WORLD TRADE  
ORGANIZATION  WT/DS344/AB/R 
30 April 2008 
 (08-2072) 
 Original:   English 
 
    
 
     
 
    
 
UNITED STATES – FINAL ANTI-DUMPING MEASURES 
ON STAINLESS STEEL FROM MEXICO 
 
  
AB-2008-1 
 
     
 
    
 
Report of the Appellate Body 
   WT/DS344/AB/R 
 Page i 
 
 
 I. Introduction................................................................................................................... ..............1  
II. Arguments of the Participants and the Third Participants ..........................................................5  
A. Claims of Error by Mexico – Appellant .........................................................................5  
1. Simple Zeroing, As Such, in Periodic Reviews................................................5  
2. Simple Zeroing As Applied in Periodic Reviews .............................................9  
3. Article 11 of the DSU .....................................................................................10  
B. Arguments of the United States – Appellee ..................................................................11  
1. Simple Zeroing, As Such, in Periodic Reviews..............................................11  
2. Simple Zeroing As Applied in Periodic Reviews ...........................................16  
3. Article 11 of the DSU .....................................................................................17  
4. Article 17.6(ii) of the Anti-Dumping Agreement ............................................17  
C. Arguments of the Third Participants ............................................................................18  
1. Chile................................................................................................................18  
2. European Communities...................................................................................19  
3. Japan ...............................................................................................................23  
4. Thailand ..........................................................................................................26  
III. Issues Raised in This Appeal ................................................................................................... .29 
IV. Introduction................................................................................................................... ............29  
A. The United States' System for the Im position and Assessment of Anti-dumping 
Duties ...........................................................................................................................32  
B. Standard of Review:  Article 11 of the DSU and Article 17.6 of the Anti-
Dumping Agreement ....................................................................................................34  
V. Simple Zeroing, As Such, in Periodic Reviews ........................................................................35  
A. Are "Dumping" and "Margin of Dumpin g" Exporter- or Importer-related 
Concepts? .....................................................................................................................38  
B. Can "Dumping" and "Margin of Dumping" Be Found to Exist at the Level of a 
Transaction? ................................................................................................................44  
C. Is It Permissible to Disregard the Amou nt By Which the Export Price Exceeds 
the Normal Value? .......................................................................................................45  
D. Periodic Reviews and Importer- specific Duty Assessment ..........................................49  
E. The Panel's Arguments Relating to  Alleged Administrative Burden ...........................51  
F. Arguments Relating to Prospective Normal Value Systems .........................................52  
G. The Panel's Contextual Arguments Relating to the Second Sentence of 
Article 2.4.2 of the  Anti-Dumping Agreement .............................................................54  
H. Historical Background .................................................................................................56  
I. Conclusion ...................................................................................................................58  WT/DS344/AB/R 
Page ii  
 
 VI.
 Simple Zeroing As Applied in Periodic Reviews .....................................................................59  
VII. Article 2.4 of the  Anti-Dumping Agreement ............................................................................60  
VIII. Mexico's Claim under Article 11 of the DSU Concerning the Panel's Failure to Follow 
Previous Adopted Appellate Body Re ports Addressing the Same Issues.................................62  
A. The Panel's Findings and Mexico's Appeal .................................................................62  
B. Analysis ........................................................................................................................65  
IX. Time-limits for Filing Submissions ..........................................................................................68  
X. Findings and Conclusions....................................................................................................... ..69 
 
ANNEX I Notification of an Appeal by Mexico  
  WT/DS344/AB/R 
 Page iii 
 
 
 CASES CITED IN THIS REPORT 
 
Short Title Full case title and citation 
EC – Audio Cassettes Panel Report, EC – Anti-Dumping Duties on Audio Tapes in Cassettes 
Originating in Japan , ADP/136, 28 April 1995, unadopted 
EC – Bed Linen  Appellate Body Report, European Communities – Anti-Dumping Duties on 
Imports of Cotton-Type Bed Linen from India , WT/DS141/AB/R, adopted 
12 March 2001, DSR 2001:V, 2049 
EC – Bed Linen  Panel Report, European Communities – Anti-Dumping Duties on Imports of 
Cotton-Type Bed Linen from India , WT/DS141/R, adopted 12 March 2001, as 
modified by Appellate Body Report, WT/DS141/AB/R, DSR 2001:VI, 2077 
EC – Bed Linen  (Article 21.5 – India)
  Appellate Body Report, European Communities – Anti-Dumping Duties on 
Imports of Cotton-Type Bed Linen from I ndia – Recourse to Article 21.5 of the 
DSU  by India , WT/DS141/AB/RW, adopted 24 April 2003, DSR 2003:III, 965 
EC – Chicken Cuts Appellate Body Report, European  Communities – Customs Classification of 
Frozen Boneless Chicken Cuts , WT/DS269/AB/R, WT/DS286/AB/R, and 
Corr.1, adopted 27 September 2005, DSR 2005:XIX, 9157 
EC – Tube or Pipe Fittings Panel Report, European Communities – Anti-Dumping Duties on Malleable 
Cast Iron Tube or Pipe Fittings from Brazil , WT/DS219/R, adopted 18 August 
2003, as modified by Appellate Body Report, WT/DS219/AB/R, DSR 2003:VII, 2701 
EEC – Cotton Yarn Panel Report, European Economic Community – Imposition of Anti-Dumping 
Duties on Imports of Cotton Yarn from Brazil , ADP/137, adopted 
30 October 1995, BISD 42S/17 
India – Patents (US)  Appellate Body Report, India – Patent Protection for Pharmaceutical and 
Agricultural Chemical Products , WT/DS50/AB/R, adopted 16 January 1998, 
DSR 1998:I, 9 
Japan – Alcoholic Beverages II  Appellate Body Report, Japan – Taxes on Alcoholic Beverages , 
WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 
1996, DSR 1996:I, 97  
US – Anti-Dumping Measures 
on Oil Country Tubular Goods Appellate Body Report, United States – Anti-Dumping Measures on Oil 
Country Tubular Goods (OCTG) from Mexico , WT/DS282/AB/R, adopted 
28 November 2005, DSR 2005:XX, 10127 
US – Corrosion-Resistant Steel 
Sunset Review  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, DSR 2004:I, 3 
US – Hot-Rolled Steel  Appellate Body Report, United States – Anti-Dumping Measures on Certain  
Hot-Rolled Steel Products from Japan , WT/DS184/AB/R, adopted 23 August 
2001, DSR 2001:X, 4697 
US – Oil Country Tubular 
Goods Sunset Reviews Appellate Body Report, United States – Sunset Reviews of Anti-Dumping 
Measures on Oil Country Tubular Goods from Argentina , WT/DS268/AB/R, 
adopted 17 December 2004, DSR 2004:VII, 3257 
US – Shrimp  
(Article 21.5 – Malaysia)  Appellate Body Report, United States – Import Prohibition of Certain Shrimp 
 and Shrimp Products – Recourse to Article 21.5 of the DSU by Malaysia , 
WT/DS58/AB/RW, adopted 21 November 2001, DSR 2001:XIII, 6481 
US – Shrimp (Ecuador) Panel Report, United States – Anti-Dumping Measure on Shrimp from 
Ecuador , WT/DS335/R, adopted on 20 February 2007 WT/DS344/AB/R 
Page iv  
 
 Short Title Full case title and citation 
US – Softwood Lumber V  Appellate Body Report, United States – Final Dumping Determination on 
Softwood Lumber from Canada , WT/DS264/AB/R, adopted 31 August 2004, 
DSR 2004:V, 1875 
US – Softwood Lumber V  Panel Report, United States – Final Dumping Determination on Softwood 
Lumber from Canada , WT/DS264/R, adopted 31 August 2004, as modified by 
Appellate Body Report, WT/DS264/AB/R, DSR 2004:V, 1937 
US – Softwood Lumber V  
(Article 21.5 – Canada) Appellate Body Report, United States – Final Dumping Determination on 
Softwood Lumber from Canada – Recourse to Article 21.5 of the DSU by 
Canada , WT/DS264/AB/RW, adopted 1 September 2006 
US – Stainless Steel (Mexico) Panel Report, United States – Final Anti-Dumping Measures on Stainless 
Steel from Mexico , WT/DS344/R, circulated to  WTO Members 20 December 
2007  
US – Zeroing (EC) Appellate Body Report, United States – Laws, Regulations and Methodology 
for Calculating Dumping Margins ("Zeroing") , WT/DS294/AB/R, adopted 
9 May 2006, and Corr.1 
US – Zeroing (EC) Panel Report, United States – Laws, Regulations and Methodology for 
Calculating Dumping Margins ("Zeroing") , WT/DS294/R, adopted 9 May 
2006, as modified by Appellate Body Report, WT/DS294/AB/R 
US – Zeroing (Japan) Appellate Body Report, United States – Measures Relating to Zeroing and 
Sunset Reviews , WT/DS322/AB/R, adopted 23 January 2007 
US – Zeroing (Japan) Panel Report, United States – Measures Relating to Zeroing and Sunset 
Reviews , WT/DS322/R, adopted 23 January 2007, as modified by Appellate 
Body Report, WT/DS322/AB/R 
 
    WT/DS344/AB/R 
 Page v 
 
 
 ABBREVIATIONS USED IN THIS REPORT 
 
Abbreviation Description 
1960 Group of Experts 
Report GATT Second Report of the Group of Experts, Anti-Dumping and 
Countervailing Duties, GATT Document L/1141, adopted 27 May 1960, BISD 9S/194 
Anti-Dumping Agreement Agreement on Implementati on of Article VI of the General Agreement 
on Tariffs and Trade 1994 
DSB Dispute Sett lement Body 
DSU Understanding on Rules and Procedures Governing the Settlement of 
Disputes  
GATT 1947 General Agreement on Tariffs and Trade 1947 
GATT 1994 General Agreement on Tariffs and Trade 1994  
Kennedy Round 
Anti-Dumping Code  Kennedy Round  Agreement on Implementation of Article VI of the 
General Agreement on Tariffs and Trade  TN.64/98, 20 June 1967 
Panel  Panel in United States – Final Anti-Dumping Measures on Stainless 
Steel  from Mexico 
Panel Report Panel Report, United States – Final Anti-Dumping Measures on 
Stainless Steel from Mexico , WT/DS344/R 
SAA Uruguay Round Agreements Act, Statement of Administrative Action, 
H.R. Doc. No. 103-316 (1994), reprinted in 1994 USCAAN 3773, 4040 (Public Law No. 103-465, 108 Stat. 4809 (1994), United States 
Code , Title 19, Section 3501) 
Tariff Act United States Tariff Act of 1930, Public Law No. 1202-1527, 46 Stat. 
741, United States Code , Title 19, as amended 
Tokyo Round Anti-Dumping 
Code Tokyo Round  Agreement on Implementation of Article VI of the 
General Agreement on Tariffs and Trade , BISD 26S/171, entered into 
force 1 January 1980 
T-T Transaction-to-transaction (compari son) in original investigations 
USDOC United States Department of Commerce 
USITC  United States International Trade Commission  
Vienna Convention  Vienna Convention on the Law of Treaties , done at Vienna, 23 May 
1969, 1155 UNTS 331;  8 International Legal Materials 679 
Working Procedures Working Procedures for Appellate Review , WT/AB/WP/5, 4 January 
2005 
W-T Weighted average-to-transac tion (comparison) in original 
investigations 
WTO World Trade Organization 
WTO Agreement Marra kesh Agreement Establishing the World Trade Organization   
W-W Weighted average-to-weighted average (comparison) in original 
investigations 
  WT/DS344/AB/R 
 Page 1 
 
 
 WORLD TRADE ORGANIZATION  
APPELLATE BODY 
 
 
United States – Final Anti-Dumping Measures 
on Stainless Steel from Mexico 
 
Mexico, Appellant 
United States, Appellee 
 
Chile, Third Participant 
China, Third Participant 
European Communities, Third Participant 
Japan, Third Participant 
Thailand, Third Participant 
  AB-2008-1 
  Present:  
Ganesan, Presiding Member 
Bautista, Member Sacerdoti, Member  
  
I. Introduction 
1. Mexico appeals certain issues of law and legal interpretations develope d in the Panel Report, 
United States – Final Anti-Dumping Me asures on Stainless Steel from Mexico  (the "Panel Report").
1  
The Panel was established to consider a complaint by Mexico concerning the calculation of margins 
of dumping by the United States Department of Commerce (the "USDOC") based on a methodology 
that does not fully reflect export prices that are above normal value.2  
2. Before the Panel, Mexico claimed that:  
 (a)  "model zeroing in investigations"3 is, as such, inconsistent with Articles VI:1  
and VI:2 of the General Agreement on Tariffs and Trade 1994 (the "GATT 1994"), 
Articles 2.1, 2.4, 2.4.2, and 18.4 of the Agreement on Implementation of Article VI of 
the General Agreement on Tariffs and Trade 1994 (the " Anti-Dumping Agreement "), 
and Article XVI:4 of the Marrakesh Agreement Establishing the World Trade 
Organization  (the " WTO Agreement ")4;  
                                                      
1WT/DS344/R, 20 December 2007. 
2Panel Report, para. 2.1.   
3According to Mexico's description, "model zeroing in investigations" occurs when the investigating 
authorities compare the weighted average normal value and the weighted average export price for each model of 
the product under consideration and treat as zero the resu lts of model-specific comparisons where the weighted 
average export price exceeds the weighted average normal  value, when aggregating co mparison results in order 
to calculate a margin of dumping for the product as a whole. (See ibid., paras. 2.1 and 7.7) 
4Ibid., para. 3.1(2). WT/DS344/AB/R 
Page 2  
 
  (b)  model zeroing, as applied in the original investigation at issue in this dispute
5, is 
inconsistent with Articles VI:1 and VI:2 of the GATT 1994, Articles 2.1, 2.4, 2.4.2, 
and 18.4 of the Anti-Dumping Agreement , and Article XVI:4 of the WTO 
Agreement 6; 
 (c)  "simple zeroing in periodic reviews"7 is, as such, inconsistent with Articles VI:1  
and VI:2 of the GATT 1994, Articles 2.1, 2.4, 9.3, and 18.4 of the Anti-Dumping 
Agreement , and Article XVI:4 of the WTO Agreement 8;  and  
(d) simple zeroing, as applied in the five periodic reviews at issue in this dispute9, is 
inconsistent with Articles VI:1 and VI:2 of the GATT 1994, Articles 2.1, 2.4, 9.3,  
and 18.4 of the Anti-Dumping Agreement , and Article XVI:4 of the WTO 
Agreement .10 
3. In the Panel Report, circulated to Members of the World Trade Organization (the "WTO") on 
20 December 2007, the Panel found that "model zeroi ng in investigations" is, as such, inconsistent 
                                                      
5USDOC, Notice of Final Determination of Sales at Le ss Than Fair Value: Stainless Steel Sheet and 
Strip in Coils from Mexico, United States Federal Register , Vol. 64, No. 109 (8 June 1999) 30790, 
subsequently amended as Notice of Amended Final Dete rmination of Sales at Less Than Fair Value and 
Antidumping Duty Order: Stainless Steel Sheet and Strip in Coils From Mexico, United States Federal  
Register , Vol. 64, No. 143 (27 July 1999) 40560 (Exhibit MEX-5.A submitted by Mexico to the Panel).   
See also Panel Report, para. 2.2. 
6Panel Report, para. 3.1(1). 
7According to Mexico's description, "simple zeroing in periodic reviews" occurs when the authorities 
compare the prices of individual expor t transactions against monthly weight ed average normal values and treat 
as zero the results of comparisons where the export pri ce exceeds the monthly weighted  average normal value, 
when aggregating comparison results in order to calculate a margin of dumping for the product as a whole.  
(See ibid., paras. 2.1 and 7.7) 
In our discussion, we use the term "periodic review" to describe the "periodic review of the amount of 
[anti-dumping] duty" as required by Section 751(a) of the United States Tariff Act of 1930 (the "Tariff Act").  
That provision requires the USDOC to review and determine the amount of any anti-dumping duty at least once during each 12-month period beginning on the anniversary of the date of publication of an anti-dumping duty 
order if a request for such a review has been received.  However, in the case of the first assessment proceeding 
following the issuance of the Notice of Antidumping Duty Order, the period of time may extend to a period of up to 18 months in order to cover all entries that may have been subject to provisional measures. 
8Panel Report, para. 3.1(3). 
9The five periodic reviews challenged by Mexico are listed in Exhibits MEX-5.B through MEX-5.F 
submitted by Mexico to the Panel;  further details may be found in Panel Report, para. 2.2. 
10Panel Report, para. 3.1(4).  WT/DS344/AB/R 
 Page 3 
 
 
 with Article 2.4.2 of the Anti-Dumping Agreement 11, and that the USDOC acted inconsistently with 
this provision by using model zeroing in the original investigation at issue.12  However, the Panel 
found that "simple zeroing in periodic reviews" is not, as such, inconsistent with Articles VI:1 
and VI:2 of the GATT 1994 and Articles 2.1, 2.4, and 9.3 of the Anti-Dumping Agreement , and that, 
accordingly, the USDOC did not act inconsistently w ith these provisions by using simple zeroing in 
the five periodic reviews at issue.13  
4. On 31 January 2008, Mexico notified the Dispute Settlement Body (the "DSB") of its 
intention to appeal certain issues of law covered in  the Panel Report and certain legal interpretations 
developed by the Panel, pursuant to Article 16.4 of the Understanding on Rules and Procedures 
Governing the Settlement of Disputes (the "DSU"), and filed a Notice of Appeal14 pursuant to Rule 20 
of the Working Procedures for Appellate Review15 (the " Working Procedures ").  On 7 February 2008, 
Mexico filed an appellant's submission.16  On 25 February 2008, the United States filed an appellee's 
submission17, and Chile, the European Communities, Japan, and Thailand each filed a third 
participant's submission.18  On the same day, China notified its in tention to attend the oral hearing as a 
third participant.19 
                                                      
11Panel Report, para. 8.1(a).  However, the Panel did not recommend to the Dispute Settlement Body 
that it request the United States to bring its model zeroing  procedures into conformity  with its WTO obligations 
under the covered agreements because of  its earlier finding that the United St ates had abandoned that practice as 
from 22 February 2007. ( Ibid., para. 7.45)  The Panel explained that it "fail[ed] to see what purpose would be 
served by a recommendation relating to a measure that no longer exists." ( Ibid., para. 7.50)  The Panel exercised 
judicial economy in relation to Mexico's claims under Articles VI:1 and VI:2 of the GATT 1994, Articles 2.1, 2.4, and 18.4 of the Anti-Dumping Agreement , and Article XVI:4 of the WTO Agreement  regarding "model 
zeroing in investigations". ( Ibid., para. 8.2(a)) 
12Ibid., para. 8.1(b).   
13Ibid., para. 8.1(c) and (d).  The Panel exercised judicial economy in relation to Mexico's claims under 
Article 18.4 of the Anti-Dumping Agreement and Article XVI:4 of the WTO Agreement regarding "simple 
zeroing in periodic reviews". ( Ibid., para. 8.2(b))  
14WT/DS344/7 (attached as Annex I to this Report). 
15WT/AB/WP/5, 4 January 2005. 
16Pursuant to Rule 21 of the Working Procedures .  Along with its appellant's submission, which it filed 
in Spanish, Mexico provided a courtesy English translation and an English executive summary of its appellant's 
submission.  On 8 February 2008, Mexico provided an executive summary of its appellant's submission in Spanish to the Appellate Body and to the United States a nd the third participants.  In view of the fact that 
Mexico filed the appellant's submission in Spanish and the executive summary in English on the due date, and 
that the Spanish executive summary wa s filed after the deadline for filing an appellant's submission, the 
Appellate Body Division hearing the appeal informed the participants and the third participants that it 
considered the Spanish version of the executive summary to be a courtesy translation. 
17Pursuant to Rule 22 of the Working Procedures . 
18Pursuant to Rule 24(1) and (3) of the Working Procedures .  On 29 February 2008, the participants 
and the third participants were provided a courtesy English translation, prepared by the WTO Language 
Services and Documentation Division, of Chile's third pa rticipant's submission originally filed in Spanish on 
25 February 2008. 
19Pursuant to Rule 24(2) of the Working Procedures . WT/DS344/AB/R 
Page 4  
 
 5. By letter dated 8 February 2008, Mexico requested  authorization from the Appellate Body to 
correct a clerical error in its appellant's submissi on, and two clerical errors in the executive summary 
of that submission, pursuant to Rule 18(5) of the Working Procedures .  On 12 February 2008, the 
Appellate Body Division hearing the appeal invite d the United States and the third participants to 
comment on Mexico's request.  No objections to Mexi co's request were received and, on 14 February 
2008, the Division authorized Mexico to correct the identified clerical errors. 
6. The oral hearing in this appeal was held on 6 March 2008.  The participants and the third 
participants, with the exception of China, made or al statements and responded to questions posed by 
the Members of the Division hearing the appeal. 
7. During the course of the appeal, the Division r eceived a request pertaining to a procedural 
matter.  By letter dated 3 March 2008, the Europ ean Communities requested the Appellate Body to 
clarify whether the United States' appellee's submissi on was considered to be filed with the Appellate 
Body within the meaning of Rule 18(1) of the Working Procedures .  The European Communities 
pointed out that the Working Schedule for this a ppeal, communicated to the parties on 1 February 
2008, provided for the United States' appellee's submission to be filed by Monday, 25 February 2008, 
at 5:00 p.m.  However, the electronic version of the United States' appellee's submission was sent to 
the Appellate Body by e-mail only at 7:56 p.m., and the European Communities presumes that printed copies were delivered to the Appellate Body after that time.  As a result, the United States "had 
significant time to examine the filings of the Thir d Participants and eventually adjust its own 
submission prior to filing."
20  At the oral hearing, the European  Communities reiterated its request that 
the Appellate Body clarify whether it considers th e United States' appellee's submission to be filed 
within the meaning of Rule 18(1) of the Working Procedures , and what the consequences are, if any, 
of a late filing.21 
                                                      
20Letter from the European Communities to the Appellate  Body Secretariat, dated 3 March 2008, p. 2. 
(emphasis omitted) 
21This issue is addressed at, infra , paras. 163 and 164.  WT/DS344/AB/R 
 Page 5 
 
 
 II. Arguments of the Participants  and the Third Participants 
A. Claims of Error by Mexico – Appellant 
1. Simple Zeroing, As Such, in Periodic Reviews  
(a) Articles VI:1 and VI:2 of the GATT 1994 and Articles 2.1 and 9.3 of 
the Anti-Dumping Agreement  
8. Mexico submits that the Panel erred in finding that simple zeroing in periodic reviews is not, 
as such, inconsistent with Articles VI:1 and VI:2  of the GATT 1994 and Articles 2.1 and 9.3 of the  
Anti-Dumping Agreement .  Mexico requests the Appellate Body to reverse this finding and to find, 
instead, that simple zeroing in periodic reviews is, as such, inconsistent with these provisions.  
Mexico's appeal is based on several arguments. 
9. First, Mexico argues that, in any anti-dumping proceeding—including periodic reviews under 
Article 9.3 of the Anti-Dumping Agreement —"the margin of dumping must be calculated in respect of 
individual exporters or foreign producers subject  to such proceeding and for the product under 
consideration taken as a whole."22  Once the authorities define the product under consideration, the 
scope of that definition also determines the sc ope of the authorities' dumping determination.  
Therefore, dumping as defined in the GATT 1994 and the Anti-Dumping Agreement  cannot exist in 
relation to a specific type, model, or category of the product under consideration or in relation to 
individual export transactions.  It follows that, when the calculation of dumping involves multiple 
comparisons between normal value and export price, the results of the intermediate comparisons are 
not "margins of dumping" but, rather, "inputs to be  taken into account in the determination of the 
margin of dumping for the product under considera tion as a whole for each known exporter or foreign 
producer."23  This is also borne out by the context pr ovided by Articles 6.10, 9.4, and 9.5 of the 
Anti-Dumping Agreement.   On this basis, Mexico argues th at Article 9.3 requires investigating 
authorities to aggregate the results of all the co mparisons when calculating the overall margin of 
dumping, and that the results of intermediate  comparisons cannot be selectively ignored or 
disregarded.  By contrast, the Panel's "reasoning"24 inappropriately permits margins of dumping to be 
                                                      
22Mexico's appellant's submission, para. 31 (" el margen de dumping debe calcularse con respecto a los 
exportadores individuales y productores extranjeros sujetos a dicho procedimiento y para el producto objeto a consideración tomado en su conjunto ").  
23Ibid., para. 32 (" insumos que deben tomarse en cuenta en la determinación de margen de dumping 
para el producto considerado tomado en su conjunto para cada exportador o productor extranjero identificado "). 
24Ibid., para. 8 (" el razonamiento "). WT/DS344/AB/R 
Page 6  
 
 defined differently under different contexts or syst ems of administration, which is contrary to the 
uniform definition of "dumping" provided for in Article 2.1 of the  Anti-Dumping Agreement .   
10. Secondly, Mexico contends that the Panel erred by concluding that anti-dumping measures 
are concerned with the pricing beha viour of importers in relation to individual import transactions.  
For Mexico, there is no support for such a conclusion in the text or context of the relevant agreements.  
As the Appellate Body has confirmed, margins of dumping do not exist for individual importers or 
transactions but, rather, they are related to the pr icing behaviour of exporte rs and foreign producers 
with respect to their exports of the product under consideration.
25  Mexico rejects the Panel's reliance 
on Article VII of the GATT 1994 in support of th e proposition that the word "product" may be 
interpreted on a transaction-specifi c basis.  That Article is concerned with the amount of customs 
duties to be applied on each import transaction, a nd therefore it provides an "entirely different"26 
context to the term "product" than the one provided  for in Article VI, which is concerned with the 
pricing behaviour of exporters and foreign producer s.  Mexico also emphasizes that the Panel's 
interpretation of the term "produc t" cannot be reconciled with the investigating authority's duty to 
make an injury determination on the basis of all th e sales made by an exporter or foreign producer of 
that product.    
11. In addition, Mexico suggests that, by referring to an importer's margin of dumping, a concept 
for which there is no textual support in the Anti-Dumping Agreement , the Panel mistakenly equated 
the system for collection of anti-dumping duties from i ndividual importers with the rules that must be 
followed for calculating margins of dumping for indi vidual exporters.  According to Mexico, liability 
to pay anti-dumping duties may be based on a specifi c transaction.  However, the rate and amount of 
that payment is subject to the ceiling provided in  Article 9.3, which is the margin of dumping 
calculated for the exporter or foreign producer under Article 2 of the Anti-Dumping Agreement .  
Mexico characterizes as "factually incorrect"27 the Panel's assertion that the obligation to pay anti-
dumping duties is not incurred on the basis of a comp arison of an exporter's total sales but, rather, on 
the basis of an individual sale betw een the exporter and its importer.   
12. Thirdly, Mexico argues that the Panel erred in concluding that the existence of a "prospective 
normal value" system under Article 9.4(ii) of the Anti-Dumping Agreement  lends contextual support 
to the view that "'anti-dumping duties can be determined on a transaction-specific basis' under 
                                                      
