset , paras. 126-132. 
12 Appellate Body Report, Japan Sunset , para. 130. 
13 Emphasis added.  See also  Appellate Body Report, United States – Anti-Dumping Measures on 
Certain Hot-Rolled Steel Products from Japan , WT/DS184/AB/R, adopted 23 August 2001, paras. 192-93 
(footnotes omitted). 
14 SAA at 889-890. 
15 SPB, Section II.A.3. 
16 Mexico's First Submission, sec. VII.A. WT/DS282/R 
Page B-6  
 
 of continuation or recurrence of dumping.  Either  or both of these factors are considered by the 
Department as constituting sufficient evidence to determ ine that termination would be "likely" to lead 
to continuation or recurrence of dumping.
17  The mechanistic application of these criteria precludes 
the Department from conducting the requisite "revie w" and making a "determination" based on fresh 
evidence, contrary to the requirement of Article 11.3, and it establishes a presumption that dumping 
will likely continue or recur.  Under the system implemented by the United States, satisfaction of at 
least one of the three basic criteria is nearly certain in every case.18 
  In addition, the United States employs a standard that is less than the "likely" or "probable" 
standard required by Article 11.3.  This is because the SAA directs the Department to interpret the 
phrase "likely to lead to continuation or recurrence of dumping" to mean that any determination – 
negative or affirmative – is permissible as long as either outcome is "possible."
19 
  The empirical evidence put forward by Mexico  demonstrates that every time the Department 
finds that at least one of the three criteria contained in section II.A.3 of the SPB is satisfied 
(continuation of dumping, cessation of imports, and no dumping with a significant decline of 
imports), the Department makes an affirmative finding of likely dumping, without considering 
additional factors.  The Department's determinations themselves demonstrate that they are based solely on the mechanistic application of presumptions.   In connection with the likelihood of dumping determination, the Department will not even 
consider factors other than dumping margins and import volumes (such as price, cost, market or 
economic factors), unless an interested party convinces it that "good cause" exists.  The SPB places the burden on an interested party to provide inform ation or evidence that would warrant consideration 
of the other factors in question.  
 In the Japan Sunset  case, the Appellate Body emphasized  that the likelihood determination 
under Article 11.3 could not be based "solely on the mechanistic application of presumptions" but 
instead must be grounded on a "firm evidentiary foundation."
20  Contrary to the Appellate Body's 
unambiguous statement, the Department's likelihoo d determinations operate exclusively on the 
"mechanistic application of presumption."  In all  (227 out of 227) of the full and expedited sunset 
reviews, the Department determined that dumpi ng was likely to continue or recur.  In all  of the sunset 
reviews for which the Department determined that  dumping was likely to continue or recur, the 
Department failed to conduct a prospective analysis , as required by Article 11.3 of the Anti-Dumping 
Agreement.   In its First Submission, the United States atte mpts to discredit the clear import of Mexico's 
empirical analysis by noting that there were only 35 cases in which respondent interested parties 
contested the existence of likelihood of dumping.
21  The United States attempted to the same in the 
Argentina OCTG case.  However,  the US position is not persuasive.  First, the US focus on only 
"contested" cases is dubious, because even where respondent  interested parties do not participate in a 
sunset review, the United States still has "a  duty to seek out relevant information"22 and to ensure that 
its likelihood of dumping determination is su pported by a "sufficient factual basis."23  T h e  
                                                      
17 Appellate Body Report, Japan Sunset , para. 171. 
18 Out of the 227 full and expedited sunset reviews conducted by the Department, no respondent was 
able to overcome the three criteria pres cribed by the SAA and Sunset Policy  Bulletin, such that the Department 
determined that dumping would not be likely.  See MEX-62. 
19 SAA at 883. 
20 Appellate Body Report, Japan Sunset , para. 178. 
21 See US First Submission, DS 282, para. 107. 
22 Appellate Body Report, Japan Sunset , para. 199. 
23 Panel Report, Japan Sunset , paras. 7.177, 7.279.  WT/DS282/R 
 Page B-7 
 
 
 United States cannot passively assume in such cases  that the continuation of recurrence of dumping 
would be likely.  Second, even assuming that onl y the "contested" cases are relevant, 35 out of 35 still 
proves Mexico's prima facie  case.  The United States simply cannot  dispute that, in 100% of these 
cases, the Department gave declines in import vol ume and/or the existence of historic dumping 
margins decisive weight, and thus employed a WT O-inconsistent presumption.  Indeed, as the United 
States itself explains, "In each of those 35 cases, th e evidence presented a scenario that satisfied one 
or more of the criteria that the Sunset Policy Bulletin  identifies as indicia of likelihood." 
  In any event, even if usin g the US benchmark of so-called "contested cases," Argentina would 
note that there were actually 43 cases in which r espondents contested the like lihood determination.  
MEX-62 shows that the Department conducted 26 full reviews in which respondents participated.  In 
addition, respondent interested parties participated in 17 expedited reviews.
24  Thus, respondent 
interested parties "contested" the likelihood determ ination in 43 (26 plus 17) sunset reviews. 
  Finally, Argentina notes that irrespective of wh ether the Panel is satisfied that Mexico has 
sustained its burden to demonstrate that the US law, SAA, and Sunset Policy Bulletin establish a 
WTO-inconsistent presumption that dumping wo uld be likely, Mexico has demonstrated a 
US violation of Article X:3(a) of the GATT 1994.  Article X:3(a) directs that the authority "shall administer in a[n] ... impartial and reasonable manne r all its laws, regulations , decisions and rulings" 
covered by Article X:1.  The results of the De partment's sunset reviews demonstrate that the 
Department failed to administer in an impa rtial and reasonable manner US anti-dumping laws, 
regulations, decisions and rulings with respect to its conduct of sunset reviews, in violation of 
Article X:3(a).
25  It is simply not credible to believe that a review based on positive evidence could 
lead to an affirmative finding of "likely" dumping in each of the 227 cases in which the US industry requests continuation of the anti-dumping measure.  A record of 227 wins and 0 losses for the US industry suggests a lack of impartiality, and the unreasonable administration of national laws. 
 
B. T
HE DEPARTMENT 'S LIKELIHOOD OF DUMPING DETERMINATION IN THE SUNSET REVIEW OF 
OCTG  FROM MEXICO WAS INCONSISTENT WITH ARTICLE  11.3  OF THE ANTI-DUMPING 
AGREEMENT  
 As Mexico's First Submission demonstrates, th e Department relied completely on declining 
import volumes of Mexican OCTG for its c onclusion that dumping was likely to recur.26  T h e  
Department justified its reliance on volume based on the authority of the US statute, the SAA, and the 
SPB.  The Department disregarded the evidence and explanations offe red by the Mexican exporters to 
explain the reason for the lower export volumes afte r the imposition of the order in 1995, and why the 
dumping margin from the original investigation wa s not relevant to the issue of whether dumping 
would be likely to continue or recur. 
 
 The Appellate Body stated that it was inconsiste nt with Article 11.3 for an authority to draw 
conclusive inferences in Artic le 11.3 reviews based solely on declines in import volumes without 
conducting a fact-specific analysis on a case-by-case basis to determine the cause for the decline.27  
                                                      
24 Similar to Mexico, Argentina conducted an exhaustive study of the Department's sunset reviews in 
DS 268, United States – Sunset Reviews of Anti-Dumping Measures on OCTG from Argentina .  Unlike Mexico, 
however, Argentina recorded the extent of foreign in terested party participation in each sunset review 
(conducted through December 2003).  Argentina found that, in addition to the 26 full reviews in which 
respondents participated, respondents participated in  17 expedited reviews.  See Argentina's Second 
Submission, United States – Sunset Reviews of Anti-Dumping Measures on OCTG from Argentina , DS 268, 
8 January 2004, n. 119 (citing Argentina's Exhibit ARG-63). 
25 See Mexico's First Submission, Secs. VII.A and B, and MEX-62. 
26 Mexico's First Submission, sec. VII.C. 
27 Appellate Body Report, Japan Sunset, para.177. WT/DS282/R 
Page B-8  
 
 Yet, this is precisely what the Department did in  the sunset review of OCTG from Mexico.  The 
Department relied solely on post-order import vol ume figures to the exclusion of a prospective 
analysis and thus violated Article 11.3. A subs tantive analysis is necessary in every case.   
  Moreover, the flaws with the De partment's analysis were com pounded in the sunset review of 
OCTG from Mexico.  The evidence on the record demonstrated that the market and economic 
circumstances prevailing at the time of the original investigation no longer existed and were not likely 
to exist in the future.
28 
  After a dumping determination in the original  1994 investigation based on "best information 
available," TAMSA obtained three consecutive no dumping determinations in the administrative 
reviews immediately preceding the sunset review.  Hylsa had never
 been shown to be "dumping" 
within the meaning of Article 2 of the Anti-Dumping Agreement.   In this case, the two Mexican exporters particip ated fully in the sunset review, and provided 
factual information to explain why export levels ha d declined after the imposition of the order in 1995 
and why the dumping margin from the original investigation was not relevant to the issue of likely dumping.
29  The Department ignored the relevant eviden ce, and, with respect to the export volumes, 
considered that TAMSA's stated reasons for the decline were irrelevant.30  
  Had the Department conducted the forward-looki ng review required by Article 11.3, it would 
have been clear that the severe peso devaluation of 1994 was an isol ated event that was not likely to 
recur, and that it was inappropriate to mechanistical ly assume that the historic rate of 21.70 per cent 
margin from years earlier was in anyway va lid for purposes of the sunset analysis. 
  In sum, in rendering its likelihood of dumping de termination in the sunset review of Mexican 
OCTG, the Department ignored current and relevant  information and failed to conduct a prospective 
analysis.  Thus, the Department's sunset dete rmination was inconsiste nt with Article 11.3. 
 C.  A
 CUMULATIVE INJURY ANALYSIS IS INCONSISTENT WITH ARTICLE 11.3 
 Consistent with Argentina's ar gumentation of this issue in DS 268, Mexico rightly asserts that 
the application of a cumulative injury analysis is not  consistent with the rights granted to individual 
WTO Members by Article 11.3.31  The purpose of Article 11.3 is to provide each WTO Member with 
the right to have an anti-dumping measure affecting its exports terminated after five years, unless its 
exports are likely to be dumped within the meani ng of Article 2 and are likely to cause injury within 
the meaning of Article 3.  A cumulative inju ry analysis violates the object and purpose of 
Article 11.3, because it conditions each Member's ri ght to termination of an anti-dumping measure 
covering its imports on the commercial prac tices of exporters from other countries. 
  In addition, fundamental to the rationale for cu mulation is the concept of simultaneity.  That 
is, the subject merchandise must be imported si multaneously and there must be demonstrated 
competition in the market.  Otherwise, the cumulative effect of imports on the importing market could not properly be assessed.  Consequently, if as Mexico's First Submission demonstrates, the 
Commission did not define the time frame within wh ich injury would be likely to recur, how then 
could the Commission be certain that imports would enter the US market simultaneously?  While the 
Commission discussed the likelihood of a reasonable overlap of competition of the subject imports, 
                                                     
 
28 See Mexico's First Submission, paras. 129-144. 
29 Case Brief of TAMSA, Sunset Review of Oil Country Tubu lar Goods (“OCTG”) from Mexico, A-
201-817, (11 Dec. 2000) at 3-8 (MEX-39). 
30 Sunset Review Issues and Decision Memorandum  at 4 (MEX-19) 
31 See Mexico's First Submission, sec. VIII.E.  WT/DS282/R 
 Page B-9 
 
 
 the Commission failed to link its analysis in this re gard to the time frame within which injury would 
be likely to continue or recur under Article 11.3.  As a result, the basis for the Commission's determination that imports would be simultaneously  present in the US market  and cause likely injury 
is flawed.  Therefore, irrespective of the time fra me within which injury most recur, for purposes of 
the obligation under Article 11.3, and even assuming arguendo  that Articles 3.3 and 11.3 do not 
preclude cumulation in Article 11.3 reviews, is its clear from the record that the way the Commission 
cumulated in this case is inconsistent with Article 11.3.   Argentina also understands that Mexico has also  rightly asserted that the express terms of the 
Anti-Dumping Agreement preclude cumulation in Article 11.3 reviews.
32  As Argentina argued in its 
submission in DS 268, article 11.3 refers to an an ti-dumping duty in the singular, not plural.  Thus, on 
its face, Article 11.3 requires the authority to determine whether the revocation of a single  anti-
dumping measure – rather than the revocation of multiple anti-dumping measures – would be likely to 
lead to the continuation or recurrence of injury.  Article 11.3 thus does not permit cumulation.  A reading of Article 11.3 within the context of th e Anti-Dumping Agreement as a whole lends further 
support to this conclusion. 
  Through Article 3.3, the Anti-Dumping Agre ement limits the use of a cumulative injury 
analysis to "investigations," and even then only where certain conditions are met.  The fact that 
Article 3.3 provides for the conditioned use of cumu lation in "investigations" but not in "reviews" 
indicates that a cumulative injury analysis is not permitted in the likelihood of injury determination 
made in an Article 11.3 review.  The failure of Article 3.3 and Article 11.3 to cross-reference each 
other corroborates this reading.  Article 11.3 contains  explicit cross-references to other articles of the 
Anti-Dumping Agreement (such as Articles 6 and 8), and other articles in the agreement explicitly 
cross-reference Article 11 (such as the cross reference in Article 12.3).  Thus, it is evident that, "when 
the negotiators . . . intended that the disciplines set forth in one provision be applied in another 
context, they did so expressly."
33  Accordingly, the lack of cro ss-references between Articles 11.3 and 
3.3 indicates that the drafters of the Anti-Dumping Agreement did not intend for the limited use  of a 
cumulative injury analysis permitted in an investigation  to be extended to the likelihood of injury 
determination in a review  under Article 11.3.  Moreover, there are no general references to cumulation 
in the Anti-Dumping Agreement, nor is cumulation generally defined for purposes of the Anti-Dumping Agreement, as are the terms "dumping" and "injury."
34 
 
D. A N INJURY DETERMINATION UNDER ARTICLE 11.3  MUST SATISFY THE "LIKELY " STANDARD 
AS WELL AS THE EVIDENTIARY REQUIREMENTS OF ARTICLE 3.1 
 The evidence required by Article 11.3 must be  sufficient to establish that injury would be 
"likely."  The Appellate Body reaffirmed that  "likely" in Article 11.3 means "probable."35  Therefore, 
the authority must determine that injury would be probable  upon termination of the anti-dumping 
measure in order to justify continuation of anti-dum ping duties under Article 11.3.  If the evidence is 
inconclusive, or is insufficient for a reasonable, obj ective person to say that injury is "likely," the 
measure must be terminated.  The United States, how ever, has interpreted "likely" in the context of 
Article 11.3 to mean "possible," or "a concept that  falls in between 'probable' and 'possible' on a 
                                                      
32 See Mexico's First Submission, para. 254. 
33 Appellate Body Report, Steel from Germany , para. 69. 
34 Similar to Argentina's reasoning in Ds 268, Mexico convincingly argues in the alternative argument 
that:  “Assuming arguendo  that Articles 3.3 and 11.3 do not preclude cumulation in Article 11.3 reviews, then 
the terms of Article 3.3 must be applied to a cumulative an alysis in a sunset review.  Indeed, the application of 
either the de minimis  or negligibility requirements would have prevented cumulation in this case.  The 
Commission's cumulative injury analysis in its Sunset Determination thus failed to satisfy the Article 3.3 requirements.”  Mexico's First Submission, para. 261. 
35 See Appellate Body Report, Japan Sunset , paras. 110-111. WT/DS282/R 
Page B-10  
 
 continuum of relative certainty."
36  US courts have held that th e Commission has not implemented the 
"likely" injury standard in sunset reviews.37 
  It is clear that the United States did not apply a "probable" standard in this case.  Indeed, in a 
NAFTA challenge to the sunset determination in this case, the Commission stated that the SAA 
precludes the Commission from applying a "probable" standard.
38 
  The same type of evidence n ecessary for an injury determination under Article 3 is required 
for a determination of "likely injury" under Article  11.3; that is, positive evidence sufficient to meet 
the substantive injury standards of Article 3.  More over, that evidence must also satisfy the "likely" 
standard of Article 11.3.  Article 3 applies to revi ews under Article 11.3 by virtue of footnote 9 to the 
Anti-Dumping Agreement, which states, " Under this Agreement the term 'injury' shall, unless 
otherwise specified, be taken to mean material inju ry to a domestic industry, threat of injury to a 
domestic industry or material retardation to  the establishment of such an industry and shall be 
interpreted in accordance with the provisions of this Article ."  (Emphasis added.)  Article 11 does not 
specify an alternative definition of "injury" for th e purposes of that article; therefore, the authority's 
likelihood of "injury" determination under Article 11.3 must comply with Article 3.
39  Article 3.1 
mandates that the authority's determination of "i njury" be based on "positive evidence" and "an 
objective examination" of "(a) the volume of dump ed imports and the effect of dumped imports on 
prices in the domestic market for like products, and (b) the consequent impact of these imports on domestic producers of such products." 
 
