WT/DS350/R 
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  ANNEX C 
 
SECOND WRITTEN SU BMISSIONS BY  
THE PARTIES 
 
 
Contents Page 
Annex C-1 Second Written Submission of the European Communities C-2 
Annex C-2 Second Written Submission of the United States C-58 
 WT/DS350/R 
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  ANNEX C-1 
 
SECOND WRITTEN SU BMISSION OF THE  
EUROPEAN COMMUNITIES 
 
 
 
TABLE OF CONTENTS 
 
 
I. INTRODUCTION ................................................................................................................... .7 
II. PRELIMINARY LEGAL ISSUES – REBUTTAL ARGUMENT .......................................7  
A. APPLICABLE STANDARD OF REVIEW ..........................................................................................7  
B. OBJECTIVE ASSESSMENT OF THE MATTER AND ROLE OF PRECEDENT .......................................9  
III. SUBSTANTIVE LEGAL ISSUES – REBUTTAL ARGUMENT......................................14  
A. APPLICATION OR CONTINUED APPLICATION IN 18 ANTI-DUMPING MEASURES OF 
ANTI–DUMPING DUTIES AT A LEVEL WHICH EXCEEDS THE DUMPING MARGIN WHICH 
WOULD RESULT FROM THE CORRECT APPLICATION OF THE ANTI-DUMPING 
AGREEMENT ..............................................................................................................................1 4 
1. The Measures at issue.......................................................................................................... ...14 
2. Violation of Article XVI:4 of the Agreement Establishing the WTO ................................16  
B. THE ZEROING METHODOLOGY AS APPLIED IN 52 ANTI-DUMPING PROCEEDINGS , 
INCLUDING ORIGINAL INVESTIGATIONS , ADMINISTRATIVE REVIEW AND SUNSET 
REVIEW PROCEEDINGS ..............................................................................................................18  
1. Original Investigations ........................................................................................................ ...18 
2. Administrative Reviews......................................................................................................... .18 
(a) Articles 2.1 and 9.3 of the Anti-Dumping Agreement and Article VI of the GATT:  
the duty must not exceed the margin of dum ping as determined with respect to the 
product as a whole ............................................................................................................. .......18  
(b) The duty must not exceed the dumping margin established in accord ance with the fair 
comparison requirement under Article 2.4 of the Anti-Dumping Agreement ..........................22  
(i) Content of the "fair comparison"  requirement in Article 2.4 ...................................................22  
(ii) "Inherently biased" ............................................................................................................ .......23  
(iii) Unjustified imbalance .......................................................................................................... .....25  
(iv) Internal Inconsistency......................................................................................................... ......25  
(v) Unjustified discrimination ..................................................................................................... ...27 
(vi) Case-law confirming United Stat es' simple zeroing unfair.......................................................28  
(vii) Article 2.4.2 second sentence.................................................................................................. ..28 
(c) Violation of Article 2.4.2 of the Anti-Dumping Agreement.....................................................28  
(i) Method for comparing normal value and ex port price: asymmetrical method ........................29  
(ii) The word "investigation" in Article 2.4.2 of the Anti-Dumping Agreement .............................29   WT/DS350/R 
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  (iii) Applicable rules of Treaty interpretation..................................................................................29  
(iv) Ordinary meaning of the Phrase...............................................................................................31  
♦ Investig ation.................................................................................................................. .............. 31  
♦ Existence ...................................................................................................................... ............... 33  
♦ "during… phase" ................................................................................................................ ......... 33  
♦ The Phrase as a whole – Grammatical meaning.......................................................................... 34  
(v) Context of the Phrase.......................................................................................................... ......36  
♦ Article VI:2 of the GATT....................................................................................................... ..... 37  
♦ Article 2...................................................................................................................... ................. 38  
♦ Article 9.3.................................................................................................................... ................ 39  
♦ Article 5...................................................................................................................... ................. 40  
♦ Article 6...................................................................................................................... ................. 41  
♦ Article  18..................................................................................................................... ................ 42  
♦ Different types of anti-dumping pr oceeding and the wo rd "phase"............................................. 43  
(vi) Object and Purpose............................................................................................................. ......43  
(vii) No proof that Member intended special  meaning (Article 31(4) of the Vienna 
Convention).................................................................................................................... ...........44  
(viii) Preparatory Work ............................................................................................................... ......45  
(ix) Panel and Appellate Body  Reports referred to by the United States ........................................49  
(x) Article 2.4.2 second sentence.................................................................................................. ..51 
(d) Article 9.3 .................................................................................................................... .............52  
3. Sunset Reviews ................................................................................................................. .......57  
IV. CONCLUSIONS .................................................................................................................... .57 
 WT/DS350/R 
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  TABLE OF CASES 
 
 
Short Title Full Case Title and Citation 
Argentina – Poultry Panel Report, Argentina – Definitive An ti-Dumping Duties on 
Poultry from Brazil , WT/DS241/R, adopted 19 May 2003 
Brazil – Desiccated Coconut Appellate Body Report, Brazil – Measures Affecting Desiccated 
Coconut , WT/DS22/AB/R, adopted 20 March 1997 
Canada – Autos Appellate Body Report, Canada – Certain Measures Affecting the 
Automotive Industry , WT/DS139/AB/R, WT/D S142/AB/R, adopted 
19 June 2000 
Canada – Dairy Appellate Body Report, Canada – Measures Affecting the 
Importation of Milk and the Exportation of Dairy Products , 
WT/DS103/AB/R, WT/DS113/AB /R, and Corr.1 adopted 
27 October 1999 
EC – Asbestos Appellate Body Report, European Communities – Measures 
Affecting Asbestos and Asbe stos-Containing Products , 
WT/DS135/AB/R/, adopted 5 April 2001 
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 
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 
EC – Chicken Cuts (Brazil) Panel Report, European Communities – Customs Classification of 
Frozen Boneless Chicken Cuts, Complaint by Brazil, WT/DS269/R, 
adopted 25 September 2005, as mo dified by the Appellate Body 
Report, WT/DS269/AB/R  and WT/DS286/AB/R 
EC – Chicken Cuts 
(Thailand) Panel Report, European Communities – Customs Classification of 
Frozen Boneless Chicken Cuts, Complaint by Thailand, 
WT/DS286/R, adopted 25 Septem ber 2005, as modified by the 
Appellate Body Report, WT/D S269/AB/R and WT/DS286/AB/R 
EC – Chicken Cuts Appellate Body Report, European Communities – Customs 
Classification of Frozen Boneless Chicken Cuts , WT/DS269/AB/R 
and WT/DS286/AB/R, ad opted 25 September 2005 
EC – Computer Equipment  Appellate Body Report, European Communities – Customs 
Classification of Certai n Computer Equipment , WT/DS62/AB/R, 
WT/DS67/AB/R, WT/DS68/AB/R , adopted 22 June 1998, 
DSR 1998:V, 1851 
EC – Hormones (United States) Panel Report, EC Measures Concerning  Meat and Meat Products 
(Hormones), Complaint by the United States , WT/DS26/R/USA, 
adopted 13 February 1998, as m odified by the Appellate Body 
Report, WT/DS26/AB/R /, WT/DS48/AB/R  WT/DS350/R 
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  Short Title Full Case Title and Citation 
EC – Tube or Pipe Fittings Appellate Body Report, European Communities – Anti-Dumping 
Duties on Malleable Cast Iron Tube or Pipe Fittings from Brazil , 
WT/DS219/AB/R, adopted 18 August 2003 
Guatemala – Cement I Appellate Body Report, Guatemala – Anti-Dumping Investigation 
Regarding Portland Cement from Mexico , WT/DS60/AB/R, adopted 
25 November 1998 
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 
Korea – Alcoholic Beverages Appellate Body Report, Korea – Taxes on Alcoholic Beverages , 
WT/DS75/AB/R, WT/DS84/AB/R, adopted 17 February 1999 
Korea – Procurement Panel Report, Korea – Measures Affecting Government 
Procurement , WT/DS163/R, adopted 19 June 2000 
Thailand – H-Beams Appellate Body Report, Thailand – Anti-Dumping Duties on 
Angles, Shapes and Sections of Iron or Non-Alloy Steel and H-
Beams from Poland , WT/DS122/AB/R, adopted 5 April 2001 
US – Corrosion-Resistant 
Steel Sunset Review  Appellate Body Report, United States – Sunset Review of Anti-
Dumping Duties on Corrosion-Resistant Carbon Steel Flat 
Products from Japan , WT/DS244/AB/R, adopted 9 January 2004 
US – Countervailing 
Measures on Certain EC Products Panel Report, United States – Counterva iling Measures Concerning 
Certain Products from the European Communities , WT/DS212/R, 
adopted 8 January 2003, as modified  by the Appellate Body Report, 
WT/DS212/AB/R 
US – DRAMs Panel Report, United States – Anti-Dumping Duty on Dynamic 
Random Access Memory Semicondu ctors (DRAMs) of One Megabit 
or Above from Korea , WT/DS99/R, adopted 19 March 1999 
US – FSC (Article 21.5 – 
EC) Panel Report, United States – Tax Trea tment for "Foreign Sales 
Corporations" – Recourse to Article 21.5 of the DSU by the 
European Communities , WT/DS108/RW, adopted 29 January 2002, 
as modified by the Appellate Body Repor t, WT/DS108/AB/RW 
US – FSC (Article 21.5 – 
EC) Appellate Body Report, United States – Tax Treatment for "Foreign 
Sales Corporations" – Recourse  to Article 21.5 of the DSU 
by the European Communities , WT/DS108/AB/RW, adopted 
29 January 2002 
US – Gambling Appellate Body Report, United States – Measures Affecting the 
Cross-Border Supply of Gambling and Betting Services , 
WT/DS285/AB/R, adopted 20 April 2005 
US – Hot-Rolled Steel Panel Report, United States – Anti-Dumping Measures on Certain 
Hot-Rolled Steel Products from Japan , WT/DS184/R, as modified 
by the Appellate Body Report, WT/DS184/AB/R 
US – Hot-Rolled Steel  Appellate Body Report, United States – Anti-Dumping Measures on 
Certain Hot-Rolled St eel Products from Japan , WT/DS184/AB/R, 
adopted 23 August 2001 WT/DS350/R 
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  Short Title Full Case Title and Citation 
US – OCTG Sunset Reviews Appellate Body Report, United States – Sunset Reviews of Anti-
Dumping Measures on Oil Country Tubular Goods from Argentina , 
WT/DS268/AB/R, adopted 17 December 2004 
US – Offset Act (Byrd 
Amendment) Appellate Body Report, United States – Continued Dumping and 
Subsidy Offset Act of 2000 , WT/DS217/DS234/AB/R, adopted 
27 January 2003 
US – Shrimp (Article 21.5 – Malaysia)  Appellate Body Report, United States – Import Prohibition of 
Certain Shrimp and Shrimp Products – Recourse to Article 21.5 of 
the DSU by Malaysia , WT/DS58/AB/RW, adopted 
21 November 2001 
US – Softwood Lumber IV Appellate Body Report, United States – Final Countervailing Duty 
Determination With Respect to Certain Softwood Lumber from 
Canada , WT/DS257/AB/R, adopted 17 February 2004 
US – Softwood Lumber V  Panel Report, United States – Final Du mping Determination on 
Softwood Lumber from Canada , WT/DS264/R, 13 April 2004 
US – Softwood Lumber V Appellate Body Report, United States – Final Dumping 
Determination on Softwood Lumber from Canada , 
WT/DS264/AB/R, 31 August 2004 
US – Softwood Lumber V (Article 21.5)  Appellate Body Report, United States – Final Dumping 
Determination on Softwood Lumber from Canada , 
WT/DS264/AB/R, adopted 31 August 2004 
US – Stainless Steel Panel Report, United States – Anti-Dumping Measures on Stainless 
Steel Plate in Coils and Stainless Steel Sheet and Strip from Korea , 
WT/DS179/R, adopted 1 February 2001 
US – Underwear Appellate Body Report, United States – Restrictions on Imports of 
Cotton and Man-made Fibre Underwear , WT/DS24/AB/R, 
adopted 25 February 1997 
US – Upland Cotton Appellate Body Report, United States – Subsidies on Upland 
Cotton , WT/DS267/AB/R, adopted 21 March 2005 
US – Wool Shirts and 
Blouses Appellate Body Report, United States – Measures Affecting 
Imports of Woven Wool Shirts and Blouses from India , 
WT/DS33/AB/R and Corr. 1, adopted 23 May 1997 
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 (EC) Panel Report, United States – Laws, Regulations and Methodology 
for Calculating Dumping Margins ("Zeroing") , WT/DS294/R, 
adopted 9 May 2006, as modified by the Appellate Body Report, 
WT/DS294/AB/R  
US – Zeroing (Japan) Appellate Body Report, United States – Measures Relating to 
Zeroing and Sunset Reviews , WT/DS322/AB/R, adopted 
23 January 2007 
US – Zeroing (Japan) Panel Report, United States – Measures Relating to Zeroing and 
Sunset Reviews , WT/DS322/R, adopted 23 January 2007, as 
modified by the Appellate Body Report, WT/DS322/AB/R 
  WT/DS350/R 
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  I. INTRODUCTION 
1. The European Communities has never seen a WTO Member in such an isolated and 
entrenched position as the United States in this disput e.  All third parties in this case which have made 
either written submissions1 and/or oral statements2 during the first substantive meeting of the Panel 
have expressly supported the position of the European  Communities, underlying the absurdity of the 
position of the United States in view of the obvious interpretation of the rules and the clear case-law 
of the Appellate Body.    2. What is striking in the First Written Subm ission of the United States is the absence of 
reference to the Vienna Convention on the Law of  Treaties while Article 3.2 of the DSU clearly 
imposes the Vienna Convention as the central interpretative tool of WTO rules.   
 3. In fact, the US line of arguments is result-or iented.  It starts with the result it intends to 
achieve, namely justifying the zeroing method as be ing WTO-consistent and tries to find arguments 
supporting it, which are however not in accordance w ith the principles of treaty interpretation.   
 
4. The correct interpretation of the relevant provisions of the Anti-Dumping Agreement  and of 
the GATT 1994  has been clarified by the Appellate Body wh ich concluded, in a clear and consistent 
case-law, that the US zeroing methodology in original and in review investigations which is used in 
the various measures challenged in this dis pute is inconsistent with WTO rules.   
 
5. Regarding more specifically Article 2.4.2 of the Anti-Dumping Agreement , the United States 
focuses its defence on the meaning of the phrase "t he existence of margins of dumping during the 
investigation phase" (the "Phrase"), arguing th at this Phrase in Article 2.4.2 of the Anti-Dumping 
Agreement  has a limited meaning, i.e. that of the inve stigation to determine the existence, degree and 
effect of any alleged dumping.  This interpretation is, however, not a permissible interpretation, that is 
one "which is found to be appropr iate after application of the pertinent rules of the Vienna 
Convention".  Indeed, as the European Communiti es will explain in detail below, pursuant to a 
systematic application of the interpretative rules in  the Vienna Convention, it is not permissible to 
interpret the Phrase in the manner a dvocated by the United States.   
 6. The European Communities offers the Panel an  interpretation that not only respects all the 
principles of treaty interpretation but also makes economic and legal sense of all the relevant treaty 
terms and respects the overall design and architect ure of the provisions concerned and of the Anti-
Dumping Agreement  as a whole.   
 7. In this Second Written Submission, the Eur opean Communities would (again) like to examine 
in the light of the agreed rules of interpretati on of the Vienna Convention the various provisions 
concerned, notably Article XVI:4 of the WTO Agreement;  Article 2.1 of the Anti-Dumping 
Agreemen t and Article VI:1 and VI:2 of the GATT 1994 ;  Article 2.4 of the Anti-Dumping Agreement ;  
Article 2.4.2 of the Anti-Dumping Agreement  and Article 9.3 of the Anti-Dumping Agreement .   
 
II. PRELIMINARY LEGAL ISSUES – REBUTTAL ARGUMENT 
A. A
PPLICABLE STANDARD OF REVIEW  
8. It is not disputed that the standard of review which is applicable to this  Panel is to be found in 
Article 11 of the Understanding on  Rules and Procedures Governing the Settlement of Disputes (the 
                                                      
1 Japan;  Korea;  Norway and Thailand.   
2 Brazil;  India;  Japan;  Korea;  Mexico;  Norw ay and the Separate Customs Territory of Taiwan, 
Penghu, Kinmen and Matsu.   WT/DS350/R 
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  "DSU") as complemented by Article 17.6 of the Anti-Dumping Agreement , in particular 
Article 17.6(ii) which concerns the Panel's legal interpretation of the Anti-Dumping Agreement .   
 9. Article 17.6(ii) provides that:  
The panel shall interpret the relevant pr ovisions of the Agreement in accordance 
with customary rules of interpretation of public international law.  Where the panel 
finds that a relevant provision of the Agreement admits of more than one 
permissible interpretation, the panel sha ll find the authorities' measure to be in 
conformity with the Agreement if it rests upon one of those permissible 
interpretations.   
 10. The Appellate Body clarified in US – Hot Rolled Steel  that:   
 
[T]he second sentence of Article 17.6(ii) presupposes  that application of the rules of 
treaty interpretation in Articles 31 and 32 of the Vienna Convention  could give rise 
to, at least, two interpretations of some provisions of the Anti-Dumping Agreement , 
which, under that Convention, would both be ' permissible  interpretations'.  In that 
event, a measure is deemed to be in co nformity with the Anti-Dumping Agreement 
'if it rests upon one of those permissible interpretations'.
3   
 
11. It follows that, under Article 17.6(ii) of the Anti-Dumping Agreement , panels are obliged to 
determine whether a measure rests upon an inte rpretation of the relevant provisions of the Anti-
Dumping Agreement  which is permissible under the rules of treaty interpretation in Articles 31 
and 32 of the Vienna Convention .  In other words, "a permissible interpretation is one which is found 
to be appropriate after  application of the pertinent rules of the Vienna Convention ".4   
 
12. The Appellate Body thus clarif ied that Article 17.6(ii) of the Anti-Dumping Agreement  does 
not call for "deference" to any "possi ble" interpretation.  It is only if, after applying the interpretative 
rules of the Vienna Convention, two competing interp retations are found to be of equal merit, that the 
possibility of concluding  that both are "permissible" arises.    
 
13. In this case, the United States submits that th ere may be "multiple permissible interpretations 
of particular provisions of the AD Agreement".5  According to the United States, "negotiators" would 
have left a number of issues unresolved and the appl ication of rules of interpretation would therefore 
lead to more than one permissible interp retation with respect to a given provision.6   
 
14. However, as the European Communities expl ained in its First Written Submission and will 
explain in further detail in the present submission, th e interpretation of the relevant provisions of the 
GATT 1994  and the Anti-Dumping Agreement  put forward by the United States is not a "permissible 
interpretation" within the meaning of Article 17.6(ii) of the Anti-Dumping Agreement  given that it is 
precluded by the correct application of the rules of the Vienna Convention.    
15. Deciding whether an interpretation constitutes a "permissible" interpretation is the essence of 
the role of panels, and particular ly the Appellate Body, when applyi ng Article 3.2 of the DSU in order 
                                                     
 
3 Appellate Body Report, US – Hot Rolled Steel , para. 59.   
4 Appellate Body Report, US – Hot Rolled Steel , paras. 59 - 60.  Appellate Body Report, US – 
Softwood Lumber V , paras. 113 - 116;  Appellate Body Report, EC – Bed Linen (Article 21.5 – India) , 
paras. 118;  Appellate Body Report, Thailand – H-Beams , paras. 121 - 128;  Appellate Body Report, EC – Bed 
Linen , paras. 63 - 65.   
5 US First Written Submission, para. 27.   
6 US First Written Submission, para. 26.    WT/DS350/R 
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  to clarify the meaning of the covered agreements , and particularly when dealing with appeals 
concerning questions of legal interpretation, pursu ant to Article 17.6 of the DSU.  The Appellate 
Body has made clear in various disputes that th ere is only one permissible interpretation of the 
relevant provisions of the GATT 1994  and the Anti-Dumping Agreement , following which maintaining 
zeroing procedures in administrative reviews and sunset reviews is not permitted.   
 
