WORLD TRADE  
ORGANIZATION   
WT/DS422/4 
14 October 2011 
 
 (11-5121) 
 Original:   English 
  
 
UNITED STATES – ANTI-DUMPING MEASURES ON CERTAIN  
SHRIMP AND DIAMOND SAWBLADES FROM CHINA 
 
Agreement on Procedures between China and the United States 
  
 The following communication, dated 13 October 2011, from the delegation of China and the delegation of the United States to the Chairperson of the Dispute Settlement Body, is circulated at the request of those delegations. 
 
_______________ 
 
  The People's Republic of China ("China") and the United States of America would like to inform the Dispute Settlement Body of the attach ed Agreement on Procedures between China and the 
United States with respect to the dispute United States – Anti-Dumping Measures on Certain Shrimp 
and Diamond Sawblades from China  (DS422). 
 We request that you please circulate the attached ag reement to the Members of the Dispute Settlement 
Body in the WT/DS422 document series.  
 WT/DS422/4 
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United States - Anti-Dumping Measures on Certai n Shrimp and Diamond Sawblades from China 
(WT/DS422) 
 
Agreement on Procedures between China and the United States 
 
On February 28, 2011, the Government of Chin a ("China") requested consultations with the 
United States under Article 4 of the Understanding on Rules and Procedures Governing the 
Settlement of Disputes  ("DSU"), Article XXII:1 of the General Agreement on Tariffs and Trade 1994  
("GATT 1994"), and Article 17 of the Agreement on Implementation of Article VI of the General 
Agreement on Tariffs and Trade 1994 ("Anti-Dumping Agreement"), with respect to anti-dumping 
measures on certain frozen warmwater shrimp from China. (WT/DS422/1).  On July 22, 2011, China requested additional consultations with respect to anti-dumping measures on diamond sawblades and 
parts thereof from China.  (WT/DS422/1/Add. 1).  On May 11, 2011 and September 8, 2011, 
consultations were held by China and the United St ates (hereinafter the "parties"); together these 
consultations covered all the measure s referenced in the Panel Request  pursuant to Article 6.2 of the 
DSU.  These consultations have enabled the parti es to agree on the following procedures for purposes 
of this dispute: 
1. Should China request the establishment of a panel in this dispute, China's panel request will 
be the one attached to this agreement (the "Pan el Request"). The United St ates will not oppose the 
establishment of a panel at the first Dispute Settleme nt Body ("DSB") meeting following the filing of 
the Panel Request by China.  The pa rties agree to make every effort to ensure that they compose the 
panel without recourse to the Director-General under Article 8.7 of the DSU.  
2. The parties will cooperate to enable the panel to  circulate its report as quickly as possible in 
light of the requirements of the DSU.  To that end, the parties will work to reach agreement on 
working procedures that aim to expedite the panel proceedings. The parties will jointly ask the panel 
to adopt these procedures, which will enable it to co mplete its work within three months after the 
composition of the panel. The parties also agree to request the panel to ask that the parties file only 
one written submission each, and that the panel forego meetings with the parties, or, at most, have 
only one substantive meeting with the parties.  The pa rties also agree to share drafts of their respective 
written submissions prior to submitting them to the pa nel and to take all reasonably available steps to 
accelerate the proceeding.  
3. China will provide the necessary evidence and argu ments to support its allegations, including 
the computer programs and output logs generated by  the United States Department of Commerce that 
were used to calculate the challenged dumping marg ins.  The United States will not contest China's 
claim that the measures identified in the Panel Requ est are inconsistent with Article 2.4.2, first 
sentence, of the Anti-Dumping Agreement, on the grounds stated in United States - Final Dumping 
Determination on Softwood Lumber from Canada , WT/DS264/AB/R, Report of the Appellate Body 
adopted 31 August 2004.  
4. China will not request that the panel suggest, pur suant to Article 19.1, second sentence, of the 
DSU, ways in which the United States could implement the panel's recommendations. 
5. Provided that the panel's finding is limited to a finding that one or more of the challenged 
measures, as identified in the Panel Request, is incons istent with Article 2.4.2, first sentence, of the 
Anti-Dumping Agreement, the parties agree that, pursuant to Article 21.3(b) of the DSU, the 
reasonable period of time for bringing each such measure into conformity with the Anti-Dumping 
Agreement will be eight months, beginning on the date on which the DSB adopts the panel report.   WT/DS422/4 
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  6. Subject to the consultation requirements of sec tion 129(b) of the Uruguay Round Agreements 
Act ("URAA"), 19 U.S.C. §3538(b), the United States will use section 129(b) to recalculate margins 
of dumping (subject to the exclusion of Zhanjiang G uolian Aquatic Products Co., Ltd, in paragraph 7, 
below) and to issue a new determination in orde r to render the anti-dumping measures on certain 
frozen warmwater shrimp from China and the anti-dumping me asures on diamond sawblades and 
parts thereof from China consistent with the r ecommendations and rulings of the DSB and the Anti-
Dumping Agreement.  In particular, the Unite d States will implement such recommendations and 
rulings in respect of the Final Determination, as am ended by any and all amen ded final determinations 
which are effective at the time of implementation. If any such recalculation that is performed under 
section 129(b) results in a change in a cash deposit rate or revocation, in part or in whole, for the anti-
dumping measures on certain frozen warmwater shri mp from China or the anti-dumping measures on 
diamond sawblades and parts thereof from China, th e new cash deposit rate or revocation will have 
prospective effect only, taking effect no sooner than the date on which the United States Trade 
Representative directs the United States Secretary of  Commerce to implement its recalculation of the 
margins and new determination, as set forth in section 129(c)(1) of the URAA, 19 U.S.C. § 
3538(c)(1).  
7. The parties also mutually understand that the scope of China's Panel Request does not include 
any claim regarding the margin of dumping calcu lated for Zhanjiang Guolia n Aquatic Products Co., 
Ltd. in the anti-dumping duty investigation on certa in frozen warmwater shrimp from China or the 
margin of dumping determined solely on the basis of  adverse facts available in either anti-dumping 
duty investigation.  The parties agree that they will inform the panel in their written submissions, 
whether made jointly or separately, that they are seeking findings consistent  with this understanding. 
Accordingly, to the extent that the findings ar e consistent with this understanding, implementation 
would not involve a recalculation of such margins of dumping.  
 
