WT/DS344/R 
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ANNEX E 
  
REQUEST FOR THE ESTABLISHMENT  
OF A PANEL 
 
 
Contents Page 
Annex E-1 Request for the Establishment of a Panel – Document WT/DS344/4 E-2 
 WT/DS344/R 
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ANNEX E-1 
  
REQUEST FOR THE ESTABLISHMENT  
OF A PANEL BY MEXICO  
 
 
 WORLD TRADE  
ORGANIZATION  WT/DS344/4 
16 October 2006 
 (06-5021) 
 Original:   Spanish 
 
  
UNITED STATES – FINAL ANTI-DUMPING MEASURES 
ON STAINLESS STEEL FROM MEXICO 
 
Request for the Establishment of a Panel by Mexico
 
   The following communication, dated 12 October 2006, from the delegation of Mexico to the Chairman of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU. 
 
_______________ 
 
  Acting on instructions from the relevant Mexi can Government authorities, I hereby request 
the establishment of a panel pursuant to Articl es 4 and 6 of the WTO Understanding on Rules and 
Procedures Governing the Settlement of Disputes (D SU), Article XXIII of the General Agreement on 
Tariffs and Trade of 1994 (GATT 1994) and Article  17 of the Agreement on Implementation of 
Article VI of the General Agreement on Tariffs  and Trade of 1994 (Anti-Dumping Agreement), 
regarding the issues listed hereunder:  1. Consultations 
 On 26 May 2006, the Government of Mexico re quested consultations with the Government of 
the United States of America (United States) under Ar ticles 4 and 6 of the DSU, Article XXII:1 of the 
GATT 1994 and Article 17 of the Anti-Dumping Ag reement, regarding the laws, regulations, 
administrative practices, measures and methodologies for calculating dumping margins, including zeroing practices.
1  The consultations were held on 15  June 2006.  They allowed a better 
understanding of the parties' positions but failed to resolve the dispute. 
 
2. Measures 
 In the anti-dumping proceedings carried out by the United States Department of Commerce 
(USDOC) the United States uses the following methodologies to calculate dumping margins: 
                                                      
1 WT/DS344/1;  G/L/778;  G/ADP/D67/1 (1 June 2006).  WT/DS344/R 
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 In original investigations, USDOC first s ubdivides reported comparison market and export 
sales (also known as "normal value" sales) by "contro l number" into a series of "averaging groups" on 
a model-specific basis.  For each averaging group,  it compares normal value and export price, and 
takes as the "dumping margin" the amount by which normal value exceeds export price.  It then aggregates the results of the various model-based comparisons.  In doing so, however, it adds up only 
"positive" results, disregarding (treating as zero, or  "zeroing") the negative results (i.e. comparison 
results where the weighted-average export price fo r the model exceeds the weighted-average normal 
value).  This practice is known as "model zeroing".  Lastly, USDOC calculates the overall margin of 
dumping for the period of investigation by dividing the sum of the positive differences (numerator) by 
the total value of all the export sales used for comp arisons (including those w ith negative differences) 
(denominator). 
  In periodic reviews (i.e. when USDOC calculates the magnitude of dumping margins in order to assess an importer's final liability for payment of anti-dumping duties and any future cash deposit 
rate), USDOC first subdivides reported comparison market sales (also known as "normal value" sales) 
by "control number" into a series of monthly "a veraging groups" on a model-specific basis.  The 
comparison is usually between each reported in dividual export transaction and the average normal 
value of the identical or most similar contem poraneous monthly averaging group to which it 
corresponds.  USDOC then aggregates the results of these comparisons.  In doing so, however, it adds 
only the "positive" comparison results, disregarding  (zeroing) the negative comparison results (i.e. 
comparison results where the individual export price for the model exceeds the weighted-average 
normal value).  This practice is known as "simple zeroing". 
 
• In order to determine the amount of cash  deposits, USDOC calculates an overall 
margin of dumping for the period of the periodic review for the "class or kind of merchandise" by dividing the sum of the pos itive differences (numerator) by the total 
value of all the export sales used in the comparisons (including those with negative 
differences) (denominator). 
 