25See Mexico's appellant's submission, para. 47 (referring to Appellate Body Report, US – Zeroing 
(Japan) , para. 111). 
26Ibid., para. 44 (" totalmente distintos "). 
27Ibid., para. 50 (" factualmente incorrecta ").  WT/DS344/AB/R 
 Page 7 
 
 
 retrospective systems such as that  employed by the United States."28  The Panel's contextual 
arguments erroneously conflate the amount of duty that is permitted to be collected from the importer 
under a prospective normal value system and the exporter's "margin of dumping".  The Appellate 
Body has consistently distinguished between these two distinct concepts.29  According to Mexico, 
"it is precisely because the amount of duties coll ected from importers under a prospective normal 
value system may differ from the actual 'margin of dumping' of the exporter or producer, that 
Article 9.3.2 requires an opportunity for a review."30  While the Anti-Dumping Agreement  provides 
for flexibility in the structure of such collection sy stems, all such systems are subject to the limitation 
in Article 9.3 that anti-dumping duties collected fro m the importers "shall not exceed the margin of 
dumping established under Article 2", for the e xporter or foreign producer concerned.   
13. Fourthly, Mexico disputes the relevance to this  proceeding of the Panel's findings concerning 
the purported "mathematical equivalence" in the r esults that would be obtained in the absence of 
zeroing under the weighted average-to-weighted average ("W-W") comparison methodology provided for in the first sentence of Article 2.4.2 of the Anti-Dumping Agreement  and the weighted average-to-
transaction ("W-T") comparison methodology provided for in the second sentence of Article 2.4.2.  
The comparison methodology provided for in the second sentence of Article 2.4.2 represents an 
exceptional rule that is not at issue in this disput e.  Mexico points out that the Appellate Body has 
consistently rejected the "mathematical equivalence"  argument on the basis that it "is based on a set of 
assumptions that may not hold in all situations".
31  The Appellate Body has also clarified that the 
comparison methodology provided for in the second sen tence of Article 2.4.2 is an exception, and 
cannot therefore determine the interpretation of the two methodologies provided for in the first 
sentence of that provision.32  Mexico further submits that the Panel improperly dismissed Mexico's 
demonstration that W-T comparisons will not yield the same result as W-W comparisons if monthly normal values are used within the targeted pattern, as foreseen under the USDOC Regulations 
implementing Article 2.4.2.
33  For Mexico, there is no textual s upport for the Panel's conclusion that 
Article 2.4.2 precludes the use of different averag ing periods between the W-W and W-T comparison 
                                                      
28Mexico's appellant's submission, para. 56 (" de valor normal prospectivo "; "los 'derechos antidumping 
puede[n] realizarse sobre la base de transacciones espec íficas' conforme a un sistema retrospectivo como tiene 
Estados Unidos ") (quoting Panel Report, para. 7.131). 
29See ibid., para. 60 (referring to Appellate Body Report, US – Zeroing (Japan) , para. 162). 
30Ibid. ("es precisamente porque el monto de los derechos recaudados de los importadores conforme al 
sistema de valor normal prospectivo puede ser distin to del 'margen de dumping' real del exportador o 
productor, que el artículo 9.3.2 dispone una oportunidad para revisarlo "). 
31Ibid., para. 66 (" el argumento de equivalencia matemática  se basa en una serie de suposiciones que 
pudieran no ser aplicables en todas las situaciones ") (referring to Appellate Body Report, US – Zeroing 
(Japan) , para. 133;  and Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 99). 
32See ibid. (referring to Appellate Body Report, US – Zeroing (Japan) , para. 133;  and Appellate Body 
Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 97). 
33See ibid., paras. 68 and 74. WT/DS344/AB/R 
Page 8  
 
 methodologies.  To the contrary, Article 2.4 of the Anti-Dumping Agreement  requires the use of 
shorter averaging periods in W-T comparisons, by  stipulating that the comparison between export 
price and normal value be made "at as nearly as possible the same time".   
14. Finally, Mexico argues that the Panel imprope rly sought to justify its conclusions on the 
grounds of "undesirable results"
34 that would arise from a prohibition of simple zeroing.  For example, 
the Panel asserted that a prohibition of simple zer oing would inappropriately "expand the scope of 
periodic reviews"35 to cover all export shipments of an expor ter or foreign producer.  Mexico disputes 
this conclusion, arguing that the USDOC Regulations do not give investigating authorities the discretion to limit the scope of the reviews to only exports pertaining to the importer requesting the 
review.  According to Mexico, importers may request  the USDOC to initiate a periodic review of any 
exporter or foreign producer from which they have imported during the review period.  However, "if 
an exporter is reviewed at all, the USDOC will examine  all  the export sales of that exporter or 
producer."
36  Mexico also argues that, under United States law, exporters or the domestic industry 
may request the initiation of a periodic review, and th at in such cases the scope of the review will not 
be limited to sales made to specific importers.  Mexico further dismisses as speculative the Panel's 
conclusion that a prohibition of simple zeroing will conflict with the remedial purposes of anti-
dumping duties by creating a "competitive disincentive to engage in fair trade"37 among individual 
importers.  Even if such considera tions were relevant to resolving this dispute, Mexico observes that, 
"[t]o the extent that the anti-dumping measures impo sed are intended to create incentives for a change 
in pricing behaviour ..., the party to be enc ouraged logically is the exporter or producer."38  In 
addition, Mexico argues that, whereas it is clear from the text of the Anti-Dumping Agreement  that all 
imports from an exporter or foreign producer found to be dumping may be included in the volume of 
"dumped imports" for the purposes of determining in jury, the Panel's reasoning implies that, for 
purposes of duty assessment, "the same transactions are treated as 'non-dumped' for one purpose, and 
as 'dumped' for another purpose."39  Such reasoning runs contrary to  "the requirement for consistent 
treatment of a product"40 in determining dumping and its injuri ous effect on the domestic industry.  
                                                      
34Mexico's appellant's submission, para. 75 (quoting Panel Report, para. 7.146). 
35Ibid., para. 81 (quoting Panel Report, para. 7.146). 
36Ibid., para. 83 (" si examina a un exportador, el USDOC examinará todas  las ventas de exportaciones 
del exportador o productor "). (original emphasis)  
37Ibid., para. 76 (quoting Panel Report, para. 7.146).  
38Ibid., para. 78 (" En la medida que las medidas antidumping impuestas pretenden crear incentivos 
para modificar el comportamiento en materia de precios …, la parte que lógicamente recibe este incentivo es el 
exportador o productor "). 
39Ibid., para. 87 (quoting Appellate Body Report, US – Zeroing (Japan) , para. 128). 
40Ibid., para. 88 (" el requisito de trato consistente a un producto ") (referring to Appellate Body Report, 
US – Softwood Lumber V , para. 99).  See also ibid., para. 46.  WT/DS344/AB/R 
 Page 9 
 
 
 (b) Article 2.4 of the Anti-Dumping Agreement  
15. Mexico argues that the Panel erred in finding that simple zeroing in periodic reviews is not, 
as such, inconsistent with Article 2.4 of the Anti-Dumping Agreement .  Mexico requests the Appellate 
Body to reverse the Panel's finding and to find, in stead, that simple zeroing in periodic reviews is 
inconsistent with this provision.   
16. Referring to the Appellate Body's decision in US – Zeroing (Japan) , Mexico contends that 
simple zeroing is "inherently biased"41 and hence violates the requirement in Article 2.4 to make a 
"fair comparison" between normal value and export price;  it "artificially inflates"42 the margin of 
dumping because export prices that exceed the normal va lue are systematically ignored.  Mexico also 
points out that, in reaching its finding that simple zer oing in periodic reviews is not inconsistent with 
Article 2.4, the Panel relied on its erroneous conclusion that simple zeroing is not, as such, 
inconsistent with Articles VI:1 and VI:2 of  the GATT 1994 and Articles 2.1 and 9.3 of the Anti-
Dumping Agreement .   
17. In addition, Mexico argues that the Panel failed to address certain arguments presented by 
Mexico in relation to Article 2.4.  In particular, Me xico faults the Panel for failing to respond to its 
arguments that simple zeroing in periodic reviews "d istorts the prices of certain export transactions by 
artificially reducing them, unjustifiably inflating the apparent magnitude of dumping", and that simple 
zeroing "is not impartial, even-handed, or unbiased".43  Mexico submits that, by not considering these 
arguments, the Panel failed to make an objective assessment of the matter before it as required by 
Article 11 of the DSU.   
2. Simple Zeroing As Applied in Periodic Reviews  
18. For the same reasons as those set out above, Mexi co submits that the Panel erred in finding 
that simple zeroing, as applied by the USDOC in the five periodic reviews at issue in this dispute, is 
not inconsistent with Articles VI:1 and VI:2 of the GATT 1994 and Articles 2.1, 2.4, and 9.3 of the 
Anti-Dumping Agreement .  Mexico therefore requests the Appella te Body to reverse this finding and 
to find, instead, that the United States acted in consistently with its obligations under these 
provisions.44 
                                                      
41Mexico's appellant's submission, para. 90 (" intrínsecamente parcial "). 
42Ibid. ("infla de manera artificial "). 
43Ibid., para. 92 (" distorsiona los precios de ciertas transacciones al reducir de manera artificial e 
inflar, sin justificación, la magnitud del dumping ";  "no es imparcial, equitativa ni justa "). 
44See ibid., paras. 93 and 94. WT/DS344/AB/R 
Page 10  
 
 3. Article 11 of the DSU
 
19. Finally, Mexico argues that the Panel acted inconsistently with Article 11 of the DSU by 
refusing to follow Appellate Body reports adopted by the DSB that address identical issues with 
respect to the same party—the United States.  More specifically, Mexico asserts that, by making 
findings and reaching conclusions that are "identical " to those that have already been rejected or 
reversed by previous Appellate B ody reports adopted by the DSB, the Panel has failed to comply with 
its duty under Article 11 of the DSU to assist the DSB in discharging its responsibilities under the 
DSU.45   
20. Mexico acknowledges that, in the WTO dispute settlement system, a panel is generally not 
bound by previous Appellate Body findings or co nclusions.  However, quoting the Appellate Body 
Report in US – Oil Country Tubular Goods Sunset Reviews , Mexico asserts that "following the 
Appellate Body's conclusions in earlier disputes is not only appropriate, but is what would be 
expected from panels [...] where the issues are the same."46   
21. Furthermore, Mexico emphasizes that a panel's duties under Article 11 are underpinned by 
Articles 3.2 and 3.3 of the DSU, which establish th at the dispute settlement system is "a central 
element in providing security and predictability to  the multilateral trading system", and that the 
"prompt settlement of situations", in which a Memb er considers that any benefits accruing to it are 
being impaired by measures taken by another Memb er, is "essential to the effective functioning of the 
WTO".47  Mexico suggests that the Panel's failure to  follow established Appellate Body precedent has 
forced it to appeal findings and conclusions of the Pa nel that are identical to those that have already 
been overturned by the Appellate Body in previ ous disputes that involved the same measures and the 
same responding party.  According to Mexico, this is  inconsistent with the Panel's function to assist 
the DSB in discharging its responsibilities under the DSU because it interferes with the prompt 
settlement of this dispute, thereby frustrating th e effective functioning of the WTO dispute settlement 
system and undermining its security and predictab ility.  The Panel's failure to follow previous 
Appellate Body reports, if left uncorrected, w ould diminish Mexico's rights under the covered 
agreements relative to other WTO Members. 
                                                      
45See Mexico's appellant's submission, para. 97 (" idénticas "). 
46Ibid. (quoting Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , para. 188). 
47See ibid., para. 95.  WT/DS344/AB/R 
 Page 11 
 
 
 B. Arguments of the United States – Appellee 
1. Simple Zeroing, As Such, in Periodic Reviews  
(a) Articles VI:1 and VI:2 of the GATT 1994 and Articles 2.1 and 9.3 of 
the Anti-Dumping Agreement  
22. The United States argues that the Panel was corre ct in finding that simple zeroing in periodic 
reviews is not, as such, inconsistent with Artic les VI:1 and VI:2 of the GATT 1994 and Articles 2.1 
and 9.3 of the Anti-Dumping Agreement .  In the United States' view, Mexico's interpretation of these 
provisions contradicts, for several reasons, the ordinary meaning of the relevant treaty text. 
23. First, the United States submits that the phr ase "all comparable export transactions" in the 
first sentence of Article 2.4.2 of the Anti-Dumping Agreement  does not provide a basis for prohibiting 
zeroing in periodic reviews.  According to the Unite d States, that phrase and the rationale attached to 
it in previous Appellate Body reports are li mited only to zeroing in W-W comparisons in 
investigations, and they do not extend to pe riodic reviews pursuant to Article 9 of the Anti-Dumping 
Agreement .48   
24. Secondly, the United States maintains that Me xico's claim rests largely on a series of 
Appellate Body findings that "dumping" and "margins of dumping" relate "solely, and exclusively, to 
the 'product' under consideration taken 'as a whole'"49, and that dumping cannot occur with respect to 
an individual transaction.  According to the United States, this leads to "a broad[] prohibition on 
zeroing in all contexts [in which] 'multiple comparisons' are made"50, and expands the prohibition of 
zeroing to transaction-to-transaction ("T-T") comparis ons in investigations and in periodic reviews 
under Article 9 of the Anti-Dumping Agreement .  Yet, according to the United States, the notion of 
"product as a whole" has no textual found ation in the covered agreements.  
25. The United States submits that the term "product"  is used in different ways in different 
contexts in different provisions, and that it does not  exclusively refer to "product as a whole".  The 
term "product" can have either a collective meaning or an individual meaning.  Article 2.6 of the  
Anti-Dumping Agreement  uses the term "product" in the collec tive sense;  by contrast, according to 
the United States, Article VII:3 of the GATT 1994—whi ch refers to "[t]he value for customs purposes 
of any imported product"—"uses  the term 'product' in the individual sense of the object of a particular 
                                                      
48United States' appellee's submission, para. 39. 
49Ibid., para. 40 (quoting Mexico's first written submission to the Panel, para. 171). 
50Ibid. WT/DS344/AB/R 
Page 12  
 
 transaction".
51  The United States main tains that neither the Anti-Dumping Agreement , nor the 
GATT 1994, provides a textual basis for requiring that a margin of dumping necessarily be 
established on an aggregate basis fo r the "product as a whole".   
26. Thirdly, the United States maintains that the Appellate Body's interpretation of the term 
"margin of dumping" is at odds with long-standi ng GATT/WTO practice and the ordinary meaning of 
the term.  The United States disagrees with the interp retation that any margins arising from individual 
transactions or individual importers  are not "margins of dumping" per se  but, instead, represent only 
inputs to be taken into account for calculating an aggregate margin of dumping for each exporter or 
foreign producer.52  According to the United States, the text  and the context of the agreements lend 
support to a transaction-specific meaning for the term "margin of dumping".   
27. The United States argues that the term "margin of dumping" forms part of "a series of special 
terms that many [negotiators] ha d ... negotiated, interpreted, app lied, debated, fought over, and 
discussed for years"53 under the General Agreement on Tariffs and Trade 1947  (the "GATT 1947"), 
the Kennedy Round Agreement on Implementation of Article VI  of the General Agreement on Tariffs 
and Trade 54 (the " Kennedy Round Anti-Dumping Code "), and the Tokyo Round Agreement on  
Implementation of Article VI of the General Agreement on Tariffs and Trade 55 (the " Tokyo Round 
Anti-Dumping Code ").  The United States further asserts that Article VI of the GATT 1947, the Tokyo 
Round Anti-Dumping Code , and GATT 1947 practice were part of the "surrounding circumstances"56 
of the Uruguay Round negotiations and that, therefore,  they constitute an important interpretative tool 
for ascertaining the "ordinary meaning" of the term  "margin of dumping".  The United States submits 
that the term "margin of dumping" first appear ed in Article VI:1 of the GATT 1947, and was 
subsequently incorporated into the Kennedy Round Anti-Dumping Code , the Tokyo Round Anti-
Dumping Code , the GATT 1994, and the Anti-Dumping Agreement .57  None of these agreements 
referred to a requirement to aggregate the results of various price comparisons for the "product as a 
whole" to arrive at a single margin of dumping.  The United States maintains that, on the contrary, the 
1960 Report of the Group of Experts on  Anti-Dumping and Countervailing Duties 58 (the "1960 Group 
of Experts Report"), the practice of GATT Members with active anti-dumping programmes, and the 
                                                      
51United States' appellee's submission, para. 47. 
52See ibid., para. 53. 
53Ibid., para. 55. 
54TN.64/98, 20 June 1967. 
55BISD 26S/171, entered into force 1 January 1980. 
56United States' appellee's submission, para. 56 (referring to Appellate Body Report, EC – Chicken 
Cuts, paras. 175 and 176). 
57See United States' appellee's submission, para. 57. 
58GATT Second Report of the Group of Expert s, Anti-Dumping and Countervailing Duties, GATT 
Document L/1141, adopted 27 May 1960, BISD 9S/194.  WT/DS344/AB/R 
 Page 13 
 
 
 negotiating history of the Anti-Dumping Agreement , demonstrate that the concepts of "dumping" and 
"margin of dumping" had long been understood in GATT practice as referring to individual 
transactions.59  In this respect, the United States argu es that these terms had a "special meaning"60 in 
the sense of Article 31(4) of the Vienna Convention on the Law of Treaties 61 (the " Vienna 
Convention "). 
28. In this respect, the United States makes referenc e to two pre-WTO panels established in 1991 
under Article 15 of the Tokyo Round Anti-Dumping Code  to consider challenges by Japan and by 
Brazil to the European Communities' affirmative anti-dumping determinations in EC – Audio 
Cassettes  and in  EEC – Cotton Yarn , respectively.  In both cases, the panels found that the European 
Communities' refusal to consider "negative dumpi ng margins" arising from non-dumped sales was not 
a violation of the Tokyo Round Anti-Dumping Code .  The United States claims that this demonstrates 
that "there was no 'common understanding' among the Contracting Parties at the time that the term 
'margin of dumping' incorporated an implicit prohibition of zeroing."62 
29. Fourthly, the United States disagrees with Mexico that Article 9.3 of the Anti-Dumping 
Agreement  requires investigating authorities to aggregate the results of all comparisons when 
calculating the overall "margin of dumping" in peri odic reviews.  The United States contends that 
neither Article 9.3 of the Anti-Dumping Agreement , nor Article VI of the GATT 1994, speaks to the 
aggregation of individual transactions in periodi c reviews or contains an explicit or implicit 
prohibition of zeroing.  The United States maintains that import duties are assessed on individual 
entries resulting from individual transactions.  Conseque ntly, the obligation set forth in Article 9.3, to 
assess no more in anti-dumping duties than the margin  of dumping, is applicable at the level of 
individual transactions as well.  The United Stat es refers to the findings of the panels in US – Zeroing 
(Japan)  and US – Zeroing (EC)  in support of its contention that the actual liability for anti-dumping 
duties accrues to individual importers that seek to en ter such goods into the market where there is an 
anti-dumping order.   
30. Fifthly, the United States asserts that the rele vant context speaks against Mexico's contention 
that Article VI of the GATT 1994 and Article 9.3 of the Anti-Dumping Agreement  bar the calculation 
of duties on the basis of individual transactions.  The United States finds contextual support in 
Article 9.2 of the Anti-Dumping Agreement , arguing that this provision recognizes that duties can vary 
on a case-by-case basis, and do not consist of broad a ggregates.  In the United States' view, Article 9.2 
                                                      
59See United States' appellee's submission, para. 64. 
60Ibid., para. 56. 
61Done at Vienna, 23 May 1969, 1155 UNTS 331;  8 International Legal Materials 679. 
62United States' appellee's submission, para. 62. WT/DS344/AB/R 
Page 14  
 
 also recognizes that such duty collection applies to  the imported goods and not to the exporter or 
foreign producer, because it refers to the collection of duties on "imports", which necessarily 
encompasses individual transactions.  Furthermore, prospective normal value systems referred to in 
Article 9.4(ii) of the Anti-Dumping Agreement  also reflect the notion of transaction-based duty 
collection.  
31. The United States further argues that a prohibiti on of zeroing that applies beyond the context 
of W-W comparisons in investigations would be in consistent with the principle of effective treaty 
interpretation, because it would render useless and re dundant the remaining text of Article 2.4.2 of the 
Anti-Dumping Agreement , which provides for an alternative targeted dumping comparison 
methodology.  The targeted dumping methodology in the second sentence of Article 2.4.2 is a limited 
exception that was designed to address situati ons where a symmetrical comparison methodology 
would mask the existence of dumping.
63  Referring to the "mathematical equivalence" argument, the 
United States argues that "[i]t is hard to see how th e targeted dumping provision  could have 'utility' if 
the only alternative methodologies that would provide it utility are, themselves, inconsistent with the 
[Anti-Dumping] Agreement".64  Therefore, in the United States' view, a prohibition of zeroing that 
applies also to the targeted dumping comparison methodology "would do major violence to the text 
by rendering whole textual provisions of the agreement 'inutile'".65 
32. The United States maintains that, if the Appe llate Body nonetheless concludes that the 
relevant legal terms of the Anti-Dumping Agreement  are ambiguous, it woul d be appropriate and 
consistent with Article 32 of the Vienna Convention to rely on supplementary means of interpretation, 
such as the preparatory work and th e circumstances of its conclusion.66  The United States submits 
that the negotiating history of the Uruguay Round Anti-Dumping Agreement  and panel reports in 
dispute settlement proceedings that were underway at the time the Anti-Dumping Agreement  was 
negotiated shed light on the meaning of the term s and provisions at issue in the present appeal.67   
                                                      
63See United States' appellee's submission, para. 88. 
64Ibid., para. 90. 
65Ibid., para. 93. 
66See ibid., para. 94. 
67See ibid., paras. 94-97.  WT/DS344/AB/R 
 Page 15 
 
 
 33. The United States argues that an examination of the historical background68 of the Anti-
Dumping Agreement  demonstrates that the negotiators were not able to agree on a broad prohibition 
of zeroing or a requirement to aggregate individual transactions under Article 9.3.69  According to the 
United States, "[n]o consensus could be reached because despite extensive efforts by Japan, Hong 
Kong, Singapore, and the Nordic Countries, their proposals were firmly opposed by the [European Communities], the United States and Canada".
 70 
34. The United States points out that its retrospective duty assessment system is designed to 
ensure that an individual importer's liability reflect s the actual level of dumping involved in that 
importer's transactions.  Accordingly, an importe r should not have to pay duties because another 
importer bought dumped goods, or escape liability b ecause another importer has not bought dumped 
goods.71  The United States argues that, if, fo llowing the Appellate Body's reasoning in US – Zeroing 
(EC)  and US – Zeroing (Japan) , "the amount of one importer's anti dumping margin must be averaged 
to account for the amount by which some other tr ansaction involving an entirely different importer 
was sold at above normal value, and vice versa , then an importer could be subjected to liability for 
dumped imports made by another importe r over whom [it] has no control."72  According to the United 
States, this would also mean that "the importer who is engaged in dumped transactions would receive 
a windfall, because [it] may escape antidumping duties, or have [its] liability sharply reduced through 
the actions of another importer who behaved responsibly by e liminating its dumping margin."73  The 
United States further submits that Mexico's interp retation of Article 9.3 as requiring the reduction of 
duty liability to account for non-dumped transactions is  also inconsistent with the treatment of 
equivalent situations in prospective normal value systems.74 
(b) Article 2.4 of the Anti-Dumping Agreement  
35. The United States requests the Appellate Body to  uphold the Panel's finding that the use of 
simple zeroing in periodic reviews is not  inconsistent with Article 2.4 of the Anti-Dumping 
                                                      
68The "historical background" that the United States invokes as support for its position consists of 
pre-WTO panel reports and certain proposals submitted by various delegations in the context of the negotiations on the Anti-Dumping Agreement .  For instance:  Panel Report, EC – Audio Cassettes  (unadopted);  
Panel Report, EEC – Cotton Yarn  (adopted); Communications from Japan , MTN.GNG/NG8/W/11   
and MTN.GNG/NG8/W/30; Proposals by Hong Kong, China, MTN.GNG/NG8/W/51/Add. 1 and MTN.GNG/NG8/W/46; Proposal by Singapore, MTN.GNG/NG8/W/55; and Proposal by the Nordic Countries, 
MTN.GNG/NG8/W/76. (See United States' appellee's submission, paras. 114-128) 
69See United States' appellee's submission, paras. 114, 126, and 128.  
70Ibid., para. 128.  
71See ibid., para. 101. 
72Ibid., para. 102.  
73Ibid.  
74See ibid., para. 103. WT/DS344/AB/R 
Page 16  
 
