WORLD TRADE  
ORGANIZATION  TN/RL/W/215 
31 January 2008 
 (08-0469) 
Negotiating Group on Rules Original:   English 
  
 
PROHIBITION OF ZEROING 
 
Statement of Brazil;  Chile;  China;  Colombia;  Co sta Rica;  Hong Kong, China;  India;  Indonesia; 
Israel;  Japan;  Korea, Rep. of;  Mexico;  Norway;  Pakistan;  Singapore;  South Africa;  Switzerland; 
Separate Customs Territory of Taiwan, Penghu, Ki nmen and Matsu;  Thailand;  and Viet Nam  
  
 The Delegations of Brazil;  Chile;  China;  Colombia;  Costa Rica;  Hong Kong, China;  
India;  Indonesia;  Israel;  Japan;  Korea, Rep. of;  Mexico;  Norway;  Pakistan;  Singapore;  South 
Africa;  Switzerland;  Separate Customs Terr itory of Taiwan, Penghu, Kinmen and Matsu;  
Thailand;  and Viet Nam present this Working Do cument concerning the issue of zeroing under the 
Anti-Dumping Agreement (ADA).  This is without prejudice to the views the Delegations may have 
on other parts of the text. While we are committe d to the objectives of this document, we may 
reserve the right to further refine or co-spons or it with other Members at a later stage. 
 
_______________ 
 
I. Introduction  
 
We listened carefully to the discussion in the Negotiating Group in December 2007.  The vast 
majority of the Members supported the "Stateme nt on 'Zeroing' in the Anti-dumping Negotiations 
(TN/RL/W/214/Rev.3)".  They found that the Chair's text (TN/RL/W/213) lacked balance.  In this 
regard, the Chair invited the Membership to  express their views regarding the balance. 
 
The Chair's text, as it now stands, permits the practice of zeroing.  Zeroing is a biased and 
partial method for calculating the margin of dumping and inflates anti-dumping duties.  If the use of 
such practice prevails in the future, it could nullif y the results of trade liberalization efforts.  The 
Chair's text must serve the spirit of the Doha De velopment Agenda, which we understand to be to 
increase trade flows, enhance predictability, and provi de more transparency.  In Marrakech, Ministers 
expressed their determination to resist protectionist  pressure of all kinds.  They believed that trade 
liberalization and strengthened rules achieved in  the Uruguay Round would lead to a progressively 
more open world trading environment.  We call upon all Members to ensure that the Multilateral 
Trading System is not undermined through zeroing. 
 
Our negotiating objective is to clarify that zeroi ng is prohibited at all stages of procedures. 
The vast majority of Members were concerned about  the statement referring to alleged discrepancies 
between the Appellate Body and panels. We do not respond to the systemic issue here – i.e. a 
Member's criticism of the Appellate  Body. Instead we intend to solv e the issue constructively in the 
negotiations by reflecting actual discussions in  the Negotiating Group and respecting Members' 
reasonable expectations on continuing the depend ability, transparency and predictability for the 
Multilateral Trading System that were achieved during the last decade. We believe continued disputes 
between Members on zeroing should be avoided by cl early codifying the prohibition of zeroing at all 
stages of procedures under the DDA.  
 TN/RL/W/215 
Page 2  
 
  II. Discussion 
 
This Rules negotiation is aimed at clarifying  and improving disciplines under the Agreements 
on Implementation of Article VI of the GATT 1994.  To accomplish this purpose with respect to the 
calculation of margins of dumping, we propose the following modifications to the Chair's text:  
1. Clarification of general prohibition of the Zeroing methodology (Articles 2.4.2, 2.4.3 and 
9.3.1 New): 
 
The vast majority of Members correctly understand,  and wish to clarify, that the current text 
of the ADA prohibits zeroing in all antidumping proceedings as contemplated in GATT Article VI.  
The ADA also should observe and clarify the basic principle under GATT Article VI:2 that the 
amount of an AD duty shall not exceed the margin of dumping, which are calculated without zeroing.  We therefore propose to codify and clarify these ru les in the ADA by deleting the phrase "during the 
investigation phase" in Article 2.4.2, by modifying Article 2.4.3 of the Chair's text, and by deleting 
Article 9.3.1 New thereof. 
1 
 
2. The time period of transactions for which th e overall margin of dumping shall be calculated 
(Article 2.4.5):  
 
The ADA has no explicit provision with respect to the time period of transactions for which 
the overall margin of dumping for an exporter or pr oducer must be calculated.  We recall that 
Members agreed at the AD Committee that the peri od of data collection for dumping investigations 
should normally be one year, and in any case no less than six months.2  We propose that this 
agreement be codified in new Arti cle 2.4.5 of the ADA.  Please se e our draft text of Article 2.4.5 New 
below.  This discipline should apply to both inves tigations initiated pursuant to Article 5 and reviews 
pursuant to Article 9 or 11. 
 
