WORLD TRADE  
ORGANIZATION  WT/DS344/3 
3 October 2006 
 
 (06-4769) 
 Original:   Spanish 
  
 
UNITED STATES – FINAL ANTI-DUMPING MEASURES 
ON STAINLESS STEEL FROM MEXICO 
 
Request for the Establishment of a Panel by Mexico
 
 
 
 The following communication, dated 2 October 2006, from the delegation of Mexico to the Chairman of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.  
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  Acting on instructions from the relevant Mexi can Government authorities, I hereby request 
the establishment of a panel pursuant to Articl es 4 and 6 of the WTO Understanding on Rules and 
Procedures Governing the Settlement of Disputes (D SU), Article XXIII of the General Agreement on 
Tariffs and Trade of 1994 (GATT 1994) and Article  17 of the Agreement on Implementation of 
Article VI of the General Agreement on Tariffs  and Trade of 1994 (Anti-Dumping Agreement), 
regarding the issues listed hereunder.  To that en d, we have requested a meeting of the Dispute 
Settlement Body on 13 October 2006:  
A. Consultations 
 On 26 May 2006, the Government of Mexico re quested consultations with the Government of 
the United States of America (United States) under Ar ticles 4 and 6 of the DSU, Article XXII:1 of the 
GATT 1994 and Article 17 of the Anti-Dumping Ag reement, regarding the laws, regulations, 
administrative practices, measures and methodologies for calculating dumping margins, including zeroing practices.
1  The consultations were held on 15  June 2006.  They allowed a better 
understanding of the parties' positions but failed to resolve the dispute. 
 
B. Measures 
 In the anti-dumping proceedings carried out by the United States Department of Commerce 
(USDOC) the United States uses the following methodologies to calculate dumping margins: 
 
 In original investigations, USDOC first s ubdivides reported domestic market and export sales 
(also known as "normal value" sales), using a "contro l number", into a series of "averaging groups" on 
a model-specific basis.  For each averaging group,  it compares normal value and export price, and 
takes as the "dumping margin" the amount by which normal value exceeds export price.  It then aggregates the results of the various model-based comparisons.  In doing so, however, it adds up only 
"positive" results, disregarding (treating as zero, or  "zeroing") the negative results (i.e. comparison 
results where the weighted-average export price fo r the model exceeds the weighted-average normal 
value).  This practice is known as "model zeroing".  Lastly, USDOC calculates the overall margin of 
dumping for the period of investigation by dividing the sum of the positive results (numerator) by the 
                                                     
 
1 WT/DS344/1;  G/L/778;  G/ADP/D67/1 (1 June 2006). WT/DS344/3 
Page 2  
 
  total value of all the export sales used in the comp arisons (including those with negative differences) 
(denominator).   In administrative reviews (i.e. when USDOC ca lculates the magnitude of dumping margins in 
order to assess an importer's final liability for payment of anti-dumping duties and the future 
percentage of the cash deposit), USDOC first subdi vides the comparisons of domestic market sales 
(also known as "normal value" sales), using a "contro l number", into a series of monthly "averaging 
groups" on a model-specific basis.  The comparis on is usually between e ach reported individual 
export transaction and the average normal value of the identical or most similar contemporaneous 
monthly averaging group to which it corresponds.  USDOC then adds together the results of these 
comparisons.  In doing so, however, it adds only th e "positive" results, disregarding (zeroing) the 
negative results (i.e. the results of a comparison where the individual export transaction price for the 
model exceeds the weighted-average normal value) .  This practice is known as "simple zeroing". 
 
• In order to determine the amount of cash  deposits, USDOC calculates an overall 
margin of dumping for the period of the admi nistrative review for the "class or kind 
of merchandise" by dividing the sum of the positive results (numerator) by the total 
value of all the export sales used in the comparisons (including those with negative 
results) (denominator). 
 
