WT/DS344/R 
 Page C-1 
 
 
ANNEX C 
 
 
SECOND WRITTEN SUBMISSI ONS OF THE PARTIES  
OR EXECUTIVE SUMMARIES THEREOF 
 
 
Contents Page 
Annex C-1 Second Written Submission of the United States C-2 
Annex C-2 Executive Summary of the Second Written Submission of Mexico C-5 
 WT/DS344/R 
Page C-2  
 
ANNEX C-1 
  
SECOND WRITTE N SUBMISSION  
OF THE UNITED STATES 
 
 
1. In its First Written Submission, the United St ates fully responded to the arguments made by 
Mexico in its First Written Submission.  The United States does not intend to duplicate those 
arguments here.  Rather, the United States wishes to address two misstatements made by Mexico at 
the first meeting of the Panel and the so-called "sys temic arguments" raised there by Mexico and the 
third parties.    
2. In its Opening Statement, Mexico misrep resented one of the arguments made by the 
United States in its First Written Submission.  Me xico stated that the United States "erroneously 
assumes that dumping is conduct enga ged in by individual importers".
1  Mexico went on to say that 
the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994  
("AD Agreement") does not address the conduct of individual importers or individual import 
transactions, but instead consistently prescribes that  dumping determinations be made in respect of 
each exporter or foreign producer examined.  Likewise,  in its Closing Statement Mexico attributed to 
the United States the "contention that importers as oppo sed to exporters are the parties that engage in 
injurious dumping".2   
 3. This is incorrect, and completely misses th e point.  The United States has never said that 
importers engage in dumping.  Rath er, our fundamental point has been that dumping can occur at the 
level of an individual export transaction.  In a ddition, the United States has emphasized that different 
provisions of the AD Agreement address different aspects of an antidumping proceeding and conduct 
or actions by different actors.  In particular, the remedy for dumping provided for in Article VI:2 of 
the General Agreement on Tariffs and Trade 1994  ("GATT 1994") and Article 9.3 of the 
AD Agreement is antidumping duties, which are applie d to individual entries for which importers are 
liable for payment.  Mexico's arguments, and the A ppellate Body reasoning it relies on, fail to take the 
importer- and import-specific nature of anti dumping duty assessment into account.  Under this 
interpretation of Article 9.3, antidumping duties would be prevented from fulfilling their intended 
purpose as a remedy for injurious dumping for the numerous reasons set forth in paragraphs 88 
through 92 of the First Written Submission of the United States.   
 4. A second statement from Mexico's Opening Stat ement that we wish to address is Mexico's 
accusation that the United States has failed to comp ly with the findings of the Dispute Settlement 
Body in related cases.
3  Mexico presented no evidence of this, and there is none.  Beyond highlighting 
the absence of facts underlying many of Mexico's arguments – such as facts supporting the existence 
of a separate "zeroing" measure (or measures) – Mexi co's statement calls into question its statements 
of concern over the importance of complying with  multilateral dispute settlement procedures.  Those 
procedures protect not only complaining parties who consider that a responding party has breached its 
obligations, but also responding parties agains t groundless, unilateral judgments of breach by 
complaining parties.  In this regard, the United St ates takes note of the requirements in Article 23.2(a) 
of the Understanding on Rules and Procedures Governing the Settlement of Disputes  ("DSU").   
 5. Finally, the United States also wishes to address comments Mexico and several third parties 
have made in connection with their request that "i n the interest of security and predictability" the 
                                                     
 
1 Opening Statement of Mexico at the First Substantive Meeting, para. 23.   
2 Closing Statement of Mexico at the First Substantive Meeting, para. 10.   
3 Opening Statement of Mexico at the First Substantive Meeting, para. 37.    WT/DS344/R 
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panel follow the recent Appellate Body reports relating to the issues in this dispute.  The United States 
explained in its First Written Submission how Mexico 's conception of "security and predictability" is 
antithetical to how that phrase is used in the DSU4, and will not repeat that explanation here.  
However, the United States would like to note several misstatements in these comments.   
 
