WORLD TRADE  
ORGANIZATION  WT/DS350/1 
G/L/786 
G/ADP/D70/1 
3 October 2006 
 
 (06-4600) 
 Original:   English 
 
 
 
UNITED STATES – CONTINUED EXISTENCE AND APPLICATION 
OF ZEROING METHODOLOGY 
 
Request for Consultations by the European Communities  
 
 
 The following communication, dated 2 October 2006, from the delegation of the European Communities to the delegation of the United States and to the Chairman of the Dispute Settlement 
Body, is circulated in accordance with Article 4.4 of the DSU. 
 
_______________ 
 
  The European Communities request consultati ons with the United States of America (the 
"United States") under Article 4 of the Unders tanding on Rules and Procedures Governing the 
Settlement of Disputes (the "DSU"); Article XXII:1 of the General Agreemen t on Tariffs and Trade 
1994 (the "GATT 1994"); and Articles 17.2 and 17.3 of the Agreement on implementation of 
Article VI of the General Agreem ent on Tariffs and Trade 1994 (the " AD Agreement ") with regard to 
the practice and methodologies for calculating dumping margins involving the use of zeroing, and the 
application of zeroing in certain specified anti-dumping measures. 
 
1. The facts 
 
 (a) When carrying out reviews of anti-dumping measures, the United States 
re-investigates and determines the margin of dumping on the basis of a comparison of 
a weighted average normal value for each "averaging group" and individual export 
prices. When adding up the results of these comparisons to determine the total amount or margin of dumping of the product under investigation, the United States 
puts at zero any negative amounts of "dum ping". As a result, the United States 
calculates a margin of dumping and collects an amount of anti-dumping duty in excess of the actual margin of dumping practised by the companies concerned. The 
United States uses this methodology systemati cally in all its annual reviews of anti-
dumping orders, so-called administrative revi ews, and indeed in all types of review 
(including new shipper and changed circumstan ces reviews) in which it is required to 
calculate a dumping margin. 
 
  The Appellate Body, in the case United States – Laws, Regulations and Methodology 
for Calculating Dumping Margins ("Zeroing")  (WT/DS294/AB/R), found that the 
United States' use of zeroing in its "adminis trative reviews" was inconsistent with 
Article 9.3 of the AD Agreement and Ar ticle VI:2 of GATT 1994. The Appellate 
Body also confirmed that the United States Department of Commerce (the "DOC") employed a "zeroing methodology" in calculating the margin of dumping in its 
"administrative reviews" as described above. WT/DS350/1 
G/L/786 G/ADP/D70/1 
Page 2 
  
    This zeroing methodology is applied pursuant, in particular, to: 
 
– the implementing regulation
1 of the DOC, in particular section 351.414(c)(2); 
and 
 
– the Import Administration Antidumping Manual (1997 edition) (the "IA AD 
Manual") including the computer program(s) to which it refers. 
 
  The zeroing methodology described above was applied in the determinations of the 
margin of dumping by the DOC in the fina l results of the anti-dumping administrative 
reviews listed in Annex I, and any assessment  instructions issued pursuant to those 
final results. 
 
 (b) In original investigations, the United States identifies sub-groups of products within 
the product under investigation ("averaging groups") on a per model basis as well as on the basis of other criteria such as the leve l of trade. Within each of the averaging 
groups, a weighted average export price is established and compared to the 
corresponding weighted average normal value. The results of these comparisons on an "averaging group" basis are added up to establish the dumping margin of the 
product under investigation as a whole; however, in this process, any negative 
margins or amounts of "dumping" resulting from the comparison of weighted average normal values with weighted average export prices on an "averaging group" basis are put at zero. As a result, the United States calculates a margin and amount of dumping in excess of the actual margin of dumping pr actised by the companies concerned. The 
panel and the Appellate Body in United States–Laws, Regulations and Methodology 
for Calculating Dumping Margins ("Zeroing")  (WT/DS294/R and WT/DS294/AB/R) 
have confirmed that such a methodology is inconsistent with Article 2.4.2 of the AD 
Agreement. This methodology was used by the DOC for the determination of the margins of dumping in the original inves tigations listed in Annex III, and in any 
automatic assessment instructions issued pursuant to  those measures. 
 