16. Indeed, in US – Zeroing (Japan) , the Appellate Body clarified that:   
 
In our analysis, we have been mindful of the standard of review provided in 
Article 17.6(ii).  However, we consider th at there is no room for recourse to the 
second sentence of Article 17.6(ii) in this a ppeal.  This is because, in our view, 
Articles 2.4, 2.4.2, 9.3, 9.5 and 11.3 of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the GATT 1994 , when interpreted in accordance with 
customary rules of public international la w, as required by the first sentence of 
Article 17.6(ii), do not admit of another in terpretation of these provisions as far as 
the issue of zeroing before us is concerned.
7   
 17. Similarly, in US – Zeroing (EC) , the Appellate Body concluded that:   
 
In our analysis of whether the zeroing me thodology, as applied by United States in 
the administrative reviews at issue, is inconsistent with Article 9.3 of the Anti-
Dumping Agreement and Article VI:2 of the GATT 1994 , we have been mindful of 
the standard of review set out in Article 17.6(ii) of the Anti-Dumping Agreement .  
Article 9.3 of the Anti-Dumping Agreement , and Article VI:2 of the GATT 1994 , 
when interpreted in accordan ce with customary rules of interpretation of public 
international law, as required by Article 17. 6(ii), do not, in our view, allow the use 
of the methodology applied by the United States in the administrative reviews at 
issue.  This is so because, as expl ained above, the methodology applied by the 
USDOC in the administrative reviews at  issue results in amounts of assessed anti-
dumping duties that exceed the foreign produ cers' or exporters' margins of dumping.  
Yet, Article 9.3 clearly stipulates that "the amount of the anti-dumping duty shall not exceed the margin of dumping as established under Article 2."  Similarly, 
Article VI:2 of the GATT 1994  provides that "[i]n order to offset 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."
8   
 18. In these prior cases, the Appellate  Body has clearly rejected th e interpretations put forward by 
the United States of Article VI:1 and VI:2 of the GATT 1994  and Articles 2.1, 2.4, 2.4.2 and 9.3 
and 11.3 of the Anti-Dumping Agreement  as being "permissible" interpretations within the meaning of 
Article 17.6(ii) of the Anti-Dumping Agreement .   
 B. O
BJECTIVE ASSESSMENT OF THE MATTER AND ROLE OF PRECEDENT  
19. In its First Written Submission, the Europ ean Communities submitted that (i) there is a 
substantial and consistent case- law of the Appellate Body whic h has concluded that zeroing in 
weighted average-to-weighted average and trans action-to-transaction comparisons in original 
investigations, in weighted average-to-transaction comparisons in administrative review and sunset 
review investigations is  inconsistent with the Anti-Dumping Agreement  and the GATT 1994  and 
that (ii) this Panel should follow this existing and c onsistent case-law, taking into account in particular 
the "security and predictability" which the dispute settlement system must provide to the multilateral 
                                                      
7 Appellate Body Report, US – Zeroing (Japan) , para. 189.   
8 Appellate Body Report, US – Zeroing (EC) , para. 134.   WT/DS350/R 
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  trading system.  It is what would be expected fro m this Panel in particular given that this case-law 
emanates from the Appellate Body, has been repeat ed in several cases consistently and has already 
addressed the arguments which are raised  by the United States in this case.
9   
 20. Disagreeing with the findings of the Appellate  Body in these prior cases, the United States 
urges this Panel to disregard these findings.  More  precisely, the United States urges this Panel to 
disregard the findings of the Appellate Body in prio r cases when they are contradictory to its position 
but relies on other findings of the Appellate Body in those same cases where they allegedly support its 
position.
10  Apparently, the findings made in prior cas es would only be legally relevant where they 
allegedly support the US position and would become  legally irrelevant where they oppose the US 
position.  This would depend, according to th e United States, on whether these findings are 
"persuasive".11  This is clearly a legally erroneous presenta tion of the question of the relevance of past 
DSB reports of the Dispute Settlement Body (the "DSB ") to present disputes.  Either findings in prior 
cases are legally relevant or they are not – and this  cannot depend on the unilateral will of one of the 
Members.   
 
21. The European Communities cons iders that the reports of panels (as eventually modified by 
the Appellate Body) and the Appellate Body in pr ior cases, which will be adopted by the DSB absent 
consensus opposing adoption, are legally relevant to subsequent panels.   
 22. In this case, the United States not only request s the Panel to disregard the findings of the 
Appellate Body which were adopted by the DSB but to follow instead the panel findings in those 
same cases that were never adopted by the DSB since they have been reversed by the Appellate Body.   
 23. Indeed, the panels' reports referred to by the United States
12 which have concluded that 
certain forms of zeroing were c onsistent with the GATT and the Anti-Dumping Agreement  have all  
been reversed on appeal by the Appellate Body wh ich has considered the panels' legal interpretation 
in those cases as being inconsistent with the provisi ons of the relevant Agreements.  In all those 
disputes, the reports that have been adopted by the DSB include the Appellate Body report and the 
Panel report as modified by the Appellate Body report .   
 24. As noted by the Appellate Body, it is the "a dopted panel reports […] [t hat] create legitimate 
expectations among WTO Members, and, therefore,  should be taken into account where they are 
relevant to any dispute".
13  In other words, such findings – which will have been adopted by the DSB 
absent consensus opposing adoption – are legally releva nt.  If the Appellate Body did not rule out, in 
Japan – Alcoholic Beverages II , that reasoning contained in an unadopted GATT panel report can 
nevertheless provide useful guidance to a subsequent  panel, the Appellate Body thereby certainly did 
not mean WTO panel findings which it has itself re versed.  Consequently, the findings of the panels 
invoked by the United States in various points of its  First Written Submission are not legally relevant 
to the extent that they have been reversed by the Appellate Body and have not been adopted by 
the DSB.  25. In its First Written Submission, the United Stat es argues that by requesting this Panel not to 
deviate from prior Appellate Body reports addressing the issue of zeroing, "the EC is urging the 
                                                     
 
9 EC First Written Submission, paras. 62 – 110.   
10 e.g. US First Written Submission, para. 133 footnote 152 (the US agrees with the findings of the AB 
in US – Zeroing (Japan) ) and para. 143 (the US disputes the findings of the AB in US – Zeroing (Japan) ).   
11 US First Written Submission, para.33;  US Closing Statement at the First Substantive Meeting of the 
Panel, para. 3.   
12 The United States refers frequently to the reports of the panels in US – Zeroing (Japan) , US – 
Zeroing (EC)  and US – Softwood Lumber Dumping (Article 21.5) .   
13 Appellate Body Report, Japan – Alcoholic Taxes on Beverages II , p. 14.    WT/DS350/R 
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  Panel […] to ignore the Panel's obligation under Article 11 of the DSU to conduct an objective 
assessment of the matter before it".14   
 26. The European Communities strongly disagrees with this.  On the contrary, ignoring the findings of the Appellate Body in previous disputes would be inconsistent with the Panel's obligation 
under Article 11 of the DSU.  Indeed, if interpreted properly, this provision implies that panels should 
follow the findings of the Appellate Body in earlie r disputes relating to precisely the same matter.   
 27. Article 11 of the DSU provides that:    
[t]he function of panels is to assist the DSB in discharging its responsibilities under 
this understanding and the cove red agreements.  Accordingly, a panel should make 
an objective assessment of the matter befo re it, including an objective assessment of 
the facts of the case and the applicability of and conformity with the relevant 
covered agreements , and make such other findings as will assist the DSB in making 
the recommendations or in giving the rulings provided for in the covered 
agreements. (emphasis added) 
 28. In accordance with the rules of treaty interp retation in the Vienna C onvention, this provision, 
which includes two sentences, must be interprete d in good faith in accordance with the ordinary 
meaning to be given to the terms of the treaty in  their context and in the light of its object and 
purpose.
15   
 29. The first sentence of Article 11 of the DSU clarif ies that the function of panels is to assist the 
DSB
 in discharging its responsibilities.  To the extent  that the same issues have  been examined by a 
panel and/or the Appellate Body in earlier disput es whose reports have been adopted by the DSB , it is 
to be expected that a panel in a subsequent case follows the findings of the panel/Appellate Body laid 
down in the reports as adopted by the DSB .   
 30. As noted above, the reports of panels whic h concluded that zeroing was consistent with the 
covered Agreements have all b een reversed on appeal and in those cases the DSB adopted the 
findings of the Appellate Body.  To the extent that they have been adopted by the DSB, these reports 
create legitimate expectations among WTO Members,  and, therefore, should be taken into account 
where they are relevant to a subsequent dispute.
16   
 31. The second sentence of Article 11 of the DSU requests panels to make an objective assessment of the matter before it.  The matte r covers both factual and legal issues.   
 
32. Article 3.2 of the DSU provides strong contex tual support for the interpretation of Article 11 
of the DSU.  Article 3.2 of the DSU provides that:    
The dispute settlement system of the WTO is a central element in providing security 
and predictability to the multilateral tradi ng system.  The Members recognize that it 
serves to preserve the rights and obliga tions of Members under the covered 
agreements, and to clarify the existing pr ovisions of those agreements in accordance 
with customary rules of interpretation of public international law.  Recommendations and rulings of the DSB cannot add to or diminish the rights and obligations provided in th e covered agreements.   
                                                     
 
14 US First Written Submission, para. 29.   
15 Article 31 of the Vienna Convention on the Law of Treaties.   
16 Appellate Body Report, Japan – Alcoholic Taxes on Beverages II , p. 14 and Appellate Body Report, 
US – Shrimp (Article 21.5 – Malaysia) , para. 107.   WT/DS350/R 
Page C-12  
 
  33. In its First Written Submission, the Europ ean Communities highlighted the importance for 
this Panel not depart from the previ ous rulings of the Appellate Body, inter alia , in view of the 
purpose of the dispute settlement system in Article 3.2 to "provide security and predictability to the 
multilateral trading system".
17   
 
34. The United States argues that "read in its contex t in Article 3.2, the reference to security and 
predictability in Article 3.2 suppor ts the opposite conclusion [that th is Panel should not follow the 
reasoning set forth in any Appellate Body report]".  The United States further states that "[a] result which adds to or diminishes the rights or obligati ons of Members provided in the covered agreements 
is prohibited by the third sentence of Article 3.2 and is therefore the antithesis of the "security and 
predictability" referred to in the first sentence of  Article 3.2.  This conclusion does not change 
because the result in question had prev iously been reached by the AB".
18   
 35. What the United States is thus actually saying is that the findings reached by the Appellate Body in the previous disputes which have f ound zeroing to be inconsistent with the WTO 
Agreements, add to or diminish the rights or oblig ations of WTO Members and therefore that this 
Panel should not follow them as th is would not ensure security and predictability to the system.   
 36. This statement of the United States is highly worrying.  It means that the United States not 
only disputes the fact that the Appellate Body corr ectly interpreted WTO law in those cases, but also 
that it is conducting its proceedings in accordan ce with the provisions of the DSU and more 
specifically that its findings are consistent with Article 3.2 of the DSU.   
 37. The Appellate Body is a standing body which has been established by the DSB. Hierarchically superior to panels, the Appellate  Body's function is to "hear appeals from panel 
cases"
19, the "appeal [being] limited to issues of law covered in the panel report and legal 
interpretations developed by the panel".20  In discharging its function, the Appellate Body, just as 
panels must do, must apply the requirements set forth in Article 3.2.  Thus, as a matter of principle, 
the Appellate Body's findings comply with the requ irements laid down in Article 3.2 of the DSU.  
Accordingly, the findings of the Appellate Body shou ld be followed by a panel in subsequent cases, in 
particular when the issues which ar e examined are the same.  It cannot  be argued, as the United States 
does, that, as a matter of principle, the findings of the Appellate Body should not be followed on the 
grounds that they add to or diminish the rights and obligations of WTO Members and are therefore 
inconsistent with Article 3.2 of the DSU.    38. The Appellate Body has expressly noted that:    
It was appropriate for the Panel, in dete rmining whether the SPB is a measure, to 
rely on the Appellate Body's conclusi on in that case.  Indeed, following the 
Appellate Body's conclusions in earlier dis putes is not only appropriate, but is what 
would be expected from panels , especially where the issues are the same .21 
(emphasis added) 
 
39. The European Communities is not arguing that  the DSU contains an express rule providing 
that panels are legally bound by the findings of the Appellate Body in prior cases, but following these 
findings is what would be expected from panels.  Panels should not depa rt, without good reasons, 
from the findings laid down in previous cases.  These principles are of particular relevance in this case 
                                                      
17 EC First Written Submission, para. 87.   
18 US First Written Submission, para. 32.   
19 DSU, Article 17.1.   
20 DSU, Article 17.6.   
21 Appellate Body Report, US – OCTG Sunset Reviews , para. 188.    WT/DS350/R 
 Page C-13 
 
 
  where the issues raised before this Panel are identical  to the issues examined by  the Appellate Body in 
US – Zeroing (Japan) , US – Zeroing (EC)  and US – Softwood Lumber (21.5) .   
 40. In other words, a proper interpretation of the standard of review of panels under Article 11 of 
the DSU implies that a panel, when assessing the app licability and the consistency of a measure with 
covered agreements, should follow the findings of the Appellate Body in prior cases.  Indeed, it 
follows from Article 3.2 of the DSU that these fi ndings are deemed to be consistent with the 
customary rules of interpretation of public intern ational law and that following these findings will 
enhance the security and predictability of the dispute settlement system.   
 
41. The United States is actually refusing to acknowledge that its arguments regarding zeroing 
have been fully considered by the Appellate Body and have in fact been rejected.   
 42. Finally, the European Communities would like to address a number of false and incorrect 
assertions  of the United States in its First Written Submission.   
 
43. First, the United States contends that that "t he EC, in relying so extensively on examples from 
outside the WTO dispute settlement context, highli ghts the fact that there is no support for its 
approach in the DSU".
22  This is incorrect.  As was explaine d above, there is strong support for the 
position that panels should follow the findings of panels and the Appella te Body in previous disputes, 
in particular Articles 11 and 3.2 of the DSU.  Furthe rmore, it is norm that in other dispute settlement 
systems, including those referenced by the Eur opean Communities, there is no express rule of 
"vertical precedent" in the legislation;  and yet this  does not preclude the application of such a rule by 
the dispute settlement system itself.  There is thus a very substantial analogy in this respect between 
those other dispute settlement systems and the DSU;   and it is the European Communities submission 
that that parallelism must of necessity extend  to the question of the relationship between 
hierarchically superior courts and hierarchically in ferior judicial instances – that is, between panel's 
and the Appellate Body.    44. Second, the United States submits that "the EC erroneously  argues that 'the WTO 
inconsistency of … [zeroing] has already been established in previous disputes".
23  This statement is 
incorrect as is demonstrated by the consistent case- law of the Appellate Body concluding that zeroing 
is inconsistent with the Anti-Dumping Agreement .   
 45. Third, the United States, in the absence of  valid counter-arguments, is trying to create 
confusion about the arguments submitted by the European Communities by saying that "the EC citations do not permit the Panel to simply adopt those findings here without an objective assessment 
of the facts at issue".
24  The European Communities has never argued that this Panel should not make 
an objective assessment of the facts.  Rather, in re viewing the facts of this case, and in making its 
objective assessment, this Panel should conclude th at the facts in this case are for all material 
purposes identical to the facts assessed in the pr evious disputes in which the Appellate Body 
concluded that zeroing was inconsistent with the Anti-Dumping Agreement  and the GATT.   
 
46. Fourth, in several paragraphs of its Writte n Submission, the United States argues that the 
Panel is not bound to apply the reasoning and fi ndings of the Appellate Body.  However, the 
European Communities disagrees with the view ex pressed by the United States according to which 
"Appellate Body reports should be taken into acc ount only to the extent that the reasoning is 
persuasive " and that "the reasoning in such reports may  be taken into account".25  As explained above, 
                                                      
22 US First Written Submission, para. 29.   
23 US First Written Submission, para. 30.   
24 US First Written Submission, para. 30.   
25 US First Written Submission, para. 33.   WT/DS350/R 
Page C-14  
 
  the findings of the Appellate Body are either legally relevant for the purpose of subsequent panels or 
they are not.  According to the European Communiti es, findings are legally relevant when they are 
included in reports that have been adopted by the DSB.    47. In conclusion, a proper interpretation of the st andard of review of panels requires a panel, 
when making an objective assessment of the matter be fore it, to follow the findings of previously 
adopted reports, in particular when the issues are the same.  In other words, panels are not simply 
entitled to follow these findings but should, as a matter of principle, do so.  This conclusion is even 
stronger in this case since (i) the findings in prev iously adopted reports are the findings of the 
Appellate Body which is hierarchically superior a nd only deals with issues of law;  (ii) these findings 
have been repeated in several cas es so that there is now a consistent line of interpretation and (iii) the 
Appellate Body examined the same issues as those ra ised in this case and has expressly rejected the 
arguments and the interpretation put forward by the United States.    
III. SUBSTANTIVE LEGAL ISSUES – REBUTTAL ARGUMENT 
A. A
PPLICATION OR CONTINUED APPLICATION IN 18 ANTI-DUMPING MEASURES OF ANTI–
DUMPING DUTIES AT A LEVEL WHICH EXCEEDS THE DUMPING MARGIN WHICH WOULD 
RESULT FROM THE CORRECT APPLICATION OF THE ANTI-DUMPING AGREEMENT  
1. The Measures at issue 
48. The first set of measures which the European  Communities challenges in this dispute is the 
application or continued application in the 18 an ti-dumping cases listed in the Annex to the Panel 
Request of anti-dumping duties which were calculate d or maintained in place pursuant to the most 
recent administrative review, or as the case may be, original proceeding or changed circumstances or 
sunset review proceedings at a level which exceeds the anti-dumping duty which would result from the correct application of the Anti-Dumping Agreement , i.e. without zeroing.   
 
49. In its First Written Submission, the United States submits that the claim concerning the 
continued application of, or the application of the specific anti-dumping duties resulting from the anti-
dumping orders enumerated from I to XVIII in the Annex "refers to an indeterminate number of alleged measures in connection with the 18 cases", "to the extent that the EC's request does not refer 
to the most recent identified measure".
26  The United States further submits that this claim "would 
challenge the calculation of anti-dumping duties in an  indeterminate number of current and/or future 
reviews that Commerce allegedly is concluding or  will conclude at some point in the future".27   
 50. By arguing that the claim of the European Co mmunities "refers to an indeterminate number of 
alleged measures", the United States is actually di sputing the characterisation of the continued 
application or application of an anti-dumping duty as a measure.  In other words, the United States is 
trying to create confusion between the two sets of  measures identified by the European Communities 
in the Panel Request:  on the one hand, the continue d application or application of an anti-dumping 
duty in the 18 cases identified by product and country of origin concerned, which has been calculated 
or maintained in place at a level exceeding th e anti-dumping margin which would result from the 
correct application of the Anti-Dumping Agreement ;  and on the other hand, the 52 anti-dumping 
proceedings.   
 
51. Similarly, during the substantive meeting with the Panel, the United States spent much time in 
trying to discuss the scope of this disput e and the measures being challenged by the 
European Communities in this case.   
                                                     
 
26 US First Written Submission, para. 51.   
27 US First Written Submission, para. 51.    WT/DS350/R 
 Page C-15 
 
 
  52. In particular, with respect to the "applica tion or continued application" of anti-dumping 
duties, the United States disputed the description of the first set of measures in the Panel Request as 
being "specific" in accordance with Article 6.2 of the DSU.28   
 53. However, the European Communities has clearly identified the precise content of the first set 
of measures being challenged:  that being a duty rate based on the use of the zeroing methodology 
which is being applied against imports of a specifi c product from a specific country.  In other words, 
the duties being currently applied in the 18 anti- dumping cases listed in the Annex to the Panel 
Request are all duties which have been calculate d and/or maintained pursuant to the zeroing 
methodology.  In US – Zeroing (EC)
29 and US – Zeroing (Japan)30, the Appellate Body has accepted 
that both the European Communities and Japan have d escribed the "precise content" in the context of 
the methodology itself.  It necessarily follows that what the European Comm unities has described in 
each of the 18 measures also meets the "precise content" requirement.    54. As noted by the Appellate Body in US – Corrosion Steel , in principle any act or omission 
attributable to a WTO Member can be a "measure" of that Member for purposes of WTO dispute 
settlement proceedings.
31  I n  Guatemala – Cement I , the Appellate Body also noted that "in the 
practice established under the GATT 1947, a "measure" may be any act of a Member, whether or not 
legally binding and it can include even non-binding administrative guidance by a government.  A measure can also be an omission or a failure to act on the part of a Member".
32  Moreover, in EC – 
Computer Equipment , the Appellate Body observed that a "duty" can be a "measure" subject to 
dispute settlement proceedings.33   
 55. There is thus no requirement as to the form of a "measure".  The United States is therefore wrong in saying that measures which can be challe nged cover either a framework law or original 
investigations, administrative review or sunset reviews.
34  The European Communities has in the 
Panel Request precisely identified the content of the me asure being challenged.  That is sufficient.  It 
is not necessary that the measure takes the form eith er of an original proceeding or an administrative 
review proceeding or a sunset review proceeding.    56. Furthermore, the European Communities submits  that there can reasonably be no dispute as to 
the existence of the 18 measures in the Panel Re quest.  The Annex to the Panel Request precisely 
identifies the 18 anti-dumping measures, by product a nd country concerned, mentioning the relevant 
places where the measures were published in the United States and the duty rates imposed.   
 57. The reference to the duty as a measur e is clear throughout Article VI of the GATT 1994  and 
the Anti-Dumping Agreement .  Thus, the title of Article VI of the GATT 1994  refers to "Anti-
dumping … Duties
";  and Article VI:2 of the GATT 1994  refers to "an anti-dumping duty ".  The title 
of the Anti-Dumping Agreement  states that it implements Article VI of the GATT 1994 ;  and Article 1 
of the Anti-Dumping Agreement , which is titled "principles", re fers to "[a]n anti-dumping measure ", 
confirming that the duty is conceived of  as a measure.  Article 7.2 of the Anti-Dumping Agreement  
expressly confirms that "[p]rovisional measures  may take the form of a provisional duty …".  The 
final sentence of Article 8.6 of the Anti-Dumping Agreement  similarly confirms the conceptual 
identity of "measures " and "duties ".  Articles 9.1, 9.2 and 9.3 of the Anti-Dumping Agreement  
repeatedly refer to the duty .  Article 11.1 of the Anti-Dumping Agreement  states that "[a]n anti-
                                                      
