WT/DS350/R 
 Page B-1 
 
 
  ANNEX B 
 
 
THIRD PARTIES' WRITTEN SUBMISSIONS 
  
Contents Page 
Annex B-1 Third Party Written Submission of Japan B-2 
Annex B-2 Third Party Written Submi ssion of the Republic of Korea B-23 
Annex B-3 Third Party Written Submission of Norway B-29 
Annex B-4 Third Party Written Submission of the Separate Customs Territory 
of Taiwan, Penghu, Kinmen and Matsu B-42 
Annex B-5 Third Party Written Submission of Thailand B-48 
 WT/DS350/R 
Page B-2  
 
  ANNEX B-1 
 
THIRD PARTY WRITTEN SUBMISSION OF JAPAN 
 
  
TABLE OF CONTENTS 
 
  Page
 
TABLE OF CASES CITED........................................................................................................... ...... 3  
TABLE OF ABBREVIATIONS USED  IN THIS SUBMISSION .................................................... 4  
I. INTRODUCTION AND EXECUTIVE SUMMARY ........................................................... 5  
II. THE ZEROING PROCEDURES........................................................................................... 6  
III. THE ZEROING PROCEDURES USED BY THE USDOC IN THE MEASURES 
CHALLENGED BY THE EC AR E INCONSISTENT WITH THE 
OBLIGATIONS ESTABLISHED BY THE ANTI-DUMPING AGREEMENT  
AND THE GATT 1994 ............................................................................................................ 7  
A. THE GOVERNING LEGAL PRINCIPLES ......................................................................................... 7  
1......................... Article 2.1 of the Anti-Dumping Agreement  and Article VI:1 of the GATT 1994 7  
2............................................... Second Sentence of Article 2.4.2 of the Anti-Dumping Agreement  11  
3................................................................................. Article 2.4 of the Anti-Dumping Agreement 13  
B. ZEROING AS USED BY THE USDOC  IN ORIGINAL INVESTIGATIONS IS INCONSISTENT 
WITH ARTICLES 2.1, 2.4.2  AND 2.4 OF THE ANTI-DUMPING AGREEMENT ............................... 14  
1................................................................ Articles 2.1 and 2.4.2 of the Anti-Dumping Agreement  14  
2................................................................................. Article 2.4 of the Anti-Dumping Agreement 15  
C. ZEROING AS USED BY THE USDOC  IN PERIODIC REVIEWS IS INCONSISTENT WITH 
ARTICLES  2.1,  2.4, AND 9.3 OF THE ANTI-DUMPING AGREEMENT .......................................... 16  
1................................................................... Articles 2.1 and 9.3 of the Anti-Dumping Agreement  16  
2................................................................................. Article 2.4 of the Anti-Dumping Agreement 19  
D. ZEROING AS USED BY THE USDOC  IN SUNSET REVIEWS IS INCONSISTENT WITH 
ARTICLES  2.1,  2.4, AND 11.3  OF THE ANTI-DUMPING AGREEMENT ........................................ 20  
E. THE ANTI-DUMPING ORDERS CHALLENGED BY THE EC ARE ALSO INCONSISTENT 
WITH ARTICLES 2.1, 2.4, 2.4.2,  9.3 AND 11.3  OF THE ANTI-DUMPING AGREEMENT 
AND ARTICLES  VI:1  AND VI:2  OF THE GATT  1994................................................................. 21  
IV. CONCLUSION..................................................................................................................... .. 22 
  WT/DS350/R 
 Page B-3 
 
 
  TABLE OF CASES CITED 
 
Short Title Full Case Title and Citation 
EC – Bed Linen  Appellate Body Report, European Communities – Anti-
Dumping Duties on Imports of Cotton-Type Bed Linen from 
India , WT/DS141/AB/R, a dopted 12 March 2001, 
DSR 2001:V, 2049 
EC – Bed Linen (Article 21.5 – 
India)  Appellate Body Report, European Communities – Anti-
Dumping Duties on Imports of Cotton-Type Bed Linen from 
India – Recourse to Article 21.5 of the DSU by India , 
WT/DS141/AB/RW, adopted 24 April 2003, DSR 2003:III, 
965 
US – Carbon Steel Appellate Body Report, United States – Countervailing 
Duties on Certain Corrosion - Resistant Carbon Steel Flat 
Products from Germany , WT/DS213/AB/R and Corr.1, 
adopted 19 December 2002, DSR 2002:IX, 3779 
US – Corrosion-Resistant Steel 
Sunset Review Appellate Body Report, United States – Sunset Review of 
Anti-Dumping Duties on Corros ion-Resistant Carbon Steel 
Flat Products from Japan , WT/DS244/AB/R, adopted 
9 January 2004, DSR 2004:I, 3 
US – Corrosion-Resistant Steel 
Sunset Review Panel Report, United States – Sunset Review of Anti-
Dumping Duties on Corrosion-Re sistant Carbon Steel Flat 
Products from Japan , WT/DS244/R, adopted 
9 January 2004, modified by the Appellate Body Report, WT/DS244/AB/R, DSR 2004:I, 85 
US – Hot-Rolled Steel Appellate Body Report, United States – Anti-Dumping 
Measures on Certain Hot-Roll ed Steel Products from Japan , 
WT/DS184/AB/R, adopted 23 August 2001, DSR 2001:X, 4697 
US – OCTG Sunset Reviews (Mexico) Appellate Body Report, United States – Anti-Dumping 
Measures on Oil Country T ubular Goods (OCTG) from 
Mexico, WT/DS282/AB/R, adopted 28 November 2005 
US – Shrimp (Ecuador) Panel Report, United States – Anti-Dumping Measure on 
Shrimp from Ecuador , WT/DS335/R, adopted 
20 February 2007 
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 (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, adopt ed 1 September 2006 
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 
US – Zeroing (Japan) Appellate Body Report, United States – Measures Relating 
to Zeroing and Sunset Reviews , WT/DS322/AB/R, adopted 
23 January 2007 WT/DS350/R 
Page B-4  
 
  TABLE OF ABBREVIATIONS USED IN THIS SUBMISSION 
 
Abbreviation Description 
Anti-Dumping Agreement Agreement on Implementation 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 
EC European Communities 
FWS First Written Submission 
GATT 1994 General Agreement on Tariffs and Trade 1994 
PNV Prospective normal value 
T-to-T comparison Transacti on-to-transaction comparison 
USDOC United States Department of Commerce 
W-to-T comparison Weighted average-to-transaction comparison 
W-to-W comparison Weighted average-to-weighted average comparison 
  WT/DS350/R 
 Page B-5 
 
 
  I. INTRODUCTION AND EXECUTIVE SUMMARY 
1. In this dispute, the EC presents a series of claims against the United States' continued use of 
the so-called "zeroing" procedures in calculating margins of dumping in a large number of anti-dumping proceedings.  Japan welcomes the opportunity  to make this third party submission to the 
Panel because of its systemic interest in the proper interpretation of the Agreement on Implementation 
of Article VI of the General Agreement on Tariffs and Trade 1994  ("Anti-Dumping Agreement ") as 
regards zeroing.    2. Without prejudice to the issues that Japan ma y address in its oral statement, Japan's written 
submission will address the prohibition on zeroi ng when used in the types of anti-dumping 
proceedings identified by the EC.   
 3. The operation of zeroing in the measures at issu e is no different from the operation of zeroing 
considered in previous disputes.  The USDOC co nducts multiple comparisons, either comparing a 
weighted average normal value with a weighted average export price ("W-to-W") or a weighted 
average normal value with an individual export pri ce ("W-to-T").  Specifically, the United States used 
the W-to-W comparison method in the measures at i ssue resulting from investigations, and it used the 
W-to-T method in the periodic reviews.  In all these measures, to determine the overall amount of "dumping", the USDOC aggregated the multiple comparison results.  Under the zeroing procedures, the USDOC summed solely the positive comparison results, ignoring all the negative comparison 
results.  In other words, the USDOC disregarde d – or treated as "zero" value – the negative 
comparison results for export transactions which the USDOC itself deemed to be comparable.
1   
 4. The consequences of zeroing in the measur es at issue are precisely the same as the 
consequences of zeroing addressed in previous disputes.  First , by excluding all negative comparison 
results, the USDOC makes a "dumping" determination that disregards an entire category of the export 
transactions making up the "product" – namely, t hose transactions that generate the negative 
comparison results.  "Dumping" is, therefore, not determined for the " product " as defined by the 
investigating authority, but for a sub-part of it.    5. In EC – Bed Linen , US – Softwood Lumber V , US – Zeroing (EC) , US – Softwood Lumber V 
(Article 21.5 – Canada) , and US – Zeroing (Japan) , the Appellate Body ruled that a partial 
determination of this type is in consistent with the definition of "dumping" in Article 2.1 of the Anti-
Dumping Agreement , and Article VI of the GATT 1994, because it is not made for the " 'product' as a 
whole ".
2  The Appellate Body also ruled that this definition of "dumping" " applies to the entire [Anti-
Dumping] Agreement ", including all the provisions governing reviews.3  By applying the zeroing 
procedures in the measures at issue, the United Stat es failed to comply with this definition because the 
amount of "dumping" is determined in reviews for a sub-part of the product, not for the "product" as a 
whole.    6. Second , zeroing means that an affirmative "dumping" determination is much more likely to be 
made than not.
4  The reason is that the positive comparison results included  in the determination relate 
to export transactions with prices that are lower  than normal value;  in sharp contrast, the excluded  
                                                      
1 See EC First Written Submission, paras. 6-29.   
2 Appellate Body Report, EC – Bed Linen , para. 53;  Appellate Body Report, US – Softwood Lumber V , 
para. 99;  Appellate Body Report, US – Zeroing (EC) , para. 126;  Appellate Body Report, US – Softwood 
Lumber V (Article 21.5 – Canada) , paras. 87 and 89;  Appellate Body Report, US – Zeroing (Japan) , para. 115.   
3 Appellate Body Report, US – Zeroing (Japan), para. 109;  Appellate Body Report, US – Softwood 
Lumber V , para. 93;  and Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , paras. 109 
and 126.   
4 Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , paras. 140 to 142;  
Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 135.   WT/DS350/R 
Page B-6  
 
  negative results relate to export transactions with prices higher  than normal value.  The export 
transactions selected for inclusion in the determinatio n, therefore, relate to the sub-part of the product 
that is the most likely to generate an affirmative dumping determination.    7. As a result, zeroing can produce a "dumping" determination where, in fact, the product as a 
whole is not dumped.
5  The exclusion of negative comparison r esults also "inflates" the amount of any 
"dumping" determination that is made.6   
 8. Thus, zeroing systematically prejudices the interests of foreign producers and exporters 
because the negative comparison results that are favour able to them are purposefully set aside by the 
USDOC.  As a result, the Appellate Body has he ld that the zeroing procedures with these effects 
involves an "inherent bias" and "distortion" in  the comparison of export price and normal value.
7  This 
is the very antithesis of the "fair comparison" required by Article 2.4 of the Anti-Dumping Agreement .   
 9. For these reasons, the United States' zeroi ng procedures, and anti-dumping measures adopted 
using these procedures, have been found to be inco mpatible with Articles 2.4 and 2.4.2, 9.3, 9.5 
and 11.3 of the Anti-Dumping Agreement  in a series of previous disputes.
8   
 10. In the current dispute, the United States' de fence consists entirely of a lengthy repetition of 
arguments that have been made in previous disputes.  Indeed, the United States makes no new 
arguments whatsoever.  Each of the United States' arguments has, therefore, been refuted by the 
complainants and third parties in previous dis putes, and rejected by the Appellate Body.   
 11. The heart of the United States' objection is that the text of the Anti-Dumping Agreement  does 
not support the Appellate Body's interpretation th at the terms "dumping" and "margin of dumping" 
must be defined in relation to the investigated "p roduct" as a whole.  It is common for parties to 
disputes to believe firmly that their own interpretati on of the covered agreements is properly rooted in 
the text of those agreements.  Yet, the purpose of  WTO dispute settlement is to allow the Dispute 
Settlement Body – acting through panels and, ultimat ely, the Appellate Body – to resolve disputes by 
clarifying the meaning of the text on a multilateral basis.  In Article 3.2 of the DSU, Members have also underscored that dispute settlement serves to promote the "security and predictability" of the 
multilateral trading system.  Japan does not consider that these ends would be served if the Panel were 
to reject the Appellate Body's previous rulings on zeroing, which are based on the text of the covered 
agreements, and have been consistently rendered.   
 12. Therefore, for the reasons that led the Appellate Body to find, in previous disputes, that the United States' zeroing measures are WTO-inconsistent, Japan urges the Panel to uphold the 
European Communities' ("EC") claims that the measures at issue are inconsistent with the Anti-
Dumping Agreement  because of the United States' use of zeroing.   
 
II. THE ZEROING PROCEDURES 
13. Japan generally agrees with the EC's detaile d description of the zeroing procedures as used by 
the USDOC in various types of anti-dumping pro ceedings, its use in conj unction with different 
                                                     
 
5 Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , paras. 140 to 142;  
Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 135.   
6 Appellate Body Report, EC – Bed Linen , para. 55; Appellate Body Report, US – Softwood Lumber V , 
para. 101;  and Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 135.   
7 See Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , paras. 140 to 142;  
Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , paras. 134 to 135;  and Appellate Body 
Report, EC – Bed Linen , para. 55.   
8 Appellate Body Report, US – Zeroing (Japan) , para. 190;  Appellate Body Report, US – Zeroing 
(EC) , para. 263;  Appellate Body Report, US – Softwood Lumber V , para. 183.    WT/DS350/R 
 Page B-7 
 
 
  comparison methodologies (W-to-W, transaction to transaction ("T-to-T"), and W-to-T), and the 
computer programming language used by the USDOC to implement the zeroing methodology.9  Japan 
notes that the United States has not contested the EC's description of these matters.    
III. THE ZEROING PROCEDURES USED BY THE USDOC IN THE MEASURES 
CHALLENGED BY THE EC ARE INCONSISTENT WITH THE OBLIGATIONS 
ESTABLISHED BY THE ANTI-DUMPING AGREEMENT  AND THE GATT 1994 
A. T
HE GOVERNING LEGAL PRINCIPLES  
13. The legal principles governing the WTO-incons istency of the zeroing procedures have been 
thoroughly canvassed by the Appellate Body in past  WTO disputes, and are well established by now.  
Two general provisions of the Anti-Dumping Agreement  – Article 2.1 (in conjunction with 
Article VI:1 of the GATT 1994) and Article 2.4 – esta blish the relevant obliga tions.  Both of those 
provisions apply to the various types of anti-dumpi ng proceedings (original investigations, periodic 
reviews, and sunset reviews) involved in the meas ures challenged by the EC in this dispute.  In 
original investigations, investigating authorities are required to determine "margins of dumping", 
under Article 2.4.2, in a manner that is consistent with the definition of "dumping" in Article 2.1 and 
Article VI:1.  Similarly, the authorities must ma ke a "fair comparison" of export price and normal 
value pursuant to Article 2.4.  The obligations imposed by Articles 2.1 and 2.4 apply to periodic reviews and sunset reviews through the operation of these provisions and Articles 9.3 and 11.3, 
respectively.    1. Article 2.1 of the Anti-Dumping Agreement  and Article VI:1 of the GATT 1994 
15. As the United States accepts, the analysis of  the zeroing issue begins with the concepts of 
"dumping" and "margins of dumping" , as defined in Article VI:1 of  the GATT 1994 and Article 2.1 of 
the Anti-Dumping Agreement .
10  Article 2.1 has particular importance among the "agreed disciplines" 
set out in Article 2 for determini ng "dumping" and "margins of dumping"11, because it provides a 
definition of "dumping":   
 
For the purpose of this Agreement,  a product  is to be considered as being dumped , 
i.e. introduced into the commerce of another country at less than its normal value, 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 country.  (Emphasis added) 
 16. This definition reiterates the definition of  "dumping" in Article VI:1 of the GATT 1994
12, 
which states that, in relevant part:    
… a product  is to be considered as being in troduced into the commerce of an 
importing country at less than its normal value [i.e. dumped], if the price of the 
product  exported from one country to another … is less than the comparable price, 
in the ordinary course of trade, for the like product  when destined for consumption 
in the exporting country … (Emphasis added.) 
 