 Agreement .  The United States submits that the Panel wa s correct in rejecting Mexico's claims under 
Articles VI:1 and VI:2 of the GATT 1994 and Articles 2.1 and 9.3 of the Anti-Dumping Agreement .  
The United States argues that, in doing so, the Pane l rejected the premise underlying Mexico's claim 
under the "fair comparison" requirement in Article 2.4.   In addition, the United States asserts that the 
"fair comparison" language in Article 2.4 encompa sses only the specific requirements set forth in that 
provision and does not contain a broad-ranging  mandate to determine whether all dumping 
calculations are "fair" or "unfair".
75  
36. The United States further observes that the te rm "fair comparison" originated in the 
1967 Kennedy Round Anti-Dumping Code , where the negotiators sought to clarify the use of the 
various adjustments in price comparisons as those listed in Article 2.4 of the Anti-Dumping 
Agreement .  The United States maintains that this la nguage was incorporated with only minor 
modifications into the Tokyo Round Anti-Dumping Code .  Later, it was included in the Uruguay 
Round Anti-Dumping Agreement  as a stand-alone sentence.  However, the "fair comparison" 
requirement has always been understood to refer to th e various adjustments listed in Article 2.4, and 
not as a freestanding obligation relati ng to all anti-dumping calculations.76  In this context, the United 
States makes reference to the findings of the panels in EC – Audio Cassettes  and  EEC – Cotton 
Yarn .77  According to the United States, these pre-WTO panel reports demonstrate that "fair 
comparison" refers only to allowances or adjustme nts to be made to calculate normal value and the 
export price, and not to zeroing.78 
2. Simple Zeroing As Applied in Periodic Reviews  
37. The United States requests the Appellate Body to reject Mexico's "as applied" claims that 
simple zeroing in the five periodic reviews at issue is inconsistent with Articles VI:1 and VI:2 of the 
GATT 1994 and Articles 2.1, 2.4, and 9.3 of the Anti-Dumping Agreement .  In the United States' 
view, the Panel properly found that simple zeroing, as such, does not violate the GATT 1994 or the Anti-Dumping Agreement .  The United States points out that Mexico's "as applied" claims are 
dependent upon the outcome of its appeal of the Panel's findings relating to its "as such" claims.
79   
                                                      
75United States' appellee's submission, para. 69. 
76See ibid., para. 67. 
77See ibid., paras. 67 and 69. 
78See ibid., paras. 109-113. 
79See ibid., para. 129.  WT/DS344/AB/R 
 Page 17 
 
 
 3. Article 11 of the DSU  
38. The United States disagrees with Mexico that the Panel failed to fulfil its responsibilities 
under Article 11 of the DSU by not adhering to previ ous Appellate Body findings.  The United States 
refers to the Appellate Body Report in Japan – Alcoholic Beverages II , stating that adopted reports 
"are not binding, except with resp ect to resolving the particular dispute between the parties".80  In the 
case before it, the Panel "carefully considered a nd took into account the Appellate Body's previous 
rulings on zeroing and explained in  detail why it did not believe they should apply in this case."81  In 
the view of the United States, "treat[ing] DSB ru lings as fully binding and definitive, even in a 
situation where experts have openly and cogently disagreed, would only undermine the legitimacy of 
the system".82 
4. Article 17.6(ii) of the Anti-Dumping Agreement  
39. The United States submits that, because its approach to periodic reviews rests on a 
permissible interpretation of the GATT 1994 and the Anti-Dumping Agreement , under Article 17.6(ii) 
of the Anti-Dumping Agreement , the Panel was required to find this a pproach to be in conformity with 
the United States' WTO obligations.  Article 17.6(ii) was added to the Anti-Dumping Agreement  in the 
closing days of the Uruguay Round negotiations.  This, in the United States' view, reflects the 
negotiators' recognition that they had left certain issues unresolved in the Anti-Dumping Agreement  
and that customary rules of interpretation of public  international law would not always yield only one 
permissible reading of a given provision.  For the United States, the absence of a similar provision in 
other WTO agreements demonstrates that WTO Members were aware that the anti-dumping text 
"would pose particular challenges and in many instances would permit more than one legitimate 
interpretation".83    
40. The United States requests the Appellate Body to  reject Mexico's claims.  For the United 
States, "it is plain that Mexico and others are tryi ng to get through the Appellate Body what they did 
not achieve at the negotiating table in the Uruguay Round."84  According to the United States, to read 
a new obligation into Article VI of the GATT 1994 and the Anti-Dumping Agreement  "would only 
                                                      
80United States' appellee's submission, para. 131 (quoting Appellate Body Report, Japan – Alcoholic 
Beverages II , p. 14, DSR 1996:I, 97, at 108). 
81Ibid., para. 131. 
82Ibid., footnote 9 to para. 11. 
83Ibid., para. 137. 
84Ibid., para. 140. WT/DS344/AB/R 
Page 18  
 
 contribute to further uncertainty and unpredictability, and further diminish the vital role of the WTO 
negotiations in expanding world trade."
85 
C. Arguments of the Third Participants 
1. Chile  
41. Chile notes that this appeal raises the critical questions of whether panels are required to 
follow previously adopted Appellate Body repor ts addressing the same issue, and whether the 
Appellate Body should follow its own prior inte rpretation when reviewing a panel report that 
disregards that interpretation.  Chile suggests th at the Appellate Body should exercise caution in 
relation to Mexico's claim that the Panel violated  Article 11 of the DSU by not following previous 
Appellate Body findings on the same issue covered in  this dispute.  Chile agrees with Mexico that the 
Panel's conclusions undermine the security and predic tability of the multilateral trading system and, if 
upheld by the Appellate Body, would prejudice Me xico in relation to other WTO Members.  
Nevertheless, the Panel's findings cannot be considered a failure to conduct an objective assessment 
of the matter pursuant to Article 11 of the DSU.  Ch ile stresses that the Appellate Body itself has only 
suggested that it would be "a ppropriate" and is "expected"86 that panels follow previous Appellate 
Body findings, but has not found that they are bound to do so.  
42. Chile also maintains that the Appellate Body should interpret Articles VI:1 and VI:2 of the 
GATT 1994 and Articles 2.1, 2.4, and 9.3 of the Anti-Dumping Agreement in accordance with the 
rules of treaty interpretation codified in the Vienna Convention .  That there are previous Appellate 
Body findings on zeroing, and that this issue is  being addressed under the Doha Round negotiations, 
are circumstances "which must be duly appreciated but must not serve as a justification for the Appellate Body to refrain from exercising the functions assigned to it."
87 
43. Finally, Chile stresses that zeroing is designed to inflate artificially margins of dumping and 
to generate a finding of dumping even where no dumping exists.  In Chile's view, zeroing is, 
therefore, inconsistent with the "fair comparis on" requirement contained in Article 2.4 of the Anti-
Dumping Agreement.   
                                                      
85United States' appellee's submission, para. 140. 
86Chile's third participant's submission, p. 2 (" apropiado "; "se espera " que así lo hagan ).  
87Ibid. ("que deben ser ponderadas en su debida dimensión pero no servir de justificación para que el 
[Órgano de Apelación] se abstenga de ejercer las funciones que le han sido encomendadas ").  WT/DS344/AB/R 
 Page 19 
 
 
 2. European Communities  
44. The European Communities agrees with Mexico th at the Panel erred in finding that simple 
zeroing in periodic reviews is not, as such, and as applie d in the five periodic reviews at issue in this 
dispute, inconsistent with Articles VI:1 and VI:2 of the GATT 1994 and Articles 2.1, 2.4, and 9.3 of 
the Anti-Dumping Agreement .  The European Communities requests the Appellate Body to reverse 
these findings, and to find, instead, that simple zer oing in periodic reviews is, as such, and as applied 
in the five periodic reviews at issue in this disput e, inconsistent with Articles VI:1 and VI:2 of the 
GATT 1994, Articles 2.1, 2.4, 2.4.2, 9.3, and 18.4 of the Anti-Dumping Agreement , and Article XVI:4 
of the WTO Agreement .  
45. The European Communities maintain s that simple zeroing in periodic reviews is inconsistent 
with the requirements in Article VI of the GATT 1994 and Articles 2 and 9.3 of the Anti-Dumping 
Agreement  to establish "dumping" and "margins of dumping" for the product as a whole.  This 
requirement entails that "dumping" and "margins  of dumping" cannot be found to exist only for a 
type, model, or category of that product, including "a  'category' of one or more relatively low priced 
export transactions".88  Investigating authorities may undertake multiple comparisons of the weighted 
average normal value and individual export transactions  in a periodic review;  however, the results of 
all such multiple comparisons must be aggregated in  order to establish the margin of dumping for the 
product as a whole.  According to the European Communities, there is no textual basis in the 
Anti-Dumping Agreement for the Panel's conclusion that investigating authorities could take into 
account only certain comparison results, while disr egarding others, when calculating margins of 
dumping in periodic reviews.  Instead, the Anti-Dumping Agreement  requires that investigating 
authorities establish "dumping" and "margins of dumping" for a product in all anti-dumping 
proceedings, including in periodic reviews.  Mo reover, the European Communities argues that 
Articles 2.2.1, 2.7, 9.4, and Annex II to the Anti-Dumping Agreement  suggest that, where Members 
have sought to allow investigating authorities to disr egard "certain matters", "they did so by way of 
express reservation."89   
46. In addition, the European Communities maintains that simple zeroing in periodic reviews is 
inconsistent with the "overarc hing and independent obligation"90 in Article 2.4 of the Anti-Dumping 
Agreement to make a fair comparison between export pr ice and normal value.  According to the 
European Communities, simple zeroing in period ic reviews contravenes the "fair comparison" 
                                                      
88European Communities' third participant's submission, para. 59. (emphasis omitted) 
89Ibid., para. 66. (emphasis omitted) 
90Ibid., para. 70.  WT/DS344/AB/R 
Page 20  
 
 requirement, because it precludes investigating auth orities from taking equal account of all the data 
relating to normal value and export pric e, and because it is "inherently biased"
91 against exporters, as 
it artificially inflates margins of dumping irrespec tive of any changes in the exporter's pricing 
behaviour.  The European Communities also suggest s that the use of simple zeroing in periodic 
reviews could result in "unjustified and unfair discrimination"92 between, on the one hand, exporters 
subject to those proceedings and, on the other ha nd, exporters whose margin was calculated on the 
basis of W-W comparisons in original investigations without zeroing.   
47. Furthermore, the European Communities argues that simple zeroing in periodic reviews is 
inconsistent with the second sentence of Article 2.4.2 of the Anti-Dumping Agreement .  The USDOC 
applies the W-T comparison methodology in periodic reviews and calculates margins of dumping exclusively on the basis of so-called dumped tran sactions, even though the conditions set out in the 
second sentence of Article 2.4.2 fo r the application of that methodology are not fulfilled.  The 
European Communities contests the Un ited States' argument that the phrase "the existence of margins 
of dumping during the investigation phase" limits the sc ope of application of Article 2.4.2 to original 
investigations, and argues, instead, that the disci plines of Article 2.4.2 apply equally to periodic 
reviews conducted under Article 9.3 of the Anti-Dumping Agreement .  According to the European 
Communities, the United States relies exclusivel y on contextual reasoning in support of the 
proposition that "the word 'phase' must be given a m eaning that is different from the word 'period'; 
and that the term 'the investigation phase' must  [be interpreted as referring to] the 'original' 
investigation phase."
93  The European Communities suggests, instead, that the term "during the 
investigation phase" in Article 2.4.2 refers to th e "existence" and not to the "establishment" of 
margins of dumping.  Therefore, "the [p]hrase refe rs to a distinct period in which margins of dumping 
exist, i.e. an investigation period;  and not ... a period of time in which margins of dumping are 
established ."94  In addition, the European Communities argues that the word "investigation" in 
Article 2.4.2 is not synonymous w ith the term "an investigation to determine the existence, degree and 
effect of any alleged dumping" in Article 5.1 of the Anti-Dumping Agreement . 95  Rather, the ordinary 
meaning of the word "investigation" indicates "a syst ematic examination or inquiry or a careful study 
of or research into a particular subject"96;  in Article 2.4.2, that particular subject is "margins of 
dumping".  The European Communities agrees with th e United States that "the ordinary meaning of 
                                                      
91European Communities' third participant's submission, para. 85. 
92Ibid., para. 89. 
93Ibid., para. 113. (emphasis omitted) 
94Ibid., para. 120. (original emphasis)  
95Ibid., para. 130.  
96Ibid., para. 131.   WT/DS344/AB/R 
 Page 21 
 
 
 the term 'during ... phase' ... has a temporal aspect  to it, and coincides with 'a distinct period'."97  
However, according to the European Communities, th is does not support the view that "the 'distinct 
period' referred to is the period of time in which th e 'margins of dumping' must be established, as the 
[United States argues], as opposed to the period of ti me in which the 'margins of dumping' must have 
existed".98  For these reasons, the European Commun ities concludes that the disciplines of 
Article 2.4.2 apply to periodic reviews under Article 9.3 of the Anti-Dumping Agreement .   
48. The European Communities also re fers to several contextual arguments in support of this 
position.  In the European Communities' view, th e definition of the term "margin of dumping" 
contained in Article VI:2 of the GATT 1994 is of "general application in all anti-dumping 
proceedings"99, including duty assessment proceedings under Article 9 of the Anti-Dumping 
Agreement .  Moreover, the use of the word "normally" in  the first sentence of Article 2.4.2 of the 
Anti-Dumping Agreement  and the exceptional nature of the second sentence of Article 2.4.2 suggest 
that the obligations and methodologies contained in the first sentence of Article 2.4.2 shall apply "in 
most situations".100  This is further supported by the refere nce to the disciplines of Article 2.4 in the 
opening sentence of Article 2.4.2.  The European Communities also maintains that the reference to 
Article 2 contained in Article 9.3 confirms that a margin of dumping in duty assessment proceedings 
is to be established "by referen ce to the whole of Article 2".101  The European Communities further 
argues that the phrase "to determine the existence, degree and effect of alleged dumping" in Article 5.1 of the Anti-Dumping Agreement  suggests that the word "investigation" in Article 2 does 
not have the special meaning attributed to it by th e United States.  Finally, the European Communities 
suggests that the "preparatory work"
102 of the Anti-Dumping Agreement  also supports this conclusion, 
and that the United States has failed to demons trate that the negotiators intended the word 
"investigation" in Article 2.4.2 to have a special  meaning in accordance with Article 31(4) of the 
Vienna Convention .103 
49. In addition, the European Communities dismis ses the Panel's relian ce on the existence of 
"prospective normal value" systems under Article 9.4(ii) of the Anti-Dumping Agreement as context 
supporting its conclusion that simple zeroing in period ic reviews is not inconsistent with Articles VI:1 
and VI:2 of the GATT 1994 and Articles 2.1 and 9.3 of the Anti-Dumping Agreement .  The collection 
                                                      
97European Communities' third participant's submission, para. 144. 
98Ibid., para. 145. 
99Ibid., para. 159.  
100Ibid., para. 162.  
101Ibid., para. 169. (emphasis omitted) 
102Ibid., para. 221. The "preparatory work" the European Communities refers to is set out in detail in 
ibid., paras. 222-228 and footnotes thereto.   
103See ibid., paras. 212-216. WT/DS344/AB/R 
Page 22  
 
 of duties on the basis of a prospective normal value under that provision corresponds to an 
intermediate stage of duty collection, because importe rs can request a refund of duties collected on the 
basis of a prospective normal value when those dut ies exceed the exporter's contemporaneous margin 
of dumping.   
50. In relation to the "mathematical equivalen ce" between the results of the W-W and W-T 
comparison methodologies absent zeroing, the Eu ropean Communities maintains that the W-T 
comparison methodology in the second sentence of Artic le 2.4.2 is an exceptional methodology with 
no relevance for the interpretation of the other two methodologies provided for in the first sentence of 
Article 2.4.2.  Thus, according to the European Co mmunities, "something can perfectly well be fair as 
a response to targeted dumping, but unfair absent targeted dumping."
104  The European Communities 
also stresses that the results of these comparisons will not coincide if the universe of export 
transactions taken into account in the W-T comparison  methodology is limited to the targeted pattern.  
The European Communities further ta kes issue with the Panel's concern that the prohibition of simple 
zeroing in periodic reviews would create an "i ncentive to dump" and cause "administrative 
inconvenience".105  The European Communities points out that it is exporters, not importers, that 
engage in the practice of dumping, and any admini strative inconvenience related to the collection of 
data from all importers is of no lega l relevance to this dispute.    
51. The European Communities argues that the Pane l erred by not following previous Appellate 
Body findings on the same issues of law and legal in terpretations involved in this dispute.  In so 
doing, the Panel attributed to previous Appellate Bo dy findings that have been adopted by the DSB 
the same legal significance as it attributed to previous  panel findings that have been reversed by the 
Appellate Body.  This subverts the hierarchical st ructure provided in the DSU, which confers to the 
Appellate Body the "final say"106 on issues of law and legal interpreta tions developed by a panel.  For 
the European Communities, panels are not only "exp ected" to follow Appellate Body conclusions in 
earlier disputes, "especially where the issues are the same"107, but are also " de jure "108 obliged to 
follow the findings of the Appellate Body where th e Appellate Body has interpreted the same legal 
questions.  This is consistent with the need to provide security and predic tability to the multilateral 
trading system, as well as the need for prompt settle ment of disputes.  Moreover, the Panel's view on 
the value of precedent defeats the object and purpose of the appeal mechanism provided in the DSU, 
                                                      
104European Communities' third participant's submission, para. 25.  See also ibid., para. 239. 
105Ibid., para. 243 (referring to Panel Report, para. 7.146).  See also ibid., para. 241. 
106Ibid., para. 39.  
107Ibid., para. 33 (quoting Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , 
para. 188). (emphasis added by the European Communities omitted) 
108Ibid., para. 35.   WT/DS344/AB/R 
 Page 23 
 
 
 because panels would be entitled to examine all legal issues "afresh"109 in every dispute.  The 
European Communities suggests that, in performing its treaty interpretation task under the DSU, the 
Appellate Body seeks to ascertain the common inte nt of all WTO Members in relation to the 
provisions of the covered agreements.  For this  reason, the Appellate Body's interpretation 
"necessarily transcends the particular facts of one case, and is not confined to the Members who are parties to a particular dispute."
110  A rule whereby panels must follow Appellate Body findings on 
legal questions would not prevent panels from depa rting from earlier decisions, provided there are 
"cogent reasons"111 for doing so.  In this dispute, however, such departure on the part of the Panel was 
not justified, because it was grounded solely on th e Panel's disagreement with previous Appellate 
Body findings.  While panelists might not always ag ree with the findings of the Appellate Body on 
particular legal issues, the role of the Appellate Body is "to defini tively settle such disagreements over 
points of law".112  Therefore, the Appellate Body should rea ffirm that all panels are not only expected, 
but are "obliged"113 to follow its findings in relation to the issue of zeroing. 
3. Japan  
52. Japan agrees with Mexico that the Panel erred in finding that simple zeroing in periodic 
reviews is not, as such, and as applied in the five peri odic reviews at issue in this dispute, inconsistent 
with Articles VI:1 and VI:2 of the GATT 1994 and Articles 2.1, 2.4, and 9.3 of the Anti-Dumping 
Agreement .  Japan requests the Appellate Body to reve rse these findings, and to  find, instead, that 
simple zeroing in periodic reviews is, as such, and as applied in the five periodic reviews at issue in this dispute, inconsistent with these provisions.    
53. Japan charges the Panel with ignoring the "overarching principles" of the Anti-Dumping 
Agreement , namely, that:  "dumping" and "margins of  dumping" are defined in relation to the 
"product" as a whole;  dumping determinations ar e made in respect of each exporter or foreign 
producer;  and the GATT 1994 and the  Anti-Dumping Agreement  are concerned with dumping that 
causes or threatens to cause material injury to the domestic industry.
114  Japan argues that Article VI:1 
of the GATT 1994 and Article 2.1 of the Anti-Dumping Agreement  define "dumping" and "margins of 
dumping" in relation to a "product  as a whole , and not to a sub-part of the product".115  Therefore, 
                                                      
109European Communities' third participant's submission, para. 42.  
110Ibid., para. 46.  
111Ibid., para. 50.  
112Ibid., para. 55.  
113Ibid., para. 56. (emphasis omitted) 
114Japan's third participant's submission, para. 26. 
115Ibid., para. 36 (referring to Appellate Body Report, US – Zeroing (Japan) , paras. 108-110, 115, and 
189). (original emphasis)  WT/DS344/AB/R 
Page 24  
 
 neither "dumping", nor "margins of dumping", can be found to exist at the model-specific or 
transaction-specific level.  Japan recognizes that the words "product as a whole" do not appear in the 
text of the Anti-Dumping Agreement .  However, it is clear that the concepts of "dumping" and 
"margins of dumping" relate to th e pricing behaviour of exporters and foreign producers, and cannot 
be established on an importer-specific basis.
116  While liability for payment of anti-dumping duties 
may be calculated transaction-wise, the rate and amount of that payment, by virtue of Article 9.3 of 
the Anti-Dumping Agreement , is limited to the margin of dumping calculated for the exporter or 
foreign producer under Article 2.  Japan further agr ees with Mexico that "the obligation to levy anti-
dumping duties only if the dumped imports cause or thr eaten to cause material injury to the domestic 
industry producing the like product ... cannot be fulfilled if the investigating authorities are free to 
disregard some or most of the sales comparisons for an exporter."117   
54. Turning to the contextual arguments develope d by the Panel, Japan argues that the Panel 
incorrectly found that the reference to the word  "product" in Articles VI:6 and VII:3 of the 
GATT 1994 should be read to suggest that the word "p roduct" in Article VI:1 may be interpreted on a 
transaction-specific basis.  Japan s ubmits that the term "product" in the context of Article VI:6 also 
refers to the "product" "as a whole".  Article VII: 3, in turn, deals with customs valuation of goods, 
which is typically performed on a transaction- specific basis.  The "significant differences"118 in text, 
context, and object and purpose of Articles VI:1  and VII:3 of the GATT 1994 imply that the words 
"product" and "products" have different meanings in these provisions.  In addition, Japan argues that 
the existence of prospective normal value systems provided for in Article 9.4(ii) of the Anti-Dumping 
Agreement does not indicate that simple zeroing in  periodic reviews is permitted.  While 
Article 9.4(ii) permits the imposition and collecti on of dumping duties on the basis of a prospective 
normal value, margins of dumping must still be es tablished in accordance with Article 2, which 
prohibits zeroing.119   
55. Japan further contests the Panel's conclu sion that, absent zeroing, the W-T and W-W 
comparison methodologies would yield "mathematically  equivalent" results and points out that the 
                                                      
116See Japan's third participant's submission, para. 49.  Japan finds contextual support for its arguments 
in Article 6.10 of the Anti-Dumping Agreement .  
117Ibid., para. 55 (quoting Mexico's appellant's submission, para. 42 (" la obligación de percibir 
derechos sólo si los importaciones que incurren en dumping causan o amenazan causar daño a la rama de producción nacional que produce el producto similar … tampoco puede cumplirse si las autoridades 
investigadoras pueden libremente ignorar algunas o la mayoría de las comparaciones de ventas para un 
exportador ")). 
118Ibid., para. 71.  
119See ibid., para. 74.  WT/DS344/AB/R 
 Page 25 
 
 
 Appellate Body has "consistently rejected"120 the "mathematical equivalence" argument in past 
appeals.  Japan submits that, "all that the Panel has shown is that, in one set of circumstances , an 
authority can 'permissibly' elect to develop methodol ogies that generate mathematical equivalence by 
relying on identical time periods."121  According to Japan, "[t]here is nothing novel in this position 
because the Appellate Body has already acknowledge d that under certain conditions, equivalent 
outcomes are possible."122  Japan agrees with Mexico that "the United States' own anti-dumping 
legislation provides for the use of ... differential ti me periods in the calculation of weighted average 
normal values using the [W-W] methodology in investigations and the [W-T] methodology in 
periodic reviews, thus ensuring that different outcomes will occur."123  In addition, Japan maintains 
that the W-T comparison methodology provided in  the second sentence of Article 2.4.2 applies 
exclusively to situations of targeted dumping, a nd cannot be determinative of the question of whether 
simple zeroing in periodic reviews is permitted. 
56. Japan submits that the "undesirable results"124 the Panel considers would arise from a 
prohibition of zeroing fall under "neither text, context, object, nor purpose"125 and are therefore 
irrelevant to the legal interpretation of the Anti-Dumping Agreement .  Japan disagrees with the 
concerns expressed by the Panel that a prohibition of  simple zeroing in periodic reviews would create 
a "competitive disincentive to engage in fair trade" among different importers.126  According to Japan, 
authorities are not required to allocate anti-dumpi ng duties evenly among all importers of a given 
exporter's merchandise.  However, any allocation of  anti-dumping duties is subject to the requirement 
under WTO law that the total amount of duties levi ed shall not exceed the exporter's margin of 
dumping.  Furthermore, Japan argues that a prohib ition of simple zeroing in periodic reviews would 
not, as the Panel found, expand the scope of pe riodic reviews and thus cause "administrative 
inconvenience"127 to investigating authorities.  Regardless of which interested party requests a 
periodic review, it is the exporter that is required to provide data on all sales made to the United States 
because importers do not have a "normal value".128  Japan also argues that a prohibition of simple 
zeroing in periodic reviews would not, as the Panel found, preclude anti-dumping duties from 
                                                      
