WORLD TRADE  
ORGANIZATION  WT/DS294/35 
2 February 2010 
 
 (10-0523) 
 Original:   English 
  
 
UNITED STATES – LAWS, REGULATIONS AND METHODOLOGY FOR 
CALCULATING DUMPING MARGINS ("ZEROING") 
 
Recourse to Article 22.2 of the DSU by the European Union
 
 
 
 The following communication, dated 29 January  2010, from the delegation of the European 
Union to the Chairman of the Dispute Settlement Bo dy, is circulated pursuant to Article 22.2 of the 
DSU.  
 
_______________ 
 
  The European Union hereby requests to circulat e the attached request for authorization from 
the Dispute Settlement Body to suspend the applica tion of concessions or othe r obligations under the 
covered agreements pursuant to Article 22.2 of the Understanding on Rules and Procedures 
Governing the Settlement of Disputes  ("DSU"), in DS294 United States – Laws, Regulations and 
Methodology for Calculating Dumping Margin – ("Zeroing") . 
  WT/DS294/35 
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World Trade Organisation 
Panel Proceedings  
 
United States – Laws, Regulations and Methodology for  
Calculating Dumping Margin ("Zeroing")  
 
 
Request by the European Union for authorisatio n from the DSB to suspend the application to 
the United States of concessions or other obli gations under the covered agreements, pursuant to 
Article 22.2 of the Understanding on Rules and Procedures Governing the Settlement of Disputes 
(DSU)  
  
 On 9 May 2006, by DSB action,
1 the DSB adopted the Appellate Body Report2 and the Panel 
Report3 as modified by the Appellate Body Report in United States – Laws, Regulations and 
Methodology for Calculating Dumping Margins ("Zeroing")  finding certain measures to be 
inconsistent with the Anti-Dumping Agreement  and the GATT 1994 . On 11 June 2009, by DSB 
action,4 the DSB adopted the Appellate Body Report5 and the Panel Report6 as modified by the 
Appellate Body Report in United States – Laws, Regulations and Methodology for Calculating 
Dumping Margins ("Zeroing"): Recourse to Article  21.5 of the DSU by the European Communities  
finding that the United States failed to bring certa in measures found to be inconsistent with the Anti-
Dumping Agreement  and the GATT 1994  into compliance; failed to comply with the recommendations 
and rulings of the DSB within the reasonable period of time determined pursuant to Article 21.3 of the 
DSU ; and adopted or maintained certain  measures inconsistent with the Anti-Dumping Agreement  and 
the GATT 1994 . In this respect, the following Members have to-date invoked the dispute settlement 
procedures as third parties: Argentina; Brazil; Ch ina; Hong Kong, China; India; Japan; Korea; 
Mexico; Norway; Chinese Taipei; Thailand; and Turkey.    On 23 January 2007, by DSB action,
7 the DSB adopted the Appellate Body Report8 and the 
Panel Report9 as modified by the Appellate Body Report in – United States – Measures Relating to 
Zeroing and Sunset Reviews  finding certain measures to be inconsistent with the Anti-Dumping 
Agreement  and the GATT 1994 . On 31 August 2009, by DSB action,10 the DSB adopted the Appellate 
Body Report11 and the Panel Report12 as modified by the Appellate Body Report in United States – 
Measures Relating to Zeroing and Sunset Review s: Recourse to Article 21.5 of the DSU by Japan  
finding that the United States failed to bring certa in measures found to be inconsistent with the Anti-
Dumping Agreement  and the GATT 1994  into compliance; failed to comply with the recommendations 
and rulings of the DSB within the reasonable period of time determined pursuant to Article 21.3 of the 
DSU ; and adopted or maintained certain  measures inconsistent with the Anti-Dumping Agreement  and 
                                                      
1 WT/DS294/17, 15 May 2006. 
2 WT/DS294/AB/R and Corr. 1. 
3 WT/DS294/R. 
4 WT/DS294/33, 18 June 2009. 
5 WT/DS294/AB/RW and Corr. 1. 
6 WT/DS294/RW. 
7 WT/DS322/15, 30 January 2007. 
8 WT/DS322/AB/R. 
9 WT/DS322/R. 
10 WT/DS322/35, 7 September 2009. 
11 WT/DS322/AB/RW. 
12 WT/DS322/RW.  WT/DS294/35 
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  the GATT 1994 . In this respect, the European Union i nvoked the dispute settlement procedures as a 
third party.   The European Union hereby requests authorisa tion from the DSB to suspend the application 
to the United States of concessions or other oblig ations under the covered agreements, pursuant to 
Article 22.2 of the DSU . 
  In considering what concessions or other oblig ations to suspend, the European Union has 
applied the principles and procedures in Article 22.3 of the DSU . 
 