 Accordingly, the authority's determination of likely injury under Article 11.3 must also be 
based on positive evidence and an objective examina tion of the likely volume, price effects, and 
impact of the imports subject to the measure under revi ew.  The likelihood of injury analysis is further 
subject to the requirements imposed by Articles 3.4,  3.5, 3.7, and 3.8 of the Anti-Dumping Agreement 
related to consideration of specific economic factors and indices having a bearing on the state of the 
domestic industry, causation, as well as the special ru les related to all future injury determinations. 
  Argentina notes that the injury portion of the Article 11.3 review of Mexican OCTG imports 
is identical to the injury portion of the Article 11.3 review of Argentine OCTG at issue in DS 268.  
Argentina endorses all of Mexico's "as applied" argumen ts related to the injury portion of the review.  
The Commission's decision is based on speculation, and, at best, "possible" events based on the 
evidence developed during the review.  The Commis sion's determination does not demonstrate, on the 
basis of positive evidence, that injury is "likely" to continue or recur. 
 E. 19
 U.S.C.  §§ 1675 A(A)(1)  AND (5) ARE INCONSISTENT AS SUCH WITH ARTICLES  11.3  AND 3 
OF THE ANTI-DUMPING AGREEMENT  
 Consistent with Argentina's analysis in DS  268, Mexico convincingly demonstrates that 
19 U.S.C. §§ 1675a(a)(1) and (5) are inconsistent as such with Articles 11.3 and 3 of the Anti-
Dumping Agreement.40  Article 11.3 requires the authority to determine whether termination of an 
                                                      
36 See Mexico's First Submission, sec. VIII.A; see also  SAA at 883 (“There may be more than one 
likely outcome following revocation or termination.  The possibility of other likely outcomes does not mean that 
a determination that revocation or termination is likely to lead to continuation or recurrence or countervailable subsidies, or injury is erroneous . . . .”)(MEX- 26); Int'l Trade Comm'n Remand Determ. Pursuant to Usinor 
Industeel S.A., et. al v.United States , No. 01-00006 (July 2002) at 6 (MEX- 45). 
37 See Mexico's First Submission, para. 171. 
38 See Mexico's First Submission, para. 171 and (MEX-47). 
39 See Panel Report, Japan Sunset , paras. 7.99 – 7.101;  Panel Report, DRAMs from Korea , para. 6.59 
n.501 (“We note that, by virtue of note 9 of the AD Agreement, the term  'injury' in Article 11.2 'shall be 
interpreted in accordance with the provisions of Article 3.'”). 
40 See First Submission of Mexico, Sec. VIII.G.  WT/DS282/R 
 Page B-11 
 
 
 anti-dumping measure would be likely to lead to the continuation or recurrence of injury.  Thus, the 
authority's likelihood of injury determination must not be based on speculation about possible market 
conditions several years into the future, but rather must be based upon the likelihood of injury upon 
"expiry" of the measure.  
 Section 1675(a)(1) requires the Commission to de termine whether injury would be likely to 
continue or recur "within a reasonably foreseeable time."  The SAA explains that  "'reasonably 
foreseeable time' . . . normally will exceed the 'imminent ' time frame applicable in a threat of injury 
analysis."
41  Moreover, section 1675(a)(5) mandates that  the Commission "shall consider that the 
effects of revocation or termination may not be imminent, but may manifest themselves only over a 
longer period of time."  Accordingly, by defini ng a "reasonably foreseeable time" as longer than an 
"imminent" time, the US statutory provisions are inconsistent with the Anti-Dumping Agreement, 
which requires the determination to be b ased upon injury upon "expiry" of the duty. 
  Sections 1675(a)(1) and (5) are also incons istent with Articles 3.7 of the Anti-Dumping 
Agreement.  Article 3.7 requires injury determin ations to be "based on facts and not merely on 
allegation, conjecture or remote possibility," and that the circumstances under which injury would 
occur be "imminent."  The US provisions provide th at the likelihood of injury determination need not 
be based on "imminent" injury, thereby fostering speculation. 
 
IV. THE UNITED STATES VIOLATED ARTICLES 11.2 AND 11.3 IN THIS CASE BY 
ASSIGNING DECISIVE WEIGHT TO DECLINING IMPORT VOLUMES. 
 
 Argentina is not surprised by the nature of th e claims advanced by Mexico in this case.  
Indeed, as previously noted, Argentina is currently in the midst of a separate WTO dispute settlement 
proceeding with the United States i nvolving many of these same issues, United States – Sunset 
Reviews of Anti-Dumping Measures on OCTG from Argentina , DS 268.  Furthermore, as part of its 
case, Argentina also undertook a comprehensive anal ysis of the all of the Department's sunset 
reviews, including the sunset review of OCTG from Mexico.   Mexico's case offers compelling evidence that the United States has not faithfully 
implemented its obligations under Article 11.  With respect to the sunset obligations established by 
Article 11.3, the United States uses presumptions a nd incorrect legal standards that enable the 
administering authorities to continue anti-dumping measures beyond the five-year term established by 
Article 11.3.  For the Department's sunset review, the mere existence of historic dumping margins or a 
decline in volume after the imposition of anti-dumpi ng duties is sufficient to keep an anti-dumping 
measure in place.  For its part, the Commission concedes that it does not apply a "probable" standard 
in making the likely injury determination.  The Commission also routinely conditions individual 
Members' rights of termination on the import prac tice of importers from other countries through its 
practice of cumulatively assessing the effects of  imports in the likely injury analysis. 
  To compound these problems, the United States takes the position that because its 
Article 11.3 review determinations reflects an orde r wide (country-wide) decision, the fact that a 
particular exporter may not be dumping or causing in jury is not determinative.  The United States 
maintains that there are other US procedures in pl ace that enable a company to have an order revoked 
as it pertains to that company and that these proce dures implement US obliga tions under Article 11.2, 
such as where an exporter obtains consecutive no dumping determinations in three consecutive 
administrative reviews of the anti-dumping duty order.  
 
 Mexico's experience stands in stark contrast to  the US characterizations of its procedures and 
practices for implementing the requirements of Article 11 as explained in DS 268 – the US-Argentina 
                                                     
 
41 SAA at 887 (MEX-26). WT/DS282/R 
Page B-12  
 
 case.  In DS 268, the United States argued that if on ly the Argentine producer, Siderca, had continued 
to ship to the United States after the imposition of the measure, or if only the company had 
participated in the annual review process, the results  might have been different.  In this case, however, 
neither the Mexican companies' complete participa tion in full sunset revi ews in which the evidence 
showed that dumping was not likely to continue or recur (in accordance with the requirements of 
Article 11.3), nor one company's participation in the annual review process and its ability to obtain 
three consecutive no dumping findings (zero margins) to demonstrate that the order was no longer necessary to offset dumping (in accordance with th e requirements of Article 11.2) resulted in 
termination of the anti-dumping duties.  
 As noted above, consistent with other WTO sunset cases, in DS 268, the United States 
asserted that sunset reviews are conducted on an "ord er-wide" basis.  Based on this approach, the 
United States considered the relevance of the individual exporter partic ipation to be limited.
42  The 
result of such an approach is that conti nuation of an anti-dumping order can be based on 
circumstances wholly unrelated to any one individual company.  At the same time, the United States 
repeatedly emphasized throughout that proceeding th at US procedures enabled a company to have an 
order revoked as it pertains to that company by  obtaining zero margins in three consecutive 
administrative reviews.43 
  For example, the US Second Submission stated:  
Specifically, revocation for a particular company from an antidumping duty order is 
possible by two methods under US law (revo cations of antidumping duty orders, in 
part, are generally termed  "company-specifi c" revocations in US parlance).  The first 
and most common method
 is for a producer or exporter to seek revocation pursuant to 
section 351.222(b)(2) of Commerce's Regulations , i.e., after three annual 
administrative reviews wherein Commerce has calculated, in each review, a dumping 
margin of zero or de minimis  for the producer or exporter seeking revocation. 
The second method for a producer or expor ter seeking revocation is the "changed 
circumstances" review.  Under this method,  a producer or exporter may request a 
review at any time after providing information that changed circumstances warrant a review for the purposes of revocation of an antidumping duty order.   
Thus, a producer or exporter may seek revocation for itself from an antidumping duty 
order prior to the initiation of a sunset review.
44 
 Thus, the United States stressed that, although the Department issues its determinations in 
sunset reviews on an order-wide basis, US law perm its a particular foreign producer/exporter to seek a 
company-specific revocation prior to the initiation of a sunset review.  Contrary to the US assertion in 
its First Submission in this case (DS 282),45 Argentina is of the view that satisfaction of the 
obligations in Article 11.2 could well require the termination of an anti-dumping duty on a company-
specific basis.  In DS 268, the United States referred to sections 351.222(b)(2) and 351.216 of the 
                                                      
42 See, e.g.,  US Answers to Argentina's First Set of Questions, DS 268 (8 Jan. 2004), para. 12;  
US Answers to Panel's First Set of Questions, DS 268 (8  Jan. 2004), paras. 3 and 19; US Answers to Panel's 
Second Set of Questions, DS 268 (Feb. 13, 2004), para. 3. 
43 US Oral Response to Panel Question During First Su bstantive Meeting of the Panel with the Parties; 
see also US Second Written Submission, United States – Sunset Reviews of Anti-Dumping Measures on Oil 
Country Tubular Goods from Argentina , WT/DS268 (8 Jan. 2004), paras. 13-15 (“US DS268 Second 
Submission”). 
44 US DS268 Second Submission, para. 13 (footnotes omitted). 
45 US First Submission, DS 282, para. 147.  WT/DS282/R 
 Page B-13 
 
 
 Department's regulations as providing company- specific revocation procedures.  Under section 
351.222(b)(2), a foreign producer/exporter may seek a company-specific revocation if the Department has calculated zero or de minimis
 dumping margins for that company in three administrative reviews.  
Under section 351.216, a foreign producer/exporter ma y argue that "changed circumstances" warrant 
the revocation of an order with respect to that company.  According to the United States, "[t]he 
Appellate Body in Japan Sunset  recognized the importance of the availability of these procedures in 
ensuring that an anti-dumping duty remain in forc e only  as long as and to the extent necessary to 
counteract dumping which is causing injury."46 
  The facts of Mexico's case belie the US statements in DS 268.  TAMSA continued to export 
to the United States throughout the life of the order and participated in three administrative reviews.  
In each review the Department determined that the company was not dumping.  The company thus 
obtained three consecutive zero margins and thereb y demonstrated that the order was no longer 
necessary to offset dumping, in accordance with th e requirements of Article 11.2.  The Department 
did not revoke the order, and ignored the results of the three, complete annual reviews that it 
conducted, based on the following rationale: 
 
Because TAMSA did not meaningfully par ticipate in the market, its sales during 
these periods do not provide a reasonable basis for determining that it is unlikely that 
TAMSA will dump  in the future.  Therefore, we find that TAMSA does not qualify 
for revocation of the order on OCTG under 19 CFR 351.222(e)(1)(ii) and 19 CFR 
351.222(d)(1).47 
 As Mexico argues, there are several flaws with  the Department's Determination in the Fourth 
Review Not to Revoke the Order as Applied to  TAMSA.  As Mexico's First Submission 
demonstrates, the United States violated Article 11.2 because:  (1) the Department applied a standard 
which required a demonstration that dumping was "not  likely" in the future;  (2) the Department 
arbitrarily imposed a "commercial quantities" threshold requirement that has no basis in Article 11.2;  
and (3) the Department ignored positive evidence that demonstrated that the measure was not 
necessary to offset dumping.48 
  Argentina endorses all three elements of the argument put forward by Mexico.  However, Argentina would like to draw the Panel's attention sp ecifically to the role that import volumes play in 
the Department's Article 11.2 determination described by Mexico.  As Mexico's submission makes 
clear, the Department's determinations not to revoke the measure as to TAMSA – under both the 
Article 11.2 and 11.3 mechanisms provided for in  US law – were based solely on a comparison 
between import volume to the United States during the original investigation period and the OCTG 
volume shipped during each of the three relevant administrative review periods.  The Department 
stated in the Article 11.3 review that: 
 
                                                     
 
46 US DS268 Second Submission, para. 15.  The United States cited paragraph 199 of the Appellate 
Body's report in Japan Sunset as support for this assertion.  This paragraph, however, does not refer to the 
company-specific revocation provisions at sections 351.222(b)(2) and 351.216.  Based on an earlier citation in 
the US second submission, it appears that the United States had intended to cite to paragraph 158 of the Appellate Body's report.  Contrary to the US characterization, however, the Appellate Body did not endorse 
these provisions as consistent with Article 11.1 (i.e.
, “only as long as and to the extent necessary”) in this 
paragraph (or in any other section of the report).  Rather, the Appellate Body merely cited the US provisions in explaining that Article 11.3 does not preclude authorities from making separate likelihood determinations for 
individual producers and exporters.  (Appellate Body Report, Japan Sunset , para. 158) 
47 See Mexico's First Submission, para. 301 (citing Fourth Review Issues and Decision Memorandum 
at 9 (MEX-9)). 
48 See Mexico's First Submission, sec. IX.C. WT/DS282/R 
Page B-14  
 