6. For example, Mexico and some of the third parties argue that the findings of the Appellate 
Body with respect to zeroing provide a "consistent body of reasoning and findings"5 and have 
"coherently and consistently addressed"6 the issues, and therefore that reasoning and findings should 
be followed.  The United States has demonstrated in  its First Written Submission that the reasoning 
and findings of the Appellate Body with respect to any prohibition of zeroing in the AD Agreement 
has been consistent only in its results – the reasoni ng itself has shifted, and in fact has contradicted 
itself.  Indeed, even panels have struggled to u nderstand the shifting Appellate Body reasoning.   
 7. As the United States has also demonstrated in its First Written Submission, it is the panels in 
the various recent zeroing disputes that have provided c oherent and well-reasoned arguments as to 
why the obligation to provide offsets does not ex tend beyond the context of average-to-average 
comparisons in investigations.  Inasmuch as that reasoning is persuasive and, more fundamentally, 
correct, it is that reasoning this Panel should follow.  There is nothing in the DSU or the WTO Agreement that, as one third party would have it, re quires that the "decisions of the hierarchically 
superior body" be followed by the "lower body".
7  As that same third party itself recognizes, it is "not 
disputed that adopted panel and Appellate Body re ports are binding . . . only on the immediate parties 
to the dispute".8   
 8. In addition, the fact that there ha ve been "numerous zeroing-related disputes"
9 has no 
relevance with respect to how this particular dis pute should be decided.  While it may indicate that 
some WTO Members disagree with zeroing as a policy matter, it does not prove that the 
AD Agreement, as written and as agreed to by all Me mbers, prohibits zeroing in all contexts.  The 
implication that the number of disputes on an i ssue – or the number of disputants favoring one 
position – can serve as a basis for disregarding the text of a WTO agreement in favor of a preferred policy outcome is antithetical to the function and ob ligations of WTO panels to apply the rules as 
written, and not to change them.  The task faced by  the Panel is whether the text of the AD Agreement 
itself requires offsets in the context of assessment  proceedings, such as Commerce's periodic reviews 
identified by Mexico in this dispute.  The United States takes note of the statement by Chile in its 
Third Party Submission that the only definitive reso lution of the "zeroing" issue would be through 
explicit, Member-negotiated c onfirmation in the AD Agreement that zeroing is prohibited.
10  Indeed, 
that would be the case because currently no prohibition of zeroing in all contexts can be found in the 
text of the AD Agreement.   
 
9. As Mexico has stated, "[This dispute] is about  the correct legal interpretation of the relevant 
provisions of the GATT 1994 and the Anti-dumping Ag reement.  Mexico asks only that this panel 
correctly interpret these provisions giving due consid eration to prior Appella te Body findings on the 
identical issues."11  As the United States has already stated , this Panel must make its own objective 
assessment of the matter, including its own objective assessment of the correct legal interpretation of 
the relevant provisions of the covered Agreemen ts.  This means that if the Panel's objective 
assessment of the correct legal interpretation of  the relevant provisions – including whether the 
                                                      
4 First Written Submission of the United States, para. 27.   
5 Third Party Oral Statement by the European Communities, para.5.   
6 Oral Statement of Thailand, para. 3.   
7 Third Party Oral Statement by the European Communities, para. 4.   
8 Third Party Oral Statement by the European Communities, para. 4.   
9 Oral Statement of Thailand, para. 2.   
10 Comunicación de Chile como Tercero, para. 7.   
11 Closing Statement of Mexico at the First Substantive Meeting, para. 3 (emphasis added).   WT/DS344/R 
Page C-4  
 
provisions admit of other permissible interpretati ons – differs from an interpretation in a prior 
Appellate Body report, then the Panel is not bound to follow reasoning it finds to be unpersuasive or 
adopt a finding it considers to be incorrect.    10. To summarize the main issues in this dispute, this Panel should reject the claim that there is 
an unwritten measure, taken by the United States in its territory, that requires the Department of 
Commerce ("Commerce") to zero with respect to ass essment proceedings that can be challenged "as 
such".  The United States has explained in detail in  its First Written Submission why the allegations 
by Mexico in its First Written Submission that it is challenging "one single zeroing measure" cannot 
stand.
12  Furthermore, Mexico has failed to provide ev idence of the existence of any act or instrument 
of the United States that requires it to zero in an y context.  Mexico has only provided evidence of 
what Commerce has done in the past.    11. With respect to the substantive arguments, the Panel should reject Mexico's request that this 
Panel create an obligation to reduce antidumping duties on dumped imports by the amounts by which 
any other imports covered by the same assessment proceeding
13 exceed normal value, notwithstanding 
the absence of any textual basis for such an obligation.  For the reasons set forth in the United States 
First Written Submission, the United States respectfully  requests the Panel to refrain from reading into 
the AD Agreement  and Article VI of the GATT 1994 an obligation that is not reflected in the text.  
Instead, the United States requests that this Panel re main faithful to the text by finding that the US 
actions in the assessment proceedings at issu e rest upon a permissible interpretation of the 
AD Agreement in accordance with the customary rules of interpretati on of public international law 
and the standard of review under Article 17.6(ii) of the AD Agreement.     
                                                     
 
12 In addition, as the United States noted in its First Written Submission and Mexico acknowledged 
during the First Substantive Meeting of the Panel, the United States is no longer making average-to-average 
comparisons in original investigations without providing offsets for non-dumped comparisons.   
13 Mexico refers to assessment procee dings as "periodic reviews".    WT/DS344/R 
 Page C-5 
 