 (c) In sunset reviews, the US makes dete rminations with refe rence to previously 
established margins of dumping which we re usually calculated using a zeroing 
methodology.
2 In the case listed in Annex II, DOC determined that dumping was 
likely to continue or recur if the anti- dumping order were revoked, notably because 
dumping had continued at levels above de minimis  after the issuance of the order. To 
find that dumping had continued after the issuance of the order, DOC relied on 
dumping margins calculated in the original  investigation and in administrative 
reviews using zeroing. 
 
2.  Subject of consultations 
 
 The matters, which the EC would like to raise in the course of the consultations include, but 
are not limited to, the following: 
                                                      
1 19 CFR Section 351. 
2 These dumping margins will normally have been established in original investigations, in which the 
zeroing methodology condemned in DS 2 94 will usually have been used; Sec tion 752(c)(3) of the Tariff Act of 
1930, Section 315.218(e)(2)(i) of the DOC implementing regulation and paragraphs II.B of the Sunset Policy 
Bulletin.  WT/DS350/1 
 G/L/786 
 G/ADP/D70/1 
 Page 3 
  
   (a) The United States regulations, zeroing methodology, practice, administrative 
procedures and measures for determining th e dumping margin in reviews mentioned 
under point 1(a) above and which the EC c onsiders are inconsistent with several 
provisions of the AD Agreement , GATT 1994 and the Marrakesh Agreement 
establishing the World Trade Organization: 
 
• Articles 2.1 of the AD Agreement  and Articles VI:1 and VI:2 of the GATT 
1994, because the US did not determine a dumping margin for the product as a whole ; 
 
• Articles 2.4 and 2.4.2 of the AD Agreement  insofar as the comparison made 
by the United States is inconsistent with those provisions; 
 
• Articles 9.1 and 9.3 of the AD Agreement  insofar as there is as a result the 
imposition and collection of an anti-dumping duty in excess of the margin of dumping determined pursuant to Article 2 of the AD Agreement ; 
 
• Articles 9.5 and 11 (including Articles 11.2 and 11.3) of the AD Agreement  
insofar as the determinations of dumping in review investigations 
contemplated by these provisions are not made in compliance with Article 2 of the AD Agreement ; 
 
• Articles 1 and 2.1 of the AD Agreement  and Articles VI:1 and VI:2 of the 
GATT 1994 insofar as there is as a result the imposition and collection of an anti-dumping duty which is inconsistent with the AD Agreement ; and 
consequently of 
 
• Article XVI:4 of the Marrakesh Agreement establishing the World Trade 
Organization and Article 18.4 of the AD Agreement  insofar as the United 
States has not taken all necessary steps, of a general or particular character, to 
ensure the conformity of its laws, re gulations and administrative procedures 
with the provisions of GATT 1994 and the AD Agreement . 
  (b) The specific anti-dumping administrative reviews listed in Annex I to the present 
request, and any assessment instructions issu ed pursuant to them in which the United 
States applied the regulations, zeroing methodology, practice, administrative 
procedures and measures described under point  1(a) above. As a consequence, the 
European Communities consider that the out come of the administrative reviews as 
detailed in Annex I is inconsis tent with Articles 1, 2.1 2.4, 2.4.2, 9.1, 9.3, 11.2 and 
18.4 of the AD Agreement,  Articles VI:1 and VI:2 of the GATT 1994 and 
Article XVI:4 of the Marrakesh Agreement establishing the World Trade 
Organization for the reasons set out above under point (a).  
  (c) The specific dumping determination in the original investigations  listed in Annex III 
to the present request, and any automatic as sessment instructions issued pursuant to 
them, in which the United States applie d the zeroing methodology described under 
point 1(b) above. As a consequence, the European Communities consider that the 
imposition of definitive duties in the original  investigations detailed in Annex III is 
inconsistent with:  
 WT/DS350/1 
G/L/786 G/ADP/D70/1 
Page 4 
  
  • Articles 2.1 of the AD Agreement  and Articles VI:1 and VI:2 of the GATT 
1994, because the US did not determine a dumping margin for the product as a whole ; 
 
• Articles 2.4 and 2.4.2 of the AD Agreement  insofar as the comparison made 
by the United States is inconsistent with those provisions; 
 