• In order to determine the amount of th e anti-dumping duties to be assessed, USDOC 
usually calculates the importer-specific amount by dividing the sum of the positive differences (numerator) of each importer by the total customs-entered value of each 
importer's export sales. 
  This means that the United States calculates a margin of dumping and collects anti-dumping 
duties in excess of the dumping actually done by the companies concerned.  The United States uses 
this methodology systematically in all administrative reviews. 
 
 The calculation methodologies described above ar e general measures applied on a prospective 
basis, and the United States implements them unde r the following laws, regulations, administrative 
procedures and measures:  
• Section 736, 751, 771 (35)(A) and (B), a nd section 777(A)(c) and (d) of the Tariff 
Act of 1930, as amended; 
 
• The Statement of Administrative Action that accompanied the Uruguay Round 
Agreements Act, H.R. Doc. No. 103-316, vol. I; 
 
• USDOC regulations codified at Title 19 of the United States Code of Federal 
Regulations, sections 351.212(b), 351.414(c), (d) and (e); 
 
• The Import Administration Anti-Dumping Manual (1997 edition), including the 
computer programme(s) to which it refers. 
  The calculation methodologies described above were applied by the United States respectively for determining the dumping margin in  the original anti-dumping investigation and for 
the final results of the administrative revi ews listed in the annex attached hereto. 
  WT/DS344/3 
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  C. Claims 
 1. As such claims  
 
 Mexico considers that the above-mentioned United States laws, regulations, administrative 
procedures, measures and methodologies for determining the dumping margin in original 
investigations and administrative reviews are incons istent as such with the obligations of the United 
States under the Marrakesh Agreement Establishing the World Trade Organization (WTO Agreement), the GATT 1994 and the Anti-Dumpi ng Agreement, and that they have resulted in 
the nullification or impairment of benefits accrui ng to Mexico under Article 3.8 of the DSU.  In 
particular, Mexico considers that the United Stat es' laws, regulations, administrative procedures, 
measures and methodologies for determining the margin of dumping in original investigations and in 
administrative reviews described above are, as su ch, inconsistent with at least the following 
provisions:  
• With respect to original investigations a nd administrative reviews:  Article 1 of the 
Anti-Dumping Agreement and Article VI:1  and VI:2 of the GATT 1994 as regards 
the zeroing methodologies and the conse quent imposition and collection of anti-
dumping duties; 
 
• With respect to original investigations: Articles 2.1, 2.4, and 2.4.2 of the Anti-
Dumping Agreement insofar as the comparison of normal value and export price is inconsistent with these provisions; 
 
• With respect to administrative reviews: Articles 2.1 and 2.4 of the Anti-Dumping 
Agreement insofar as the comparison of norma l value and export price is inconsistent 
with these provisions; 
 
• With respect to administrative reviews: Article 9 (including but not limited to 
Article 9.3) of the Anti-Dumping Agreem ent insofar as the measures result in the 
imposition and collection of an anti-dumpi ng duty in an amount in excess of the 
margin of dumping pursuant to Article 2 of the Anti-Dumping Agreement; 
 
• With respect to original investigations a nd administrative reviews: Article XVI:4 of 
the WTO Agreement and Article 18 of th e Anti-Dumping Agreement insofar as the 
United States has failed to take all necessary steps, of a general or particular character, to ensure the conformity of its laws, regulations, administrative procedures 
and measures with the provisions of the GATT 1994 and the Anti-Dumping 
Agreement. 
 
 2. As applied claims
 
  In the original investigation and administra tive reviews identified in the Annex attached 
hereto, the United States applied the laws, regul ations, administrative procedures, measures and 
methodologies described above.  Accordingly, Mexi co considers that the determinations made by 
USDOC and the subsequent determination of an ti-dumping duties and the fu ture cash deposits are 
inconsistent with the following provisions of the Anti-Dumping Agreement, the GATT 1994 and the 
WTO Agreement: 
 
• With respect to the original investigation: Article VI:1 and VI:2 of the GATT 1994, 
Articles 1, 2.1, 2.4, 2.4.2 and 18.4 of the Anti-Dumping Agreement, and Article XVI:4 of the WTO Agreement, for the reasons set forth above; WT/DS344/3 
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• With respect to the administrative reviews:  Article VI:1 and VI:2 of the GATT 1994, 
Articles 1, 2.1, 2.4, 9 (including, but not limited to Article 9.3) and 18.4 of the Anti-
Dumping Agreement, and Article XVI:4 of the WTO Agreement, for the reasons set forth above. 
 