 We disagree with TAMSA's claim that the Department cannot base its decision with 
regard to whether dumping is likely to r esume if the order were revoked on the fact 
that the post-order export volumes were well  below pre-order volumes.  As discussed 
in section II.A.3 of the Sunset Policy Bulletin, the SAA at 889, and the House Report at 63-64, if the volume of imports declin ed significantly after the issuance of the 
order and dumping was eliminated, the De partment may reasonably infer that 
dumping would resume if the order were re voked.  The premise that the decline in 
TAMSA's export levels after the issuance of the order was the result of a prudent and 
necessary business strategy, and the fact that TAMSA was able to sell small amounts of OCTG without dumping in no way conflict with the Department's inference.  If it 
became "prudent and necessary" to make fewer sales at more fairly traded prices 
while the discipline of the order was in pl ace, it is reasonable to infer that dumping 
would be likely to resume if such discip lines ceased to exist and it was no longer 
"necessary" for TAMSA  and other Mexican e xporters to maintain the same business 
strategy.
49 
 Likewise, in the Article 11.2 review, the Depa rtment specifically defended the "inference" it 
had drawn from the lower import volumes and justifie d the use of a so-called "commercial quantities" 
threshold test:   
As explained in the SAA at 889-90, and the House Report at 63-64, if the volume of imports declined significantly after the issuance of the order and dumping was 
eliminated, the Department may reasonably infer that dumping would resume if the 
order were revoked.  The same logic also applies on a company-specific basis.  The 
premise that the decline in TAMSA's export le vels after the issuance of the order was 
the result of a depressed market for OCTG and a high deposit rate, and the fact that TAMSA was able to sell small amounts of OCTG without dumping in no way 
conflict with the Department's inference.  If it became necessary to make fewer sales 
at more fairly traded prices while the di scipline of the order was in place, it is 
reasonable to infer that dumping would be likely to resume if such disciplines ceased to exist, especially if TAMSA were again to encounter a "depre ssed market" in this 
very cyclical industry.
50 
 These statements leave no doubt that the Unite d States did not fulfil its obligations under 
either Article 11.2 or 11.3 in this case.  As in th e treatment of Argentine exports examined in DS 268, 
the Department decisions relating to Mexican exports  demonstrate clearly that the Department gave 
decisive weight to a single factor – declining export volumes.  Reliance on this factor precluded the Department from making a determinat ion consistent with the requirem ents of Articles 11.2 and 11.3.  
The Appellate Body has ruled that an administer ing authority cannot draw a conclusive inference 
from a decline in volume alone for purposes of an Article 11.3 determination,
51 and the same rationale 
applies with equal force for purpose of the Article 11.2 determination. 
  While the common denominator in this case and DS 268 is the Department's reliance on 
declining import volumes, the two cases demonstrate the bias with which the Department applies its 
laws.  In the Argentine case examined in DS 26 8, very small volumes from an unknown source were 
                                                     
 
49 Mexico's First Submission, para. 123, citing Oil Country Tubular Goods from Mexico , 66 Fed. 
Reg. 14,131 (Dep't Commerce Mar. 9, 2001)(final results of sunset review); Issues and Decision Memorandum  
for the Full Sunset Review of the Anti-Dumping Duty Order on Oil Country Tubular Goods from Mexico  
(9 Mar. 2001)(final results)(“ Sunset Review Issues and Decision Memorandum ”) at 4 (MEX-19). 
50 Mexico's First Submission, para. 316, citing Fourth Review Issues and Decision Memorandum at 
8 (MEX-9) . 
51 See Appellate Body Report, Japan Sunset , para. 177.  WT/DS282/R 
 Page B-15 
 
 
 considered to be relevant enough to trigger the "w aiver" provisions of US law, and to justify the 
application of "facts available," both of which were used by the Department to justify continuation of 
the measure against Argentine exports.52  In the review of Mexican exports, comparable import 
volumes are considered to be completely irrelevant.  It simply does not matter that the imports in 
comparable volume are demonstrated to be traded fa irly; now the volume is too small to be relevant.  
Not only is the demonstrated reliance on import volumes itself a violation of Articles 11.2 and 11.3, 
the inconsistency in treatment of the volume factor  highlights concerns about the objectivity with 
which the United States implements its Article 11 obligations.   
V. REQUEST FOR SUGGESTIONS FROM THE PANEL ON THE MANNER IN 
WHICH THE UNITED STATES SHOULD IMPLEMENT THE PANEL'S 
RECOMMENDATIONS 
  
 Mexico has alleged that the United States has committed multiple violations of its WTO obligations.  Argentina believes that Mexico has presented a compelling case of violations.  If the 
panel agrees and recommends that the United States bring itself into compliance with its obligations, 
Argentina agrees that termination of the anti-dumping measure on OCTG from Mexico would be the appropriate suggestion from the panel.   In light of the obligations in Article 11.3, th e chance to renew the duti es in the sunset review 
determination arise only at the time of the expiry of  the five year period of the duty.  Such a review 
can be conducted only once.  Additionally, as stated in Article 11.1, which provides context for the 
obligation in Article 11.3, the duty "shall remain in force only as long as and to the extent necessary 
to counteract dumping which is causing injury."  If in  this context, an author ity failed to conduct the 
review according to the Anti-Dumping Agreement, then  there is no chance for that Member to cure in 
a subsequent proceeding.  Otherwise, the obliga tion of Article 11 (i.e., termination of the anti-
dumping measure) will be thwarted because Member s could always continue the imposition of anti-
dumping duties, knowing that that they could again revisit that decision after WTO dispute settlement proceedings.  As in the case of Argentina in DS 268, the only remedy that will restore the benefits 
obtained by Mexico through the negotiation of th e Anti-Dumping Agreement is termination of the 
measure that has applied to its exports for the last decade. 
                                                     
 
52 The key facts at issue in DS 268 relevant to  the Department's sunset review of OCTG from 
Argentina are recounted briefly as follows.  The Argentine producer, Siderca, had not exported any OCTG to 
the United States for consumption during the relevant period for purposes of the sunset review.  Siderca 
provided this information to the Department and made similar “no-shipment” representations during each of the relevant administrative review periods.  The Department conducted “no-shipment” revi ews and in each instance 
verified Siderca's claims that the company had not ex ported OCTG to the United States.  The Department's 
import data, however, showed the existence of very small quantities of Argentine OCTG imports to the United States.  Because Siderca's total exports of OCTG  to the United States (zer o exports) were less than 
50 per cent of total OCTG exports from Argentina to the United States, however, the Department determined 
Siderca's response to be “inadequate.”  See First Submission of Argentina, DS 268, paras. 97-99.  The 
Department then determined that because Siderca's res ponse was deemed to be “inadequate,” the company was 
similarly deemed to have “waived” its right to participate in the sunset review.  See First Submission of 
Argentina, DS 268, para. 98, citing the Department's Issues and Decision Memorandum at 4-5 (“In the instant 
reviews, the Department did not receive an adequate response from respondent  interested parties.  Pursuant to 
section 351.218(d)(2)(iii) of the Sunset Regulations, this constitutes a waiver of participation.”).  The 
Department deemed Argentina to have waived its right to participate because of the “inadequate” response to the initiation notice.  The co mpany's response was inadequate simply  because of its low export volume.  
Ironically, it is interesting to note the Department's reliance in DS 268 on very small Argentine OCTG import 
quantities to deem Siderca to have waived its participati on in the sunset review, with devastating consequences.  
In the end, it is clear that import volume is used by the Department in a very outcome determinative manner. 
 WT/DS282/R 
Page B-16  
 
  
VI. CONCLUSION 
 
 Argentina thanks the Panel for providing the opportunity to comment on the important issues 
presented in this dispute. 
 WT/DS/282/R 
Page B-17 
 
  
 
ANNEX B-2 
 
 
THIRD PARTY SUBMISSION OF CHINA 
 
 
(28 April 2004) 
 
 
TABLE OF CONTENTS 
 
 
Page  
  
I. INTRODUCTION ..............................................................................................................B -18 
 
II. ARGUMENTS.................................................................................................................. ...B-18 
 
A. THE DEPARTMENT'S SUNSET REVIEW DETERMINATION IS INCONSISTENT 
WITH THE ANTI-DUMPING AGREEMENT ..................................................................B-18 
 
1. Provisions Of Article 2 Apply To The Determination Of Likelihood Of Continuation Or 
Recurrence Of "Dumping" Under Article 11.3...............................................................B-19  
 2. The Department's Sunset Review Determin ation Is Not Consistent With The Anti-
dumping Agreement Article 2 and Article 1.3.................................................................B-20  
 B. THE COMMISSION'S SUNSET REVIEW DETERMINATION IS INCONSISTENT WITH 
THE ANTI-DUMPING AGREEMENT...............................................................................B-22 
 
1. Provisions of Article 3 Apply to Article 11.3 ...................................................................B-23  
 
2. The Commission's Injury Determination Is Inconsistent With Article 3.1, 3.4, 3.5, 
And 11.3....................................................................................................................... ........B-24  
 3. 19 U.S.C. § 1675a(A)(1) And 19 U.S.C. § 1675a(A)(5), Are Inconsistent, As Such And As 
Applied, With Articles 11.1, 11.3 And 3 Of The Anti-Dumping Agreement ................B-25  
 C. THE DEPARTMENT ACTED INCONSISTENTLY WITH ARTICLE 2.1 AND 2.4 OF THE 
ANTI-DUMPING AGREEMENT BY APPLYING "ZEROING" IN ITS DETERMINATION OF DUMPING MARGIN .................................................................................................. B-26 
 III. CONCLUSION ............. ........................ .............................. ...................... ...................... .. B-28 
 
 WT/DS282/R 
Page B-18  
 
 I. INTRODUCTION 
 
1. China welcomes this opportunity to present its view in the dispute brought by Mexico over 
the consistency with Article VI of the Genera l Agreement on Tariffs and Trade 1994 ("GATT") and 
the Agreement on Implementation of Article VI of the GATT ("Anti-Dumping Agreement") of the 
decision made by the United States not to terminate the imposition of the anti-dumping duty on oil 
country tubular goods ("OCTG") from Mexico, to impose a positive dumping margin in the forth 
administrative review and US statutory, regulatory, and administrative measures with regard to sunset 
review.  
2. China has systemic interests in the inte rpretation and application of the Anti-dumping 
Agreement with regard to sunset review and dumping margin calculation.  As a third party, China 
would like to address the following issues raised by Mexico:  – Inconsistency of the determination by the US  Department of Commerce ("Department") of 
likelihood of continuation or recurrence of  dumping with Article 2 and Article 11.3; 
 – Inconsistency of the dete rmination by the US International Trade Commission 
("Commission") of likelihood of continuation or r ecurrence of injury with Articles 3.1, 3.4, 
3.5 and 11.3; 
 
– Inconsistency of margin of  dumping determined by the De partment based on the zeroing 
methodology for determining "dumpi ng" with Articles 2.1 and 2.4. 
 
II. ARGUMENTS 
 A. T
HE DEPARTMENT 'S SUNSET REVIEW DETERMINATION IS INCONSISTENT WITH THE ANTI-
DUMPING AGREEMENT  
3. Article 11.3 of the Anti-Dumping Agreement requests that an existing anti-dumping measure 
shall be terminated unless "the expiry of the duty w ould be likely to lead to continuation or recurrence 
of dumping and injury."  The term "likely" in Article 11.3 requires that the authorities make an 
affirmative determination on a prospective basis1 that there is a probability, not a mere possibility, that 
the dumping will continue or recur in the future.2 In US – Sunset Review of Steel from Japan , the 
panel also expressed that the term "lik ely" in Article 11.3 means "probable." 3   The continuation or 
recurrence of dumping and injury shall, therefore,  be based on evidences that show "probability" 
rather than simple "possibility."  
4. As Mexico pointed out in its first submission regarding this case, the United States itself 
acknowledged such interpretation of the term "likely" into "probable" in  US – Steel from Germany ,
4 
and it demonstrates the understanding of th e United States regarding this issue. 
 5. In The Sunset Review of Steel from Japan , the Appellate Body reaffirmed that continuation of 
anti-dumping duty in a sunset review is exceptiona l and thus requires that "authorities must conduct 
a rigorous examination
 in a sunset review before the excep tion (namely, the continuation of the 
                                                      
1See Panel Report, US – Carbon Steel , para. 8.96. 
2 See Panel Report, US – DRAMs , para. 6.45. 
3 Appellate Body Report, US – Sunset Review of Steel from Japan , paras. 110-111. 
4 See the First Submission of Mexico before the World Trade Organization regarding the current 
dispute, para 163.  WT/DS282/R 
 Page B-19 
 
 
 duty) can apply. (emphasis added)  The Appellate  Body also agreed with the Panel's reasoning 
below5: 
 
"In order to continue the imposition of the measure after the expiry of the five-year application period, it is clear that the inv estigating authority has to determine, on the 
basis of positive evidence, that termination of  the duty is likely to lead to continuation 
or recurrence of dumping and injury.  An investigation authority must have a sufficient factual basis to allow it to draw reasoned and adequate conclusions concerning the likelihood of such continuation or recurrence."
6 
6. Thus, in order to make a determination that is  consistent with Article 11.3, the US authorities 
would need to find that it is "likely" and thus far more than "possible" (i.e., more probable than not) 
that termination of the anti-dumping measure will lead  to the continuance or recurrence of injury and 
dumping, respectively.    
1. Provisions Of Article 2 Apply To The Dete rmination Of Likelihood Of Continuation Or 
Recurrence Of "Dumping" Under Article 11.3 
 
7. The title of Article 2 states "Determination of Dumping."  Article 2.1 then states that: 
 
For the purpose of this Agreement , a product is to be considered as being dumped, 
i.e., introduced into the commerce of another country at less than its normal value, if 
the export price of the product exported from one country to another is less than the 
comparable price, in the ordinary course of  trade, for the like product when destined 
for consumption in the exporting country. (emphasis added) 
8. The first phrase "[f]or the purpose of this Agre ement" demonstrates drafter's clear intent to 
apply the obligation of Article 2 throughout th e Anti-Dumping Agreement, wherever the word 
"dumping" appears.  The basic concept of "dumpi ng" under Article 2 thus applies to all "dumping" 
determinations throughout the Anti-Dumping Agreemen t, including sunset review under Article 11.3. 
 9. Therefore, the phrase "likely to lead to con tinuation or recurrence of dumping" in Article 11.3 
does not change the core concept of "dumping," no r does it affect the applicability of Article 2 to 
Article 11.3.  To find "continuation of dumping," th e authorities must find the existence of dumping at 
the time of the sunset review.  To find "recurren ce of dumping," the authorities must first find that 
dumping has ceased by the time of sunset review.  10. The Appellate Body in  US – Sunset Review of Steel From Japan has confirmed such cross-
reference that general provision a nd definition of dumping applies to the sunset review provisions: 
 
"[a]rticle 2.1 of the Anti-Dumping Agreement and Article VI:1 of the GATT 1994 suggest that the question for investigation authorities, in making a likelihood determination in a sunset review pursuant to article 11.3, is whether the expiry of the 
duty would be likely to lead to continuation or recurrence of dumping of the product subject to the duty (that is, to the introdu ction of that product into the commerce of 
the importing country at less than its normal value)."
7 
                                                      
5 Appellate Body Report, US – Sunset Review of Steel from Japan , p. 41 
6 Panel Report,  US – Sunset Review of Steel from Japan , para. 7.271. 
7 Appellate Body Report, US – Sunset Review of Steel from Japan , p. 39. WT/DS282/R 
Page B-20  
 
 11. Therefore, a determination of whether futu re dumping is likely to continue or recur under 
Article 11.3 must reflect the definition and obligat ions enumerated in Articles 2.1, 2.4 and other 
provisions in Article 2.  12. However, in the Department's sunset revi ew practice, continued dumping margins, the 
cessation of imports, and/or declining import volumes accompanied by the elimination of dumping 
margins become the three criteria. Such criteria do not  adhere to the "dumping" definition in Article 2 
of the Anti-Dumping Agreement.   13. The United States admitted that "[a]s the starting point for making its likelihood 
determination is this sunset review, Commerce c onsidered the findings concerning dumping made in 
the original investigation.
8 The fact that the 21.70 per cent dumping margin for all other Mexican 
companies was provided to the Commission by the Department testifies the Department determination.  
14. However, article 11.3 requests the importing authority to determine
 whether expiry of the 
duty would be likely to lead to continuation or recurrence of dumping.  Based on Article 2 of the Anti-Dumping Agreement, the authority would need  to use evidences that can prove that dumping 
continued at the time of the sunset review or that dumping has ceased at the time of the sunset review but is "likely" to recur.  
15. The Appellate Body confirms the Pa nel's description of "determine" in the US – Sunset 
Review of Steel from Japan:
9 
 