• Article 5.8 of the AD Agreement  insofar as a de minimis  dumping margin is 
erroneously determined to be not de minimis ; 
 
• Articles 9.1 and 9.3 of the AD Agreement  insofar as there is as a result the 
imposition and collection of an anti-dumping duty in excess of the margin or 
amount of dumping as determined pursuant to Article 2 of the AD Agreement; 
 
• Articles 1 and 2.1 of the AD Agreement  and Articles VI:1 and VI:2 of the 
GATT 1994 insofar as there is as a result the imposition and collection of an anti-dumping duty which is inconsistent with the AD Agreement ; and 
consequently of 
 
• Article XVI:4 of the Marrakesh Agreement establishing the World Trade 
Organization and Article 18.4 of the AD Agreement  insofar as the United 
States has not taken all necessary steps, of a general or particular character, to ensure the conformity of its laws, re gulations and administrative procedures 
with the provisions of GATT 1994 and the AD Agreement . 
  (d) The specific Sunset review determinati on in the case listed in Annex II to the present 
request. The United States relied in its de termination on dumping margins that were 
calculated in the original investigation and in administrative reviews using the 
methodology described under point 1(a) above. As a consequence, the European 
Communities consider that the continua tion of the anti-dumping in this case is 
inconsistent with:  
 
• Articles 11.1 and 11.3 of the AD Agreement  insofar as the United States 
relied on a dumping margin which was not established for the product as a whole and not conform to Articles 2.4 and 2.4.2 of the AD Agreement ; 
 
• Articles 2.4 and 2.4.2 of the AD Agreement  insofar as the comparison made 
by the United States is inconsistent with those provisions; 
 
• Articles 2.1 of the AD Agreement  and Articles VI:1 and VI:2 of the GATT 
1994, because the US did not determine a dumping margin for the product as a whole ; 
 
• Articles 9.1 and 9.3 of the AD Agreement  insofar as there is as a result the 
imposition and collection of an anti-dumping duty in excess of the margin or amount of dumping as determined pursuant to Article 2 of the AD Agreement; 
  WT/DS350/1 
 G/L/786 
 G/ADP/D70/1 
 Page 5 
  
  • Articles 1 and 2.1 of the AD Agreement  and Articles VI:1 and VI:2 of the 
GATT 1994 insofar as there is as a result the imposition and collection of an anti-dumping duty which is inconsistent with the AD Agreement ; and 
consequently of 
 
• Article 18.3 of the AD Agreement  insofar the United States has not applied 
the provision of this Agreement to a review of existing measures initiated 
after the entry into force for the United States of the WTO Agreement 
 
• and Article XVI:4 of the Marrakesh Agreement establishing the World Trade 
Organization and Article 18.4 of the AD Agreement  insofar as the United 
States has not taken all necessary steps, of a general or particular character, to 
ensure the conformity of its laws, re gulations and administrative procedures 
with the provisions of GATT 1994 and the AD Agreement . 
  The European Communities reserve the right to raise additional claims and legal matters 
during the course of the consultations. 
  The European Communities look forward to receivi ng the United States' reply to this request 
and to setting a mutually convenient date for these consultations.   
  WT/DS350/1 
G/L/786 
G/ADP/D70/1 
Page 6 ANNEX:  LIST OF CASES  
 