120Japan's third participant's submission, para . 77 (referring to Appellate Body Report, US – Zeroing 
(Japan) , paras. 133-135;  and Appellate Body Report, US – Softwood Lumber V  (Article 21.5 – Canada) , 
paras. 97-100).     
121Ibid., para. 90. (original emphasis) 
122Ibid. 
123See ibid., para. 85 and footnote 89 thereto.  See also Mexico's appellant's submission, para. 83 and 
footnotes 64 and 65 thereto. 
124Japan's third participant's submission, para. 93 (quoting Panel Report, para. 7.146). 
125Ibid., para. 94. 
126Ibid., para. 95 (quoting Panel Report, para. 7.146). 
127Ibid., para. 98 (quoting Panel Report, para. 7.146).  
128Ibid., para. 99. WT/DS344/AB/R 
Page 26  
 
 removing the injurious effects of dumping.  It is only by including all export transactions in a periodic 
review that investigating authorities can levy dumping duties at a level no greater than that necessary 
to remove the injurious effect of dumping.  
57. Japan argues that the Panel erred in rejecting Me xico's claim that simple zeroing in periodic 
reviews is inconsistent with Article 2.4 of the Anti-Dumping Agreement .  Japan refers to previous 
Appellate Body reports that have made it clear th at the use of zeroing in periodic reviews is not 
"impartial, even-handed, or unbiased" and is ther efore inconsistent with the "fair comparison" 
requirement contained in Article 2.4.
129   
58. Finally, Japan submits that the Panel's refusal  to follow previous Appellate Body reports 
addressing "exactly the same measures and claims"130 amounts to a failure to conduct an objective 
assessment of the matter as required by Article 11 of the DSU.  The adoption of Appellate Body 
reports by the DSB creates "legitima te expectations among WTO Members"131, and reflects a 
clarification of all WTO Members' rights and obliga tions with respect to the matter addressed in those 
reports.  By setting aside adopted Appellate Body fi ndings on the same matter, the Panel "d[id] not 
bring the required degree of objectivity to its work , substituting its subjective assessment of the matter 
for one that carries the approval of the DSB."132  In addition, Japan asserts that the Panel's assessment 
of the matter compromised the objectives of the WT O dispute settlement system under Articles 3.2, 
3.3, and 3.7 of the DSU, because it "introduce[d]  uncertainty and unpredictability into the law, 
disturbing the stability of the rules-based system"133, and prevented the prompt resolution of this 
dispute. 
4. Thailand  
59. Thailand agrees with Mexico that the Panel erre d in finding that simple zeroing in periodic 
reviews is not inconsistent with Articles VI:1 and VI:2 of the GATT 1994 and Articles 2.1, 2.4, 
and 9.3 of the Anti-Dumping Agreement .  Thailand also submits that the Panel's failure to follow 
previous Appellate Body findings on the issue of zeroi ng raises systemic concerns in relation to the  
functioning and credibility of the WTO dispute se ttlement system.  Although strictly speaking not 
                                                      
129Japan's third participant's submission, paras. 108 and 109 (referring to Appellate Body Report, EC – 
Bed Linen , para. 55;  Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 135;  
Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , paras. 140-142;  and Appellate Body 
Report, US – Zeroing (Japan) , para. 146).  
130Ibid., para. 13. 
131Ibid., para. 15 (quoting Appellate Body Report, US – Shrimp (Article 21.5 – Malaysia) , para. 108, in 
turn quoting Appellate Body Report, Japan – Alcoholic Beverages II , p. 14, DSR 1996:I, 97, at 108). (emphasis 
added by Japan omitted) 
132Ibid., para. 18.  
133Ibid., para. 24.  WT/DS344/AB/R 
 Page 27 
 
 
 binding, previous Appellate Body findings "c reate legitimate expectations among WTO Members"134, 
and therefore panels are "expected" to follow previo us Appellate Body conclusions, "especially when 
the issues are the same".135  Thailand emphasizes that a panel's failure to observe the hierarchy 
between panels and the Appellate Body, especially where the Appellate Body has repeatedly decided 
on the same issue, impairs the effective functi oning of the WTO dispute settlement system, and 
undermines its security and predictability.  Moreover, if WTO Members cannot be reasonably 
confident that the decisions of panels will be consis tent with the jurisprudence of the Appellate Body, 
they "will begin to see the dispute settlement process as requiring both panel and Appellate Body 
proceedings in order to obtain an objec tive assessment of the matter at issue."136  According to 
Thailand, "[t]his will increase the costs of using the system and decrease the efficiency of the system 
in promptly resolving disputes between Members"137 and discourage participation by developing 
country Members.138   
60. Thailand further argues that "[i]t is beyond di spute that the Appellate Body's rulings on 
zeroing gave rise to legitimate expectations among Members."139  According to Thailand, "[t]hese 
legitimate expectations have been undermined by th e recent panels that have  declined to follow the 
Appellate Body's jurisprudence, most notably the Panel in this case."140  Thailand submits that the 
Appellate Body's findings on the zeroing issue "hav e been both clear and correct", and urges the 
Appellate Body to reverse the Panel's findings on  zeroing and to "clarif[y] the importance to the 
credibility of the WTO dispute settlement system that panels follow unambiguous Appellate Body 
rulings."141 
61. Thailand further notes that, in rejecting the Ap pellate Body's interpretation that the word 
"product" in Article 2.1 of the Anti-Dumping Agreement  refers to the product under investigation "as a 
whole", and not to a specific transaction, the Panel fa iled to consider the broader ramifications of its 
interpretation.  Thailand points out that, with the exception of panels that have addressed the issue of 
zeroing, panels that have considered the concep t of dumping in other contexts have adopted the 
interpretation that dumping must be defined in relati on to a product, and not in relation to individual 
transactions.  Therefore, a departure from this in terpretation would affect Members' obligations in 
                                                      
134Thailand's third participant's submission, para. 13 (quoting Appellate Body Report, Japan – 
Alcoholic Beverages II , p. 14, DSR 1996:I, 97, at 108). 
135Ibid. (quoting Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , para. 188).  
136Ibid., para. 15. (original emphasis) 
137Ibid. 
138See ibid. 
139Ibid., para. 16.  
140Ibid. 
141Ibid., para. 17.  WT/DS344/AB/R 
Page 28  
 
 relation to other stages of dumping proceedings, such  as the initiation phase, injury determination, and 
the imposition of anti-dumping duties.  Thailand argues that systemic concerns call for an 
interpretation pursuant to which dumping is uniformly defined in relation to a product in all stages of 
anti-dumping proceedings.   
62. Thailand adds that, until a WTO panel or the Appellate Body decides that WTO Members 
must use the same weighted average normal va lue in W-W and W-T comparisons in original 
investigations, the targeted dumping provision in the second sentence of Article 2.4.2 of the Anti-
Dumping Agreement  "is simply not relevant to the issue of whether zeroing is permissible"
142, and 
that, therefore, the "mathematical equivalence" argument does not hold.  
63. Thailand also maintains that the second sentence of  Article 2.4.2 is neither at issue in this 
dispute, nor determinative of whether simple ze roing in periodic reviews is consistent with 
Articles 2.1 and 9.3 of the Anti-Dumping Agreement .  Thailand also dismisses the Panel's suggestion 
that a prohibition of zeroing would expand the scope of periodic reviews, because, in USDOC periodic review proceedings, including those at issue in this dispute, "exporters  are  already  required 
to 'submit information pertaining to all of their e xport transactions rather than those pertaining to the 
importer requesting the review.'"
143   
64. Finally, Thailand rejects the Panel's assumpti on that, "even if some transactions are not 
dumped, the domestic industry is injured by the dumped imports."144  According to Thailand, "this 
simply begs the question of the basis on wh ich the determination of injury was made."145  If the 
determination of injury were made only on the b asis of the effects of individual transactions, the 
Panel's position might have some merit.  However,  the volume of dumped imports, for the purpose of 
determining injury, includes both "dum ped" and "non-dumped" transactions.146  I n  t h e s e  
circumstances, according to Thailand, "it makes no se nse to distinguish between the injurious effects 
of individual transactions."147  
 
                                                      
142Thailand's third participant's submission, para. 35.  
143Ibid., para. 36 (referring to Panel Report, para. 7.146). 
144Ibid., para. 37 (referring to Panel Report, para. 7.147). 
145Ibid. 
146See ibid. (referring to Panel Report, EC – Bed Linen , paras. 6.135-6.142). 
147Ibid., para. 37.  WT/DS344/AB/R 
 Page 29 
 
 
 III. Issues Raised in This Appeal 
65. The following issues are ra ised in this appeal: 
(a) whether the Panel erred in finding that "s imple zeroing in periodic reviews" is not, 
as such, inconsistent with Articles VI:1 and VI:2 of the GATT 1994 and Articles 2.1 
and 9.3 of the  Anti-Dumping Agreement ; 
(b) whether the Panel erred in finding that  the United States Department of Commerce 
(the "USDOC") did not act inconsistently  with Articles VI:1 and VI:2 of the 
GATT 1994 and Articles 2.1 and 9.3 of the  Anti-Dumping Agreement by using 
simple zeroing in the five periodic reviews at issue in this dispute; 
(c) whether the Panel erred in finding that "s imple zeroing in periodic reviews" is not, 
as  such, inconsistent with Article 2.4 of the Anti-Dumping Agreement  and, 
consequently, in finding that the USDOC did not act inconsistently with that 
provision in the five periodic reviews at issue in this dispute;  and  
(d) whether the Panel failed to fulfil its obligations under Article 11 of the DSU by 
making findings that contradict those in pr evious Appellate Body reports adopted by 
the DSB. 
IV. Introduction 
66. The issue of "zeroing" has been raised on app eal on numerous occasions in  different contexts.  
The Appellate Body has examined the WTO-cons istency of the zeroing methodology in original 
investigations, periodic reviews148, new shipper reviews149, and sunset reviews.150  In each context, the 
Appellate Body has held that zeroing is inconsiste nt with the relevant provisions of the GATT 1994 
                                                      
148The term "periodic review" applies to the "periodic review of amount of anti-dumping duty" under 
Section 751(a) of the United States Tariff Act of 1930 (the "Tariff Act").  That provision requires the USDOC to 
review and determine the final liab ility for anti-dumping duty at least once during each 12-month period 
beginning on the anniversary of the date of publication of an anti-dumping duty order, if a request for such a review has been received.  However, in the case of th e first assessment proceeding fo llowing the issuance of the 
Notice of Antidumping Duty Order, the period of time may extend up to 18 months in order to cover all entries 
that may have been subject  to provisional measures. 
149The term "new shipper review" applies to the revi ew to establish an individual weighted average 
dumping margin for the exporter or foreign producer under Section 751(a)(2)(B) of the Tariff Act.  That 
provision requires the USDOC to review and determine the individual dumping margin for an exporter or foreign producer that did not export the product at issue during the original period of investigation.   
150The term "sunset review" applies to the review of an anti-dumping duty order at the end of five 
years, as required by Sec tion 751(c) of the Tariff Act.  That provision requires the USDOC to conduct a review, 
five years after the date of publication of an anti-dumping duty order, to determine whether revocation of the 
anti-dumping duty order would be likely to lead to continuation or recurrence of dumping and of material injury. WT/DS344/AB/R 
Page 30  
 
 and the  Anti-Dumping Agreement .  More specifically, the Appellate Body has found zeroing to be 
inconsistent with Article 2.4.2 of the Anti-Dumping Agreement  in the original investigations  in five 
disputes.
151  The Appellate Body has also found zeroing in  periodic reviews  to be inconsistent with 
Article VI:2 of the GATT 1994 and Article 9.3 of the  Anti-Dumping Agreement  in two disputes.152  
In one of those disputes, the Appellate Body fu rther found zeroing in new shipper reviews to be 
inconsistent with Article 9.5 of the Anti-Dumping Agreement .153  Moreover, in that same dispute, the 
Appellate Body found that the United States had acted inconsistently with Article 11 of the  Anti-
Dumping Agreement  because it relied on margins of dumping calculated in previous proceedings in 
using zeroing in two sunset  review determinations.154  
67. Before the Panel, Mexico distinguished betw een two types of zeroing:  "model zeroing in 
investigations" and "simple zeroing in periodic re views".  By "model zeroing in investigations", 
Mexico meant the method under which the USDOC, in  original investigations, makes a weighted 
average-to-weighted average ("W-W") comparison of  export price and normal value for each "model" 
of the product under investigation, and disregards the amount by which the weighted average export 
price exceeds the weighted averag e normal value for any model, when aggregating the results of 
model-specific comparisons to calcu late a weighted average margin of dumping for the exporter or 
foreign producer 155 investigated.156  By "simple zeroing in periodic reviews", Mexico meant the 
method under which the USDOC, in periodic reviews fo r assessment of final liability for payment of 
anti-dumping duties, compares the prices of indivi dual export transactions against monthly weighted 
average normal values, and disregards the amount  by which the export price exceeds the monthly 
                                                      
151See Appellate Body Report, EC – Bed Linen , para. 66;  Appellate Body Report, US – Softwood 
Lumber V , para. 117;  Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 124;  
Appellate Body Report, US – Zeroing (Japan) , para. 138;  and Appellate Body Report, US – Zeroing (EC) , 
para. 222.  In addition, we note that model zeroing in original investigations has been found to be inconsistent 
with Article 2.4.2 of the  Anti-Dumping Agreement   by all panels that have exam ined that practice, including the 
panels in  EC – Bed Linen , EC – Tube or Pipe Fittings , US – Softwood Lumber V , US – Zeroing (EC) ,  
US – Zeroing (Japan) , and US – Shrimp (Ecuador) , as well as the Panel in this dispute. (See Panel Report, 
paras. 7.55, 7.61, and 8.1(a))   
152See Appellate Body Report, US – Zeroing (EC) , paras. 132-135; and Appellate Body Report, US – 
Zeroing (Japan) , para. 166. 
153See Appellate Body Report, US – Zeroing (Japan) , paras. 165 and 166. 
154See ibid., paras. 185 and 186.  In US – Corrosion-Resistant Steel Sunset Review , the Appellate Body 
stated that it saw "no obligation under Article 11.3 [of the Anti-Dumping Agreement ] for investigating 
authorities to calculate or rely on dumping margins in determining the likelihood of continuation or recurrence 
of dumping". (Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 127)  However, if 
the investigating authorities choose to rely on dumping margins in making their likelihood determination in a 
sunset review, "the calculation of these margins must conform to the disciplines of Article 2.4." ( Ibid.)  The 
Appellate Body was, however, unable to complete the anal ysis and rule on the use of zeroing in that particular 
case because it did not have a sufficient factual basis to do so. (See Ibid., paras. 133-138)  See also Appellate 
Body Report, US – Zeroing (Japan) , paras. 165 and 166. 
155In our discussion, we hereinafter use the term "expo rter(s)" to refer to exporter(s) and/or foreign 
producer(s).  
156See Panel Report, paras. 7.7-7.9.    WT/DS344/AB/R 
 Page 31 
 
 
 weighted average normal value for each model, when  aggregating the results of the comparisons to 
calculate the margin of dumping for the exporte r and the duty assessment rate for the importer 
concerned.157 
68. The Panel agreed with Mexico that "model zeroi ng in investigations" is, as such, inconsistent 
with Article 2.4.2 of the   Anti-Dumping Agreement .158  As a result, the Panel found that the USDOC 
also acted inconsistently with Article 2.4.2 by a pplying model zeroing in the original anti-dumping 
investigation at issue in this dispute.159  The Panel, however, rejected Mexico's claim that "simple 
zeroing in periodic reviews" is, as such, inconsiste nt with Articles VI:1 and VI:2 of the GATT 1994 
and Articles 2.1, 2.4, and 9.3 of the Anti-Dumping Agreement .160  As a result, the Panel found that the 
USDOC did not act inconsistently with those provisions by using simple zeroing in the five periodic reviews at issue in this dispute.
161  In reaching this conclusion, the Panel disagreed with the 
jurisprudence and conclusions of the Appellate Body in US – Zeroing (EC)  and US – Zeroing (Japan) . 
69. Mexico appeals the Panel's findings regardi ng the WTO-consistency of simple zeroing in 
periodic reviews and requests the Appellate Body to  find, instead, that simple zeroing in periodic 
reviews is inconsistent with Artic les VI:1 and VI:2 of the GATT 1994 and Articles 2.1, 2.4, and 9.3 of 
the  Anti-Dumping Agreement .  In addition, Mexico claims that th e Panel acted inconsistently with its 
obligations under Article 11 of the DSU by ma king findings that "directly contradict"162 those in 
adopted Appellate Body reports. 
70. By contrast, the United States asserts that the Appellate Body should dismiss Mexico's 
appeal.  The United States requests the Appellate Body to uphold the Panel's finding that simple 
zeroing in periodic reviews is allowed under Articles VI:1 and VI:2 of the GATT 1994 and 
Articles 2.1, 2.4, and 9.3 of the  Anti-Dumping Agreement , because it is a permissible interpretation of 
these provisions in accordance with Article 17.6(ii) of the  Anti-Dumping Agreement .   
                                                      
157See Panel Report, paras. 7.7-7.9 and 7.99.    
158Ibid., para. 8.1(a).  However, the Panel did not recommend to the DSB that it request the United 
States to bring its model zeroing procedures into conformity with its obligations under the  Anti-Dumping 
Agreement  and Article VI of the GATT 1994 because of its earlier finding that the United States had abandoned 
that practice as from 22 February 2007. ( Ibid., para. 7.45)  The Panel explaine d that it "fail[ed] to see what 
purpose would be served by a recommendation relating to a measure that no longer exists." ( Ibid., para. 7.50) 
159Ibid., para. 8.1(b);  USDOC, Notice of Final Determination of Sales at Less Than Fair Value: 
Stainless Steel Sheet and St rip in Coils from Mexico, United States Federal Register , Vol. 64, No. 109 (8 June 
1999) 30790, subsequently amended as Notice of Amende d Final Determination of Sales at Less Than Fair 
Value and Antidumping Duty Order: Stainless Steel Sheet and Strip in Coils from Mexico, United States 
Federal Register , Vol. 64, No. 143 (27 July 1999) 40560 (Exhibit MEX-5.A submitted by Mexico to the Panel). 
160Panel Report, para. 8.1(c).  
161Ibid., para. 8.1(d).  The five periodic reviews challenged by Mexico are listed in Exhibits MEX-5.B 
through MEX-5.F submitted by Mexico to the Panel;  furt her details may be found in Panel Report, para. 2.2. 
162Notification of an Appeal by Mexico, WT/DS344/7 (attached as Annex I to this Report), para. 4 
("contradicen directamente "). WT/DS344/AB/R 
Page 32  
 
 A. The United States' System for the Impos ition and Assessment of Anti-dumping Duties 
71. Before addressing the issues raised by the participan ts in this appeal, we consider it useful to 
provide a brief overview of the United States' system for the imposition and assessment of anti-
dumping duties.  This overview is based on the explan ations provided by the participants in their 
written submissions and at the oral hearing in  the course of these appellate proceedings.   
72. The first stage of the system is the original investigation for the imposition of anti-dumping 
duties.  The USDOC conducts an investigation to determine whether dumping by an exporter 
occurred during the period of investigation.  This is done by calculating an "overall weighted average 
dumping margin for each foreign producer/exporter investigated".
163  This determin ation is published 
in a Notice of Final Determination of Sales at Less Than Fair Value.  The USDOC communicates its 
determination of the existence and level of dumping to the United States International Trade 
Commission (the "USITC").  The USITC conducts an investigation to determin e whether the relevant 
United States industry is materially injured or threat ened with material injury by reason of the dumped 
imports.  If the USDOC finds that dumping existed du ring the period of investigation, and the USITC 
finds that the domestic industry was materially injure d, or threatened with ma terial injury, by reason 
of dumped imports, the USDOC issues a Notice of Antidumping Duty Order and imposes an "estimated anti-dumping duty deposit rate"
164 (also referred to as a "cash deposit rate"), equivalent to 
the "overall weighted average dumping margin",  for each exporter individually examined.  In 
addition, the Notice of Antidumping Duty Order sets out  an "all-others" rate applicable to exporters 
that were not individually examined.  
73. In order to determine the existence of dumping and the "overall weighted average dumping 
margin" for each exporter investigated, the US DOC normally uses the W-W comparison methodology 
under which the weighted average normal value is  compared with the weighted average export 
price.165  In doing so, the USDOC takes into consider ation all of the export transactions of each 
exporter investigated.  The Panel found, as a factua l matter, that "the United States [had] abandoned 
the practice of model zeroing in inve stigations as from 22 February 2007".166  In other words, the 
USDOC currently takes into account  the results of all model-specific comparisons, regardless of 
whether the weighted average export price is above  or below the weighted average normal value for 
                                                      
163United States' appellee's submission, para. 16.  
164Ibid., para. 17. 
165The United States stated at the oral hearing that, in investigations, it "almost universally" uses the 
W-W comparison methodology and that it rarely uses  the transaction-to-transaction ("T-T") comparison 
methodology, because the latter met hodology is a "very burdensome proced ure" and is appropriate only in 
limited circumstances. 
166See Panel Report, para. 7.50.  This was also conf irmed by the United States at the oral hearing.  WT/DS344/AB/R 
 Page 33 
 
 
 each model.  If the "overall weighted average dumping margin" for a particular exporter thus 
calculated is zero, or below  de minimis  levels, that exporter is not found to be dumping and the 
investigation is terminated in relation to it.  On  the other hand, if the "overall weighted average 
dumping margin" is above  de minimis  levels, the exporter is found to be dumping, and the entire 
volume of sales  made by that exporter is considered to be "dumped imports" for purposes of the injury 
determination.167   
74. The second stage of the United States' system is the assessment of the final liability for anti-
dumping duties.  For assessing anti-dumping duties, the United States follows a "retrospective" assessment system under which final liability fo r anti-dumping duties is determined after the 
merchandise is imported.  Under this system, the United States initially collects cash deposits at the 
time of each entry of the subject merchandise at th e estimated anti-dumping duty deposit rate of the 
relevant exporter.  Subsequently, once a year, during the anniversary month of the anti-dumping duty 
order, interested parties—including importers, domes tic interested parties, foreign producers, and 
exporters
168—may request the USDOC to conduct a periodic review to determine the final amount of 
anti-dumping duties owed on entries that occurred duri ng the previous year.  If a request for a periodic 
review is made by any party, the USDOC will review  all  sales made by the relevant exporter in order 
to calculate a going-forward cash deposit rate that will apply to all future entries of the subject 
merchandise from that exporter.  Simultaneously, the USDOC will calculate a duty assessment rate 
applicable to each importer that imports from th at exporter and determine the final liability for 
payment of anti-dumping duties by that importer on the basis of its duty assessment rate.  If no 
periodic review is requested, the cash deposits made on entries during the previous year are 
automatically assessed as the final duties. 
75. In a periodic review, the USDOC determines th e final liability for anti-dumping duties of an 
individual importer—that is, the duty assessment rate applicable to that importer—on the basis of a 
methodology that compares monthly weighted average normal value with prices of individual export 
transactions.169  Under this methodology, the product under consideration is broke n down into models, 
and a monthly weighted average normal value is determined for each model.170  When comparing the 
monthly weighted average normal value with the price of each individual export transaction, the 
USDOC considers the amount by which the normal va lue exceeds the export price to be the "dumping 
                                                      
167United States' response to questi oning at the oral hearing. 
168See Panel Report, footnote 74 to para. 7.98.  See also United States' appellee's submission, para. 21;  
and USDOC Regulations, Section 351.213(b). 
169See supra , para. 67.  See also USDOC Regulations, Section 351.414(c)(2);  and USDOC 
Antidumping Manual, chapter 6, p. 7. 
170See Panel Report, para. 7.99.  WT/DS344/AB/R 
Page 34  
 
 margin" for that export transaction.
171  If, however, the export price exceeds the normal value, the 
USDOC considers the "dumping margin" for that export transaction to be zero.  For each importer, 
the USDOC expresses the total of the "dumping margins"  as a percentage of the total entered value of 
its imports of the subject merchandise from the re levant exporter, including the value of those 
transactions for which the dumping margin was considered to be zero.172  This percentage becomes 
the "duty assessment rate" for that importer, and it is applied to the total entered value of its imports 
from the relevant exporter during the period review ed in order to determine the final anti-dumping 
liability of that importer.  The same zeroing me thodology is also applied to determine the going-
forward cash deposit rate for all future entr ies of the subject merchandise from the exporter 
concerned. 
B. Standard of Review:  Article 11 of the DSU and Article 17.6 of the Anti-Dumping 
Agreement 
76. Before turning to the issues raised on appeal, we recall that the standard of review applicable 
to disputes under the Anti-Dumping Agreement  is set out in both Article 11 of the DSU and 
Article 17.6 of the Anti-Dumping Agreement .173  As regards issues of legal interpretation, 
Article 17.6(ii) provides that: 
[a] panel shall interpret the releva nt provisions of the Agreement in 
accordance with customary rules of interpretation of public international law.  Where the panel finds that a relevant provision of 
the Agreement admits of more than one permissible interpretation, 
the panel shall find the authorities' me asure to be in conformity with 
the Agreement if it rests upon one of those permissible interpretations. 
The Appellate Body has noted that the customary rul es of interpretation of public international law as 
codified in Articles 31 and 32 of the Vienna Convention apply to the interpretation of the Anti-
Dumping Agreement .
174  The Appellate Body has recognized that the second sentence of 
Article 17.6(ii): 
                                                      