• In order to determine the amount of th e anti-dumping duties to be assessed, USDOC 
usually calculates the importer-specific amount by dividing the sum of the positive differences (numerator) for each importer by  the total customs entered value of each 
importer's export sales. 
 
 This means that the United States calculates a margin of dumping and collects anti-dumping 
duties in excess of the actual dumping practiced by th e companies concerned.  The United States uses 
this methodology systematically in all periodic reviews.   The calculation methodologies described above are measures of general and prospective 
application, and the United States implements them pursuant to the following laws, regulations, 
administrative procedures and measures:  
• Sections 736, 751, 771(35)(A) and (B), a nd section 777(A)(c) and (d) of the Tariff 
Act of 1930, as amended; 
 
• The Statement of Administrative Action that accompanied the Uruguay Round 
Agreements Act, H.R. Doc. No. 103-316, vol. I; 
 
• USDOC regulations codified at Title 19 of the United States Code of Federal 
Regulations, sections 351.212(b), 351.414(c), (d) and (e); 
 
• The Import Administration Anti-Dumping Manual (1997 edition), including the 
computer program(s) to which it refers. WT/DS344/R 
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  The calculation methodologies described above were applied by the United States respectively for determining the dumping margin in  the original anti-dumping investigation and for 
the final results of the periodic review s listed in the annex attached hereto. 
 3. Claims 
 1. As such claims
 
 
 Mexico considers that the above-mentioned United States laws, regulations, administrative 
procedures, measures and methodologies for determining the dumping margin in original 
investigations and periodic review s are inconsistent, as such, with th e obligations of the United States 
under the Marrakesh Agreement Establishing the Wo rld Trade Organization (WTO Agreement), the 
GATT 1994 and the Anti-Dumping Agreement, and that they have resulted in the nullification or impairment of benefits accruing to Mexico under Article 3.8 of  the DSU.  In particular, Mexico 
considers that the United States laws, regula tions, administrative procedures, measures and 
methodologies for determining the margin of dumpi ng in original investigations and in periodic 
reviews described above are, as such, inconsis tent with at least the following provisions: 
 
• With respect to original investigations a nd periodic reviews:  Article 1 of the Anti-
Dumping Agreement and Article VI:1 a nd VI:2 of the GATT 1994 as regards the 
zeroing methodology and the consequent im position and collection of anti-dumping 
duties; 
 
• With respect to original investigations: Articles 2.1, 2.4, and 2.4.2 of the Anti-
Dumping Agreement insofar as the comparison of normal value and export price is inconsistent with these provisions; 
 
• With respect to periodic reviews: Ar ticles 2.1 and 2.4 of the Anti-Dumping 
Agreement insofar as the comparison of norma l value and export price is inconsistent 
with these provisions; 
 
• With respect to periodic reviews: Article 9 (including but not limited to Article 9.3) 
of the Anti-Dumping Agreement insofar as the measures result in the imposition and 
collection of an anti-dumping duty in an amount in excess of the margin of dumping pursuant to Article 2 of the Anti-Dumping Agreement; 
 
• With respect to original investigations a nd periodic reviews:  Article XVI:4 of the 
WTO Agreement and Article 18 of the Anti-Dumping Agreement insofar as the United States has failed to take all necessary steps, of a general or particular character, to ensure the conformity of its laws, regulations, administrative procedures and measures with the provisions of the GATT 1994 and the Anti-Dumping 
Agreement. 
 