 
 ANNEX C-2 
 
 
EXECUTIVE SUMMARY OF THE SECOND WRITTEN  
SUBMISSION OF MEXICO 
 
 I. INTRODUCTION 
 
1. The claims presented by Mexico refer to Zero ing.  Mexico seeks findings that the use of 
model zeroing by the US Department of Commerce ("USDOC") in calculating margins of dumping in 
original investigations and the use of simple zero ing in periodic reviews is  inconsistent with the 
United States' obligations under Article VI:1 and VI :2 of the GATT 1994 and Articles 2.1, 2.4, 2.4.2, 
and 9.3 of the Anti-Dumping Agreement , both "as such" and "as applied" in the contested final 
determinations.   
 2. There are two essential textual foundations to Me xico's claims in this case.  The first is the 
definitions of "dumping" and "mar gins of dumping" contained in Articles VI:1 and VI:2 of the 
GATT 1994 and in Article 2.1 of the Anti-Dumping Agreement .  These terms refer to the dumping of 
the specific "product" that is under investigation or review (not to individual transactions, models or 
other sub-groupings within the product).  The "pr oduct" under investigation or  review is the product 
defined by the investigating authorities taken in  its entirety.  In the case of the as-applied 
determinations challenged by Mexico, this would be "stainless steel sheet and strip in coils" as 
defined by the USDOC.  Accordingly, any purported "margins of dumping" that is calculated with 
respect to stainless steel sheet and strip in coils from Mexico must relate to that product taken as a 
whole.  Any calculation of the margin of dumping that is based on less than, or only part of, the 
transactions for the product under consideration – such as price differences for certain models or 
individual transactions – do not reflect the marg in of dumping for the "product" at issue and are 
therefore inconsistent with these fundamental definitions.   
 3. The second is the fact that the Anti-Dumping Agreement  and the remedies contained therein 
are directed toward the conduct of individual pr oducers and exporters.  Exporters or producers 
"dump".  Importers do not dump but instead purchase dumped products.   
4. The USDOC calculates margins of dumping in or iginal investigations and in periodic reviews 
in two stages.  In the first stag e, the USDOC makes intermediate comparisons between export prices 
and normal value.  Such intermediate comparis ons can be made using different comparison 
methodologies, including average-to-average, transac tion-to-transaction, or average-to-transaction 
comparisons.  Regardless of the comparison methodolog y applied, the results of such intermediate 
comparisons are not "margins of dumping" within th e meaning of Article VI of the GATT or Article 2 
of the Anti-Dumping Agreement .  Margins of dumping are instead determined in the second stage, in 
which the USDOC aggregates the intermediate comparis on results to arrive, in the third stage, at a 
margin of dumping for the exporter or producer for the entire product under investigation or review.   
 
5. Zeroing is concerned with the second step in the margin calculation – the aggregation stage.  
Zeroing is the rule or norm attributable to the Un ited States of general and prospective effect pursuant 
to which the USDOC in aggregating intermediate co mparison results invariably ignores or treats as 
zero price comparison results where the export pri ce exceeds the normal value (negative comparison 
results).  Zeroing negative intermediate comparis on results violates the covered agreements because 
the resulting aggregate margin of dumping does not fu lly, nor does it accurately, reflect the margin of 
dumping for the product under consider ation taken as whole.  The margin of dumping resulting from 
the application of Zeroing at the aggregation stage instead reflects only a part of, or less than, the WT/DS344/R 
Page C-6  
 
 product under consideration.  More over, because only negative intermediate comparison results are 
disregarded or treated as zero, this measure also  systematically and unfairly inflates the resulting 
margin of dumping above its actual magnitude for the product as a whole.   
 
6. The calculation of margins of dumping employ ing Zeroing results is inconsistent with the 
definitions of "dumping" and "margins of dumping" as set forth in Articles VI:1 and VI:2 of the 
GATT 1994 and Article 2.1 of the Anti-Dumping Agreement  which relate to the dumping of a product 
taken in its entirety.  In the case of periodic reviews,  by leading to the collection of duties in excess of 
the margin of dumping determined under Article 2, this methodology also violates Article 9.3 of the 
Anti-Dumping Agreement .  In both original investigations and periodic reviews, by calculating 
margins of dumping in excess of the margin of  dumping for the product as a whole, the resulting 
calculation is inconsistent with the broad fair ness requirement embodied in Article 2.4 of the Anti-
Dumping Agreement .   
 
7. The issue before the Panel is not whether the covered agreements contain an affirmative 
obligation to "provide offsets" to margins of dumping, as the United States would have it, but rather, whether the covered agreements perm it investigating authorities to systematically ignore or alter the 
results of intermediate price comparisons in calculating margins of dumping.   
 8. The Appellate Body, in an unbroken line of reports from EC – Bed Linen  to US – Zeroing 
(Japan) , has consistently interpreted the text of the covered agreements in precisely the same manner 
as Mexico and has reached precisely the same legal conclusions – namely that Zeroing violates the 
obligation under the agreements to calculate a singl e margin of dumping for each exporter or producer 
for the product under investigation or review.  Mexico  urges this Panel to follow the Appellate Body's 
reasoning.   
 