171See Tariff Act, Section 751(a)(2)(A)(ii). 
172See USDOC Regulations, Section 351.212(b)(1).  See also Panel Report, para. 7.99:  "The numerator 
for the importer-specific assessment rate reflects the re sults of comparisons where the normal value exceeds the 
export price within the universe of the imports made by th at particular importer, and the denominator is the total 
value of all imports by the importer."   
173See Appellate Body Report, US – Hot-Rolled Steel , para. 62. 
174See ibid., para. 59;  Appellate Body Report, EC – Bed Linen (Article 21.5 – India) , para. 118;  and 
Appellate Body Report, US – Softwood Lumber V , para. 116.  WT/DS344/AB/R 
 Page 35 
 
 
 … presupposes  that application of the rules of treaty interpretation in 
Articles 31 and 32 of the Vienna Convention  could give rise to, at 
least, two interpretations of some provisions of the Anti-Dumping 
Agreement , which, under that Convention, would both be 
"permissible   interpretations".  In that event, a measure is deemed to 
be in conformity with the Anti-Dumping Agreement "if it rests upon 
one of those permissible interpretations."175 (original emphasis) 
In our analysis, we therefore bear in mind that ther e could be more than one permissible interpretation 
of a provision of the Anti-Dumping Agreement . 
V. Simple Zeroing, As Such, in Periodic Reviews 
77. The Panel found that "simple zeroing in periodic reviews" is not, as such, inconsistent with 
Articles VI:1 and VI:2 of the GATT 1994 and Articles 2.1 and 9.3 of the Anti-Dumping Agreement .176  
The Panel reasoned that Articles VI:1 and VI :2 of the GATT 1994 and Article 2.1 of the Anti-
Dumping Agreement  do not "compel a definition of 'dumping'  based on an aggregation of all export 
transactions"177 and that those provisions do not "exclude an  interpretation that allows the concept of 
dumping to exist on a transaction-specific basis".178  The Panel further reasoned that anti-dumping 
duties are paid by importers and that, therefore, th e importer- or transaction-specific character of the 
payment of anti-dumping duties must be taken into consideration in interpre ting Article 9.3 of the 
Anti-Dumping Agreement .179  The Panel emphasized that "an importer does not incur liability for the 
payment of anti-dumping duties on the basis of th e totality of exports made by an exporter"180 and that 
Articles 9.3.1 and 9.3.2 must be interpreted in th is light "because the former  concerns the calculation 
of the final liability of individual importers  (in the case of a retrospective system), and the latter the 
refund of duties paid in excess of the margin of dumping of individual importers  (in the case of a 
prospective system)."181  For the Panel, "[t]he fact that final duties or refunds in duty assessment 
proceedings are calculated for individual importers ... leads to the conclusion that Article 9.3 does not 
exclude an importer and import-specific calculation [of margin of dumping], and does not necessarily 
require a calculation on the basis of all sales made by an exporter."182  The Panel considered that "the 
fact that other importers do not dump, or dump at a lower margin, does not affect the liability of an 
                                                      
175Appellate Body Report, US – Hot-Rolled Steel , para. 59. 
176Panel Report, paras. 7.143 and 8.1(c). 
177Ibid., para. 7.117.  
178Ibid., para. 7.119.  
179See ibid., para. 7.124.  
180Ibid., para. 7.126.  
181Ibid. (original underlining)  The Anti-Dumping Agreement  gives WTO Members the discretion to 
assess duties either retrospectively or prospectively.   
182Ibid. WT/DS344/AB/R 
Page 36  
 
 importer who imports at dumped prices".
183  The Panel expressed its concern that, "[i]f ... the 
authorities have to take into account the export prices paid by other importers importing from the 
same exporter or foreign producer, … importers with  high margins of dumping would be favoured at 
the expense of importers who do not dump or who dump at a lower margin."184  In essence, the Panel 
adopted an importer- and transaction-specific approach  to the concepts of "dumping" and "margin of 
dumping" and concluded that simple  zeroing in periodic reviews is not, as such, inconsistent with 
Articles VI:1 and VI:2 of the GATT 1994 and Articles 2.1 and 9.3 of the Anti-Dumping Agreement .185  
78. Mexico challenges this legal interpretation by  the Panel.  Mexico argues that, once the 
investigating authorities define the product under consideration, the scope of that definition 
determines the scope of the authorities' dumping dete rmination.  Therefore, dumping cannot exist in 
relation to a specific type, model, or cate gory of the product under consideration, "or in relation to 
individual import  transactions ".186  Instead, in any anti-dumping proceeding—including periodic 
reviews under Article 9.3 of the Anti-Dumping Agreement —"the margin of dumping must be 
calculated in respect of the individual exporters or  foreign producers subject to such proceeding and 
for the product under consideration taken as a whole"187, without disregarding any export transaction.  
According to Mexico, this interpretation is  consistent with the "necessary relationship"188 between 
dumping and injury, and with the fact that the purpose of anti-dumping duties is to offset dumping and injury to the domestic industry caused by exporte rs.  Mexico emphasizes that the Panel's analysis 
is based on the erroneous assumption that importers have margins of dumping and that such margins 
can be calculated for each individual transaction.  Ac cording to Mexico, "[i]mporters may, of course, 
purchase products that are priced below normal va lue ... but there is no such thing under the WTO 
agreements as 'importers w ith high margins of dumping'".
189    
79. Chile, the European Communities, Japan, and Thailand support Mexico's appeal and submit 
that the Appellate Body should find that simple zer oing in periodic reviews is, as such, inconsistent 
with Articles VI:1 and VI:2 of the GATT 1994 and Articles 2.1 and 9.3 of the  Anti-Dumping 
                                                      
183Panel Report, para. 7.131.  
184Ibid., para. 7.146.   
185Ibid., para. 8.1(c). 
186Mexico's appellant's submission, para. 31 (" o en relación con transa cciones individuales de 
importación "). (emphasis added) 
187Ibid. ("el margen de dumping debe calcularse con respecto a los exportadores individuales y 
productores extranjeros sujetos a dicho procedimiento y para el producto objeto a consideración tomado en su conjunto ") (referring to Appellate Body Report, US – Zeroing (Japan) , para. 156).  
188Ibid., para. 46 (" relación necesaria "). 
189Ibid., para. 77 (" Desde luego que los importadores pueden comprar productos cuyo precio es menor 
que el valor normal … . Sin embargo, en los Acuerdos de la OMC no existen conceptos tales como 'los 
importadores con altos márgenes de dumping' ").   WT/DS344/AB/R 
 Page 37 
 
 
 Agreement .190  The thrust of their arguments is that  these provisions establish a requirement that 
"dumping" and "margins of dumping" be established by reference to a product under consideration as 
a whole and to individual exporters, and not in rela tion to specific models or subsets of low-priced 
transactions.  They also argue that there must be a consistent treatment of  dumping and margins of 
dumping for all purposes and stages of anti-dumping proceedings, including injury determinations, as these terms have the same meaning throughout the Anti-Dumping Agreement . 
80. By contrast, the United States argues that th e findings of the Panel should be upheld.  
According to the United States, Article VI  of the GATT 1994 and Article 2.1 of the Anti-Dumping 
Agreement  do not require that margins of dumping necessarily be established on an aggregate basis 
for the "product as a whole".
191  Rather, for the United States, "dumping" can be found to exist each 
time that a weighted average normal value exceeds th e export price in a particular export transaction, 
and "margins of dumping" can be calcu lated for individual import transactions.192  The United States 
argues that Article 9.3 deals with only transaction- specific comparisons, and that it does not require 
the aggregation of the results of such comparisons in order to determine a margin of dumping for the 
relevant exporter.  The United States submits that, once an anti-dumping investigation has been 
completed and an anti-dumping duty has been impos ed, in all systems, "the focus in the duty 
assessment phase then shifts to individual import transactions"193, because duties are assessed on 
individual import transactions.  Thus, under its retr ospective assessment system, final liability for 
payment of anti-dumping duties by each importer is determined on the basis of a comparison of a 
contemporaneous monthly weighted average normal value with the export price in each individual 
import transaction.  At the oral hearing, the United States acknowledged that the USDOC aggregates 
the results of transaction-specific comparisons in periodic reviews, but explained that such aggregation is not done for the purpose of establi shing a margin of dumping under Article 9.3.  
Rather, it is done in order to determine the going-fo rward cash deposit rate for future entries of the 
subject merchandise from a given exporter and, for th e sake of practical convenience, to determine the 
importer-specific duty assessment rate  applicable to all sales made to a particular importer.  The 
United States further explained that, under its re trospective assessment system, neither the cash 
deposit rate of an exporter, nor the duty assessment rate of an importer, constitutes a "margin of 
dumping" within the meaning of Article 9.3 of the Anti-Dumping Agreement .  Under its system, the 
"dumping margin" calculated for each individual import transaction is the "margin of dumping" 
envisaged under Article 9.3 of the Anti-Dumping Agreement .  According to the United States, there 
                                                     
 
190Chile's third participant's submission, p. 2;  Eu ropean Communities' third participant's submission, 
para. 69;  Japan's third participant's submission, para 110 ;  Thailand's third participant's submission, para. 38. 
191United States' appellee's submission, para. 50. 
192United States' response to questi oning at the oral hearing. 
193United States' appellee's submission, para. 85. WT/DS344/AB/R 
Page 38  
 
 can be multiple "margins of dumping" for each import er.  Moreover, at the oral hearing, the United 
States suggested that the terms "dumping" and "d umping margin" may have different meanings in 
different parts of the Anti-Dumping Agreement , and that a major flaw in previous Appellate Body 
jurisprudence is the interpretation that these term s have the same unitary meaning throughout the 
Anti-Dumping Agreement .
194 
81. The United States finds contextual support for its  position in the text of Article VI:1 of the 
GATT 1994.  Since this Article uses the plural "produ cts" when it refers to "injurious dumping" and 
the singular "product" when it refers to "dumping" , it suggests that dumping can be found at the level 
of individual  export  transactions.195  The United States points out that, in the context of the GATT, 
the concept of dumping has historically been unders tood to be applicable at the level of individual 
export  transactions.196  
82. In our view, the reasoning of the Panel and the arguments advanced in this appeal raise,  
in essence, three questions for our consideration.  First, are the terms "dumping" and "margin of 
dumping" exporter- or importer-re lated concepts for the purpose of Article 9.3 of the Anti-Dumping 
Agreement ?  Secondly, can "dumping" and "margin of dum ping" be found to exist at the transaction- 
and importer-specific level for the purpose of Article 9.3 of the Anti-Dumping Agreement ?  Thirdly, in 
duty assessment proceedings under Article 9.3 of the Anti-Dumping Agreement , is it permissible to 
disregard the amount by which the export price ex ceeds the normal value in any export transaction?  
We examine these questions in turn below,  recognizing that they are interconnected. 
A. Are "Dumping" and "Margin of Dumping" Ex porter- or Importer-related Concepts?  
83. We begin with an examination of the concep ts of "dumping" and "margin of dumping"  
under Article VI of the GATT 1994 and the Anti-Dumping Agreement .  "Dumping" is defined in 
Article VI:1 of the GATT 1994 as occurring when a product of one country is introduced into the commerce of another country at less than its normal va lue.  Article VI:1 further states that dumping is 
to be "condemned" if it causes or threatens to cau se material injury to the domestic industry producing 
a like product.  In turn, Article VI:2 lays down th at, "[i]n order to offset or prevent dumping, a 
Member may levy on any dumped product an anti-dumping duty not greater in amount than the 
margin of dumping in respect of such product."  Article VI:6(a) also stipulates that no anti-dumping 
duty shall be levied unless the importing Member "determines that the effect of the dumping ... is such 
                                                     
 
194United States' response to questi oning at the oral hearing.  
195See United States' appellee's submission, para. 52. 
196See ibid., para. 58.  WT/DS344/AB/R 
 Page 39 
 
 
 as to cause or threaten material injury to an esta blished domestic industry, or is such as to retard 
materially the establishment of a domestic industry."   
84. This definition of "dumping" is carried over into the  Anti-Dumping Agreement  by Article 2.1,  
which states that a product is to be considered as being "dumped" if the "export price" of the product 
"exported" from one country to another is less than the comparable price for the "like" product when 
destined for consumption in the "exporting" count ry.  Furthermore, and significantly, the opening 
phrase of Article 2.1—"For the purpose of this Ag reement"—makes it clear that this definition of 
"dumping" applies throughout the Anti-Dumping Agreement .197   
85. The term "margin of dumping" is defined in Article VI:2 of the GATT 1994 as the difference 
between the "export price" and the "normal value" (t hat is, "the domestic price" of the like product in 
the exporting country) determined in accordance with Ar ticle VI:1.  Article VI:2 further clarifies that 
the "margin of dumping" is in respect of the dumped "product".  The "margin of dumping" thus 
measures the "degree"—as used in Article 5.1 of the Anti-Dumping Agreement —or the 
"magnitude"—as used in Article 3.4 of the Anti-Dumping Agreement —of dumping.198  As the 
"margin of dumping" is only a measure of dumping,  it also has the same meaning throughout the Anti-
Dumping Agreement  by virtue of Article 2.1.   
86. The elements of the definition of "dumping" c ontained in Article VI:1 of the GATT 1994 and 
Article 2.1 of the Anti-Dumping Agreement —namely, that "dumping" occurs when a product is 
"introduced into the commerce of another country " at an " export price " that is less than the 
"comparable price for the like product in the  exporting country "199—suggest to us that Article VI:1 of 
the GATT 1994 and Article 2.1 of the Anti-Dumping Agreement  address the pricing practice of an 
exporter.  Article 2.2 of the Anti-Dumping Agreement as well as Article VI:1(b) of the GATT 1994 
also point in the same direction because they indi cate that, if sales of the like product in the domestic 
market of the exporting country do not permit a proper comparison, the comparison may be made 
with the price at which the product is exported to an  appropriate third country.  Similarly, Article 2.3 
of the Anti-Dumping Agreement  allows the "export price" to be c onstructed in cases where it appears 
to the authorities that the  export price is unreliable. 
87. The context found in various other provisions of the Anti-Dumping Agreement  confirms that 
"dumping" and "margin of dumping" are exporter-speci fic concepts.  Articles 5.2(ii), 6.1.1, and 6.7 
indicate that the focus of an anti-dumping investig ation to determine the existence and degree of 
                                                      
197See Appellate Body Report, US – Zeroing (Japan) , para. 109. 
198See ibid., para. 110.   
199Emphasis added. WT/DS344/AB/R 
Page 40  
 
 dumping is the known exporters of the product under inv estigation.  Furthermore, Article 5.8 provides 
that there shall be "immediate termination" of an anti-dumping investigation against an exporter 
where the authorities determine that the ma rgin of dumping of that exporter is  de minimis , that is, if 
the margin is less than 2 per cent,  expressed as a percentage of the export price.  A plain reading of 
Article 5.8 indicates that the term "margin of dumping" as used in that provision refers to a single margin established for each exporter by aggregation of its export transactions.  The same Article 
provides that, if  the volume of exports  originating from an  exporting country  is "negligible" 
according to the criteria stated therein, the anti-dum ping investigation against that country must be 
terminated.   
88. Articles 6.10 and 9.5 of the  Anti-Dumping Agreement  also reveal that "dumping" and 
"margin of dumping" are exporter-spe cific concepts.  Thus, the first sentence of Article 6.10 requires, 
"as a rule", that authorities determine "an individual margin of dumping for each known exporter or 
producer concerned of the product under investigation".
200  Similar language app ears in Article 6.10.2, 
which provides that, in cases where the authorities have limited their examination in accordance with 
Article 6.10, "they shall nevertheless determine an individual margin of dumping for any exporter or 
producer not initially selected who su bmits the necessary information in  time for that information to 
be considered during the course of the investigation" .  Likewise, Article 9.5, dealing with new shipper 
reviews, requires the authorities to determine an i ndividual margin of dumping for any exporter that 
had not exported the product during the period of investigation.   
89. There is nothing in Articles 5.8, 6.10, and 9.5 of the  Anti-Dumping Agreement  to suggest 
that it is permissible to interpret the term "margi n of dumping" under those provisions as referring to 
multiple "dumping margins" occurring at the level of individual importers.  Instead, these provisions 
reinforce the notion that a single margin of dumpi ng is to be established for each individual exporter 
investigated.   
90. Other provisions of the Anti-Dumping Agreement  also confirm that "dumping" and "margin of 
dumping" are exporter-specific concepts.  Article 8.1 refers to the "receipt of satisfactory voluntary 
undertakings from any exporter  to revise its prices or to cease exports to the area in question at 
                                                      
200We recall that, in accordance with the rules of treat y interpretation codified in Article 33(3) of the 
Vienna Convention , the terms of a treaty authenticated in more than one language "are presumed to have the 
same meaning in each authentic text".  It follows that the treaty interprete r should seek the meaning that gives 
effect, simultaneously, to the terms of the treaty as they  are used in each authentic language.  We find support 
for our reading in the French version of Article 6.10 of the Anti-Dumping Agreement , which requires the 
determination of " une marge de dumping individuelle ", that is, "one" single margin of dumping, for "each 
exporter" for "the product" under investigation.  Similarl y, the Spanish version requires the determination of a 
single margin (" el margen ") for each exporter, not multiple margins (" márgenes ").    WT/DS344/AB/R 
 Page 41 
 
 
 dumped prices so that the authorities are satisfied that the injurious effect of the dumping is 
eliminated."201  Article 8.2 enjoins that price undertakings "shall not be sought or accepted  from 
exporters  unless the authorities of the importing country have made a preliminary affirmative 
determination of dumping and injury caused by such dumping." 202  In addition, Article 8.5 indicates 
that "[p]rice undertakings may be suggested by the authorities of the importing Member, but no 
exporter  shall be forced to enter into such undertakings." 203  Article 8.1 further requires that, when 
price undertakings are taken, price increases thereunde r shall not be higher than necessary to eliminate 
the margin of dumping.  Since price undertakings ar e taken from individual exporters, this also shows 
that the margin of dumping is related to individual exporters.  
91. We further note that Article 9.4 and subparagraph (i) of the Anti-Dumping Agreement  lays 
down that, "[w]hen the authorities have limited their examination in accordance with the second 
sentence of paragraph 10 of Article 6, an y anti-dumping duty applied to imports from exporters or 
producers  not included in the examination shall not ex ceed … the weighted average dumping margin 
established with respect to the selected exporters or producers ".204  Where the liability for payment of 
anti-dumping duties is calculated on the basis of a pr ospective normal value, Article 9.4(ii) specifies 
that any anti-dumping duty applie d to such imports shall not exceed "the difference between the 
weighted average normal value of the  selected exporters or producers  and the export prices  of 
exporters or producers  not individually examined."205  
92. We note, moreover, that Article VI of the GATT 1994 and the Anti-Dumping Agreement  deal 
not with dumping  per se , but with dumping that causes or threat ens to cause material injury to the 
domestic industry producing a "like" product.206  Indeed, the very purpose of an anti-dumping duty, at 
a level not higher than the margin of dumping of each  exporter, is to counteract the injury caused to 
the domestic industry by dumping.  Article 3.1 of the Anti-Dumping Agreement stipulates that a 
determination of injury shall be based on an objective examination of both the volume of the dumped  
imports and the effect of the dumped  imports on prices in the domestic market for like products, and 
of the consequent impact of the  dumped  imports on domestic producers of such like products.  
                                                      
201Emphasis added. 
202Emphasis added. 
203Emphasis added. 
204Emphasis added. 
205Emphasis added. 
206In this regard, Article VI:1 of the GATT 1994 its elf states that dumping "is to be condemned if it 
causes or threatens material injury to an established industry in the territory of a Member or materially retards 
the establishment of a domestic industry".  Articles 5.2 and 5.6 of the Anti-Dumping Agreement  also show that 
an anti-dumping investigation can be initiated or can proc eed only if the investigating authorities have evidence 
of dumping, injury, and a causal link between the two. WT/DS344/AB/R 
Page 42  
 
 Furthermore, Article 3.5 lays down that "[t]he authorities shall also examine any known factors other 
than the dumped imports which at the same time are injuring the domestic industry and the injuries 
caused by these other factors must not be attributed to dumped imports."  Among such non-attribution 
factors listed in this Article are "the volume and prices of imports not sold at dumping prices".  Furthermore, Article 9.1 exhorts levy of anti-dumpi ng duty at less than the full margin of dumping if 
such lesser duty would be adequate to rem ove the injury to the domestic industry. 
93. The review provisions contained under Article 11 of the Anti-Dumping Agreement  also reveal 
the crucial link between dumping and injury.  Article  11.1 sets out the overarching principle 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."  Article 11.2 allo ws a request for review to examine whether the 
injury would continue or recur if the duty were  removed or varied.  Article 11.3 requires an 
examination as to whether the expiry of the duty woul d be likely to lead to continuation or recurrence 
of dumping and injury. 
94. To sum up the above analysis, it is clear fro m Articles VI:1 and VI:2 of the GATT 1994 and 
the various provisions of the Anti-Dumping Agreement  that:  (a) "dumping" and "margin of dumping" 
are exporter-specific concepts;  "dumping" is prod uct-related as well, in the sense that an anti-
dumping duty is a levy in respect of the product that is investigated and found to be dumped;  
(b) "dumping" and "margin of dumping" have the same meaning throughout the Anti-Dumping 
Agreement ;  (c) an individual margin of dumping is to  be established for each investigated exporter, 
and the amount of anti-dumping duty levied in respect  of an exporter shall not exceed its margin of 
dumping
207;  and (d) the purpose of an anti-dumping duty is to counteract "injurious dumping" and not 
"dumping" per se .  It must be stressed that, under the Anti-Dumping Agreement , the concepts of 
"dumping", "injury", and "margin of dumping" are in terlinked and that, therefore, these terms should 
                                                      
207This does not mean that anti-dumping duties are levi ed upon or collected from exporters.  The duties 
may be levied upon or collected from the importers, but, under Article 9.3, the margin of dumping established for an exporter operates as the ceiling for such levy and collection of duties from the importers who import from 
that exporter.   WT/DS344/AB/R 
 Page 43 
 
 
 be considered and interpreted in a coherent  and consistent manner for all parts of the Anti-Dumping 
Agreement .208 
95. Based on the above analysis, we disagree with the proposition that importers "dump" and can 
have "margins of dumping".209  Dumping arises from the pricing practices of exporters as both normal 
values and export prices reflect  their pricing strategies in home and foreign markets.210  The fact that 
"dumping" and "margin of dumping" ar e exporter-specific concepts under the  Anti-Dumping 
Agreement  is not altered by the fact that the export pr ice may be the result of negotiation between the 
                                                      
208It is well recognized in international economic a nd trade literature that "dumping" is "international 
price discrimination" reflecting the pricing practice of an exporting firm to charge a lower price for exported 
goods than it does for the same goods sold domestically.  Some examples of the definition of "dumping" in 
international economic literature are as follows:  "The most common form of price discrimination  in 
international trade is dumping, a pricing practice in which a firm charges a lower price for exported goods than it does for the same goods sold domestically." (Paul R. Krugman and Maurice Obstfeld, International 
Economics: Theory and Policy , 6th edn (Pearson Education, 2007), p. 174);  "Dumping is international price 
discrimination in which an exporting firm sells at a lower price in a foreign market than it charges in other (usually its home-country) markets." (Peter H. Lindert and Thomas A. Pugel, International Economics , 10th edn 
(Irwin, 1996), p. 174);  "dumping: In international trade,  the practice of selling a commodity at a lower price in 
the export market than in the domestic market for reasons unrelated to differences in costs of servicing the two markets" and "Dumping is a form of price discrimination studied in the theory of monopoly." (Richard G. 
Lipsey, Paul N. Courant, and Christopher T.S. Ragan, Economics , 12th edn (Addison-Wesley, 1999), p. G-5 and 
p. 788);  "Broadly defined, "dumping" is international price discrimination.  Dumping occurs when an exporter sells merchandise in an importing country at a price below that at which it sells like merchandise in its home 
country ... .  A more restrictive definition of "dumping" is  that it occurs when an exporter sells merchandise in 
an importing country at below the cost of production of that exporter." (Raj Bhala, Modern GATT Law: A 
Treatise on the General Agreem ent on Tariffs and Trade, International Trade Law Series  (Sweet & Maxwell, 
2005), p. 685)  See also Martyn Taylor, International Competition Law: A New Dimension for the WTO?  
(Cambridge University Press, 2006), pp. 264 ff. 
209See Panel Report, para. 7.146. 
210As the Appellate Body has previously explained:  "The concept of dumping relates to the pricing 
behaviour of exporters or foreign producers;  it is the exporter, not the importer, that engages in practices that 
result in situations of dumping." (Appellate Body Report,  US – Zeroing (Japan) , para. 156 (referring to 
Appellate Body Report,  US – Zeroing (EC) , para. 129))   
In this regard, we note that the United States' St atement of Administrative Action (the "SAA") states 
that, if foreign "companies continue to dump with the discipline of an order in place, it is reasonable to assume 
that dumping would continue if the discipline were removed", and that, "[i]f imports cease after the order is 
issued, it is reasonable to assume that the exporters could not sell  in the United States without dumping and that, 
to reenter the U.S. market, they would have to resu me dumping." (Uruguay Round Agreements Act, Statement 
of Administrative Action, H.R. Doc. No. 103-316 (1994), reprinted in 1994 USCAAN 3773, 4040 (Public Law No. 103-465, 108 Stat. 4809 (1994), United States Code , Title 19, Section 3501, pp. 889-890) (emphasis 
added))  The SAA furt her provides that "declining import volumes accompanied by the continued existence of 
dumping margins after the issuance of an order may provide a strong indication that, absent an order, dumping would be likely to continue, because  the evidence would indicate that the exporter needs to dump  to sell at pre-
order volumes." ( Ibid. (emphasis added))  In addition, the SAA stat es that "[d]eclining (or no) dumping margins 
accompanied by steady or increas ing imports may indicate that foreign companies do not have to dump  to 
maintain market share in the United States". ( Ibid. (emphasis added))  These passages are quoted in Sections 
II.A.3 and II.A.4 of the USDOC's Policies Regarding the Conduct of Five-Year ("Sunset") Reviews of 
Antidumping and Countervailing Duty Orders; Policy Bulletin, United States Federal Register , Vol. 63, No. 73 
(16 April 1998) 18871 and 18872)  As we see it, these and other similar passages in the SAA support the notion 
that "dumping" is an exporter-related  concept, and that dumping reflects the pricing behaviour of exporters.  WT/DS344/AB/R 
Page 44  
 
 importer and the exporter.
211  Nor is it altered by the fact that it is the importer that incurs the liability 
to pay anti-dumping duties.212 
96. We also disagree with the proposition that the term "margin of dumping" has a different or 
special meaning in the context of Article 9.3 of the Anti-Dumping Agreement .  As we stated earlier, a 
margin of dumping measures only the degree or magnit ude of dumping.  Article 9.3 refers to the 
margin of dumping as established in Article 2 of the Anti-Dumping Agreement .  Article 2.1 of the 
Anti-Dumping Agreement  defines "dumping", and the opening phrase of that Article makes it clear 
that the definition applies "[f]or the purpose of this Agreement".  Therefore, "dumping" and "margin 
of dumping" have the same meaning throughout the  Anti-Dumping Agreement .  Article 9.3 does not 
indicate, either expressly or by implication, that "margin of dumping" has a different meaning in the context of duty assessment proceedings than it does u nder Article 2.  Nor does any other provision of 
the Anti-Dumping Agreement  suggest a special or particular meaning for this term for any stated 
purpose.
213  Although transaction-based multiple comparisons may be necessary in periodic reviews 
to calculate an importer's liability for payment of anti-dumping duties, this cannot impart a different 
or special meaning to the term "margin of dumping" in Article 9.3. 
B. Can "Dumping" and "Margin of Dumping" Be Found to Exist at the Level of a 
Transaction?  
97. We turn next to address the question of whethe r "dumping" and "margin of dumping" can be 
found to exist at the transaction- and importer-sp ecific level for the purpose of Article 9.3 of the Anti-
Dumping Agreement .   
98. First, as we noted earlier, dumping arises from th e pricing behaviour of an exporter.  A proper 
determination as to whether an exporter is dumpi ng or not can only be made on the basis of an 
examination of the exporter's pricing behaviour as re flected in all of its transactions over a period of 
time.  Contrary to what the Panel indicates214, the notion that "a product is introduced into the 
commerce of another country at less than its norm al value" in Article VI:1 of the GATT 1994 
suggests to us that the determination of dumping with  respect to an exporter is properly made not at 
the level of individual export transactions, but on th e basis of the totality of an exporter's transactions 
                                                      