 2. As applied claims
 
 
 In the original investigation and periodic revi ews identified in the Annex attached hereto, the 
United States applied the laws, regulations, admi nistrative procedures, measures and methodologies 
described above.  Accordingly, Mexico considers that the determinations made by USDOC and the 
subsequent anti-dumping duty assessments and future cash deposit requirements are inconsistent with 
the following provisions of the Anti-Dumping Ag reement, the GATT 1994 and the WTO Agreement: 
  WT/DS344/R 
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• With respect to the original investigation: Article VI:1 and VI:2 of the GATT 1994, 
Articles 1, 2.1, 2.4, 2.4.2 and 18.4 of the Anti-Dumping Agreement, and Article XVI:4 of the WTO Agreement, for the reasons set forth above; 
 
• With respect to the periodic reviews: Article VI:1 and VI:2 of the GATT 1994, 
Articles 1, 2.1, 2.4, 9 (including, but not limited to Article 9.3) and 18.4 of the Anti-
Dumping Agreement, and Article XVI:4 of the WTO Agreement, for the reasons set 
forth above. 
 
4. Request 
 Accordingly, Mexico respectfully request s that a panel be established pursuant to 
Article XXIII of the GATT 1994, Articles 4 and 6 of the DSU and Article 17 of the Anti-Dumping 
Agreement.  The terms of reference shall be the te rms provided in Article 7 of the DSU.  Mexico asks 
that this request be placed on the agenda of th e next meeting of the WTO Dispute Settlement Body 
that will take place on 26 October 2006.  WT/DS344/R 
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ANNEX
 
 
United States – Final Anti-Dumping Measures 
on Stainless Steel from Mexico 
(Investigation and Order) 
 
Specific Case No. 1  
  The measure
 
 
 This case concerns the imposition of anti-dum ping duties on certain stainless steel products 
from Mexico (USDOC case number A-201-822; 64 Fe deral Register (FR) 30790 of 8 June 1999 and 
64 FR 40560 of 27 July 1999).  The ad valorem  rate of the anti-dumping duty was 30.85 per cent for 
ThyssenKrupp Mexinox S.A. de C. V. and all other companies. 
 
Use of the zeroing methodology  
  In calculating the dumping margin in the original investigation of stainless steel from Mexico, USDOC utilized the zeroing methodology.  It thus disregarded results wher e the difference between 
the applicable normal value and the export price w as negative, i.e. where normal value was lower than 
export price. 
 Dumping margin without zeroing
 
  By using the above methodology, USDOC calculated a dumping margin of 30.85 per cent.  
Had it not used the zeroing methodology (i.e. had th e negative comparison results been included), the 
dumping margin would have been lower.  The use of zeroing increased the exposure of ThyssenKrupp Mexinox S.A. de C.V. to the imposition of exces sive anti-dumping duties through the collection of 
excessive estimated duty deposits.   
United States –Final Anti-Dumping Measures 
on Stainless Steel from Mexico 
(First Review) 
 
Specific Case No. 2
 
 
 The measure
 
  This case concerns the imposition of anti-dumping duties on stainless steel from Mexico (USDOC case number A-201-822;  67 FR 6490 of 12 February 2002 and 67 FR 15542 of 
2 April 2002).  The review period was from January 1999 to June 2000 and the ad valorem  rate of the 
anti-dumping duties was 2.28 per cent for ThyssenKrupp Mexinox S.A. de C.V. 
 Use of the zeroing methodology
 
 
 In calculating the dumping marg in in the first periodic review of stainless steel from Mexico, 
USDOC utilized the simple zeroing methodology, th ereby disregarding results where the difference 
between the applicable normal value and the export price was negative, i.e. where normal value was 
lower than export price.   WT/DS344/R 
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Dumping margin without zeroing  
  By using the above methodology, USDOC calculated a dumping margin of 2.28 per cent.  Had it not used the simple zeroing methodology (i .e. had the negative comparison results been 
included), the dumping margin would have been -6.02 per cent, and no anti-dumping duties would 
have been collected. 
  
United States –Final Anti-Dumping Measures 
on Stainless Steel from Mexico 
(Second Review) 
 
Specific Case No. 3
 
  
The measure
 
  This case concerns the imposition of anti-dum ping duties on certain stainless steel products 
from Mexico (USDOC case number A-201-822;  68 FR 6889 of 11 February 2003 and 68 FR 13686 
of 20 March 2003).  The review period was from July 2000 to June 2001, and the ad valorem  rate of 
the anti-dumping duties was 6.15 per cent fo r ThyssenKrupp Mexinox S.A. de C.V. 
 