28 US Opening Statement at the First Panel Meeting, paras. 19 – 22.   
29 Appellate Body Report, US – Zeroing (EC) , paras. 185 – 205.   
30 Appellate Body Report, US – Zeroing (Japan) , para. 96.   
31 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Steel , para. 81.   
32 Appellate Body Report, Guatemala – Cement I , footnote 47.   
33 Appellate Body Report, EC – Computer Equipment , para. 65.   
34 US Opening Statement at the First Panel Meeting, para. 22.   WT/DS350/R 
Page C-16  
 
  dumping duty
 shall remain in force only as long as and to the extent necessary to counteract dumping 
which is causing injury".  The term "in force" is si gnificant, since that concept generally refers to a 
legal instrument, that is, a measure, which is here  equated with the "duty".  Article 11.2 refers 
repeatedly to the "duty ", and to the "termination" of the "duty " – again confirming the nature of the 
duty as a measure. Article 11.3 of the Anti-Dumping Agreement  is drafted in the same terms.  
Article 12.2.2 of the Anti-Dumping Agreement  refers again to the imposition of the "duty ".  The first 
sentence of Article 15 of the Anti-Dumping Agreement refers to "anti-dumping measures ", which is 
equated with the reference in the second sentence to "anti-dumping duties ".  Article 18.3.2 of the Anti-
Dumping Agreement  similarly refers to "anti-dumping measures ", that is, duties, being "imposed".   
58. For all of these reasons the European Co mmunities respectfully requests the Panel to 
conclude that the measures at issue duly before  the Panel include the 18 cases referred to by the 
European Communities; and respectfully requests th e Panel to make the findings in relation to 
these 18 measures that the European Commun ities considers are its right under the Anti-Dumping 
Agreement  and the DSU.   
 2. Violation of Article XVI:4 of the Agreement Establishing the WTO 
59. In its First Written Submission, the European  Communities submitted that the United States 
violates Article XVI:4 of the WTO Agreemen t, not only as a consequential claim ( i.e., when a 
violation of other provisions of the Anti-Dumping Agreement  has been found), but also as an 
independent claim of having laws, re gulations or administrative procedures not in conformity with the 
covered agreements, as declared by adopted DSB reports.
35  Indeed, the reports of the panels and the 
Appellate Body adopted by the DSB in prior disputes and finding the same zeroing methodologies 
challenged in the present proceeding inconsistent w ith the covered agreements create an independent 
obligation for the United States.    60. Once the interpretation of the relevant ru les was made and the violation was found and 
adopted by the DSB, it becomes evident that any attempt by the United States to keep the zeroing 
methodology in anti-dumping proceedings would run ag ainst its obligation to ensure the conformity 
of its existing laws, regulations, a nd administrative procedures with the Anti-Dumping Agreement  and 
the GATT 1994 .  Such obligation can be invoked by any WTO Member, regardless of whether a 
Member was a Party to the dispute where the adopted DSB report found the violation.  Indeed, the European Communities notes that the DBS reports  are adopted by the whole WTO Membership.  
Thus, since the interpretation of the rules and the DSB reports are adopted by all Members, any 
Member can invoke Article XVI:4 of the WTO Agreement.    61. The United States contests the idea of an "inde pendent international obligation" arising from 
adopted DSB reports.  The United States submits that  it cannot be reconciled with the fact that the 
Appellate Body and panel reports are not binding, except with respect to re solving the particular 
dispute between the Parties to that dispute.  It furt her submits that it cannot be  reconciled with the text 
of the DSU, in particular Articles 3.2 and 19.2 of the DSU. In other words, according to the 
United States, there can be no obligation arising fr om adopted reports given that panels and the 
Appellate Body cannot add to or diminish the rights and obligations of WTO Members.
36   
 
62. The European Communities disagrees with the observations made by the United States on this 
point.  In the view of the European Communities, th e issue is not whether adopted DSB reports add to 
or diminish the rights and obligations of Member s.  Indeed, the adopted DSB reports clarify the 
interpretation of the relevant provisions of the cove red agreements with respect to a particular law, 
regulation or practice on which the Parties to that part icular dispute did not agree.  It cannot be argued 
                                                      
35 EC's First Written Submission, paras 122 - 132.   
36 US Opening Statement at the First Panel Meeting, para. 12.    WT/DS350/R 
 Page C-17 
 
 
  that, because an interpretation is negative for a Me mber, such interpretation of the rules "adds to or 
diminishes rights and obligations of Members".  In other words, the obligation of the panels and the 
Appellate Body not to add to or diminish the ri ghts and obligations of the Members relates to the 
content of their findings.  In that respect, the pane ls and the Appellate Body are not entitled to make 
findings that would add to or diminish the rights and obligations of the WT O Members as laid down 
in the various WTO Agreements.  The issue here is different.  It relates to the consequences for the 
losing Member arising from those adopted DSB reports.    63. Whether adopted DSB reports create an inde pendent international obligation which may be 
invoked by any WTO Member needs to be answered on the basis of the texts of the WTO Agreement 
and of the DSU in accordance with the relevant princi ples of treaty interpretation.  In particular, the 
fact that adopted DSB reports create an independe nt obligation for the losing party which can be 
invoked by any WTO Member is supported by vari ous provisions of the DSU, in particular 
Articles 3.2, 3.4, 3.8 and 17.14 of the DSU.    
64. Article 3.2 of the DSU states that a central element of the WTO is "providing security and 
predictability to the multilateral trading system".  The dispute settlement system is thus supposed to 
"clarify" the various rules of the covered agreemen ts.  This objective obviously supports the notion of 
the desirability of developing a jurisprudence th at not only would accord in particular some 
predictability and reliability, but also would be av ailable to all government members of the WTO.  
Further, Article 3.4 of the DSU provides that "r ecommendations and rulings made by the DSB shall 
be aimed at achieving a satisfactory settlement of  the matter", which means a settlement which is 
consistent with all obligations under the covered agreements.  More over, as Article 3.8 of the DSU 
states, if an infringement of the obligations assu med under a covered agreement has been found by an 
adopted DSB report, it is presumed that the measure concerned causes nullification or impairment for "other Members parties to the covered agreem ents".  Thus, any WTO Member can invoke 
nullification or impairment when an infringement ha s been found and adopted by the DSB.  Last but 
not least, Article 17.14 of the DSU provides for th e obligation on the Parties to the dispute to 
unconditionally  accept the reports adopted by the DSB.  The losing Member cannot argue that it has 
unconditionally accepted the DSB reports if, in a ne w dispute concerning the same matter, it denies 
that the same measures violated the covered agreem ents.  Since the adoption of those reports take 
place by negative consensus, this implies that all WTO Members adopt the interpretation of the 
relevant provisions of the covered agreements with respect to a particular law, regulation or practice 
contained in the adopted report.  Again, this i ndependent obligation for the United States arising from 
the adopted DSB reports can be invoked by any WTO Member, as a violation of Article XVI:4 of the 
WTO Agreement.    
65. The principles included in those provisions would be frustrated if it was not acknowledged 
that an independent obligation exists under Artic le XVI:4 of the WTO Agreement for Members to 
ensure conformity of their laws, regulations and administrative procedures with the covered 
agreements, once it has been clarified by adopted DSB reports that existing laws, regulations or 
administrative procedures are inconsistent with the Members' WTO obligations.    
66. Moreover, it should be noted that the fact th at Article XVI:4 of the WTO Agreement creates 
an independent obligation is supported by the impor tant treaty interpretation principle according to 
which the interpretation of clauses or paragra phs of a treaty cannot lead to redundancy or inutility ".
37  
Indeed, Article XVI:4 of the WTO Agreement must be given a meaning by itself.  As the Appellate Body mentioned in US – Gasoline , an interpreter is not free to adopt a reading that would result in 
reducing whole clauses or paragraphs of a treaty to redundancy or inutility.
38  Treating this provision 
                                                      
37 Appellate Body Report , Japan – Alcoholic Beverages , paras. 12 - 13.   
38 Appellate Body Report, US – Gasoline , p. 23, footnote 45.   WT/DS350/R 
Page C-18  
 
  as a purely consequential claim when a violation of another provision has been found would render 
this provision inutile
.   
 67. Finally, the European Communities clarifies that  it is not asking this Panel to rule on whether 
the United States has complied or failed to comply  with DSB recommendations and rulings in past 
disputes.  Rather, the European Communities is asking this Panel to take into account the fact that the 
United States, by its own admission, bases its en tire defence on its refusal to unconditionally accept 
the Appellate Body Reports in DS294 and DS322.    68. In light of the foregoing, the European Co mmunities requests this Panel to make a specific 
finding that the United States, by applying and contin uing to apply zeroing in original investigations, 
administrative review and sunset review proceed ings, has violated Article XVI:4 of the WTO 
Agreement.  The European Communities also reque sts the Panel to examine the argument based on 
Article XVI:4 of the WTO Agreement first, as an independent claim, and to refrain from exercising 
judicial economy on this point.   
 
B. T
HE ZEROING METHODOLOGY AS APPLIED IN 52 ANTI-DUMPING PROCEEDINGS , INCLUDING 
ORIGINAL INVESTIGATIONS , ADMINISTRATIVE REVIEW AND SUNSET REVIEW PROCEEDINGS  
1. Original Investigations 
69. The European Communities challenges four origin al investigations contained in the Annex to 
the request for establishment of the Panel (C ases XV to XVIII) as being inconsistent with the Anti-
Dumping Agreement  and the GATT 1994 .39   
 70. The United States does not dispute these clai ms, thereby acknowledging their inconsistency 
with the GATT 1994  and the Anti-Dumping Agreement .
40   
 2. Administrative Reviews 
(a) Articles 2.1 and 9.3 of the Anti-Dumping Agre ement and Article VI of the GATT:  the duty 
must not exceed the margin of dumping as determ ined with respect to the product as a whole 
71. The European Communities claims that, in th e relevant measures at issue, the United States 
did not correctly establish the anti-dumping duty amount  or the margin of dumping, consistent with 
the obligations set out in Articles 9.3 and 2 of the Anti-Dumping Agreement  and Article VI of the 
GATT 1994 .  This is so because the simple zeroing used  by USDOC in the measures at issue did not 
allow for the calculation of the margin of dumping for the product as a whole .   
 72. In its First Written Submission, the United St ates contests this.  In essence, the disagreement 
between the parties flows from their respective inte rpretations of the terms "dumping" and "margins 
of dumping" in the Anti-Dumping Agreement  and whether these terms apply at the level of the product 
as whole or at the level of a comparison between a weighted average normal value and an individual export transaction.    73. The United States contends that the terms of  "dumping" and "margins of dumping" are not 
defined in the GATT and in the Anti-Dumping Agreement  so as to require that export transactions be 
examined at an aggregate level.
41  According to the United States, the definition of "dumping" as 
included in Article 2.1 of the Anti-Dumping Agreement  "describes the real-world commercial conduct 
                                                      
39 EC First Written Submission, paras 135 – 179.   
40 US First Written Submission, para. 155.   
41 US First Written Submission, paras 82 – 98.    WT/DS350/R 
 Page C-19 
 
 
  by which a product is imported into a country, i.e. transaction by transaction".42  The United States 
further submits that "there is nothing in the GATT 1994  or the Anti-Dumping Agreement that suggests 
that injurious dumping that occurs with respect to  one transaction is mitigat ed by the occurrence of 
another transaction made at non-dumped price".43   
 
74. The interpretation put forward by the Unite d States is not permissible as it is directly 
contradicted not only by the ordinary meaning of the text of Articles 2 and 9.3 of the Anti-Dumping 
Agreement  and Article VI of the GATT 1994 , but also by their context and the well-established and 
consistent findings of the Appellate Body in previous disputes according to which the terms 
"dumping" and "margins of dumping" as defined in Article 2.1 of the Anti-Dumping Agreement  and in 
Article VI:1 of the GATT 1994 apply to the product under investigation as a whole.44   
 75. The European Communities firs t examines Article VI:1 of the GATT 1994  and Article 2.1 of 
the Anti-Dumping Agreement  which defines "dumping
".  Article VI:1 defines "dumping" as occurring 
where "products of one country are introduced into the commerce of another country at less than the 
normal value of the products".  This defi nition is reiterated in Article 2.1 of the Anti-Dumping 
Agreement  as follows:  "For the purpose of this Agreem ent, a product is to be considered as being 
dumped, i.e. introduced into the commerce of another c ountry at less than its normal value, if […]".  It 
is clear from the texts of these provisions that dumping is defined in relation to a product as a whole as defined by the investigating authority.    
76. This is further clear from the context of the Agreement. Indeed, the purpose of Article VI of 
the GATT 1994  and of the Anti-Dumping Agreement  is to determine the conditions for the application 
of anti-dumping measures.  Article 1 of the Anti-Dumping Agreement  states that "[a]n anti-dumping 
measure shall be applied only under the circ umstances provided for in Article VI of the GATT 1994  
and pursuant to investigations in itiated and conducted in accordan ce with the provisions of this 
Agreement " (emphasis added).  For the purpose of the inv estigation, the investigating authority must 
identify the "product under consideration"45 which will have to be used consistently throughout the 
investigation for various purposes including the de termination of the volume of dumped imports, the 
injury determination, the causal link, etc.  Article VI:2 of the GATT 1994  clarifies that "in order to 
offset or prevent dumping, a contracting party may levy on any dumped product an anti-dumping duty 
not greater than the margin of dumping in respect of such product".  Article 6.10 clarifies that "the 
authorities shall, as a rule, determine an individua l margin of dumping for each known exporter or 
producer concerned of the product under investigation" .  It is thus clear that "dumping", within the 
meaning of Article VI:1 of the GATT 1994 and Article 2.1 of the Anti-Dumping Agreement , can be 
found only for the product under investigation as a whole, and cannot be found to exist only for a 
type, model or category of that product, including a "category" of one or more relatively low priced 
export transactions.   
 77. Other provisions of the Anti-Dumping Agreement  confirm this view.  For example, Article 9.2 
stipulates that an anti-dumping duty is to be imposed in respect of the product under investigation.  In addition, Article 6.10 provides that the "investig ating authorities shall, as a rule, determine an 
individual margin of dumping for each known export er or producer concerned of the product under 
investigation".   
 
                                                     
 
42 US First Written Submission, para. 82.   
43 US First Written Submission, para. 85.   
44 Appellate Body Report, EC – Bed Linen , para 53;  Appellate Body Report, US – Hot-Rolled Steel , 
para 118;  Appellate Body Report, US – Softwood Lumber V , paras 91 to 103;  Appellate Body Report, US – 
Zeroing (EC) , paras 123 to 135;  Appellate Body Report, US – Zeroing (Japan) , paras 108 to 116.   
45 This flows from Article 2.6 of the Anti-Dumping Agreement  which defines the "term 'like product' as 
a product which is identical, i.e.  alike in all respects to the pr oduct under consideration".   WT/DS350/R 
Page C-20  
 
  78. The United States is therefore clearly wrong when stating that "there is nothing in the 
GATT 1994  or the AD Agreement that suggests that inju rious dumping that occurs with respect to one 
transaction is mitigated by the occurrence of a nother transaction made at a non-dumped price".
46   
 79. Second, the European Communities examines the terms "margin of dumping".  While 
"dumping" refers to the introduction of a product into  the commerce of another country at less than its 
normal value, the term "margin of dumping" refers to the magnitude of dumping.  Indeed, as noted in 
Article VI:2 of the GATT 1994  "[…] the margin of dumping is the price difference determined in 
accordance with the provisions of paragraph 1 [of Article VI of the GATT 1994 ]".  As with dumping, 
margins of dumping can be found only for the product under investigation as a whole.  As noted by 
the Appellate Body in US – Hot Rolled  Steel "'margins' means the individual margin of dumping 
determined for each of the investigated exporters a nd producers of the product under investigation, for 
that particular product.  This margin reflects a co mparison that is based upon examination of all of the 
relevant home market and export market transactions".
47   
 
80. It is clear that an investigating authority  may undertake multiple intermediate comparisons 
between a weighted average normal value and individu al export transactions.  However, the results of 
any such multiple comparisons are not "margins of dumping".  Rather, those results reflect only 
intermediate calculations made by an investigating authority in the context of establishing margins of 
dumping for the product under investigation.  Thus, it is only on the basis of aggregating all these 
"intermediate values" that an investigating author ity can establish margins of dumping for the product 
under investigation as a whole.   
 81. The European Community fails to see how margins of dumping can properly be established 
for the product as a whole without aggregating all of the "results" of the multiple comparisons.  Aside 
from the exception provided for by the targeted dumping provisions, there is no textual basis in the 
Anti-Dumping Agreement  that would justify taking into account the "results" of only some multiple 
comparisons in the process of calculating margins of  dumping, while disregarding other "results".   
 82. In its First Written Submission, the United St ates does not explain how, in the light of the 
rules of treaty interpretation embodied in the Vien na Convention on the Law of Treaties, the terms 
"dumping" and "margins of dumping" could be in terpreted as referring to the product at individual 
transaction level.   
 83. The United States largely relies on the findings of the panels in US – Zeroing (Japan)  and in 
US – Softwood Lumber (Article 21.5) .  However, these findings have been reversed by the Appellate 
Body which has concluded and explained why " dumping" and "margins of dumping" can only be 
established for the product under investigation as a whole.  In US – Zeroing (Japan) , the Appellate 
Body stated that:    
A product under investigation may be define d by an investigating authority.  But 
"dumping" and "margins of dumping" can be  found to exist only in relation to that 
product as defined by that 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 .  Thus, when an investigating authority calculates a margin of dumping 
on the basis of multiple comparisons of normal value and export price, the results of such intermediate comparisons are not, in themselves, margins of dumping. Rather, 
they are merely inputs that are to be aggr egated in order to est ablish the margin of 
                                                     
 
46 US First Written Submission, para.85.   
47 Appellate Body Report, US – Hot Rolled Steel , para. 118.    WT/DS350/R 
 Page C-21 
 
 
  dumping of the product under investigations for each exporter or producer.48 
(emphasis added) 
 84. In fact, there is a continuous and consiste nt line of findings of the Appellate Body in EC – 
Bed Linen , US – Softwood Lumber , US – Zeroing (EC)  and US – Zeroing (Japan)  according to which 
""dumping" and "margins of dumping can only be est ablished for the product under investigation as a 
whole".    85. The United States errs in arguing that "in US – Softwood Lumber  V, the Appellate Body 
reasoned that zeroing was not permitted in the contex t of "multiple averaging", on the basis of the 
phrase "all comparable export transactions" but did no t explain how zeroing coul d be prohibited in the 
context of "multiple comparisons" generally.
49  On the contrary, as the Appellate Body made clear in 
US – Softwood Lumber V , these principles are based most fundament ally on Articles VI:1 and VI:2 of 
the GATT 1994  and on Article 2.1 of the Anti-Dumping Agreement50 and are confirmed by 
Articles 9.2 and 6.10 of the Anti-Dumping Agreement  and Articles VI:1 and VI:2 of the GATT 1994 .51  
The Appellate Body explicitly rejected the noti on that these principles apply only in original 
proceedings.  Referring to Article VI:1 of the GATT 1994  and Article 2.1 if the Anti-Dumping 
Agreement , the Appellate Body concluded:  "it is clea r from the texts of these provisions that dumping 
is defined in relation to a product as a whole as define d by the investigating authority.  Moreover, we 
note that the opening phrase of Article 2.1 "for the purposes of this Agreement" indicates that the definition of "dumping" as contained in Article 2.1 applies to the entire agreement…".
52  I n  US – 
Softwood Lumber V , the Appellate Body referred generally to the use of zeroing in relation to the use 
of "multiple comparisons" when it stated that, "[i]f an investigating authority has chosen to undertake 
multiple comparisons, the investigating authority necessar ily has to take into account the results of all 
those comparisons in order to establish marg ins of dumping for the product as a whole".53   
 
86. The United States submits that the examination of the term "product" as used throughout the 
Anti-Dumping Agreement  and the GATT 1994  demonstrates that the term "product" in these 
provisions does not exclusively refer to "product as a whole" and that it can have either a collective 
meaning or an individual meaning.54  However, the unique example that the United States gives where 
the word "product" would be used in the individua l sense of the object of a particular transaction is 
Article VII:3 of the GATT 1994 .  However, Article VII:3 of the GATT 1994  is a provision concerning 
customs valuation issues.  It has thus nothing to do with anti-dumping.  As explained above, the term 
"dumping" as defined in Article 2.1 of the Anti-Dumping Agreement  must be interpreted in the 
specific context of the determination of the framework in which anti-dumping measures can be 
applied, i.e. pursuant to an investigation which focuses on a specific "product under investigation" as 
defined by the investigating authorities.  Therefore, we do not consider this ex ample to be relevant.   
 