211See United States' appellee's submission, para. 99.  
212See Panel Report, para. 7.124;  and United States' appellee's submission, para. 99. 
213See Appellate Body Report, US – Zeroing (Japan) , para. 114. 
214See Panel Report, para. 7.117.    WT/DS344/AB/R 
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 of the subject merchandise over the period of investigation.215  Furthermore, as we emphasized earlier, 
the  Anti-Dumping Agreement  deals with "injurious dumping", and the very purpose of an anti-
dumping duty is to counteract the injury caused or threatened to be caused by "dumped imports" to 
the domestic industry.  The notion that dumping and margin of dumping can exist at the level of an 
individual transaction runs counter to these basic principles of the Anti-Dumping Agreement .216   
99. Secondly, if it were permissible to determine a separate margin of dumping for each 
individual transaction, several margins of dumping would exist for each exporter and for the product 
under consideration.217  However, the existence of "dumping" and several "margins of dumping" at 
the transaction-specific level cannot be reconciled with a proper interpreta tion and application of 
several provisions of the Anti-Dumping Agreement .  We do not see how, for example:  the 
determination of injury under Article 3;  the est ablishment of an individual margin of dumping for 
each exporter under Articles 5.8, 6.10, 6.10.2, 9.4, and 9.5;  the acceptance of voluntary undertakings 
from an exporter under Article 8;  and a review  under Article 11.2 or 11.3 for continuation or 
revocation of an anti-dumping duty order, can be done  at the transaction- or importer-specific level.  
The Panel's interpretation appears to us to be prem ised on the notion that the concept of transaction- 
and importer-specific dumping and margin of dumpi ng could be confined to the stage of duty 
assessment and collection under Article 9.3.  However, we find no textual or contextual basis for such 
an interpretation.   
C. Is It Permissible to Disregard the Amount  By Which the Expor t Price Exceeds the 
Normal Value?  
100. We now turn to the question whether it is permissible, in duty assessment proceedings under 
Article 9.3 of the Anti-Dumping Agreement , to disregard the amount by which the export price 
exceeds the normal value in any transaction;  in othe r words, whether it is permissible to use "simple 
zeroing" in duty assessment proceedings.  
                                                      
215We note that the 1960 Group of Experts Report, to which the United States re ferred in its appellee's 
submission, suggests that, in order to fulfil the principles that imposition of anti-dumping duties is justified only 
where "a product was in fact found to be dumped" and where material injury is thereby caused to a domestic 
industry, " the ideal method ... was to make a determination in respect of ...  each single importation of the 
product concerned ". (Supra , footnote 58, para. 8 (emphasis added))  Such a method would avoid the need of 
aggregation.  The Group of Experts, itself, recognized that "[t]his however,  was clearly impracticable, 
particularly as regards injury ". (Ibid. (emphasis added))  Such a method of anti-dumping determination is not 
before us in this appeal, nor has it been referred to by the participants or third par ticipants in these appellate 
proceedings. 
216We are not dealing here with a hypothetical case where there may be just one large import 
transaction at a price below normal value, which, by itself, is causing injury to the domestic industry.   
217See also Appellate Body Report, US – Zeroing (Japan) , para. 126.   WT/DS344/AB/R 
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 101. As we understand it, the United States' position th at simple zeroing is permitted in periodic 
reviews is premised on the argument that "dumping"  and "dumping margins" can be found to exist at 
the level of individual transactions and for i ndividual importers when assessing the anti-dumping duty 
liability for each importer.  Under this argument,  individual transactions where the export price 
exceeds the normal value are "non-dumped" transacti ons and can be disregarded for the purpose of 
determining importer-specific duty assessment rates.  Furthermore, the United States argues that 
Article  9.3 deals with only transaction-specific comparisons, and that it does not require the 
aggregation of the results of such comparisons in  order to determine a margin of dumping for the 
relevant exporter.
218  The United States points out that, in the calculation of a duty assessment rate for 
a particular importer, the value of  all  sales made to that importer is included in the denominator 
merely for the sake of convenience to enable the customs authorities to apply a single duty assessment 
rate to all such sales.219   
102. Article 9.3.1 of the Anti-Dumping Agreement  is subject to the overarching requirement in 
Article 9.3 that the amount of anti-dumping duty "shall not exceed the margin of dumping as established under Article 2" of that Agreement.  We  recall that our examination of the context of 
Article VI:2 of the GATT 1994 and Article 9.3 of the Anti-Dumping Agreement   confirmed that the 
term "margin of dumping", as used in those provisi ons, relates to the "exporter" of the "product" 
under consideration and not to indivi dual "importers" or "import transactions", and, furthermore, that 
the concepts of "dumping" and "dumping marg in" apply in the same manner throughout the Anti-
Dumping Agreement  and do not vary under the various provisions of the Agreement.
220  Thus, under 
Article VI:2 and Article 9.3, the margin of dum ping established for an exporter in accordance with 
Article 2 operates as a  ceiling  for the total amount of anti-dumping duties that can be levied on the 
entries of the subject merchandise from that exporter.     
103. We see no basis in Article VI:2 of the GATT 1994 or in Articles 2 and 9.3 of the Anti-
Dumping Agreement  for disregarding the results of comparisons where the export price exceeds the 
normal value when calculating the margin of dumpi ng for an exporter.  The Appellate Body has 
previously noted that other provisions of the Anti-Dumping Agreement  are explicit regarding the 
permissibility of disregarding certain matters.  For example, Article 9.4 of the Anti-Dumping 
Agreement  expressly directs investigating aut horities to disregard "any zero and  de minimis  margins" 
                                                      
218See supra , para. 80.  
219At the oral hearing, the United States argued that  the definition of dumping applies at a transaction-
specific level in a periodic review, and that the margin of  dumping therefore relates to an individual transaction.  
Any transaction obviously is specific to both an exporter  and an importer, and so, in that sense, dumping is 
importer-specific and also ex porter-specific. (United St ates' response to questioning at the oral hearing) 
220See also Appellate Body Report, US – Zeroing (Japan) , para. 114.  WT/DS344/AB/R 
 Page 47 
 
 
 under certain circumstances, when calculating the weighted average margin of dumping to be applied 
to exporters that have not been individually inves tigated.  Similarly, Article 2.2.1, which deals with 
the calculation of normal value, sets forth the only circumstances under which sales of the like 
product in the exporting country can be disregarded.   Thus, when the negotiators sought to permit 
investigating authorities to disregard cer tain matters, they did so explicitly.221    
104. We further recall that, based on its analysis of  Article VI:1 of the GATT 1994 and Article 2.1 
of the Anti-Dumping Agreement , the Appellate Body emphasized, in US – Softwood Lumber V , that: 
[i]t is clear that an investigating authority may undertake multiple 
averaging to establish margins of dumping for a product under 
investigation.  ... [T]he results of the multiple comparisons at the sub-
group level are, however, not "margins of dumping" within the meaning of Article 2.4.2.  Rather, those results reflect only intermediate calculations made by an investigating authority in the context of establishing margins of dumping for the product under investigation.  Thus, it is only on the basis of aggregating  all  these 
"intermediate values" that an i nvestigating authority can establish 
margins of dumping for the product under investigation as a whole.
222 
(original emphasis) 
105. In that appeal, the Appellate Body upheld the panel's finding that the use of zeroing under the 
W-W comparison methodology in an original investig ation was inconsistent with Article 2.4.2 of the 
Anti-Dumping Agreement .223  In  US – Zeroing (EC) and in US – Zeroing (Japan) , the Appellate Body 
confirmed its interpretation of Article VI:1 and Ar ticle 2.1 and found that the use of zeroing was also 
prohibited in the context of duty assessment  proceedings under Article 9.3 of the Anti-Dumping 
Agreement .224  The Appellate Body further emphasized that: 
[i]f, as a consequence of zeroing, the results of certain comparisons 
are disregarded only for purposes of calculating margins of dumping, but taken into consideration for de termining injury, this would mean 
that the same transactions are treated as "non-dumped" for one 
purpose, and as "dumped" for another purpose.  This is not in 
                                                     
 
221See Appellate Body Report, US – Softwood Lumber V , para. 100. 
222Ibid., para. 97. 
223Ibid., para. 117. 
224See Appellate Body Report, US – Zeroing (EC) , paras. 125 and 135;  and Appellate Body Report, 
US – Zeroing (Japan) , paras. 166 and 176.  The issue of zeroing also arose in US – Corrosion-Resistant Steel 
Sunset Review , where the Appellate Body reversed the panel's finding that the use of zeroing in a sunset review 
was not inconsistent with Articles 2.4 and 11.3 of the Anti-Dumping Agreement .  The Appellate Body did not, 
however, complete the analysis because of insufficient factual panel findings and facts undisputed by the parties. 
(Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , paras. 133-138)   WT/DS344/AB/R 
Page 48  
 
 consonance with the need for consis tent treatment of a product in an 
anti-dumping investigation.
225 (footnote omitted) 
106. We also note that, while investigating author ities may define the scope of a product for an 
anti-dumping investigation, that definition applies throughout the investigation.   "Dumping", within 
the meaning of the Anti-Dumping Agreement , can "be found to exist only for the product under 
investigation as a whole"226, by fully taking into account all the transactions pertaining to that 
product.227  That definition of the product has implicati ons for subsequent stages of an anti-dumping 
proceeding as well.  In particular, we consider that the application of simple zeroing in periodic 
reviews may result in certain models of the produ ct under investigation not being fully taken into 
account at the duty assessment stage. 
107. We fail to see a textual or contextual basis in the GATT 1994 or the Anti-Dumping Agreement  
for treating transactions that occur above normal value as "dumped" for purposes of determining the 
existence and magnitude of dumping in the origin al investigation and as "non-dumped" for purposes 
of assessing the final liability for payment of an ti-dumping duties in a periodic review.  Such 
treatment brings about the following inconsistencies.   First, as noted above, the transactions that are 
disregarded may well pertain to a model, type, or class that fell within the definition of the product 
under investigation and were treated as "dumped" in  the original investigation.  By excluding these 
transactions at the duty assessment stage, a mismat ch is created between the product considered 
"dumped" and the product as defined by the investigating authority.  
108. Secondly, and more importantly, this treatment  is inconsistent with the manner in which 
injury was determined in the original investiga tion, where transactions that occurred at above the 
normal value were taken into account in order to calculate the volume of dumped imports for 
purposes of injury determination.228  Obviously, we do not suggest th at there need be a fresh injury 
determination at the duty assessment stage;  rather, we wish to point to the contradiction that arises 
when the same type of transactions are treated as "dumped" for purposes of injury determination in 
the original investigation and as "non-dumped" in periodic reviews for duty assessment.  
109. In addition, as we see it, a reading of Article 9.3 of the  Anti-Dumping Agreement  that 
permits simple zeroing in periodic reviews would allow WTO Members to circumvent the prohibition 
of zeroing in original investigations that applies under the first sentence of Article 2.4.2 of the Anti-
                                                      
225Appellate Body Report, US – Zeroing (Japan) , para. 128. 
226Appellate Body Report, US – Softwood Lumber V , para. 93.   
227Ibid.  See also Appellate Body Report, US – Zeroing (Japan) , para. 115.  See also Appellate Body 
Report, US – Zeroing (EC) , para. 127. 
228See also supra , para. 73.  WT/DS344/AB/R 
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 Dumping Agreement .  This is because, in the first periodic re view after an original investigation, the 
duty assessment rate for each importer will take effect from the date of the original imposition of anti-
dumping duties.  Consequently, zeroing would be intr oduced although it is not permissible in original 
investigations.  We further note that, if no periodi c review is requested, the final anti-dumping duty 
liability for all importers will be assessed at the cash  deposit rate applicable to  the relevant exporter.  
When the initial cash deposit rate is calculated in th e original investigation w ithout using zeroing, this 
means that the mere act of conducting a periodic review would introduce zeroing following 
imposition of the anti-dumping duty order.   
110. We also wish to draw attention to certain other aspects of the United States' duty assessment 
system, which are relevant for our analysis.  First, if all sales made by an exporter to a particular 
importer are found to have occurred at above normal va lue, the duty assessment rate applicable to that 
importer will be zero for the period under review.  Ho wever, the importer con cerned will still be liable 
to pay a cash deposit for its future imports at the ra te applicable to the relevant exporter if that 
exporter has made sales at below norma l value to some other importers.229  Secondly, in a periodic 
review, a going-forward cash deposit rate is calculate d in respect of the relevant exporter, and all 
importers importing from that exporter will pay cash de posits at that rate for future entries of the 
subject merchandise, regardless of the importer-specific duty assessment rates calculated for each importer for the previous period.  These aspects  indicate that the duty assessment and collection 
system of the United States is not entirely impor ter-driven, but depends as well on exporter-related 
determinations.  The fact that the final liability of all importers would be assessed at the exporter's 
cash deposit rate, if no periodic review is re quested, also confirms this conclusion. 
D. Periodic Reviews and Importer- specific Duty Assessment  
111. The United States and the Panel have expressed cer tain concerns regarding the implications 
for importer-specific duty assessment in periodic reviews that flow from the Appellate Body's 
interpretation of Article 9.3 of the Anti-Dumping Agreement  in previous disputes.  The United States 
argues that, if, under US – Zeroing (EC)  and US – Zeroing (Japan) , "the amount of one importer's 
antidumping margin must be averaged to account for the amount by which some other transaction 
involving an entirely different importer was sold at above normal value, and vice versa , then an 
importer could be subjected to liability for dumped imports made by another importer over whom [it] 
has no control."
230  According to the United States, this w ould also mean that "the importer who is 
                                                      
229At the oral hearing, the United States explained that the rationale for this approach is that the 
exporter's pricing behaviour is unpredictable.     
230United States' appellee's submission, para. 102.  WT/DS344/AB/R 
Page 50  
 
 engaged in dumped transactions would receive  a windfall, because [it] may escape antidumping 
duties, or have [its] liability sharply reduced th rough the actions of another importer who behaved 
responsibly by eliminating its dumping margin."
231  In the same vein, the Panel expressed the concern 
that "importers with high margins of dumping woul d be favoured at the expe nse of importers who do 
not dump or who dump at a lower margin."232 
112. It appears to us that the United States a nd the Panel have not correctly understood the 
Appellate Body's interpretation of Article 9.3 in previous disputes.  First, the Appellate Body has not 
recognized the notion of "an importer's dumping margin" and has not held that "an importer's 
dumping margin must be averaged out".233  Rather, the Appellate Body has consistently held that 
"margin of dumping" is an exporter-specific concep t, and that, whatever methodology is followed for 
assessment and collection of anti-dumping duties, the total amount of anti-dumping duties assessed 
and collected from all importers must not exceed th e total amount of dumping found in all the sales 
made by the exporter concerned, calculated accordi ng to the margin of dumping established for that 
exporter without zeroing.234  Secondly, the Appellate Body has also consistently held that "dumping" 
and "margin of dumping" do not exist at the level of  individual transactions, and that, therefore, the 
terms "dumping" and "margin of dumping" cannot be interpreted as applying at an individual 
transaction level, as the United States suggests.235  Thirdly, with respect to assessment  of anti-
dumping duty, however, the Appellate Body has re cognized that, under Article 9.3, anti-dumping duty 
liability can be assessed in relation to a specific im porter on the basis of its transactions from the 
relevant exporter. 
113. We do not agree that the Appellate Body's interpretation of Article 9.3 would favour 
"importers with high margins of dumping … at th e expense of importers who do not dump or who 
dump at a lower margin", as the Panel suggests.236  In our view, it is not correct to say that, under the 
Appellate Body's interpretation, an "offset" is pr ovided for the so-called "non-dumped" transactions.  
                                                      
231United States' appellee's submission, para. 102.  
232Panel Report, para. 7.146. 
233The Appellate Body stated, in US – Zeroing (EC) , that: 
... a reading of Article 9.3 of the Anti-Dumping Agreement  and Article VI:2 
of the GATT 1994 does not suggest that final anti-dumping duty liability 
cannot be assessed  on a transaction- or importer -specific basis, or that the 
investigating authorities may not use specific methodologies that reflect the distinct nature and purpose of proceedin gs governed by these provisions, ... 
provided that the total amount of an ti-dumping duties that are levied does 
not exceed the exporters' or foreign producers' margins of dumping. 
(Appellate Body Report, US – Zeroing (EC) , para. 131 (original emphasis;  footnote omitted)) 
234See Appellate Body Report, US – Zeroing (Japan) , para. 156.   
235See ibid., paras. 115 and 151;  and Appellate Body Report, US – Zeroing (EC) , paras. 126 and 128. 
236Panel Report, para. 7.146.  We reiterate our view  that importers do not "dump" and do not have 
"dumping margins".  WT/DS344/AB/R 
 Page 51 
 
 
 A margin of dumping is properly calculated under the Anti-Dumping Agreement  only if all 
transactions are taken into account, including those where the export prices exceed the normal value.  
Moreover, our interpretation does not preclude a WT O Member applying a retrospective system from 
assessing an importer's final anti-dumping duty liability  on the basis of its own transactions, subject, 
however, to the legal requirement that the prescrib ed overall margin of dumping for the exporter is 
respected.237   
114. In sum, the Appellate Body has ruled on the amount of anti-dumping duty that can be levied 
in accordance with Article 9.3 of the Anti-Dumping Agreement , and not on how this amount is to be 
collected from the importers.  In addition, the Appellate Body has recognized that WTO Members 
have flexibility in choosing their duty assessment and collection system within the parameters highlighted above. 
E. The Panel's Arguments Relating to  Alleged Administrative Burden 
115. The Panel stated that a prohibition of zeroing in periodic reviews "would unnecessarily 
expand the scope of periodic reviews because the exporters would have to submit information 
pertaining to all of their export transactions rather than those pertaining to the importer requesting the 
review."
238  According to the Panel, this would "als o cause administrative in convenience because the 
investigating authorities would have to analyze all that information and be unable to complete the 
review in a timely manner."239  
116. It appears that the Panel has misunderstood a procedural aspect of the United States' duty 
assessment system.  As Mexico points out, the USDOC Regulations do not give the USDOC the 
discretion to limit the scope of a periodic review to only exports pertaining to the importer requesting 
the review.240  As we have explained earlier241, a periodic review under the United States' system can 
be requested by any interested party.  Howeve r, once a periodic review is conducted, the USDOC 
examines contemporaneous data pertaining to an exporter's sales to all of the importers of the subject merchandise and determines simultaneously a going-fo rward cash deposit rate to be applied to all 
                                                     
 
237The Appellate Body has previously stated that, if aggregation of the results of multiple comparisons 
yields a negative value for a particular importer, "this would not mean that the authorities would be required ... 
to compensate an importer for the amount of that negative value (that is, when export prices exceed normal value)." (Appellate Body Report, US – Zeroing (Japan) , footnote 363 to para. 155 (quoting Appellate Body 
Report, US – Zeroing (EC) , footnote 234 to para. 131))  We further note, as stated in paragraph 110 of this 
Report, that, in the case of such an exporter, under the United States' system, cash deposits will continue to be 
collected at the going-forward cash deposit rate applicable to the exporter concerned. 
238Panel Report, para. 7.146.  
239Ibid. 
240See Mexico's appellant's submission, para. 83 and footnotes 64 and 65 thereto.  
241Supra , para. 74. WT/DS344/AB/R 
Page 52  
 
 future entries of that product from that exporter and an individual duty assessment rate for each 
importer in order to assess the final liability for payment of anti-dumping duties by that importer for 
the period under review.
242  The Panel's concern over additional administrative burden or 
inconvenience is therefore misplaced.   
F. Arguments Relating to Prospective Normal Value Systems  
117. We turn next to examine the Panel's analysis  relating to "prospective normal value" systems 
referred to in Article 9.4(ii) of the  Anti-Dumping Agreement .243 
118. The Panel stated that Article 9.4(ii) "cl early provides for a prospective normal value 
system".244  The Panel observed that, "[i]n a prospective normal value system, the importer's liability 
is determined through the comparison of the price pa id by the importer in a given transaction and the 
prospective normal value."245  According to the Panel, under su ch a system, "prices paid in other 
export transactions have no bearing on this importer's liability."246  The Panel added that, "[i]n other 
words, the fact that other importers do not dump, or dump at a lower margin, does not affect the 
liability of an importer who imports at dumped prices."247  
119. For the Panel, it would have been "quite illogical"248 if the drafters of the Anti-Dumping 
Agreement allowed prospective normal value systems a nd yet envisaged that duties collected under 
such a system would be subject to a duty assessme nt proceeding under Article 9.3 "in a manner that 
would require the authorities to calculate a margin of dumping not on the basis of the data pertaining 
to the importer seeking the initiation of the proceedi ng, but based on the aggregated data pertaining to 
the exporter(s) from whom the importer imports."249  According to the Pane l, "[t]he prospective 
                                                      
242See Mexico's appellant's submission, para. 83 (referring to Issues and Decision Memorandum for the 
Final Results of Review in the 2001/2003 Administrative Review of Automative Replacement Glass ("ARG") Windshield from the People's Republic of China, A-570-867, 69 FR 61790, 21 October 2004 (Exhibit 
MEX-13.1 submitted by Mexico to the Panel), pp. 10-11:  "The regulation limits an importer's ability to request 
an administrative review to its own producers or exporter s.  The purpose of this limitation is to allow only those 
companies with a stake in the outcome to request an administrative review of the producers relevant to them.  
Once the [USDOC] decides to conduct its review, however, any such review covers that producer's or exporter's 
sales to all importers").   
243Article 9.4(ii) provides that an anti-dumping duty  applied to imports from exporters not examined 
individually and not included in the examination shall not exceed "where the liability for payment of anti-
dumping duties is calculated on the basis of a prospectiv e normal value, the differ ence between the weighted 
average normal value of the selected exporters or producers and the export prices of exporters or producers not 
individually examined".   
244Panel Report, para. 7.131.  
245Ibid. 
246Ibid. 
247Ibid. 
248Ibid., para. 7.133. 
249Ibid.  WT/DS344/AB/R 
 Page 53 
 
 
 normal value system is based on the notio n of transaction-based duty collection."250  For the Panel, 
"[t]he Appellate Body's reasoning that duties collect ed under such a system are nevertheless subject to 
duty assessment proceedings just like other duties assess ed on a prospective basis is, therefore, far 
from being convincing."251   
120. As Mexico, the European Communities, and Japan point out, the Panel has failed to 
distinguish between duty "collection" at the time of importation, on the one hand, and determinations 
of the final duty liability of an importer and the ma rgin of dumping for an exporter, on the other 
hand.252  The anti-dumping duty collected from each importer at the time of importation, under a 
prospective normal value system, does not represent the "margin of dumping" under Article 9.3, 
which, as the Appellate Body has found, is the margin  of dumping for an exporter for all of its sales of 
the subject merchandise into the country concerned.  As the Panel itself observed, under Article 9.3.2, 
the amount of duties collected on a pr ospective basis also is subject to review.  Under a prospective 
normal value system, a review can be triggered as well if the prospective normal value has been 
improperly determined and thereby the ceili ng prescribed under Article 9.3 is breached.  
Article 9.4(ii) does not exempt prospective norma l value systems from the requirement set out in 
Article 9.3. 
121. The Panel stated that, if "liability for anti- dumping duties can be determined on a transaction-
specific basis in a prospective normal value system , there is no reason why the same cannot be the 
case in the context of the retrospective duty assessment system under Article 9.3.2."253  It is true that, 
in a prospective normal value system, anti-dumping duties are "collected" on only the individual 
export transactions where the prices are less than th e prospective normal value, regardless of whether 
prices of other export transactions are above the pr ospective normal value.  However, as we have 
stated above, a review can be requested if th e prospective normal value has been improperly 
determined so as to result in collection of anti-dumping duties in  excess of the ceiling prescribed in 
Article 9.3.  As the Appellate Body has stated, the  Anti-Dumping Agreement  is neutral as to the 
different systems for levy and collection of anti-dumping duties.254 
                                                      