The text of Article 11.3 contains an obligation "to determine" likelihood of 
continuation or recurrence of dumping and in jury.  The text of Article 11.3 does not, 
however, provide explicit guidance regarding the meaning of the term "determine."  
The ordinary meaning of the word "determine" is to "find out or establish precisely" or to "decide or settle".  The requireme nt to make a "determination" concerning 
likelihood therefore precludes an investig ating authority from simply assuming that 
likelihood exists.  In order to continue th e imposition of the measure after the expiry 
of the five-year application period, it is clear that the investigating authority  has to 
determine , on the basis of positive evidence, that termination of the duty is likely to 
continuation or recurrence of dumping and in jury.  The investigating authority must 
have a sufficient factual basis to allow it to draw reasoned and adequate conclusions 
concerning the likelihood of such continuation or recurrence. (emphasis added) 
2. The Department's Sunset Review Determ ination Is Not Consistent With The Anti-
Dumping Agreement Article 2 And Article 11.3 
 
16. The Department acted inconsistently with Article 11.3 of the Anti-Dumping Agreement by 
not basing its determination on overall evaluation but rather ignoring the current information and 
focusing only on the import volume factor.   
17. The United States made the following statement in its First Submission:
10 
 
"Commerce normally will find that dumping would be likely to continue or recur based on evidence of significantly depressed import volumes after imposition of the duty even where there is al so evidence that dumping has been eliminated during the 
                                                     
 
8 US First Submission, para. 122 
9 Panel Report, US – Sunset Review of Steel from Japan, para. 7.271.  
10 US First Submission, para. 123.  WT/DS282/R 
 Page B-21 
 
 
 five-year period preceding the sunset review .  If there is evidence that no dumping 
has existed since the order was imposed but import volumes have been adversely affected to a significant degree, Commerce may make an affirmative sunset determination because, if these conditions are found, Commerce may reasonably conclude that dumping would continue were  the discipline of the duty removed." 
18. According to the First Submission of Mexico , "the record demonstrates vividly that the 
conclusion was based entirely on an  approach which:  1) was based solely on Mexican OCTG import 
volumes;  2) ignored current and relevant evidence;  and 3) was not prospective."
11   
 19. China agrees with Mexico that a determ ination solely based on the decrease of import 
volumes, bearing no consideration on the current information and prospective evidence, is not 
consistent with Article 11.3 of the WTO Anti-Dumpi ng Agreement, as the latter clearly requests that 
no anti-dumping duty should be continued unless the au thority determines that the expiration of such 
duty would be likely (probably) to lead to continuation or recurrence of dumping and injury.  
20. As Mexico points out in its First Submissi on, in the "Sunset Review Issues and Decision 
Memorandum," the Department clearly states that it pe rceives that "if the volume of imports declined 
significantly after the issuance of the order and dumping was eliminated, the Department may reasonably infer that dumping would r esume if the order were revoked."
12  According to the 
Department, the decline of import volume is directly attributed to the effect of the anti-dumping duty, 
and ceasing such duty would cause resumption of dumpi ng.  The Department also explained in the 
"Sunset Review Issues and Decision Memorandum" that "[b]ecause we continue to find that Mexican 
export volumes in the post-order period were signi ficantly lower than pre-order levels, we also 
continue to find that recurrence of dumping of OCTG  from Mexico is likely if the order were to be 
revoked."13 
 
21. It is clearly demonstrated that the Departme nt relied solely on the export volumes for its 
conclusion that dumping was likely to recur,  is inconsistent with Article 11.3. 
 22. The Appellate Body in US – Sunset Review of Steel from Japan  reasoned that "the cessation 
of imports in the second scenario and the decline in import volumes in the third scenario could well 
have been caused or reinforced by changes in the competitive conditions of the market-place or 
strategies of exporters, rather than by the impos ition of the duty alone.  Therefore, a case-specific 
analysis of the factors behind a cessation of imports  or a decline in import volumes (when dumping is 
eliminated) will be necessary to determine that dumping will recur if the duty is terminated.
14   
 23. Despite the fact that Article 11.3 requires a cas e-specific and proactive analysis rather than a 
passive assumption and simple comparison
15, in the OCTG Sunset Review, the Department based its 
determination that termination of the anti-dumping measure would be likely to lead to recurrence of 
dumping solely on a comparison of the total quantities shipped to the United States during the original 
                                                      
11 See the First Submission of Mexico before the World Trade Organization regarding the current 
dispute, para 122. 
12 See the First Submission of Mexico before the World Trade Organization regarding the current 
dispute, para 123. 
13 Oil Country Tubula r Goods from Mexico , 66 Fed. Reg. 14,131 (Dep't Commerce 9 Mar. 2001)(final 
results of sunset review);  Issues and Decision Memorandum  for the Full Sunset Review of the Anti-dumping 
Duty Order on Oil Country Tubular Goods from Mexico  (9 Mar. 2001)(final results)(“ Sunset Review Issues and 
Decision Memorandum ”) at 4;  see also the First Submission of Mexico before the World Trade Organization 
regarding the current dispute, para 123. 
14 Appellate Body Report, US – Sunset Review of Steel from Japan , para. 177. 
15 Appellate Body Report, US – Sunset Review of Steel from Japan , p.39. WT/DS282/R 
Page B-22  
 
 investigation period with the total quantities shipped during review periods, which is a clear violation 
of the afore-mentioned Article.  24. The Department did not act consistently with  its obligation under Article 11.3 to consider all 
positive evidence by ignoring the most recent admi nistrative reviews where the Mexican companies 
obtained zero dumping margins.  Although the Depa rtment conducted all these reviews and was well 
aware of the company's financial and export data, it gave preference to the "d ecisive factor" of the 
decrease in export volume and even rejected the co mpany's justification of the decrease from the 
commercial aspect.  Rather, the Department plante d its position in the sole factor of export volume 
decrease and made the determination that dumping w ould continue or recur without a comprehensive 
and rigorous evaluation of all aspects.  
 25. In US – Sunset Review of Steel from Japan , the Appellate Body illustrated that "[t]he 
likelihood determination is a pros pective determination.  In other words, the authorities must 
undertake a forward-looking analysis
 and seek to resolve the issue of  what would be likely to occur 
if the duty were terminated."16(emphasis added)  By using the 21.70 per cent dumping margin 
calculated in the original investigation years a go when there might be other factors (significant 
currency devaluation) involved and neglecting or ignoring the most recent dumping margins 
calculated by the Department itself in the administra tive reviews, the Department failed its obligation 
to do a "forward-looking analysis".  
26. In summary, that the Department relied solely on the depressed state of OCTG imports from 
Mexico to make its affirmative determination th at dumping was likely to continue or recur is 
inconsistent with Article 11.3 and Artic le 2 of the Anti-Dumping Agreement. 
 B. T
HE COMMISSION 'S SUNSET REVIEW DETERMINATION IS INCONSISTENT WITH THE ANTI-
DUMPING AGREEMENT  
27. Mexico challenged the Commission's standa rd for "likely" and concluded that the 
Commission's "likely" standard is compromised.   China supports Mexico in this argument. 
 28. Article 11.3 of the Anti-Dumping Agreement states:  
"Notwithstanding the provisions of paragr aphs 1 and 2, any definitive anti-dumping 
duty shall be terminated on a date not la ter than five years from its imposition (or 
from the date of the most recent review under paragraph 2 if that review has covered both dumping and injury, or under this pa ragraph), unless the authorities determine, 
in a review initiated before that da te on their own initiative or upon a duly 
substantiated request made by or on be half of the domestic industry within a 
reasonable period of time prior to that date, th at the expiry of the duty would be likely 
to lead to continuation or recurrence of dumping and injury.  The duty may remain in force pending the outcome of such a review." 
29. The Appellate Body has also reaffirmed the sa me principle repeatedly that continuation of an 
anti-dumping after its 5-year application period is  an exception, which can only exist when the 
authority determines in the sunset review that the e xpiration of such duty would be "likely" to lead to 
continuation or recurrence of injury.
17  
 
                                                      
16 Appellate Body Report, US – Sunset Review of Steel from Japan , para.105. 
17 See Appellate Body Report, US – Sunset Review of Steel from Japan , para. 104;  Appellate Body 
Report, Steel from Germany , para. 88.  WT/DS282/R 
 Page B-23 
 
 
 30. In  US – Sunset Review of Steel from Japan , the Appellate Body ruled that the ordinary 
meaning of "likely" as used in Article 11.3 is "pro bable," rather than simply possible or plausible.18  
The DRAMs from Korea panel interpreted the word "likely' in  accordance with "its normal meaning of 
'probable.'"19   
 1. Provisions of Article 3 Apply to Article 11.3 
 
31. Mexico correctly interprets that Article 3 app lies to Article 11.3.  The title of Article 3 states 
"Determination of Injury."  Footnote 9 then defines the term "injury" that:  
Under this Agreement  the term "injury" shall, unless otherwise specified, be taken 
to mean material injury to a domestic industry,  threat of material injury to a domestic 
industry or material retardation of the estab lishment of such an industry and shall be 
interpreted in accordance with the provis ions of this Article.(emphasis added) 
32. The phrase "[u]nder this Agreement" in Footno te 9 ensures that, whenever the Anti-Dumping 
Agreement uses the term "injury," the provisions of  Article 3 define the te rm.  To find "injury," 
therefore, the provisions in Article 3 setting forth re quirements for finding "injury" must be satisfied. 
 33. The Appellate Body in US – Sunset Review of Steel from Japan found that similar language in 
Article 2 ("For the purpose of this Agreement") made  clear that the disciplines of Article 2 apply to 
sunset review under Article 11.3.  The Appellate Body's reasoning thus requires the parallel finding 
that Article 3 applies to Article 11.3.  Just as Article 2 contains the disciplines for making dumping 
determinations for the purpose of Anti-Dumping Ag reement, Article 3 contains the disciplines for 
determining injury under the Anti-Dumping Agreement.  34. The texts of the individual provisions of Articles 3 further clarify that the requirements in 
these provisions apply to a determinat ion of "injury."  Article 3.1 set s forth general requirements for a 
determination of "injury."  The phrase "a determ ination of injury for purposes of Article VI of 
GATT 1994" clarifies its cross-reference that the provisions of Article 3 apply to an "injury" determination throughout the Anti-Dumping Agreem ent to determine circumstances in which anti-
dumping measure can be applied.
20   
 
35. The Panel in US –  Sunset Review of Steel from Japan states that: 
 
Article 3 is entitled "Injury".  This title is linked to footnote 9 of the Anti-Dumping 
Agreement …  This seems to demonstrate that the term "injury" as it appears throughout the Anti-Dumping Agreement-incl uding Article 11-is to be construed in 
accordance with this footnote, unless othe rwise specified.  This would seem to 
support the view that the provisions in Artic le 3 concerning injury may be generally 
applicable throughout the Anti-Dumping Agreement and are not limited to the application to investigations.  Article 11 does not seem to explicitly specify otherwise 
in the case of sunset review. 
36. Article 3.1 requires the authorities to base th eir injury determination on "positive evidence" 
and "objective examination" of "the volume of th e dumped imports" and "the effect of the dumped 
imports on prices."   
                                                     
 
18 See Appellate Body Report, US – Sunset Review of Steel from Japan , para. 111;  see also Panel 
Report, US – DRAMs  from Korea , para. 6.48 n.494. 
19 Panel Report, DRAMS from Korea , para. 6.46. 
20 See Article 1 of the AD Agreement, which defines that “[a]n anti-dumping measure shall be applied 
under the circumstances provided for in Article VI of GATT 1994.” WT/DS282/R 
Page B-24  
 
  
37. Article 3.1 also provides that the authorities must base their injury determinations on positive 
evidence and objective examination of "the c onsequent impact of these imports on domestic 
producers of such products."  Article 3.4 then set s forth how "the impact of dumped imports on the 
domestic industry" must be examined.  Article 3. 4 thus provides the detailed requirements for the 
examination of the impact of dumped imports under Ar ticle 3.1, and therefore, for a determination of 
injury.  As such, the authorities must satisfy the re quirements in Article 3.4 to determine "injury" in 
any proceedings under the Anti-Dumping Agreement.  38. Article 3.5 provides that injury "within the meaning of this Agreement" must be caused by 
dumped imports through the effects of dumping as set forth in paragraphs 2 a nd 4.  The phrase "injury 
within the meaning of this Agreem ent" ensures that the provisions of Article 3.5 further define the 
term "injury" whenever the term "injury" a ppears in this Agreement.  The causation and non-
attribution requirements under Article 3.5, therefore,  must be satisfied to make a determination of 
"injury." 
 
39. The phrase "likely to lead to continuation or recurrence" in Article 11.3 does not change the 
core concept of "injury," as is the case of " dumping" discussed above.  The terms "continuation or 
recurrence" demonstrate that the authorities must firs t find the current state of injury to the domestic 
industry, and then how the current state is likely to change.  The modifying phrase therefore does not 
affect the applicability of Article 3 to Article 11.3. 
 
40. The provisions of Article 3, therefore, apply to "injury" determinations in sunset reviews 
under Article 11.3.  
2. The Commission's Injury Determination Is Inconsistent With Article 3.1, 3.4, 3.5,  
And 11.3 
 
41. China supports Mexico's claims that Commissi on's injury determination was inconsistent with 
Article 3.1, 3.4 and 3.5 of the Anti-Dumping Agreement.  42. As mentioned before, Article 3.1 provides that the authority must base their injury 
determination on positive evidence and objective exam ination of the consequent impact of these 
imports on domestic producers.  Ar ticle 3.4 thus provides detailed requirements for the examination 
of the impact of dumped imports under Article 3.1.  Article 3.5 then provides that the authorities must 
examine any known factors other than the dumped imports to prove the causal link between the dumped imports and injury. 
 
43. Mexico submitted convincing evidence
21 that the Commission did not evaluate certain factors 
mandated by Article 3.4 for determining injury.  As  Mexico pointed out, Article 3.4 requires that the 
authorities evaluate all relevant economic factors indices as set forth in the Article.  The Appellate Body in Thailand – H-Beams confirmed the obligation of the authorities, stating, "Article 3.4 requires 
a mandatory evaluation of all of the factors listed in that provision."
22   
 
44. By using outdated and fragmente d information and failing to eval uate "all of the factors," the 
Commission acted inconsistently with Artic le 3.4 and accordingly with Article 11.3. 
 45. Mexico further indicated in its First Submi ssion that the Commission failed to demonstrate a 
causal relationship of the dumped imports and lik ely injury to the domestic industry.  The 
                                                     
 
21 See First Submission of Mexico, para. 229 and related exhibits. 
22 Appellate Body Report, Thailand – H-Beams , para. 128.  WT/DS282/R 
 Page B-25 
 
 
 Appellate Body in Hot-Rolled Steel from Japan  laid out a framework for the Commission to conduct 
such causation analysis.  46. China respectfully requests that the Pane l review whether the Commission did causal link 
analysis.  If the Panel finds that the Commission failed to do so, the Commission has acted 
inconsistently with Article 3.5 and 11.3. 
 47. Furthermore, by failing to satisfy the requi rements under Article 3.4 and 3.5, the Commission 
consequently failed to act consiste ntly with Article 3.1, which requires an "objective examination" of 
"positive evidences". 
 