Use of the zeroing methodology
 
  In calculating the dumping margin in the second periodic review of stainless steel from Mexico, USDOC utilized the simple zeroing methodology, thereby disregarding results where the 
difference between the applicable normal value and the export price was negative, i.e. where normal 
value was lower than export price.  Dumping margin without zeroing
 
  By using the above methodology, USDOC calculated a dumping margin of 6.15 per cent.  
Had it not used the simple zeroing methodology (i .e. had the negative comparison results been 
included), the dumping margin would have been 1.83 per cent, and lower anti-dumping duties would have been collected.   
United States –Final Anti-Dumping Measures 
on Stainless Steel from Mexico 
(Third Review) 
 
Specific Case No. 4
 
 
 
The measure  
  This case concerns the imposition of anti-dumping duties on stainless steel from Mexico (USDOC case number A-201-822;  69 FR 6259 of 10  February 2004).  The review period was from 
July 2001 to June 2002, and the ad valorem  rate of the anti-dumping duties was 7.43 per cent for 
ThyssenKrupp Mexinox S.A. de C.V.  WT/DS344/R 
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Use of the zeroing methodology
 
  In calculating the dumping margin in the third periodic review of the anti-dumping investigation concerning certain stainless steel products from Mexico, USDOC utilized the simple 
zeroing methodology, thereby disregarding results where the difference be tween the applicable 
normal value and the export price was negative, i.e.  where normal value was lower than export price. 
 Dumping margin without zeroing
 
  By using the above methodology, USDOC calculated a dumping margin of 7.43 per cent.  
Had it not used the simple zeroing methodology (i .e. had the negative comparison results been 
included), the dumping margin would have been 4.96 per cent, and lower anti-dumping duties would have been collected.   
United States –Final Anti-Dumping Measures 
on Stainless Steel from Mexico 
(Fourth Review) 
 
Specific Case No. 5
 
 
The measure  
  This case concerns the imposition of anti-dumping duties on stainless steel from Mexico (USDOC case number A-201-822;  70 FR 3677 of  26 January 2005).  The review period was from 
July 2002 to June 2003, and the ad valorem  rate of the anti-dumping duties was 5.42 per cent for 
ThyssenKrupp Mexinox S.A. de C.V. 
 Use of the zeroing methodology
 
  In calculating the dumping margin in the four th periodic review of stainless steel from 
Mexico, USDOC utilized the simple zeroing methodology, thereby disregarding results where the 
difference between the applicable normal value and the export price was negative, i.e. where normal 
value was lower than export price.  Dumping margin without zeroing
 
 
 By using the above methodology, USDOC calculated a dumping margin of 5.42 per cent.  
Had it not used the zeroing methodology (i.e. had th e negative comparison results been included), the 
dumping margin would have been 1.54 per cent,  and lower anti-dumping duties would have been 
collected.   
United States –Final Anti-Dumping Measures 
on Stainless Steel from Mexico 
(Fifth Review) 
 
Specific Case No. 6
 
 
The measure  
  This case concerns the imposition of anti-dumping duties on stainless steel from Mexico (USDOC case number A-201-822;  70 FR 73444 of 12 December 2005).  The review period was from  WT/DS344/R 
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July 2003 to June 2004, and the ad valorem  rate of the anti-dumping duties was 2.96 per cent for 
ThyssenKrupp Mexinox S.A. de C.V.  Use of the zeroing methodology
 
 
 In calculating the dumping margin in the fifth periodic review of stainless steel from Mexico, 
USDOC utilized the simple zeroing methodology, th ereby disregarding results where the difference 
between the applicable normal value and the export price was negative, i.e. where normal value was 
lower than export price.  
Dumping margin without zeroing
 
  By using the above methodology, USDOC calculated a dumping margin of 2.96 per cent.  Had it not used the zeroing methodology (i.e. had th e negative comparison results been included), the 
dumping margin would have been -4.57 per cen t, and no anti-dumping duties would have been 
collected. 
 
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