. /.   WORLD TRADE  
ORGANIZATION  TN/RL/W/208 
5 June 2007 
 (07-2301) 
Negotiating Group on Rules Original:   English 
  
 
 
OFFSETS FOR NON-DUMPED COMPARISONS 
 
Communication from the United States
 
 
 
The following communication, dated 1 June 2007, is  being circulated at the request of the 
Delegation of the United States.  
_______________ 
 
 
The focus of this paper is on the issue of "zeroing," or more appropriately, whether 
investigating authorities are required to provide "offsets" or otherwise reduce margins of dumping 
because certain comparisons between export pric e and normal value (regardless of the basis of 
comparison) indicate that the export price exceeds the normal value i.e., the particular comparison 
was not dumped.  Although Members have id entified the issue in the Rules negotiations
1 and, to some 
degree, have expressed their views, there has not been  a full and serious exploration of the subject to 
date because of the ongoing WTO disputes and the e volving reasoning of the Appellate Body with 
respect to the relevant provisions of the Anti-dum ping (AD) Agreement.  Members lack clarity and 
certainty as to the full range of implications of  the reasoning utilized by the Appellate Body in its 
reports on this matter.  If anything, more questions  have been raised than have been resolved as a 
result of this litigation, which warrants putting such questions to the Negotiating Group on Rules  at 
this time.   
Despite the recent Appellate Body reports addr essing this issue in at least five separate 
proceedings
2, Members still have different views on whether "offsets" are required, and when and 
under what circumstances they must be provided.  The reasoning that the Appellate Body used to find 
that offsets are required under the AD Agreement h as broad repercussions for all Members, not just 
those who apply a retrospective anti-dumping duty co llection system.  Indeed, the Appellate Body 
reports are contrary to what many have long unde rstood to be consistent with the text of the AD 
Agreement.  The fact that three panels, co mposed of experienced anti-dumping practitioners, 
administrators, and negotiators, ca me to conclusions different from  those reached by the Appellate 
                                                      
1 In an earlier paper (TN/RL/W/72), the United Stat es stated that the Agreement on Implementation of 
Article VI of GATT 1994 is not clear as to the manner in  which investigating authorities are to calculate overall 
weighted average dumping margins, and rais ed the need for clarifications to the AD  Agreement.  Japan and 
other Members have also submitted papers (e.g., TN/RL/GEN/8 and TN/RL/GEN/126) that seek to address certain aspects of this issue.   
2 European Communities – Anti-Dumping Duties on Imports of Cotton-Type Bed Linen From India, 
WT/DS141/AB/R (1 March 2001); United States – Final Dumping Determination on Softwood Lumber from Canada, WT/DS264/AB/R (11 August 2004); United States – Laws, Regulations and Methodology for 
Calculating Dumping Margins ("Zeroing"), WT/DS294/AB/R (18 April 2006); United States – Final Dumping 
Determination on Softwood Lumber from Canada: Recourse to Article 21.5 of the DSU By Canada, WT/DS264/AB/R/W (15 August 2006); United States – Measures Relating to Zeroing and Sunset Reviews, 
WT/DS322/AB/R (9 January 2007). TN/RL/W/208 
Page 2  
 
  Body demonstrates that this issue has not been  resolved in any genuine sense and underscores the 
reality that there remain  fundamental differences among Member s as to the proper interpretation and 
operation of the AD Agreement and the underlying concept of dumping.   
There also remain many questions that ha ve gone unanswered by the Appellate Body’s 
findings.  Just as Members have never agreed to ru les governing the calculation of an overall dumping 
margin, neither have they ever agreed to any require ment to provide an offset or otherwise reduce the 
amount of dumping found because of non-dumped transactions in that calculation.  Given the lack of explicit language and the differenc es of views, both among Members and between the Appellate Body 
and multiple panels, the United States considers  that this is an issue ripe for clarification and 
improvement through the Rules negotiation process, as envisaged by the Doha Ministerial mandate.   
 A prohibition of zeroing, or a requirement to provide offsets for non-dumped transactions, 
simply cannot be found in the text of the AD Agreement.  Nevertheless, the Appellate Body 
concluded that authorities are required to offset non-dumped comparisons against dumped 
comparisons, even though this c onclusion is at odds with long -standing practices implementing AD 
Agreement provisions relating to, among other things , targeted dumping and prospective normal value 
systems, as well as with long-held views on the very concept of dumping itself.
3  The issue of zeroing, 
on which Members could not reach agreement in th e Uruguay Round, should not be left to dispute 
settlement.  We as Members should endeavour to  reach an agreement on this issue through 
negotiation.   
 
The Negotiating Group on Rules needs to eval uate openly the panel and Appellate Body 
reports and understand as clearly as possible the reas oning adopted, whether we agree with it or not, 
and what that reasoning means for different aspects of the AD Agreement as well as for  the different 
systems recognized by the AD  Agreement as legitimately operating w ithin its rules.  As negotiators 
responsible for clarifying and improving the provisions of the AD Agreement, it behoves us  to 
evaluate the panel and Appellate Body  reasoning and its implications and,  to the extent that there is a 
lack of clarity with respect to the proper interpre tation of the text and the proper operation of anti-
dumping systems, to resolve these issues with clear, pr ecise text.  To this end, it is the view of the 
United States that the proper resolution of this i ssue requires clear text providing that margins of 
dumping may be determined without offsets for no n-dumped transactions, cons istent with the long-
held concept of dumping.  We therefore respectfu lly request that the Chairman consider undertaking 
consultations on this matter at the earliest opportuni ty.  The United States reserves the right to submit 
additional proposals to strengthen anti-dumping enforc ement, or in response to proposals by other 
participants, in order to ensure a balanced outcome.  
 
__________ 
 
 
                                                     
 
3 See, e.g., The Second Report of the Group of  Experts on Anti-Dumping and Countervailing Duties, 
adopted on 27 May 1960, BISD 9S/194, paragraph 8 (noting that "the ideal method … was to make a determination in respect of both dumpi ng and material injury in respect of each single importation of the product 
concerned …").