17. The text of both these provisions refers to the dumping of "a product ".  In addition, they state 
that dumping of " a product " occurs when " the [export] price  of the  product " is less than " the 
                                                     
 
9 EC First Written Submission, paras. 6-31.   
10 United States' First Written Submission ("FWS"), para. 90.   
11 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 127.   
12 Appellate Body Report, US – Zeroing (Japan) , para. 109;  and Appellate Body Report, US – 
Softwood Lumber V , para. 92.   WT/DS350/R 
Page B-8  
 
  comparable price  … for the like  product ".  The text, therefore, defines "dumping" in terms of the 
difference between two prices, each one an aggregate  price for "the product".  The "dumping" 
determination is, therefore, made by reference to a single, overall price difference for the product.
13  
As the Appellate Body held,   
. . . "dumping" and "margins of dumping" can be found to exist only in relation to 
[the] product as defined by [the] authority.  They cannot be found to exist for only a type, model or category of that product.  Nor, under any comparison methodology
, 
can "dumping" and "margins of dumping" be found to exist at the level  of an 
individual transaction.14    
 
18. Thus, whether or not the investigating authority decides initially to make multiple 
comparisons at the sub-product level, the wordi ng of Article 2.1 and Article VI emphasizes that 
"dumping is defined in relation to a product".15  I n  EC – Bed Linen (Article 21.5 – India) , in 
confirming that "dumping" is determined for th e "product", and not individual transactions, the 
Appellate Body agreed with the United States that import transactions "need not be separated into two 
categories – dumped and non-dumped transactions".16  This is because a "dumping" determination is 
made in respect of a single category pertaining to the "product" as a whole.    19. On the basis of this interpretation of Article  2.1 and Article VI:1, the Appellate Body further 
found that  
 
. . . if the investigating authority establi shes the margin of dumping on the basis of 
multiple comparisons made at an intermedia te stage, it is required to aggregate the 
results of all of the multiple comparisons , including those where the export price 
exceeds the normal value .17   
 
Thus, "it is only on the basis of aggregating all these "intermediate values" that an investigating 
authority can establish margins of dumping for the product under investigation as a whole".18   
 20. This interpretation of the terms "dumping"  and "margin of dumping" is supported by 
Article 6.10 of the Anti-Dumping Agreement , which requires, as a rule, that the investigating authority 
determines "an individual  margin of dumping for each  known exporter or producer of the product  
under investigation".
19  Similar language appears in Articles 6.10.2 and 9.5.   
 21. Thus, for each individually examined producer or exporter, the text of the Anti-Dumping 
Agreement  expressly contemplates the determination of only a single  margin of dumping for the 
product .  As stated by Article 2.1, this langua ge underscores that a single, overall dumping 
determination is made for the product as a whole on th e basis of aggregate price comparisons, even if 
multiple intermediate comparisons are undertaken at th e sub-product level.  In  contrast, this language 
cannot support the view that "dumping" and the "margin of dumping" can be determined for each and  
every  transaction or model, as the United States conte nds.  Otherwise, if every transaction- or model-
                                                     
 
13 Appellate Body Report, US – Zeroing (Japan) , para. 109.   
14 Appellate Body Report, US – Zeroing (Japan) , para. 115.  Underlining added.   
15 Appellate Body Report, US – Softwood Lumber V , para. 93.  See also  Appellate Body Report, US – 
Zeroing (Japan) , paras. 109, 115.   
16 Appellate Body Report, EC – Bed Linen (Article 21.5 – India) , para. 143 and footnote 177.   
17 Appellate Body Report, US – Zeroing (EC) , para. 127.  Underlining added.  See also  Appellate Body 
Report, US – Softwood Lumber V , para. 98.   
18 Appellate Body Report, US – Zeroing (Japan) , para. 122.   
19 See Appellate Body Report, US – Softwood Lumber V , footnote 158, citing Appellate Body Report, 
US – Hot-Rolled Steel , para. 118.    WT/DS350/R 
 Page B-9 
 
 
  specific comparison constituted a "margin of dumpi ng", there would be multiple margins – one for 
each transaction or model – and not "an individual  margin of dumping" for "the product".   
 22. Finally, as noted above, Article 2.1 sets forth a definition of "dumping" that applies "[f]or the 
purpose of this Agreement".  In light of these wo rds, and absent any other definition of "dumping", 
the Appellate Body has held that the definition in Article 2.1 "applies to the entire Agreement"
20, and 
it expressly rejected the notion that the terms " dumping" and "margins of  dumping" could have 
"different meanings under different provisions of the Anti-Dumping Agreement ".21  Therefore, a 
uniform definition of "dumping" relating to the product as a whole applies throughout the Anti-
Dumping Agreement , and to the different types of anti-dumping proceedings that are conducted 
pursuant to the Agreement .22   
 23. Having set forth the Appellate Body's interpre tation of the terms "dumping" and "margins of 
dumping" – which Japan has shown is based in the text of the Agreement  – Japan now addresses 
specific arguments raised by the United States to support its argument that "dumping" in Article 2.1 
and Article VI:1 need not be defined in relation to the "product" as a whole.   
 24. First , the United States appears to argue that th e meaning of the treaty terms "dumping" and 
"margins of dumping" must be based on "real-wor ld commercial conduct" in the marketplace, where 
prices are often determined for individual transactions.
23  This argument is without foundation.  First, 
as a commercial matter, it is by no means evident th at companies engaging in "real-world commercial 
conduct" develop their market strategies and asse ss their relative positions in the marketplace by 
reference to individual transactions.  Thus, it is likewise not evident that the concept of "dumping" 
should be construed in such a narro w and short-sighted manner.  Second, the fact that prices may be 
set on a transaction-specific basis does not mean that, as a matter of law, the words "product", 
"dumping" and "margin of dumping" have a tran saction-specific ordinary meaning under the Vienna 
Convention .  As Japan has explained, the text of the Anti-Dumping Agreement  requires that a 
comparison be made of aggregate  prices for the "product" to arrive at a single  margin of dumping for 
each foreign producer or exporter.  Moreover, as th e United States knows, investigating authorities, 
including the USDOC, routinely aggregate prices fo r multiple transactions into a single price for a 
product.  As a result, there is no necessity to de termine margins for individual transactions simply 
because prices can be transaction-specific.   
 
25. Moreover, the Appellate Body has explained that the requirement to determine "dumping" 
and "margins of dumping" for the product as a whole "is in consonance with the need for consistent 
treatment of a product in an anti-dumping investigation ".24   This consistent treatment of the product 
as a whole serves important purposes in anti-dumping proceedings.  A dumping determination has a 
series of regulatory consequences that affect the pr oduct as a whole.  For example, on the basis of a 
dumping determination, the investigating authority:  decides whether to term inate an investigation 
into the "product" under Article 5.8;  determines th at all entries of the product are dumped and treats 
them as such for the purposes of an injury determination under Article 3;  and, imposes an anti-
dumping duty " on the product " under Articles 9.2 and 9.5, and Artic le VI:2.  By defining "dumping" 
in relation to a product as a whole, the Anti-Dumping Agreement  ensures parallelism between the 
scope of a dumping determination and the scope of the regulatory consequences the determination 
entails.    
                                                     
 
20 Appellate Body Report, US – Softwood Lumber V , paras. 93 and 99; Appellate Body Report, US – 
Zeroing (EC) , para. 125;  and Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , paras. 126 
and 127.   
21 Appellate Body Report, US – Zeroing (Japan) , para. 151.   
22 Appellate Body Report, US – Zeroing (Japan) , para. 109.   
23 US FWS, paras. 82 and 83.   
24 Appellate Body Report, US – Softwood Lumber V , para. 99.   WT/DS350/R 
Page B-10  
 
  26. Thus, the fact that prices may be determined  in the marketplace for individual transactions is 
not the sole consideration that motivated WTO Members.  Instead, mindful of the product-wide consequences of a dumping determination, the Members settled upon treaty text that defines 
"dumping" in relation to the "product" as a whole.    
27. Second , the United States argues that Ad Article VI:1 "provides for importer-specific 
comparisons" and, as a result, "the term "margin of dumping" cannot rela te to aggregated results of all 
comparisons for the "product as a whole" ".
25  This interpretation of Ad Article VI:1 is incorrect.  
Ad Article VI:1 does not provide a definition of eith er "dumping" or "margins of dumping".  Nor does 
it provide that margins are calculated for indi vidual transactions.  Rather, it addresses the price  that 
may be used for certain export transactions in th e process of calculating the margin of dumping.  
The Ad Article does not purport to alter the requirement in Article 2.1 and Article VI:1 that dumping, 
and margins of dumping, are determined for a "pro duct".  Instead, consistent with these provisions, 
the term "margin of dumping" in the Ad Article can, and must, be read to refer to the margin for the 
"product".   
 
28. Third , the United States relies on Article 2.2 of the Anti-Dumping Agreement , arguing that a 
product-wide definition of dumping "would require th e use of constructed [normal] value for the 
"product as a whole"".26  The Appellate Body rejected this argument in US – Softwood Lumber V 
(Article 21.5 – Canada) .27  It held that an authority may sub-divide the product for purposes of 
conducting intermediate comparisons on a model-specif ic basis.  In so doing, it may assess whether 
the conditions in Article 2.2 for construction of no rmal value are met on a model-specific basis, and it 
may conduct intermediate comparisons  on that basis under Article 2.4.2.28  However, whether or not 
normal value is constructed for some  or all models under Article 2.2, the results of the intermediate 
comparisons must all be aggregated to determin e "dumping" on a product-wide basis to meet the 
definition in Article 2.1.   
 
29. Fourth , the United States relies on certain historical  arguments in support of its argument that 
zeroing is permissible.  It refers, in particular , to the following:  the second report of a Group of 
Experts from 1960;  two GATT panel reports ;  and the negotiating history of the Anti-Dumping 
Agreement .29  The United States made virtually the same arguments in previous disputes.  In US – 
Softwood Lumber V (Article 21.5 – Canada) , the Appellate Body dismissed these arguments as 
follows:   
 
The same historical materials submitted in  these Article 21.5 proceedings were also 
raised by the United States before th e Appellate Body in the original [ Softwood 
Lumber V ] dispute.  The Appellate Body stated in response that "[t]he material to 
which the United States refer[red] does not ... resolve the issue of whether the 
negotiators of the Anti-Dumping Agreement intended to prohibit zeroing".  The 
Appellate Body noted that, "[i]n any ev ent", it had "concluded, based on the 
ordinary meaning of Article 2.4.2 read in its context, that zeroing is prohibited when 
establishing the existence of margins of  dumping under the weighted-average-to-
weighted-average methodology".  In our view, the historical materials referred to by 
the Panel and the United States are of li mited relevance.  The Group of Experts 
Report dates back to 1960.  Both pre-WTO panel reports examined the issue under the provisions of the Tokyo Round Anti-Dumping Code , which did not contain a 
provision equivalent to Article 2.4.2 of the  Anti-Dumping Agreement .  The latter 
Agreement entered into force in 1995, as part of the Uruguay Round results, long 
                                                     
 
25 US FWS, para. 96. 
26 US FWS, para. 97.   
27 Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 104.   
28 Appellate Body Report, US – Softwood Lumber V , paras. 82 and 97.   
29 US FWS, paras. 86 and 89.    WT/DS350/R 
 Page B-11 
 
 
  after the 1960 Group of Experts Report and after the panels referred to by the 
United States and the Panel had been establis hed.  Furthermore, one of the two panel 
reports was not adopted.  Finally, the negotiating proposals referred to by the 
United States are inconclusive and, in any event, reflected the positions of some, but 
not all, of the negotiating parties.  In sum,  the historical materials do not provide any 
additional guidance for the question whet her zeroing under the transaction-to-
transaction comparison methodology is cons istent with Article 2.4.2 of the Anti-
Dumping Agreement .30   
 30. In sum, although the United States believ es that the negotiations produced an outcome 
permitting zeroing, nothing in the text shows that th e Membership "as a whole" agreed to this view.  
Instead, the Members agreed to wording that – in light of the text, context, and object and purpose – 
shows that "dumping" and "margins of dumping" are defined in relation to the "product" as a whole, 
and that definition renders zeroing WTO-inconsistent.   
 2. Second Sentence of Article 2.4.2 of the Anti-Dumping Agreement  
31. As it has done in previous disputes, the United States attaches particular importance to the 
second sentence of Article 2.4.2.  In particular, it contends that a "general prohibition of zeroing" 
would be "inconsistent" with the second  sentence of Article 2.4.2 of the Anti-Dumping Agreement
31, 
and specifically would "reduce to inutility" th e comparison methodology authorized by that 
sentence.32  The United States made this argument, without success, in US – Zeroing (EC) , US – 
Softwood Lumber V (Article 21.5 – Canada)  and US – Zeroing (Japan) .   
 32. In US – Softwood Lumber V (Article 21.5 – Canada) , the Appellate Body rejected Panel's 
conclusion (and the United States' argument) that  the prohibition of zeroing would render the second 
sentence of Article 2.4.2 inutile.  First , it noted that the United States has never applied the 
methodology authorized by the sec ond sentence, so the argument as to "mathematical equivalence" 
between the W-to-W and W-to-T comparisons "rests on an untested hypothesis".
33   
 33. Second , the Appellate Body noted that the methodology authorized in the second sentence is 
an "exception" to the methodologies authorized in  the first sentence, and as such, the second sentence 
"alone cannot determine the in terpretation of the two methodologies provided in the first 
sentence …".
34  Because the second sentence constitutes an excep tion, the requirements that attach to 
determinations made under the first senten ce do not apply under the second sentence.   
 34. Third , the Appellate Body noted that "there is  considerable uncertainty regarding how 
precisely the third methodology [i.e. the methodolog y in the second sentence] should be applied", 
because it has never been invoked, and the United Stat es could not provide details regarding how this 
never-used methodology would work.  The Appellate Body held that the uncertainties regarding the 
application of the W-to-T methodology "undermine the Panel's reasoning based on the 'mathematical 
equivalence' argument".
35   
 35. The Appellate Body noted that Japan and othe rs have "suggested that the weighted average-
to-transaction methodology could be applied only to  the pattern of exports transactions that have 
                                                     
 
30 Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 121.  Footnotes 
omitted.   
31 US FWS, para. 112 ff.   
32 US FWS, para. 113.   
33 Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 97.   
34 Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 97.   
35 Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 98.   WT/DS350/R 
Page B-12  
 
  prices that differ significantly among different purchasers, regions, or time periods".
36  T h e  
United States indicated to the Appellate Body th at its use of W-to-T comparison method would be 
limited to the export transactions making up the "p ricing pattern", and that W-to-W comparisons 
would be conducted for the remaining export transac tions.  However, "the United States failed to 
explain how precisely the results of the two comparison methodologies would be combined".37   
 
36. Finally , the Appellate Body agreed with the arguments of Japan and others that 
"mathematical equivalence" does not necessarily  arise when using the W-to-T and W-to-W 
comparisons without zeroing because, in various circumstances, different outcomes would obtain.  Thus, it concluded:   
 
One part of a provision setting forth a methodology is not rendered inutile  simply 
because, in a specific set of circumstances, its application would produce results that 
are equivalent to those obtained from the application of a comparison methodology 
set out in another part of that provision.
38   
 
37. Rather, applying the proper test for inutility, the Appellate Body found that "[i]t has not been 
proven that in all cases, or at least in most of  them, the two methodologies would produce the same 
results".39  The Appellate Body, therefore, found that the concerns regarding "mathematical 
equivalence" were unwarranted.40   
 38. In US – Zeroing (Japan) , the Appellate Body also rejected a similar argument advanced by 
the United States.  After recalling its analysis from US – Softwood Lumber V (Article 21.5 – 
Canada)
41, summarized above, the Appellate Body adde d that the second sentence of Article 2.4.2 
does not provide contextual support for a finding that zeroing is permissible because, "[i]n order to unmask targeted dumping, an investigating authority may limit the application of the W-T comparison 
methodology [under the second sentence] to the pr ices of export transactions falling within the 
relevant pattern".
42  On this interpretation, absent zeroi ng, a comparison based on this sub-set of 
transactions would not produce the same outcome as a W-to-W comparison under the first sentence.  
There is, therefore, no need to permit zeroing unde r the second sentence in order to avoid the inutility 
of the second sentence.    39. The United States now dismisses the Appellate Body's finding in US – Zeroing (Japan) by 
noting that (1) it is "unaware of any Member ever  having done this" or s uggesting this (i.e. limiting 
the W-to-T comparison to export transactions making up the pricing pattern), and (2) "[t]he language 
of the AD Agreement says nothing about selecting a subset of transactions when conducting a 
targeted dumping analysis".
43   
 
40. As to the United States' first point, the Un ited States' own regulations recognize that, in a 
situation that may involve "targeted dumping", the W-to-T comparison set forth in the second sentence of Article 2.4.2 is confined to the e xport transactions making up the pricing pattern.  
Specifically, the regulations state that where "there is targeted dumping in the form of export prices … that differ significantly among purchasers, regions, or periods of time" " the Secretary 
                                                     
 
36 Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 98.  See also Japan's 
Third Participant's Submissions in US – Zeroing (EC) , paras. 187 to 194, and Appellate Body Report, US – 
Softwood Lumber V (Article 21.5 – Canada) , paras. 52 to 61, which set forth in detail Japan's interpretation of 
the second sentence of Article 2.4.2.  Japan adopts those passages into this submission.   
37 Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 98.   
38 Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 99.   
39 Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 99.   
40 Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 100.   
41 Appellate Body Report, US – Zeroing (Japan) , para. 133.   
42 Appellate Body Report, US – Zeroing (Japan) , para. 135.   
43 US FW Submission, para. 116.    WT/DS350/R 
 Page B-13 
 
 
  normally will limit the application of the average-to- transaction method to those sales that constitute 
targeted dumping  … ."44  Thus, at least one Member – the United States – agrees with the Appellate 
Body that the W-to-T comparison method under th e second sentence is confin ed to the transactions 
making up the relevant pricing pattern.    
41. In reply, the United States has argued in pr evious disputes that it would combine the W-to-T 
method with a W-to-W method on the transactions  outside the pricing pattern.  Although the 
United States is free to do so, this appro ach is not compelled by the text of the Anti-Dumping 
Agreement .  Under Article 2.4.2, each comparison method provides an independent basis for 
determining margins of dumping.  Further, as describ ed in paragraph 0, the Appellate Body noted that 
the United States has failed to demonstrate how it wo uld combine the results of a W-to-T and W-to-W 
comparison methods.    42. In any event, the United States' argument misse s the point.  The interpretive issue is what type 
of W-to-T comparison is required by the second sentence of Article 2.4.2 of the Anti-Dumping 
Agreement .  The United States' regulations follow the Appellate Body's interpretation that this 
comparison is confined to the export transactions maki ng up the relevant pricing pattern.  The fact that 
the United States chooses, additionally, to conduct a W-to-W comparison does not alter the nature of 
the W-to-T comparison.    43. The United States' second point – that the Appellate Body's ruling lacks textual basis – 
ignores that the Appellate Body based its interp retation on the language of the second sentence of 
Article 2.4.2 of the Anti-Dumping Agreement .  In particular, the Appellate Body relied on the phrase 
"pattern of export prices which differs signifi cantly among different purchasers, regions or time 
periods".  To give meaning to these words, the Appellate Body held that the comparison must focus on the transactions that fall within the pattern, and not transactions that are outside it.  It is, therefore, 
the United States that seeks to ignore the text of the Anti-Dumping Agreement .   
 44. For these reasons, Japan submits that the Un ited States' argument regarding mathematical 
equivalence is unwarranted.  Properly interpre ted, absent zeroing, a W-to-W comparison under the 
first sentence of Article 2.4.2 and a W-to-T co mparison under the second sentence of that provision 
do not necessarily produce identical outcom es.  As the Appellate Body found in US – Softwood 
Lumber V (Article 21.5 – Canada)  and US – Zeroing (Japan) , the general prohibition of zeroing does 
not render the second sentence of Article 2.4.2 inutile.    
3. Article 2.4 of the Anti-Dumping Agreement 
45. Regarding Article 2.4 of the Anti-Dumping Agreement , the first sentence of this Article 
obliges an investigating authority to conduct a " fair comparison" of normal value and export price.  
Under Article 2.4, the process by which investig ating authorities compare – that is, establish the 
"price difference" between – normal value and expor t price for a product, must not be biased, lack 
even-handedness, favour particular interests or outcom es, or otherwise distort the facts, in particular 
to the detriment of export ers or foreign producers.
45  Moreover, the "fair comparison" requirement set 
forth in the first sentence of Article 2.4 is unde rstood to be an "overarching" obligation that is 
independent of the specific obligations described in  the remaining sentences of the Article, and which 
applies to the price comparability provisions of Article 2 generally.46   
 46. In previous zeroing disputes, the Appellate  Body has observed that an "inherent bias"
47 infects 
the zeroing procedures – the very antithesis of fairness.   It is not surprising, therefore, that the 
                                                      