87. In any case, as the Appellate Body correctly noted in US – Softwood Lumber (Article 21.5) , 
"the Appellate Body referred to  Article VI:1 and 2 of the GATT 1994 , together with Article 2.1 of the 
Anti-Dumping Agreement , to interpret the term "margins of dum ping" in Article 2.4.2.  The Appellate 
Body did not address the meaning of "product" in th e other paragraphs of Article VI or in other 
provisions of the GATT 1994 ".55   
                                                      
48 Appellate Body Report, US – Zeroing (Japan) , para. 115. 
49 US First Written Submission, para.91.   
50 Appellate Body Report, US – Softwood Lumber V , paras. 91 - 93.   
51 Appellate Body Report, US – Softwood Lumber V , para. 94.   
52 Appellate Body Report, US – Softwood Lumber V , para. 93.   
53 Appellate Body Report, US – Softwood Lumber V , para. 98 quoted by the Appellate Body in 
Appellate Body Report, US – Softwood Lumber V (Article 21.5) , para. 114.   
54 US First Written Submission, para. 92.   
55 Appellate Body Report, US – Softwood Lumber V (Article 21.5) , para. 113.   WT/DS350/R 
Page C-22  
 
  88. Indeed, even though it could be demonstrated  that the word "product" may have various 
meanings across the GATT and the Anti-Dumping Agreement , it is clear from both the text and 
context that in the framework of Article 2.1 of the Anti-Dumping Agreement  and Articles VI:1 
and VI:2 of the GATT 1994  the word product refers to "product under investigation" and thus the 
product as a whole.  
 
89. The view that "dumping" and "margins of  dumping" can only be established for the product 
under investigation as a whole is in consonance with the need for consistent treatment of a product in 
an anti-dumping proceeding.  Thus, having defined th e product under investiga tion, the investigating 
authority must treat that product as a whole for, inter alia , the following purposes:  determination of 
the volume of dumped imports, injury  determination, causal link between dumped imports and injury 
to domestic industry, and calculation of the margin of dumping.  Moreover, according to Article VI:2 
of the GATT 1994  and Article 9.2 of the Anti-Dumping Agreement , an antidumping duty can be levied 
only on a dumped product.  For all these purposes, the product under investigation is treated as a 
whole, and export transactions in the so-called " non-dumped" sub-groups (that is, those sub-groups in 
which the weighted average normal value is less than the weighted average export price) are not 
excluded.  The European Comm unities sees no basis, under the Anti-Dumping Agreement , for treating 
the very same sub-group transactions as "non-dumpe d" for one purpose and "dumped" for other 
purposes.
56   
 90. The obligations and methodologies that apply wh en a margin of dumping is investigated or 
relied upon are the same for the entire Anti-Dumping Agreement,  including administrative review 
investigations.  The use of zeroing by the United Sa tes is thus equally inconsistent 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.  The US calculation of a revised margin for cash deposit 
purposes is identical in all relevant respects to the margin calculation performed in the original 
proceeding.  There is no basis on which it is possibl e to argue that zeroing, which is prohibited in 
original proceedings, becomes somehow permissibl e in the same calculation in an administrative 
review.    (b) The duty must not exceed the dumping margin  established in accordance with the fair 
comparison requirement under Article 2.4 of the Anti-Dumping Agreement 
91. As a preliminary remark, the European Co mmunities notes that it appears undisputed by 
the United States that the fair comparison requireme nt in Article 2.4 also applies to proceedings 
governed by Article 9.3 of the Anti-Dumping Agreement .  The Parties, however, disagree as to the 
content of this obligation and as to whether, as a result, the simple zeroing method used by the 
United States in the relevant measures at issue r esults in the calculation of a dumping margin which 
violates Article 2.4 of the Anti-Dumping Agreement .   
 
(i) Content of the "fair comparison" requirement in Article 2.4 
92. Referring to the quotation which the Eur opean Communities makes in its First Written 
Submission of the Appellate Body's findings in US – Zeroing (Japan) , the United States submits that 
"the rationale followed by the Appellate Body [in that case] was based on the results  of the 
comparison methodology in relation to the previously interpreted 'margin of dumping' rather than on 
any inherently unfair aspect of the comparison methodology itself" and therefore that "the EC claim of unfairness depends not on the text of Article 2. 4 but on whether it is permissible to interpret the 
term 'margin of dumping' as used in Article 9.3 as applying to transactions".
57  This is an incorrect 
description of the European Communities' claim wh ich, on the contrary, and as explained further 
                                                      
56 Appellate Body Report, US – Softwood Lumber V , para. 99.   
57 US First Written Submission, para. 143.    WT/DS350/R 
 Page C-23 
 
 
  below, is based on an inherent analysis of the fair comparison requirement which demonstrates the 
inherently unfair nature of the simple zeroing meth od used by the United States in its administrative 
reviews.    93. The first argument presented by the United States to support the view that there is no 
inconsistency with Article 2.4 is th at if "it is permissible to unders tand the term 'margin of dumping' 
as used in Article 9.3 as applying to an individual  transaction, then the challenged assessment will not 
exceed the margin of dumping" and there will therefor e be no basis for a finding of inconsistency with 
Article 2.4.
58  It implies that, according to the United Stat es, whether the use of simple zeroing in the 
context of administrative reviews is consistent with  the fair comparison requirement in Article 2.4 or 
not depends on whether Article 9.3 would authorize the use of zeroing.  According to the 
United States, since it is permissible to interpret "margin of dumping" as used in Article 9.3 as 
applying to an individual transaction, there is no obligation to aggregate tr ansactions in calculating 
margins of dumping in an assessment proceeding, and there can be no obligation to "offset" the antidumping duty liability for a transaction to reflect the extent to which other transactions were not 
dumped.  As a result, there is no basi s for inconsistency with Article 2.4.
59  The United States does not 
offer any explanation as to why the simple zeroing me thod would be consistent with Article 2.4 apart 
from saying that if such method is authorized by Article 9.3, there is no inconsistency with 
Article 2.4.  94. The United States' approach is incorrect as it conflicts with the independent and general 
nature of the fairness requirement in Article 2.4 of the Anti-Dumping Agreement .  Since the fairness 
requirement of Article 2.4 is an independent and general obligation,  it cannot be reduced to whether 
the simple zeroing method applied by the United St ates is permitted or not under the other provisions 
of the Anti-Dumping Agreement .   
 (ii) "Inherently biased" 
95. In its First Written Submission, the European  Communities noted that the term "fair" is 
generally understood to connote impartiality, even-handedness or lack of bias
.60  The simple zeroing 
used in administrative reviews is inherently biased  because when an exporter makes some sales above 
normal value and some below normal value, the u se of zeroing will inevitably result in a margin 
higher than would otherwise be calcu lated.  This increase in the margin is not attributable to any 
change in the pricing behaviour of the exporter but is the result of the United States' choice to apply a 
calculation methodology which has the effect of ignoring the negative intermediate comparison 
results.61   
 96. The United States disputes the European Comm unities' claim that zeroing in administrative 
reviews is inconsistent with Article 2.4 since it is inherently biased.  Accordin g to the United States, 
there is "nothing in the text of the Agreement to support its contention that a methodology can be designated as "fair" or "unfair" within the meaning of Article 2.4 solely on the basis of whether it 
makes dumping margins go up or down".
62   
 
                                                      
58 US First Written Submission, para. 144.   
59 US First Written Submission, para. 144.   
60 EC First Written Submission, para. 167.  According to the dictionary, fair means "just, unbiased, 
equitable, impartial, legitimate, in accordance with the rules of standards" and "offering an equal chance of 
success" (Shorter Oxford English Dictionary;  5th edn, W.R. Trumble, A. Stevenson (eds) (Oxford University 
Press, 2002), Vol.1, p.915), quoted by the Appellate Body in US – Lumber V (Article 21.5) , para. 138.   
61 EC First Written Submission, para. 200.   
62 US First Written Submission, para.146.   WT/DS350/R 
Page C-24  
 
  97. In this regard, the Euro pean Communities notes that the Anti-Dumping Agreement  does not 
contain a definition of the concept of "fairness".  However, various panels and the Appellate Body 
have analysed the "fair" nature of both dumpi ng and injury determinations.  Any methodology or 
approach taken by investigating authorities in th e framework of either dum ping determinations or 
injury determinations and which makes it more likely to find either dumping (or higher dumping 
margins) or injury, is not "fair".  As a resu lt, a methodological choice such as the simple zeroing 
method in administrative reviews which systemati cally and inevitably result in a higher dumping 
where there is no change in pricing behaviour is inherently biased and therefore unfair within the 
meaning of Article 2.4 of the Anti-Dumping Agreement .   
 
98. Furthermore, the Appellate Body in US – Hot Rolled Steel  examined the "objective 
examination" requirement in Article 3.1 of the Anti-Dumping Agreement  and underlined that "the 
word "objective", which qualifies the word "exami nation", indicates essentially that the "examination" 
process must conform to the dictates of the basic principles of good faith and fundamental fairness.  In short, an "objective examination" requires that the domestic industry, and the effects of dumped 
imports, be investigated in an unbiased manner, wit hout favouring the interests of any interested party 
or group of interested parties, in the investigation".
63   
 99. Applying this test in EC – Bed Linen (Article 21.5) , the Appellate Body found that:   
 
The approach taken by the European Co mmunities in determining the volume of 
dumped imports was not based on an "objective examination".  The examination 
was not "objective" because its result is predetermined by the methodology itself. 
Under the approach used by  the European Communities, whenever the investigating 
authorities decide to limit the examination to some, but not all, producers—as they 
are entitled to do under Article 6.10— all imports from all non -examined producers 
will necessarily always be included in the volume of dumped imports under Article 
3, as long as any of the producers examined individually were found to be dumping.  This is so because Article 9.4 permits the imposition of the "all others" duty rate on 
imports from non-examined producers, regardless of which alternative in the second 
sentence of Article 6.10 is applied.  In other words, under the European 
Communities' approach, imports attributable to non-examined producers are simply 
presumed , in all circumstances, to be dumped , for purposes of Article 3, solely 
because they are subject to the imposition of anti-dumping duties under Article 9.4.  This approach makes it "more likely [tha t the investigating authorities] will 
determine that the domestic industry is injured", and, therefore, it cannot be 
"objective" .  Moreover, such an approach tends to favour methodologies where 
small numbers of producers are examined individually.  This is because the smaller 
the number of individually-examined producers, the larger the amount of imports 
attributable to non-examined producers, and, therefore, the larger the amount of 
imports presumed  to be dumped .  Given that the Anti-Dumping Agreement generally 
requires examination of all producers, and only exceptionally permits examination 
of only some of them, it seems to us that the interpretation proposed by the European 
Communities cannot have been intended by the drafters of the Agreement.64  
(emphasis added) 
 100. Similarly, the European Communities argues that the simple zeroing method used by the 
United States in its administrative reviews is to be  regarded as "unfair" since the use of zeroing makes 
it more likely that the investigating authorities fi nd dumping or higher margins of dumping and cannot 
                                                     
 
63 Appellate Body Report, US – Hot Rolled Steel , para. 193.   
64 Appellate Body Report, EC – Bed Linen (Article 21.5) , para. 132.    WT/DS350/R 
 Page C-25 
 
 
  therefore be regarded as being "fair" within the meaning of Article 2.4 of the Anti-Dumping 
Agreement .   
 
(iii) Unjustified imbalance 
101. The obligation imposed by Article 2.4 to conduct a fair comparison precludes the simple 
zeroing method used by the United States in the measur es at issue.  Given the ordinary meaning of the 
word "fair"65, the obligation to make a fair or equivalent  comparison must necessarily involve a fairly 
balanced comparison, being one that, subject to the targeted dumping exception, takes equivalent 
account of all the data relating to  normal value and export price, in  calculating a "margin of dumping" 
for each exporter.  The United States in fact used a simple zeroing method without any justification, 
and for that reason acted in a manner inconsistent with its obligation to make a fair comparison, 
pursuant to Article 2.4.    102. The Panel and Appellate Body reached a similar conclusion in US Hot – Rolled Steel , 
regarding the "arm's length" and "aberrationally high" price tests for determining whether or nor 
domestic sales are made in the ordinary course of trad e.  The panel observed that the mere fact that a 
domestic sale is at a relatively low price does not necessarily mean that it can no longer be considered to have been made in the ordinary course of trade.  Similarly, in the present case, the mere fact that an 
export sale is at a relatively high price does not mean that it ceases, for that reason alone, to be comparable.  The panel further observed that the United States' methodology excluded lower priced domestic sales, skewing the normal value upward,  thereby inflating the margin of dumping.  
Similarly, in the present case, th e United States' methodology partially excludes higher priced export 
sales, skewing the export price downward, thereby in flating the margin of dumping.  The Appellate 
Body agreed with the panel that the United Stat es was systematically exercising discretion in a 
manner that was not even-handed and that was unfai r, automatically resulting in the distortion and 
inflation of the margin of dumping, to the disadvantage of exporters.
66   
 
(iv) Internal Inconsistency 
103. Just as an anti-dumping proceeding concerns "a  product" (the subject product), so it also 
concerns a margin of dumping based on a compar ison of sales made during the investigation period 
(whatever type of anti-dumping proceedi ng is being conducted).  Just as the  Anti-Dumping Agreement  
contains no express rule governing the definition of  the "subject product", so it contains no express 
rule governing the definition of the investigation pe riod.  The investigation period might be a shorter 
period or a longer period (such as a year), provided th at it is a sustained period, in relation to which 
market fluctuations or other vagari es do not distort a proper evaluation.67  Just like product 
characteristics, time  is typically a parameter by reference to  which markets – that is, categories of 
goods or services with a certain competitive relations hip or degree of comparability - are defined.  
Just as the United States defined the "subject produc t", so the United States defined the investigation 
period in the measure at issue.  Just as the Europ ean Communities does not take  issue, in this case, 
with the definition of the subject product, so the European Communities does not take issue, in this 
case, with the definition of the investigation peri od.  Just as in the case of model zeroing, having 
defined the investigation period, the United States wa s obliged to ensure that the margin of dumping 
                                                      
65 A comparison that is "just, unbiased, equitable, impartial", "offering an equal chance of success", 
conducted "honestly, impartially" and "evenly, on a level" ( The New Shorter Oxford English Dictionary ).   
66 Panel Report, US – Hot-Rolled Steel , paras 7.110 to 7.112;  Appellate Body Report, US – Hot-Rolled 
Steel , paras 144, 145, 148, 154 and 158.   
67 Appellate Body Report, EC – Tube or Pipe Fittings , para 80.   WT/DS350/R 
Page C-26  
 
  for that period was fairly calculate d in conformity with Article 2.4 .  The United States had become 
bound by its own logic.
68   
 104. The United States having fixed the investigati on period, it had effectively decided that, in 
principle, and due account being taken of all necessary adjustments, any transaction during the 
investigation period, at whatever time it was made, was potentially comparable with any other 
transaction during the investigation period, at whatever time it was made.  In short, the reasoning of 
the Appellate Body in the EC – Bed Linen  and US – Softwood Lumber V cases in relation to model 
zeroing also applies whenever an investigating au thority decides to fix the parameters of its 
investigation, whether in relation to subject pro duct, region, time or any other parameter.  The 
investigating authority thereby becomes bound by its own logic, and must complete its analysis on the 
basis of the same logic.
69   
 105. The European Communities finds contextual support for the preceding analysis in Article 2.4.2, which refers to certain other paramete rs of the determination, including "time periods".  
This indicates that, having fixed the temporal para meters of its investigation, the United States had 
become bound by its own logic, unless the exceptiona l targeted dumping situation described in the 
second sentence of Article 2.4.2 was present (which it w as not).  The same is true in respect of any 
other parameters of the investigation fixed by th e investigating authority, notably the purchasers and 
regions concerned, these also being matters referred to in the second sentence of Article 2.4.2.  The 
simple zeroing method used by the United States is  offensive to any one of these parameters, because 
it is performed at the most disaggregated level, that is, at the level of individual transactions.  In other 
words, instead of treating all the relevant e xport transactions as a whole, the United States 
methodology is based on treating each export transac tion individually in the same manner as model 
zeroing is based on treating each model separately.    
106. Further contextual support may be found in other provisions of the  Anti-Dumping Agreement  
which indicate that temporal considerations are rele vant to the calculation of a margin of dumping.  
For example, below cost domestic sales may only be disregarded if they are made within an extended 
period of time.  That period should normally be one y ear (the typical length of an investigation) but in 
no case less than six months.  Cost allocations must  be adjusted appropriately for non-recurring items 
of cost which benefit future production (so that su ch cost items are not en tirely allocated to the 
investigation period, inflating the normal value, thus  artificially generating a finding of "dumping").  
Exporters must be allowed at least 60 days to have  adjusted prices to reflect sustained movements in 
exchange rates.  In the ordinary course of trade co sts and prices typically vary in the very short term, 
even if in the medium term things average out.  Dumping only occurs when a situation in which 
export prices are below normal value becomes the norm.  Similar contextual support may be found in 
the Anti-Dumping Agreement  in relation to both pur chasers and regions.   
 107. The European Communities does not enter into  a discussion of the several mooted economic 
rationales for the anti-dumping rules, much discus sed in the literature and well known.  The fact 
remains, however – and this much is uncontrovers ial – that they are all economic.  Articles VI:1 
and VI:2 of the GATT 1994  repeatedly use words such as "commer ce", "trade", "price", "sale", "cost" 
and "profit".  In this respect, it is highly signi ficant that Ad Article VI, paragraph 1, second sub-
paragraph and Article 2.7 of the Anti-Dumping Agreement  disapply certain rules with respect to 
Members in which there is no market economy .  The preamble to the GATT 1994  refers to "trade and 
economic endeavour", "expanding the production and exchange of goods" and "international 
commerce".  Similarly, the preamble to the WTO Agreement refers to "trade and economic 
                                                     
 
68 Appellate Body Report, EC – Bed Linen , paras 57, 58, 60 and 62;  Appellate Body Report, US – 
Softwood Lumber V , paras 93 and 99.   
69 Panel Report, US – Stainless Steel , paras 6.121 to 6.123.    WT/DS350/R 
 Page C-27 
 
 
  endeavour" and "expanding the produc tion of and trade in goods" and "international trade relations" 
and the objective "to develop an integrated, more vi able and durable multilateral trading system".   
 108. The application of the discipline of ec onomics requires a minimum of consistency
.  
Investigating authorities cannot, from one day to the next, and in a random or capricious manner, or 
even within the same proceeding, chop and change  the basic legal economic concepts used in the 
Anti-Dumping Agreement  – such as, for example, the concept of  sales not "in the ordinary course of 
trade" or the concept of what is an "exporter or pr oducer" or related company, and so on.  On certain 
matters, Members may have a certain latitude in deci ding what rule they will apply.  But once they 
have made their choice, they must apply the rule in an even-handed way.   
 
109. Thus, it is not by chance that the Anti-Dumping Agreement  uses the words "market" or 
"competition" or "compete" 28 times70, these being the indispensable and basic building blocks of 
consistent  economic analysis.  It is particularly signifi cant that Article 2.2 refers repeatedly to a 
"market  of the exporting country".  And it is not by  chance that the basic parameters by which 
markets are defined:  product (or physical characteristics)71, geography72 and time73 play a central role 
in the Anti-Dumping Agreement .  Nor is it chance that these are al so the basic parameters essentially 
referred to in the second sentence of Article 2.4.2.  Fi nally, it must come as no surprise that part of the 
reasoning of the Appellate Body in the mode l zeroing cases is essentially about consistency  with 
respect to one of these parameters:  product defin ition.  The Appellate Body has recently confirmed 
that a market  is "a place with a demand for a commodity or service … a geographical area of demand 
for commodities or services … the area of economic  activity in which buyers and sellers come 
together and the forces of supply and demand affect prices ".74   
 110. Viewed in this light, it is impossible to me asure international price discrimination in two 
different markets (the domestic market and the e xport market), if the fundamental methodology for 
defining and measuring price
 in each of the markets is di fferent.  Absent good reason (targeted 
dumping – that is, distinct markets), such an approach is actually incapable  of measuring alleged 
international price discrimination.  And in this sense it is unfair, because it is internally inconsistent.  
As Jacob Viner observed:    
… sufficient justification is to be found in the usage of the most  authoritative writers 
and in the considerations of economy and precision of terminology for confining the 
term dumping to price-discrimination between national markets
.  This definition, I 
venture to assert, will meet all reasonable requirements  … The one essential characteristic of dumping, I contend, is price-discrimination 
between purchasers in different national markets.
75   
 
(v) Unjustified discrimination 
111. Article 9.2 of the Anti-Dumping Agreement  obliges WTO Members to collect any anti-
dumping duty on a non-discriminatory basis on import s of such products from all sources found to be 
                                                      
70 Anti-Dumping Agreement , Articles 2.2 (thrice), 2.2.1, 2.2.2(i) , 2.2.2(ii), 2.2.2(iii), 2.4.1, 3.1, 3.3 
(twice), 3.4, 3.5, 3.7(i), 3.7(ii) (t wice), 4.1(ii) (seven times ), 4.2, 4.3, 5.2(iii), 5.2(iv), footnote 2.   
71 See particularly Article 2.6 of the Anti-Dumping Agreement .   
72 See particularly Article 4 of the Anti-Dumping Agreement .   
73 See the repeated references to the investigation "period" in the Anti-Dumping Agreement .   
74 Appellate Body Report, US – Upland Cotton , para 404.   
75 Jacob Viner, Dumping, A Problem in International Trade , First Edition 1923, Reprinted 1991, 
Chapter I, The Definition of Dumping , pages 3 and 4 (original italics, footnote omitted).   WT/DS350/R 
Page C-28  
 
  dumped and causing injury.  The United States' zero ing method results in imposition and collection on 
the basis of unfair and unjustified discrimination.    112. Indeed, in relation to the same period, so me firms may be assessed and have to pay anti-
dumping duties at the rate resulting from the origin al proceeding and the methodology used therein 
(model zeroing).  Other firms, exporting the same  product from the same country during the same 
period, may be assessed at a revised rate, in "a dministrative review" proceedings, calculated on the 
basis of a different methodology (simple zeroing).    113. Similarly, some firms may be subject to a measure imposed on the basis of model zeroing in 
the original proceeding;  whilst other firms subject , for example, to a new shipper proceeding may be 
subject to a measure imposed on the basis of simple zeroing.  In such a case, it would appear that, in 
the logic of the United States, a firm could be penalised simply for having begun exports to the United States after the end of the original period of investigation.    (vi) Case-law confirming United States' simple zeroing unfair 
114. The above-mentioned conclusions are confirmed by the findings of the Appellate Body in 
several cases, as indicated in the First Wr itten Submission of the European Communities.
76   
 
(vii) Article 2.4.2 second sentence 
115. The United States defends itself by submitting that  "an interpretation of Article 2.4 that gives 
rise to a general prohibition of zeroing renders the second sentence of Article 2.4.2 'inutile'".77  
However, the issue which this Panel needs to examin e is not whether there is a "general prohibition of 
zeroing" but whether the simple zeroing method app lied by the United States in the administrative 
review proceedings concerned is consistent or not with the fair co mparison requirement in Article 2.4.   
 
