WORLD TRADE  
ORGANIZATION  WT/DS294/12 
17 January 2006 
 (06-0246) 
 Original:   English 
  
 
UNITED STATES – LAWS, REGULATIONS AND METHODOLOGY 
FOR CALCULATING DUMPING MARGINS ("ZEROING") 
 
Notification of an Appeal by the European Communities
 
under Article 16.4 and Article 17 of the Understanding on Rules  
and Procedures Governing the Settlement of Disputes (DSU),  
and under Rule 20(1) of the Working Procedures for Appellate Review  
   The following notification, dated 17 January  2006, from the Delegation of the European 
Commission, is being circulated to Members. 
 
_______________ 
 
Pursuant to Article 16.4 and Article 17 of th e DSU the European Communities hereby notifies 
to the Dispute Settlement Body its decision to app eal to the Appellate Body certain issues of law 
covered in the Panel report and cer tain legal interpretations devel oped by the Panel in the dispute 
United States – Laws, Regulations and Methodology for Calculating Dumping Margins ("Zeroing")  
(WT/DS294/R). Pursuant to Rule 20(1) of the Working Procedures for Appellate Review , the 
European Communities simultaneous files this Notice of  Appeal with the Appellate Body Secretariat. 
The European Communities considers that the Pa nel has failed to correctly apply customary 
rules of interpretation of public international la w, as required by Article 3.2 of the DSU and  
Article 17.6(ii) of the Agreement on Implementation of Article VI  of the General Agreement on Tariffs 
and Trade 1994  (Anti-Dumping Agreement ), particularly as reflected in Articles 31 and 32 of the 
Vienna Convention on the Law of the Treaties. 
For the reasons set out in its submissions to the Panel, and for the reasons to be further 
elaborated in its submissions to the Appellate B ody, the European Communities appeals, and requests 
the Appellate Body to modify or reverse the legal findings and conclusions of the Panel, with respect 
to the following errors : 
(a)  the Panel erred when it found that the Un ited States did not act inconsistently with 
Articles 9.3 and 2.4 of the Anti-Dumping Agreement  and Articles VI:1 and VI:2 of the 
GATT 1994, despite the fact that the United States did not ensure, in the measures at 
issue described in the third sen tence of para 2.6 of the Pane l Report, in the context of 
the "administrative review" proceedings liste d in Exhibits EC-16 to EC-31, that the 
rate and amount of anti-dumping duty did not exceed the true margin of dumping 
established in accordance with Article 2, b ecause the United States did not calculate a 
margin of dumping for the product as whole
 (Panel Report, paras 8.1(f) and (e),  
and 7.288, 7.284 and 7.248 to 7.285); 
(b)  the Panel erred when it found that the Un ited States did not act inconsistently with the 
obligation to make a fair comparison contai ned in the first sentence of Article 2.4  of 
the Anti-Dumping Agreement  when, in the measures at i ssue described in the third WT/DS294/12 
Page 2  
 
sentence of para 2.6 of the Panel Report, in the context of the "administrative review"  
proceedings listed in Exhibits EC-16 to EC -31, the United States used a methodology 
that, absent targeted dumping, involved asymmetrical comparison between "normal 
value" and "export price", in which, at an intermediate stage in the calculation of the 
margins of dumping, the prices at which export transactions above "normal value" 
were made were effectively adjusted downw ards ("zeroing" any negative intermediate 
results)  (Panel Report, paras 8.1(e), 7.284, 7.248 to 7.275, 7.281 to 7.283 and 7.285); 
(c)  the Panel erred when it found that the Un ited States did not act inconsistently with the 
third to fifth sentences of Article 2.4
 of the Anti-Dumping Agreement  when, in the 
measures at issue described in  the third sentence of para 2.6 of the Panel Report, in 
the context of the "administrative review" proceedings listed in Exhibits EC-16 to 
EC-31, the United States used a methodology that involved, at an intermediate stage in the calculation of the margins of dumping, a zeroing adjustment not demonstrated to have been made for a difference affec ting price comparability (Panel Report,  
paras 8.1(e), 7.284, 7.276 to 7.283 and 7.285); 
(d)  the Panel erred when it found that the Un ited States did not act inconsistently with 
Article 2.4.2
 of the Anti-Dumping Agreement  when, in the measures at issue described 
in the third sentence of para 2.6 of the Panel Report, in the context of the "administrative review" proceedings listed in Exhibits EC-16 to EC-31, the United 
States used a methodology that involved asymmetrical comparison between "normal 
value" and "export price", and in which, at an intermediate stage in the calculation of 
the margins of dumping, the prices at whic h export transactions above "normal value" 
were made were effectively adjusted downw ards ("zeroing" any negative intermediate 
amounts), without complying with the cond itions and obligations set out in that 
provision (Panel Report, paras 8.1(d), 7.223, 7.142 to 7.222 and 7.285); 
(e)  the Panel erred when it found that the Standard Zeroing Methodology
 used by the 
United States in "administrative review" proceedings  is not inconsistent with Articles 
2.4, 2.4.2, 9.3, 11.1, 11.2, 1 and 18.4 of the Anti-Dumping Agreement ; Articles VI:1 
and VI:2 of the GATT 1994; and Article XVI:4 of the WTO Agreement  (Panel Report, 
paras 8.1(g) and 7.289 to 7.291); 
(f)  the Panel erred when it exercised judicial economy on the question of whether the 
Manual  is a measure inconsistent with Articles 2.4, 2.4.2, 5.8, 9.3, 9.5, 11.1, 11.2, 
11.3, 1 and 18.4 of the Anti-Dumping Agreement ; Articles VI:1 and VI:2 of the GATT 
1994; and Article XVI:4 of the WTO Agreement  (Panel Report, paras 7.107 and 7.289 
to 7.294); 
(g)  the Panel erred when it found, in the c ontext of "administrative review" proceedings , 
that Section 351.414(c)(2) of the Regulations  is not as such inconsistent with Articles 
2.4, 2.4.2, 9.3, 11.1, 11.2, 1 and 18.4 of the Anti-Dumping Agreement ; Articles VI:1 
and VI:2 of the GATT 1994; and Article XVI:4 of the WTO Agreement  (Panel Report, 
paras 8.1(g) and 7.289 to 7.291); 
(h)  the Panel erred when it found, with r espect to new shipper proceedings, changed 
circumstances proceedings, and sunset proceedings , that the Standard Zeroing 
Methodology and Section 351.414(c)(2) of the Regulations are not as such 
inconsistent with Articles 2.4, 2.4.2, 9.3,  9.5, 11.1, 11.2, 11.3, 1 and 18.4 of the Anti-
Dumping Agreement ; Articles VI:1 and VI:2 of the GATT 1994; and Article XVI:4 of 
the WTO Agreement  (Panel Report, paras 8.1(h) and 7.292 to 7.294);  WT/DS294/12 
 Page 3 
 