44 USDOC Anti-dumping regulations, 19 C.F.R. § 351.414(f)(2).  Emphasis added.  Exhibit EC-3.   
45 Appellate Body Report, US – Hot-Rolled Steel , paras. 193, 196.   
46 Appellate Body Report, US – Zeroing (EC) , para. 146.   
47 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 135.   WT/DS350/R 
Page B-14  
 
  Appellate Body stated that a comparison methodology that includes the use of zeroing "is not a "fair 
comparison" between export price and normal value, as required by Articles 2.4 and 2.4.2".
48  This 
statement was initially made in an evaluation of  "model zeroing" used under the W-to-W comparison 
methodology, but the Appellate Body subsequent ly held in the T-to-T situation:   
 
[T]he use of zeroing under the T-T comparison methodology distorts the prices of 
certain export transactions because the "prices of [certain] export transactions [made] are artificially reduced".  In this  way, "the use of zeroing under the [T-T] 
comparison methodology artificially inflates the magnitude of dumping, resulting in 
higher margins of dumping and making a positive determination of dumping more 
likely".
49   
 In US – Zeroing (Japan) , the Appellate Body concluded that the use of the zeroing procedures in any 
comparison methodology cannot be considered "imp artial, even-handed, or unbiased", and that it 
therefore is "inconsistent with the fair  comparison requirement of Article 2.4".
50   
 
47. As noted above, the obligations established in Articles 2.1 and 2.4 of the Anti-Dumping 
Agreement , as well as Articles VI:1 and VI:2 of the GATT 1994,  apply to all three of the types of 
anti-dumping proceedings involved in the meas ures challenged by the EC – i.e., original 
investigations, periodic reviews, and sunset reviews.51  In the remainder of this submission, Japan 
reviews the application of the obligations set forth in the Agreement  and the GATT 1994 to the 
individual types of proceedings.   
 B. Z
EROING AS USED BY THE USDOC  IN ORIGINAL INVESTIGATIONS IS INCONSISTENT WITH 
ARTICLES 2.1, 2.4.2  AND 2.4 OF THE ANTI-DUMPING AGREEMENT  
48. Japan agrees with the EC that the USDOC's use of the zeroing procedures in original 
investigations has been found to be incons istent with Article 2.4 and 2.4.2 of the Anti-Dumping 
Agreement .  Japan will only briefly survey this issu e, because the United States in recent WTO 
disputes has ceased defending the USDOC's u se of the zeroing methodology in original 
investigations, at least in the situation in wh ich the W-to-W comparison methodology is employed.52  
Further, in late 2006 the USDOC published a no tice implementing the DSB's recommendations and 
rulings in US – Zeroing (EC)  by abandoning the use of zeroing in that situation.53   
 
1. Articles 2.1 and 2.4.2 of the Anti-Dumping Agreement  
49. The Appellate Body has explained that the first sentence of Article 2.4.2 provides for two 
comparison methodologies (W-to-W and T-to-T) that "shall normally" be used by an investigating 
authority to determine the existence and margin of dumping.54  Regardless of the comparison 
methodology or type of zeroing employed by the USDOC ("model" or "simple", in the terminology 
                                                      
48 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 135.  Original 
emphasis.  See also  Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , paras. 140 to 
142;  and Appellate Body Report, EC – Bed Linen , para. 55.   
49 Appellate Body Report, US – Zeroing (Japan) , para. 146, quoting Appellate Body Report, US – 
Softwood Lumber V (Article 21.5 – Canada) , para. 142.   
50 Appellate Body Report, US – Zeroing (Japan) , para. 146.   
51 See supra  para. 0.   
52 See Appellate Body Report, US – Zeroing (Japan) , para. 99;  and Panel Report, US – Shrimp 
(Ecuador) , para. 7.25.   
53 See Antidumping Proceedings:  Calculation of the Weighted-Average Dumping Margin During an 
Antidumping Investigation , Federal Register, vol. 71, at 77722 (USD OC) (27 December 2006), Exhibit EC-6.   
54 Appellate Body Report, US – Zeroing (Japan) , para. 118.  As discussed above, the second sentence 
of Article 2.4.2 permits the use of a third (W-to-T) compar ison methodology in original investigations if certain 
conditions are satisfied.    WT/DS350/R 
 Page B-15 
 
 
  used by the EC55), the authority's obligation to determine the margin of dumping under Article 2.4.2 
by (i) aggregating the results of all intermediate comparisons, and (ii) in doing so, incorporating the 
results of all of the intermediate comparisons (i ncluding those whose export prices are greater than 
normal value), applies with equal force.  This  obligation arises from both the first sentence of 
Article 2.4.2 of the Anti-Dumping Agreement , as well as Article 2.156, which, as noted above, defines 
"dumping" in terms of "a product" – i.e., for all transactions of the product under investigation.   
 50. The USDOC fails to meet these requirements by  incorporating zeroing into the calculation of 
dumping margins.  Under the zeroing procedures, the USDOC conducts multiple comparisons at the 
sub-product level for all export transactions that it finds to be comparable, but in determining the 
amount of dumping, the USDOC sums exclusively the positive comparison results, systematically 
ignoring the negative comparison results.  In conseq uence, the USDOC fails to determine an amount 
of dumping for the product as a whole.    51. The multiple comparison results do not express an amount of "dumping", nor are they 
"margins of dumping" within the meaning of the Anti-Dumping Agreement  and the GATT 1994.  In 
the words of the Appellate Body, each comparison is  merely an "intermediate calculation" and each 
comparison result is merely an "intermediate value".
57  As the Appellate Body stated in US – 
Softwood Lumber V :   
 
We fail to see how an investigating aut hority could properly establish margins of 
dumping for the product under investigation as a whole without aggregating all of 
the "results" of the multiple comparisons for all product types.58   
 52. Indeed, after noting that "model zeroing" had already been found to be inconsistent with 
Article 2.4.2 in US – Zeroing (EC)  when used in W-to-W comp arisons, the Appellate Body in US – 
Zeroing (Japan)  went on to explain that (simple) zeroi ng in T-to-T comparisons is likewise 
inconsistent.
59  Accordingly, it has been established that  the USDOC's use of zeroing in original 
investigations, regardless of the comparison met hodology, is inconsistent with the obligations 
established in Articles 2.1 and 2.4.2 of the Anti-Dumping Agreement .   
 
2. Article 2.4 of the Anti-Dumping Agreement 
53. As to Article 2.4, the USDOC's zeroing pr ocedures operate uniformly in all anti-dumping 
proceedings, and therefore the zeroing procedures at issu e in the investigations that are the subject of 
this dispute produce the same prejudicial effects prev iously described by the Appellate Body.  Thus, 
the USDOC has conducted multiple comparisons in these investigations, and in determining the 
amount of dumping the USDOC has summed solely the positive comparison results, systematically 
ignoring the negative results.  The zeroing methodology, therefore, has resulted in an overstatement of 
the amount of dumping by an amount equal to the excluded negative values.    54. As a result, again like the zeroing measures cons idered in previous disputes, in situations 
where the value of the excluded  negative results exceeds  the value of the included  positive results, the 
zeroing methodology produces a dumping determination that would not arise, absent zeroing.  
Moreover, the level of any dumping margin is ne cessarily inflated by the value of the excluded 
negative comparison results.  Accordingly, the zeroing procedures as used in the original 
investigations that are the subject of the current di spute cannot be considered "impartial, even-handed, 
                                                     
 
55 See EC First Written Submission, paras. 10, 25.   
56 Appellate Body Report, US – Zeroing (EC) , para. 126;  and Appellate Body Report, US – Softwood 
Lumber V (Article 21.5 – Canada) , para. 92.   
57 Appellate Body Report, US – Softwood Lumber V , para. 97. 
58 Appellate Body Report, US – Softwood Lumber V , para. 98.  Original emphasis.   
59 Appellate Body Report, US – Zeroing (Japan) , para. 123.   WT/DS350/R 
Page B-16  
 
  or unbiased", and the measures resulting from those inv estigations are, therefore, "inconsistent with 
the fair comparison requirement of Article 2.4".
60   
 55. Japan notes that the United States' defence under Article 2.4 is based, in important part, on its view that "dumping" and "margins of dumping" are not defined in relation to the "product" as a 
whole.
61  However, for the reasons set forth already,  the United States' arguments on the meaning of 
these terms are incorrect, and no t based on the text of the Anti-Dumping Agreement .   
 C. Z
EROING AS USED BY THE USDOC  IN PERIODIC REVIEWS IS INCONSISTENT WITH 
ARTICLES  2.1,  2.4, AND 9.3 OF THE ANTI-DUMPING AGREEMENT  
1. Articles 2.1 and 9.3 of the Anti-Dumping Agreement  
56. Regarding zeroing's inconsistency with the Anti-Dumping Agreement when employed in 
periodic reviews, the starting point of the analysis is Article 9.3, which governs those reviews.  The 
chapeau  of Article 9.3 states:  "the amount of the anti-dumping duty shall not exceed the margin of 
dumping as established under Article 2".  This requir ement parallels the language of Article VI:2 of 
the GATT 1994, which provides that, "[i]n order to of fset 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".  It also reflects the rule in Article 9.1 that the amount of duty can be no more 
than the margin of dumping.   57. As a discipline on the "magnitude" of the duty imposed
62, the rule that the maximum amount 
of anti-dumping duty cannot exceed the "margin of dumping" reflects the " overarching principle " in 
Article VI of the GATT 1994 and Article 11.1 of the Anti-Dumping Agreement  that duties may be 
imposed solely " to the extent necessary  to counteract dumping " during the time period covered by the 
review.63   
 
58. On the basis of this treaty text, the Appella te Body held that "the margin of dumping 
established for an exporter or foreign producer operates as a ceiling  for the total amount of anti-
dumping duties that can be levied on the entries of  the subject product (from th at exporter) covered by 
the duty assessment proceeding".64  In other words, the "margin of dumping" and the amount of the 
duty imposed are independent concepts, with the ma gnitude of the former serving as a constraint on 
the total amount of the latter.   
 
59. The express reference to Article 2 in the chapeau  of Article 9.3 includes, among others, 
Article 2.1, which, as noted above, sets forth a defi nition of "dumping" that applies "[f]or the purpose 
of this Agreement".  In US – Zeroing (EC) , relying on these textual cross-references, the Appellate 
Body made an explicit interpretive connection be tween the "product as a whole" requirement of 
Article 2.1 and dumping determinations in  periodic reviews under Article 9.3:   
 
We note that Article 9.3 refers to Article 2.   It follows that, under Article 9.3 of the 
Anti-Dumping Agreement  and Article VI:2 of the GATT 1994, the amount of the 
assessed anti-dumping duties shall not exceed the margin of dumping as established "for the product as a whole".
65   
                                                      
60 Appellate Body Report, US – Zeroing (Japan) , para. 146.   
61 US FWS, para. 143.   
62 Appellate Body Report, US – Carbon Steel , para. 70.   
63 Appellate Body Report, US – OCTG Sunset Reviews (Mexico) , para. 115.   
64 Appellate Body Report, US – Zeroing (EC) , para. 130.  Original emphasis.  See also  Appellate Body 
Report, US – Zeroing (Japan) , para. 155.   
65 Appellate Body Report, US – Zeroing (EC) , para. 127, quoting Appellate Body Report, US – 
Softwood Lumber V , para. 99.    WT/DS350/R 
 Page B-17 
 
 
  60. Accordingly, if, in a periodic review, th e investigating authority chooses to undertake 
multiple comparisons at an intermediate stage, it is  not permitted to take into account the results of 
only some of the multiple comparisons, while disregarding others.66  Thus, for purposes of these 
reviews, the investigating authority must aggregat e all multiple comparisons to establish a margin of 
dumping for the "product" under investigation as a whole.  It is required to compare the anti-dumping 
duties collected on all entries of the subject merc handise from a given exporter or foreign producer 
with that exporter's or foreign producer's margin of dumping for the product as a whole, to ensure that 
the total amount of the former does not exceed the latter.67   
 61. The Appellate Body also rejected the Unite d States' argument – reiterated in this dispute
68 – 
that, in a periodic review, "dumping" and "margins  of dumping" can be dete rmined on an importer - 
or import-specific basis.  In doing so, the Appella te Body relied in part on Article 6.10 of the Anti-
Dumping Agreement  as context, which requires an authority to calculate "an individual margin of 
dumping for each known exporter or producer concer ned of the production under investigation".  
Article 6.10, therefore, precludes the calculation of a margin of dumping for each individual import 
transaction, and it also requires that margins be calculated for exporters and foreign producers, not 
importers.69   
 62. This interpretation is cons istent with the principles underlying the imposition of anti-dumping 
duties under the Anti-Dumping Agreement  and the GATT 1994.  As the A ppellate Body explained in 
US – Zeroing (Japan) :  "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".
70  And in US – Zeroing (EC) , it stated:   
 
Establishing margins of dumping for exporte rs or foreign producers is consistent 
with the notion of dumping, which is designed to counteract the foreign producer's 
or exporter's pricing behaviour.  Indeed, it  is the exporter, not the importer, that 
engages in practices that result in situati ons of dumping.  For all of these reasons, 
under Article 9.3 of the Anti-Dumping Agreement  and Article VI:2 of the 
GATT 1994, margins of dumping are established for foreign producers or exporters.
71   
 
63. As it has done in previous disputes, the United States objects to the Appellate Body's 
interpretation that margins of dumping are determined  for foreign producers or exporters.  It alleges 
that this interpretation disturbs the conditions of  competition between different importers that import 
goods from a single foreign producer or exporter.72  However, as the Appellate Body has previously 
explained, the United States' misgivings are misplaced.  Although margins of dumping  are established 
for foreign producers or exporters for the produc t as a whole, Members can assess anti-dumping 
duties  on "a transaction- or importer-specific basis", "provided that the total amount of anti-dumping 
duties that are levied does not exceed the exporte rs' or foreign producers' margins of dumping".73  
Subject to this proviso, Members enjoy discretion to apportion liability appropriately among importers to avoid disturbing competitive conditions.  Furtherm ore, there is no question of the authorities being 
                                                     
 
66 Appellate Body Report, US – Zeroing (EC) , para. 127, quoting Appellate Body Report, US – 
Softwood Lumber V , para. 99.   
67 Appellate Body Report, US – Zeroing (EC) , para. 132.   
68 US FWS, paras. 130 to 136.   
69 Appellate Body Report, US – Zeroing (EC) , para. 128.  See also  Appellate Body Report, US – 
Zeroing (Japan) , para. 112.   
70 Appellate Body Report, US – Zeroing (Japan) , para. 156.  Citation omitted.   
71 Appellate Body Report, US – Zeroing (EC) , para. 129.   
72 US FWS, paras. 132 and 135.   
73 Appellate Body Report, US – Zeroing (EC) , para. 131.   WT/DS350/R 
Page B-18  
 
  obliged to refund to importers an amount that exceed s the duties initially paid in the event that export 
price is higher than normal value for the product as a whole.
74   
 64. In the context of periodic reviews, the United States also argues that Members using a 
prospective normal value ("PNV") system are entitle d to assess duties on the basis of a transaction-
specific margin of dumping.
75  Thus, it says, the same entitlement to make transaction-specific 
assessments should be afforded to users of retros pective systems.  This argument has also been 
dismissed by the Appellate Body.    65. The argument confuses two distinct concepts – the " amount  of anti-dumping duty" imposed 
under Article 9 and the " margin of dumping " determined under Article 2.  In EC – Bed Linen 
(Article 21.5 – India) , the Appellate Body held that "the rules on the determination  of the margin of 
dumping are distinct and separate from the rules on the imposition and collection  of anti-dumping 
duties".
76   
 
66. In response to this same argument,  the Appellate Body explained further in US – Softwood 
Lumber V (Article 21.5 – Canada)  that, under Article 2, the margin  of dumping is first established 
during the investigation phase;  when an anti-dumpi ng order has been imposed, Articles 9.1 and 9.2, 
and Article VI:2, allow duties to be collected in  appropriate amounts not exceeding the margin of 
dumping (determined either during the investigation or a subsequent review);  and, the amount of 
duties imposed may be reviewed under Article 9.3 in  light of the margin of dumping determined for 
the review period.77  However, the manner in which a Member chooses to impose and collect duties 
under Article 9 – retrospectively or  prospectively – does not alter the uniform definition of "dumping" 
in Article 2.1 and Article VI:1.  Accord ingly, as the Appellate Body held in US – Zeroing (EC)  and 
US – Zeroing (Japan) :   
 
Under any system of duty collection , the margin of dumping established in 
accordance with Article 2 operates as a ceiling for the amount of anti-dumping duties that could be collected in resp ect of the sales made by an exporter.
78   
 67. The United States makes a similar argument that Article 9.4(ii) of the Anti-Dumping 
Agreement  authorizes Members using a PNV system to determine margins of dumping on a 
transaction-specific basis.
79  This argument, again, conflates the distinct concepts of the "amount of 
anti-dumping duty" that may be imposed under Article 9.4 and the " margin of dumping " determined 
under Article 2.  Article 9.4 does not set forth any rules on the definition or determination of  "margins 
of dumping"  that could justify zeroing.  Instead, Article  9.4, and Article 9.4(ii) in particular, 
establishes rules on the imposition of duties  that apply to non-sampled producers precisely where no 
individual margin is determined .80  As the Appellate Body held, rul es, such as Article 9.4, governing 
the imposition of dumping duties  "do not have a bearing on" the rules governing the determination of 
dumping margins .81   
 68. The United States' arguments on PNV systems are, therefore, misplaced, and do not justify 
the use of zeroing.   
                                                     
 
74 Appellate Body Report, US – Zeroing (EC) , footnote 234.   
75 US FWS, paras. 137 ff.   
76 Appellate Body Report, EC – Bed Linen (Article 21.5 – India) , para. 124.   
77 Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 112.   
78 Appellate Body Report, US – Zeroing (Japan) , para. 162;  Appellate Body Report, US – Zeroing 
(EC) , para. 130.   
79 US FWS, para. 137. 
80 Appellate Body Report, EC – Bed Linen (Article 21.5 – India) , para. 125.   
81 Appellate Body Report, EC – Bed Linen (Article 21.5 – India) , paras. 124 and 125.    WT/DS350/R 
 Page B-19 
 
 
  69. Japan turns now to consider the periodic revi ews at issue.  As described in the EC's first 
written submission, in periodic reviews, the USDOC calculates:  (1) a margin of dumping for each exporter  that becomes the duty deposit rate for all entri es of the product exported to the United States 
by that exporter until the completion of the next review;  and (2) an importer -specific assessment rate 
based on the total amount of dumping attributable to  each importer, which determines that importer's 
liability for the review period.
82  In both cases, the United States applies the zeroing procedures as 
part of its dumping determination.    70. In light of its interpretation of Article 9.3 and Article VI:2, in  conjunction with other relevant 
provisions including Article 2.1 and Article VI:1, the Appellate Body in US – Zeroing (EC) found 
that, because the USDOC "systema tically disregarded" negative comparison results under the zeroing 
procedures, "the methodology applied by the USDOC in the administrative reviews at issue resulted 
in amounts of assessed anti-dumping duties that excee ded the foreign producers' or exporters' margins 
of dumping with which the anti-dumping duties had to be compared".
83  Accordingly, the zeroing 
procedures, and reviews based on them, were found to be inconsistent with Articles 2.1 and 9.3 of the 
Anti-Dumping Agreement  and Article VI:2 of the GATT 1994.   
 71. For the same reasons, Japan submits that the periodic review measures at issue are inconsistent with Articles 2.1 and 9.3 of the Anti-Dumping Agreement , and Articles VI:1 and VI:2 of 
the GATT 1994.  Japan takes no position on the cons istency of zeroing in periodic reviews with 
Articles 2.4.2 and 11.2 of the Anti-Dumping Agreement .   
 