3. Consistent use of the margin calculation methodology in reviews  
 
(1) Article 9.x  
 
We understand that an authority determines the existence of margins of dumping based on a 
methodology that the authority considers appropriate  for such determination in an investigation 
initiated pursuant to Article 5.  In any review of such determination and the margins of dumping, it 
would be most reasonable to re-examine the marg ins of dumping in accordance with the methodology 
used in the original determination. Indeed, an authority would not have any reasonable basis to 
deviate in a review from the methodology used in  the original determination absent compelling 
reasons found in the particular review, such as a fundamental change of circumstances.  The 
authorities also must adequately explain reasons for their determination.3  The application of different 
methodologies on an ad hoc  or results-oriented basis could result in potential manipulation of margins 
of dumping.  We thus propose that the ADA clar ify that the authorities must use the same 
methodology in subsequent margin determinations in reviews as th at which was used in the initial 
investigation absent an adequate explanation of the reasons on the basis of which the authorities 
decided to deviate from the methodology that they previously used. 
 
                                                      
1 We reaffirm the clear principle that "Zeroing" must be prohibited in all methods of comparison and in 
all AD proceedings.  We will work in order to improve and strengthen the disciplines regarding the second 
sentence of Article 2.4.2. 
2  See G/ADP/6. 
3  See Article 12.2.2 of the ADA.  TN/RL/W/215 
 Page 3 
 
 
  (2) Article 11.x  
 
Where an authority reviews the necessity to offset dumping under proceedings pursuant to 
Article 11.2 or 11.3, the authority may base its de termination on the current or past margins of 
dumping.  In such a case, the ADA  sets forth in Article 2.1 the fundamental discipline that such 
margin of dumping must be calculated in accordance with  the provisions of Article 2.  It is clear that 
this requirement applies throughout the ADA, due  to the language "for the purpose of this 
Agreement".  In the past, however, misunderstanding s of this discipline have been observed in the 
practices of some Members.  To avoid a recurrence of such confusion in the future, we propose that 
the ADA explicitly provide in Article 11 that ma rgins of dumping -- as the evidentiary basis for 
determinations under Article 11 -- must be  calculated pursuant to Article 2.  
 
III. Proposed modifications to the Chair's text: 
 
 For the reasons discussed above, we propose that Chair's text be modified as follows: 
 
Article 2.4.2:  
 
2.4.2 (first sentence) Subject to the provisions governing fair comparison in 
paragraph 4, the existence of margins of dumping in an investigation initiated 
pursuant to the Ar ticle 5 shall normally be established on the basis of 
comparison of a weighted average normal value with a weighted average of 
prices of all comparable export transactions or by a comparison of normal value and export prices on a transaction-to-transaction basis. (second sentence)… 
 
Article 2.4.3:
 
 
2.4.3 When the authorities aggregate the resu lts of multiple comparisons in order to 
establish the existence or extent of a margin of dumping, the provisions of 
this paragraph shall apply:  
   (i)
 when, in an investigation initiated pursuant to Article 5 and in 
a review pursuant to Article 9 or 11 , the authorities aggregate the 
results of multiple comparisons of a weighted average normal value 
with a weighted average of prices of all comparable export 
transactions,  they shall take into account the amount by which the 
export price exceeds the normal value for any of the comparisons.   
 
  (ii)  when, in an investigation initiated pursuant to Article 5, the 
authorities aggregate the results of multiple comparisons of no rmal 
value and export prices on a transaction -to-transaction basis or of 
multiple comparisons of individual export transactions to a weighted 
average normal value, they may  shall  not disregard the amount by 
which the export price exceeds the normal value for any of the comparisons.  
 
  (iii)
 when, in a review pursuant to Articles 9 or 11, the authorities 
aggregate the results of multiple comparisons, they may disregard the 
amount by which the export price exceeds the normal value for any of 
the comparisons.  
 TN/RL/W/215 
Page 4  
 
  Article 2.4.5
: 
 
2.4.5  For the purpose of this Agreement, an individual margin of dumping for an 
exporter or producer shall be determ ined with respect to all export 
transactions during a period of time which shall normally be one year and, in 
no case, less than six months . 
 
Article 9.x:  
 9.x  The provisions of Article 2 shall apply to all determinations pursuant to  paragraphs 3 and 5 of 
this Article.  The authorities shall normally use th e same methodologies consistently in determining a 
margin of dumping in an investigation initiate d pursuant to Article 5, and in subsequent 
determinations pursuant to paragraph 3.  If the authorities find that they cannot use the same 
methodology in a subsequent determination pursuant to paragraph 3, the authorities shall disclose a 
different methodology to be used  and give a full explanation of why such different methodology was 
used, in order to provide interested parties w ith a sufficient opportunity to make comments.   
 Article 9.3.1 New:
 
 
9.3.1 New A determination of fi nal liability for payment of anti -dumping duties, or of 
whether a duty in excess of the margin of dumping has been paid, may be made 
on the basis of (i) individual import tr ansactions, (ii) all import transactions by 
an importer from an exporter or produce r, or (iii) all import transactions from 
an exporter or producer.  In determining the existence or amount of liability for 
any duty, or the entitlement to any refund, the authorities may disregard the 
amount by which the export price exceeds the normal val ue for any 
comparisons.  
 Article 11.x:
 
 11.x  If the authorities base its determination on  the margin of dumping in a review under this 
Article, such margin of dumping shall be calculate d in accordance with the provisions of Article 2.  
 
 
__________