250Panel Report, para. 7.133. 
251Ibid.  
 252See Mexico's appellant's submission, paras. 49-5 1;   European Communities' third participant's 
submission, para. 68;  and Japan's third participant's submission, para. 51.   
253Panel Report, para. 7.131.  
254See Appellate Body Report, US – Zeroing (Japan) , paras. 162 and 163.   WT/DS344/AB/R 
Page 54  
 
 G. The Panel's Contextual Arguments Relating to  the Second Sentence of Article 2.4.2 of 
the  Anti-Dumping Agreement 
122. The Panel relied on the second sentence of Article 2.4.2 as context to justify its decision not 
to follow the legal interpretation of the Appellate Body in US – Zeroing (Japan) .  The second 
sentence of Article 2.4.2 reads: 
A normal value established on a weighted average basis may be 
compared to prices of individual export transactions if the authorities 
find a pattern of export prices which differ significantly among different purchasers, regions or time periods, and if an explanation is provided as to why such differences cannot be taken into account appropriately by the use of a wei ghted average-to-weighted average 
or transaction-to-transaction comparison. 
We recall that, under the first sentence of Article 2.4.2, an investigating authority is "normally" 
required to use one of the two symmetrical compar ison methodologies provided for in that sentence.  
The second sentence of Article 2.4.2 provides an asymmetrical comparison methodology to address a 
so-called pattern of "targeted" dumping found among certain purchasers, in certain regions, or during 
certain time periods. 
123. The Panel stated that an interpretation that prohi bits zeroing in all contexts would be contrary 
to the principle of effective treaty interpretation,  because it would mean that the application of the 
second sentence of Article 2.4.2 would always yield the same mathematical result as that obtained by 
applying the W-W comparison methodology of the first sentence, thereby rendering the second 
sentence of Article 2.4.2  inutile .
255 
124. Mexico responds to the Panel's interpretation of the second sentence of Article 2.4.2 in two 
ways.  First, it points out that the asymmetrical comparison methodology in Article 2.4.2 (which is meant to be used against "targeted dumping") was not  an issue before the Panel and that, therefore, 
the Appellate Body need not rule on whet her zeroing is permitted under that provision.
256  Secondly, 
the "mathematical equivalence" argument works onl y under the assumption that the weighted average 
normal value used in the weighted average-to -transaction ("W-T") comparison methodology is 
identical to that used in the W-W comparison met hodology.  According to Mexico, this is not the  
case under the United States' system.  Instead, th e USDOC's Regulations "call for the use of 
                                                      
255See Panel Report, para. 7.136.  The United States generally supports the Panel's interpretation of 
Article 2.4.2. (See United States' appellee's submission, paras. 87-93).  
256See Mexico's appellant's submission, para. 65.   WT/DS344/AB/R 
 Page 55 
 
 
 contemporaneous monthly normal values in 'targe ted dumping' [W-T] situations, while mandating 
period-long normal value averages (normally one year) for [W-W] comparisons."257   
125. The European Communities, Japan, and Th ailand generally agree with Mexico.258  I n  
addition, Japan and Thailand argue that the second senten ce of Article 2.4.2 is not relevant to the issue 
of whether simple zeroing is permitted in periodic reviews. 
126. We note that the United States did not contest before the Panel Mexico's assertion that, if the 
determination of weighted average normal values was based on different time periods , dumping 
margin calculations under these two methodologies w ould yield different mathematical results.259  We 
further note the Panel's statement that a methodology based on a comparison of "monthly normal values with individual export transactions is the same methodology prescribed in US Regulations for 
investigations where targeted dumping is identif ied and the third comparison methodology is used"
260, 
and that the United States did not dispute this statement.261  In our view, this suggests that the 
"mathematical equivalence" argument works only un der a specific set of assumptions, and that there 
is uncertainty as to how the W-T comparison methodology would be applied in practice.262 
127. In any event, the Appellate Body has explai ned that, "[b]eing an exception, the comparison 
methodology in the second sentence of Article 2.4. 2 (weighted average-to-transaction) alone cannot 
determine the interpretation of the two me thodologies provided in the first sentence".263  A s  t h e  
Appellate Body has also said, it could be argued, in reverse, that permitting zeroing under the first 
sentence of Article 2.4.2 "would enable inves tigating authorities to capture pricing patterns 
constituting 'targeted dumping', thus rendering the third methodology inutile ."264  The Appellate Body 
has also observed, in US – Zeroing (Japan) , that, "[i]n order to unmask targeted dumping, an 
investigating authority may limit the application of the W-T comparison methodology to the prices of export transactions falling within the relevant pattern."
265  The Appellate Body has so far not ruled on 
the question of whether or not zeroing is permis sible under the comparison methodology in the second 
                                                      
257Mexico's appellant's submission, para. 67 (" obligan a usar el valor normal promedio mensual más 
contemporáneo en situaciones de 'dumping dirigido', y obligar usar valores normales de periodos completos 
(normalmente un año) cuando se trata de comparaciones promedio-contra-promedio ").  
258See European Communities' third participant's submission, paras. 239 and 240;  Japan's third 
participant's submission, paras. 80-83;  and Thailand 's third participant's submission, paras. 32-35. 
259Panel Report, para. 7.140. (emphasis added) 
260Ibid., para. 7.142. (footnote omitted) 
261See ibid. and footnote 105 thereto (referring to United States' response to Question 5 posed by the 
Panel at the second panel meeting). 
262See also Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 99.   
263Ibid., para. 97. 
264Appellate Body Report, US – Zeroing (Japan) , para. 133 (quoting Appellate Body Report, US – 
Softwood Lumber V (Article  21.5 – Canada) , para. 100 (original emphasis)). 
265Ibid., para. 135.   WT/DS344/AB/R 
Page 56  
 
 sentence of Article 2.4.2.  Nor is it an is sue before us in this appeal.  As in US – Zeroing (Japan) , our 
analysis here of the second sentence of Article 2.4.2 is therefore confined to addressing the contextual 
arguments of the Panel based on that provision.
266 
H. Historical Background 
128. We do not consider it strictly necessary in this  case to have recourse to the supplementary 
means of interpretation identified in Article 32 of the  Vienna Convention  because our analysis under 
Article 31 has not left the meaning of the relevant provisions of the Anti-Dumping Agreement 
"ambiguous or obscure", nor has it led to a "manifest ly absurd or unreasonable" result.  Nevertheless, 
we turn to examine the United States' arguments relating to the historical background of the Anti-
Dumping Agreement . 
129. The United States argues that recourse to th e circumstances of the conclusion of the  Anti-
Dumping Agreement   is appropriate in this case as a s upplementary means of interpretation under 
Article 32 of the  Vienna Convention .  The United States refers to various historical materials, 
including the 1960 Group of Experts Report, two pre-WTO panel reports267 that dealt with the issue of 
zeroing in the context of the Tokyo Round Anti-Dumping Code , and several proposals submitted 
during the Uruguay Round.268  According to the United States, the historical materials demonstrate 
that the negotiators were not able to agree on a ge neral prohibition of zeroing or on a requirement to 
aggregate individual transactions under Article 9.3 of the  Anti-Dumping Agreement .269  The United 
States submits that, throughout the history of the GATT, it was recognized that zeroing was allowed 
under Article VI of the GATT 1947, and adds that this Article was not modified during the Uruguay 
Round.270  According to the United States, "[n]o c onsensus could be reach ed because despite 
extensive efforts by Japan, Hong Kong, Singapore,  and the Nordic Countries, their proposals [for 
prohibiting zeroing] were firmly opposed by the [European Communities], the United States and 
Canada." 271  
                                                      
266See Appellate Body Report, US – Zeroing (Japan) , para. 136.  Accordingly, the inferences that the 
Panel seeks to draw as to the Appellate Body's inte rpretation of the second sentence of Article 2.4.2 are 
misguided. (See Panel Report, paras. 7.138 and 7.139) 
267Panel Report, EC – Audio Cassettes , circulated 28 April 1995, unadopted;  Panel Report, EEC – 
Cotton Yarn , adopted 30 October 1995. 
268See United States' appellee's submission, paras. 59-64.  
269See ibid., paras. 114, 126, and 128. 
270See ibid., paras. 126 and 127. 
271Ibid., para. 128 (referring to Communications from Japan, MTN.GNG/NG8/W/11 and 
MTN.GNG/NG8/W/30; Proposals by Hong Kong, China, MTN.GNG/NG8/W/51/Add.1 and MTN.GNG/NG8/W/46;  Proposal by Singapore, MTN.GNG/NG8/W/55;  and Proposal by the Nordic 
Countries, MTN.GNG/NG8/W/76).  See also ibid., paras. 114-128.  WT/DS344/AB/R 
 Page 57 
 
 
 130. We are not persuaded that the aforementioned historical materials provide guidance as to 
whether simple zeroing is permi ssible under Article 9.3 of the  Anti-Dumping Agreement .  First, as we 
see it, the negotiating proposals referred to by the United States reflect the positions of only some of 
the negotiating parties.  Japan argued at the oral hearing that, contrary to what the United States 
suggests, if certain proposals on zeroing were not expressly included in the text, it is because the negotiators considered that the new Uruguay Round Anti-Dumping Agreement prohibited zeroing.  
The European Communities, in turn, suggests that there is a "strong indication of consensus that the 
interests of both parties in the asymmetry and zeroi ng debate could be accomm odated in the targeted 
dumping provisions that eventually became the second sentence of Article 2.4.2".
272  
131. Secondly, we note that the same historical materials referenced by the United States were 
examined by the Appellate Body in US – Softwood Lumber V 273, where the Appellate Body 
concluded that these materials did not resolve the issue of whether the negotiators of the Anti-
Dumping Agreement intended to prohibit zeroing.  Alt hough the 1960 Group of Experts Report 
concluded that making an injurious dumping determ ination based on individual transactions was the 
"ideal method", it also regarded su ch method as "clearly impracticable".274  This report is of little 
relevance to our analysis and does not shed light on the determination of a margin of dumping under 
Article 9.3 of the Anti-Dumping Agreement .  In addition, even if we were to assume that zeroing was 
permitted under Article VI of the GATT 1947, Article VI of the GAT T 1994 has to be interpreted 
now in conjunction with the relevant provisions of the Anti-Dumping Agreement , such as Articles 2.1, 
2.4, 2.4.2, and 9.3. 
132. Thirdly, the Anti-Dumping Agreement  entered into force in 1995, as part of the results of the 
Uruguay Round negotiations, long after the 1960 Group of Experts Report.  The Panel Reports in  
EC – Audio Cassettes  (unadopted) and EEC – Cotton Yarn (adopted), referred to by the United States, 
examined the issue of zeroing under the provisions of the  Tokyo Round Anti-Dumping Code .  The 
relevance of these panel reports is diminished by the fact that the plurilateral  Tokyo Round Anti-
Dumping Code was legally separate from the GATT 1947 and h as, in any event, been terminated.  
This Code was not incorporated into the WTO c overed agreements and, fu rthermore, it contained 
provisions that were less detailed than those in the Anti-Dumping Agreement .  In its arguments on the 
permissibility of zeroing, the United States relies specifically on Article 2.6 of the Tokyo Round Anti-
                                                      
272European Communities' third participant's submission, para. 226. (emphasis omitted)  In response to 
questioning at the oral hearing, the European Communities argued that the negotiating history of the second sentence of Article 2.4.2 suggests further that investigating authorities are permitted to select low-priced export 
transactions, in order to calculate a margin of dumping, only where a pattern of export prices for different 
purchasers, regions, or time periods exists.    
273See Appellate Body Report, US – Softwood Lumber V , para. 108. 
274Supra , footnote 58, para. 8. WT/DS344/AB/R 
Page 58  
 
 Dumping Code .  We note that the corresponding provision in the Anti-Dumping Agreement , namely, 
Article 2.4, has a different wording in that it contains a new first sentence.  Moreover, the Tokyo 
Round Anti-Dumping Code contained no provision similar to Article 2.4.2 of the Anti-Dumping 
Agreement .  Therefore, whatever the legal status of zeroing under the Tokyo Round Anti-Dumping 
Code , it is of little relevance for the interpretation of differently phrased or new provisions of the Anti-
Dumping Agreement .  
I. Conclusion 
133. As noted above, when applying "simple zeroing"  in periodic reviews, the USDOC compares 
the prices of individual export transactions against monthly weighted average normal values, and 
disregards the amounts by which the export prices exceed the monthly weighted average normal values, when aggregating the results of the comp arisons to calculate the going-forward cash deposit 
rate for the exporter and the duty assessment rate fo r the importer concerned.  Simple zeroing thus 
results in the levy of an amount of anti-dumping duty that exceeds an exporter's margin of dumping, 
which, as we have explained a bove, operates as the ceiling for th e amount of anti-dumping duty that 
can be levied in respect of the sales made by an  exporter.  Therefore, simple zeroing is, as such, 
inconsistent with Article VI:2 of  the GATT 1994 and Article 9.3 of the Anti-Dumping Agreement .   
134. For these reasons, we  reverse   the Panel's finding, in paragra phs 7.143 and 8.1(c) of the Panel 
Report, that simple zeroing in periodic reviews is not, as such, inconsistent with Article VI:2 of the 
GATT 1994 and Article 9.3 of the Anti-Dumping Agreement , and  find, instead, that simple zeroing in 
periodic reviews is, as such, inconsistent with th e United States' obligations under those provisions.  
As a consequence, we also reverse  the Panel's findings, in paragra phs 7.143 and 8.1(c) of the Panel 
Report, that simple zeroing in periodic reviews is no t, as such, inconsistent with Article VI:1 of the 
GATT 1994 and Article 2.1 of the Anti-Dumping Agreement .  The Panel offers no additional 
reasoning that could independently support its findings under those provisions.     
135. We note that Mexico requests the Appellate Body  not only to reverse the Panel's findings of 
consistency, but also to find that simple zeroing in periodic reviews is, as such, inconsistent with the 
United States' obligations under Article VI:1  of the GATT 1994 and Article 2.1 of the Anti-Dumping 
Agreement .
275  As we have found that simple zeroing in pe riodic reviews is, as such, inconsistent with 
Article VI:2 of the GATT 1994 and Article 9.3 of the Anti-Dumping Agreement , we do not consider it 
                                                      
275Mexico confirmed at the oral hearing that, in making its claim under Article VI:1 of the GATT 1994, 
it does not rely on the last sentence of th at Article dealing with price comparability.  WT/DS344/AB/R 
 Page 59 
 
 
 necessary to make an additional finding on Mexico 's claim under Article VI:1 of the GATT 1994 and 
Article 2.1 of the Anti-Dumping Agreement .276   
136. In our analysis, we have been mindful of the st andard of review provide d in Article 17.6(ii) of 
the Anti-Dumping Agreement .  However, we consider that Article VI:2 of the GATT 1994 and 
Article 9.3 of the Anti-Dumping Agreement , when interpreted in accordan ce with the customary rules 
of interpretation of public international law as require d by the first sentence of Article 17.6(ii) of the 
Anti-Dumping Agreement , do not admit of another interpretation as far as the issue of zeroing raised 
in this appeal is concerned. 
VI. Simple Zeroing As Applied in Periodic Reviews 
137. The Panel found that zeroing, as applied by the USDOC in the five periodic reviews at issue 
in this dispute, is not inconsistent with Artic les VI:1 and VI:2 of the GATT 1994 and Articles 2.1 
and 9.3 of the  Anti-Dumping Agreement .277  In support of its findings, the Panel referred to the 
reasoning that led it to conclude that simple zeroing in periodic reviews is not inconsistent with those 
provisions.278    
138. On appeal, Mexico requests the Appellate Body to reverse the Panel's findings under 
Articles VI:1 and VI:2 of the GATT 1994 and Articles 2.1 and 9.3 of the Anti-Dumping Agreement  
and to find, instead, that the United States acted inconsistently with its obligations under these 
provisions. 
139. We have found279 that simple zeroing in periodic reviews is, as such, inconsistent with 
Article VI:2 of the GATT 1994 and Article 9.3 of the Anti-Dumping Agreement .280  F o r  t h e  s a m e  
reasons, we reverse  the Panel's finding, in paragraphs 7.149 and 8.1(d) of the Panel Report, that 
zeroing, as applied by the USDOC in the five peri odic reviews at issue in this dispute, is not 
inconsistent with Articles VI:1 and VI:2 of  the GATT 1994 and Articles 2.1 and  9.3 of the Anti-
Dumping Agreement , and  find, instead, that the United States acted inconsistently with its obligations 
under Article VI:2 of the GATT 1994 and Article 9.3 of the Anti-Dumping Agreement  in the five 
periodic reviews at issue in this dispute.   
                                                      
276See also Appellate Body Report, US – Zeroing (Japan) , para. 140. 
277Panel Report, paras. 7.149 and 8.1(d).  
278Ibid., para. 7.149.  
279See supra , para. 134.  
280See also Appellate Body Report, US – Zeroing (EC) , para. 133;  and Appellate Body Report, US – 
Zeroing (Japan) , paras. 174-176. WT/DS344/AB/R 
Page 60  
 
 140. In relation to Article VI:1 of the GATT 1994 and Article 2.1 of the Anti-Dumping Agreement , 
we note that Mexico requests the Appellate Body no t only to reverse the Panel's findings, but also to 
find that the United States acted inconsistently with these provisions.
281  However, having found that 
zeroing, as applied by the USDOC in the five periodic re views at issue in this dispute, is inconsistent 
with Article VI:2 of the GATT 1994 and Article 9.3 of the  Anti-Dumping Agreement , we do not 
consider it necessary to make an additional findin g on Mexico's claim under Article VI:1 of the 
GATT 1994 and Article 2.1 of the Anti-Dumping Agreement .282  
VII. Article 2.4 of the  Anti-Dumping Agreement  
141. Before the Panel, Mexico argued that simple zer oing in periodic reviews is inconsistent with 
Article 2.4 of the  Anti-Dumping Agreement , because "a comparison that fails to take into account 
certain export transactions cannot result in a determination of dumping for the product under 
consideration as a whole and cannot be considered  as a 'fair comparison' within the meaning of 
Article 2.4."283  The Panel viewed Mexico's claim as being "premised on the assumption that 
Articles VI:1 and VI:2 of the GATT 1994 and Articles 2.1 and 9.3 of the Anti-Dumping Agreement  
prohibit simple zeroing in periodic reviews."284  Having disagreed with Mexico's assertion that these 
provisions "require investigating au thorities in a periodic review to base their dumping determinations 
on an aggregation of all export transactions from ea ch exporter", the Panel found that simple zeroing 
in periodic reviews is not, as such, inconsistent with the obligation to make a "fair comparison" 
between the normal value and the export price as stipulated in Article 2.4 of the  Anti-Dumping 
Agreement .285  The Panel further found that the United States did not, therefore, act inconsistently 
with Article 2.4 in the five periodic reviews at issue in this dispute. 
142. Mexico challenges the Panel's findings on appeal .  Mexico argues that the Panel erred in 
rejecting Mexico's arguments concerning the consis tency of simple zeroing in periodic reviews with 
Articles VI:1 and VI:2 of the GATT 1994 and Articles 2.1 and 9.3 of the Anti-Dumping Agreement .286  
In addition, Mexico argues that the Panel failed to  conduct an "objective assessment of the matter", as 
required under Article 11 of the DSU, by faili ng to address other "independent arguments" put 
forward by Mexico that simple zeroing in periodic re views is inconsistent with the "fair comparison" 
requirement in Article 2.4 because it "distorts the prices of certain export transactions by artificially 
                                                      
281See Mexico's appellant's submission, para. 101.  
282See, supra , para. 133.  
283Panel Report, para. 7.144.  
284Ibid., para. 7.145.  
285See ibid. (referring to para. 7.123) and para. 7.149.  
286Mexico's appellant's submission, para. 91.   WT/DS344/AB/R 
 Page 61 
 
 
 reducing them, [thus] inflating the apparent magnitude of dumping" and because "calculating margins 
of dumping [through the use of zeroing] is not impartial, even-handed, or unbiased."287 
143. The Panel's finding that simple zeroing in periodi c reviews is not inconsistent with Article 2.4 
of the Anti-Dumping Agreement  is based on the Panel's reasoning and findings relating to 
Articles VI:1 and VI:2 of the GATT 1994 and Articles 2.1 and 9.3 of the Anti-Dumping Agreement , 
which we have reversed.  The Panel offers no a dditional reasoning that c ould independently support 
its finding under Article 2.4.  As a consequence, we reverse  the Panel's findings, in paragraphs 7.145 
and 8.1(c) of the Panel Report, that simple zeroi ng in periodic reviews is not, as such, inconsistent 
with Article 2.4 of the Anti-Dumping Agreement .  We also reverse  the Panel's findings, in 
paragraphs 7.149 and 8.1(d) of the Panel Report, that  the United States did not act inconsistently with 
Article 2.4 in the five periodic reviews at issue in this dispute.   
144. We note that Mexico requests the Appellate B ody not only to reverse the Panel's finding of 
consistency, but also to find that simple zeroing in  periodic reviews is inconsistent with the United 
States' obligations under Article 2.4.  As we ha ve found that simple zeroing in periodic reviews is, 
as such, inconsistent with Article VI:2 of the GATT 1994 and Article 9.3 of the Anti-Dumping 
Agreement , we find it unnecessary to make an additional finding in relation to Mexico's "as such" and 
"as applied" claims under Article 2.4.288  For the same reason, we find it unnecessary to make an 
additional finding on Mexico's claim that the Panel acted inconsistently with Article 11 of the DSU by 
failing to address certain "independent" arguments put  forward by Mexico in support of its claim 
under Article 2.4. 
                                                      
287Mexico's appellant's submission, para. 92 (" argumentos independientes "; "distorsiona los precios de 
ciertas transacciones al reducir de manera artificial e inflar … la magnitud del dumping "; "cálculo de los 
márgenes de dumping [por la utilización de la reducción a cero ] no es imparcial, equitativa ni justa ").  
288We recall that, in US – Zeroing (EC) , the Appellate Body considered that, in the light of its earlier 
finding that zeroing as applied in the periodic review s at issue was inconsistent with Article 9.3 of the Anti-
Dumping Agreement  and Article VI:2 of the GATT 1994, additional findings under Article 2.4 of the Anti-
Dumping Agreement  were not necessary to resolve that dispute. (Appellate Body Report, US – Zeroing (EC) , 
para. 147)  In that same appeal, the Appellate Body wa s unable to complete the an alysis and determine whether 
zeroing in periodic reviews was, as such, inconsistent with the "fair comparison" requirement in Article 2.4. 
(Ibid., para. 228)  In US – Softwood Lumber V (Article 21.5 – Canada) , the Appellate Body found that the use of 
zeroing in calculating the margins of dumping unde r the T-T comparison methodology in the original 
investigation at issue in that dispute was inconsistent with the "fair comparison" requirement in Article 2.4 of 
the Anti-Dumping Agreement . (Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , 
para. 146)  In US – Zeroing (Japan) , the Appellate Body found that zeroing in periodic reviews is, as such, 
inconsistent with Article 2.4 of the Anti-Dumping Agreement. (Appellate Body Report, US – Zeroing (Japan) , 
para. 169)   WT/DS344/AB/R 
Page 62  
 
 VIII.  Mexico's Claim under Article 11 of the DSU Concerning the Panel's Failure to Follow 
Previous Adopted Appellate Body Re ports Addressing the Same Issues 
145. We turn next to address Mexico's claim that th e Panel acted inconsistently with Article 11 of 
the DSU because, by making findings and conclusions  that are identical to those that have been 
reversed by the Appellate Body in previous disp utes, it failed to assist the DSB in discharging its 
responsibilities under the DSU and the covered agreements.   
A. The Panel's Findings and Mexico's Appeal 
146. At the outset of its analysis, the Panel r ecalled previous Appella te Body jurisprudence 
regarding the relevance of adopted  panel and Appellate Body report s for future panels addressing the 
same issues.  The Panel referred to the Appellate Body Report in  Japan – Alcoholic Beverages II , 
where the Appellate Body said that, although adopte d panel reports are not binding, except with 
respect to resolving the particular dispute between  the parties, they should be taken into account 
where they are relevant to any dispute.
289  The Panel also referred to the Appellate Body's statement in 
US – Oil Country Tubular Goods Sunset Reviews , that "following the Appellate Body's conclusions in 
earlier disputes is not only appropriate, [it] is what  would be expected from panels, especially where 
the issues are the same."290  Nevertheless, the Panel decided not to follow the legal interpretation of 
the Appellate Body in  US – Zeroing (EC)  and  US – Zeroing (Japan) , where the Appellate Body 
found that simple zeroing in periodic reviews is in consistent with Article VI:2 of the GATT 1994 and 
Article 9.3 of the Anti-Dumping Agreement .291  Instead, the Panel relied on findings in panel reports 
that the Appellate Body has reversed.       
147. On appeal, Mexico argues that the Panel's approach  was inconsistent with the first sentence of  
Article 11 of the DSU, which stipulates that the func tion of panels is to assist the DSB in discharging 
its responsibilities under the DSU.  In support of its clai m, Mexico refers to Articles 3.2 and 3.3 of the 
DSU, which state that the dispute settlement system  is a "central element in providing security and 
predictability to the multilateral trading system" an d that the "prompt settlement of situations" is 
"essential to the effective functioning of the WT O".  Mexico emphasizes that the Panel acted 
inconsistently with Article 11 of the DSU by faili ng "to follow a consistent line of adopted Appellate 
Body reports that address identical issues with respect to the same responding party"292 and, as a 
                                                      