2. Article 2.4 of the Anti-Dumping Agreement 
72. Regarding the inconsistency of zeroing with th e "fair comparison" obligation of Article 2.4 in 
the context of periodic reviews, as the chapeau  of Article 9.3 states, margins of dumping in such 
reviews must be established consistently with Article  2, including Article 2.4.  Accordingly, periodic 
reviews are subject to the same "fair comparison" requirement as original investigations, which 
prohibits the use of the zeroing methodology in the calculation of margins of dumping.    73. The Appellate Body expressl y reached that conclusion in US – Zeroing (Japan) , in which it 
stated,   
If anti-dumping duties are assessed on the basis of a methodology involving 
comparisons between the export price a nd the normal value in a manner which 
results in anti-dumping duties being collected from importers in excess of the amount of the margin of dumping of the exporter or foreign producer, then this methodology cannot be viewed as involving a "fair comparison" within the meaning 
of the first sentence of Article 2.4.  Th is is so because such an assessment would 
result in duty collection from importers in excess of the margin of dumping established in accordance with Article 2, as we have explained previously.
84   
 74. Accordingly, Japan agrees with the EC's ar gument that the zeroing procedures used by the 
USDOC to calculate margins of dumping in the periodi c reviews that are the subject of this dispute 
render those reviews inconsistent with the obligatio ns set forth in Article 2.4, as well as Articles 2.1 
and 9.3 of the Anti-Dumping Agreement .   
 75. Japan notes, again, that the United States defen ce under Article 2.4 is based, in important part, 
on its view that "dumping" and "margins of dumping"  are not defined in relation to the "product" as a 
                                                     
 
82 EC First Written Submission, paras. 20-22.   
83 Appellate Body Report, US – Zeroing (EC) , para. 133.   
84 Appellate Body Report, US – Zeroing (Japan) , para. 168.  Footnotes omitted.   WT/DS350/R 
Page B-20  
 
  whole.
85   However, for the reasons set forth already, the United States' arguments on the meaning of 
these terms are incorrect, and no t based on the text of the Anti-Dumping Agreement .   
 D. Z
EROING AS USED BY THE USDOC  IN SUNSET REVIEWS IS INCONSISTENT WITH 
ARTICLES  2.1,  2.4, AND 11.3  OF THE ANTI-DUMPING AGREEMENT  
76. It is by now well established that the results of sunset reviews are inconsistent, as applied, 
with the obligations established by the Anti-Dumping Agreement , to the extent that they are based 
upon prior determinations that are themselves obtained through the use of the zeroing methodology.86   
 77. First , in sunset reviews, the investigating author ity determines whether termination of a duty 
would be likely to lead to continuation or recurrence of " dumping " and injury.  The Appellate Body 
has already ruled that, with respect to sunset reviews, "the word 'dum ping' as used in Article 11.3 has 
the meaning described in Article 2.1".
87  The Appellate Body also held that, if a sunset determination 
is made in reliance on a margin of dumping determ ined in earlier proceedings, the margin must have 
been determined consistently with Article 2.  Ot herwise, the reliance upon the earlier margin that is 
inconsistent with Article 2 "taints" the subsequent sunset determination.88   
 78. Second , regarding the obligations established by Article 2.4 of the Anti-Dumping Agreement , 
according to the Appellate Body, the requirement of a "fair comparison" involves "a general  
obligation" that "informs all of Article 2 …".
89  These requirements apply whenever an authority 
determines the existence or amount of "dumping", wh ether in original investigations or review 
proceedings.   
 79. This conclusion is borne out by  the Appellate Body's reasoning in US – Corrosion-Resistant 
Steel Sunset Review  and its conclusions in US – Zeroing (Japan) .  In US – Corrosion-Resistant Steel 
Sunset Review , Japan claimed that a sunset determina tion violated Article 11.3 because the USDOC 
had relied on dumping margins calculated using zeroing in a periodic review.
90  The Appellate Body 
opined that:    
… should investigating authorities choose to rely upon dumping margins in making their likelihood determination [under Artic le 11.3], the calculation of these margins 
must conform to the disciplines of Article 2.4.  We see no other provisions in the 
Anti-Dumping Agreement according to which Members may calculate dumping 
margins. In the CRS sunset review, USDOC  chose to base its affirmative likelihood 
determination on positive dumping margins that  had been previously calculated in 
two particular administrative reviews.  If these margins were legally flawed because 
they were calculated in a manner inconsistent with Article 2.4, this could give rise to 
an inconsistency not only with Article 2. 4, but also with Article 11.3 of the Anti-
Dumping Agreement .91   
 Zeroing creates just such "legally flawed" ma rgins, because they are calculated in a manner 
inconsistent with Article 2.4.   
                                                     
 
85 US FWS, para. 143.   
86 Appellate Body Report, US – Zeroing (Japan) , para. 183; Appellate Body Report, US – Corrosion-
Resistant Steel Sunset Review , para. 127.   
87 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 126.   
88 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , paras. 127 and 130;  see also 
Appellate Body Report, US – Zeroing (Japan) , para. 183.   
89 Appellate Body Report, EC – Bed Linen , para. 59.  Emphasis added.   
90 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 116;  Panel Report, 
US – Corrosion-Resistant Steel Sunset Review , paras. 7.150 and 7.155.   
91 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 127.  Underlining 
added.  See also  Appellate Body Report, US – Zeroing (Japan) , paras. 183-185.    WT/DS350/R 
 Page B-21 
 
 
  80. Because of the flawed basis on which the US DOC rested its determinations in the sunset 
reviews at issue in US – Zeroing (Japan) , the Appellate Body explained:   
 
We have previously concluded that zeroi ng, as it relates to periodic reviews, is 
inconsistent, as such, with Articles 2.4 and 9.3.  As the likelihood-of-dumping 
determinations in the sunset reviews at issue in this appeal relied on margins of 
dumping calculated inconsistently with the Anti-Dumping Agreement , they are 
inconsistent with Article  11.3 of that Agreement.92   
 81. Japan does not know the factual details underl ying the USDOC's "likelihood" determinations 
in the sunset reviews challenged by the EC in this dispute.  However, the same principles apply here 
as described in the preceding paragraphs.  To th e extent that the USDOC relied on margins of 
dumping determined in original investigations and periodic reviews using the zeroing procedures, 
those margins were "legally flawed" and cannot co nstitute a proper foundation for a determination in 
a sunset review.  As a result, the challenged sunset  reviews are tainted by the same legal flaws that 
infected the margins of dumping from earlier proceedings on which the USDOC relied.  The 
United States, therefore, violated Articles 2.1, 2.4 and 11.3 of the Anti-Dumping Agreement , as well 
as Articles VI:1 and VI:2 of the GATT 1994.
93   
 E. T
HE ANTI-DUMPING ORDERS CHALLENGED BY THE EC ARE ALSO INCONSISTENT WITH 
ARTICLES 2.1, 2.4, 2.4.2,  9.3 AND 11.3  OF THE ANTI-DUMPING AGREEMENT AND 
ARTICLES  VI:1  AND VI:2  OF THE GATT  1994 
82. Japan notes that, in addition to challenging certa in investigations, periodi c reviews, and sunset 
reviews, the EC also challenges certain United States anti-dumping orders ("Orders").  In United States law, these Orders provide the le gal basis for the imposition of anti-dumping duties 
following an investigation in which it is establishe d that the conditions for the imposition of anti-
dumping duties are met.  The amount of definitive du ties imposed under an Order is varied over time 
by, among others, periodic reviews, and the life of an Order is extended by subse quent sunset reviews.  
In Japan's view, these Orders are measures that may be challenged in WTO dispute settlement.   
 83. It is settled that, under Article 6.2 of the DSU, a measure may be any act that is attributable to 
a WTO Member.
94  An Order is undoubtedly an act of the United States.   
 
84. In terms of Article 17.4 of the Anti-Dumping Agreement , in disputes under the Anti-Dumping 
Agreement , a Member must challenge one of three types of measure.  One of these measures is "final 
action … to levy definitive anti-dumping duties".  In Japan's view, Orders  constitute, among others, 
the final action by which the United States imposes definitive anti-dumping duties.  Indeed, it is these 
Orders that provide the initial, and the on-going, lega l basis for the imposition of definitive duties.  As 
a result, the Orders may be challenge d in WTO dispute settlement under the Anti-Dumping 
Agreement .  The past practice of Members in challeng ing US anti-dumping actions does not alter the 
legal status of Orders as "final action" th at may be challenged under Article 17.4.   
                                                      
92 Appellate Body Report, US – Zeroing (Japan) , para. 185.  Footnote omitted.   
93 Having found the sunset reviews in US – Zeroing (Japan)  to violate Article 11.3 of the Anti-
Dumping Agreement , the Appellate Body exercised judicial econo my and stated that it did not "consider it 
necessary to rule on whether the same sunset  review determinations are also inconsistent with Articles 2.1 
and 2.4 of the Anti-Dumping Agreement  and Articles VI:1 and VI:2 of the GATT 1994".  Appellate Body 
Report, US – Zeroing (Japan) , para. 187.  However, Japan submits that  because the violatio ns of Article 11.3 
are premised on underlying violations of Articles 2.1 and 2.4 (as well as Articles VI:1 and VI:2 of the 
GATT 1994), a finding of a violation of Article 11.3 leads a fortiori to the conclusion that those provisions have 
been violated as well.   
94 Appellate Body Report, US – Zeroing (Japan) , para. 74; Appellate Body Report, US – Corrosion-
Resistant Steel Sunset Review , para. 81.   WT/DS350/R 
Page B-22  
 
  IV. CONCLUSION 
85. Japan submits the following:   
 (1)  the use of the zeroing procedures in the origin al investigations identified by the EC renders 
those investigations, and the anti-dumping Orde rs resulting from them, inconsistent with, 
inter alia , Articles 2.1, 2.4 and 2.4.2 of the Anti-Dumping Agreement , and Article VI:1 of 
the GATT 1994;   
 (2)  the use of the zeroing procedures in the peri odic reviews identified by the EC renders those 
measures, and the continuation of the releva nt anti-dumping Orders, inconsistent with 
Articles 2.4 and 9.3 of the Anti-Dumping Agreement , and Articles VI:1 and VI:2 of the 
GATT 1994;  and  
 (3)  to the extent that, in the sunset reviews identified by the EC, the USDOC relied on margins of 
dumping calculated in prior proceedings (investig ations or periodic reviews) in which the 
zeroing methodology had been employed, those s unset reviews, and the continuation of the 
relevant anti-dumping Orders, are inconsistent  with Articles 2.1, 2.4, and 11.3 of the Anti-
Dumping Agreement , and Articles VI:1 and VI:2 of the GATT 1994.   
 86. Japan therefore supports the EC's conclusion th at the measures at issue in this dispute are 
inconsistent with the Anti-Dumping Agreement  and the GATT 1994.   
 
   WT/DS350/R 
 Page B-23 
 
 
 ANNEX B-2 
 
 
THIRD PARTY WRITTEN SUBMISSION OF 
THE REPUBLIC OF KOREA  
 
 I. INTRODUCTION 
1. This third party submission is presente d by the Government of the Republic of 
Korea ("Korea") with respect to certain aspects of the first written submissions by the 
European Communities (the "EC") dated 20 A ugust 2007 and by the United States dated 
12 September 2007, respectively, in United States – Continued Existence and Application of Zeroing 
Methodology (DS350) .   
 
2. Korea has systemic interests in the interpreta tion and application of pr ovisions of Articles 2.4, 
2.4.2, 9.3, 11.1, 11.2 and 11.3 of the Agreemen t on Implementation of Article VI of the General 
Agreement on Tariffs and Trade 1994 ("AD Agre ement"), which lay out legal guidelines for 
investigating authorities of the Members in calculating dumping margins in an anti-dumping 
investigation or a subsequent review.  Therefore,  Korea reserved its third party rights pursuant to 
Article 10.2 of Understanding on Rules and Procedur es Governing the Settlement of Dispute.  Korea 
appreciates this opportunity to present its view to the Panel.    3. The EC challenges, as applied, a wide range of zeroing practices adopted by the United States 
Department of Commerce ("USDOC").  The challe nged measures consist of two groups;  the first 
group includes 18 instances of continued applicati on of anti-dumping duty orders as a result of 
erroneous dumping margin calculation because of zeroing, and the second group includes 52 instances 
of utilization of zeroing either in original investiga tions, administrative reviews or sunset reviews.  In 
Korea's view, this dispute catalogues all possible va riations of the distortive nature of the zeroing 
practice maintained by the United States.   
 
4. Korea therefore generally supports the argu ments raised by the EC in its first written 
submission.  Rather than covering all the argument s, however, Korea will address in this submission 
certain critical issues in Korea's view to assist the panel in reaching a decision.  
 II. LEGAL ARGUMENTS 
A. A
S THE APPELLATE BODY HAS CONSISTENTLY FOUND , "ZEROING " MUST BE PROHIBITED IN 
ALL ANTI-DUMPING PROCEEDINGS INCLUDING ORIGINAL INVESTIGATIONS , 
ADMINISTRATIVE REVIEWS , AND SUNSET REVIEWS  
5. First of all, Korea notes that in US – Zeroing (Japan), the most recent decision relating to 
zeroing, in which the Appellate Body exercised a comprehensive review of all aspects of the zeroing 
practice under the AD Agreement, the Appellate Body unequivocally held that zeroing in all respects 
violates relevant provisions of the AD Agreement.1  Korea requests the Panel to reiterate in this 
dispute that "zeroing" must be prohibited in all anti-dumping proceedings.   
 6. As a matter of fact, even before US – Zeroing (Japan) the Appellate Body has held on a 
number of occasions that "zeroing" is inconsistent wi th the requirements of the AD Agreement.  It has 
                                                     
 
1 See United States – Measures Relating to Zeroing and Sunset Reviews , WT/DS322/AB/R (adopted 
23 January 2007) (" US – Zeroing (Japan) "), at paras. 137-138, 147, 166, 167-169, 177, 186-187.   WT/DS350/R 
Page B-24  
 
 consistently indicated that "zeroing" should be condemned as unfair and prohibited in both the 
original investigations and reviews.
2   
 7. Given the long history of zeroing disputes at the WTO involving the USDOC, as with any other Member, Korea also would like to observe  the final compliance from the United States, i.e., the 
USDOC's complete elimination of the zeroing practice in all types of anti-dumping proceedings.
3  
This dispute, therefore, provides the Panel with an important opportunity to pronounce again that zeroing must be prohibited in all contexts of an ti-dumping proceedings, so that the United States 
could accelerate its internal procedure to completely abolish the practice.    
B. "Z
EROING ", AS USED IN ORIGINAL INVESTIGATIONS , VIOLATES ARTICLES 2.4 AND 2.4.2  OF 
THE AD AGREEMENT  
8. Furthermore, there is an ample body of pr ecedents, where panels and the Appellate Body 
found that the zeroing practice used in an average-to -average comparison in an original investigation 
(that is, the first methodology in the first sentence of Article 2.4.2 of the AD Agreement) violates 
Article 2.4.2 of the AD Agreement.4  In Korea's view, therefore, the Panel could easily render its 
determination on this issue in the present dispute.    9. In Bed Linen,  the Appellate Body relied on both Ar ticle 2.4 and Article 2.4.2 in finding 
"zeroing" to be inconsistent with the requirement s of the AD Agreement.  The Appellate Body first 
addressed the requirements of Article 2.4.2, and fo und that by "zeroing" the models with negative 
dumping margins, the EC effectively failed to take into account the prices of some export transactions 
when calculating the overall dumping margin for the product as a whole  and that the EC instead 
discounted these prices, thereby inflating the dumping margin.  As a result, the Appellate Body concluded that the EC did not establish the existe nce of margins of dumping for the product at issue 
on the basis of all export transactions, as required by Article 2.4.2.
5   
 
10. The Appellate Body then turned to the "fair comparison" requirement of Article 2.4, and held 
that a comparison between export price and nor mal value that does not take into account all 
transactions does not constitute a "fair comparis on" between export price and normal value, as 
                                                      
2 See European Communities – Anti-Dumping Duties on Imports of Cotton-Type Bed Linen from India , 
Report of the Appellate Body, WT/DS141/AB/R, adopted 1 March, 2001;  United States – Sunset Review of 
Anti-Dumping Duties on Corrosion-Resistant Carbon Steel Flat Products from Japan , Report of the Appellate 
Body, WT/DS244/AB/R, adopted 15 December 2003;  United States – Final Dumping Determination on 
Softwood Lumber from Canada , Report of the Appellate Body, WT/DS264/AB/R, adopted 11 August 2004.   
3 See the First Written Submission of the European Communities  dated 20 August 2007 ("EC First 
Written Submission"), at para. 4.   
4 See, e.g.,  Panel Report, US – Zeroing (Japan) , para. 7.86;  Appellate Body Report, US – Softwood 
Lumber V , para. 117;  Panel Report, US – Softwood Lumber V , para. 7.224 and 8.1(a)(i);  Panel Report, US – 
Zeroing (EC) , paras. 7.31-32;  Appellate Body Report, EC – Bed Linen , paras. 46-66.   
5 Id.  In EC – Bed Linen , the Appellate Body found that:   
 