9. The arguments advanced by the United Stat es cannot be squared with the text of the 
agreements and it relies exclusively on reasoning pr esented in panel reports th at were subsequently 
reversed on appeal.   
  ARGUMENT  II. MEXICO'S "AS SUCH" CLAIMS RELATED TO INVESTIGATIONS AND 
PERIODIC REVIEWS ARE PROPERLY BEFORE THE PANEL 
 A. M
EXICO 'S "AS SUCH" CLAIMS ARE WITHIN THE PANEL 'S TERMS OF REFERENCE  
 10. Mexico specifically challenges the manif estation of the single measure (i.e., Zeroing 
procedures) in two principal contexts: original inv estigations and periodic reviews.  The structure of 
Mexico's challenge in no way diminishes the unitary nature of the Zeroing measure at issue.  The 
substantive content of the measure is identical  in both procedural contexts specifically challenged by 
Mexico, i.e., pursuant to the challenged measure the USDOC systematically and invariably disregards 
results where the export price exceeds normal va lue when aggregating intermediate comparison 
results to determine the margin of dumping for the exporter or producer. The challenged 
manifestations and Mexico's "as such" and "as applie d" claims are clearly within the scope of this 
Panel's terms of reference.    WT/DS344/R 
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 B. M EXICO PROVIDED SIGNIFICANT – AND SUFFICIENT – EVIDENCE OF THE EXISTENCE AND 
NATURE OF THE ZEROING MEASURE AT ISSUE IN THIS PROCEEDING  
 
11. Mexico has presented overwhelming evidence demonstrating the specific content of the 
Zeroing measure, that it is attributable to the Unite d States, and that it constitutes a rule of general and 
prospective effect.  The evidence before this Panel is nearly identical to – and perhaps even more 
extensive than – the evidence based  upon which the Appellate Body in US – Zeroing (Japan)  found 
that a single Zeroing measure exists, which can be challenged "as such".    
12. With respect to the United  States' assertion that Mexico has identified no evidence that 
United States has actually zeroed in all possible contexts,  Mexico is under no obligation to do so.  
Mexico challenges the manifestation of the singl e Zeroing measure in two contexts – original 
investigations and periodic reviews.  Mexico has presented ample evidence that the United States has 
consistently employed the Zeroing Proce dures complained of in both contexts.   
 
13. As to the claim that Mexico has provided no evidence that the USDOC cannot – or will not – 
change its methodology in future cases, the United States misstates the standard for establishing that a 
measure exists, which can be challenged "as su ch".  The standard requires only that Mexico 
demonstrate the precise content of the measure, that  the measure is attributable to the United States, 
and that the measure has general and prospec tive application.  Mexico has done so.   
 
14. As the Appellate Body noted in US – Zeroing (Japan) , paragraph 85, relying on evidence 
nearly identical to that presented in the current di spute, "the evidence … shows that what is at issue 
goes beyond the simple repetition of the application of a certain methodology to specific case".  That 
the USDOC could  change its methodology is of no significance in this case.  The ev idence before this 
Panel demonstrates that the Zeroing measure is a rule or norm that has general and prospective 
application – indeed, it is a deliberate policy that h as been, and continues to be systematically applied 
by the USDOC.    
C. USDOC'S
 POLICY ANNOUNCEMENT RELATED TO INVESTIGATIONS HAS NO EFFECT ON 
MEXICO 'S "AS SUCH" CLAIMS RELATED TO INVESTIGATIONS OR REVIEWS  
 15. The United States notes that it has announced a change in policy as of 22 February 2007.  
This asserted change in policy does not detract from – nor does it render moot – Mexico's "as such" 
challenge with respect to the general and prosp ective nature of the single Zeroing measure.   
 
16. The measure that remains following the change  in policy is no different than the measure 
originally challenged, with the ex ception that it purportedly no longer manifests itself with respect to 
the application of one particular calculation me thodology (average-to-average) in one type of 
proceeding (original investigations).  Its application is still "general" and "prospective" with respect to 
all other manifestations including the other ma nifestation and methodology challenged—simple 
zeroing in periodic reviews.   
 
17. Even with respect to average-to-average comp arisons in original investigations, the general 
and prospective effect of the rule or norm on inves tigations prior to 22 February 2007 – in which the 
Zeroing measure was uniformly applied by the USDOC – fully remains, because the orders issued as 
a result of these investigations continue to affect imports being made today.  That the United States 
has undertaken to recalculate dumping margins without  Zeroing in a handful of specific investigations 
is of no consequence to the remaining investigations, the results of all of which were – and continue to 
be – impacted by Zeroing.   WT/DS344/R 
Page C-8  
 
 III. ZEROING IS NOT PERMITTED IN PERIODIC REVIEWS 
 
A. A
RTICLE 2.4.2 
 1. The "All Comparable Transactions" Clause in Article 2.4.2, First Sentence 
 
18. The United States and Mexico differ on the significance of the "all comparable export 
transactions" clause in the first sen tence of Article 2.4.2 of the Anti-Dumping Agreement .  The 
United States claims that this clause was "integra l" to the Appellate Body's original finding in US – 
Softwood Lumber V  that Zeroing is prohibited under Article 2. 4.2 in the context of average-to-average 
comparisons in original investigations.  The Un ited States goes so far as to claim that the "all 
comparable export transactions" clause provides "the  only textual basis" for the Appellate Body's 
determination in that case.  The United States hopes to  persuade the Panel that there is no textual basis 
for recognizing a general prohibition on Zero ing that extends beyond that context.   
 