116. Furthermore, the United States incorrectly assum es that what an investigating authority must 
necessarily do in a targeted dumping analysis is the same as the simple zeroing method discussed in 
this case.  But this is not so. Article 2.4.2 sec ond sentence does not specify in every detail how an 
investigating authority might conduct its targeted dumping analysis.  For example, an investigating 
authority faced with a pattern of export transactions at different prices into two different regions might 
simply make a margin of dumping calculation for the region in which targeted dumping is occurring.  
In such a case, the investigating authority will simply  have re-set the paramete rs of its investigation, 
consistent with the targeted dumping provisions.    (c) Violation of Article 2.4.2 of the Anti-Dumping Agreement 
117. The European Communities' cl aim with respect to Article 2.4.2 is double.  First, the 
European Communities clai ms that by using the asymmetrical method of comparison of the second 
sentence of Article 2.4.2, the United States violates Article 2.4.2. Second, the European Communities also claims that by using simple zeroing in the measures at issue, wh ich involves a downward 
adjustment of the relatively high export prices, a nd the making of the dumping calculation based only 
or preponderantly on the relatively low export transac tions, the United States breaches Article 2.4.2.   
 
118. The obligation under Article 2.4.2 to normally make price comparisons on a symmetrical 
basis is not coextensive with the obligation not to  zero in aggregating the results of intermediate 
comparisons, although the different is sues are related.  The obligati on not to zero primarily derives 
from the requirements in Article VI of the GATT 1994  and in Articles 2.1 and 9.3 of the Anti-
                                                     
 
76 EC First Written Submission, paras. 171 - 175.   
77 US First Written Submission, para. 145.    WT/DS350/R 
 Page C-29 
 
 
  Dumping Agreement  that the dumping margin must be computed for the product as a whole without 
distortion in the aggregation of intermediate comp arisons;  and from the obligation in Article 2.4 of 
the Anti-Dumping Agreement  to effect a fair comparison.  All of these obligations apply to the 
determinations in the measures at issue by virtue of  the rule in Article 9.3 that the amount of the anti-
dumping duty must not exceed the margin of dumping as established under Article 2.   
 
(i) Method for comparing normal value an d export price: asymmetrical method 
119. In its first written submission, the Europ ean Communities submitted that the United States 
violates Article 2.4.2 inter alia  by using the asymmetrical method of comparison of the second 
sentence in Article 2.4.2.78   
 
120. It appears to the European Communities that the US First Written Submission does not 
contain any assertions to the effect that the Unit ed States did not use th e average-to-transaction 
method or that the conditions required by Article 2. 4.2 were fulfilled or that the required explanation 
was provided.  Therefore, the European Communities concludes that, apart from the alleged restricted 
meaning of the word "investigation" in Article 2.4. 2, the United States does not contest the claims and 
arguments of the European Communities on that point.    
(ii) The word "investigation" in Article 2.4.2 of the Anti-Dumping Agreement 
 
121. In its First Written Submission, the United Stat es repeatedly refers to what it asserts is the 
limited application of Article 2.4.2, based on the allegedly limiting meaning of the Phrase "the 
existence of margins of dumping during the investigation phase".  That limited meaning, according to the United States, is an "original investigation" or an "investigation to determine the existence, degree 
and effect of any alleged dumping" un der the terms of Article 5.1 of the Anti-Dumping Agreement .  
According to the United States, there is no prohibition against zeroing that would apply in the context 
of assessment proceedings since Article 2.4.2, by its  very terms, is limited to the "investigation phase" 
considered by the United States to mean "original proceeding".  The United States even goes so far as 
to assert that the text leaves no doubt
 that the Members did not intend to extend these obligations to 
any phase beyond the investigation phase" (emphasis added).79   
 122. It is incumbent on the United States to establish that the word "investigation" in Article 2.4.2 
does have the limited or defined or special mean ing that the United States asserts it to have.  
However, the United States merely repeats this assertion without explaining the reasons for such 
assertion.
80  In particular, it never refers to the Vienna Convention on the Law of Treaties (the 
"Vienna Convention") and to its rules.    (iii) Applicable rules of Treaty interpretation 
123. Pursuant to Article 3.2 of the DSU, any le gal analysis must be conducted in accordance with 
the customary rules of interpretation of public inte rnational law.  Various panels and the Appellate 
Body have confirmed this requirement as allowing r esort to be made to the Vienna Convention.   
 124. It is striking when reading the United States' First Written Submission that there is no 
reference at all to the Vi enna Convention.  Actually, in its Fi rst Written Submission, the United States 
submits that Article 2.4.2 would not be applicable to assessment proceedings since Article 2.4.2 limits 
                                                     
 
78 EC First Written Submission, paras 209 - 226.   
79 US First Written Submission, para. 102.   
80 See for instance at para. 102 the statement that "the limited applicability of Article 2.4.2 could not be 
plainer".   WT/DS350/R 
Page C-30  
 
  its application to the "investigation phase" and that  "to require the application of Article 2.4.2 to 
Article 9 assessment proceedings would read out the AD Agreement Article 2.4.2's express limitation 
to investigations".  According to the United Stat es, such a result would be inconsistent with the 
principle of effectiveness, under which all the te rms of an agreement should be given a meaning.
81   
 
125. However, the systematic application of th e Treaty interpretation rules as included in the 
Vienna Convention leads to the very clear conclu sion that Article 2.4.2 applies to administrative 
review investigations covered by Article 9.3 and that the asymmetrical comparison method using 
zeroing applied by the United States in its administrati ve reviews is inconsistent with Article 2.4.2.   
 
126. Article 31 of the Vienna Conve ntion entitled "General rule of interpretation" provides that:   
 
1. A treaty shall be interpreted in goo d faith in accordance with the ordinary 
meaning to be given to the terms of the treat y in their context and in the light of its 
object and purpose.   
 
2. The context for the purpose of the inte rpretation of a treaty shall comprise, in 
addition to the text, including its preamble and annexes:    (a) any agreement relating to the treaty which was made between all the parties 
in connection with the conclusion of the treaty;   
 
(b) any instrument which was made by one of more parties in connection with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty;    
3. There shall be taken into account, together with the context 
 (a) any subsequent agreement between the parties regarding the interpretation of 
the treaty of the application of its provisions;    (b) any subsequent practice in the appli cation of the treaty which establishes the 
agreement of the parties regarding its interpretation;   
 (c) any relevant rules of international la w applicable in the relations between the 
parties.   
4. A special meaning shall be given to a te rm if it is established that the parties 
so intended.   
 127. Article 32 of the Vienna C onvention entitled "Supplementary me ans of interpretation" further 
provides that:    
"Recourse may be had to supplementary means of interpretation including the 
preparatory work of the treaty and the circ umstances of its conclusion, in order to 
confirm the meaning resulting from the appli cation of Article 31, or to determine the 
meaning when the interpretation according to Article 31:    
(a) leaves the meaning ambiguous or obscure; or 
(b) leads to a result which is manifestly absurd or unreasonable." 
 
                                                     
 
81 US First Written Submission, para. 99.    WT/DS350/R 
 Page C-31 
 
 
  128. In accordance with the above-mentioned rules,  the European Communities will analyse below 
in details the relevant Phrase in the first sentence of  Article 2.4.2 (i.e. "the existence of margins of 
dumping during the investigation phase"), including (i ) the ordinary meaning of the Phrase (ii) the 
context of the Phrase and (iii) in the light of the object and purpose.    (iv) Ordinary meaning of the Phrase 
♦ Investigation 
129. The United States considers the word "investig ation" in Article 2.4.2 first sentence as being 
determinative of the issue as to whether Article 2.4. 2 applies only to original proceedings or also to 
other types of proceedings.  However, the United St ates refrains from analyzing the ordinary meaning 
of that word.  According to the United States, the te rm "investigation" as used in Article 2.4.2 has the 
same specific meaning as in Article 5, namely "an investigation to determine the existence, degree 
and effect of any alleged dumping".
82  The United States submits that "panels have consistently found 
that the references to "investigations" in Article 5 on ly refer to the original investigation and not to 
subsequent phases of an anti-dumping proceeding".83  It is not disputed that "investigations" in 
Article 5 only refer to original investigations since these are "investigations to determine the 
existence, degree and effect of any alleged dumping ".  However, there is no such limitation to the 
word "investigation" in Article 2.4.2.  Therefore,  why would "investigations" in Article 2.4.2 equate 
to an "investigation to determine the existence, degr ee and effect of any alle ged dumping" as this term 
is used in Article 5, while it is clear that this word does not have a particular meaning in all provisions 
of the Agreement?    
130. In its First Written Submission, the European Communities highlights the fact that dictionary 
meanings strongly support the view that the ordina ry meaning of the word "investigation" indicates a 
systematic examination or inquiry or careful study of or research into a particular subject.
84   
 131. Indeed, the New Shorter Oxford English Dic tionary gives the following meaning for the word 
"investigation":  "the action or process of investigat ing;  systematic examination;  careful research … 
An instance of this;  a systematic inquiry;  a careful st udy of a particular subject".   This is not a rare or 
specific meaning but a common and even universal meaning.    132. The United States does not dispute this definition but argues that "the Panel in US – 
Zeroing (EC)  squarely rejected that the decisive elemen t regarding the interpretation of the scope of 
Article 2.4.2 is the word "investigation" which h as not been defined in the AD Agreement and which 
must therefore be interpreted strictly by  reference to a dictionary definition".
85   
 133. The European Communities does not argue that  the dictionary meaning is the decisive 
criterion, but that it is a relevant element that must be included in the analysis.
86  In other words, in 
considering the ordinary meaning, it is appropriate  to have regard to the meanings provided by 
dictionaries as a part of the analysis.  In that respect, it is interesting to note that no dictionary indicates that the word "investiga tion" has the special meaning argued for by the United States.   
                                                     
 
82 US First Written Submission, para. 101.   
83 US First Written Submission, para. 101.   
84 EC First Written Submission, para. 213.   
85 US First Written Submission, para. 107.   
86 The Appellate Body has observed that dictionaries are a "useful starting point" for the analysis of 
"ordinary meaning" of a treaty term even if they ar e not necessarily dispositive.  See Appellate Body Report, 
EC – Chicken Cuts , para.175.  See also Appellate Body Report, US – Softwood Lumber IV , para. 59;  Appellate 
Body Report, US – Offset Act (Byrd Amendment) , para. 248;  and Appellate Body Report, US – Gambling , 
para. 166.   WT/DS350/R 
Page C-32  
 
  134. Additional evidence supports the European  Communities' interpretation of the word 
"investigation".    135. First, numerous panels and Appellate Body  reports refer to "original investigations".
87  If, by 
definition, all investigations were "original" , it would not be necessary to specify that the 
investigations are "original".  It is thus clear that  the term "original investigations" has been used to 
limit the meaning of the word investigations.  In all these cases, the use of the word "original" is used 
as a shorthand way of referring to the words "to de termine the existence, degree and effect of any 
alleged dumping" as referred to in Article 5.1.    
136. Second, there are panel reports which have u sed the word "investigation" to describe "sunset 
review investigations".  For instance, in US – Countervailing Duties on certain EC Products , the 
Panel stated:  "We consider that in a sunset review investigation the importing Member is obliged…".
88   
 
137. Third, in US – DRAMs , the Panel expressly noted that:   
 
The DOC initiated the first annual review of DRAMs from Korea on 15 June 1994 and investigated whether the Korean co mpanies made sales of DRAMs less than 
normal values, (i.e. dumped) during the period of review.
89   
 
138. Fourth, there are numerous examples in US pr actice in which the word "investigation" is used 
in the context of review investigations.    139. Referring to the web site of the United States International Trade Commission, the 
European Communities notes that that investigating au thority clearly does believe itself to be involved 
in the conduct of "investigations" – giving that word  its ordinary meaning – since it refers expressly 
and repeatedly, for example, to "changed circum stances review investigations" and "Five-Year 
Review (Sunset) Investigations".    140. In addition, the Rules of Practice and Pr ocedure of the International Trade Commission
90 
contain the following provision:   
 
Investigation to review outstanding determination 
 
(a) Request for review.  Any person may file with the Commission a request for the institution of a review investigation unde r Section 751(b) of the Act.  The person 
making the request shall also promptly serve copies on the request on the parties to 
the original investigation upon which the review is to be based.  All request shall set forth a description of changed circumstances su fficient to warrant the institution of a 
review investigation by the Commission. (emphasis added) 
 141. A review under Section 751(b) of the Tari ff Act is a changed circumstances review, as 
provided for in Article 11.2 of the Anti-Dumping Agreement .   
 142. As a matter of fact, this language is also to  be found in specific determinations adopted by 
the ITC relating to individual cases – the Europ ean Communities does not wish to burden the Panel 
with these documents, but can provide examples on request.   
                                                     
 
87 For example, Appellate Body Report US – OCTG Sunset Reviews  (54 instances).   
88 US – Countervailing Duties on certain EC Products, footnote 295 para.7.114.   
89 Panel Report, US – DRAMs , paras 2.3 – 2.4.   
90 63 FR 30599.    WT/DS350/R 
 Page C-33 
 
 
  143. Finally, it is also consistent with the way in which the Anti-Dumping Agreement has been 
implemented by the European Communities.91   
 144. In the light of the foregoing, and recalling th at the burden of proof and persuasion that the 
word "investigation" has the special meaning advo cated by the United Sates falls on or has been 
shifted to the United States, the correct conclusi on is that the ordinary meaning of the word 
investigation in Article 2.4.2 is that a dvanced by the European Communities.   
 
♦ Existence 
145. The United States has previously sought to re ly on the term "existence", arguing that this 
refers only to a question addressed during an orig inal investigation, and that it appears only in 
Article 5.1 of the Anti-Dumping Agreement .  The United States is mistaken.  The term "existence" 
also appears in the title to Article 2 of the Anti-Dumping Agreement  (in the French and Spanish 
language versions).  Furthermore, also during an assessment proceeding an investigating authority is 
concerned not only with the amount but also with the existence of dumping:  if the amount of 
dumping is found to be zero, then dumping does not exis t.  In this respect, and for these purposes, it is 
not possible to dissociate the concept of "dumping" and the concept of "margin of dumping", as the 
Appellate Body confirmed in US – Zeroing (Japan) .  In other words, by definition, it is not possible to 
state whether or not an exporter is dumping without actually making a precise calculation in that respect of the supposed amount or margin of dumping.   
146. Furthermore, in making such an argument, the United States actually confirms another point 
that the European Commun ities has consistently made:  the grammatical structure of the Phrase 
compels the conclusion that the term "during … phase" refers to a distinct period of time in which 
dumping margins exist, that is, an investigation pe riod; and not, as the United States would have it, 
the time period referred to in Article 5.10 of the Anti-Dumping Agreement .  In other words, the 
grammatical structure of the Phrase precludes the US  interpretation, and confirms that it is not 
permissible.  The United States has consistently demonstrated itself unable or unwilling to be 
responsive to this point.   
 
♦ "during… phase" 
 
147. The New Shorter Oxford English Dictionary  provides that the meanings of the term "during" 
include "through the duration of; in the course of;  in the time of".  It further provides that the 
meanings of the term "phase" include "a distin ct period or stage in a process of change or 
development;  any one aspect of a thing of vary ing aspects".  The European Communities considers 
that the ordinary meaning of the term "during … phase" considered as a whole has a temporal aspect 
to it and coincides with a distinct period.  The terms "during … phase" indicate a determinate 
temporal stage in the passage of time.  However, nothing indicates that the "distinct period" referred 
to is the period of time in which the "margins of  dumping" must be established, as the United States 
would have it, as opposed to the period of time in whic h the "margins of dumping" must have existed.   
 148. The United States is wrong to assume that th e terms "during … period" and "during … phase" 
cannot  be equated.  In other words, there is no rule of interpretation of public  international law that 
                                                     
 
91 Council Regulation (EC) No 384/96 of 22 D ecember 1995 on protection against dumped imports 
from countries not members of the European Community, Official Journal of the European Communities , L 56, 
6.3.1996, p.1, as amended, Article 2.11 ("existence of margins of dumping during the investigation period") and 11.2, third sub-para, 11.3, third sub-para, 11.5, third sub-para, 11.9 and 11.10 (references to new shipper, 
changed circumstances, sunset, and refund investigations
).   WT/DS350/R 
Page C-34  
 
  rigidly  and mechanistically
92 precludes synonyms.  The Appellate Body has held that the terms 
"contingent", "conditional", "tied to" and "tie" are synonymous in the context of Articles 3.1(a) and 
footnote 4 of the SCM Agreement .93  Similarly, the Appellate Body has held that the terms "nature of 
competition" and "quality of competition" may be considered synonymous94;  as may the terms "like" 
and "similar"95;  and the terms "jural society", "sta te" and "organized political community".96  T h e  
Appellate Body has also effectively agreed with the United States that the term "except" in Article 2.4 
of the Agreement on Textiles and Clothing  is synonymous with the terms "only", "provided that" and 
"unless".97  Remarkably, the United States itself elsewher e considers that the terms "investigation" 
and "investigation to determine the existence, de gree and effect of any alleged dumping" are also 
synonymous.98  The conclusion that the meaning of the terms "during … period" and "during … 
phase" coincide is a far more reasonable and ba lanced conclusion, consistent with all other 
considerations of context and object and purpose;  than the conclusion that all the Members intended 
the terms "investigation" and "investigation to de termine the existence, degree and effect of any 
alleged dumping" to be synonymous.    
149. Furthermore, the fact that the word "phase" is only used in Article 2.4.2, i.e. is unique, is not 
significant.  Indeed, the Vienna Convention does not  indicate that "uniqueness" in itself is a basic 
principle of treaty interpretation.
99   
 150. In addition, the United States' interpretation implies that because of the word "phase" in 
Article 2.4.2, each of the five types of anti-dumping proceeding, that is, Article 5 (original), 9.5 (new 
shipper), 11.2 (changed circumstances), 11.3 (sunset ) and 9.3 (assessment), are to be re-labelled 
"phases".  Such a proposition flatly contradicts the text of the Anti-Dumping Agreement  which refers 
to five types of anti-dumping "proceedings" and not "phases".  Thus, the word "proceedings" is used, 
for example, in Article 5.9 to include original pr oceedings.  Article 9.5 refers to "duty assessment … 
proceedings".  Article 9.5 also refers to "rev iew proceedings", meaning changed circumstances or 
sunset proceedings.  Finally, footnote 20 refe rs to "judicial review proceedings".  The Anti-Dumping 
Agreement  therefore does not refer to five "phases", but rather five types of "proceeding".   
 
♦ The Phrase as a whole – Grammatical meaning  
 
151. It is now necessary to consider whether or not  combining terms in th e Phrase or considering 
the Phrase as a whole, changes the conclusi on concerning the ordinary meaning(s).   
 
152. First, the European Communities considers th at the ordinary grammatical meaning of the 
Phrase as a whole is that the term "during the inves tigation phase" refers to the term "existence" and 
not to the term "established".  Thus, the Phrase re fers to a distinct period in which margins of 
dumping exist, i.e. an investigation period.   
 