Under [the weighted averag e] method, the investigating authorities are required to 
compare the weighted average normal valu e with the weighted average prices of all 
comparable export transactions….  By " zeroing" the negative dumping margins, the 
European Communities did not fully take into account the entirety of the prices of some  export 
transactions, namely, those export transactions involving models of cotton-type bed linen where "negative dumping margins" were found.  Instead, the European Communities treated 
those export prices as if they were less than th ey were.  This, in turn, inflated the result form 
the calculation of the margin of dumping… 
 
Id. para. 55.    WT/DS350/R 
 Page B-25 
 
 
 required by Articles 2.4 and 2.4.2.6  The Appellate Body's subsequent decision in Japanese Steel 
Sunset Review  reaffirmed that "zeroing" was incons istent with both Articles 2.4 and 2.4.2.7  I n  
Canadian Lumber , the Appellate Body based its analysis so lely on the language of Article 2.4.2 —
 and its requirement that the calculation of dumpi ng margins on an average-to-average basis must 
consider " all comparable export transactions".8  Then the Appellate Body concluded again that 
"zeroing" is inconsistent with Article 2.4.2.  
 11. In these precedents, the Appellate Body has noted  the inherent bias of "zeroing" that generally 
inflates the margins calculated and can, in some in stances, find that dumping exists where there is 
none, and consequently found that "zeroing" is incons istent with the "fair comparison" requirements 
of Articles 2.4 and 2.4.2 of the AD Agreement.
9  Thus, the Appellate Body's precedents as noted 
above collectively evidence that "zeroing", whic h the United States has consistently used for 
calculating dumping margins in original investigati ons, is inconsistent with the requirements of 
the AD Agreement and, therefore, must be prohibited.    
12. In this dispute, therefore, Korea requests th e Panel to determine that the zeroing practice of 
the USDOC as applied to listed original investigati ons against EC products constitutes violations of 
Articles 2.4 and 2.4.2 of the AD Agreement.    C. T
HE PERIODIC REVIEW UNDER ARTICLE 9.3 IS ALSO GOVERNED BY THE PRINCIPLES OF 
ARTICLES 2.4 AND 2.4.2  AND THUS ZEROING IN THE PERIODIC REVIEWS VIOLATES 
ARTICLE  9.3 AND SUBSEQUENTLY ARTICLE 11.2 
13. The "fair comparison" requirement of Ar ticle 2.4 is an overa rching and independent 
obligation, which applies to all dumping calculations, and "zeroing" in administrative reviews, 
therefore, constitutes violation of the obligation.    
14. Article 2.4 of the  AD Agreement provides that "[a] fair  comparison shall be made between 
the export price and the normal value".  Article 2.4 thus establishes an overarching and independent 
obligation to make a fair compar ison between normal value and export price.  Korea is of the view 
that a comparison of the text of the current AD Agreement to the corresponding provision of the Tokyo Round Anti-dumping Code suggests that the "fair comparison" requirement of the first sentence of Article 2.4 was intended to be independe nt of the provisions in the subsequent sentences 
of Article 2.4.   
 15. Under the Tokyo Round Code, the "fair co mparison" requirement was set forth as an 
introductory clause to a sentence describing the mechan ics of the comparison.  Thus, the first sentence 
of Article 2.6 of the Tokyo Round Code stated:   
                                                     
 
6 See id.   
7 The Appellate Body held that:   
 
In  EC – Bed Linen , we upheld the finding of the panel that the 
European Communities acted inconsistently with Article 2.4.2 of the  Anti-Dumping 
Agreement  by using a "zeroing" methodology in the anti-dumping investigation at issue in 
that case.  We held that the European Communities' use of this methodology "inflated the result from the calculation of the margin of dumping".  We also emphasized that a comparison 
such as that undertaken by the European Comm unities in that case is not a "fair comparison" 
between export price and normal value as required by Articles 2.4 and 2.4.2.   
 
Japanese Steel Sunset Review , Report of the Appellate Body, para. 134.   
 
8 See United States – Final Lumber AD Determination, Report of the Appellate Body, paras. 86-87.   
9 See EC – Bed Linen,  Report of the Appellate Body. para. 55.   WT/DS350/R 
Page B-26  
 
 In order to effect a fair comparison  between the export price and the domestic 
price in the exporting country (or the country of origin) or, if applicable, the price established pursuant to the provisions of Article VI:1 (b) of the General Agreement, the two prices shall be compared  at the same level of trade, normally 
at the ex-factory level, and in respect of sales made at as nearly as possible the 
same time.
10 (emphasis added) 
 
16. Because of this structure, there was, argua bly, some ambiguity concerning whether the "fair 
comparison" language of the Tok yo Round Code constituted an indepe ndent requirement, or simply 
an introductory explanation.    
17. In the AD Agreement, however, the words are phrased in a different manner.  The words "fair 
comparison … between the export price and the no rmal value" were taken out of the sentence 
describing the mechanics of the comparison, and inst ead set out in an independent new first sentence 
of Article 2.4.  As such, the AD Agreement no long er describes methodologies that must be used "in 
order to effect a fair comparison".  Instead, th e AD Agreement contains a separate and explicit 
command that a "fair comparison shall be made".   
 18. One could argue that the drafters of the AD Agreement presumably would not have made this 
change without a particular purpose.  Consequently , Korea supports the interpretation that the first 
sentence of Article 2.4 of the AD Agreement was in tended to provide an ove rarching and independent 
obligation, that goes beyond the obligations to ma ke "due allowances" described in the other 
sentences of Article 2.4.  The language is una mbiguous and clearly establishes an independent 
obligation.    19. In Korea's view, therefore, not only the histor ical context of Article 2.4, but also the language 
of that provision confirms that the fair compar ison requirement is an ove rarching and independent 
obligation that the investigating authorities must observe whenever  dumping margins are calculated.   
 20. Korea submits that, barring targeted dumpi ng, a comparison between normal value and export 
price that does not fully take into account all export transactions cannot and does not result in the 
calculation of a dumping margin for the product as a whole , and is therefore not a fair comparison 
within the meaning of the first sentence of Article 2.4.  "Zeroing" makes the investigating authority 
methodically fail to take into account all export transactions for the product as a whole , and therefore 
inevitably leads to an "unfair comparison".  Korea thus submits that the "fair comparison" requirement of Article 2.4 – which applies to all dumping calculations – provides an independent 
ground for finding "zeroing" to be inconsistent with the AD Agreement.    
21. Having said that, to the extent that a dumpi ng margin is effectively calculated, the "fair 
comparison" obligation must equally apply to ad ministrative reviews.  By adopting the zeroing 
methodology in administrative reviews, and by failing to abide by the fair comparison obligation in those proceedings, the USDOC also violated Article  2.4 of the AD Agreement with respect to its 
various administrative reviews identified in  the EC's first written submission.   
 
22. Likewise, Korea also submits that Article 2. 4.2 applies to administrative reviews as well.  
Korea believes that the term "investigation phase" contained in Article 2.4.2 also incorporates periodic reviews envisioned in Article 9.3.    23. More properly understood, the term "investiga tion" connotes "activities" of an investigating 
authority as opposed to contents or scope of its inqu iry in the course of carrying out such activities.  
The ordinary meaning of the word "investigation" in dicates a systematic examination or inquiry, or a 
                                                     
 
10 Tokyo Round Anti-dumping Code, Article 2.6.    WT/DS350/R 
 Page B-27 
 
 
 careful study of or research into a particular subject.11  This is hardly a rare or specialized meaning.  
Korea points out that the dictionary meaning should be a critical starting point for treaty interpretation.
12   
 24. In the Japanese Steel Sunset Review  case, the Appellate Body explained that reviews under 
Article 11 "envision a process combining both investigatory and adjudicatory aspects".
13  T h e  
Appellate Body therefore concluded that the proh ibition of zeroing implicit in Article 2.4.2 also 
applied to dumping calculations in  sunset reviews under Article 11.3.14  The Appellate Body's 
decision in the Japanese Steel Sunset Review  case suggests that the term "investigation phase" is 
properly understood in the context of Article 2.4. 2 to mean the portion of the proceeding (original 
investigation or review) in which the authorit y "investigates" whether dumping has occurred.   
 25. Korea submits that the same logic employed in the Japanese Steel Sunset Review  should be 
applied to a periodic review for duty assessment unde r Article 9.3.  It is clear from the preceding 
observations that the obligations and methodologies that apply when a margin of dumping is 
investigated or relied upon are the same for th e entire AD Agreement, including "administrative 
review" proceedings.  The use of zeroing by the Un ited States in the administrative reviews at issue 
here is thus inconsistent with the AD Agreemen t in both the calculation of a revised margin of 
dumping for cash deposit purposes and in the calculation of the amount of duty retrospectively assessed.    
26. Therefore, in a periodic review, where the USDOC chooses to calculate a new dumping 
margin for the duty assessment and for the future cash deposit rate, the calculation of a new dumping 
margin must be done without using "zeroing", co nsistent with the requirements of Articles 2.4 
and 2.4.2.    
27. Also Article 11.2 of the AD Agreement imposes an obligation on the i nvestigating authority 
to review the need to continue with a particular an ti-dumping duty.  As a result, to the extent that the 
investigating authority conducts its analysis under Article 11.2 based on margins of dumping produced as a result of zeroing, such analysis in evitably violates Article 11.2 because the amount of 
anti-dumping duty calculated with zer oing would exceed the margin of dumping properly established.   
 
28. Accordingly Korea requests the Panel to find that the use of zeroing in the administrative 
reviews constitutes a direct violation of Articles 2.4, 2.4.2 9.3 and 11.2 of the AD Agreement.   
 D. U
TILIZATION OF ZEROING IN SUNSET REVIEWS ALSO CONSTITUTES VIOLATION OF 
ARTICLES  2.4,  2.4.2,  11.1  AND 11.3  OF THE AD AGREEMENT  
29. The same rule should also apply to the sunset reviews.  In light of the above reasoning, to the 
extent the USDOC conducts sunset reviews based  on margins of dumping calculated in previous 
proceedings using the zeroing methodology, it inevitabl y constitutes violations of Articles 2.4, 2.4.2, 
11.1 and 11.3 of the AD Agreement.    30. The sunset reviews of the USDOC cannot be separated from previous anti-dumping 
proceedings.  Rather, the sunset reviews are simply an  extension of previous findings to the extent the 
                                                     
 
11 See The New Shorter Oxford English Dictionary, Clarendon House (1993).   
12 See European Communities – Customs Classific ations of Frozen B oneless Chicken Cuts, 
WT/DS269,286/AB/R, Report of the Appellate Body, adopted 12 September 2005, para. 238 ;  Canada – 
Measures Affecting Automotive Industry , WT/DS139/R, Report of the Panel, adopted 11 February 2000, 
para. 10.12.   
13 See Japanese Steel Sunset Review , para. 111.   
14 Id., para. 127.   WT/DS350/R 
Page B-28  
 
 USDOC relies on dumping margins calculated in a prio r original investigation or an administrative 
review as the basis for the sunset review's likelihoo d determination.  Therefore, Korea believes that 
the violation of these provisions is unavoidable.    
III. CONCLUSION 
31. Korea respectfully submits that in reaching its  decision in this important dispute, the Panel 
should ensure that the provisions of Articles 2.4, 2.4.2, 9.3, 11.1, 11.2 and 11.3 of the AD Agreement are construed in their proper context.  That will give  effect to the ordinary meaning of those Articles 
consistently with the context, object and purpo se of the AD Agreement as a whole, and will add 
clarity, consistency and fairness to the conduct of anti-dumping investigations and reviews by 
Members.   
 32. Korea appreciates the opportunity to particip ate in these proceedings, and to present its views 
to the Panel.    
 
  WT/DS350/R 
 Page B-29 
 
 
 ANNEX B-3 
 
 
THIRD PARTY WRITTEN SUBMISSION OF NORWAY 
 
 
TABLE OF CONTENTS 
   Page
 
 
I. INTRODUCTION ..................................................................................................................3 1 
II. THE ROLE OF PRECEDENT..............................................................................................31  
III. THE FUNCTION OF THE ADOPTED LEGAL REPORTS IN 
INTERPRETING THE AGREEMENTS.............................................................................33  
IV. THE PRACTICE OF ZEROING IS CONTRARY TO ARTICLES 2.1 AND 2.4 
OF THE AD AGREEMENT..................................................................................................33  
4.1 INTRODUCTION .........................................................................................................................33  
4.2 THE EXISTENCE AND AMOUNT OF DUMPING MUST BE DETERMINED FOR THE PRODUCT 
AS A WHOLE ..............................................................................................................................3 4 
4.3 ZEROING IS CONTRARY TO THE REQUIREMENT  THAT THE MARGIN OF DUMPING MUST 
BE CALCULATED FOR "THE PRODUCT AS A WHOLE " .................................................................36  
4.4 ZEROING IS CONTRARY TO THE REQUIREMENT OF "FAIR COMPARISON " IN ARTICLE 
2.4 OF THE AD AGREEMENT .....................................................................................................38  
V. ARTICLE 2.4.2 OF THE AD AGREEMENT APPLIES ALSO TO REVIEW 
PROCEEDINGS .................................................................................................................... .39 
5.1 INTRODUCTION .........................................................................................................................39  
5.2 ADMINISTRATIVE REVIEWS MUST COMP LY WITH THE REQUIREMENTS OF ARTICLE 
2.4.2  OF THE AD AGREEMENT ..................................................................................................39  
VI. SUNSET REVIEWS ...............................................................................................................40  
VII. CONCLUSION ..................................................................................................................... ..41 
 WT/DS350/R 
Page B-30  
 
 TABLE OF CASES CITED IN THIS SUBMISSION 
 
 
Short Title Full Case Title and Citation 
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 
Japan – Alcoholic Beverages II  Appellate Body Report, Japan – Taxes on Alcoholic Beverages , 
WT/DS8/AB/R, WT/DS10/AB/R, and WT/DS11/AB/R, adopted 
1 November 1996  
United States – OCTG Sunset Reviews  Appellate Body Report, United States – Sunset Re views of Anti-Dumping 
Measures on Oil Country T ubular Goods From Argentina , 
WT/DS268/AB/R, adopted 17 December 2004 
US – Corrosion Resistant Steel Sunset Review  Appellate Body Report, United States – Sunset R eview of Anti-Dumping 
Duties on Corrosion-Resistant St eel Flat Produc ts From Japan , 
WT/DS244/AB/R, adopted 9 January 2004 
US – Shrimp (Article 21.5 – Malaysia  Appellate Body Report, United States – import  Prohibition of Certain 
Shrimp and Shrimp Prod ucts – Recourse to Article 21.5 of the DSU by 
Malaysia , WT/DS58/AB/R, adopted 21 November 2001 
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 
US – Softwood Lumber V 
(Article 21.5 – Canada) Appellate Body Report,  United States – Final Dumping Determination on 
Softwood Lumber from Canada – Recour se to 21.5 of the DSU by Canada , 
WT/DS264/AB/R, adopted 1 September 2006 
US – Zeroing (EC)  Appellate Body Report, United States – Laws, Regulations and 
Methodology for Calculating Dumping Margins , /DS294/AB/R, adopted 
9 May 2006 
US – Zeroing (Japan)  Appellate Body Report, United States – Measures Relating to Zeroing and 
Sunset Reviews , WT/DS322/AB/R, adopted 23 January 2007 
  WT/DS350/R 
 Page B-31 
 
 
 I. INTRODUCTION 
1. Norway welcomes this opportunity to be heard a nd to present its views as a third party in this 
dispute brought by the European Communities ("EC")  regarding whether the continued existence and 
application of zeroing methodologies by the United St ates in anti-dumping proceedings is consistent 
with various provisions of the Agreement on Implementation of Article VI of the General Agreement 
on Tariffs and Trade 1994  (the " Anti-Dumping Agreement" or the "AD Agreement"), Article VI:1 and 
VI:2 of the GATT 1994 and Article XVI:4 of the WTO Agreement.    2. Norway will not discuss the concrete cases to which the EC refers in this case.  Norway 
understands that the facts surrounding these cases are not in dispute between the EC and the 
United States, and that the dispute is limited to qu estions of legal interpre tation of the various WTO 
instruments referred to by the EC.    3. Norway will not in this third party submissi on address all the legal issues raised by the EC 
and responded to by the United States.  Rather , Norway addresses the following general issues 
discussed in the First Written Submissions of the EC and the United States:   
 
• whether a Panel may depart from the legal interp retations of the Appellate Body as set out in 
adopted Appellate Body Reports (Section II);   
• the relationship between the obligations of Article XVI:4 of the WTO Agreement and the 
obligation to comply with adopted reports (Section III);   
• whether the practice of zeroing in all forms and in all proceedings under the AD Agreement is 
consistent with Articles 2.1 and 2.4 of that agreement (Section II);   
• whether Article 2.4.2 of the AD Agreement  applies to review proceedings in addition to 
original investigations (Section III);  and 
• whether the continuation of anti-dumping measures in  a sunset review is inconsistent with the 
Anti-Dumping Agreement  in cases where the practice of zeroi ng has been used either in the 
original investigation or in a assessment review (Section IV).   
 
II. THE ROLE OF PRECEDENT 
4. The Appellate Body has ruled on almost all the issues raised in this case already, and set out 
the correct legal interpretation to be given to the contested provisions in respect of zeroing.  The 
United States has not advanced any new legal argumen ts, and all the legal arguments presented by the 
United States in its First Written Submission have b een rejected by the Appellate Body in previous 
cases.    
5. The United States asks the Panel to disregard the legal interpretations of the Appellate Body, 
claiming that the reasoning of the previous Appellate  Body reports is not "persuasive".  Norway will 
address some of these arguments as they relate to sp ecific provisions of the Agreements later in this 
submission.  In this Section, Norway will present certain arguments relating to the precedential value 
of adopted Appellate Body Reports.   
 