19. The United States has misread the Appellate Body's reasoning in US – Softwood Lumber V 
and subsequent Appellate Body re ports.  The "all comparable export transactions" language did not 
significantly guide the Appellate Body 's reasoning in those cases and is not the textual basis for the 
general prohibition on Zeroing.  It is instead the re ference to "margins of dumping" in Article 2.4.2, 
9.3, and elsewhere, and the interpretation of that te rm by the Appellate Body that provides the textual 
foundation to the general pr ohibition on Zeroing.   
 
(a) US – Softwood Lumber V 
 20. The Appellate Body's report in US – Softwood Lumber V  found that the "all comparable 
export transactions" clause refers to the manner in  which intermediate comparisons are made on an 
average-to-average basis in the first step of the ma rgin calculation and does not speak to or resolve the 
question of whether Zeroing is permissible where it actually occurs, in the second aggregation step of 
the calculation.  The latter question is instead an  issue of interpreting the terms "dumping" and 
"margins of dumping".   
21. The "all comparable export tran sactions" language pertains to the first step of the calculation 
process in which the investigating authority conducts intermediate  price comparisons and requires 
only that investigating authorities include "all" of the "comparable" export transactions within each of 
the comparison sub-groups.   
 
(b) Subsequent Appellate Body Reports  22. Contrary to the United States' claims, ther e has been no "shift" in the Appellate Body's 
reasoning with regard to zeroing.  Subsequent A ppellate Body reports cons idering the Zeroing issue 
are consistent with the reasoning followed in US – Softwood Lumber V  and confirm that the "all 
comparable export transactions" language is not the textual basis for the general prohibition on 
Zeroing at the aggregation stage (see US – Zeroing (EC 1) , US – Softwood Lumber V (Article 21.5 - 
Canada) , and US – Zeroing (Japan) ).   
 
(c) Alleged "Redundancy" of the "All Comparable Export Transactions" Clause 
 23. The preceding discussion of the Appellate Body's reasoning in US – Softwood Lumber V  also 
effectively responds to, and refutes, the claim of the United States that the recognition of a general 
prohibition on Zeroing renders the "all compar able export transactions" language redundant.  As 
demonstrated above, the prohibition on Zeroing identified in US – Softwood Lumber V,  and every 
other Appellate Body decision considering the issue, is not rooted in the "all comparable export 
transactions" language.  Moreover, the "all comp arable export transactions" language relates  WT/DS344/R 
 Page C-9 
 
 
 specifically to the manner in which intermediate pri ce comparisons are structured in the first step of 
the margin calculation where comparisons are made  on an average-to-average basis.  Thus, the 
general prohibition on Zeroing identified by the Appe llate Body in no way conf licts with or renders 
"inutile" the "all comparable export transactions" langua ge in the first sentence of Article 2.4.2.   
 
2. "Targeted Dumping" and Alleged "Mathematical Equivalence" 
 
24. The United States' First Written Submission claims that "[t]he mathematical implication of a general prohibition of zeroing … is that the targeted dumping clause would be reduced to inutility".  
The United States' arguments regarding mathematical  equivalence are addressed in Mexico's response 
to Question 9 of the Panel.    
B. A
RTICLE 2.1 OF THE ANTIDUMPING AGREEMENT AND GATT  ARTICLE VI 
 25. The general prohibition against Zeroing identified by the Appellate  Body is rooted in the term 
"margin of dumping" in Articles 2.4.2 and Article 9. 3.  As the Appellate Body has found, these terms 
are defined in Articles VI:1 and VI:2 of the GATT 1994 and Article 2.1 of the Anti-Dumping 
Agreement , and refer to the "product" under investiga tion or review taken in its entirety.   
 
26. The United States nevertheless continues to ch allenge the Appellate Body's conclusion that 
"margins of dumping" necessarily refers to the marg in of dumping for the exporter or producer for the 
product under investigation or review taken as a whole.  It insists instead that "dumping" and 
"margins of dumping" can be interpreted as re lating to individual import transactions and other 
groupings of less than the entire product under review.  It advances a series of erroneous arguments in 
support of this contention.   
 