D. Request 
 Accordingly, Mexico respectfully request s that a panel be established pursuant to 
Article XXIII of the GATT 1994, Articles 4 and 6 of the DSU and Article 17 of the Anti-Dumping 
Agreement.  The terms of reference shall be the te rms provided in Article 7 of the DSU.  Mexico asks 
that this request be placed on the agenda of the next meeting of the WTO Dispute Settlement Body. 
  WT/DS344/3 
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  ANNEX  
 
United States –Final Anti-Dumping Measures on Stainless Steel 
from Mexico 
(Investigation and Order) 
 
Specific Case No. 1  
  The measure
 
 
 This case concerns the imposition of anti-dum ping duties on certain stainless steel products 
from Mexico (USDOC case number A-201-822; 64 Fe deral Register (FR) 30790 of 8 June 1999 and 
64 FR 40560 of 27 July 1999).  The ad valorem  rate of the anti-dumping duty was 30.85 per cent for 
ThyssenKrupp Mexinox S.A. de C. V. and all other companies. 
 
Use of the zeroing methodology  
  In calculating the dumping margin in the original investigation of stainless steel from Mexico, USDOC utilized the zeroing methodology.  It thus disregarded results wher e the difference between 
the applicable normal value and the export price w as negative, i.e. where normal value was lower than 
export price. 
 Dumping margin without zeroing
 
  By using the above methodology, USDOC calculated a dumping margin of 30.85 per cent.  
Had it not used the zeroing methodology (i.e. had the comparison of the negative results been 
included), the dumping margin would have been lowe r.  The use of zeroing increased the exposure of 
ThyssenKrupp Mexinox S.A. de C.V. and led to  the imposition of excessive anti-dumping duties 
through the collection of excessive estimated duty deposits.   
United States –Final Anti-Dumping Measures on Stainless Steel 
from Mexico 
 
(First Administrative Review) 
 
Specific Case No. 2
 
  The measure
 
  This case concerns the imposition of anti-dumping duties on stainless steel from Mexico 
(USDOC case number A-201-822;  67 FR 6490 of 12 February 2002 and 67 FR 15542 of 
2 April 2002).  The review period was from January 1999 to June 2000 and the ad valorem  rate of the 
anti-dumping duties was 2.28 per cent for ThyssenKrupp Mexinox S.A. de C.V. 
 Use of the zeroing methodology
 
 
 In calculating the dumping margin in the firs t administrative review of stainless steel from 
Mexico, USDOC utilized the simple zeroing methodology, thereby disregarding results where the 
difference between the applicable normal value and the export price was negative, i.e. where normal 
value was lower than export price. WT/DS344/3 
Page 6  
 
   
Dumping margin without zeroing
 
  By using the above methodology, USDOC calculated a dumping margin of 2.28 per cent.  Had it not used the simple zeroing methodology (i.e. had the comparison of the negative results been 
included), the dumping margin would have been  6.02 per cent, and no anti-dumping duties would 
have been collected.   
United States –Final Anti-Dumping Measures on Stainless Steel 
from Mexico 
(Second Administrative Review) 
 
Specific Case No. 3
 
 
 
The measure  
  This case concerns the imposition of anti-dum ping duties on certain stainless steel products 
from Mexico (USDOC case number A-201-822;  68 FR 6889 of 11 February 2003 and 68 FR 13686 
of 20 March 2003).  The review period was from July 2000 to June 2001, and the ad valorem  rate of 
the anti-dumping duties was 6.15 per cent fo r ThyssenKrupp Mexinox S.A. de C.V. 
 Use of the zeroing methodology
 
  In calculating the dumping margin in the sec ond administrative review of stainless steel from 
Mexico, USDOC utilized the simple zeroing methodology, thereby disregarding results where the 
difference between the applicable normal value and the export price was negative, i.e. where normal 
value was lower than export price.  Dumping margin without zeroing
 
 
 By using the above methodology, USDOC calculated a dumping margin of 6.15 per cent.  
Had it not used the simple zeroing methodology (i.e. had the comparison of the negative results been 
included), the dumping margin would have been 1.83 per cent, and lower anti-dumping duties would have been collected.  
 