For The People's Republic of China 
     
Mme. ZHAO Hong 
Chargé d'Affaires  For the United States of America 
     
H.E. Mr. Michael Punke  
Ambassador  
 WT/DS422/4 
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  ANNEX 
 
United States – Anti-Dumping Measures on  
Certain Shrimp and Diamond Sawblades from China (WT/DS422) 
Request for the Establishment of a Panel by China 
On February 28, 2011 and July 22, 2011, the People's Republic of China ("China") requested 
consultations with the United States of America pursuant to Article 4 of the Understanding on Rules 
and Procedures Governing the Settlement of Disputes  ("DSU"), Article XXII:1 of the General 
Agreement on Tariffs and Trade 1994  ("GATT 1994") and Article 17 of the Agreement on 
Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 ("Anti-Dumping 
Agreement") with regard to the "zeroing" practi ce by the United States Department of Commerce ( 
"USDOC") in its anti-dumping measures on certain frozen warmwater shrimp from China1 and 
diamond sawblades and parts thereof from China2 respectively.  
Consultations were held on May 11, 2011 and September 8, 201 1.  While these consultations 
assisted in clarifying the issues before the par ties, they failed to resolve the dispute.  
Therefore, China respectfully requests, pursuan t to Article XXIII of the GATT 1994, Articles 
4 and 6 of the DSU, and Article 17.4 of the Anti- Dumping Agreement, that the Dispute Settlement 
Body ("DSB") establish a panel to examine this matter.  
Specific Measures at Issue  
(1) Frozen Warmwater Shrimp 
The United States initiated an anti-dumping inves tigation of certain frozen warmwater shrimp 
from China on January 27, 2004 (Investigation No. A–570–893). The specific measures at issue in 
this dispute are the anti-dumping order imposed by the United States on certain frozen warmwater 
shrimp from China, as amended, and the final dete rmination by the USDOC, as amended, leading to 
that order. To be specific, these measures include :  
 Notice of Final Determination of Sales at Less Than Fair Value: Certain Frozen and Canned 
Warmwater Shrimp From the People's Republic of China , 69 Federal Register 70997 
(December 8, 2004);  
 Notice of Amended Final Determination of Sal es at Less Than Fair Value and Antidumping 
Duty Order: Certain Frozen Warmwater Shr imp From the People's Republic of China , 70 
Federal Register 5149 (February 1, 2005); 
 Certain Frozen Warmwater Shrimp from  the People's Republic of China: Notice  of Second 
Amended Final Determination of Sales at Less Than Fair Value ， 71 Federal Register 47484 
(August 17, 2006); 
 Certain Frozen Warmwater Shrimp From Brazil,  India, the People's Republic of China, 
Thailand, and the Socialist Republic of Vietnam: Notice of Amended Final Determinations of 
Sales at Less Than Fair Value Pursuant to Court Decision , 75 Federal Register 53947 
(September 2, 2010); 
                                                      