1. Reading the Definitional Provisions of Articles VI:1 and VI:2 of the GATT 1994 and 
Article 2.1 of the Anti-Dumping Agreement 
 
27. The United States asserts that Article 2.1 of the Anti-Dumping Agreement  and Article VI:1 of 
the GATT 1994 are definitional provisions that, "read  in isolation, do not impose independent 
obligations".  However, Mexico is not proposing to  read these provisions in isolation.  To the 
contrary, these definitions are being properly read in  connection with and specifically to interpret the 
operative language contained in Article 2.4.2 ("ma rgins of dumping") and Article 9.3 ("margin of 
dumping").   
 
2. "Real-World" Commercial Conduct 
 28. The United States next claims that "dumpi ng" refers to "real-world commercial conduct by 
which a product is imported into a country, i.e., tran saction by transaction".  Subjective views held by 
the United States regarding purported "real-world co mmercial conduct" cannot ove rride the text of the 
agreements.   
 
3. Historical Background Documents 
 
29. As in previous disputes, the United States also seeks to rely on a handful of selected historical 
"background" documents to bolster its claim that " dumping" has in the past been viewed by certain 
Members as applying at the level of individual impor t transactions.  It is only if interpretation under 
Article 31 of the Vienna Convention leads to an "ambiguous or obscure" meaning and/or a 
"manifestly absurd or unreasonable" result that this  Panel – or any other – would need to resort to 
supplementary means of interpretation.  There is  no such meaning or result in this instance, 
particularly in the light of the Appellate Bo dy's numerous decisions regarding Zeroing.   WT/DS344/R 
Page C-10  
 
 30. Nevertheless, even if this Panel chose to cons ider the documents, they would be of no – or at 
best, extremely limited – probative value in  resolving the issues presented.  In US – Softwood 
Lumber V (Article 21.5 - Canada) , paragraph 121, the Appellate Body concluded "the historical 
materials do not provide any additional guidan ce for the question of whether zeroing under the 
transaction-to-transaction comparison methodology is consistent with Article 2.4.2 of the Anti-
Dumping Agreement ".  This Panel should similarly reject these documents as  irrelevant.   
 
4. Use of Term "Product" Throughout GATT 1994 and Anti-Dumping Agreement 
 
31. The United States takes issue with the Appellate  Body's interpretation of the word "product" 
as used in connection with "dumping" and "margins of dumping" as referring to the product taken as a 
whole.  According to the United States, there is evidence that the term "product" as used in the 
GATT 1994 and the Anti-Dumping Agreement does not exclusively refer to the "product as a whole".  
Mexico responds to the arguments as follows.    
32. First, the United States' reference to the use of the term "product" in  Article VII:3 of the 
GATT 1994 is not relevant.  Article VI is concer ned with market-based price discrimination by 
exporters or producers  with respect to specified products, whereas the customs valuation provisions 
of Article VII are concerned with the value of indi vidual import transactions.  The two provisions are 
completely distinguishable.  The argument by the Un ited States is reminiscent of the claim made in 
US – Softwood Lumber V (Article 21.5 - Canada)  concerning the use of the word "product" in 
Article II of the GATT.  The Appellate Body in that case correctly, and summarily, rejected that 
comparison.    
33. Second, the United States makes reference to the term "product" as used in relation to the 
"levy" of anti-dumping duties on a "product" under Ar ticles VI:2, VI:3, VI:6(a) and VI:6(b) of the 
GATT 1994 as further evidence that "product" may refe r to individual import transactions.  However, 
the United States incorrectly conflates rules concerning the determination of margins of dumping on the one hand with assessment  or levying of the duties on the other.  Margins of dumping must be 
determined with reference to the product taken as a whole.  Assessments, on the other hand, may be 
carried out at the level of individual importers, and Mexico has never contended otherwise.  However, 
the assessment of duties against individual importers re mains, by virtue of Article 9.3, subject to an 
overall cap based on the margin of dumping determined  for the product (as a whole) under Article 2.   
 34. The United States' next argument, based on the fact that dumping is defined as where the 
export price is "less than" the normal value, does not conflict with Mexico's argument.  The definition 
referred to by the United States identifies the margin of dumping with the "product" under investigation.  As repeatedly discussed herein, th e "product" at issue refers to the product under 
investigation as defined by the investigating auth orities.  Margins of dumping may be calculated only 
with reference to that product taken as a whole, not  with respect to individual transactions or parts 
thereof.   
 
35. The United States next points to a provision of  the GATT heretofore not considered relevant 
to this dispute, Ad Article VI:1, which deals w ith "hidden dumping".  This reference essentially 
supports  Mexico's point that the structure of Article VI should be read to define  "product" consistently 
throughout the Anti-Dumping Agreement .  The reference to the "margin of dumping" in this provision 
can hardly be construed as being limited solely to a single importer, if the exporter or producer sells to 
many importers.    
36. The United States also argues that if the Appella te Body's interpretation of the word "product" 
is adopted, then Article 2.2 of the Anti-Dumping Agreement  would require constr ucted value to be 
calculated for the "product as a whole".  This sam e argument was considered and rejected by the 
Appellate Body in US – Softwood Lumber V (Article 21.5 – Canada)
.    WT/DS344/R 
 Page C-11 
 