 Consistent with Articles 22.3(a) and 22.3(f) of the DSU , the European Union seeks to suspend 
concessions or other obligations with respect to th e same sector(s) as that in which the Panel or 
Appellate Body has found a violation or other nulli fication or impairment, that is, with respect to 
goods. The European Union will provide a list of pr oducts to be subject to the suspension when 
making any request pursuant to Article 22.7 of the DSU  and/or when publishing the suspending 
measures. 
  Consistent with Articles 22.3(a) and 22.3(g) of the DSU , the European Union seeks to 
suspend concessions under the same agreement, that is, the agreements listed in Annex 1A of the 
WTO Agreement , taken as a whole. Also consistent with Ar ticle 22.3 and particularly 22.3(a) of the 
DSU , the European Union seeks to suspend concessions or  other obligations with respect to the same 
sector(s) under the DSU . 
  Accordingly, this request is made pursuant to Article 22.3 as a whole, and in particular 
Article 22.3(a) of the DSU . 
 
 The nature of the concessions or other obligatio ns to be suspended will take into account (1) 
the direct trade loss caused by the WTO inconsis tent measures (2) the amounts imposed by the WTO 
inconsistent measures and (3) other nullification or impairment. It will take the form either of a 
prohibitive tariff (such as, for example, 100 %) on a specified annual value of trade from the United States to the European Union; or of an equivalent ad valorem  tariff on an equivalent annual value of 
trade. 
 
 In the first case, the annual value of trade fro m the United States to the European Union to 
which the prohibitive import tariff of 100 % will be  applied is US$ 311 Million. In the second case, an 
ad valorem  import tariff of 13.18 % will be applied to an  annual trade value of US$ 477 Million. The 
European Union reserves the right to review the calculation as appropriate. 
 
 In addition, the European Union requests au thorisation to suspend concessions or other 
obligations under the DSU : as long as the United States does not withdraw, with respect to the 
products covered by the above proceedings, its stat ement that the zeroing methodology used in review 
investigations will not be brought into conformity with the covered agreemen ts, the European Union 
will suspend all concessions and obligations under the DSU  with respect to any application by the 
United States of the zeroing methodology to the Europ ean Union with respect to products covered by 
the above proceedings. With respect to any such ma tters the European Union will proceed directly to 
the suspension of concessions or other obligations under the agreements listed in Annex 1A of the 
WTO Agreement , taken as a whole; and under the DSU
. 
 
 The level of the suspension of concessions or other obligations with respect to which the 
European Union requests this authorisation is equiva lent to, or less than, the level of the nullification 
or impairment.  WT/DS294/35 
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   Pursuant to Article 1.1 of the DSU , this request complies with the rules and procedures set out 
in Article 6 of the DSU . It is made in writing. No prior consu ltations were held with the United States. 
It identifies the relevant measures and provides a brief summary of the legal basis of the complaint sufficient to state the problem clearly. It states under which agreements suspension of concessions or 
other obligations is sought; and it states the leve l of nullification or impairment. Any Article 22.6 
DSU  arbitration panel shall have the standard terms of  reference, as they result from Article 22 of the 
DSU , other relevant provisions of the DSU , and this request. 
   Pursuant to Article 22.6 of the DSU , if the United States objects to the level of suspension 
proposed, the matter shall be referred to the original  panel, if members are available, which shall, 
applying the rules and procedures of the DSU (pursuant to Article 1.1 of the DSU ), settle any dispute 
between the European Union and the United Stat es concerning their rights and obligations under 
Article 22 of the DSU  taken in isolation or in combination with any other covered agreement. The 
Panel shall in particular determin e, to the extent requested, whethe r the principles and procedures of 
Article 22.3 have been applied; whether the leve l of suspension is equivalent to the level of 
nullification or impairment; and if the proposed su spension of concessions or other obligations is 
allowed under the covered agreements.   
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