I.  ADMINISTRATIVE REVIEWS 
Product MS USDOC 
No Final Results Amended Final 
Results Company Dumping 
margin Period covered by the review 
1.  Ball Bearings  F A-427-801 68 FR 35623, June 16, 
2003 68 FR 43712, 
July 24, 2003 France SNR Roulements 
SKF 3,52% 
6,70% 1 May 2001–30 April 2002 
2.  Ball Bearings G A-428-801 68 FR 35623, June 
16,2003  FAG 
Torrington 
Paul Mueller 
SKF 1,45% 
70,41% 
0,19% 
3,38% 1 May 2001–30 April 2002 
3.  Ball Bearings  I A-475-801 68 FR 35623, June 16, 
2003  FAG 
SKF 2,87% 
5,08% 1 May 2001–30 April 2002 
4.  Stainless Steel 
Sheet & Strip Coils  I A-475-824 68 FR 69382 
December 12, 2003  Thyssenkrupp Acciai 
Terni SpA 1,62% 1 July 2001–30 June 2002 
5.  Certain Pasta  I A-475-818 69 FR 6255, 
February 10, 2004 69 FR 81, April 27, 
2004 Garofalo 
Indalco 
PAM 
Tomasello 
Zaffiri 2,57% 
2,85% 
45,49% 
4,59% 
7,23% 1 July 2001–30 June 2002 
6.  Stainless Steel 
Sheet & Strip coils  G A-428-825 69 FR 6262, 
February 10, 2004   TKN 3,72% 1 July 2001–30 June 2002 
7.  Certain Hot-
rolled Carbon Steel 
Flat Nl A-421-807 69 FR 115, June 16, 
2004 69 FR 43801, 
July 22, 2004 Corus 4,80% 3 May 2001–31 October 2002 
8.  Stainless Steel 
Bar G A-428-830 69 FR 113, June 14, 
2004  BGH 0,52% 2 August 2001–28 February 2003 
9.  Stainless Steel 
Bar I A-475-829 69 FR 113, June 14, 
2004  Foroni 
Ugine-Savoi-Imphy SA 4,03% 
33,00% 2 August 2001–28 February 2003 
10.  Antifriction 
Bearings and Parts 
thereof  F A-427-801 69 FR 55574, 
September 15, 2004 69 FR 62023, 
October 22, 2004 Numerous 66,42% (43) 
to less than 
7% (3) 1 May 2002–30 April 2003 
11.  Antifriction 
Bearings and Parts 
thereof G A-428-801 69 FR 55574, 
September 15, 2004 69 FR 63507, 
November 2, 2004 Numerous 70, 41% (43) 
to less than 
7% (4) 1 May 2002–30 April 2003 
12.  Antifriction 
Bearings and Parts 
thereof  I A-475-801 69 FR 55574, 
September 15, 2004 69 FR 62023, 
October 22, 2004 Numerous 68, 29% (43) 
to less than 
5% (3) 1 May 2002–30 April 2003  
   WT/DS350/1
 G/L/786
 G/ADP/D70/1
 Page 7I.  ADMINISTRATIVE REVIEWS 
Product MS USDOC 
No Final Results Amended Final 
Results Company Dumping 
margin Period covered by the review 
13.  Antifriction 
Bearings and Parts 
thereof  UK A 412-801 69 FR 55574, 
September 15, 2004 69 FR 62023, 
October 22, 2004 Aeroengine Bearings 
Barden/FAG 61,14% 
4,10% 1 May 2002–30 April 2003 
14.  Stainless Steel 
Plate in Coils  B A-423-808 69 FR 74495, 
December 14, 2004 70 FR 2999, 
January 19, 2005 U&A Belgium 2,71% 1 May 2002–30 April 2003 
15.  Stainless Steel 
Sheet and Strip in 
Coils  G A-428-825 69 FR 75930, 
December 20, 2004  Thyssen Krupp Nirosta 7,03% 1 July 2002–30 June 2003 
16.  Steel Concrete 
Reinforcing Bars LV A-449-804 69 FR 74498, 
December 14, 2004  LM 3, 01% 1 September 2002–31 August 2003 
17.  Certain Pasta  I A-475-818 70 FR 6832, 
February 9, 2005  Barilla 
Corticella/Combattenti 
Indalco PAM 
Riscossa 
Russo 7,25% 
4% 
6,03% 4,78% 
1,05% 
7,36% 1 July 2002–30 June 2003 
18.  Certain hot-
rolled carbon steel 
flat products  NL A-421-807 70 FR 18366, April 11, 
2005  Corus 4,42% 1 November 2002–31 October 2003 
19.  Stainless steel 
bar  G A-428-830 71 FR 42802, July 28, 
2006 71 FR 52063, 
September 1, 2006 BGH Group 0,73% 1 March 2004–28 February 2005 
20. Stainless steel 
bar F A-427-820 70 FR 46482, 
August 10, 2005  Ugitech S.A. 14,98% 1 March 2003–29 February 2004 
21.  Ball Bearings 
and parts thereof F A-427-801 70 FR 54711, 
September 16, 2005  SKF 
SNR 8,41% 
11,93% 1 May 2003–30 April 2004 
22.  Ball Bearings 
and parts thereof G A-428-801 70 FR 54711, 
September 16, 2005  FAG/INA 
GRW 
SKF Germany 5,65% 
4,58% 
16,06% 1 May 2003–30 April 2004 
23.  Ball Bearings 
and parts thereof I A-475-801 70 FR 54711, 
September 16, 2005  FAG Italy 
SKF Italy 5,88% 
2,59% 1 May 2003–30 April 2004 
24. Ball Bearings 
and parts thereof UK A-412-801 70 FR 54711, 
September 16, 2005  Barden/FAG 
SKF IK 2,78% 
61,14% 1 May 2003–30 April 2004  
  WT/DS350/1 
G/L/786 
G/ADP/D70/1 
Page 8 I.  ADMINISTRATIVE REVIEWS 
Product MS USDOC 
No Final Results Amended Final 
Results Company Dumping 
margin Period covered by the review 
25.  Certain Pasta  I A-475-818 70 FR 71464, 
November 29, 2005  Barilla 
Corticella/Combattenti 
Indalco Pagani 
Riscossa 20,68% 
3,41% 
2,59% 2,76% 
2,03% 1 July 2003–30 June 2004 
26.  Stainless steel 
plate in coils  B A-423-808 70 FR 72789, 
December 7 2005  Ugine & ALZ Belgium 
NV 2,96% 1 May 2003–30 April 2004 
27.  Stainless steel 
sheet and strip in 
coils  G A-428-825 70 FR 73729 December 
13, 2005  TKN 9,5% 1 July 2003–30 June 2004 
28. Steel concrete 
reinforcing bars LV A-449-804 71 FR 7016, 
February 10, 2006  Liepajas Metalurgs 5,24% 1 September 2003–31 August 2004 
29.  Stainless Steel 
Bar F A-427-820 71 FR 30873, May 31 
2006  Ugitech S.A. 9,68% 1 March 2004–28 February 2005 
30.  Ball Bearings 
and parts thereof F A-427-801 71 FR 40064, July 14, 
2006  SKF France 
SNR 12,57% 
11,75% 1 May 2004–30 April 2005 
31.  Ball Bearings 
and parts thereof G A-428-801 71 FR 40064, July 14, 
2006  FAG/INA 
GRW 
SKF Germany 4,04% 
1,14% 
7,35% 1 May 2004–30 April 2005 
32.  Ball Bearings 
and parts thereof I A-475-801 71 FR 40064, July 14, 
2006  FAG Italy 
SKF Italy 2,52% 
7,65% 1 May 2004–30 April 2005 
33.  Steel concrete 
reinforcing bars LV A-449-804 71 FR 45031, August 8, 
2006 (preliminary 
results, final results to be issued by early 
December 2006)  Liepajas Metalurgs 6,03% 1 September 2004–31 August 2005 
 