1 See G/ADP/D87/1, G/L/953, WT/DS422/1.  
2 See G/ADP/D87/1/Add.1, G/L/953/Add.1, WT/DS422/1/Add.1.   WT/DS422/4 
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   Certain Frozen Warmwater Shrimp From Brazil,  India, the People's Republic of China, 
Thailand, and the Socialist Republic of Vi etnam: Amended Antidumping Duty Orders in 
Accordance with Final Court Decision, 76 Federal Register 23277 (April 26, 2011);3 
 Certain Frozen Warmwater Shrimp From the Pe ople's Republic of China: Notice of Amended 
Final Determination of Sales at Less Than Fair Value Pursuant to Court Decision , 76 Federal 
Register 30100 (May 24, 2011); 
 as well as any amendments to the measures identified above.  
In the final determination, as amended, th e USDOC used the "zeroing" methodology in 
determining the final dumping margins for thr ee individually investigated Chinese exporters4, for 
which margins above the 2 per cent de minimis level were calculated. 
 (2) Diamond Sawblades and Parts Thereof 
 
The United States initiated an anti-dumping i nvestigation of diamond sawblades and parts 
thereof from China on June 21, 2005 (Investigation No. A-570-900).  The specific measures at issue 
in this dispute are the anti-dumping order imposed by the United States on diamond sawblades and parts thereof from China, as amended, and the final determination by the USDOC, as amended, 
leading to that order.  To be specific, these measures include:  
 Final Determination of Sales at Less Than Fair Value and Final Partial Affirmative 
Determination of Critical Circumstances: Di amond Sawblades and Parts Thereof from the 
People's Republic of China, 71 Federal Register 29303 (22 May 2006);  
 Notice of Amended Final Determination of Sales at Less Than Fair Value: Diamond 
Sawblades and Parts Thereof from the People's Republic of China, 71 Federal Register 35864 
(22 June 2006);  
 Diamond Sawblades and Parts Thereof from the Pe ople's Republic of China and the Republic 
of Korea: Antidumping Duty Orders, 74 Federal Register 57145 (4 November 2009);  
 as well as any amendments to the measures identified above.  
In the final determination, as amended, th e USDOC used the "zeroing" methodology in 
determining the final dumping margins for thr ee individually investigated Chinese exporters
5, for 
which margins above the 2 per cent de  minimis level were calculated. 
                                                      