6. Norway is of the opinion that it serves the development of international law and the 
preservation of workable international relations to  build on the rulings in previous reports in 
subsequent cases.  There is no disagreement that the legal doctrine of stare decisis is not mandated by 
WTO law.  While the Appellate Body is, thus, not fo rmally bound to follow previous rulings, it is in 
the interests of legal certainty, foreseeability and equa lity before the law that the Appellate Body or a 
Panel should not depart, without goo d reason, from precedents laid down in previous cases.  In this 
respect, the Appellate Body's practice is entirely in line with the practice of other international 
tribunals.   WT/DS350/R 
Page B-32  
 
 7. The question before this Panel is both a lega l question, and a practical question.  Firstly, 
whether – and under what conditions – a Panel can depart from the legal interpretation expressed by 
the Appellate Body and endorsed by the Members of the WTO through the adoption of the report(s).  Secondly, whether the facts of this case makes it a ppropriate for the Panel to exercise its competence 
(if any) to make such a departure.   
 
8. Addressing the first of these issues, the Panel must bear in mind, as also underscored by the 
Appellate Body, that adopted reports create leg itimate expectations among WTO Members, and, 
therefore, should be taken into account where they are relevant to any dispute.
1  The Appellate Body 
has even submitted that "following the Appellate Bo dy's conclusions in earlier disputes is not only 
appropriate, but is what would be expected fro m panels, especially where issues are the same".2  
Norway would add that following previous reports also ensures fewer disputes ("the issue is settled") 
and preserves both the system and the systemic function of the Appellate Body.    9. Additionally, the Panel should remember that the reports in question have all been adopted by 
the whole Membership through their decisions in the Dispute Settlement Body.  This adoption is not 
just a formality, but makes the rulings and recomme ndations into binding international obligations.  
Norway also recalls the central importance given to  the security and predictability of the system, as 
set out in Article 3.2 of the Dispute Settlement Understanding (the "DSU").   
 10. The United States argues that a Panel should free itself from the legal interpretations set out in 
Appellate Body reports, and only take  such legal interpretations into account "to the extent that the 
reasoning is persuasive ".
3   
 11. Norway disagrees with the standard proposed by the United States, which may be considered 
lax and confusing.  Norway does not argue that it is never possible for a Panel to advance a legal 
interpretation different from that set out in adopted Appellate Body reports.  It is, however, clear from 
the central function of the reports in the dispute se ttlement system as well as in the clarifications of 
the provisions of the covered agreements, that Panels may only do so in extreme cases.  More 
concretely, they may only do so where following th e legal interpretation of  the challenged provision 
by the Appellate Body would lead to a manifestly  absurd result in a particular case, and where the 
facts of that case are entirely different from those already addressed in previous reports.   
 
12. Such is not the case here.  There is nothing ne w for the Panel to consider, the factual basis is 
the same, the methodologies are the same and the contested provisions are the same.   
 13. Norway further considers that if it were  permissible to depart from previous legal 
interpretations in adopted Appellate  Body reports, one enters into an unchartered territory.  It also 
exposes the whole Membership to uncertainty, and is  itself creating a precedent where all cases could 
be perpetually reargued.  Such a result would be contrary to the object and purpose of the dispute 
settlement system, as well as the object and purpo se of a rule based multilateral trading system 
ensuring security and predictability for all economic actors.    
                                                     
 
1 Appellate Body Report, Japan – Alcoholic Beverages II , paras. 107-108 (with regard to adopted panel 
reports) and Appellate Body Report, US – Shrimp (Article 21.5 – Malaysia)  (with regard to Appellate Body 
reports).   
2 Appellate Body Report, United States – OCTG Sunset Reviews , para. 188.   
3 United States' First Written Submission para. 33.    WT/DS350/R 
 Page B-33 
 
 
 III. THE FUNCTION OF THE ADOPTED LEGAL REPORTS IN INTERPRETING THE 
AGREEMENTS 
14. Where laws, regulations or administrative proce dures have been found to be inconsistent with 
the obligations of any of the WTO agreements, th is entails a breach of Article XVI:4 of the WTO 
Agreement, which reads:   
 
"Each Member shall ensure the confor mity of its laws, regulations and 
administrative procedures with its obligations as provided in the annexed 
Agreements."   
 15. The obligations incumbent upon the respondent, having been found to be in non-compliance, 
does not seem to be in dispute between the parties to this dispute.  Where a law, regulation or 
administrative procedure of a particular Member has been found to be inconsistent with a WTO 
agreement, that Member has an obligation to remedy that situation.    16. The legal issue before this Panel is whether Article XVI:4 of the WTO-Agreement implies an 
obligation on the respondent that is different or additional to the obligation to comply with the 
adopted reports.  Norway believe s the issue here is not whethe r adopted reports are binding upon 
Members not party to the dispute.  Clearly the rulings and recommendations are addressed only to the 
parties to the dispute.    17. In respect of this issue, Norway submits th at adopted Appellate Body reports influences the 
obligations of all Members under Article XVI:4 of the WTO – not  just the obligations of the parties to 
the dispute subject to the Appellate Body reports.    18. This is because, in adopting or maintaining dom estic laws and regulations  in areas covered by 
the WTO agreements, Members will have to take into account the legal interpretation of the WTO 
provisions in adopted panel and A ppellate Body reports.  This oblig ation is a continuous obligation 
upon all Members.  The obligation does not set in from the adoption of a particular report, contrary to what the EC seems to argue
4, but is there since the entry into fo rce of the WTO Agreement.  Being a 
continuous obligation, Members are required to re view their laws, regulations and administrative 
procedures, when appropriate, to ensure that they  are continuously in conformity with their WTO 
obligations.   
 
19. As such, the obligation in Article XVI:4 is different from the obligation to comply with a 
particular adopted panel or Appella te Body report.  Article XVI:4, therefore, entails obligations that 
go beyond the individual dispute.  A Panel, however , can only address the claims in that particular 
dispute and between the parties to that particular dispute.   
 
IV. THE PRACTICE OF ZEROING IS CONTRARY TO ARTICLES 2.1 AND 2.4 OF 
THE AD AGREEMENT 
4.1 I NTRODUCTION  
20. Panels and the Appellate Body has repeatedly  found that the use of zeroing when applying a 
"weighted average-to-weighted average" comparis on methodology to calculate the dumping margin in 
original investigations (so-called model zeroi ng) is contrary to Article 2.4.2 of the AD Agreement .5  
                                                      
4 EC's First Written Submission, para 131.   
5 See e.g. Appellate Body Report, EC – Bed Linen , para. 66 and Appellate Body Report, US –
 Lumber V , para. 117.   WT/DS350/R 
Page B-34  
 
 The United States acknowledges this, but contests any claims of WTO inconsistency as to Articles 2.1 
and 2.4 of the AD Agreement.
6   
 21. Norway considers that the prohibition of zer oing is not limited to cases of model zeroing 
under the weighted average-to-weighted average met hodology in Article 2.4.2 of the AD Agreement.  
In line with the Appellate Body's ruling in previ ous cases, Norway finds that the prohibition of all 
forms of zeroing in all forms of proceedings under the AD Agreement  is based on two important 
considerations:  first, that dumping shall be estab lished for the "product as a whole" – which is not the 
case where zeroing is employed.  And second, that  zeroing is contrary to the "fair comparison" 
requirement of Article 2.4 of the AD Agreement .   
 
4.2 T
HE EXISTENCE AND AMOUNT OF DUMPING MUST BE DETERMINED FOR THE PRODUCT AS A 
WHOLE  
22. There is a consistent line of reasoning by th e Appellate Body regarding the requirement that 
the existence and amount of dumping must be determ ined for the product as whole.  However, as the 
existence of such a requirement is something that is disputed between the Parties, Norway finds it 
pertinent to repeat the legal reasoning behind it.    23. The point of departure for Norway is that th ere is but one definition of "dumping" in the Anti-
dumping Agreement, and that this definition is applicable to all proceedings under the 
AD Agreement .
7   
 
24. The definition applicable to all calculati ons of dumping margins throughout the agreement 
can be found in Article 2.1 of the AD Agreement , which reads:   
 
"For the purposes of this Agreement, a product  is considered as being dumped, i.e. 
introduced into the commerce of another count ry at less than normal value, if the 
export price of the product  exported from one country to another is less than the 
comparable price, in the ordinary course of trade, for the like product  when destined 
for consumption in the exporting country."  (emphasis added) 
 25. A number of provisions of the AD Agreement  make reference to "a product"
8, "the product"9 
or "any product"10, using the singular form of the word, thus making clear that the comparisons 
between normal value and export price for purposes of calculating the dumping margin is based on 
the totality of the product under investigation.  Ther e is no reference in the Agreement to calculating 
more than one margin of dumping for sub-categories or individual transactions of the product.  As 
stated by the Appellate Body in EC – Bed Linen:    
 
"[...] Whatever the method u sed to calculate the margins of dumping, in our view, 
these margins must be, and can only be, established for the product under investigation as a whole.  [...]"
11   
 
                                                      
6 United States' First Written Submission paras. 155-156.   
7 There are five such instances where the authorities calculate dumping margins, those being 
(i) original proceedings, (ii) "assessment reviews" ( ADA Article 9.3), (iii) "new  shipper reviews" (ADA 
Article 9.5), (iv) "changed circumstances reviews" (ADA Article 11.2), and (v) "sunset reviews" (ADA Article 11.3).   
8 E.g. Article 2.6.   
9 E.g. Article 2.2.   
10 E.g. Article 9.2.   
11 Appellate Body Report, EC – Bed Linen , para. 53.    WT/DS350/R 
 Page B-35 
 
 
 26. The Appellate Body in US – Softwood Lumber V , restated this, where it held that "dumping is 
defined in relation to a product".12  The Appellate Body went on to say that the authorities:   
 
"... having defined the product under investigation, the i nvestigating authority must 
treat that product as a whole  for, inter alia, the followi ng purposes:  determination of 
the volume of dumped imports, injury dete rmination, causal link between dumped 
imports and injury to domestic industry,  and calculation of the margin of dumping .  
[...]"13 (emphasis added) 
 27. In US – Zeroing (EC)  the Appellate Body, recalling its earlier rulings, stated that:   
 
"...the text of Article 2.1 of the Anti-Du mping Agreement, as well as the text of 
Article VI:1 of the GATT 1994 … indicate clearly that "dumping is defined in relation to a product as a whole"".
14   
 
28. The Appellate Body in US – Softwood Lumber (Article 21.5 – Canada)  reiterated this, and 
analysed the context provided by Articles 5.8, 6.10 and 9.3 ADA.  It was noted that a dumping determination "under Article 5.8 re quires aggregation" of multiple comparison results to establish a 
margin for the product as a whole.
15  A l s o i n  US – Zeroing (Japan) , the Appellate Body based its 
reasoning on the concept of "product as a whole".16   
 
29. Furthermore, it is evident from the provision of Article 6.10 ADA, which stipulates that there 
shall be but one "individual margin of dumping fo r each known exporter or producer concerned of the 
product under investigation", that the margin of  dumping shall be calculated for the product as a 
whole.  In the words of the Appellate Body, this obligation "reinforce[s] the notion that the "margins 
of dumping" are the result of an aggregation".17  Norway adds that Article 6.10 applies to original 
investigations and to reviews pursuant to Article 11 by virtue of Article 11.4.   
 30. In Article 9.3 it is stated that "The amount of anti-dumping duty shall not exceed the margin 
of dumping  as established under Article 2".  Norway holds th at it is evident from this text that the 
Agreement foresees one single dumping margin for "t he product" for each i ndividual exporter.  The 
Appellate Body noted that Article 9.3 ADA "suggests that the margin of dumping is the result of an 
overall aggregation and does not refer to the r esults of the transaction-specific comparisons".18   
 31. For "new shipper reviews" Article 9.5 e qually foresees individual margins of dumping for 
each exporter for "the product".    
32. Norway also refers to the provisions of GATT Article VI, which is the basis for the Anti-
Dumping Agreement, and which is still the b asis for permitting the imposition of anti-dumping 
duties – which barring this provision would have been contrary to the MFN provision of GATT 
Article I and the prohibition on levying of duti es in excess of the scheduled bound duty under GATT 
Article II.  The provision of GATT Article VI:2 states that:   
                                                     
 
12 Appellate Body Report, US – Softwood Lumber V , para. 93.   
13 Appellate Body Report, US – Softwood Lumber V , para. 99.   
14 Appellate Body Report, US – Zeroing (EC), para. 126, quoting Appellate Body Report, US – 
Softwood Lumber V  paras. 92-93.  See also Appellate Body Report US – Zeroing (EC), paras. 125, 127-129 
and 132.   
15 Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 105.   
16 Appellate Body Report, US – Zeroing (Japan),  para. 129.   
17 Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 107.   
18 Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 108.   WT/DS350/R 
Page B-36  
 
 "In order to offset or prevent dumping, a contracting party may levy on any dumped 
product an anti-dumping duty not greater in amount than the margin of dumping in 
respect of such product .  For the purposes of this Article, the margin of dumping is 
the price difference determined in accord ance with the provisions of paragraph 1."  
(emphasis added) 
 
33. It follows from this provision firstly that the duty cannot be greater than the margin of dumping;  secondly that the margin of dumping is  in respect of "such product" encompassing the 
totality of the product;  and thirdly that the margin ha s to be calculated in ac cordance with the specific 
provisions of paragraph 1 of GA TT Article VI (Paragraph 1 of GATT Article VI is similar to 
Article 2.1 ADA in respect of the calculation of th e dumping margin).  Nothing in GATT Article VI 
permits the calculation of more than one marg in of dumping per product under investigation (from 
each exporter) and nothing permits the imposition of duties based on a multitude of margins of dumping for each and every transaction.    
34. Based on the above it is clear that the margin  of dumping must be calculated for the product 
as a whole in all proceedings under the AD Agreement .   
 4.3 Z
EROING IS CONTRARY TO THE REQUIREMENT THAT THE MARGIN OF DUMPING MUST BE 
CALCULATED FOR "THE PRODUCT AS A WHOLE " 
35. The Appellate Body has in several rulings po inted out that the use of zeroing distorts the 
process of establishing dumping margins and inflates the dumping margin for the product as a whole.  
The United States acknowledges this as regards the u se of zeroing in original investigations where 
comparisons are made using the weighted  average-to-weighted average methodology.19  T h e  
United States does not however acknowledges this fo r any other type of proceeding or comparison 
methodology, and Norway sees therefore the need to  reiterate the legal arguments made by the 
Appellate Body in this respect.   
 36. The Appellate Body in US – Corrosion Resistant Steel Sunset Review , recalling its findings in 
the EC – Bed Linen  case, stated that:   
 
"When investigating authorities use a zeroing methodology
 such as that examined in 
EC – Bed Linen  to calculate a dumping margin, whet her in an original investigation 
or otherwise, that methodology will tend to inflate the margins  calculated.  Apart 
from inflating the margins, such a methodol ogy could, in some instances, turn a 
negative margin of dumping into a positive margin of dumping.  As the Panel itself 
recognised in the present dispute, "zeroing … may lead to an affirmative 
determination that dumping exists wher e no dumping would have been established 
in the absence of zeroing".  Thus, the inherent bias in a zeroing methodology  of this 
kind may distort not only the magnitude of a dumping margin, but also a finding of the very existence of dumping."
20  (emphasis added)  
 37. The importance of calculating the dumping margin for the product as a whole – and not 
zeroing out the instances where the export price exceed s the normal value – has been reaffirmed by 
the Appellate Body in US – Softwood Lumber V,  where it stated that:   
                                                     
 
19 See EC's First Written Submission para. 145, with re ferences to relevant decisions in footnote 107.  
See also United States' First Written Submission para. 155.   
20 Appellate Body Report, US – Corrosion Resistant Steel Sunset Review , para 135.    WT/DS350/R 
 Page B-37 
 
 
 "We fail to see how an investigating author ity could properly es tablish margins of 
dumping for the product under investigation as a whole without aggregating all of the 
"results" of the multiple comparisons for all product types."21   
 38. The cases referred to above dealt with in stances of zeroing procedures in original 
investigations using the weighted average-to-weight ed average methodology.  The principle, however, 
applies equally to other forms of zeroing and to ot her forms of proceedings.  The Appellate Body has 
confirmed this in recent rulings.    39. First of all, in regard to zeroing procedures in  periodic reviews, the Appellate Body stated in 
US – Zeroing (EC) :   
 
"We note that Article 9.3 refers to Article 2.  It follows that, under Article 9.3 of the Anti-Dumping Agreement  and Article VI:2 of the GATT 1994, the amount of the 
assessed anti-dumping duties shall not exceed the margin of dumping as established 
"for the product as a whole".
22   
 40. The Appellate Body then went on to say that:    
"… if the investigating authority establishes the margin of dumping on the basis of multiple comparisons made at an intermedia te stage, it is required to aggregate the 
results of all of the multiple comparisons , including those where the export price 
exceeds the normal value."
23   
 41. The requirement in Article 2.1 AD Agreement  to aggregate multiple comparison results to 
produce a margin of dumping for the product as a whol e applies equally when an authority conducts:  
weighted average-to-weighed average comparisons, weighted average-to-transaction comparisons and 
transaction-to-transaction comparisons.    42. In US – Softwood Lumber V (Article 21.5 – Canada) , the Appellate Body concluded that the 
definition of "dumping" and "margin of dumping" in Article 2.1 (and Articles VI:1 and VI:2 of 
GATT 1994) applies to zeroing procedures using transac tion-to-transaction comparison in an original 
investigation.  The Appellate Body underlined that  in relation to Article 2.4.2 ADA, the weighted 
average-to-weighted average and transaction-to-tra nsaction comparisons provide "alternative means 
for establishing "margins of dumping" and that they  "fulfil the same function" with no "hierarchy 
between them".  In light of this, the Appellate Body stated:    
"… the term "margin of dumping" has the same meaning regardless of which of the 
two methodologies in the first sentence of Artic le 2.4.2 is used to establish them.  In 
other words, it is a unitary concept and the two methodologies provided in the first 
sentence of Article 2.4.2 are a lternative means to capture it."
24   
 43. Based on these premises, the Appellate Body held that:   
 
"…it would be illogical to interpret the ["T to T"] comparison methodology in a manner that would lead to results that are systematically different from those obtained under the ["W to W"] methodology."
25   
                                                      
21 Appellate Body Report, US – Softwood Lumber V,  para. 98 (emphasis in the original).   
22 Appellate Body Report, US – Zeroing (EC) , para. 127.   
23 Appellate Body Report, US – Zeroing (EC) , para. 127.   
24 Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 89.   
25 Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para 93.   WT/DS350/R 
Page B-38  
 
 44. In US – Zeroing (Japan),  the Appellate Body reiterates this line of reasoning, and thus 
carrying out a consistent interpretati on of the various provisions involved.
26   
 45. Regarding sunset reviews, Norway holds that it would not be logically consistent to interpret 
the AD Agreement  in a manner that will allow the investigating authorities to apply a duty where the 
requirements of the AD Agreement would have made it  illegal to impose the duty in the first place.   
 46. Based on the above, Norway holds that zeroing procedures in all forms and in all proceedings 
under the AD Agreement is contrary to the principl e that the margin of dumping must be established 
for the product as a whole.   
 
