WORLD TRADE  
ORGANIZATION  WT/DS322/23 
11 January 2008 
 
 (08-0147) 
 Original:   English 
  
 
UNITED STATES – MEASURES RELATING TO ZEROING  
AND SUNSET REVIEWS 
 
Recourse to Article 22.2 of the DSU by Japan
 
 
 
 The following communication, dated 10 January  2008, from the delegation of Japan to the 
Chairman of the Dispute Settlement Body, is circulated pursuant to Article 22.2 of the DSU.  
_______________ 
 
 Japan requests that an ordinary meeting of th e Dispute Settlement Body (DSB) to be held on 
21 January 2008 considers the following agenda item:  
United States – Measures Relating to Zeroing and Sunset Reviews  (WT/DS322) 
– Recourse by Japan to Article 22.2 of the Understanding on Rules and 
Procedures Governing the Settlement of Disputes 
 
Background to this request
 
 
 On 23 January 2007, the DSB adopted the Appe llate Body Report, and the Panel Report, as 
modified by the Appellate Body Report.  In these reports, it was found that the United States' zeroing 
procedures,1 and the application of those procedures in a series of anti-dumping proceedings, are 
inconsistent with various provisions of the Agreement on Implementation of Article VI of the General 
Agreement on Tariffs and Trade 1994 ("Anti-Dumping Agreement ") and the General Agreement on 
Tariffs and Trade 1994  ("GATT 1994").  In particular: 
 
(i) by maintaining zeroing procedures in orig inal investigations when calculating 
margins of dumping on the basis of weighted average-to-weighted average comparisons, the United States acts incons istently with Article 2.4.2 of the Anti-
Dumping Agreement ;
2 
(ii) by maintaining zeroing procedures in orig inal investigations when calculating 
margins of dumping on the basis of transaction-to-transaction comparisons, the 
United States acts inconsistently with Articles 2.4 and 2.4.2 of the Anti-Dumping 
Agreement ;3 
                                                      
1 The term "zeroing procedures" refers to the methodology under which the United States Department 
of Commerce ("USDOC") disregards intermediate negative comparison results in the process of establishing the 
overall dumping margin for the product as a whole for a foreign producer or exporter.  See Appellate Body 
Report, footnote 3. 
2 Panel Report, para. 7.258(a). 
3 Appellate Body Report, para. 190(b). WT/DS322/23 
Page 2  
 
  (iii) by applying zeroing procedures in the an ti-dumping investigation regarding imports 
of cut-to-length carbon quality steel pr oducts from Japan, the United States acted 
inconsistently with Article 2.4.2 of the Anti-Dumping Agreement ;
4 
(iv) by maintaining zeroing procedures in pe riodic reviews, the United States acts 
inconsistently with Articles 2.4 and 9.3 of the Anti-Dumping Agreement  and Article 
VI:2 of the GATT 1994;5 
(v) by maintaining zeroing procedures in new shipper reviews, the United States acts 
inconsistently with Articles 2.4 and 9.5 of the Anti-Dumping Agreement ;6 
(vi) by applying zeroing procedures in the 11 periodic reviews identified in Japan's 
Request for the Establishment of a Panel,7 the United States acted inconsistently with 
Articles 2.4 and 9.3 of the Anti-Dumping Agreement  and Article VI:2 of the GATT 
1994;8 and 
(vii) by relying on margins of dumping calculated in previous proceedings using the 
zeroing procedures in the two sunset review s identified in Japan's Request for the 
Establishment of a Panel,9 the United States acted inconsistently with Article 11.3 of 
the Anti-Dumping Agreement .10 
 On 27 December 2006, the United States Depa rtment of Commerce ("USDOC") published a 
notice stating that, with effect from 22 Febr uary 2007, it would abandon the use of zeroing in 
weighted average-to-weighted average comparisons in original anti-dumping investigations, pursuant 
to the recommendations and rulings of the DSB in dispute WT/DS294.  This action also addresses the 
DSB's recommendations and rulings under point (i) above.   
 