 
(i)  the Panel erred when it exercised judicial economy  on the question of whether or not 
"administrative review" proceedings based  on model zeroing are consistent with 
Article 9.3 of the Anti-Dumping Agreement  (Panel Report, paras 6.4 to 6.6 and 7.34); 
(j)  the Panel erred when it exercised judicial economy  on the question of whether or not 
model zeroing is consistent with Article 2.4 of the Anti-Dumping Agreement  (Panel 
Report, paras 8.2, 7.33 and 7.108); 
(k)  the Panel erred when it dismissed the EC's claims under Articles 11.1 and 11.2  of the 
Anti-Dumping Agreement  (Panel Report, paras 8.1(f), 7.143 and 7.286 to 7.288); 
(l)  the Panel erred when it dismissed other of  the EC's claims, considered by the Panel to 
be "dependent " (Panel Report, paras 8.1(f), 8.2, 7.34, 7.109 and 7.286 to 7.288); and 
(m)  the Panel failed to make an objective assessment  of the matter before it, including (as 
appropriate) an objective assessment of the facts of the case and th e applicability of 
and conformity with the relevant covered agreements, as required by Article 11 of the 
DSU. 
 The EC had also claimed before the Panel that the Standard Zeroing Procedures  used by  
the United States are a measure  or part of a measure and are inconsistent  with Articles 2.4, 2.4.2, 5.8, 
9.3, 1 and 18.4 of the Anti-Dumping Agreement,  Articles VI:1 and VI:2 of the GATT 1994 and  
Article XVI:4 of the WTO Agreement. It appears to the EC that th e Panel has considered these 
Standard Zeroing Procedures  to be part of or a reflection of the methodology that it held to be as such 
inconsistent with the obligations of the US in the ca se of original proceedings (and consistent with the 
obligations of the US in the case of "administrat ive review" proceedings). However, this is not 
expressly stated by the Panel and if the Appellate Bo dy should consider this not to be the case (and 
that bringing the methodology into conformity with the WTO obligations of the US would not necessarily require bringing the Pr ocedures into conformity), the EC conditionally appeals and asks 
the Appellate Body to find that  the Standard Zeroing Procedures
 are as such inconsistent with the 
obligations of the US in the case of original pr oceedings, "administrative review" proceedings, new 
shipper proceedings, changed circumstances proceed ings and sunset proceedings. (Panel Report,  
paras 8.1(c), 7.106 and 7.96 to 7.97; Panel Report, paras 8.1(g) and 7.289 to 7.291; and Panel Report, 
paras 8.1(h) and 7.292 to 7.294). 
 With regard to Practice , the EC appeals the exercise of judicial economy by the Panel with 
respect to the US Practice of zeroing in original  proceedings, "administra tive review" proceedings, 
new shipper proceedings, changed circumstan ces proceedings and sunset proceedings. 
 The EC also requests the Appellate Body to complete the analysis of the Panel where it 
reverses or modifies findings of the Panel and comp letion of the analysis is necessary to resolve this 
dispute. 
__________