 
II.  SUNSET REVIEW 
Product MS USDOC Case No  DOC Final Determination ITC Case 
Number ITC Determination Continuation Order 
34.  Brass sheet & strip G A-428-602 71 FR 4348, January 26, 2006 731-TA-317 71 FR 14719, 
March 23, 2006 71 FR 16552, April 3, 2006 
 
  
   WT/DS350/1
 G/L/786
 G/ADP/D70/1
 Page 9III.  IMPOSITION OF  ANTI-DUMPING DUTY 
Product MS USDOC Case No  DOC Final Determination ITC Case 
Number ITC Determination AD Order 
35.  Purified 
carboxymethylcellulose SW A-401-808 70 FR 28278, May 17, 2005 731-TA-1087 70 FR 39334, July 7, 
2005 70 FR 39734, July 11, 2005 
36.  Purified 
carboxymethylcellulose NL A-421-811 70 FR 28275, May 17, 2005 731-TA-1086 70 FR 39334, July 7, 
2005 70 FR 39734, July 11, 2005 
37.  Purified 
carboxymethylcellulose FIN A-405-803 70 FR 28279, May 17, 2005 731-TA-1084 70 FR 39334, July 7, 
2005 70 FR 39734, July 11, 2005 
38.  Chlorinated 
Isocyanurates SP A-469-814 70 FR 24506, May 10, 2005 731-TA-1083 70 FR 36205, June 22, 
2005 70 FR 36562, June 24, 2005 
 
 
__________