3 On April 29, 2011, as a result of the determinations by the USDOC and the International Trade 
Commission (“ITC”) that revocation of the antidumping duty orders on certain frozen warmwater shrimp from 
Brazil, India, China, Thailand, and the Socialist Republic of Vietnam (“Vietnam”) would be likely to lead to continuation or recurrence of dumping and of material in jury to an industry in the United States within a 
reasonably foreseeable time, the USDOC published a notice of the continuation of these antidumping duty 
orders.  See Certain Frozen Warmwater Shrimp From Brazil, India, the People’s Republic of China, Thailand, 
and the Socialist Republic of Vietnam: Continuation of Antidumping Duty Orders , 76 Federal Register 23972 
(April 29, 2011). 
4 The three exporters are Allied P acific Group ("Allied"), Yelin Enterprise Co Hong Kong ("Yelin") 
and Shantou Red Garden Foodstuff Co., Ltd. ("Red Garden"). 
5 The three exporters are Advanced  Technology & Materials Co., Ltd. (including Beijing Gang Yan 
Diamond Products Company and Yichang HXF Circular Saw Industrial Co., Ltd.) (“AT&M”),  Bosun Tools 
Group Co., Ltd. (“Bosun”) and Hebei Jikai Industrial Group Co., Ltd. (“Hebei Jikai”).    WT/DS422/4 
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  In respect of the two investigations identif ied above, the USDOC's methodology of "zeroing" 
negative dumping margins may be described more specifically in the following:  
a) different "models", i.e., types, of products are identified based on the most relevant 
product characteristics;  
b) weighted average prices in the United States and weighted average normal values in the 
comparison market are calculated on a model-specific basis for the entire period of 
investigation;  
c) the weighted average normal value of each m odel is compared to the weighted average 
United States price for that same model;  
d) to calculate the dumping margin for an exporter, the amount of dumping for each model 
is summed and then divided by the aggregat ed United States price for all models; and  
e) before summing the total amount of dumping for all models, all negative margins on 
individual models ( i.e., where the weighted average normal value is less than the 
weighted average export price ) are set to zero.  
Through this method, the USDOC calculates margins of dumping and collects cash deposits in 
amounts that exceed the actual extent of dumping, if any, by the said individually investigated 
exporters.  
In addition, in respect of the anti-dumping inv estigation of certain frozen warmwater shrimp, 
on the basis of the individual dumping margins cal culated with the application of zeroing, the 
USDOC further calculated a weighted-average margin (known as the "separate ra te") that applies to 
the cooperating non-mandatory respondents6.  
The USDOC's unpublished Issues and Decisi on Memorandums as well as other documents 
contained in the administrative record of the investigations, including the computer programs, 
describe in more detail the USDOC's use of zeroi ng in the anti-dumping investigations of frozen 
warmwarter shrimp and diamond sawbla des and parts thereof from China. 
China considers that these measures are inconsiste nt with the obligations of the United States 
under the provisions of the GATT 1994 and the Anti-Dumping Agreement described below. 
The Legal Basis of the Complaint  
Through the use of "zeroing," the United States  treats transactions with negative dumping 
margins as having margins equal to zero in determ ining weighted average dumping margins in an 
anti-dumping investigation.  
The use of "zeroing" led the United States to find dumping where none would have otherwise 
been found or to calculate dumping margins that ar e inflated. China considers that, in the specific 
measures at issue as identified above, the USDOC' s use of "zeroing" in cal culating the margins of 
dumping for the individually investigated exporters  and the "separate rate" for the cooperating non-
mandatory respondents is inconsistent with th e obligations of the United States under the Anti-
Dumping Agreement. Specifically, China considers th at the measures are inconsistent with the first 
sentence of Article 2.4.2 of the Anti-Dumping Agreement.  
                                                      
6 Such non-mandatory respondents were also required to pass the "separate-rate test" in order to receive 
the separate rate.  WT/DS422/4 
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  The "zeroing" methodology that the USDOC used in its anti-dumping investigations of shrimp 
and diamond sawblades from China is virtually iden tical to the methodology that was held to be 
inconsistent with the obligations of the Unite d States under the Anti-Dumping Agreement in the 
following disputes: United States - Final Dumping Determination on Softwood Lumber from 
Canada7; United States - Anti-Dumping Measures On Shrimp from Ecuador8; United States - Anti-
Dumping Measures on Polyethylene Retail Carrier Bags from Thailand9; and United States - 
Measures Relating to Shrimp from Thailand10. 
The forgoing paragraphs are provided without prejudice to any arguments that China may 
develop and present to the panel regarding the WTO-inconsistency of the measures at issue. 
Request for the Establishment of a Panel  
Accordingly, China requests pursuant to Article  XXIII of the GATT 1994, Articles 4 and 6 of 
the DSU, and Article 17.4 of the Anti-Dumping Agr eement, that the DSB establish a panel with the 
standard terms of reference as set out in Article 7.1 of the DSU. China asks that  this request be placed 
on the agenda of the meeting of the DSB scheduled for October 25, 2011. 
 
__________  
                                                      
7 Panel Report, WT/DS264/R, and Appellate Body Report, WT/DS264/AB/R, adopted on August 31, 
2004.  
8 Panel Report, WT/DS335/R, adopted on February 20, 2007.  
9 Panel Report, WT/DS383/R, adopted on May 20, 2008.  
10 Panel Report, WT/DS343/R, adopted as modified by the Appellate Body on August 1, 2008.