                                                     
 
92 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , paras 93 and 178;  Appellate 
Body Report, US – OCTG Sunset Reviews , paras 208, 213 and 214.   
93 Appellate Body Report, Canada – Autos , para 107.   
94 Appellate Body Report, Korea – Alcoholic Beverages , paras 133 to 134.   
95 Appellate Body Report, EC – Asbestos , para 91.   
96 Appellate Body Report, Canada – Dairy , para 97 and footnote 73.  See also Panel Report, EC – 
Hormones (United States) , para 8.60:  "good veterinary practice" synonymous with "good animal husbandry 
practice" synonymous with "Good Practice in the Use of Veterinary Drugs".   
97 Appellate Body Report, US – Wool Shirts and Blouses , page 9, second para;  and page 16, final para.   
98 US First Written Submission, paras 101 - 102.   
99 Panel Report, EC – Chicken Cuts , para. 7.172;  Appellate Body Report, EC – Chicken Cuts , 
para. 218 (rejecting argument about the significance of the uniqueness of a treaty term).    WT/DS350/R 
 Page C-35 
 
 
  153. The grammatical units of English are:  word, phrase, clause and sentence.  In English 
grammar, there are nine word classes:  verb;  noun;  adjective;  adverb;  pr eposition;  determiner;  
pronoun;  conjunction;  and interjection.  There ar e five kinds of phrase:  verb phrase;  noun phrase;  
adjective phrase;  adverb phrase and prepositional phrase.  These are the elements of an English sentence or clause:  subject;  verb;  object;  comple ment;  adverbial.  The subject precedes the verb.  
The relevant clause contains one verb phrase, "shall … be established", in the passive:  the verb "be" 
and the passive participle "established", it being und erstood that it is the investigating authority that 
will do the "establishing".  The use of the modal auxilia ry verb "shall" and the future tense of the verb 
"be" indicates a formal or binding rule, of prospective application.
100   
 
154. The word "during" is a preposition of time.  The term "during the investigation phase" is a 
temporal modifier of the term "the existence of margins of dumping".  The indivisible subject of the 
clause is the entire Phrase "the existence of marg ins of dumping during the investigation phase".   
 155. Thus, applying basic rules of English gramma r, the term "during the investigation phase" 
cannot be construed as a modifier either of the object of the clause, which is, by implication, the 
investigating authorities;  or of the verb phrase ("shal l … be established").  It can only be construed as 
a temporal modifier of the term "the existence of margins of dumping";  and as an integral part of the 
subject of the clause.  In this respect, the rules of  English grammar are clear;  and there is no basis for 
reaching any other conclusion.  An y other conclusion would directly and manifestly contradict the 
basic rules of English grammar.   
 
156. In order for the term "during the investigation phase" to modify the verb, the clause would have to be drafted differently, for example:    
"during the investigation phase, the existenc e of margins of dumping shall normally be 
established on the basis of …";  or 
 "the existence of margins of dumping sh all normally be established, during the 
investigation phase, on the basis of …";  or  "the existence of margins of dumping sha ll, during the investigation phase, normally 
be established on the basis of …".   
 157. The Members had these and many other alte rnatives open to them – all of which they 
rejected, opting instead for the specific grammatical structure of the text as it now stands.   
 
158. The word "normally" is an adverb that modi fies the verb phrase "shall … be established".  It 
shows that the Members were perfectly aware of th e possibility of modifying the verb phrase with an 
adverbial;  and that they chose to do that with th e word "normally", but not with the term "during the 
investigation phase".    159. The same conclusion results from a considerati on of the grammatical structure of the French 
and Spanish texts of the Anti-Dumping Agreement .
101   
 160. This is confirmed by the preparatory work.  In each of the New Zealand I, II and III texts the 
phrase "during the investigation phase" appears at the e nd of the first sentence, in such a way that it 
could refer to "when establishing" or to "the existence of dumping margins".  In the final
 Dunkel 
Draft text the Members decided to eliminate this ambiguity, moving the phrase "during the 
                                                      
100 Oxford Guide to English Grammar, John Eastwood, Oxford University Press  (1994), pages 1, 2, 3, 
4, 7, 96, 97, 130 and 135.   
101 Vienna Convention, Article 33(3).   WT/DS350/R 
Page C-36  
 
  investigation phase" to a new position in the grammati cal structure of the first sentence, so that it 
unambiguously refers to "the exis tence of margins of dumping" a nd does not refer to "shall … be 
established".  This change in the final Dunkel Dr aft text marks a significant difference.  This carefully 
negotiated  language, which reflects an equally carefully drawn balance of rights and obligations of 
Members, must be respected.
102  It is not now possible to reverse and eliminate the meaning achieved 
through negotiation, and counterbala nced by other concessions and to re-instate precisely the structure 
discarded by the Members during the negotiations.    161. Furthermore, the European Commun ities considers the term "existence of margins  of 
dumping".  The word "margin
" in the term "margins of dumping", as opposed to the word "dumping" 
on its own, confirms that Article 2.4.2 is c oncerned with a precise numerical determination , by 
contrast, for example, with Article 11.3, which is  concerned with a prospective determination of 
"dumping".  Thus, the term "margin" does not refer to a "binary" yes or no answer to the hypothetical question:  does dumping  "exist".  This confirms the position of the European Communities.   
 
162. Finally, the European Communities consider s the significance of reading the special term 
"margins of dumping" together with the general term "during … phase".  Any interpretation of the 
general term "during … phase" must take into accoun t the special meaning of the term "margins of 
dumping" which precedes it, the two terms being inseparable parts of the subject of the relevant clause.  This further supports the view that the Phrase cannot be interpreted in the manner advocated 
by the United States.   
 
163. Having carefully considered the ordinary meanings of the terms in the Phrase, the 
European Communities fails to see how combining these terms in itself
 leads to an ordinary meaning 
of the Phrase as a whole that supports the United States defence.    
164. The above thus clearly demonstrates that the or dinary meaning of the word "investigation" as 
flowing not only from dictionaries but also by th e practice of the United States and as supported by 
numerous references of pa nel and Appellate Body re ports refers to the gene ral notion of "systematic 
analysis" as advanced by the Eu ropean Communities.  The correct  conclusion is that the word 
"investigation" in Article 2.4.2, and the Phr ase as a whole, has the meaning advocated by the 
European Communities.    (v) Context of the Phrase 
165. In accordance with the principles of treaty inte rpretation, the context is an important tool for 
the purposes of interpretation.  Not all context ca rries equal weight.  Some context may be more 
persuasive than other context.  The weight to be given to a particular contextual argument must be 
considered on a case-by-case basis.  The European  Communities will consider first the immediate 
context, moving progressively to more remote contex t.  Thus, the European Communities begins with 
provisions to which the Phrase expressly and directly refers;  then the provisions of Article 2 of which 
the Phrase is a part;  then other provisions of the Anti-Dumping Agreement  that cross-refer the Phrase;  
then other specific provisions of the Anti-Dumping Agreement  in the order in which they appear in the 
Anti-Dumping Agreement ;  finally contextual arguments derived from the Anti-Dumping Agreement  
as a whole.   
                                                     
 
102 Appellate Body Report, US – Wool Shirts and Blouses , page 16, penultimate para;  Appellate Body 
Report, US – Underwear , page 15.    WT/DS350/R 
 Page C-37 
 
 
  ♦ Article VI:2 of the GATT 
166. The Phrase contains one direct link to other tr eaty terms:  the term "margins of dumping" has 
a special defined meaning, as provi ded for in Article VI:2 of the GATT 1994 .103  There are only a 
handful of defined terms in Article VI of the GATT 1994  and the Anti-Dumping Agreement104, and 
they have a significance that goes beyond a mere cross-reference.105  Furthermore, the Anti-Dumping 
Agreement  implements the GATT 1994106;  and Article 2 of the Anti-Dumping Agreement  implements 
the defined term "margin of dumping".    167. Article VI:1 of the GATT 1994  defines the word "dumping";  whilst Article VI:2 of the 
GATT 1994  defines the term "margin of dumping".
107  Thus, whenever the Anti-Dumping Agreement  
uses the word "dumping" (such as, for example, in Article 11.3), that word has the special meaning 
given to the defined term "dumping";  and whenever the Anti-Dumping Agreement  uses the term 
"margin of dumping" (such as, for example, in Article 2.4.2) that phrase has the special meaning given to the defined term "margi n of dumping".  It results from the text of Article 2.1 of the Anti-
Dumping Agreement  ("a product is to be considered as bei ng dumped …") that Article 2.1 implements 
the definition of "dumping".  Similarly, it results fro m the text of Article 2.2 ("the margin of dumping 
shall be determined …") and the text of Article 2.4 ("margins of dumping") that Articles 2.1 to 2.4 
also implement the definition of "margin of dumping".  There are no other provisions of the Anti-
Dumping Agreement  that concern themselves with how to calculate a margin of dumping.   
 168. In these circumstances, the European Communities fails to see how the United States may be 
permitted to see the defined term "margin of dumping" in Article VI:2 of the GATT 1994  in one way 
for one anti-dumping proceeding (all of the provisions  of Article 2 in the case of an original 
proceeding), and in other ways for other anti-dumpi ng proceedings (only some of the provisions of 
Article 2).  That would mean that the defined te rm "margin of dumping" in  Article VI:2 of the 
GATT 1994  would have multiple meanings:  one meani ng for original proceedings;  and different 
meanings for each of the other four types of anti- dumping proceeding.  This would be fundamentally 
inconsistent with the basic concept of a definition.   The purpose of defining a term is to give it one 
meaning;  subsequently to refer to that meaning by referring to the defined term;  and to achieve a 
particularly high degree of consistency.  The implementation  of a definition cannot result in its 
negation, and certainly not merely on the basis of an  interpretation that is grammatically incorrect;  
ignores the ordinary meaning;  relies on remote context;  and relies on object and purpose arguments that lead to a result that is mani festly absurd or unreasonable.   
 
169. There is no textual basis for such a proposition in Article VI of the GATT 1994 .  On the 
contrary, those provisions set out definitions of  "dumping" and "margin of dumping" of general 
application in all anti-dumping proceedings.  Th is is further confirmed by the reference in 
Article VI:2 of the GATT 1994  to "levy
", a term defined in the Anti-Dumping Agreement  as referring 
to final assessment or collection of a duty, including those made under Article 9.108  This further 
confirms that the concept of "margins of dumping"  applies to all anti-dumping proceedings, whenever 
investigating authorities calculate or rely on margins of dumping;  or levy  an anti-dumping duty.  
                                                      
103 Article VI:2 of the GATT 1994, second sentence:  "For the purposes of this Article, the margin of 
dumping is the price difference determined in accordance with the provisions of paragraph 1".   
104 Dumping, margin of dumping, injury, domestic i ndustry, like product, interest ed parties, authorities, 
initiated, levy (Articles VI:1 and VI:2 of the GATT 1994;  Articles 2.6, 4. 1, 6.11 and footnotes 1, 3, 9 and 12 of 
the ADA ).   
105 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para 126.   
106 The title of the ADA  is:  "Agreement on Implementation  of Article VI of the General Agreement on 
Tariffs and Trade 1994".   
107 Appellate Body Report, US – Softwood Lumber V , paras 91 to 96.   
108 ADA , footnote 12:  "As used in this Agreement "levy" shall mean the definitive or final legal 
assessment or collection of a duty or tax".   WT/DS350/R 
Page C-38  
 
  Since any interpretation of the general term "dur ing … phase" must take into account the special 
meaning of the term "margins of dumping" which precedes it, the two terms being inseparable parts of the subject of the relevant clause, this further suppor ts the view that the Phrase cannot be interpreted 
in the manner advocated by the US.    
170. In conclusion, the use of the term "margins of dumping" in the Phrase, together with the 
defined term "margin of dumping" in Article VI:2 of the GATT 1994 , as implemented in Article 2 of 
the Anti-Dumping Agreement  and used in other provisions of the Anti-Dumping Agreements , supports 
the European Communities' claim;  and must be  given weight commensurate with the express and 
direct link between the Phrase and the definition.   
 
♦ Article 2 
171. The European Communities cons iders that the context of Article 2 supports its position.   
 172. The first sentence of Article 2.4.2
 continues, after the Phrase, with the words "shall normally  
be established …".  The use of the word "normally " suggests that these obligations and methodologies 
apply in most situations.  That is at odds with the view expressed by the United States that the 
comparison rules only apply in one situation:  an  original proceeding;  and do not apply to the 
investigation of or reliance on margins of dumping in any of the other four types of anti-dumping 
proceeding.  That is, according to the United Stat es, these obligations would only apply in 1 out of 
5 types of proceeding.  This ratio increases when it is taken into account that one original proceeding 
will typically spawn several other types of pro ceeding, particularly "administrative review" 
proceedings, so that the final ratio is likely to be 1 in 10 or more .  This would make the rules in 
Article 2.4.2, first sentence, at best, the exception  as opposed to the norm, and this is inconsistent with 
the use of the word "normally".  In the structure of Article 2.4.2, the exception  is contained in the 
second sentence.  The European Comm unities therefore submits that the context of this part of the 
first sentence of Article 2.4.2 does not support the US defence.   
 
173. Article 2.4.2 begins:  "[s]ubject to the provi sions governing fair comparison in paragraph 4".  
This includes the third to fifth sentences of Article 2.4.  The fourth sentence of Article 2.4 contains a 
further reference to Article 2.3, which concerns c onstructed export price.  There is nothing in these 
provisions to support the view that they apply only in one type of proceeding under the Anti-Dumping 
Agreement .  On the contrary, the drafting of the provisions supports the view that they apply 
whenever an authority investigates or relies on a "m argin of dumping".  We conclude that the context 
of this part of the first sentence of Article 2.4.2 does not support the US defence.  Precisely the same 
is true of the second sentence of Article 2.4.2 ;  as well as the other provisions of Article 2.4 ;  and the 
provisions of Article 2 as a whole , which implements the definitions  of "dumping" and "margin of 
dumping" in Article VI of the GATT 1994 .  In particular, Article 2.2 contains rules according to which 
"the margin of dumping shall be determined" and refers eight times  to the word "investigation".  In 
relation to each of these specific provisions US municipal anti-dumping law implements the Anti-
Dumping Agreement  not just for original proceedings, but for all types of proceedings under the Anti-
Dumping Agreement  in which margins of dumping are investigated or relied on.  The SAA expressly 
states that this is "required or appropriate".  The United States admits that these obligations apply to 
all types of proceedings, and not just to original proceedings.  Furthermore, the words "in the course 
of the investigation" in Article 2.2.1.1 and "during the investigation" in footnote 6 refer to the period 
of time in which the investigation is to be c onducted;  yet the United States admits that these 
obligations apply to all typ es of proceedings under the Anti-Dumping Agreement .  Finally, the title of  WT/DS350/R 
 Page C-39 
 
 
  Article 2 , in the French and Spanish texts, demonstrates that the whole of Article 2 is concerned with 
the "existence" of dumping.109   
 174. In the light of the foregoing, the Europ ean Communities concludes that the context of 
Article 2 confirms the ordinary meaning of the word "investigation" in the Phr ase as referring to all 
types of proceeding under the Anti-Dumping Agreement  in which margins of dumping are 
investigated or relied on, and does not support the US defence.    
♦ Article 9.3 
175. The European Communities submits that its inte rpretation of Article 2. 4.2 is further supported 
by Article 9.3 of the Anti-Dumping Agreement .   
 
176. According to Article 9.3:  "[t]he amount of  the anti-dumping duty shall not exceed the margin 
of dumping as established under Article 2".  The refe rence to "Article 2" must be taken to be a 
reference to the whole of Article 2
.  The cross-references in the Anti-Dumping Agreement  make 
express provision when they refer only to certain  paragraphs or sub-paragraphs of an article, 
particularly when the cross-reference is between different articles110, or when they are restricted in 
some way111, or when the provision to which reference is made is to be modified when applied in 
certain circumstances.112  There is no such express provision in Article 9.3. Article 9.3 does not 
provide, for example, that the amount of the anti-dumping duty is not to exceed the margin of dumping as provided under Article 2, with the exception of  Article 2.4.2;  or as provided in Article 2, 
with the exception of the rules for comparing duly adjusted normal value and export price;  or mutatis 
mutandis .  This confirms that, in the context of Article  9.3, a "margin of dumpi ng" is to be established 
by reference to the whole
 of Article 2, consistent with the use of the defined term "margin of 
dumping".113   
 177. If the cross-reference in Article 9.3 to Article  2 was intended to mean all of the provisions of 
Article 2, except Article 2.4.2, then the text of the Anti-Dumping Agreement  would have said that, as 
in other instances.  If this would mean mutatis mutandis , then the text of the Anti-Dumping Agreement  
would say that, as in other instances.  The text of Article 2.4.2 does not contain such limitation.  To 
get to that result, the following steps must be taken:   break the grammatical structure of the Phrase;  
ignore the changes in the final Dunkel Draft;  ignor e the defined term "margin of dumping";  ignore 
the coinciding ordinary meaning of "during … pe riod" and "during … phase";  transpose the Phrase 
into the second sentence of Article 2.4.2;  deduce from the word "phase" that the Anti-Dumping 
Agreement  refers to anti-dumping "phases" when it in f act refers to anti-dumping proceedings;  read 
the 11 words "to determine the existence, degree and e ffect of any alleged dumping" into the Phrase;  
                                                     
 
109 "Determination de l'existence  d'un dumping";  "Determinacion de la existencia  de dumping ";  
Vienna Convention, Article 33(3):  "The terms of the treaty are presumed to have the same meaning in each authentic text".   
110 For example:  Article 11 (footnote 21) cross-refe rs to "paragraph 3 of Article 9";  Article 11 
(footnote 22) cross-refers to "subparagraph 3.1 of Article 9";  Article 9.3.3 cross-refers to "paragraph 3 of Article 2";  Article 9.4 cross-refers to "paragraph  10 of Article 6", "paragraph 8 of Article 6" and 
"subparagraph 10.2 of Article 6";  Article 4.4 cross-re fers to "paragraph 6 of Article 3";  Article 10.1 cross-
refers to "paragraph 1 of Article 7" and "paragraph 1 of Article 9".   
111 For example:  Article 11.4 cross-refe rs to "The provisions of Article 6 regarding evidence and 
procedure  …";  Article 7.5 cross-refers to " The relevant provisions of  Article 9 …".   
112 For example:  Article 11.5 cross-refers to Article 8 " mutatis mutandis ";  Article 12.3 cross-refers to 
Articles 11 and 10 " mutatis mutandis ".   
113 Appellate Body Report, US – Softwood Lumber V , paras 93 ("… which includes, of course, 
Article 2.4.2. …") and 99 ("… Moreover, according to Ar ticle VI:2 of the GATT 1994  and Article 9.2 of the 
Anti-Dumping Agreement , an anti-dumping duty can be levied only on a dumped product.  For all these 
purposes , the product under investigation is treated as a whole …").   WT/DS350/R 
Page C-40  
 
  conclude, a contrario , that the obligation does not apply outside an original proceeding;  rely on an 
alleged object and purpose that is manifestly absu rd or unreasonable;  ignore the absence of any such 
intent on the part of the Members;  and ignore the preparatory work.    
♦ Article 5 
 
178. The European Communities next considers Article 5 of the Anti-Dumping Agreement , this 
being the provision to which the United States firs t refers in its defence.  According to the 
United States, Article 5 limits its application to "the investigation phase of an anti-dumping proceeding".
114  However, Article 5 does not refer to the "investigation phase".  It refers to 
investigation to "determine the existence, degree and effect of any alleged dumping".   
 
179. As underlined above, the Eur opean Communities agrees that the provisions of Article 5 are 
limited to original proceedings, precisely because of  the limiting words "to determine the existence, 
degree and effect of any alleged dum ping" that appear in Article 5.1, to which the other provisions of 
Article 5 refer.   
 
180. The parties agree that Article 5.1 refers to "a n investigation to determine the existence, degree 
and effect of any alleged dumping";  that through a series of cross-references the other provisions of 
Article 5 that refer to investiga tions equally refer to "an investig ation to determine the existence, 
degree and effect of any alleged dumping";  that Ar ticle 5 does not contain a definition of the word 
"investigation" for the purposes of the Anti-Dumping Agreement ;  and that there are no cross-
references between Articles 2 and 5.   
 181. Titles do not themselves generally contain or  create rights or obligations.  The title of 
Article 5 does not define its subject matter.  The pur pose of a title is to quickly convey to a reader the 
essential content of an article, part or annex.  The Anti-Dumping Agreement and the GATT 1994  
contain several definitions, but no definition of the term "investigation".  The Members were aware of 
definitions, discussing them at length during the preparatory work, and used them when they sought a particularly high degree of consistency.  The Members chose, however, not to define the term 
"investigation" (or for that matte r, the terms "proceeding" and "review"), and those choices must be 
respected.  In these circumstances, it would be an error to interpret the Anti-Dumping Agreement , 
under the guise of context or otherwise, as if Article  5 contains a definition of "investigation", when 
manifestly it does not.   
 182. The European Communities does not agree that it is natural to read into Article 2.4.2 the 
11 words "to determine the existence, degree and e ffect of any alleged dumping", an exercise that 
would significantly contribute to completely changi ng the ordinary meaning of the Phrase.  Nor does 
it consider that it is natural to interpret Article 2 by  reference to provisions that the reader has not yet 
even reached (Article 5), and absent any definition or  cross-reference.  Nor does it consider that it is 
natural to read the Phrase in a manner that is gramma tically erroneous.  Nor does it consider that it is 
natural to assume that all the Memb ers intended such a result, given that they chose not to use the 
various simple means at their disposal to achieve it (different drafting, definitions, cross-references), 
and when the evidence overwhelmingly supports the view  that the Members intended no such thing.   
 183. On the contrary, the European Communities cons iders that it is natural to read Article 2 as 
containing the consistent methodologies  for determining "dumping" and "margins of dumping".  The 
Phrase must be read in the only manner that is gra mmatically correct.  Therefore, the term "during … 
phase" must be interpreted as synonymous with "dur ing … period", given that the ordinary meanings 
coincide.  Furthermore, given the repeated refe rences to the investigation period in Article 2, 
                                                     
 
114 US First Written Submission, para. 101.    WT/DS350/R 
 Page C-41 
 
 
  especially taken together with the grammatical link, and given the inherent logic of and even necessity 
for such a rule, the Phrase must be read as referring to the investigation period.  Finally, the European 
Communities considers that it is most natural to give  the word "investigation" its ordinary meaning;  
and most natural to read the words "to determine the existence, degree and effect of any alleged 
dumping" in Article 5.1 not as redundant, but rather as delimiting the scope of the particular type of 
investigation with which Article 5 is concerned.   
 