3. 19 U.S.C. § 1675a(A)(1) And 19 U.S.C. § 1 675a(A)(5), Are Inconsistent, As Such And As 
Applied, With Articles 11.1, 11.3 And 3 Of The Anti-Dumping Agreement 
 
48. China upholds Mexico's position in that 19 U.S.C. § 1675a(a)(1) and 19 U.S.C. § 1675a(a)(5) 
are inconsistent with Articles 11.1, 11.3 a nd Article 3 of the Anti-Dumping Agreement.  
 49. The US legislation requires that in a sun set review the Commission must determine whether 
injury would be likely to continue or r ecur "within a reasonably foreseeable time,"
23 and the 
Commission "shall consider that the effects of re vocation or termination may not be imminent, but 
may manifest themselves only over a longer period of time."24  The SAA further elaborates that the 
"'reasonably foreseeable time' ... normally will exceed th e 'imminent' time frame applicable in a threat 
of injury analysis."25  The SAA also provides that the Commission shall consider "factors that may 
only manifest themselves in the longer term."26 
 50. Article 11.1 clearly states that an "anti-dum ping duty shall remain in force only as long as and 
to the extent necessary to counteract dumping which is  causing injury."  A literal interpretation of the 
article would tell that, if at the time of the review  there is no injury then the anti-dumping duty should 
be terminated.  The US statute, however, allows the authorities to probe in to the long-term future 
possibilities which, even according to common sense, is unpredictable and is almost impossible to 
prove with sound facts.    
51. As discussed above, the phrase "likely to lead  to continuation or recurrence of injury" in 
Article 11.3 does not change the core concept of  "injury".  The footnote 9 of the Anti-dumping 
Agreement defines the term "injury" means material in jury to a domestic industry, threat of material 
injury to a domestic industry or material retard ation of the establishment of such an industry …  
Therefore, to determine whether the injury is likel y to continue or recur under Article 11.3 of sunset 
review also requests the investigati ng authority to identify the injury. 
 52. Article 3.1 of the Anti-Dumping Agreement re quests the investigating authority to determine 
injury on the basis of positive evidence and involve an objective examination.  There is no room that 
the investigating authority "shall consider that th e effects of revocation or termination may not be 
imminent, but may manifest themselve s only over a longer period of time." 
 
53. Furthermore, regarding threat to material injury, Article 3.7 of the Anti-Dumping Agreement 
makes it compulsory that the authority cannot base its threat of material injury determination on sheer 
"allegation, conjecture or remote possibility," and "t he change in circumstances which would create a 
                                                     
 
23 19 U.S.C. § 1675a(a)(1). 
24 19 U.S.C. § 1675a(a)(5). 
25 SAA at 887. 
26 Id. WT/DS282/R 
Page B-26  
 
 situation in which the dumping would cause injury must be clearly foreseen and imminent
." 
(emphasis added).    54. The SAA's elaboration that the "'reasonabl y foreseeable time' ... normally will exceed the 
'imminent' time frame applicable in a threat of inju ry analysis" is inconsistent with the Article 3 and 
Article 11.3 of the Anti-Dumping Agreement. 
 55. Further, the "reasonably foreseeable time,"  defined by the US statute, which the SAA 
interprets as an ambiguous and undefined term "in th e longer term," is inconsistent with the Anti-
Dumping Agreement that requires the determination to be based on injury upon "expiry" of the order.   
 
C. T
HE DEPARTMENT ACTED INCONSISTENTLY WITH ARTICLE 2.1 AND 2.4 OF THE ANTI-
DUMPING AGREEMENT BY APPLYING "ZEROING " IN ITS DETERMINATION OF DUMPING 
MARGIN  
56. China agrees with Mexico that the marg in of dumping calculated using the "zeroing" 
methodology in the Department forth administrative re view is inconsistent with the Article 2.1 and 
2.4 of the Anti-Dumping Agreement.  57. The practice of "zeroing" selectively calculates margins only for those sales of a product with positive margins, setting negative margins produced  from sales of the product to zero.  This 
methodology thus creates an artificially inflated dumping margin.  As discussed below, a "dumping" 
determination based on margins with the "zeroing" prac tice is inconsistent with Articles 2.1 and 2.4.  
 58. Article 2.1 of the Anti-Du mping Agreement states that: 
 
For the purpose of this Agreement, a product is  to be considered as being dumped, i.e. 
introduced into the commerce of another count ry at less than its normal value, if the 
export price of the product exported from one  country to another is less than the 
comparable price, in the ordinary course of  trade, for the like product when destined 
for consumption in the exporting country.
27  
59. The term "a product" under Article 2.1 clarifie s that the margin of dumping, i.e., the basis of 
the determination of "dumping," must incorporate all types of the product that are subject to a 
particular anti-dumping proceeding.   
 60. The Appellate Body in EC - Bed Linen  has stated, "from the wording of this provision, it is 
clear to us that the Anti-Dumping Agreement concerns the dumping of a product."
28  The Appellate 
Body in EC-Bed Linen  further clarified this point:  
 
"[a]ll references to the establishment of "the existence of margins of dumping" are references to the product  that is subject of the inv estigation.  …  Whatever the 
method used to calculate the margins of dum ping, in our view, these margins must be, 
and can only be, established for the product  under investigation as a whole
.29" 
61. The Appellate Body in EC – Bed Linen  also confirmed, "dumping is a determination made 
with reference to a product from a particular prod ucer [or] exporter, and not with reference to 
                                                      
27 Article 2.1 of the AD Agreement. 
28 Appellate Body Report, EC -- Bed Linen , para. 51. 
29 Appellate Body Report, EC – Bed Linen , para. 53.  WT/DS282/R 
 Page B-27 
 
 
 individual transactions."30  Article 2.1 thus provides that dumpi ng must be determined on the basis of 
all types of a product under consideration as a whole, not some types of the product.    62. Article 2.4 requires the authorities to make "a  fair comparison" between the export price and 
the normal value. The Appellate Body in EC - Bed Linen  clarified that the "fair comparison" required 
in Article 2.4 and the "price comparability" define d in Article 2.1 mean that the establishment of 
dumping margins must be made by evaluating the pr oduct under consideration as a whole, not just a 
portion of the product.  The Appellate Body stated "[ a]ll types or models falling within the scope of a 
'like' product must necessarily be 'comparable.'"
31  It then further stated that: 
 
"[T]he European Communities argues on the b asis of the "due allowance" required by 
Article 2.4 for "differences in physical char acteristics" that distinctions can be made 
among different types or models of co tton-type bed linen when determining 
"comparability".  But here again we fail  to see how the Eur opean Communities can 
be permitted to see the physical characteris tics of cotton-type bed linen in one way 
for one purpose and in another way for another.32" 
63. The Appellate Body in US – Sunset Review of Steel from Japan  confirms that "zeroing" 
methodology will tend to inflate the margins calcula ted either in an original investigation or 
otherwise.  The report states:  
When investigating authorities use a zeroi ng methodology such as that examined in 
EU-Bed Linen to calculate a dumping margin, whether in an original investigation 
or otherwise, that methodology will tend to inflate the margins calculated .  Apart 
from inflating margins, such a methodology c ould, in some instances, turn a negative 
dumping margin of dumping into a positive dumping margin of dumping.  As the Panel itself recognized in the present dispute, "zeroing … may lead to an affirmative 
determination that dumping exists where no dumping would have been established in 
the absence of zeroing".  Thus, the inherent bias in zeroing methodology of this kind may distort not only the magnitude of a dumping margin, but also finding of the very existence of dumping. (emphasis added) 
64 The United States makes the following statement in its First Submission:
33 
 
"[I]n Japan Sunset, the Appellate Body f ound that it was unable to make findings on 
whether the United States acted inconsistently  with Article 2.4 or Article 11.3 of the 
ADA by relying on dumping margins from administrative reviews in making its likelihood determination in a sunset review .  Consequently, there were no findings in 
that report relevant to this dispute." 
65. However, the Appellate Body in US – Sunset Review of Steel from Japan made the following 
findings and conclusions:  
"[R]everses the Panel's findings, in paragraphs  7.170, 7.184, and 8.1(d) (iii) of the 
Panel Report, that the United States did not act inconsistently with Article 2.4 or 
Article 11.3 of the Anti-Dumping Agreement by relying, in the CRS sunset review, 
                                                     
 
30 Appellate Body Report, European Communities -- Anti-Dumping Duties on Imports of Cotton-Type 
Bed Linen from India, Recourse to Article 21.5 of the DSU India ("EC – Bed Linen (Article 21.5 – India)" ), 
WT/DS141/AB/RW (8 April 2003), para. 143. 
31 Appellate Body Report, EC – Bed Linen , para. 58. 
32 Ibid. para. 60. 
33 US First Submission, para. 213. WT/DS282/R 
Page B-28  
 
 on dumping margins calculated in previous administrative reviews allegedly using a 
"zeroing" methodology; but finding that  there is not a sufficient factual basis
 to 
complete the analysis of Japan's claims on this issue. (emphasis added). 
66. The Appellate Body in US – Sunset Review of Steel from Japan  confirms that "zeroing" 
methodology will tend to inflate the margins calcula ted either in an original investigation or 
otherwise.  However, just due to there is no suffici ent factual basis, the Appellate Body did not make 
any finding.  67. Mexico in its First Submission presented a table to prove that the Department adopted 
"zeroing" methodology in its fourth administrative review in calculating dumping margin for Hylsa.
34 
 
68. China therefore respectfully requests that the Panel carefully review the evidence to confirm 
if the Department adopted zeroing methodology to fi nd that 0.79 per cent dumping margin to Hylsa.  
If the Panel finds that the Department applied the zeroing methodology to find the positive dumping 
margin, the Department's determination in the four th administrative review was inconsistent with 
Article 2.1 and 2.4 of the Anti-Dumping Agreement. 
 
III. CONCLUSION 
 
69 China hereby wishes to thank the Panel for providing it with an opportunity to comment on the issues involved in this proceeding, and hop es that these comments will prove to be useful. 
 
 
                                                     
 
34 Mexico First Submission, para. 23-24.  WT/DS282/R 
 Page B-29 
 
 
  
 
ANNEX B-3 
 
 
THIRD PARTY SUBMISSION OF TH E EUROPEAN COMMUNITIES 
  
I. SUNSET REVIEW "AS APPLIED" 
 
A. L IKELY RECURRENCE OF DUMPING  
1. A sunset review necessarily involves an historical analysis, including a dumping 
determination, which must be  consistent with Article 2 ADA .  USDOC made a determination of likely 
recurrence  of dumping.  The historical basis for th e recurrence determination was the dumping 
margin calculated in the original period of inv estigation (1 January to 30 June 1994).  The events 
USDOC found likely to recur are thus those that occurred during that period. 
 2. With the US method, a dumping measure could be perpetuated indefinitely, on the basis of the calculation made in relation to the original invest igation period, together with the prospective part 
of the likely recurrence determination.  That  is inconsistent with Article 11.1 and 11.3  ADA .  
Article 11.1  ADA states a general and overarching principle in the light of which Article 11.3 must be 
interpreted.  Only as long a s there is dumping can there be an anti-dumping duty.  A dumping 
determination in relation to the orig inal investigation period has a limited "shelf-life".  There must be 
a sufficiently recent determination of dumping , not just a determination concerning imports .  The 
minimum meaning of Article 11.3 ADA is that, to continue the measure beyond 5 years, a dumping 
determination more recent than that made in the original investigation is necessary. 
 
3. If the historical dumping determination relates only to the original investigation period, some new facts must be added for the prospective determ ination.  The additional fact relied on by USDOC 
was that post-order export volumes were well below pr e-order export volumes.  This was insufficient.  
There are many reasons why imports from one Member  to another might have been at a particular 
level prior to the order, and not increased after the or der, other than the existence of the order itself.  
A sufficient and fair consideration of those reaso ns cannot be made if the factual basis for the 
determination is as narrow as that used by USDOC.  4. Identifying facts relevant to a prospective determination is problematic.  Reasons assume a 
particular importance.  A sufficiently detailed and persuasive set of reasons is necessary.  USDOC 
failed to review  the (highly unusual) reasons that gave ri se to the original dumping determination, 
imposing a duty of 21.7 per cent (instead of 0 per cent) on all firms some 12 years, 2 months and 
9 days  later.  That determination neither meets the "likely" standard nor corresponds to a 
determination made by an objective and even-handed au thority.  The most that could be said is that 
USDOC established likely recurrence of dumping within the meaning of the Tokyo Round AD Code .  
That is not enough.  USDOC must establish lik ely recurrence of dumping within the meaning of 
Article 2 of the ADA .  
 B. L
IKELY RECURRENCE OF INJURY  
5. The provisions of Article 3  ADA apply mutatis mutandis  in the context of a sunset review 
investigation.  The likely injury  for the purposes of Article 11.3 ADA  need not be imminent.  
A determination of likely injury within a reasonabl y foreseeable time would be based on a permissible WT/DS282/R 
Page B-30  
 
 interpretation of the ADA .  A cumulative analysis of injury is permissible in a sunset review, provided 
that the conditions set out in Article 3.3 ADA  are fulfilled.  The conditions should be fulfilled, if not at 
the time of the sunset review, at least within the reasonably foreseeable future. 
 
II. SPB AND CONSISTENT PRACTICE "AS SUCH" 
 6. The SPB is "as such" reviewable by  this Panel for consistency with the ADA . 
 7. The SPB is a useful tool for authorities and participants in anti-dumping proceedings.  
However, provisions that create "irrebuttable" presump tions, or "predetermine" a particular result, are 
inconsistent with the ADA .  The US anti-dumping system is skew ed towards findings of likelihood in 
sunset reviews. This case is just one more par ticularly egregious example.   The suggestive language 
of the SPB makes an important contribution towards that state of affairs.   8. The drafters of the ADA  contemplated the possibility of a recidivist dumper, and inserted 
provisions in the ADA  to address that scenario.  These provisions would have no purpose if, once a 
measure was in place, it was never terminated.  It ma kes a difference in the US system if a measure is 
in place with a zero cash deposit rate.  There is, in th e US system, a chilling effect.  If, in the long run, 
USDOC always  found likelihood and never  terminated, it would be possi ble to conclude in general 
terms that the US was not complying with its obligations under Article 11.3 ADA .  The Panel should 
thus consider the history of past sunset  cases and draw the appropriate conclusions. 
 
III. FOURTH PERIODIC REVIEW OF AMOUNT OF DUTY 
 
A. Z
EROING  
1. Article 2.4 ADA 
 (a) Overarching and independent obligation 
 9. The first sentence of Article 2.4  ADA  establishes a general principle - an overarching 
obligation to make a fair comparis on between export price and normal va lue.  That is an independent 
and separate obligation on Members.  It is more th an a mere introduction to the following sentences of 
Article 2.4. 
 10. This is confirmed by the fact that the text of the Uruguay Round ADA  contains an important 
and significant innovation by comparison with the text of the Tokyo Round AD Code .  The words 
"fair comparison … between the export price and th e normal value" were lifted up and placed on their 
own in a new first sentence of Article 2.4. 
 (b) US zeroing unfair  11. Given the common and ordinary meaning of the word "fair", the obligation to make a fair or 
equivalent comparison must necessarily normally in volve a fairly balanced comparison, being one 
based on equivalent methodologies – that is, a symmetrical comparison.  A symmetrical comparison 
for the purposes of calculating a dumping margin and eventually imposing a duty, in relation to a 
given product or time, is necessarily one that precludes zeroing.  12. The inherent unfairness of the zeroing method u sed by the US, and the dramatic effect it can 
have on the outcome of the calculation is illustrated in table 1.  Table 1 shows a hypothetical dumping 
calculation for three models (A, B, C) and four customers (1 to 4).  Without zeroing the dumping margin is 2.8 per cent.  With model zeroing the dum ping margin is 4.7 per cent.  With simple zeroing 
the dumping margin is 6.7 per cent.  Thus, the effect  of the zeroing method used by the US in periodic  WT/DS282/R 
 Page B-31 
 
 
 reviews of the amount of duty is that, even if an  exporter's selling prices and quantities are identical to 
those examined in the original investigation, USDOC will find a higher dumping margin, simply because it has switched from model zeroing to simple  zeroing. If model zeroing in an original 
investigation does not involve a "fair comparison" as required by Article 2.4 ADA , it cannot be that 
simple zeroing, which leads to an even higher margin of dumping, constitutes a fair comparison. 
 