4.4 Z
EROING IS CONTRARY TO THE REQUIREMENT OF "FAIR COMPARISON " IN ARTICLE 2.4 OF THE 
AD AGREEMENT  
47. The EC contends in its First Written Submissi on that the requirement of "fair comparison" in 
Article 2.4 of the AD Agreement  is an independent and overarching obligation, which in addition to 
applying to original investigations, also is applicab le to proceedings governed by Article 9.3.  The EC 
further argues that the zeroing methodologies used by th e United States both in original investigations 
and in later reviews are inconsistent with the "fair comparison" requirement.27  The United States, on 
the other hand, submits that zeroing is not cont rary to the "fair comparison" requirement.   
 48. The Appellate Body has in several cases found that zeroing is contrary to a "fair comparison" 
between the export value and normal value.
28  It has been found that "the use of zeroing (…) 
artificially inflates the magnitude of dumping resu lting in higher margins of dumping and making a 
positive determination of dumping more likely", and further that "this way of calculating cannot be 
described as impartial, even-handed, or unbiased".29   
 
49. In the latest case – US – Zeroing (Japan)  – the Appellate Body referred to its earlier rulings in 
its interpretation of Article 2.430, and expressed the following when addressing the application of the 
requirement of "fair comparison" to assessment reviews:    
If anti-dumping duties are assessed on the basis of a methodology involving comparisons between the export price a nd the normal value in a manner which 
results in anti-dumping duties being collected from importers in excess of the 
amount of the margin of dumping of the exporter or foreign producer, then this methodology cannot be viewed as involving a "fair comparison" within the meaning 
of the first sentence of Article 2.4.  Th is is so because such an assessment would 
result in duty collection from importers in excess of the margin of dumping 
established in accordance with Article 2, as we have explained previously.
31   
 50. The Appellate has had the oppor tunity to consider the "fairness" of the practice of zeroing 
with regard to all three comparison methodologies, and with regard to both original investigations and 
assessment reviews.  The message from the Appellate Body in these cases has been clear:  there is an 
inherent bias in zeroing methodology and zeroing is not  a "fair comparison".  Zeroing thus implies a 
                                                     
 
26 Appellate Body Report, US – Zeroing (Japan) , paras. 119-129.   
27 EC's First Written Submission para. 159, 176 and paras. 198-199.   
28 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 (Art. 21.5 – Canada) , para. 42 
and Appellate Body Report, US – Zeroing (Japan) , para. 146.   
29 Appellate Body Report, US – Softwood Lumber V (Art. 21.5 – Canada) , para. 142.   
30 Appellate Body Report, US – Zeroing (Japan) , para. 146.   
31 Appellate Body Report, US – Zeroing (Japan) , para. 168.    WT/DS350/R 
 Page B-39 
 
 
 breach of Article 2.4 of the AD Agreement.   Nothing in this case gives any cause to disturb the 
consistent Appellate Body fi ndings in this respect.   
 51. In light of the clear case law referred to  above, Norway does not see any need to go any 
further into the details of the interpretation of Article 2.4 of the AD Agreement .   
 
V. ARTICLE 2.4.2 OF THE AD AGREEMENT APPLIES ALSO TO REVIEW 
PROCEEDINGS  
5.1 I
NTRODUCTION  
52. The EC submits that Article 2.4.2 of the AD Agreement  applies not only in the context of 
original investigations, but also in the context of review proceedings, including administrative 
reviews.32  The United States argues otherwise, contending that the express terms of Article 2.4.2 
limit the application to original investigations.33   
 53. Norway is of the firm view that the methodologies provided for in Article 2.4.2 are the only 
permissible methodologies also for assessment revi ews.  Article 9.3.1 does not prescribe or permit a 
method for margin calculation different from those set out in Article 2.4.2 of the AD Agreement .   
 5.2 A
DMINISTRATIVE REVIEWS MUST COMP LY WITH THE REQUIREMENTS OF ARTICLE 2.4.2  OF 
THE AD AGREEMENT  
54. Article 9.3.1 does not speak to the question of the method for margin calculation in 
assessment reviews.  The provision is silent in this regard, and thus cannot be said to imply a 
permission or a prohibition of any specific methodology.    55. Article 9.3 (the "chapeau") does, however, pr ovide that "the amount of the anti-dumping duty 
shall not exceed the margin of dumping as establishe d under Article 2".  The reference to Article 2 
must be read as a reference to the whole of that Ar ticle, without exceptions.  On this basis, Norway 
submits that the establishment of a margin of dumping in the context of Article 9.3 must adhere to the 
disciplines of Article 2, including Article 2.4.2.    56. As mentioned above, the United States understa nds Article 2.4.2 to be limited to original 
investigations.  It is argued that the term "the existence of margins of dumping during the 
investigation
 phase..." implies that the provision is not a pplicable to assessment reviews according to 
Article 9.3.1.34   
 57. Norway believes that a proper interpretation of the terms of Article 2.4.2, read in context and 
in light of the object and purpose of the treaty, leads to a different result.  First of all the ordinary 
meaning of the word "investigation" comprises more th an just the type of examination that takes place 
in an original investigation (…).  The EC refers  in its First Written Submission to how the word is 
defined in The New Shorter Oxford English Dictiona ry:  "the action or process of investigating;  a 
systematic inquiry;  a careful study of a particular subject".
35  Norway submits that there are different 
kinds of examinations that are undertaken dur ing the proceedings in accordance with the 
AD Agreement that fits this definition, including the assessment into the am ount of anti-dumping duty 
addressed in Article 9.3.1.   
                                                      
32 EC's First Written Submission paras. 212 and 223.   
33 United States' First Written Submission para. 99.   
34 United States' First Written Submission para. 99.   
35 EC's First Written Submission para. 213 and footnote 152.   WT/DS350/R 
Page B-40  
 
 58. Norway contends that also the context and the object and purpose of the treaty indicate that 
Article 2.4.2 is not limited to original investigations .  Article 2 is the sole provision in the Agreement 
dealing with the "determination of dumping", and Artic le 2.4.2 is the sole provision in the Agreement 
dealing with how to calculate dumping margins.
36  If one were to interpret Article 2.4.2 in such a way 
as to limit its application to original  investigations, one would implicitly say that there are no specifics 
as to the methodologies to be applied in determin ing dumping margins in reviews and thus no 
"security or predictability" in the system.  This woul d effectively abolish also the "due process rights" 
for the exporter.  Such a result would – in Norway's view - be manifestly absurd and contrary to the 
object and purpose of the treaty.  One cannot come to the conclusion that it is for each and every 
Member to chose how to calculate dumping margins.  This could lead to 151 different methodologies 
with 151 different results.   
 59. It is a general tenet of p ublic international law that where a treaty may give rise to two 
different interpretations, the one enabling the treaty to  have appropriate effect s should be adopted.  In 
the words of the International Law Commission:   
 
"When a treaty is open to two interpreta tions, on of which does and the other does 
not enable the treaty to have appropria te effects, good faith and the objects and 
purposes of the treaty demand that the former interpretation should be adopted."
37   
 60. In Norway's view this requires us to adopt  an interpretation of "investigation phase" in 
Article 2.4.2 that ensures that there are agreed me thodologies applicable also to reviews, and not an 
interpretation that permits "a free for all" making the choice of methodology into a "black hole".  Norway again refers to the object and purpose of the WTO Agreement, which inter alia is to establish 
a rules-based multilateral trading system ensuring s ecurity and predictability for Members in their 
trading relations.
38  Without such an interpretation, margin s calculated based on the same sales may 
change wildly from Member to Member, leaving no  security and predictability for the exporters.   
 61. While not entering into a detailed critique of all the interpretative arguments put forward by 
the United States, Norway believes that the above principle of "effectiveness" and the object and 
purpose of the WTO Agreement , the GATT 1994  and the AD Agreement all  imply that Article 2.4.2 
must be interpreted to apply to all investiga tions – including those carried out for purposes of 
establishing dumping margins in reviews.   
 
VI. SUNSET REVIEWS 
62. The Appellate Body has previously held that all dumping margins in sunset reviews 
conducted in accordance with Article 11.3, must c onform to the disciplines of Article 2.4.  If the 
margins are calculated using a methodology that is inc onsistent with Article 2.4, then this could give 
rise to an inconsistency not only with Ar ticle 2.4, but also with Article 11.3.
39  "In such 
circumstances, "the likelihood[of dumping] determination could not constitute a proper foundation for 
the continuation of anti-dumping duties under Article 11.3"."40   
 63. Norway notes that the Appellate Body has confirmed that this also applies where the 
investigating authority relies on margins calculated (w ith the use of zeroing) during periodic reviews:  
In US – Zeroing (Japan)  the Appellate Body ruled that since it was found that zeroing was 
                                                     
 
36 Appellate Body Report, US – Corrosion Resistant Steel Sunset Review , para. 127.   
37 YBILC 1966-II, page 219.   
38 See DSU Article 3.2,  first sentence.   
39 Appellate Body Report, US – Corrosion Resistant Steel Sunset Review , paras. 127 and 130.   
40 Appellate Body Report, US – Zeroing (Japan) , para. 183, referring to Appellate Body Report, US – 
Corrosion Resistant Steel Sunset Review , para. 130.    WT/DS350/R 
 Page B-41 
 
 
 inconsistent, as such, with Article 2.4 and Article  9.3, and the likelihood-of -dumping determinations 
in the sunset reviews at issue in the case relied on margins of dumping calculated inconsistently with 
the Anti-Dumping Agreement , they were inconsistent with Ar ticle 11.3 of that Agreement.   
 64. A margin calculated with zeroing can, therefor e, never be the foundation for an authority's 
determination regarding the likelihood of continuation or recurrence of dumping.   
 65. The United States argues that the Panel should re ject the claim by the EC because the EC has 
not demonstrated that a calculation without zeroing would result in zero or de minimis margins.
41   
 
66. This is an incorrect understanding of th e obligation incumbent upon the investigating 
authority by virtue of Article 11.3 of the Anti-Dumping Agreement.   Article 11.3 requires of the 
investigating authority that it makes a reasoned dete rmination.  As the Appellate Body has set out, a 
determination of the likelihood of continuation or recurrence of dumping based on a finding of 
dumping, where the dumping margin has been calculated employing zeroing, cannot be considered a 
reasoned determination.  It is sufficient to constitu te a breach of Article 11.3 for the EC to present a 
prima facie case that the determination is flawed.  It  is not necessary for the EC, nor for this Panel, to 
make the correct determination for the United States.  The Panel's role is to review the determinations 
actually made by the United States.  A panel's role is not to redo the investigation and make its own 
determinations.    VII. CONCLUSION 
67. Norway respectfully requests the Panel to exam ine carefully the facts presented by the parties 
to this case in light of our arguments, in order to ensure a proper and consiste nt interpretation of the 
AD Agreement .   
 
 
 
                                                     
 
41 United States, First Written Submission para. 154.   WT/DS350/R 
Page B-42  
 
 ANNEX B-4 
 
 
THIRD PARTY WRITTEN SUBMISSION OF THE SEPARATE CUSTOMS 
TERRITORY OF TAIWAN, PE NGHU, KINMEN AND MATSU 
 
 
TABLE OF CONTENTS 
   Page
 
 
INTRODUCTION................................................................................................................... .............43  
ARGUMENTS...................................................................................................................... ................43  
The definition of "dumping" contained in Article VI:1 of the GATT 1994 and Article 2.1 
of the Anti-Dumping Agreement applies throughout the Agreement. ............................................43  
The existence of dumping and margins of dum ping must be determined with respect to 
the product as a whole ......................................................................................................... ................44 
The term "investigation" in Article 2.4.2 of the Anti-Dumping Agreement  does not refer 
exclusively to "original investigations"....................................................................................... .......44  
Article 2.4 imposes a general obligation requiring Members to ensure a "fair 
comparison". ................................................................................................................... .....................45  
The assessment of anti-dumping duties sha ll be based on the margin of dumping 
established in accordance with Article 2 of the Agreement. ............................................................45  
The application of the zeroing methodology is WTO-inconsistent in all anti-dumping 
proceedings. ................................................................................................................... .......................46  
CONCLUSION ..................................................................................................................... ...............46  
  WT/DS350/R 
 Page B-43 
 
 
 INTRODUCTION 
1. The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (hereinafter referred 
to as "TPKM"), as a third party in this proceeding, thanks the Panel for this opportunity to present its 
views on the issue of zeroing.    
2. The question before the Panel in this disput e is whether the application of zeroing in the 
52 anti-dumping proceedings with respect to the 18 specific products cited by the European Communities is inconsistent  with Articles 2.1, 2.4, 2.4.2, 9.3, 11.1, 11.2 and 11.3 of the 
Anti-Dumping Agreement,  and Articles VI:1, VI:2 and XVI:4 of the GATT 1944.   
 
3. In its first written submission, the Europ ean Communities has clearly described how the 
United States incorporates the zeroing methodology into its determinations in or iginal investigations, 
administrative reviews and sunset reviews.  The fu ndamental issue in these proceedings with respect 
to all of these determinations, therefore, is whethe r the use of the zeroing methodology impermissibly 
distorts the calculation of the dumping margin upon which the existence of dumping is determined 
and the subsequent duty assessments are based.   
 4. TPKM will focus its submission on why the zeroing methodology as applied in anti-dumping proceedings is inconsistent with the Anti-Dumping Agreement  and relevant WTO provisions.  This 
submission will address the following:   
 
 (1) The definition of "dumping" in Artic le VI:1 of the GATT 1994 and Article 2.1 
applies throughout the Anti-Dumping Agreement .   
 (2) Pursuant to Article 2.1 of the Anti-Dumping Agreement  and Articles VI:1 and VI:2 of 
the GATT 1994, dumping and margins of dumping must be defined with respect to 
the product under investigation as a whole.   
 (3) The term "investigation" in Article 2.4.2 of the Anti-Dumping Agreement  does not 
refer exclusively to "original investig ations" conducted under Article 5 of the Anti-
Dumping Agreement .   
 (4) Article 2.4 of the Anti-Dumping Agreement  requires Members to ensure a "fair 
comparison" when making a determination of dumping in any anti-dumping 
proceeding.   
 (5) The assessment of dumping duties shall not exceed the margin of dumping 
established in accordance with Articles 2.4 and 2.4.2 of the Anti-Dumping Agreement.    
 (6) The use of the zeroing methodology distorts the margins of dumping and renders any 
determination of dumping based on that met hodology inconsistent with WTO rules.   
 
ARGUMENTS 
The definition of "dumping" contained in Article VI:1 of the GATT 1994 and Article 2.1 of the 
Anti-Dumping Agreement applies throughout the Agreement.    
5. Article 2.1 of the Anti-Dumping Agreement  reiterates the definition of "dumping" provided in 
Article VI:1 of GATT 1994 and specifies that this  definition applies "for the purpose of this 
Agreement".  TPKM is of the view, therefore, that  in any determination of "dumping", in any anti-
dumping proceeding, it is not permissible to establish a margin of dumping without reference to the various requirements of Article 2.    6. For example, the Appellate Body has stated in US – Zeroing (EC)  and US – Zeroing (Japan)  
that "the margin of dumping established for an e xporter or foreign producer operates as a ceiling for WT/DS350/R 
Page B-44  
 
 the total amount of anti-dumping duties".
1  This means that the requirements of Article 2 must be 
respected in establishing the margin of dumping in an assessment review.  TPKM notes that Article 9.3 provides expressly that the amount of duties shall not exceed a margin of dumping established in accordance with the rules of Article 2.    The existence of dumping and margins of dumping  must be determined with respect to the 
product as a whole.   
 
7. Both Article VI:1 of the GATT 1994 and Article 2.1 of the Anti-Dumping Agreement define 
dumping by reference to "a product".  Article 2.1 sp ecifies that the determination of dumping is based 
on a comparison of "the export price of the produ ct" and "the comparable price ... for the like 
product".  Thus, these texts expressly require that the existence of dumping and margins of dumping 
be determined for the product as a whole.    8. The Appellate Body has found that "Dumping, within the meaning of the Anti-Dumping 
Agreement , can therefore be found to exist only for th e product under investigation as a whole, and 
cannot be found to exist only for a type, model, or category of that product".
2  The Appellate Body 
has consistently found that the use of zeroing in a manner that does not fully take into account the 
actual prices of all export transactions is inconsistent with the Anti-Dumping Agreement .3   
 
The term "investigation" in Article 2.4.2 of the Anti-Dumping Agreement  does not refer 
exclusively to "original investigations".   
9. Contrary to the United States' interpretati on, TPKM's view, as expressed in its third party 
submission in US – Zeroing (EC) WT/DS294 , is that the term "investigation" as used in Article 2.4.2 
of the Anti-Dumping Agreement  does not refer exclusively to "ori ginal investigations" conducted in 
accordance with Article 5 of the Anti-Dumping Agreement .   
 