 
 C. A RTICLE 9.3 
 
1. Prior Appellate Body Decisions Support Me xico's Claim that the Zeroing Procedures 
are inconsistent with Article 9.3 of the Anti-Dumping Agreement 
 37. Pursuant to Article 9.3 of the Anti-Dumping Agreement :  "[t]he amount of the anti-dumping 
duty shall not exceed the margin of dumping as estab lished under Article 2".  The Appellate Body has 
previously set forth a clear analysis leading to  the conclusion that the Zeroing Procedures are 
inconsistent with Article 9.3 and Mexico fully endorses this conclusion.   
 38. As indicated by the express language of Ar ticle 9.3, for the purposes of duty assessment and 
collection proceedings, the margin of dumping – whic h sets the maximum amount of the duties to be 
imposed – must be calculated in accordance with the provisions set forth in Article 2 of the Anti-
Dumping Agreement , including Article 2.1.  Article 2.1 of the Anti-Dumping Agreement  and 
Article VI:2 of the GATT 1994 require that "dumping"  and "margins of dumping " must be established 
for the product under review as a whole.  Citing to the Appellate Body Report in US-Softwood 
Lumber V, the Appellate Body in US – Zeroing (EC 1) , paragraph 127, noted that the reference to 
Article 2 in Article 9.3 confirms that "the am ount of the assessed anti dumping duties shall not exceed 
the margin of dumping as established 'for the product as a whole".   
 
39. The Appellate Body in EC – Bed Linen and US – Softwood Lumber V  expressly held that the 
provisions of Article 2.1 of the Anti-Dumping Agreement  are neither expressly nor implicitly limited 
to any particular phase or phases of an anti-dumping proceeding.  In US – Softwood Lumber V , the 
Appellate Body therein stated "unambiguously" that  its conclusion that "t he terms "dumping" and 
"margins of dumping" in Article VI of the GATT 1994 and the Anti-Dumping Agreement apply to the 
product under investigation as a whole".  As previous ly demonstrated by Mexico, this conclusion was 
not based solely on the first sentence of Article 2.4. 2, but "also on the context found in Article 2.1 of 
the Anti-Dumping Agreement ".  Therefore, the requirement to calculate margins of dumping for the 
product as a whole clearly applies to periodic reviews under Article 9.3.   
 
2. Importers do not engage in "dumping" 
 
40. Mexico disagrees with the United States' claim that, if applied, Mexico's interpretation of 
Article 9.3 would prevent anti-dumping duties "from fulfilling their intended purpose under 
Article VI:2 of the GATT 1994, because importers that contribute the most to injurious dumping 
would be favored over other importers (and domestic competitors) that price fairly".  This argument 
improperly focuses on the behavior of importers rather  than the behavior of exporters.  It is well-
established that "dumping" describes the price discrim inatory behavior engaged in by exporters or 
foreign producers, not by importers.  The importer does not set the export price and does not have any 
part in setting the normal value for a product, whic h is the benchmark against which dumping must be 
measured.  It is only by altering the export price or the normal value, both of which relate to the 
exporter that dumping can be eliminated.    3. The elimination of Zeroing is not inconsistent with prospective systems 
 
41. Mexico disagrees with the United States that  retrospective and prospective systems are 
intended to be fundamentally different in their oper ation and results or that Article 9.4(ii) may be 
interpreted as endorsing the concept of transaction- specific margins of dumping in prospective normal 
value systems.  The systems are not intended to, and cannot reasonably be interpreted as allowing for 
different definitions of "dumping", "margins of  dumping", or "product".  The difference between 
prospective and retrospective assessment systems is th at in the former, the duties deposited at the time 
of importation are definitive, while in the latte r they are not.  However, "the rules on the 
determination  of the margin of dumping are distinct and separate from the rules on the imposition and WT/DS344/R 
Page C-12  
 
 collection  of anti-dumping duties".  In order to conform to the requirements of the Anti-Dumping 
Agreement , a collection system must provide for a refund procedure if the duties actually assessed and 
collected exceed the "margin of dumping" calculated under Article 2.   
 
42. This is clearly reflected in the text of Article 9.3.2 concerning prospective normal value 
systems.  That provision requires refund procedur es "upon request" and clearly distinguishes between 
"the anti-dumping duty assessed on a prospective basis" and the "margin of dumping", requiring 
refunds where the former exceeds the latter.  The interpretation proffered by the United States holds 
that the amount assessed on a prospective basis is a "margin of dumping".  If that were so, then 
amounts assessed would always equal the margin of  dumping and the entire refund obligation under 
Article 9.3.2 would be rendered a nullity.   
 