13. These conclusions are confirmed if one consid ers the situation from the exporter's point of 
view. Having been made subject to a duty following the original investigation, an exporter will wish 
to raise its prices to eliminate dumping.  However, the removal of the original margin of dumping will 
not prevent the exporter from being subject to the further imposition of a duty following a US periodic 
review of the amount of duty, unless the exporter actually increases its prices by more than  the margin 
of dumping.  In the example in table 2, even if the exporter raises its prices so as to eliminate the 
margin of dumping found by USDOC in the orig inal investigation, USDOC will still calculate a 
margin of dumping of 3.6 per cent.  This cannot be  consistent with the ge neral overarching principle 
that comparisons between normal value and export price be fair. 
 
14. Another aspect of the inherent unfairness of  the zeroing methodology used by the US in 
periodic reviews of the amount of duty is illustrated in  table 3.  In the logic of the US, an exporter's 
liability for anti-dumping duties may depend entirely on the frequency and size of its sales in the US.  
Two exporters, A and B, both sell 1.000 units of an  identical product to the same customer in the 
US at an average price of $100 per unit, normal valu e also being $100.  Exporter A chooses to sell at 
the same time in one large transaction, whilst exporter B chooses to sell at five different times in five 
separate transactions.  USDOC will calculate a dumping margin of zero for exporter A, and a 
dumping margin of 4 per cent for exporter B, despite the fact that the pricing policy of both is the 
same to the same customer, and the return on their e xport sales is identical.  This is an absurd result.  
In effect, the US appears to be making its assessment  on the basis that exporter B is engaged in some 
kind of targeted dumping simply because its shipment s are carried out as five transactions instead of 
one.  There is nothing in Articles 2.4 or 2.4.2 ADA  that would permit this, as there is nothing in those 
provisions that would permit a targeted analysis on  the basis of the model zeroing condemned in the 
EC – Bed Linen  case.  In truth, the proposition that expor ter B is engaged in "dumping" in such 
circumstances is an illusion – nothing more than that.  
(c) Existing case law confirms US zeroing unfair 
 15. These conclusions are confirmed by th e findings of the Appellate Body in EC – Bed Linen  
and US – Carbon Steel from Japan  and by the panel Report in US – Softwood Lumber from Canada . 
 
16. In the present case, the zeroing methodology used  by the US involved an inherent bias that 
had the effect of inflating the margin of dumping,  and even of turning a negative margin into a 
positive one.  
2. Article 2.4.2 ADA 
 
(a) Method for comparing normal value and export price 
 17. The main purpose of Article 2.4.2 ADA  is to provide for an exception (asymmetrical 
comparison in the case of targeted dumping) to  the normal methods of comparison (symmetrical 
comparison) in order to ensure a fair co mparison within the meaning of Article 2.4 ADA.   T h e  
US acted inconsistently with the ADA  for three reasons : use of the asymmetrical method when 
neither the first nor second conditions were fulfilled;  and failure to use a symmetrical method when 
that was the only lawful option.  
 WT/DS282/R 
Page B-32  
 
 (b) Simple zeroing 
 18. Just as an anti-dumping proceeding concerns "a  product" (the subject product), so it also 
concerns a margin of dumping based on a comparison of sales made at as nearly as possible "the same 
time" (the investigation or review period).  Just as the  ADA  contains no express rule governing the 
definition of the "subject product", so it contains no express rule governing the definition of the period 
of investigation or the period of review.  The "sam e time" might be a shorter period or a longer period 
(such as a year).  Just like product characteris tics, time (along with geography) is typically a 
parameter by reference to which markets – that is, categories of goods or services with a certain competitive relationship or degree of comparability - are defined. Just as the US defined the "subject 
product", so the US defined the period of review
, and decided to calculate a single dumping margin 
for that period of review . Just as in the case of "model zeroing", having defined the period of review, 
and having decided to calculate a single overall dumping margin for that period of review, the US was 
obliged to ensure that the dumping margin for that period of review was calculated in conformity with 
Articles 2.4 and 2.4.2 of the  ADA.   The US had become bound by its own logic. 
 
19. The reasoning of the Appellate Body in the EC – Bed Linen  case in relation to model zeroing 
also applies whenever an investig ating authority decides to fix the parameters of its investigation, 
whether in relation to subject product, time, level of  trade, region, or any other parameter.  USDOC 
thereby became bound by its own logic, and should ha ve completed its analysis on the basis of the 
same logic. 
 
20. The US decision to calculate a single dumping margin and impose a single rate of duty in 
relation to "the same time" (the period of review ), means that whichever of the two methods would 
have been chosen, simple zeroing would not have ar isen or would have been impermissible.  Thus, 
since the US used simple zeroing, it must necessarily  have acted inconsistently with Articles 2.4 and 
2.4.2  ADA . 
 (c) During the investigation phase  21. The words "during the inves tigation phase" in Article 2.4.2 ADA  do not mean that the 
methodologies set out in that provision are irrelevant to the present case. 
 
22. First, the "periodic review of amount of duty" carried out in the US must be consistent with 
the provisions of Article 9 ADA , which expressly provide that the amount of duty shall not exceed the 
margin of dumping calculated under Article 2.  
23. Second, the term "investigation" and "review"  are not mutually exclusive.  There is no 
definition of the terms "investigation" or "review" in the ADA .  Those words are used in many 
different senses. including initial or original invest igation within the meaning of Article 5 of the 
Agreement ; and in the more general sense of Article 6 of the Agreement , which must apply to the 
exercise under scrutiny in this case because of the express cross-reference from Article 11.4 to 
Article 6, and absent the words mutatis mutandis , which are used in Article 11.5 of the Agreement .  It 
is not possible to apply the provisions of Article 6 of the Agreement  in a US periodic review of the 
amount of duty and assert that there is no investigati on, when that word is used repeatedly – there 
must at least be a review investigation, con ducted by investigating authorities.  The word 
"investigation" in Article 2 of the Agreement  has the same general and unqualified meaning as in 
Article 6. If the drafters had intended otherwise, th ey would have inserted words to that effect, which 
they chose not to do.  There is no reason based on context or purpose to conclude otherwise.  The 
Panel should not read into that provision words such as "original" or "initial" or "Article 5" that are 
not there.   WT/DS282/R 
 Page B-33 
 
 
 24. Third, the exercise conducted by the US in a periodic review of the amount of duty 
corresponds, objectively, to an investigation or  assessment by an investigating authority. 
 25. Fourth, Article 2 of the ADA  contains a definition, which goes beyond a cross-reference, and 
is not qualified by the words "unless otherwise specified". 
 
26. Fifth, even if the US would be correct, that would not mean that simple zeroing would be permitted in periodic reviews – it woul d still be prohibited by Article 2.4 ADA , as analysed above. 
 27. Sixth, if the US would be correct on its inte rpretation of the phrase "during the investigation 
phase", that could effectively only mean that the negotiators, when agreeing to transform a commonly 
used method of comparison into an exception subject  to certain conditions, decided to limit the scope 
of application of such method to original investig ations only.  Otherwise, the implication would be 
that that Members could use the exception outside orig inal investigations without being subject to any 
conditions at all.  That would be a very strange conclusion that would be at odds with the overall 
obligation to make a fair comparison in all circumstances.  The United States has offered no context 
or reason to explain why the exception could become  the norm outside original investigations.  The 
European Communities considers that such propos ition, if accepted, would severely undermine the 
overall obligation to make a fair comparison in all margin of dumping determinations. 
 28. Seventh, if the US would be correct in respect of both Articles 2.4.2 and Article 2.4 ADA , that 
would open up in the ADA  a vast loophole on the fundamental issue of how to calculate a dumping 
margin.  29. Eighth, the view expressed by the US woul d appear to be an attempt to create a gross 
distortion between systems of retrospective collecti on and those of prospective collection, for which 
there is no basis in the ADA .  
 
3. Articles 11.1 and 11.2 ADA 
 
30. If an investigating authorit y makes or relies on a dumping determination for the purposes of 
Article 11.2 ADA , it is bound to establish any such dumping margin in conformity with the provisions 
of Article 2.4, including Article 2.4.2 ADA .  
 31. It being temporal  considerations that are at the heart of  this provision, rec ourse to Article 11.2 
ADA  does not provide an opportunity for a Member to switch to making a comparison between 
normal value and export price that is "unfair" within the meaning of Articles 2.4 and 2.4.2 ADA , 
insofar as it involves unlawful zeroing.  To accept that would be to accept a fundamental rupture in 
continuity that would set at naught the word "continue d" in the text of Article 11.2.  This is all the 
more so when the first review period stretches ba ck to the date on which provisional measures were 
first imposed, thus eclipsing entirely the results of the original investigation. WT/DS282/R 
Page B-34  
 
  
Table 1 
 
Model Customer EP NV Amount of 
dumping No zeroing Zeroing 
per model Zeroing by 
transaction 
A 1 95 100 5   5 
A 2 110 100 -10   0 
A 2 95 100 5   5 
A 3 110 100 -10   0 
A 4 115 100 -15   0 
 AVERAGE 105 100 -5  0.0  
B 1 95 110 15   15 
B 2 90 110 20   20 
B 3 100 110 10   10 
B 4 125 110 -15   0 
 AVERAGE 102.5 110 7.5  7.5  
C 1 115 120 5   5 
C 3 95 120 25   25 
C 4 120 120 0   0 
 AVERAGE 110 120 10  10  
        
  1265  MARGIN 2.8% 4.7% 6.7% 
 
Table 2 
 
Initial investigation Review 
Mode
l Customer EP NV Amount 
of 
dumping No 
zeroing Zeroing 
Per 
model EP 
Increased 
by original 
dumping 
amount Zeroing
By trans-
action 
A 1 95 100 5   95 5 
A 2 110 100 -10   110 0 
A 2 95 100 5   95 5 
A 3 110 100 -10   110 0 
A 4 115 100 -15   115 0 
 AVERAGE 105 100 -5  0.0 105  
B 1 95 110 15   102.5 7.5 
B 2 90 110 20   97.5 12.5 
B 3 100 110 10   107.5 2.5 
B 4 125 110 -15   132.5 0 
 AVERAGE 102.5 110 7.5  7.5 110  
C 1 115 120 5   125 0 
C 3 95 120 25   105 15 
C 4 120 120 0   130 0 
 AVERAGE 110 120 10  10 120  
         
  1265  MARGIN 2.8% 4.7% 1325 3.6% 
  WT/DS282/R 
 Page B-35 
 
 
 Table 3 
 
Exporter Transaction Quantity Export Price Dumping 
A 1 1000 100 0 
B 1 200 90 2000 
 2 200 90 2000 
 3 200 100 0 
 4 200 110 0 
 5 200 110 0 
Total/Average     
A  1000 100 0 
B  1000 100 4000 
 WT/DS282/R 
Page B-36  
 
  
 
ANNEX B-4 
 
 
THIRD PARTY SUBMISSION OF JAPAN  
  
(7 May 2004) 
 
 
1. Japan joined this proceeding as a third party because it has systemic concerns with respect to 
the interpretation and the application of the AD Agreement, the GATT 1994 and the WTO Agreement 
with regard to sunset reviews and administrative revi ews.  Japan would like to address the legal issues 
as follows. 
 
A. T HE THREE SCENARIOS IN THE SUNSET POLICY BULLETIN  ARE INCONSISTENT WITH ARTICLE 
11.3  OF THE AD AGREEMENT AS SUCH 
2. Japan agrees with Mexico th at the three scenarios, which the DOC sets forth in Section II.A.3 
of the Sunset Policy Bulletin  to instruct individual sunset review  determinations, are inconsistent with 
Article 11.3. 
 
3. The Appellate Body in US – CRS Sunset Review , as a preliminary jurisdictional matter,  
clarified that the Sunset Policy Bulletin is a measure that is challengeable, as such , under the WTO 
Agreement.1 
 
4. In this dispute, Mexico claims the inconsistency of the Sunset Policy Bulletin  with AD 
Agreement as such.  The Panel, th erefore, must review whether the Sunset Policy Bulletin  satisfies the 
substantive requirements of Article 11.3 of the AD Agreement.  5. As also clarified by the Appellate Body in US – CRS Sunset Review , if the three scenarios in 
the Section II.A.3 of the Sunset Policy Bulletin  are found to be determina tive or conclusive of the 
likelihood of future dumping, they are, as such, inconsistent with Article 11.3. 
2 
 6. In this dispute, Mexico has established that the DOC consistently app lied, and never deviated 
from, the three scenarios in all p ast sunset reviews, and every time it found that at least one of the 
three scenarios was satisfied,  the DOC made thes e affirmative findings of likely dumping without 
considering additional factors. 
 7. The repeated and consistent application of the three scenarios to all sunset reviews could not 
be a coincidence.  Nor were similar facts presented to  the DOC in all previous cases.  It demonstrates 
the DOC's mechanical application to all cases of  the presumption in the three scenarios in the Sunset 
Policy Bulletin  that respondents, who were found to have dumped in the original investigations and 
did not sell more volume than the pre-order level at non-dumped price, are likely to continue or recur 
dumping.  It also demonstrates that the DO C's sunset reviews in accordance with the Sunset Policy 
Bulletin  lack any rigorous or diligent examination of facts underlying individual sunset reviews.  
 