♦ Article 6 
184. Consistent with the progressive analysis of  the context, the Europ ean Communities turns to 
the next provision of the Anti-Dumping Agreement :  Article 6.  The European Communities argues 
that the application of the word "investigation" in Article 6 to changed circumstances and sunset 
proceedings is context supporting its claim.   
 185. Article 6 of the Anti-Dumping Agreement  apply to "reviews" within the meaning of Article 11 
of the Anti-Dumping Agreement because of the express cross-reference from Article 11.4 to Article 6.  The European Communities notes that Article 11.4,  cross-referring to the provisions of Article 6 
regarding evidence and procedure, does not contain the words " mutatis mutandis ", such as are used in 
Articles 11.5 and 12.3.  Consequently, absent any further express cross-reference, the relevant 
provisions of Article 6 apply, without any modification
, to changed circumstances and sunset 
proceedings.  The European Communities notes that  the relevant provisions of Article 6 refer 
repeatedly to an "investigation".  Consequently, a pl ain reading of the text supports the view that an 
investigating authority engaged in the conduct of a changed circumstances or sunset proceeding is 
engaged in an "investigation" within the mean ing of these provisions.  The European Communities 
further notes that this is consistent with US m unicipal anti-dumping law, which refers expressly to 
"changed circumstances review investigati ons" and "sunset review investigations".115  In conclusion, 
the meaning of the word "investigation" in these pr ovisions is not limited to "an investigation to 
determine the existence, degree and effect of any alleged dumping".  This supports the view of the 
European Communities that the meaning of the word "investigation" in the Phrase is also not limited 
to the type of investigation conducted in original proceedings.    186. The method by which it is confirmed that th e relevant provisions of Article 6 apply to 
changed circumstances and sunset proceedings does not  have any bearing on this analysis.  To reason 
that "but for" the cross-reference in Article 11.4 th e relevant provisions of Ar ticle 6 would be limited 
to investigations in original  proceedings is to pre-judge the very question into which we are supposed 
to be enquiring, because such reasoning is b ased on the (erroneous) premise that the word 
"investigation" has the special meaning original  investigation throughout the Anti-Dumping 
Agreement .   
 
187. Furthermore, the European Communities not es that in a US administrative review the 
investigating authority makes two determinations: it not only establishes final liability for payment on 
a retrospective basis;  but at the same time it re views and changes (that is, varies) the "cash deposit 
rate", that is, the anti-dumping duty rate at which the measure will be prospectively applied until the 
next administrative review.  The European Comm unities considers that this second determination 
varying the duty rate is also subject to the obligations set out in Article 11.2, which refers expressly to 
a proceeding in which the duty is "varied" in this wa y.  This is confirmed by footnote 21, which states 
that the determination of final liability for payment itself  is not a review, indicating that any variation 
of the duty is;  and by footnote 22, which again confirms the distinction between final assessment 
proceedings and changed circumstances proceedi ngs.  The European Communities does not express a 
view on whether or not the United States is required , when conducting a final assessment proceeding, 
to also review the duty rate.  The European Co mmunities considers only that if an investigating 
                                                     
 
115 See Section III.B.2(c)(iv)(a).   WT/DS350/R 
Page C-42  
 
  authority chooses to rely on or calculate a varied duty rate, it must do so in accordance with the 
provisions of Article 11.2.  The European  Communities sees no other provisions of the Anti-Dumping 
Agreement  that deal directly with the variation of the duty rate.   
 188. Accordingly, the European Communities concl udes that the provisions of Article 6 also 
apply, without modification, to the variation of th e duty rate.  It thus further concludes that the 
variation of the duty rate also involves an "investiga tion" within the meaning of Article 6.  It notes 
that the calculation of an exporter's margin of dum ping for the purposes of a variation of the rate of 
duty, and the calculation of an exporter's marg in of dumping for the purpose of retrospective 
assessment of final liability for payment, are based  on identical facts and investigative activity, and 
are in these respects inseparable .  The European Communities does not see how the United States may 
be permitted to see these identical and inseparable  facts and activities in one way for one purpose 
(there is an investigation for the purposes of varyin g the rate of duty) and in another way for another 
purpose (there is no investigation for the purposes of calculating final liability).   
 
189. In conclusion, Article 6 of the Anti-Dumping Agreement supports the claims of the European 
Communities.    
♦ Article 18 
190. According to the United States, "Article 18.3 of the AD Agreement explicitly recognizes the 
difference between investigations, which may lead to  the imposition of a measure, and "reviews" of 
existing measures".
116  Thus, the United States considers that th e word "investigations" in Article 18.3 
means original proceedings and that this indicates th at the word "investigation" has that particular 
meaning throughout the Anti-Dumping Agreement , including in Article 2.4.2.   
 191. Article 18.3.1 indicates that where, as in th e present case, the measures at issue are "refund 
procedures under paragraph 3 of Article 9" in whic h the authorities investigate "margins of dumping", 
then in the first refund procedure the investigating authorities are obliged to apply the same rules as 
were used in the original proceeding to determine "margins of dumping".  Those rules are set out in 
Article 2, and include the comparison rules in Ar ticle 2.4.2.  The European Communities concludes 
that Article 18.3.1 confirms its position in this case.    192. The European Communities does not believe that  the word "investigations" in Article 18.3 is 
necessarily limited to the type of i nvestigation conducted in original pr oceedings.  Rather, the fact that 
Article 18.3 is "subject to" Article 18.3.1 suggests th at "refunds" could be either "investigations" or 
"reviews".  Given that Article 9.5 clearly indicates that duty assessments are not reviews
117, the only 
logical conclusion would be that "administrativ e review" proceedings do involve investigations, 
giving that word its ordinary meaning.   
 
193. In any event, even if the word "investigati ons" in Article 18.3 did carry the special meaning 
argued for by the United States, it would still not be the case that Article 18.3 defines the word 
"investigation" for the purposes of the Anti-Dumping Agreement .  The review of the use of the word 
"investigation" in the Anti-Dumping Agreement  leads the European Communities to the conclusion 
that it does not have a particular special meaning throughout the Anti-Dumping Agreement  (that is, 
investigations in original proceedings);  but that  in each case its meaning must be discerned through 
the application of customary rules of interpretation of public international law.  However Article 18.3 
would be interpreted, that conclusion remains the sa me.  Such an interpretation would therefore have 
no implications for our interpretation of the Phrase.   The European Communiti es concludes that such 
                                                      
116 US First Written Submission, para. 105.   
117 "… Such a review shall be initiated and carried out on an accelerated basi s, compared to normal 
duty assessment and review proceedings in the importing Member …".    WT/DS350/R 
 Page C-43 
 
 
  context as is provided by Article 18.3 does not suppor t the United States' defenc e, but rather confirms 
the position of the European Communities.    
♦ Different types of anti-dumping proceeding and the word "phase" 
194. The United States refers to the "distinctions be tween investigations and other segments of an 
anti-dumping proceeding " and later on in the same paragraph to the "purpose of an assessment 
proceeding ".118  This is incoherent.  One the one hand, th e United States submits that there would be 
within a given anti-dumping proceeding various seg ments or phases, the first of these phases being 
the "original investigation".  On the other hand, th e word "proceeding" would refer to each of these 
segments or phases.  The United States' analysis  collapses in a morass of confusion because the 
United States is unable to state to what it is referring:  phase or proceeding.   
 
195. As noted above, such a propositio n contradicts the terms of the Anti-Dumping Agreement  
which refers to five types of anti-dumping proceedings , not "phases".  For instance, in Article 5.9, the 
word "proceedings" is used to refer to original pr oceedings.  Article 9.5 refers to "duty assessment … 
proceedings".  Article 9.5 also refers to "rev iew proceedings", meaning changed circumstance or 
sunset proceedings.   
 
(vi) Object and Purpose 
196. According to the United States, the fact that Article 2.4.2 would apply to original 
investigations only is consistent with the distinction between origin al proceedings and other types of 
proceedings and the fact that they serve different purposes119 and have different functions.  The 
United States further argues that "the limited applica tion of Article 2.4.2 to the investigation phase is 
consistent with the divergent functions of investigations and other proceedings under the Anti-
Dumping Agreement ".120   
 197. However, that the disciplines in Article 2 appl y whenever an authority investigates or relies 
on a "margin of dumping" does not have as result that there is no longer any meaningful distinction 
between different types of anti-dumping proceedings.    198. In US – Corrosion-Resistant Steel Sunset Review , the Appellate Body noted that "Article 2 
sets out the agreed disciplines in the Anti-Dumping Agreement for calculating dumping margins.  As 
observed earlier, we see no obligation under Article 11. 3 for investigating authorities to calculate or 
rely on dumping margins in determining the likel ihood of continuation or recurrence of dumping.  
However, should investigating authorities choo se to rely upon dumping margins in making their 
likelihood determination, the calculation of th ese 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 margi ns" (emphasis added).121  The findings of the Appellate Body are clear 
and logical.  If investigating authorities rely on dumping margins for the purposes of proceedings 
other than original proceedings, the calculation of these margins will have to comply with the 
disciplines of Article 2.4.  If Article 2.4 and 2.4.2 we re limited to "original investigations", that would 
open up in the Anti-Dumping Agreement  a vast loophole on the fundamental issue of how to calculate 
a margin of dumping. It would also make the results of an original investigation worthless.122   
                                                      
118 US First Written Submission, para. 108.   
119 US First Written Submission, para. 108.   
120 US First Written Submission, para. 110.   
121 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 187.   
122 EC First Written Submission, para. 221.   WT/DS350/R 
Page C-44  
 
  (vii) No proof that Member intended special me aning (Article 31(4) of the Vienna Convention) 
199. According to Article 31(4) of the Vienna Conve ntion, "a special meaning shall be given to a 
term if it is established that the parti es so intended".  This means the Members
 and all the Members.  
The burden of proof is on the Member seeking to est ablish the intent, in this case, the United States.  
The first place to look for evidence of the Members' intent is the text of the Anti-Dumping Agreement  
and the GATT 1994 .  In this respect, it is appropriate to bear in mind that if the Members intend to 
give a term a special meaning, there is a simple means of doing that:  define  it, or at least use a cross-
reference .  The Anti-Dumping Agreement  and the GATT 1994  contain several definitions and many 
cross-references, but no definition of the word "investigation", and no cross-reference between 
Articles 2 and 5.123   
 
200. In our view, if the Members had "intended" the Phrase to have the result argued for by the 
United States, they would not have tried to "imp lement" the definition of "margin of dumping" by 
fragmenting that definition and introduc ing internal inconsistencies in the Anti-Dumping Agreement  
and the GATT 1994 ;  they would not have confined the Phrase to the first sentence of Article 2.4.2;  
they would not have grammatically tied the word s "during the investigation phase" to the word 
"existence" as opposed to the word "established" (in English, French and Spanish);  they would not 
have changed the drafting in the final Dunkel Draf t precisely in order to achieve this grammatical 
link;  they would have expressly defined or cross -referenced or referred to  "an investigation to 
determine the existence, degree and effect of any alleged dumping";  they would have made express 
provision for investigating authorities to disregard the relevant data, as they did in Articles 2.2.1, 2.7, 
9.4 and Annex II, paras 5 to 7;  they would not have  inserted the cross-reference to all of Article 2 in 
Article 9.3;  and they would not have used the word  "investigation" in Articles 2, 6 and elsewhere in 
the Anti-Dumping Agreement  to refer to different types of anti-dumping proceeding.   
 201. The Phrase uses the words "during … phase" ra ther than the words "during … period".  
However, the ordinary meaning of these two phrases co incides, both terms referring to:  "a distinct 
period ".  Furthermore, there are other words that appear only once in the Anti-Dumping Agreement  
without that meaning, mechanistically, th at those words have a special meaning.124  And there is no 
general mechanistic rule against synonyms .  Taking all of these matters fairly into consideration, and 
considering the range of options open to the Memb ers, it is simply not possible to reasonably 
conclude that all the Members intended, merely by the use of the word "phase", placed in a 
grammatically irrelevant position, to render the disciplines of Article 2 on the calculation of the 
defined term "margin of dumping" worthless – and this  for all practical purposes, that is, for all final 
payments, given that the results of the first re fund procedure are applied from the date on which 
provisional duties are first imposed.    
202. The United States did not adduce any evidence in support of the proposition that the Members 
intended the Phrase to have the special meaning argued for by the United States.  Instead, the 
European Communities refers to several pieces of evidence.   
 
                                                     
 
123 Panel Report, US – FSC (Article 21.5 - EC) , para 8.93:  "… it is not clear to us that the term has 
obtained a universally agreed upon special meaning.  … no such definition or meaning has been included in the 
SCM Agreement  as a common understanding among WTO Members.  Therefore … we do not impose a single 
rigid definition or interpretation of the term …";  confirmed by Appellate Body Report, US – FSC (Article 21.5 - 
EC), para 138 and footnote 115.   
124 For example "accelerated" in Article 9.5;  "fragmen ted" in footnote 13;  " zero" in Article 9.4;  
"offset" in Article 11.2.  In the context of the present di spute, what matters is the ordinary meaning of the word 
"investigation".  The ordinary meaning of the word phase is of much less significance – and in any event merely 
confirms the position of the European Communities.    WT/DS350/R 
 Page C-45 
 
 
  203. First, the European Communities refers to th e preparatory work, and provides an analysis of 
those documents.125  If all the Members had intended to take a step as important as that argued for by 
the United States, one might expect to find some tr ace of that decision in those documents, which run 
to several hundred pages, and span seven years.   However, these documents offer no support to the 
United States.  On the contrary, they support the European Communities.   
 
204. Second, the European Communities refers to a nd has previously adduced a complete copy of 
the notifications made by 105 WTO Members to the WTO of municipal laws implementing the Anti-
Dumping Agreement , together with an analysis of those laws .  None of these notifications indicate any 
Member that has taken the same line as the United Stat es.  It is not to be expected that the Members 
would intend one thing when concluding the Anti-Dumping Agreement , and systematically do 
something different on implementation.  Whether or not the legislation pre-dates the WTO Agreement  
is irrelevant, if it has subsequent ly been notified as implementing the Anti-Dumping Agreement .  The 
European Communities also cites this in suppor t of its case as "subsequent practice" within the 
meaning of Article 31(3)(b) of the Vienna Convention.   
 
205. In the light of the preceding matters, it is cl ear that the United States has not established that 
all the WTO Members intended to give the spec ial meaning to the Phrase argued for by the 
United States.    
(viii) Preparatory Work 
206. A correct interpretation of the Phrase accordi ng to Article 31 of the Vienna Convention does 
not leave the meaning ambiguous or obscure and does not  lead to a result which is manifestly absurd 
or unreasonable.  It just means that the United States' defence fails.  And this is confirmed  by the 
preparatory work.  However, the inte rpretation adopted by the United States does lead to a result that 
is manifestly absurd or unreasonable.  That in terpretation cannot therefore prevail without a proper 
analysis of the preparatory work.  The relevant asp ects of the preparatory work may be summarised as 
follows.    207. A review of the negotiating history up until the first draft of a revised agreement from the 
chair shows that many Members repeatedly raised  the issues of definitions;  of the need for a 
consistent, balanced and fair appr oach;  of changes in internationa l trade;  and of asymmetry and 
zeroing.   
 208. At the meetings of the MTN Negotia ting Group on 31 January-2 February and 19-
20 February 1990 the Members generally presented and discussed the submissions made up until that 
moment;  and the Chairman circulated a paper "whi ch could provide a structured agenda for future 
work".  Aside from the continuing pre-occupation with the need for balance
 and definition  issues, the 
discussion on the price comparison issue is revealing:   
 
Some delegations said that it was fair to have the principles of symmetry of price calculation 
and symmetry of adjustment in normal value and in export price inscribed in Article 2.6.  
One delegation said that the practice of comp aring the average of the normal value with 
export prices on a transaction-by-transaction basis was duly described and commented upon 
in Table 1 of MTN.GNG/NG8/W/64, as well as in MTN.GNG/NG8/W/51/Add.1, 
paragraphs 14-15.  This was an obvious area of prejudice against exporters;  the Code should 
be amended to require comparison to be made  between the weighted average of the normal 
value and the weighted average of the export price .   
 … 
 
                                                      
125 See below Section III.B.2(c)(viii).   WT/DS350/R 
Page C-46  
 
  One delegation considered that it would be too large a burden upon the investigating 
authority if it were to investigate possible factors leading to adjustments, without the 
mentioning of such factors by the exporters.  It  was normal that even small exporters at least 
drew attention to the factors that might lead to adjustment, and that they provide evidence, 
since they alone had it.  It did not think that on the basis of Article 2.6 there was a symmetry problem;  it required a comparison of prices at the same level of trade and adjustments for 
factors that affected price comparability.  The main reason for the practice of averaging on a 
transaction-by-transaction basis was to prevent exporters from practising selective dumping .  
This phenomenon was of great concern and mani fested itself by successive attacks of unfair 
trade practices on different parts of an importing market .  Such a strategy should not leave 
the authorities concerned without the possibility to react.  It added, concerning the table in 
MTN.GNG/NG8/W/64, that it was common to break down the periods in case of significant 
fluctuations;  differences should not be calcul ated in an artificial manner which for given 
time periods did not exist.  However, it believed current practices took care of this.   
 
One delegation said that the problem remained that the method used against selective dumping was applied to all, by way of which protectionist barriers were raised across the 
board.   
 One delegation said that there was a real problem of selective dumping whether on a regional 
basis or along product-lines within a single "like product" category.  However, it also 
understood the concerns of some other delegations.  The Group should try to find solutions 
to accommodate the legitimate concerns of both sides .   
 
209. In this discussion ones sees the juxtaposition between the two sides and critically, one sees 
the express statement that the reason for the practi ce of comparing a weighted-average normal value 
with export prices transaction-by-transaction was to combat targeted dumping.  Finally, one sees the 
launching of the solution "to accommodate the leg itimate concerns of both sides" – that being 
Article 2.4.2 of the Anti-Dumping Agreement  as it stands today.   
 210. Duty assessment was also discussed (see page 26 of the note), but only with reference to the 
question of the "lesser duty rule".  Once again, it is highly significant that at no time was there any 
indication or suggestion in the discussion of differe nt treatment for original investigations and 
retrospective assessments on the fundamental question of how to calculate a margin of dumping.   
 
211. Further meetings of the MTN Nego tiating Group followed on 21-22 March 1990
126, with a 
submission from the European Communities127, and on 1 May 1990128, discussing a submission by 
the Nordic Countries129, broadly speaking maintaining its established line on symmetry and zeroing.  
The notes of the 1 May 1990 and 1 June 1990130 meetings of the MTN Negotiating Group recall that 
the negotiations were continuing under the chair of  Mr. C. R. Carlisle, Deputy Director-General.  
Japan submitted a further communication131 stating:   
(b) The Code should set out clear guidelines  that ensure symmetrical comparison of 
"normal value" and "export price" at the same level of trade, and eliminate the possibility of 
asymmetrical comparison, in disregard of certain costs actually incurred, and thereby 
artificially creating "dumping" when none actually exist.  The Code should also be clarified, 
as another aspect of "symmetrical comparis on", to disallow the practice of calculating 
"normal value" on an average basis and then to compare it to "export price" on an individual basis.   
                                                      
126 MTN.GNG/NG8/16.   
127 MTN.GNG/NG8/W/74.   
128 MTN.GNG/NG8/17.   
129 MTN.GNG/NG8/W/76, at page 3.   
130 MTN.GNG/NG8/18.   
131 MTN.GNG/NG8/W/81.    WT/DS350/R 
 Page C-47 
 
 
  212. Thus, the conclusions about the ne gotiating process are as follows:   
 213. First, the negotiators were acutely aware of and sensitive to the issue of definitions.  Every 
single one of the documents in the negotiating history, without exception, whether drafted by 
Members or by the secretariat, refers to and discu sses several definitions.  The documents repeatedly 
and at length discuss the merits of having definitions  or not having definitions.  There is never one 
voice raised against the basic assumptions that und erlie these discussions.  There is consensus:  it 
really matters whether or not something is defined;   and the fact that some terms are defined and 
others not must be given meaning.    
214. Second, there was general consensus on the need for a consistent, balanced and fair 
application of anti-dumping measures.    215. Third, there was broad consensus on both sid es of the debate that international markets and 
business had evolved, and that the Anti-Dumping Agreement  should be up-dated accordingly.   
 
216. Fourth, at no point in the debate was it ever suggested that there should be different treatment 
for original investigations and retrospective as sessments on the fundamental question of how to 
calculate a margin of dumping.  This is so notw ithstanding the fact that assessment and refund issues 
were repeatedly discussed in detail and at length, w ith regard to the "duty as a cost" and "lesser duty" 
issues.   
 