 On 20 February 2007, the United States informed  the DSB that it intended to comply with its 
WTO obligations in this dispute but that it woul d require a reasonable period of time to do so.  
Pursuant to Article 21.3(b) of the Understanding on Rules and Pro cedures Governing the Settlement 
of Disputes  ("DSU"), Japan and the United States agreed that this reasonable period would be 
11 months, expiring on 24 December 2007.  On 27 December 2007, the USDOC announced publicly 
that it had taken steps to implement the DSB's re commendations and rulings under point (iii) above. 
 
Japan's request for authorization to suspend tariff concessions 
 
 By 24 December 2007, the United States had not complied with the DSB's recommendations 
and rulings because it failed to bring the measures found to be inconsistent with the Anti-Dumping 
Agreement  and the GATT 1994 into conformity with its  obligations under these agreements, except 
with respect to the zeroing procedures in weighted  average-to-weighted average comparisons in anti-
dumping original investigations, as referred to in point (i) above, which were  abandoned with effect 
from 22 February 2007 pursuant to the USDOC's notice of 27 December 2006.  Additionally, on 
27 December 2007, the USDOC announced publicly that  it had taken steps to implement the DSB's 
recommendations and rulings with respect to the an ti-dumping investigation regarding imports of cut-
to-length carbon quality steel products, as referred to in point (iii) above.   
                                                      
4 Panel Report, para. 7.258(a). 
5 Appellate Body Report, para. 190(c). 
6 Appellate Body Report, para. 190(d). 
7 WT/DS322/8. 
8 Appellate Body Report, para. 190(e). 
9 WT/DS322/12. 
10 Appellate Body Report, para. 190(f).  WT/DS322/23 
 Page 3 
 
 
   Therefore, pursuant to Article 22.2 of the DS U, Japan requests authorization from the DSB to 
suspend the application to the United States of tariff concessions and other related obligations 
regarding goods, within the meaning of Article 22. 3(f)(i) of the DSU.  This request addresses the 
United States' failure to bring itself into conform ity with the recommendations and rulings of the DSB 
and the United States' obligations under the covere d agreements, with respect to the measures found 
to be inconsistent with the Anti-Dumping Agreement  and the  GATT 1994 as referred to in points (ii), 
(iv) and (v) above . 
 
In accordance with Article 22.4 of the DSU, the level of the suspension of concessions and other 
related obligations will be equivale nt to the level of the nullification or impairment.  In any given 
year, the level of the nullification or impairment is (a) the total  amount of the anti-dumping duties 
illegally determined , and interest thereon ("excess duti es"), plus (b) the annual  value of Japan's lost 
exports to the United States ("trade effects").  In the first year, the amount of excess duties is 
US$18.7 million and the amount of trade effects is USD $48.6 million. 
 
 Japan intends to implement the suspension of tariff concessions and other related obligations 
under by imposing additional import duties above bound custom duties ("additional duties") on a final list of products originating in the United States, wh ich will be notified to the DSB together with the 
rate of the additional duties.  For the purpose of su spension with regard to item (a) in the previous 
paragraph, the additional duties will be set so as to  collect an amount that does not exceed the total 
excess duties.  In addition, for th e purpose of suspension with rega rd to item (b) in the previous 
paragraph, the additional duties will be set so as to decrease the value of exports from the United 
States to Japan by the annual value of Japan's lost exports to the Un ited States.  As necessary, for the 
purposes of both items (a) and (b), Japan will adjust the additional duties imposed from year to year in light of changes in the level of the nullification or im pairment, as described in the previous paragraph.  
In the event of such an adjustment, Japan will no tify to the DSB a list indicating the products subject 
to the additional duties, as well as the rate of the add itional duties, in the light of the adjusted level of 
the nullification or impairment.  
__________