                                                     
 
1 See WT/DS244/AB/R, paras. 87-88. 
2 See WT/DS244/AB/R, para. 178.  WT/DS282/R 
 Page B-37 
 
 
 8. As such, the DOC's mechanical and consiste nt applications without rigorous and diligent 
examination of facts on a case-specific basis well prove  that the three scenarios in the Section II.A.3 
of the Sunset Policy Bulletin  are determinative and conclusive  and are inconsistent with the 
requirements of Article 11.3.    
B. T
HE ITC'S DETERMINATION OF LIKELIHOOD OF CONTINUATION OR RECURRENCE OF INJURY 
WOULD BE INCONSISTENT WITH ARTICLES 3.1, 3.4, 3.5 AND 11.3  OF THE AD AGREEMENT  
1. Provisions of Article 3 Apply to Article 11.3 
 
9. Mexico correctly stated that provisions of Article 3 apply to Article 11.3. 
 
10. The phrase "[u]nder this Agreement" in Footno te 9 of Article 3 ensures that, whenever the 
AD Agreement uses the term "injury," the provisions of Article 3 define the term.  11. The texts of the individual provisions of Articles 3 further clarify that the requirements in 
these provisions apply to a determinat ion of "injury."  Article 3.1 set s forth general requirements for a 
determination of "injury."  The phrase "a determination of injury for purposes of Article VI of GATT 
1994" clarifies its cross-reference that the provisions of Article 3 apply to an "injury" determination 
throughout the AD Agreement to determine circumst ances in which an anti-dumping measure can be 
applied.  The Appellate Body in Thailand – H-Beams  has confirmed that "Article 3.1 is an 
overarching provision that sets forth a Member's funda mental, substantive obligation in this respect.  
Article 3.1 informs the more detailed obligations in succeeding paragraphs."
3 
 12. Article 3.1 requires the authorities to base th eir injury determination on positive evidence and 
objective examination of "the volume of the dumped imports" and "the effect of the dumped imports 
on prices."  Article 3.2 then sets forth further ru les on how the authorities shall consider these two 
elements.  In this way, Article 3.2 informs Artic le 3.1 and all other provisions of the AD Agreement 
of the analytical methods that the authorities must follow for making an injury determination.  13. Article 3.1 also provides that the authorities must base their injury determinations on positive 
evidence and objective examination of "the c onsequent impact of these imports on domestic 
producers of such products."  Article 3.4 then set s forth how "the impact of dumped imports on the 
domestic industry" must be examined.  Article 3. 4 thus provides the detailed requirements for the 
examination of the impact of dumped imports under Ar ticle 3.1, and therefore, for a determination of 
injury.  The authorities must satisfy the requirement s in Article 3.4 to determine "injury" in any 
proceedings under the AD Agreement.  
14. Article 3.5 provides that injury "within the meaning of this Agreement" must be caused by 
dumped imports through the effects of dumping as set forth in paragraphs 2 a nd 4.  The phrase "injury 
within the meaning of this Agreem ent" ensures that the provisions of Article 3.5 further define the 
term "injury" whenever the term "injury" a ppears in this Agreement.  The causation and non-
attribution requirements under Article 3.5, therefore,  must be satisfied to make a determination of 
"injury."   
 
15. The phrase "likely to lead to continuation or recurrence" in Article 11.3 does not change the 
core concept of "injury," as is the case  of "dumping" as the Appellate Body in US – CRS Sunset 
Review .
4 The terms "continuation or recurrence" demonstr ate the drafters' intent that the authorities 
must first find the current state of injury to the do mestic industry, and then how the current state is 
likely to change.  The modifying phrase therefore does not affect the applicability of Article 3 to 
                                                      
3 See, WT/DS122/AB/R, para.106. 
4 See WT/DS244/AB/R, para.109. WT/DS282/R 
Page B-38  
 
 Article 11.3.  The provisions of Article 3, therefore, apply to "injury" determin ations in sunset reviews 
under Article 11.3.  
2. The ITC Would Have Acted Inconsistently with Articles 3.4 and 11.3 
 16. Japan agrees with Mexico that  the authorities must evaluate all relevant economic factors and 
indices as set forth in the Article 3.4 in sunset reviews.   17. It seems to us that Mexico submitted convi ncing evidence that the ITC did not evaluate 
certain factors mandated by Article 3.4 for determining injury.   
 
18. We note that the ITC's evaluation of the magnitude of the margin of dumping, even if the ITC were to evaluate it, would be inc onsistent with Article 3.4.  The ma gnitude of the margin of dumping 
is a factor that the ITC must evaluate in accordance with Article 3.4.  If the ITC did not evaluate this 
factor, the ITC's injury determination is inconsistent with Article 3.4.  As Mexico has established, the 
DOC had no positive evidence which would show that the OCTG market would be under the 
conditions similar to those at the time of the pre-AD order.  The ITC's evaluation of the magnitude of 
the margin of dumping was, thus, not supported by  positive evidence required by Article 3.1, and, 
therefore, is inconsistent with Articles 3.1 and 3.4.  
3. The ITC Would Have Acted Inconsistently with Articles 3.5 and 11.3 
 
19. The first sentence of Article 3.5 expressly stat es that the authorities must demonstrate that the 
effects of "dumping" actually caused the injury.    20. Further, the "non-attribution" requirement in the second and third sentences of Article 3.5 
requires that the authorities explicitly separate and distinguish the injurious effects of other injury 
factors from the injurious effects of the dumping.
5 
 21. Japan, therefore, respectfully requests that  the Panel carefully review whether the ITC 
demonstrated that the likely injury to the domestic industry was caused by the effects of dumping and 
whether the ITC separated and distinguished effects of all known factors to the likely injury to the 
domestic industry from the effects of dumping. 
 C. T
HE DOC'S DETERMINATION IN THE FOURTH REVIEW NOT TO REVOKE THE ANTI-DUMPING 
MEASURES BASED ON THE DUMPING MARGINS CALCULATED WITH ZEROING 
METHODOLOGY IS INCONSISTENT WITH ARTICLES 11.2  AND 2.4 OF THE AD AGREEMENT  
1. Article 11.2 Reviews are Subject to Disciplines in Article 2 
 
22. The Appellate Body clarified that the disci plines in Article 2 of the AD Agreement are 
applicable to any determination of "dumping," and dumping margins, in any kind of AD proceedings, 
unless otherwise indicated in the provisions which set forth such proceedings.  A determination of dumping, including likelihood of dumping under Article 11. 3, therefore, would be inconsistent with 
Article 2.4 (and Article 11.3), if it relies on the dum ping margins calculated in a manner inconsistent 
with Article 2.4.
6 
 23. The DOC's revocation review in questi on was conducted under Article 11.2 of the AD 
Agreement.  As is the case of Article 11.3, Article 11.2 does not contain any language, which 
indicates that "dumping" has a different meaning in the context of such proceedings from that in the 
                                                     
 
5 See WT/DS184/AB/R, paras. 222-223. 
6 See, WT/DS244/AB/R, paras. 109 and 127.  WT/DS282/R 
 Page B-39 
 
 
 rest of the AD Agreement.  Therefore, the disci plines of Article 2 apply with equal force to the 
determination of "dumping" and calculation of the dumping margins, including those for the reviews 
under Article 11.2.  
2. The Zeroing Methodology for Calculating Dumping Margins Is Inconsistent With 
Article 2.4   
 
24. The "zeroing" occurs when the authorities calc ulate the dumping margins in two steps.  At the 
first step, the authorities calculate dumping margins of various sub-groups of  all export transactions 
separately.  At the second step, the authorities add up these individual margins to obtain the overall 
margin of dumping, but setting negative individual margins to zero. 
 25. The Appellate Body in EC – Bed Linen  clarified that such zeroing methodology is 
inconsistent with Articles 2.4 and 2.4.2.  It f ound that the EC's methodology "inflated the result from 
the calculation of the margin of dumping" and was inconsistent with "fair comparison" because it 
"did not take fully into account the entirety of the prices of  some  export transactions, namely, those 
export transactions involving models of cotton-type bed linen where 'negative dumping margins' were 
found."
7 
 26. The Appellate Body in US – CRS  Sunset Review also confirmed the above-stated rationales 
for prohibiting the zeroing methodology, and further stated that the zeroing not only distorts the 
magnitude of the dumping margin, but may distor t a finding of the very existence of dumping.
8 
 27. Thus, the zeroing methodology to calculate dumping margins, whether in an original investigation or otherwise, is in consistent with Article 2.4.  
 3. The DOC Uses Zeroing Methodology to Calculate Dumping Margins in Its 
Administrative Reviews, and Thus the Calculation Is Inherently Inconsistent with Article 2.4 
 
28. The above rationale squarely applies to the DOC's dumping margin calculation methodology 
in administrative reviews.  In administrative re views, the DOC calculates the dumping margins using 
a weighted average-to-transaction method.  Under th is method, at the first step, the DOC calculates 
the dumping margin of each individual export transaction.  If there are 100 export transactions, for example, the DOC calculates 100 different dumping margins.  The DOC then calculates the total dumping margin of all export transactions.  The DO C, however, does not simply add all 100 dumping 
margins.  In adding these margins,  the DOC turns negative dumping margins to zero.  In effect, the 
DOC adds only positive dumping margins of indivi dual transactions to reach the total dumping 
margin.  29. Thus, there is no methodological differen ce between the EC's method challenged in EC – Bed 
Linen  and the DOC's method in administrative reviews in applying the zeroing methodology to the 
individual negative margins at the second calcu lation step.  The DOC's method of zeroing in 
administrative reviews is, therefore, equivalent to, if not worse, the zeroing methodology which was 
disputed and found to be inconsistent in EC – Bed Linen . 
 
                                                     
 
7 See, WT/DS141/AB/R, para. 55. 
8 See, WT/DS244/AB/R, para. 135. WT/DS282/R 
Page B-40  
 
 30. As demonstrated by Mexico, the DOC's dete rmination not to revoke the AD order against 
OCTG from Mexico relied on dumping margins whic h were calculated on the basis of the zeroing 
methodology.  Therefore, the DOC's determination is inconsistent with Articles 2.4 and 11.2.  
   WT/DS282/R 
 Page B-41 
 
 
  
 
ANNEX B-5 
 
 
THIRD PARTY SUBMISSION OF THE SEPARATE CUSTOMS 
TERRITORY OF TAIWAN, PE NGHU, KINMEN AND MATSU 
 
 
(28 April 2004) 
  
TABLE OF CONTENTS 
  
Page
 
 
 
I. INTRODUCTION……………………….………………………………………………..B-42  
 
II. LEGAL ARGUMENTS…………………………………………………………………..B-42 
 
A. THE STATEMENT OF ADMINISTRATIV E ACTION (SAA) AND THE SUNSET 
REVIEW BULLETIN (SPB) CAN BE CHALLENGED AS SUCH…………………......B-42 
 B. THE SAA AND THE SPB VIOLATE THE OBLIGATION IN ADA ARTICLE 11.3 TO 
TERMINATE THE DUTY NO LATER THAN FIVE YEARS FROM THE DATE OF THE IMPOSITION, UNLESS THE CONDITIONS SET FORTH IN THE PROVISION ARE MET…....................................................................................................................... ..B-44 
 
1. The explicit obligation contained in Article 11.3 of the ADA is the termination of the 
anti-dumping duty within five years, unless the conditions set forth in the provision are met....…....................................................................................….................B-4 4 
 
2. The SAA and the SPB are inconsistent with the "likely" standard in Article 11.3 of 
the ADA…..……………………………………………......................................................B-45 
 3. The burden is erroneously assigned to exporters instead of remaining with the 
investigative authority………… …………………………………................ ....................B-47 
 C. ARTICLE 3 OF THE ADA APPLIES TO ARTICLE 11.3 SUNSET  
INVESTIGATIONS.............................................................................................................B-47  
 
III. CONCLUSION………….……………………..……………………………………........B-48 
 WT/DS282/R 
Page B-42  
 
 I. INTRODUCTION 
 
1. The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu presents this third 
party submission because of its systemic interest in  the interpretation of Article VI of the General 
Agreement on Tariffs and Trade of 1994 (GATT) a nd the Agreement on Implementation of Article VI 
of the General Agreement on Tariffs and Trade 1994 (ADA) with respect to sunset reviews.  
In particular, this third party submission will address the following issues:   - the ability of the Statement of Administrative Action (SAA) and the Sunset Policy 
Bulletin (SPB) to be challenged as such; 
 
 - the inconsistency of the SAA and the SPB with the ADA Article 11.3 obligation to 
terminate  the duty no later than five years from the date of the imposition, unless the 
conditions set forth in the Article are met;  and 
 
 - the applicability of Article 3 of the ADA in sunset reviews. 
 2. The Separate Customs Territory of Taiwan , Penghu, Kinmen and Matsu considers that the 
limited scope of this submission does not prejudice its position on the other claims raised by Mexico 
in this dispute.  Accordingly, the Separate Cu stoms Territory of Taiwan, Penghu, Kinmen and Matsu 
reserves its right to raise the issues not contained in this written submission in the oral statement. 
 
II. LEGAL ARGUMENTS 
 
A. T
HE STATEMENT OF ADMINISTRATIVE ACTION (SAA) AND THE SUNSET POLICY BULLETIN 
(SPB) CAN BE CHALLENGED AS SUCH 
2. The Separate Customs Territory of Taiwan , Penghu, Kinmen and Matsu agrees with Mexico 
that the SAA and SPB are "measures" that can be challenged as such.1  In US – Sunset Review of Steel 
from Japan , the Appellate Body reversed "the Panel fi nding…that the Sunset Policy Bulletin is not a 
mandatory legal instrument and thus is not a measu re that is 'challengeable', as such, under the Anti-
Dumping Agreement  or the WTO Agreement ."2  Though the Appellate Body stopped short of stating 
that the SPB in itself  is an "administrative procedure" w ithin the meaning of ADA Article 18.4 and 
therefore a measure, the Appellate Body, in ex amining specific as such claims by Japan on 
Sections II.A.2, 3, and 4 of the SPB, did consid er those provisions as measures, and entertained 
Japan's as such challenges.3  Similarly, in this case, these same provisions, and others, of the SPB can 
certainly be considered measures capable of being challenged as such.  
3. Neither the Panel nor the Appellate Body addr essed the nature of the SAA to be challenged as 
such in US – Sunset Review of Steel from Japan  because the claim was not raised by Japan.
4  
However, in its examination of the SPB, th e Appellate Body cite d its own report in Guatemala – Anti-
Dumping Investigation Regarding Portland Cement from Mexico  in observing the broad scope of 
                                                      
1 First Submission of Mexico, 24 March 2004, paras. 42-46. 
2 United States – Sunset Review of Anti-Dumping Duties on Corrosion-Resistant Carbon Steel Flat 
Products from Japan  (US – Sunset Review of Steel from Japan), Appellate Body Report, WT/DS244/AB/R, 
paras. 100, 212. 
3 Id., paras. 156 and 169. 
4 The United States does not seem to be refuting Me xico's claim that the S AA can be challenged as 
such.  Nevertheless, this submission presents the argume nts with regard to the SAA for consideration by the 
Panel in case the United States raises the issue in future submissions.  WT/DS282/R 
 Page B-43 
 
 
 "measures" that could be subject to WTO disput e settlement, including "non-binding administrative 
guidance".5  The Appellate Body further stated that, 
 
instruments of a Member containing rules or norms  could constitute a "measure", 
irrespective of how or whether those rules or norms are applied in a particular 
instance.  This is so because the discip lines of the GATT and the WTO, as well as the 
dispute settlement system, are intended to protect not only existing trade but also the security and predictability needed to conduct future trade.  This objective would be 
frustrated if instruments setting out rules or norms  inconsistent with a member's 
obligations could not be brought before a pa nel … It would also lead to a multiplicity 
of litigation if instruments embodying rules or  norms could not be challenged as such, 
but only in the instances of their application.
6 [emphasis added] 
4. In reversing the Panel's conclusions that th e SPB is not a mandatory legal instrument and 
therefore cannot be challenged as such under the WTO,  the Appellate Body also faulted the Panel for 
concentrating too much on the mandatory/discretionary distinction7, and failing to recognize the 
undue limitations the SPB has on the US De partment of Commerce's determinations8 and thus the 
"normative nature" of the provisions9. 
 5. According to the Appellate Body, therefor e, a "non-binding administrative guidance" 
containing "rules or norms" can constitute a "measure".  Furthermore, even if the measure is non-mandatory, it can be challenged as such if it improperl y limits the factors to be taken into account by 
the investigating authorities in making determinati on in a sunset review as to become normative in 
nature.    6. The SAA, following the Appellate Body reasoni ng outlined above, is a measure capable of 
being challenged as such.  As Mexico has pointed out, the SAA contains three criteria or rules that the 
United States believes to be "highly probative" of likely dumping.
10  The introduction of the SAA also 
confirms that,  
this Statement represents an authoritative expression by the Administration concerning its views regarding the interp retation and application of the Uruguay 
Round agreements … Furthermore, the Administration understands that it is the 
expectation of the Congress that future Administrations will observe and apply the 
interpretations and commitments set out in this Statement .  Moreover, since this 
Statement will be approved by the Congr ess at the time it implements the Uruguay 
Round agreements, the interpretations of tho se agreements included in this Statement 
carry particular authority.
11 [emphasis added] 
                                                      