10. It should be noted that the Anti-Dumping Agreement  does not contain any definition of the 
term "investigation", although the term "investigatio n" is used in many different provisions of the 
Agreement .  However, the term does not have the sa me meaning in all the instances in which it 
appears in the Agreement .  While in certain provisions it must be interpreted narrowly, referring only 
to "original investigations", in other instances th e term has a broader meaning, covering original 
investigations as well as assessment and review proceedings.   
 11. For example, Article 6.8, which relates to th e use of facts available, refers to the term 
"investigation".  However, it is accepted that the us e of facts available is not limited to "original 
investigations".  Indeed, as far as Article 6 is concerned, Article 11.4 of the Agreement  expressly 
provides that the provisions of Article 6 regarding evidence and procedure shall apply to any "review" 
carried out under this Article, i.e. under Article 11.  The existence of this cr oss-reference supports the 
view that the term "investigation" is capable of  referring to proceedings additional to "original 
investigations".  Any interpretation to the contrary would lead to the absurd result, for example, that 
Article 6.8 would not be applicable to du ty assessment proceedings under Article 9.   
                                                     
 
1 Appellate Body Report, United States – Laws, Regulations and Methodology for Calculating Dumping 
Margins (Zeroing), para. 130, WT/DS294/AB/R ;  Appellate Body Report,  United States – Measures Relating to 
Zeroing and Sunset Reviews,  para. 155, WT/DS322/AB/R.   
2 Appellate Body Report, United States – Final Dumping Determination on Softwood Lumber from 
Canada , para. 93, WT/DS264/AB/R.   
3 Appellate Body Report, European Communities – Anti-Dumping Duties on Imports of Cotton-Type Bed 
Linen from India , para. 55, WT/DS141/AB/R.  See also, Appellate Body Report, United States – Final Dumping 
Determination on Softwood Lumber from Canada , WT/DS264/AB/R;  Appellate Body Report, United States – 
Laws, Regulations and Methodology for Calculating Dumping Margins (Zeroing),  WT/DS294/AB/R ;  
Appellate Body Report,  United States – Measures Relating to Zeroing and Sunset Reviews,  WT/DS322/AB/R.    WT/DS350/R 
 Page B-45 
 
 
 12. TPKM believes that the word "investigation" must be interpreted in light of its specific 
context.  Even if they have different purposes, a ll types of anti-dumping proceedings involve the same 
kind of investigation of prices and costs in order to  determine and measure dumping.  In this respect, 
the purpose of Article 2 would be frustrated if, to gether with Articles 2.4 and 2.4.2, it were not 
generally applicable to assessment and sunset revi ews.  Therefore, TPKM considers the provisions of 
Article 2 are applicable not only to original i nvestigations but also to duty assessment and other 
reviews.    
Article 2.4 imposes a general obligation requiring Members to ensure a "fair comparison".   
13. Article 2.4 of the Anti-Dumping Agreement  establishes the fundamental obligation that "A 
fair comparison shall be made between the export price and the normal value".
4  This fair comparison 
is the only permissible means of determining or  measuring the existence of dumping under the Anti-
Dumping Agreement .   
 14. Furthermore, the fair comparison requirement  in Article 2.4 does not only apply to certain 
types of intermediate comparisons used to de termine margins of dumping;  instead, it applies 
whenever dumping margins are calculated, no matter how the comparisons are made.  As the Appellate Body stated in US – Corrosion- Resistant Steel , "should investigating authorities choose to 
rely upon dumping margins in making their likelihood determination, the calculation must conform to 
the disciplines of Article 2.4.  We see no other provisions in the Anti-Dumping Agreement  according 
to which Members may calculate dumping margins".
5   
 
15. To comply with the obligation to make a "fair comparison" between export prices and normal 
value, the investigating authority must take fu lly into account the prices of all relevant export 
transactions.  A "fair comparison" under Article 2.4 of Anti-Dumping Agreement  requires that the 
comparison be conducted in an objectively "fair" manner, in the sense of being equitable and 
balanced.  The comparison cannot prejudge the outcome and cannot contain a tendency to produce 
one outcome rather than another.  For this reason,  Article 2.4 entails an independent obligation to 
determine the relevant dumping margin by a fair method of comparison that takes fully into account 
the entirety of the actual prices of all sales of th e products under investigation.  The investigating 
authority cannot simply disregard or adjust the prices of some transactions in its calculation of the overall margin of dumping.   
 
The assessment of anti-dumping duties shall be based on the margin of dumping established in 
accordance with Article 2 of the Agreement.   
16. Article 9.3 of the Anti-Dumping Agreement , which determines the applicable rules for duty 
assessment proceedings, stipulates "the amount of the anti-dumping duty shall not exceed the margin 
of dumping as established under Article 2".  The Appe llate Body has reiterated this stipulation by 
stating "the margin of dumping established for an exporter or foreign producer operates as a ceiling  
for the total amount of anti-dumping duties".
6  This creates an unambiguous link between the 
dumping duty imposed, reassessed or collected a nd the disciplines in Article 2 governing the 
calculation of dumping margins.  Article 9.3 thus  expressly refers to Article 2 and requires the 
application of Article 2 to duty assessment proceed ings.  It follows that when calculating dumping 
margins in these proceedings, investigating authorit ies must do so in accordance with the rules of 
                                                      
4 Appellate Body Report, European Communities – Anti-Dumping Duties on Imports of Cotton-Type Bed 
Linen from India , para. 59, WT/DS141/AB/R.   
5 Appellate Body Report, United States – Sunset Review of Anti-Dumping Duties on Corrosion- Resistant 
Carbon Steel Flat Products from Japan , para.127, WT/DS244/AB/R.   
6 Appellate Body Report, United States – Laws, Regulations and Methodology for Calculating Dumping 
Margins (Zeroing), para.130, WT/DS294/AB/R ;  Appellate Body Report,  United States – Measures Relating 
and Sunset Reviews,  para.155, WT/DS322/AB/R .   WT/DS350/R 
Page B-46  
 
 Article 2, including, naturally, Article 2.4 and Article 2.4.2.
7  In other words, any determination of 
margins of dumping in a duty assessment review must fully comply with the requirements of Articles 2.4 and 2.4.2.    
The application of the zeroing methodology is  WTO-inconsistent in all anti-dumping 
proceedings.   
17. Under the zeroing methodology, the prices of certain export transactions are not fully taken 
into account in determining the overall margin of dumping for the product as a whole.  In these circumstances, the margin ceases to accurately refl ect the margin of dumping as a whole and, instead, 
is improperly based on the prices of a particular pa rt or category of that product.  The result is the 
systematic inflation of the dumping margins.  Such  a comparison does not provide a "fair" basis for 
determining the existence of dumping or measuring dumping margins for the product as a whole as required by Articles 2.4 and 2.4.2 of the Anti-Dumping Agreement,  and Articles VI:1 and VI:2 of the 
GATT 1944.    
18. In the United States' practice at dispute, th e USDOC determined the existence of dumping in 
the original investigations using the zeroing methodol ogy (so-called "model" zeroing).  In subsequent 
administrative reviews, the margin of dumping w as also determined by the use of zeroing in 
aggregating the results of transaction-to-average comparisons.  In sunset review proceedings, the 
USDOC relied on either the dumping margins calculated in the original investigation or a subsequent 
assessment review, both of which used zeroing, to determine whether the dumping was likely to 
continue or recur.  The potential consequences of this approach include the improper finding of the 
very existence of dumping, as well as the excessi ve imposition and collection of anti-dumping duties, 
and the improper continuation of anti-dumping measures in sunset reviews.    
19. The Appellate Body in US – Corrosion Steel  noted that "When investigating authorities use a 
zeroing methodology such as that examined in EC – Bed Linen  to calculate a dumping margin, 
whether in an original investigation or otherwise, that methodology will tend to inflate the margins calculated".
8  The Appellate Body also stated that there is an "inherent bias in a zeroing 
methodology".  Such bias "could, in some instances, turn a negative margin into a positive margin of 
dumping" and may "distort not only the magnitude of a dumping margin, but also result in a finding 
of the very existence of dumping".9  Thus, it is clear that the use of the zeroing methodology is 
inconsistent with the requirements of Article 2.4 and Article 2.4.2, not only in original investigations 
but also in other proceedings such as admi nistrative reviews and sunset reviews.   
 20. Accordingly, any determinati on in an original investigation, assessment review, or sunset 
review that relies on dumping margins that incorporate the zeroing methodology may be contrary not 
only to Articles 2.4 and 2.4.2 of the Anti-Dumping Agreement  and Articles VI:1 and VI:2 of the 
GATT 1944, but also Articles 2.1, 9.3, 11.1, 11.2 and 11.3 of the Anti-Dumping Agreement .   
 
CONCLUSION 
21. For the reasons discussed above, TPKM considers that, in line with the findings of previous 
Panels and the Appellate Body in similar cases that have found the zeroing methodology "as such" 
                                                     
 
7 Appellate Body Report, United States – Sunset Review of Anti-Dumping Duties on Corrosion- Resistant 
Carbon Steel Flat Products from Japan , para.135, WT/DS244/AB/R.   
8 As noted and confirmed by the Appellate Body, "the opening phrase of Article 2.1—"[f]or the purpose 
of this Agreement"—ind icates that the definition of "dumping" as c ontained in Article 2.1 applies to the entire 
Agreement, which includes, of course, Article 2.4.2." Appellate Body Report, United States – Final Dumping 
Determination on Softwood Lumber from Canada , para.93, WT/DS264/AB/R.   
9 Appellate Body Report, United States – Sunset Review of Anti-Dumping Duties on Corrosion- Resistant 
Carbon Steel Flat Products from Japan , para.135, WT/DS244/AB/R.    WT/DS350/R 
 Page B-47 
 
 
 and "as applied" inconsistent with the Anti-dumping Agreement , the United States' application of the 
zeroing methodology in all phases of its investig ations and reviews of  anti-dumping measures, 
including the determinations cited by the Eur opean Communities, are inconsistent with the Anti-
Dumping Agreement  in light of Articles 2.1, 2.4 and 2.4.2, and 9.3, 11.1, 11.2 and 11.3, as well as 
Articles VI:1 and VI:2 of the GATT 1944.   
 
22. In the interests of ensuring security and pr edictability in the multilateral trading system, 
TPKM encourages the Panel to find that, consistent w ith the previous findings of the Appellate Body, 
the use of zeroing, whether in investigations or re views, and regardless of the type of comparison 
employed, is inconsistent with the Anti-Dumping Agreement  and WTO provisions, and should be 
eliminated once and for all from all types of anti-dumping proceedings.   
  WT/DS350/R 
Page B-48  
 
 ANNEX B-5 
 
 
THIRD PARTY WRITTEN SUBMISSION  
OF THAILAND 
 
 
1. Thailand appreciates the opportunity to particip ate in this proceeding and to present its views 
to the Panel in this written submission.    2. Thailand reserved its right to participate as a third party in this proceeding under Article 10.2 
of the Dispute Settlement Understanding  due to its concern about the continued use of "zeroing" by 
the United States in the types of assessment and sunset review proceedings at issue before this Panel.  
In Thailand’s view, the use of zeroing in any circumstance is inconsistent with both the spirit and the 
substance of Article VI of the GATT 1994  and the Anti-Dumping Agreement .  In effect, the use of 
zeroing either artificially creates margins of dum ping where none would otherwise have been found 
or, at a minimum, artificially inflates margins of du mping in both original anti-dumping investigations 
and periodic reviews of dumping margins.   
 
3. Thailand generally supports the arguments made by the European Communities in its first 
written submission in this dispute regarding the inco nsistency of the use of zeroing in the challenged 
measures with the Anti-Dumping Agreement .  Thailand will not repeat those arguments.  Instead, 
Thailand would simply remind the Panel that the A ppellate Body's rulings to date on the issue of 
zeroing have coherently and consis tently addressed the numerous differe nt arguments put before it in 
each dispute, ranging from EC – Bed Linen  to the latest US – Zeroing (Japan) .  To summarize, the 
Appellate Body has held that whenever an inv estigating authority uses intermediate comparisons 
between subgroups of export prices and normal va lues – whether on a model-by-model, transaction-
by-transaction or any other basis – as a step to arrive at the overall dumping margin for that product, the investigating authority may not, in aggregating those intermediate comparisons, "zero" the results 
of some of those comparisons.   
 4. Thailand considers this principle to have b een fully and correctly reasoned by the Appellate 
Body and to apply equally and fully to the issues that  are before the Panel in this case.  Thailand notes 
that the dispute settlement system is intended to pr ovide security and predictability to the multilateral 
trading system.  Any departure by the Panel from th e principles enunciated by the Appellate Body in 
its previous reports runs the risk of undermini ng the security and predictability of the multilateral 
trading system and, specifically, the dispute settlement system.
1   
 5. In its first written submission, the United St ates has failed to provide any convincing legal 
ground for the Panel to depart from the reasoning of the Appellate Body in its previous decisions on 
the issue of zeroing.  Thailand will address briefly so me of the points made by the United States.   
 A. T
RANSACTION -SPECIFIC DUMPING  
6. First, the United States is incorrect to s uggest that dumping – within the meaning of the 
GATT 1994 or the Anti-Dumping Agreement  "may occur in a single transaction".2  The United States 
                                                      
1 See Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , para. 188 ("following 
the Appellate 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").   
2 See First Written Submission of the United Stat es of America, 12 September 2007, para. 84 et seq . 
("US Submission").    WT/DS350/R 
 Page B-49 
 
 
 relies on the 1960 Report of the Group of Experts to support this proposition.  However, the 
United States fails to note that the Group of Experts emphasised that a determination of both dumping 
and injury should be made for each importation.3  In that circumstance, there would be symmetry 
between the universe of goods with respect to whic h the determination of dumping and injury would 
be made and, therefore, the determinations could al so be said to be made with respect to the same 
"product".  However, the Group of Experts noted that  this was "clearly impracticable, particularly as 
regards to injury, and instead envisaged that these determinations would be made on the broader basis 
of a "pre-selected" product.  Accordingly, the Unite d States' reliance on the Group of Experts' Report 
as supporting the use of zeroing is misplaced.    
7. In addition, anti-dumping measures may be  imposed only against dumped goods that are 
found to cause or to threaten to cause injury to the domestic industry.  Measures cannot be imposed, 
therefore, unless there is symmetry between the universe of goods found to be dumped and the universe of goods found to be causing injury.  The United States' interpretation would permit dumping 
to be addressed on a transaction-specific basis, wi thout requiring the injury determination to be 
determined on the same basis.  Even at the st age of review proceedings, this would undermine the 
basic principle of Article VI of the GATT 1994 that dumping is to be condemned only if it causes or threatens to cause material injury.    B. P
ROSPECTIVE NORMAL VALUE SYSTEMS  
8. Thailand also disagrees with the United Stat es' argument that the European Communities' 
interpretation of Article 9.3 as requiring a determ ination of margins for the product as a whole is 
inconsistent with the existence of prospective normal value systems of assessment.  Thailand sees no 
difference between prospective normal value (PNV) and retrospective systems of assessment that has any bearing on the question of whether zeroing is consistent with the Anti-Dumping Agreement .   
 
9. Under a PNV system of assessment, following an investigation, in which the use of zeroing is 
not permitted, the authority uses the margin of dum ping established in the investigation to set up a 
PNV.  Importers must pay a duty equal to the di fference between the export price and the PNV on all 
subsequent transactions priced below the PNV.  Importers need not pay anything on imports priced 
above the PNV.  Under this system, the amount, if any, paid at the time of entry is based on the authority's margin determination in the original inve stigation, and does not reflect an actual margin of 
dumping on a particular transaction.  The United States (and in the panel in US – Zeroing (Japan) , 
which it quotes) is incorrect to say that in a PNV sy stem, liability is final at the time of importation.
4  
In fact, in a PNV system, the amount of the liability may not be final until the conclusion of any refund review conducted in accordan ce with Article 9.3.2 of the Anti-Dumping Agreement .
5   
 
10. Under a retrospective system, such as the Unite d States', the investigating authority uses the 
margin of dumping established in the investigati on, again in which zeroing is not permitted, to 
establish an ad valorem rate that will be applied to all imports to collect estimated duties at the time of 
                                                      
3 See US Submission, para. 86, citing Anti-Dumping and Countervailing Duties, Second Report of the 
Group of Experts, 27 May 1960, L/1141, BISD 9S/194, para. 7 ("Group of Experts").   
4 US Submission, para. 140.   
5 The availability of a review under Article 9.3.2 to determine whether a refund is due with respect to 
imports already made means that, contrary to the United States' views, PNC systems already include a 
"retrospective" component.  In practice, reviews occur less frequently in PNV systems than in retrospective 
systems, because (i) importers are le ss likely to request reviews in PNV sy stems where there was already a cap 
on their liability at the time of entry and, perhaps mo re importantly, (ii) at least under the US retrospective 
system, the domestic industry may also request review s in the hope that the importer's liability may be 
increased.  These various features of the two systems, however, have no direct bearing on whether zeroing may be used in determining margins of dumping in any proceeding subject to the disciplines of Article 2 of the Anti-
Dumping Agreement .   WT/DS350/R 
Page B-50  
 
 entry.  As with PNV systems, the amount paid at the time of entry is based on the authority's margin 
determination in the original investigation, a nd does not reflect an actual margin of dumping on a 
particular transaction.  Also similar to PNV systems, the amount of the final liability may not be determined until the completion of a review, in this  case conducted in accordance with Article 9.3.1 of 
the Anti-Dumping Agreement .   
 
11. The only substantive difference between PNV a nd retrospective systems, therefore, is that 
under PNV systems, the liability for anti-dumping duties at the time of entry is  limited to the amount 
by which the price falls below the target PNV and that the final liability is capped at that amount.  
Under the retrospective system, the importer must pa y estimated duties at the time of import even for 
sales for which the export price might exceed the nor mal value and, moreover, the importer's liability 
is not capped at that amount but might later be increased in a review under Article 9.3.1.   
 12. There are two fundamental problems with the United States' arguments based on PNV systems to support its position that zeroing is permis sible in reviews under its retrospective system.  
First, the United States incorrectly compares what happens in its reviews  under Article 9.3.1 with 
what happens at the time of entry  in PNV systems.  The appropriate comparison, however, would be 
between reviews conducted under Artic le 9.3.1 in retrospective syst ems with reviews conducted under 
Article 9.3.2 in PNV systems.  Both kinds of re views must be conducted in accordance with Article 2 
and must, therefore, determine a margin of dum ping for the "product" rather than individual 
transactions and must be based on a fair comparison within the meaning of Article 2.4.  In other 
words, the use of zeroing is not permitted in either kind of review.   
 13. Second, Thailand fails to understand how, as a ma tter either of textual interpretation or logic, 
the existence of a cap on the amount that an importe r must pay at the time of entry in PNV systems 
supports the United States' position that it is allowe d to use zeroing – which increases the liability for 
duties – in reviews conducted in a retrospective sy stem, in which there is no cap on the potential 
liability for duties.    14. For these reasons, Thailand urges this Panel to follow the reasoning and findings of the 
Appellate Body, and rule that as submitted by th e European Communities, the use of zeroing by the 
United States in original investigations and pe riodic reviews - regardless of the comparison 
methodology used - is inconsistent with its obligations under Article VI of the GATT 1994  and the 
Anti-Dumping Agreement .   
 15. Thailand looks forward to providing some add itional views to the Panel during the course of 
the Panel's meeting with the parties and third parties.   
 
  
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