43 The US argument that Mexico's interpretati on of Article 9.3 (requiring the aggregation of the 
results of all comparisons on an exporter-specific ba sis) "would require that retrospective reviews be 
conducted" in all cases, including in prospective nor mal value systems is also incorrect.  As the 
Appellate Body determined in US – Zeroing (Japan) , paragraph 162, prospective normal value 
systems may collect definitive anti-dumping duties from importers, and those importers will not be 
liable for any additional anti-dumping duties.  Howe ver, such payments are necessarily subject to 
refund procedures to the degree that the total am ount of anti-dumping duties collected exceeds the 
"margin of dumping".   
 
D. A
RTICLE 2.4 
 44. In its First Written Submission, the United Stat es argues that there is no independent standard 
of "fairness" that is violated by Zeroing and that  Mexico's argument with regard to Article 2.4 is 
entirely "consequential" to its Article 9.3 argume nt.  Mexico disagrees.  The "fair comparison" 
language in Article 2.4 "creates an  independent obligation", the scope of which is not limited to the 
general subject matter addressed in paragraph 4 ( i.e., price comparison).  This independent obligation 
applies to all comparison methodologies employed in all types of anti-dumping proceedings.  WTO 
precedents recognize the "inherent bias" of the Zero ing methodology in all types of proceedings.  The 
Zeroing methodology inflates the margins contrary to the terms of the Anti-Dumping Agreement  and 
indeed turns a negative dumping margin into a positiv e one.  It is this fundamental "unfairness" – the 
biased and distortive effects of Zeroing – which underlies Mexico's argument with respect to 
Article 2.4.    
 
IV. ARTICLE XVI:4 OF WTO AGREEMENT AND ARTICLE 18.4 OF THE ANTI-
DUMPING AGREEMENT 
 45. The United States asserts that Mexico's claims concerning Article XVI:4 of the WTO 
Agreement and Article 18.4 of the Anti-Dumping Agreement  "depend upon a finding of inconsistency 
with other provisions of the Anti-Dumping Agreement  and the GATT 1994".   
 
46. Even if the Panel agrees with  this position, it should make findings in favor of Mexico's 
argument (which is set forth in more detail in its First Written Submission) that the Zeroing 
Procedures are inconsistent with Article XVI:4 of the WTO Agreement and Article 18.4 of the Anti-
Dumping Agreement .   
 
 
V. AS APPLIED CLAIM WITH RESPECT TO THE ORIGINAL INVESTIGATION 
 
47. In its First Written Submission, the United States recognizes that the USDOC zeroed in the 
original investigation being challenged "as applied" in  this proceeding, and that such Zeroing has been  WT/DS344/R 
 Page C-13 
 
 
 found to be "inconsistent with Artic le 2.4.2".  Mexico welcomes th is acknowledgment.  However, for 
reasons relating to implementation, Mexico maintain s its request for a finding of WTO-inconsistency 
with respect to this claim.   
 
 
VI. MEXICO'S REQUEST FOR A SUGGESTION 
 
48. There is no doubt regarding the Panel's authority to make suggestions concerning 
implementation, as Mexico has requested in this di spute.  Article 19.1 of the DSU states that "[i]n 
addition to its recommendations, the panel or Appella te Body may suggest ways in which the Member 
concerned could implement the recommendations".  Dispute settlement panels have exercised this 
discretion in past cases to suggest that implemen tation be achieved through revocation of the anti-
dumping measure (see Argentina – Definitive Anti-Dumping Duties on Poultry from Brazil  and 
Guatemala – Definitive Anti-Dumping Measures  on Grey Portland Cement from Mexico ).  Panels in 
disputes involving other types of measures have also suggested that their recommendations be 
implemented by specific means of outright revocation or  repeal of the entire measure at issue.  In yet 
other cases, Panels have made even more specifi c suggestions with respect to compliance.   
 
 
VII. CONCLUSION 
 
49. For the foregoing reasons, and in order to be  consistent with the Mexico's request for the 
establishment of a panel, Mexico respectfu lly requests that the Panel find that:   
 
(a) Zeroing, as applied in the original inves tigation of Stainless Steel Sheet and Strip in 
Coils from Mexico, is inconsistent with Articles VI:1 and VI:2 of the GATT 1994 and Articles 2.1, 2.4, 2.4.2, and 18.4  of the Anti-Dumping Agreement;  and 
Article XVI:4 of the WTO Agreement;   
 
(b) Zeroing in original investigations is, as su ch, inconsistent with Articles VI:1 and VI:2 
of the GATT 1994 and Articles 2.1, 2.4, 2.4.2, and 18.4 of the Anti-Dumping 
Agreement;  and Article XVI:4 of the WTO Agreement;   
 
(c) Zeroing in periodic reviews is, as such, in consistent 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;  and  
 
(d) Zeroing, as applied in the five listed pe riodic reviews of Stainless Steel Sheet and 
Strip in Coils from Mexico, is inconsiste nt with Articles VI:1 and VI:2 of the 
GATT 1994 and Articles 2.1, 2.4, 9.3, and 18.4 of the Anti-Dumping Agreement, and Article XVI:4 of the WTO Agreement.