5 Id., para. 85. 
6 Id., para. 82. 
7 Id., para. 93. 
8 Id., para. 97. 
9 Id., para. 98. 
10 First Submission of Mexico, para. 91. 
11 Statement of Administrative Action, H.R. 5110, H.R. Doc. 316, Volume 1, 103d Congress, 2nd 
Session, 656 (1994), page 656. WT/DS282/R 
Page B-44  
 
 7. The SAA has been approved by Congress.
12  The investigating authority, as part of the 
Administration of the United States, is expected by Congress to "observe and apply" the SAA.  This is 
language which indicates that the SAA is intended to  be normative; the Administrative does not have 
the discretion to deviate from the SAA in its im plementation of the Urugua y Round agreements.  And 
in practice, as Mexico has demonstrated in E xhibit MEX-62, the US Department of Commerce 
follows the interpretation of the SAA, which is furt her elaborated by the SPB, in every sunset review 
case.  Based on these facts, the SAA is certainly  a measure that can be challenged as such. 
 B. T
HE SAA AND THE SPB VIOLATE THE EXPLICIT OBLIGATION IN ADA ARTICLE  11.3  TO 
TERMINATE THE DUTY NO LATER THAN FIVE YEARS FROM THE DATE OF THE IMPOSITION , 
UNLESS THE CONDITIONS SET FORTH IN THE PROVISION ARE MET 
8. The Separate Customs Territory of Taiwan , Penghu, Kinmen and Matsu agrees with Mexico 
that the SAA and SPB are inconsiste nt with ADA Article 11.3 as such.13  Leaving aside the question 
of whether a WTO-inconsistent presumption of th e continuation or recurrence of dumping has been 
created by the SAA and the SPB, as Mexico alleges,14 the SAA and the SPB are nevertheless 
inconsistent with the explicit oblig ation in Article 11.3 of terminati on of the anti-dumping duty within 
five years unless the specific conditions are met.  In particular, this submission will discuss the 
incorrect "likely" standard called for by the S AA and the SPB, and the improper assignment of burden 
on the exporters to provide information and to demonstrate good cause to consider other factors. 
 
1. The explicit obligation contained in Article 11.3 of the ADA is the termination of the 
anti-dumping duty within five years, unless the conditions set forth in the provision 
are met 
 
9. Article 11.3 of the ADA requires at the outset  that "any definitive anti-dumping duty shall be 
terminated on a date no later than five years from its imposition."15  The conditions for the 
continuation of the duty beyond five years are stated in the subsequent depende nt clause following the 
word "unless".  The use of such a grammatical co nstruction suggests that the main sentence, which 
calls for termination no later than five years, shoul d be considered the norm and thus constitutes the 
obligation on Members under Article 11.3, while con tinuation of the duty is the exception, and only if 
the conditions are met.  
                                                     
 
12 19 USC § 3511 
 (a) Approval of agreements and statement of administrative action 
  … the Congress approves –   (1)  … 
 (2) the statement of administrative action pr oposed to implement the agreements that 
   was submitted to the Congress on September 27, 1994. 
13 First Submission of Mexico, para. 88. 
14 Id., paras. 88-109. 
15 The full text of Article 11.3 provides that, 
 
11.3 Notwithstanding the provisions of paragraphs 1 and 2, any definitive anti-dumping duty 
shall be terminated on a date not later than five years from its imposition (or from the date of the most recent review under paragraph 2 if that review ha s covered both dumping a nd injury, or under this 
paragraph), 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 dump ing and injury .
22  The duty may remain in force pending the outcome of such review.  
22 When the amount of the anti-dumping duty is assessed on a retroactive basis, a finding in the most 
recent assessment proceeding under subpar agraph 3.1of Article 9 that no dut y is to be levied shall not be 
itself require the authorities to terminate the definitive duty.  WT/DS282/R 
 Page B-45 
 
 
 10. The Appellate Body in US – Sunset Review of Steel from Japan  agrees with this 
interpretation:  
Article 11.3 imposes a temporal limita tion on the maintenance of anti-dumping 
duties.  It lays down a mandatory rule w ith an exception.  Specifically, Members are 
required to terminate an anti-dumping duty within five years of its imposition 
"unless " the following conditions are satisfied…If any one of these conditions is not 
satisfied, the duty must be terminated.
16 [emphasis original][footnote omitted] 
The Appellate Body further noted the parallel language between Article 11.3 of the ADA and 
Article 21.3 of the Agreement on Subsidies a nd Countervailing Measures (SCM Agreement), and 
affirmed that its similar prior interpretation in US – Carbon Steel  with regard to Article 21.3 of the 
SCM Agreement can be applied mutatis mutandis  to Article 11.3 of the ADA.17 
 11. Article 11.1 of the ADA re-enforces the obligation of termination in Article 11.3.  It states 
that, "[a]n anti-dumping duty shall remain in fo rce only as long as and to the extent necessary to 
counteract dumping which is causing injury."  The Panel in EC – Pipe Fittings from Brazil  explained 
that Article 11.1 contains "a general, unambi guous and mandatory requirement … It furnishes the 
basis for the review procedures contained in Ar ticle 11.2 (and 11.3) by stating a general and 
overarching principle, the modalities of which are set forth in paragraph 2 (and 3) of that Article."
18  
Article 11.1 thus informs Members of the obligatio n to terminate a anti-dumping measure should the 
dumping and injury, and in the case of Article 11.3,  the likelihood of continuation or recurrence of 
dumping and injury, no longer exist. 
 12. A Member may extend an anti-dumping measure only if the conditions for the exception, as 
set forth in Article 11.3 are met.  The text of Article  11.3 is clear that the authorities, in asserting that 
exception, must actively "determine … that the expiry  of the duty would be likely lead to continuation 
or recurrence of dumping and injury."  This active role of the authorities is affirmed by the Appellate 
Body in US – Sunset Review of Steel from Japan , that: 
 
Article 11.3 assigns an active rather than  a passive decision-making role to the 
authorities.  The words "review" and "determine" in Article 11.3 suggest that authorities conducting a sunset review must act with an appropriate degree of 
diligence and arrive at a reasoned conclusi on on the basis of information gathered as 
part of a process of reconsideration and examination.
19   
Any other interpretation or the reversal of the bur den of demonstrating information or evidence in 
order to assert the exception would be inconsistent with Article 11.3. 
 2. The SAA and the SPB are inconsistent with  the "likely" standard in Article 11.3 of 
the ADA 
 
13. One of the conditions for the continuation of the anti-dumping order under Article 11.3 of 
ADA is a determination by the authorities that the e nd of the duty would "likel y lead to continuation 
or recurrence of dumping and injury."  The Separa te Customs Territory of Taiwan, Penghu, Kinmen 
                                                     
 
16 US – Sunset Review of Steel from Japan , Appellate Body Report, para. 104. 
17 Id., Fn. 114.  See also United States – Countervailing Duties on Certain Corrosion-Resistant Carbon 
Steel Flat Products From Germany  (US – Carbon Steel), Appellate Body Report, WT/DS213/AB/R, paras. 63, 
88. 
18 European Communities – Anti-Dumping Duties on Malleable Cast Iron Tube and Pipe Fittings from 
Brazil (EC Pipe Fittings from Brazil), Panel Report, WT/DS219/R, para. 7.113. 
19 US – Sunset Review of Steel from Japan , para. 111. WT/DS282/R 
Page B-46  
 
 and Matsu agrees with Mexico that the SAA a nd the SPB, in interpreting the statue of the 
United States
20 on the revocation of the anti-dumping order, establish a standard that is inconsistent 
with the "likely" standard in Article 11.3.21   
 14. The Appellate Body in US – Sunset Review of Steel from Japan , citing the Shorter Oxford 
English Dictionary, defined the term "likely" as "[h]aving an appearance of truth or fact; that looks as 
if it would happen, be realized, or prove to be what is alleged or su ggested; probable; to be reasonably 
expected."
22  In the next paragraph, the Appellate Bo dy stated that, "an affirmative likelihood 
determination may be made only if the ev idence demonstrates that dumping would be probable  if the 
duty were terminated – and not simply if the evidence suggests that  such a result might be possible or 
plausible ."23 [emphasis added]  The "likely" standard in Article 11.3, therefore, is one of probable 
occurrence.  15. Instead, the SAA and the SPB establish a much looser standard.  The "likely" language in 
Article 11.3 is transformed in the SAA to the much  more uncertain languages of "highly probative of 
the likelihood", "it is reasonable to assume", "may  provide a strong indication," and "highly probative 
of the likelihood."
24  Because of these uncertain indications and assumptions, the SPB directs the 
US Department of Commerce (Department) to determ ine that dumping is likely to continue or recur, 
if,   (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.
25 
 16. Without going into too much detailed analys is, these criteria bear minimal relationship with 
the probable occurrence of dumping in the future.  Import volumes may fluctuate for any number of 
reasons, with or without the anti-dumping duty.  In addition, the imposition of the duty and the 
manner in which the duty is collected
26 may further affect the business decisions of the importers and 
exporters.  The resulting decline or cessation of import s therefore is not surprising, nor should it be an 
indication of the likelihood of future dumping, especially when no other factors are considered. 
 
17. These criteria are based on uncertain indications  and assumptions and simply do not meet the 
higher and more certain "likely" standard.  Theref ore, they are inconsistent with Article 11.3.  
Furthermore, the SAA and the SPB, by establishing a lower standard, violates the presumptive action in Article 11.3 to be taken by the authorities that th e duty is to be terminated no later than five years 
from its imposition unless the conditions for the assertion of the exception are met. 
                                                     
 
20 19 USC § 1675a(c)(1). 
21 First Submission of Mexico, paras. 105-109, 166-175. 
22 US – Sunset Review of Steel from Japan , para. 110. 
23 Id., para. 111. 
24 SAA at 889-890. 
25 Sunset Policy Bulletin, Section II.A.3, at 18872. 
26 The US assesses anti-dumping duties on a retrospec tive basis, by which the final duty is not certain 
until the Department conducts the annual review.  With this system, the importers face more uncertainty with respect to the maximum amount of final anti-dumping duties that will eventually be levied, and thus may affect 
their purchase decision.  WT/DS282/R 
 Page B-47 
 
 
  
3. The burden is erroneously assigned to exporters instead of remaining with the 
investigative authority 
 
18. The SPB recognizes that the above criteria are not only indicators of likelihood of dumping to 
continue or recur: "[t]he Department recognizes that, in the context of a sunset review of a suspended 
investigation, the data relevant to the criteria under paragraphs (a) through (c), above, may not be 
conclusive with respect to likelihood."27  Instead of directing the Department to consider other criteria 
or factors on its own, the statute, the SAA, and th e SPB shifts the burden onto the exporters to show 
that other factors warrant consideration.  The SPB states, 
 
the Department will consider other factors in AD sunset reviews if the Department determines that good cause to consider such other factors exists.  The burden is on an 
interested party to provide information or  evidence that would warrant consideration 
of the other factors in question
28. 
19. By shifting the burden onto the exporters to provide information or evidence, the SPB is 
essentially reaffirming the supremacy and the decisive nature of the historical dumping margin and import volumes as factors in the Department's determin ation of likelihood.  The implication here is 
that if exporters do not demonstrate good cause (and  there is no explanation of what constitutes good 
cause) to consider other factors, the Department w ould automatically take the existence of any one of 
the three above criteria as a demonstration of th e likelihood of the continuation or recurrence of 
dumping, without examining other economic and market factors. 
 20. Article 11.3 simply does not allow such a sh ift of burden.  As already discussed above, the 
obligation in Article 11.3 is the termination of the duty "no later than five years from its imposition."  
The exception, namely, the continuation of the duty, is allowed only if inves tigating authorities have 
properly determined, on the basis of sufficient evidence,  that the expiry of the duty would be likely to 
lead to continuation or recurrence of dumping
29. 
 21. By requiring the exporters to provide inform ation that would warrant the consideration of 
other factors by the Department, the SPB, and by ex tension SAA and the statute, grants the authorities 
the discretion of examining only the historic dumpi ng margin and import volumes, and re-assigns the 
burden on the exporters to produce informati on and to demonstrate good cause to examine other 
factors.  The Department, as a result, can mechan ically apply the three criteria, assuming a passive 
role and relinquishing the requirement of active info rmation gathering by investigating authorities in 
Article 11.3.  The conditions for the assertion of th e exception under Article 11.3 cannot be met if the 
Department follows the SPB, and in the proce ss, the United States ignores the obligation of 
termination pursuant to Article 11.3.  Therefore, the United States violates Article 113 as such. 
 C. A
RTICLE 3 OF THE ADA APPLIES TO ARTICLE 11.3  SUNSET INVESTIGATIONS  
22. The Separate Customs Territory of Taiwan , Penghu, Kinmen and Matsu disagrees with the 
assertion of the United States that Articl e 3 does not apply to sunset reviews.30  The text of Article 
11.3 places on the authorities an obligation to exam ine dumping and injury.  Recalling the statement 
of the Appellate Body in US – Sunset Review of Steel from Japan  cited above, the words "review" and 
"determine" assigns an active role to the authorities,  should the authorities wish  to assert the exception 
in Article 11.3.  While the nature of sunset revi ews differs from an original investigation in that 
                                                      
27 Id. 
28 Id., at Section II.C, at 18874. 
29 US – Sunset Review of Steel from Japan , para. 158. 
30 First Written Submission of the United States of America, 21 April 2004, paras. 238-258. WT/DS282/R 
Page B-48  
 
 Article 11.3 requires a prospective analysis, th e underlying determination to be made by the 
authorities still relates to dumping and injury.    23. In addition to the arguments Mexico has al ready presented in its first written submission
31, the 
Appellate Body ruled in US – Sunset Review of Steel from Japan  that Article 2 applies to the 
calculation of dumping margins in Artic le 11.3 likelihood determination:  
 
Article 2 sets out the agreed disciplines in the Anti-Dumping Agreement  for 
calculating dumping margins … should investigating authorities choose to rely upon dumping margins in making their likelihood de termination, the calculation of these 
margins must conform to the disciplines of Article 2.4.  We see no other provisions in 
the Anti-Dumping Agreement  according to which Members may calculate dumping 
margins.
32 
24. Similarly, Article 3 of ADA must also appl y to the likelihood determination for the likelihood 
of injury, because it represents the agreed disciplin es for the determination of injury, and no other 
provisions of ADA exist upon which Members may make their determination of injury.  Therefore, 
even in the case of prospective injury analysis pursuant to Ar ticle 11.3, the authorities must 
necessarily apply, wherever appropriate, Article 3.  
III. CONCLUSION 
 25. The Separate Customs Territory of Taiw an, Penghu, Kinmen and Matsu takes the position 
that the SAA and SPB are measures capable of be ing challenged as such.  The SAA and SPB, as such, 
violate the explicit obligation under ADA Article 11.3 to terminate the duty no later than five years after the imposition.  Finally, ADA Article 3 applies to  the prospective injury analysis in Article 11.3, 
wherever appropriate. 
 
26. The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu respectfully requests 
that the Panel consider the views presente d above and make its findings accordingly. 
   
                                                     
 
31 First Submission of Mexico, paras. 191-195. 
32 US – Sunset Review of Steel from Japan , para. 127.