289Panel Report, para. 7.103 (referring to Appellate Body Report, Japan – Alcoholic Beverages II , 
p. 14, DSR 1996:I, 97, at 108. 
290Ibid., para. 7.104 (quoting Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , 
para. 188).  
291See ibid., para. 7.106.  
292Mexico's appellant's submission, para. 97 (" la negativa de seguir los informes del Órgano de 
Apelación que abordaron las mismas cuestiones con respecto a la misma parte demandada ").   WT/DS344/AB/R 
 Page 63 
 
 
 result, by making findings that are identical to those that have been expressly reversed by the 
Appellate Body in previous cases.  Mexico maintain s that it was compelled to appeal because of the 
Panel's departure from previous Appellate Body reports.   In Mexico's view, this "interfere[d] with the 
prompt settlement of this dispute and, thereby,  frustrate[d] the effective functioning of the WTO 
dispute settlement system".293 
148. The United States requests the Appellate Body to reject Mexico's claim.  According to the 
United States, the Panel made an objective assess ment of the matter by "conduct[ing] its own, 
objective review of the applicable facts and la w to come up with findings to assist the DSB."294  The 
United States further submits that the Panel "caref ully considered and took into account the Appellate 
Body's previous rulings on zeroing and explained in  detail why it did not believe they should apply in 
this case."295  With respect to the "expectation" that panels follow adopted panel and Appellate Body 
reports, the United States disagrees with Mexico that a failure to meet this expectation could 
constitute a violation of Article 11 of the DSU.  The United States also refers to the last sentence of 
Article 3.2 of the DSU, which states that recommend ations and rulings of the DSB cannot add to or 
diminish the rights and obligations provided in the covered agreements.   
149. The European Communities, Japan, and Thailand support Mexico's claim that the Panel acted 
inconsistently with its obligati ons under Article 11 of the DSU.296  The European Communities 
submits that the legal questions that the Panel had to  deal with are the same as those that were before 
the Appellate Body in previous cases.  The Eur opean Communities underlines that the Panel did not 
"distinguish"297 the legal issues raised by Mexico in the present case from those addressed by the 
Appellate Body in previous cases.  Although th e European Communities ac knowledges that case law 
can change if there are cogent reasons for such a change298, such a change could not be justified solely 
on the basis of a disagreement by the hierarch ically lower body with the reasoning of the 
hierarchically higher body in the WTO dispute settlement system.299  The European Communities 
therefore requests the Appellate Body to make it unambiguous that panels are not only expected, but 
also obliged, to follow Appellate Body findings.     
                                                      
293Mexico's appellant's submission, para. 98 (" interf[irió] con la solución pr onta de esta controversia y, 
por ende, frustr[ó] el funcionamiento eficaz del mecanismo de solución de diferencias de la OMC ").  
294United States' appellee's submission, para. 130. 
295Ibid., para. 131. 
296See European Communities' third participant's subm ission, para. 35;  Japan's third participant's 
submission, para. 13;  and Thailand's third participant's submission, paras. 14 and 15. 
297European Communities' third participant's submission, para. 53. 
298See ibid., para. 50;  and European Communities' first written submission to the Panel, 
paras. 141-144.  
299See European Communities' third participant's submission, para. 51. WT/DS344/AB/R 
Page 64  
 
 150. Japan contends that, where a subsequent di spute involves the same matter as an adopted 
report, the adopted report "clarifies" the respondent's  obligations with respect  to the specific matter 
and creates expectations among other WTO Members of their rights with respect to that matter.
300  
Japan adds that "a panel that sets aside  adopted rulings on the same 'matter'"301 acts inconsistently 
with its obligations under Article 11 of the DSU, because it substitutes its own "subjective assessment 
of the matter for one that carries the approval of the DSB".302 
151. Thailand maintains that, for a multi-tiered system  of adjudication to function effectively and 
to provide "security and predictability", the hierar chy between the two tiers in the system must be 
respected.  Thailand further maintains that, if WTO Members cannot be confident that the decisions of 
panels will be consistent with the jurisprudence of the Appellate Body, they will lose confidence in 
the WTO dispute settlement process;  they will see WTO dispute settlement proceedings as requiring 
an appeal in every dispute in order to obtain an objective assessment of the matter.303  According to 
Thailand, this would increase the cost of using the system, diminish efficiency, and be particularly 
harmful for developing countries.304 
152. According to Chile, the Panel's findi ngs may create a "vicious circle"305 that would not 
provide security and predictability to the dispute settlement system.  Nonetheless, Chile argues that, 
while panels are expected to follow Appellate Body  jurisprudence, they are under no obligation to do 
so.  Therefore, the fact that a panel did not do what was expected of it cannot, in and of itself, constitute a violation of Article 11 of the DSU.
306 
153. Having recalled the participants' arguments on app eal, we turn to an examination of Article 11 
of the DSU.   
                                                      
300See Japan's third participant's submission, paras. 15 and 19. 
301Ibid., para. 18. 
302Ibid. 
303See Thailand's third participant's submission, para. 14. 
304See ibid., para. 15. 
305Chile's third participant's submission, p. 1 (" círculo vicioso "). 
306See ibid., p. 2.  WT/DS344/AB/R 
 Page 65 
 
 
 B. Analysis 
154. On appeal, Mexico argues that the Panel acted in consistently with Article 11 of the DSU by 
failing to follow well-established A ppellate Body jurisprudence.  In support of its claim, Mexico 
refers to Articles 3.2 and 3.3 of the DSU. 
155. We begin our consideration with the text of  Article 11 of the DSU, which sets forth the 
function of panels in the WTO dispute settlement sy stem.  The first sentence stipulates that "[t]he 
function of panels is to assist the DSB in disch arging its responsibilities" under the DSU and the 
covered agreements.  The second sentence states that "a panel should make an objective assessment of 
the matter before it, including an objective assessment of the facts of the case and the applicability of 
and conformity with the relevant covered agreements, and make such other findings as will assist the 
DSB in making the recommendations or in giving the rulings provided for in the covered agreements." 
156. Mexico stated at the oral hearing that its cl aim focuses on the first sentence of Article 11 of 
the DSU
 .  However, we observe that the second sen tence of Article 11 begins with the term 
"Accordingly".  This term creates a link between  the first and the second sentence of Article 11307;  it 
ties the second sentence to the general description contained in the first sentence.  The second 
sentence enunciates two specific "functions" of pa nels, namely, the duty "to make an objective 
assessment of the matter before it" and "to make su ch other findings as will assist the DSB in making 
the recommendations or in giving the ru lings" under the covered agreements.   
157. We consider the meaning of "[t]he function of panels" in the first sentence of Article 11 is 
informed by the general provisions contained in Article 3 of the DSU, which sets out the basic 
principles of the WTO dispute settlement system.  Ar ticle 3.2 provides that "[t]he dispute settlement 
system of the WTO is a central element in provi ding security and predicta bility to the multilateral 
trading system";  it serves "to preserve the right s and obligations of Members under the covered 
agreements, and to clarify the existing provisions of those agreements in accordance with customary 
rules of interpretation of public international law."      
                                                      
307The word "accordingly" is used in a similar way in Article 2 of the DSU.  There, the first sentence 
establishes the DSB.  In the second sentence, starting wi th the word "accordingly", the DSB is provided with 
"the authority to establish panels, adopt panel and Appellate Body reports, maintain surveillance of implementation of rulings and recommendations, and authorize suspension of concessions and other obligations 
under the covered agreements."    WT/DS344/AB/R 
Page 66  
 
 158. It is well settled that Appellate Body reports are not binding, except with respect to resolving 
the particular dispute between the parties.
308  This, however, does not mean that subsequent panels are 
free to disregard the legal interpretations and the ratio decidendi  contained in previous Appellate 
Body reports that have been adopted by the DSB.309  In Japan – Alcoholic Beverages II , the Appellate 
Body found that:  
[a]dopted panel reports are an important part of the GATT acquis .  
They are often considered by s ubsequent panels. They create 
legitimate expectations among WT O Members, and, therefore, 
should be taken into account where they are relevant to any dispute.
310 
159. In US – Shrimp (Article 21.5 – Malaysia) , the Appellate Body clarified that this reasoning 
applies to adopted Appellate Body reports as well.311  I n  US – Oil Country Tubular Goods Sunset 
Reviews , the Appellate Body held that "following the A ppellate Body's conclusions in earlier disputes 
is not only appropriate, but is what  would be expected from panels, especially where the issues are the 
same."312   
160. Dispute settlement practice demonstrates that  WTO Members attach significance to reasoning 
provided in previous panel and A ppellate Body reports.  Adopted pa nel and Appellate Body reports 
are often cited by parties in support of legal ar guments in dispute settlement proceedings, and are 
relied upon by panels and the Appellate Body in sub sequent disputes.  In addition, when enacting or 
modifying laws and national regulations pertaining to international trade matters, WTO Members take 
into account the legal interpretation of the cove red agreements develope d in adopted panel and 
Appellate Body reports.  Thus, th e legal interpretation embodied in adopted panel a nd Appellate Body 
                                                      
308See Appellate Body Report, Japan – Alcoholic Beverages II , pp. 12-15, DSR 1996:I, 97, at 106-108.  
In that case, the A ppellate Body stated: 
It is worth noting that the Statute of the International Court of Justice has an explicit provision, Article 59, to the same effect.  This has not inhibited the 
development by that Court (and its predecessor) of a body of case law in 
which considerable reliance on the value of previous decisions is readily discernible.  
(Ibid., p. 14, footnote 30, DSR 1996:I, 97, at 108)  See also Appellate Body Report, US – Softwood Lumber V , 
paras. 109-112;  Appellate Body Report, US – Shrimp (Article 21.5 – Malaysia) , para. 109.   
While Appellate Body reports adopted by the DSB shall be accepted unconditionally by the parties to 
the dispute, it is the exclusive authority of the Ministerial Conference and the General Council to adopt, 
pursuant to Article IX:2 of the WTO Agreement , interpretations that are binding upon the WTO membership.   
309We note that the mandate of an Article 21.5 panel includes the task of assessing whether the 
measures taken to comply with the rulings and r ecommendations adopted by the DSB in the original 
proceedings achieve compliance with those rulings.  Therefore, panels established under that provision are bound to follow the legal interpretation contained in the original panel and Appellate Body reports that were 
adopted by the DSB.   
310Appellate Body Report, Japan – Alcoholic Beverages II , p. 14, DSR 1996:I, 97, at 108. 
311See Appellate Body Report, US – Shrimp (Article 21.5 – Malaysia) , para. 109. 
312Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , para. 188.  WT/DS344/AB/R 
 Page 67 
 
 
 reports becomes part and parcel of the  acquis  of the WTO dispute settlement system.  Ensuring 
"security and predictability" in the dispute settlement system, as contemplated in Article 3.2 of the 
DSU, implies that, absent cogent reasons, an adjudicat ory body will resolve the same legal question in 
the same way in a subsequent case.313 
161. In the hierarchical structure contemplated in the DSU, panels and the Appellate Body have 
distinct roles to play.  In order to strengthen di spute settlement in the multilateral trading system, the 
Uruguay Round established the Appellate Body as a st anding body.  Pursuant to Article 17.6 of the 
DSU, the Appellate Body is vested with the author ity to review "issues of law covered in the panel 
report and legal interpretations deve loped by the panel".  Accordingly, Article 17.13 provides that the 
Appellate Body may "uphold, modify or reverse" the legal findings and conc lusions of panels.  The 
creation of the Appellate Body by WTO Members to review legal interpretati ons developed by panels 
shows that Members recognized the importance of c onsistency and stability in the interpretation of 
their rights and obligations under the covered agreem ents.  This is essential to promote "security and 
predictability" in the dispute settlement system, an d to ensure the "prompt settlement" of disputes.  
The Panel's failure to follow previously adopted  Appellate Body reports addressing the same issues 
undermines the development of a coherent and predic table body of jurisprudence clarifying Members' 
rights and obligations under the covere d agreements as contemplated unde r the DSU.  Clarification, as 
envisaged in Article 3.2 of the DSU, elucidates the scope and meaning of the provisions of the covered agreements in accordance with customary rul es of interpretation of public international law.  
While the application of a provision may be regard ed as confined to the context in which it takes 
place, the relevance of clarification contained in a dopted Appellate Body reports is not limited to the 
application of a particular provision in a specific case.   
                                                     
 
313See H. Lauterpacht, "The so-called Anglo-American and Continental Schools of Thought in 
International Law" (1931) 12 British Yearbook of International Law  53, who points out that adherence to legal 
decisions "is imperative if the law is to fulfil one of its  primary functions, i.e. the maintenance of security and 
stability".  Consistency of jurisprudence is valued also in dispute settlement in other international fora.   In this respect we note the Decision of the Interna tional Criminal Tribunal for the Former Yugoslavia,  
Case No. IT-95-14/1-A, Prosecutor v. Aleksovski , Judgement of 24 March 2000, para. 113, which states that 
"the right of appeal is ... a component of the fair trial requirement, which is itself a rule of customary 
international law and gives rise to the right of the accuse d to have like cases treated alike.  This will not be 
achieved if each Trial Chamber is free to disregard decisions of law made by the Appeals Chamber, and decide 
the law as it sees fit."  Furthermore,  we note the Decision of 21 March 2007 of the ICSID (International Centre 
for Settlement of Investment Disputes) Arbitration Tribunal, Case No. ARB/05/07, Saipem S.p.A. v. The 
People's Republic of Bangladesh , ICSID IIC 280 (2007), p. 20, para. 67, which states that "[t]he Tribunal 
considers that it is not bound by previous decisions.  At the same time, it is of the opinion that it must pay due consideration to earlier decisions of international tribuna ls.  It believes that, subject to compelling contrary 
grounds, it has a duty to adopt solutions established in a series of consistent cases.  It also believes that, subject 
to the specifics of a given treaty and of the circumstances of the actual case, it has a duty to seek to contribute to 
the harmonious development of investment law and thereby to meet the legitimate expectations of the 
community of States and investors towards certainty of the rule of law." WT/DS344/AB/R 
Page 68  
 
 162. We are deeply concerned about the Panel's d ecision to depart from well-established Appellate 
Body jurisprudence clarifying the interpretation of the same legal issues.  The Panel's approach has 
serious implications for the proper functioning of  the WTO dispute settlement system, as explained 
above.  Nevertheless, we consider that the Pane l's failure flowed, in essence, from its misguided 
understanding of the legal provisions at issue.  Si nce we have corrected the Panel's erroneous legal 
interpretation and have reversed all of the Panel's findings and conclusions that have been appealed, 
we do not, in this case, make an additional finding that the Panel al so failed to discharge its duties 
under Article 11 of the DSU.   
IX. Time-limits for Filing Submissions 
163. In a letter dated 3 March 2008, the European Communities complained that the United States' 
appellee's submission was submitted almost three hour s after the time-limit set out by the Appellate 
Body in the Working Schedule for this appeal, communi cated to the participants and third participants 
on 1 February 2008.  The European Communities subm its that the United States "had significant time 
to examine the filings of the Third Participants and eventually adjust its own submission prior to 
filing."
314  At the oral hearing, the European Commun ities reiterated its request that the Appellate 
Body clarify whether it considers the United Stat es' appellee's submission to be filed within the 
meaning of Rule 18(1) of the Working Procedures , and what the consequences are, if any, of a late 
filing. 
164. We share the concerns raised by the Europ ean Communities.  Compliance with established 
time periods by all participants regarding the fili ng of submissions is an important element of due 
process of law.  The Appellate Body clarified in  India – Patents (US)  that due process requirements 
are implicit in the DSU.315  This is particularly important, gi ven that, according to Rules  22(1)  
and 24(1) of the Working Procedures , the appellee's submission(s) and the third participant's 
submission(s) are filed contemporaneously.  The late  filing of a participant's submission could have 
implications for the other participants.  Complian ce with the procedural requirements relating to the 
timely filing of submissions is a matter of fairness and orderly procedure, which are referred to in 
Rule 16(1) of the Working Procedures .  In the circumstances of this appeal, we nevertheless consider 
the United States' appellee's submission as filed.  
                                                      
314Letter from the European Communities to the Appellate  Body Secretariat, dated 3 March 2008, p. 2. 
(emphasis omitted) 
315See Appellate Body Report, India – Patents (US) , para. 94.  WT/DS344/AB/R 
 Page 69 
 
 
 X. Findings and Conclusions 
165. For the reasons set out in this Report, the Appellate Body: 
(a) reverses  the Panel's finding, in paragraphs 7. 143, 7.145, and 8.1(c) of the Panel 
Report, that simple zeroing in periodic re views is not, as such, inconsistent with 
Articles VI:1 and VI:2 of the GATT 1994 and Articles 2.1, 2.4, and 9.3 of the  Anti-
Dumping Agreement ;  and finds , instead, that simple zeroing in periodic reviews is, 
as such, inconsistent with Article VI:2 of the GATT 1994 and Article 9.3 of the Anti-
Dumping Agreement ;  
(b) reverses  the Panel's finding, in paragraphs 7.1 49 and 8.1(d) of the Panel Report, that 
the United States did not act inconsistently with Articles VI:1 and VI:2 of the GATT 1994 and Articles 2.1, 2.4, and 9.3 of the Anti-Dumping Agreement ;  and 
finds
, instead, that the United States acted inc onsistently with Article VI:2 of the 
GATT 1994 and Article 9.3 of the Anti-Dumping Agreement  by applying simple 
zeroing in the five periodic reviews at issue in this dispute;  
(c) finds  it unnecessary, for purposes of resolving this dispute, to make an additional 
finding on Mexico's claim that simple zeroing in periodic reviews is, as such, and as applied in the five periodic reviews at is sue in this dispute, inconsistent with 
Article 2.4 of the  Anti-Dumping Agreement , and on Mexico's related claim under 
Article 11 of the DSU;  and 
(d) does not make
 an additional finding that the Panel failed to discharge its duties under 
Article 11 of the DSU by making findings that  contradict those in previous Appellate 
Body reports adopted by the DSB. 
166. The Appellate Body recommends that the DS B request the United States to bring its 
measures, found in this Report, and in the Panel Repor t as modified by this Report, to be inconsistent 
with the GATT 1994 and with the Anti-Dumping Agreement , into conformity with its obligations 
under those Agreements. WT/DS344/AB/R 
Page 70  
 
 Signed in the original in Geneva this 4th day of April 2008 by:  
 
    
_________________________ 
A.V. Ganesan 
Presiding Member 
 
 
 
  
 _________________________ _________________________ 
 Lilia R. Bautista Giorgio Sacerdoti 
 Member Member 
  WT/DS344/AB/R 
 Page 71 
 
 
 ANNEX I  
 
 WORLD TRADE  
ORGANIZATION  WT/DS344/7 
4 February 2008  
 
(08-0497) 
 Original:   Spanish 
   
UNITED STATES – FINAL ANTI-DUMPING MEASURES 
ON STAINLESS STEEL FROM MEXICO 
 
Notification of an Appeal by Mexico under Ar ticle 16.4 and Article 17 of the Understanding
 
on Rules and Procedures Governing th e Settlement of Disputes (DSU) and  
Rule 20(1) of the Working Procedures for Appellate Review  
   The following notification dated 31 January 20 08, from the delegation of Mexico, is being 
circulated to Members.  
_______________ 
 
  Pursuant to Articles 16.4 and 17 of the Understanding on Rules and Procedures Governing 
the Settlement of Disputes  (DSU) and Rule 20(1) of the Working Procedures for Appellate Review , 
Mexico hereby notifies its decision to appeal to th e Appellate Body certain issues of law covered in 
the Panel Report on United States – Final Anti-Dumping Measures on Stainless Steel from Mexico  
(WT/DS344/R) (Panel Report), and certain legal in terpretations developed by the Panel in this 
dispute.   At issue is "simple zeroing," whereby the Unite d States investigating authorities, in a periodic 
review, compare individual export transactions agai nst average normal values and do not fully take 
into account the results of comparisons where the export price exceeds the average normal value when 
such results are aggregated in order to calculate the exporter's or producer's margin of dumping for the 
product under consideration.
1 
 
 In making its findings and conclusions regardi ng simple zeroing, the Panel failed to interpret 
the relevant provisions of the General Agreement on Tariffs and Trade 1994  (GATT 1994) and the 
Agreement on Implementation of Article VI of  the General Agreement on Tariffs and Trade 1994  
(Anti-Dumping Agreement ) in accordance with the customary rules of interpretation of public 
international law as required by Articles 3.2 an d 11 of the DSU and Article 17.6(ii) of the Anti-
Dumping Agreement .  In particular, the relevant interpretati ons set out in the Panel Report are at odds 
with the rules of treaty interpretation in Articles 31 and 32 of the Vienna Convention on the Law of 
Treaties . 
 
                                                      
1 See Panel Report, paragraphs 7.7 and 7.84-7.97. WT/DS344/AB/R 
Page 72  
 
  Mexico seeks review by the Appellate Body of the following: 
 1. The Panel's findings and conclusions that "sim ple zeroing" in periodic reviews is "as such" 
not inconsistent with Articles VI:1 and VI:2  of the GATT 1994 and Articles 2.1, 9.3 of the 
Anti-Dumping Agreement .
2  These findings and conclusions are based on an erroneous 
interpretation and application of these provisions.  In particular, the Panel erred in finding 
that: 
  (i) Articles VI:1 and VI:2 of the GATT 1994 and Articles 2.1 and 9.3 of the Anti-
Dumping Agreement  do not require, for purposes of periodic reviews, that "dumping" 
and "margins of dumping" be  determined for the "product" under investigation as a 
whole and, instead, permit a determin ation of dumping for individual export 
transactions
3; 
  (ii) Articles VI:1 and VI:2 of the GATT 1994 and Articles 2.1 and 9.3 of the Anti-
Dumping Agreement , do not require, for the purposes of periodic reviews, that 
"dumping" and "margins of dumping" be determined for each exporter and producer 
subject to the proceeding and, instead, permit a determination of dumping for individual importers or import transactions
4;  and 
  (iii) Articles VI:1 and VI:2 of the GATT 1994 and Articles 2.1 and 9.3 of the Anti-
Dumping Agreement , do not prohibit simple zeroing in periodic reviews.
5 
 2. The Panel's findings and conclusions that "sim ple zeroing" in periodic reviews is "as such" 
not inconsistent with Article 2.4 of the Anti-Dumping Agreement .
6  This conclusion is based 
on an erroneous interpretation and application of Articles VI:1 and VI:2 of the GATT 1994 
and Articles 2.1 and 9.3 of the Anti-Dumping Agreement , as described in paragraph 1.7 
 3. The Panel's findings and conclusions that by  applying simple zeroing in the five periodic 
reviews on Stainless Steel Sheet and Strip in Coils from Mexico  identified by Mexico in its 
request for establishment of a panel, the U.S. Department of Commerce (USDOC), did not act 
inconsistently with Articles VI:1 and VI:2 of  the GATT 1994 and Articles 2.1, 2.4 and 9.3 of 
the Anti-Dumping Agreement .
8  This conclusion is based on an erroneous interpretation and 
application of these provisions, as d escribed in the above paragraphs. 
 4. The Panel's findings and conclu sions that directly contradict those in adopted Appellate Body 
reports and force a WTO Member to appeal findings and conclusions that have already been 
specifically overturned on appeal.  In the par ticular circumstances of this dispute, such 
findings and conclusions are inconsistent w ith the function of the Panel which, under 
Article 11 of the DSU, is to assist the Dispute Settlement Body (DSB) in discharging its responsibilities under the DSU.  Underlying tho se responsibilities are Articles 3.2 and 3.3 of 
the DSU which establish that the WTO dispute se ttlement system is a "central element in 
providing security and predictability" and that the "prompt settlement of situations" is 
"essential to the effective functioning of the WTO". 
 
                                                     
 
2 See Panel Report, paragraphs 7.145, 7.149, and 8.1(c). 
3 See, for example , Panel Report, paragraphs 7.117 to 7.123. 
4 See, for example , Panel Report, paragraphs 7.124 to 7.128. 
5 See Panel Report, paragraphs 7.129-7.143 and 7.146-7.148. 
6 See Panel Report, paragraphs 7.145 and 8.1(c). 
7 See Panel Report, paragraph 7.145. 
8 See, for example , Panel Report, paragraphs 7.149 and 8.1(d).  WT/DS344/AB/R 
 Page 73 
 
 
 5. The Panel's failure to consider in their entiret y the claims presented by Mexico relating to the 
inconsistency of zeroing with Article 2.4 of the Anti-Dumping Agreement .  By failing to fully 
address these claims the Panel failed to make an  objective assessment of the matter before it 
as required by Article 11 of the DSU. 
 
 Mexico considers that the Panel erred in law in the interpretation and application of 
Articles VI:1 and VI:2 of the GATT 1994 and Articles 2.1, 2.4, and 9.3 of the Anti-Dumping 
Agreement  and acted inconsistently with Article 11 of the DSU.  Mexico requests that, upon reversal 
of the Panel's erroneous findings and conclusions id entified above, the Appellate Body resolve this 
dispute promptly by finding that simple zeroing is "as such" inconsistent with Articles VI:1 and VI:2 
of the GATT 1994 and Articles 2.1, 2.4, and 9.3 of the Anti-Dumping Agreement , and that the United 
States violated these provisions by applying simple ze roing in the five periodic reviews identified by 
Mexico.  
__________