United States –Final Anti-Dumping Measures on Stainless Steel 
from Mexico 
(Third Administrative Review) 
 
Specific Case No. 4
 
 
 The measure
 
  This case concerns the imposition of anti-dumping duties on stainless steel from Mexico 
(USDOC case number A-201-822;  69 FR 6259 of 10  February 2004).  The review period was from 
July 2001 to June 2002, and the ad valorem  rate of the anti-dumping duties was 7.43 per cent for 
ThyssenKrupp Mexinox S.A. de C.V.   WT/DS344/3 
 Page 7 
 
 
  Use of the zeroing methodology  
  In calculating the dumping margin in the th ird administrative review of the anti-dumping 
investigation concerning certain stainless steel products from Mexico, USDOC utilized the simple 
zeroing methodology, thereby disregarding results where the difference be tween the applicable 
normal value and the export price was negative, i.e.  where normal value was lower than export price. 
 Dumping margin without zeroing
 
  By using the above methodology, USDOC calculated a dumping margin of 7.43 per cent.  
Had it not used the simple zeroing methodology (i.e. had the comparison of the negative results been 
included), the dumping margin would have been 4.96 per cent, and lower anti-dumping duties would have been collected.   
United States –Final Anti-Dumping Measures on Stainless Steel 
from Mexico 
(Fourth Administrative Review) 
 
Specific Case No. 5
 
 
The measure  
  This case concerns the imposition of anti-dumping duties on stainless steel from Mexico (USDOC case number A-201-822;  70 FR 3677 of  26 January 2005).  The review period was from 
July 2002 to June 2003, and the ad valorem  rate of the anti-dumping duties was 5.42 per cent for 
ThyssenKrupp Mexinox S.A. de C.V. 
 Use of the zeroing methodology
 
  In calculating the dumping margin in the fourth administrative review of stainless steel from Mexico, USDOC utilized the simple zeroing methodology, thereby disregarding results where the 
difference between the applicable normal value and the export price was negative, i.e. where normal 
value was lower than export price.  Dumping margin without zeroing
 
 
 By using the above methodology, USDOC calculated a dumping margin of 5.42 per cent.  
Had it not used the zeroing methodology (i.e. had the comparison of the negative results been included), the dumping margin would have been 1.54 per cent, and lower anti-dumping duties would have been collected.   
United States –Final Anti-Dumping Measures on Stainless Steel 
from Mexico 
(Fifth Administrative Review) 
 
Specific Case No. 6
 
 
The measure  
  This case concerns the imposition of anti-dumping duties on stainless steel from Mexico (USDOC case number A-201-822;  70 FR 73444 of 12 December 2005).  The review period was from WT/DS344/3 
Page 8  
 
  July 2003 to June 2004, and the ad valorem  rate of the anti-dumping duties was 2.96 per cent for 
ThyssenKrupp Mexinox S.A. de C.V.  Use of the zeroing methodology
 
 
 In calculating the dumping margin in the fifth administrative review of stainless steel from 
Mexico, USDOC utilized the simple zeroing methodology, thereby disregarding results where the 
difference between the applicable normal value and the export price was negative, i.e. where normal 
value was lower than export price.  
Dumping margin without zeroing
 
  By using the above methodology, USDOC calculated a dumping margin of 2.96 per cent.  Had it not used the zeroing methodology (i.e. had the comparison of the negative results been included), the dumping margin would have been  4.57 per cent, and no anti-dumping duties would 
have been collected. 
 
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