217. Fifth, there is a clear and strong indication of consensus that the interests of both parties in the asymmetry and zeroing debate could be accommodat ed in the targeted dumping provisions that 
eventually became the second sente nce of Article 2.4.2 of the Anti-Dumping Agreement .   
 
218. Sixth, there is an overwhelming indicati on of consensus that the presence of the word 
"investigation", used repeatedly in wh at was to become Article 2.2 of the Anti-Dumping Agreement , 
did not mean that those provisions were to be irre levant when a margin of dumping was calculated in 
retrospective assessments.    219. Following the MTN Negotiations, successive drafts  of what eventually became Article 2.4.2 
of the Anti-Dumping Agreement  are referred to as:  Carlisle I
132, Carlisle II, New Zealand I, 
New Zealand II, New Zealand II Ramsauer and the Dunke l draft.  All of these drafts reflect the basic 
"solution to accommodate the interests of both sides" that emerged from the MTN Negotiating Group, as outlined above:  symmetry, with an excep tion in the case of targeted dumping.   
 
220. In all of the drafts, the word "investigation"  or the words "investigation period" were used 
several times in the draft provisions that were eventu ally incorporated into Ar ticle 2, and particularly 
Article 2.2, of the current Anti-Dumping Agreement .  At no time was there any indication or 
suggestion that this meant that these provisions w ould only apply in an original investigation, as 
opposed to any circumstances in which a margin of  dumping was to be re-calculated, including a 
retrospective assessment.  The United States has fully implemented the provisions of Article 2.2 in its 
municipal anti-dumping law also for "reviews", consid ering this "required or appropriate".  In these 
circumstances, the mere introducti on of the word "investigation" into what eventually became 
Article 2.4.2, in the New Zealand I text, was not such as to indicate any exceptional or special or 
limited or defined meaning for that word, dis tinguishing it from the other provisions of what 
eventually became Article 2.2.  And this situation was not altered by the use of the word "phase", 
given the ordinary meaning of that word.   
 
                                                     
 
132 MTN.GNG/NG8/W/83/Add.5 and Corr.1.   WT/DS350/R 
Page C-48  
 
  221. The negotiating history does not record which Member or Members – if any – proposed the 
particular form of words "during the investigation ph ase" or why.  It may or may not be that one or 
more persons acting for the United States  (but not all the other Members of the WTO) thought  that 
retrospective assessments had thereby been excluded.   However, they were mistaken.  They erred 
because they made the mistake of assuming that the word "investigation" – as it may or may not be 
commonly understood in United States municipal anti-dumping law – always  means in WTO anti-
dumping law, an original  investigation.  But that is not true .  Because, unlike many other terms, the 
word "investigation" is not defined in the Anti-Dumping Agreement .  And a brief perusal of the Anti-
Dumping Agreement  reveals that the word "investigation" cannot be construed as always  meaning an 
investigation "to determine the existence, degree or  effect of any alleged dumping" – that is, an 
original investigation.  They also made the mist ake, apparently, of forgetting about the rules of 
interpretation of customary international law, as set out in the Vienna Convention, expressly 
incorporated into the Anti-Dumping Agreement , according to which terms must be given their 
ordinary meaning (referring to a dictionary where ap propriate), having regard to context, object and 
purpose.  If they had paused for thought for a moment – for legal  thought as opposed to wishful 
thinking  – they would have instantly recognised the errors in their thinking.   
 222. At the same time, all the other Members  of the WTO, not knowing which Member or 
Members (if any) were at the origin of the relevant  Phrase, and not being privy to the points of view 
now expressed by the United States before this Pane l, would not have had a ny particular reason to 
associate the Phrase with the municipal anti-dumping law of the United States – nor draw inspiration 
from that law for the purposes of interpreting the revi sed text.  In any event, not having the power of 
mind reading, they would have had no reason what soever, based on proper legal considerations of 
correct interpretation, to view the insertion of th e words "investigation" (already littered about in the 
draft of Article 2.2) or "phase" as having the c onsequences argued for by the United States – namely 
the complete negation of all the concerns a bout asymmetry and zeroing consistently expressed 
throughout the MTN negotiations.  There would be co mplete negation, because the results of the first 
retrospective assessment displace entirely the results of  the original investigation.  That would not be 
a balanced solution.  Nor would it be a solution that "accommodates the leg itimate interests of both 
sides".    223. And the final proof of that is that when th e United States negotiators brought the text home, 
they were obliged, in the SAA, un ilaterally, and in an attempt at ex post  rationalisation of the 
negotiations, to insert the words they no doubt so d early wished were in Ar ticle 2.4.2 – words that 
they had neglected or chosen not to place fairly and squarely on the table during the negotiations:  
"(not reviews)".    
224. Making the reasonable assumption that the Members negotiated in full cognizance of the 
customary rules of interpretation of public intern ational law, including Articles 31 and 32 of the 
Vienna Convention, it may reasonably be assumed th at they negotiated in good faith, just as they 
agreed that the terms of the Anti-Dumping Agreement  were to be interpreted in good faith.
133  In such 
negotiations, one would neither expect nor accept that wh at is clearly given, after lengthy debate, with 
one hand (agreement not to use asymmetry, absent targeted dumping), would be entirely  taken away 
with the other, on the basis of an obscure, unarticul ated, unilateral and erroneous "interpretation" of 
the relevant provisions.  In these circumstances, in sofar as the United States claims paternity of the 
Phrase, it cannot be allowed to rely on its own failure  either to have the Phrase drafted so as to convey 
the meaning now argued for by the United States, or  its failure to explain the supposed object and 
purpose of the Phrase to its negotiating partners, as an excuse for unilaterally ignoring other clear 
obligations clearly entered into.  That would be in consistent with basic requirements of legal security 
and legal stability in international relations, which also inform sub sequent negotiations.  Members are 
                                                      
133 Panel Report, Korea – Procurement , para 7.100:  "Parties have an obligation to negotiate in good 
faith just as they must implement the treaty in good faith".  See also, Vienna Convention, Article 48.    WT/DS350/R 
 Page C-49 
 
 
  not entitled to any reservation other than to  the extent clearly provided for in the Anti-Dumping 
Agreement .134   
 
(ix) Panel and Appellate Body Reports referred to by the United States 
225. In support of its assertion that Article 2. 4.2 is limited to original proceedings, the 
United States refers to various pa nel and Appellate Body reports.   
 226. The United States refers to the findings of the Panel in US – Zeroing (EC)  which have been 
overruled by the Appellate Body and are therefore not legally relevant.    
227. The United States also refers to the Appellate Body Report in Brazil – Desiccated Coconut .  
According to the United States, "Article 18. 3 of the AD Agreement explicitly recognises the 
difference between investigations, which may lead to  the imposition of a measure, and "reviews" of 
existing measures.  In Brazil – Desiccated Coconut (AB) , the Appellate Body analysing an identical 
distinction in Article 32.3 of the SCM Agreement,  noted that the imposition of "definitive" duties 
ends the investigative phase".
135   
 228. However, the United States does not provide any quotation.  Footnote 116 in the US First Written Submission refers to "p. 9" of the Appellate  Body Report in that case which appears to mean 
"page 9".  However, page 9 contains no statem ent by the Appellate Body, but merely summarises 
arguments of the parties.   
 
229. First , the Appellate Body has never stated in th at case that "the imposition of "definitive" 
duties ends the investigative phase" as alleged by th e United States.  In particular, the Appellate Body 
makes no reference to an investigation "phase".  In that respect, the European Communities would 
like to draw the Panel's attention to the weakn ess of references such as these which are even not 
quotations and the non-transparent manner in wh ich they are presented to the Panel by the 
United States.  Second , in that dispute, the Appellate Body was not concerned with considering the 
meaning of the word "investigation" in general te rms, but about the trans itional provisions of the SCM 
Agreement  and its relationship with GATT 1994 .  The European Communities therefore disagrees 
with the United States' assertion that the Appella te Body was in that case, "analysing [the] … 
distinction in Article 32.3" of the SCM Agreement  between investigations and reviews.  This is simply 
not an accurate description of that case.  In that case, the Appellate Body had to determine whether 
GATT 1994  Article VI and the SCM Agreement  apply to a countervailing duty imposed pursuant to an 
investigation initiated by Brazil pursuant to an appli cation for an investigation filed prior to the entry 
into force of the WTO Agreement for Brazil.  In  this context, the Appellate Body considered 
Article 32.3 of the SCM Agreement  as a clear statement that for countervailing duty investigations or 
reviews the dividing line between the applicati on of the GATT 1947 system of agreements and the 
WTO Agreement is to be determined by the da te on which the application was made for the 
countervailing duty investigation or reviews.
136   
 230. The United States refers to the Appellate Body findings in US - OCTG  Sunset Reviews.
137  
This case does not, however, support the United States in the present dispute.  Indeed, in that case, the 
Appellate Body dealt with an entirely different issu e, i.e. the application of rules on cumulation in 
sunset reviews.  The European Comm unities agrees that Article 3.3 of the Anti-Dumping Agreement  is 
limited to original proceedings, given the cross-re ference to Articles 5.8 and 5.1 which are expressly 
limited by their own terms to original proceedings .  That has no bearing on the meaning of the word 
                                                      
134 Article XVI.5 of the WTO Agreement.   
135 US First Written Submission, para. 105.   
136 Appellate Body Report, Brazil – Desiccated Coconut , p. 18.   
137 US First Written Submission, para. 106.   WT/DS350/R 
Page C-50  
 
  "investigation" in Article 2.4.2 of the Anti-Dumping Agreement .  In fact, that case supports the 
European Communities' position to the extent that the Appellate Body notes that when the rationale 
for a certain provision applies to different types of anti-dumping proceedings , it would be anomalous 
to read the Anti-Dumping Agreement  as limiting such provisions to original proceedings.
138   
 
231. The United States' reference to the Panel's findings in US – DRAMs  is inappropriate.139  The 
full quotation reads:    
In this regard, we note that Korea has not argued before us that an Article 9.3 duty 
assessment procedure should be included with in the notion of "investigation" for the 
purpose of Article 5.8.  In the context of Article 5 of the AD Agreement, it is clear 
to us that the term "investigation" mean s the investigative phase leading up to the 
final determination of the investigating authority.   
 232. In the first place the European Communities ta kes note that the United States does not quote 
the full text of footnote 519, nor even the full text of the second sentence of that footnote.  Rather, it 
chooses to omit the important opening words "In the context of Article 5 of the AD Agreement …".  
This probably reflects an awareness on the part of  the United States that the meaning of the word 
"investigation" in Article 2.4.2 is an entirely diffe rent legal matter from the meaning of that word in 
various provisions of Article 5 of the Anti-Dumping Agreement .  Furthermore, the existence of those 
opening words also indicates that an important a nd significant degree of care was being exercised by 
the drafter of the panel report in US – DRAMs .  The drafter took care to limit the observation to the 
context of Article 5 – saying nothing about Article 2. 4.2 – and with good reason.  As repeated several 
times already, it is not disputed that Article 5 of the Anti-Dumping Agreement  only deals with original 
proceedings. Actually, this statement of the Pane l would support the Europ ean Communities' case in 
that it implies that there may be investigative phases other than the one leading up to the final 
determination of the inves tigating authority in the context of Article 5.   
 233. The United States also refers
140 to para. 7.70 of the Panel Report in US – Corrosion-Resistant 
Steel Sunset Reviews  which states:   
 
[T]he text of paragraph 8 of Article 5 re fers expressly to the termination of an 
investigation in the event of de minimis  dumping margins.  There is, therefore, no 
textual indication in Article 5.8 that would suggest or require that the obligation in 
Article 5.8 also applies to sunset reviews.   
 234. The European Communities agrees that the outc ome in that panel on this point is correct.  
Article 5.8 of the Anti-Dumping Agreement  refers expressly to "[a]n application under 
paragraph 1 …" and paragraph 1 of  Article 5 refers expressly to "a n investigation to determine the 
existence, degree and effect of any alleged dumping" – th at is, to an original investigation.  That said, 
the European Communities would point out that in that case the panel was enquiring into whether or 
not certain obligations contained in Article 5 apply only to original investigation, or also in other 
types of investigation or proceeding.  The pane l was not enquiring into the meaning of the word 
"investigation" in Article 2.4.2 of the Anti-Dumping Agreement , which is an entirely different legal 
matter.  There was no argument and no findings  in that case on the meaning of the word 
"investigation" in Article 2.4.2 of the Anti-Dumping Agreement .  In these circumstances, the case 
provides no support for the position of the United States in these proceedings.    
                                                     
 
138 Appellate Body Report, US – OCTG Sunset Reviews , para. 297.   
139 US First Written Submission, para. 106.   
140 United States first written submission, para 101.    WT/DS350/R 
 Page C-51 
 
 
  (x) Article 2.4.2 second sentence 
235. The United States submits that the prohib ition of zeroing in duty assessment proceedings 
would be inconsistent with Ar ticle 2.4.2 which provides for an  alternative "targeted dumping" 
methodology that may be utilized in certain circum stances.  According to  the United States, the 
implication of a general prohibition of zeroing is that the targeted dumping clause would be reduced 
to inutility since the targeted dumping methodology ma thematically must yield the same result as an 
average-to-average comparison if, in both cases,  non-dumped comparisons are required to offset 
dumped comparisons.141   
 236. As a preliminary matter, the European  Communities would like to recall that the 
United States does not argue
 that the use of zeroing in its administrative review proceedings is 
justified by the fact that they address targeted dumping within the meaning of Article 2.4.2 second 
sentence.  In other words, the United States is not  defending itself by submitting that its investigating 
authorities have found a pattern of export prices which differ significantly among different purchasers, regions or time periods, and that an ex planation has provided as to why such differences 
cannot be taken into account appropriately by the u se of a weighted average-to-weighted average or 
transaction-to-transaction comparison.    237. Actually, this third method can only be u sed by investigating authorities in exceptional 
circumstances.  According to the wording, the circumstances justif ying the use of that exceptional 
method is where the investigating authorities find  a "pattern" of "export prices" which "differ 
significantly among purchasers, regions or time periods".  This provision thus focuses on the 
existence of a "pattern" which affects "export pri ces".  The second condition to use this methodology 
is that these differences cannot appropriately be addressed by one of the two symmetrical comparison 
methods.  These conditions are not fulfilled with respect to the measures at issue – which the 
United States does not dispute.   
 
238. Since the United States does not submit that the second sentence of Article 2.4.2 is applicable 
to the administrative review proceedings, the Eu ropean Communities consid ers that the issue of 
whether zeroing is or not permitted under the asy mmetrical comparison method contained in that 
provision is not an issue here.    
239. In any event, the European Communities woul d like to respond to th e arguments submitted by 
the United States as follows.    240. First, the United States refers to a "general prohibition of zeroing".  However, recourse to targeted dumping is an exceptional remedy under the Anti-Dumping agreement and is of no relevance 
as regards the fairness of otherwise of  zeroing in other situations.   
 241. In US – Softwood Lumber (21.5) , the Appellate Body expressly noted that "the methodology 
in the second sentence of Article 2.4.2 is an excep tion.  […] Being an exception, the comparison in 
the second sentence of Article 2.4.2 alone cannot  determine the interpretation of the two 
methodologies provided in the first sentence, that is, transaction-to-transaction and weighted average-
to-weighted average".
142   
 242. Second, in any case, there appears to be a nu mber of ways of responding to targeted dumping 
that do not involve zeroing, such as restricting the universe of export transactions to those in the pattern in which case there would be no mathematical equivalence.   
 
                                                     
 
141 US First Written Submission, para. 112.   
142 Appellate Body Report, US – Lumber (Article 21.5) , para. 97.   WT/DS350/R 
Page C-52  
 
  243. In US – Lumber (21.5) , the Appellate Body expressed this by saying that:   
 
the United States' "mathematical equivalence" argument assumes that zeroing is prohibited under the methodology set out in the second sentence of Article 2.4.2.  The permissibility of zeroing under the wei ghted average-to-transaction comparison 
methodology provided in the second sentence of Ar ticle 2.4.2 is not before us in this 
appeal, nor have we examined it in prev ious cases.  We also note that there is 
considerable uncertainty regarding how precisely the third methodology should be applied.
143   
 
244. Third, the United States' mathematical equiva lence argument is simply legally erroneous.  As 
underlined by the Appellate Body, "[o]ne 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 set out in another 
part of that provision".144    
 
245. The United States further submits that "if the Appellate Body is correct that dumping may only be determined for the product as a whole, there is  no textual basis for inferring that the targeted 
dumping comparison methodology is an exception to that provision".
145   
 246. The methodology described in Article 2. 4.2 second sentence applies in very specific 
circumstances.  It permits a comparison between  a weighted average normal value and the export 
transactions that fall within the pattern.  Excludi ng the export transactions outside the pattern would 
not be inconsistent with the basi c rule that the dumping margin must be calculated for the product as a 
whole because the targeted dumping provisions are an exception
 to the normal rule which permits an 
authority to unmask targeted dumping that would otherwise be hidden.   
247. All of this reasoning was effectivel y confirmed by the Appellate Body in US – Zeroing (EC) , 
and with even greater force in US – Zeroing (Japan) .   
 (d) Article 9.3 
248. In its First Written Submission, the European Communities has indicated that the provision in 
Article 9.3 according to which "the amount of th e anti-dumping duty shall not exceed the margin of 
dumping as established under Article 2" clearly means that Article 2.4.2 applies in administrative 
reviews as well.  The United States spends much time in its First Written Submission in trying to 
argue why Article 2.4.2 would not be applicable to ad ministrative reviews, on the basis of Article 9.3.  
More specifically, the United States submits that Article 2.4.2 is not applicable to assessment 
proceedings because the general reference to Article  2 in Article 9.3 necessarily would include any 
limitations found in the text of Artic le 2 and that since Article 2.4.2 would be limited by its own terms 
to original investigations, such limitation woul d be included in the reference to Article 2 in 
Article 9.3.
146   
 249. For the reasons already set out in this submis sion, this argumentation has no merit.  The US 
method is inconsistent with Article VI of the GATT 1994  and Articles 2.1 and 9.3 of the Anti-
Dumping Agreement .  Although these issues have largely been dealt with above, for the convenience 
of the Panel, in this section the European Commun ities groups together and re-visits various issues 
related to the interpretation of Article 9.3, and Article 9 more generally.   
                                                     
 
143 Appellate Body Report, US – Lumber (Article 21.5 ), para. 98.   
144 Appellate Body Report, US – Lumber (Article 21.5) , para. 99.   
145 US First Written Submission, para. 116.   
146 US First Written Submission, para. 120.    WT/DS350/R 
 Page C-53 
 
 
  250. In the first place, the interpretation put forwar d by the United States is directly contradicted 
by the text itself which indeed refers to  Article 2.  The cross-references in the Anti-Dumping 
Agreement  make express provision when they refer only to certain paragraphs or sub-paragraphs of an 
article, particularly when the cross-re ference is between different articles147, or when they are 
restricted in some way148, or when the provision to which reference is made is to be modified when 
applied in certain circumstances.149  There is no such express provision in Article 9.3. Article 9.3 does 
not provide, for example, that the amount of th e anti-dumping duty is not to exceed the margin of 
dumping as provided under Article 2, with the exception of  Article 2.4.2;  or as provided in Article 2, 
with the exception of the rules for comparing duly adjusted normal value and export price; or mutatis 
mutandis .  This confirms that, in the context of Article  9.3, a "margin of dumpi ng" is to be established 
by reference to the whole  of Article 2, consistent with the use of the defined term "margin of 
dumping".150   
 251. The United States tries to find support for its position in the Panel's Report Argentina – 
Poultry  according to which "Article 9.3 does not refe r to the margin of dumping established "under 
Article 2.4.2", but to the margin established "under Ar ticle 2".  In our view, this simply means that, 
when ensuring that the amount of  the duty does not exceed the margin of dumping, a Member should 
have reference to the methodology set out in Article 2".
151  This statement simply confirms that the 
duty applied cannot exceed the dumping margin as esta blished in accordance with  Article 2, including 
all its provisions.  What the panel is saying is that the reference to Article 2 in Article 9.3 includes the 
entire Article 2, including Article 2.1, 2.4 and 2.4.2.   
 
252. In addition, it is important to recall the context of these findings of the panel.  In that dispute, 
Argentina had imposed a variable duty which was ba sed on the difference between the invoiced f.o.b. 
price and a "minimum export price" calculated for each exporter found to have dumped.  Therefore, 
depending on the amount of the invoiced f.o.b. price for a given import trans action, this difference 
(and the resultant duty) could sometimes exceed th e dumping margin "calculated for the relevant 
exporter during the investigation".  Brazil claimed th at this was inconsistent with Article 9.3 and 
Article 2.4.2, particularly because of the refere nce in Article 2.4.2 to the words "during the 
investigation phase".  Brazil claimed that the vari able anti-dumping duties at issue are inconsistent 
with Article 9.3 because they are collected by re ference to a margin of dumping established at the 
time of collection and that duties cannot exceed the margin of dumping established during the 
investigation .  The panel correctly concluded that the variab le duties at issue are not inconsistent with 
Article 9.3 simply because they are collected by reference to a margin of dumping established at the 
time of collection.  The panel expressly noted that  Brazil had not argued that the anti-dumping duties 
actually collected by the authoriti es exceeded the margin of dumping prevailing at the time of duty 
collection.152   
 
                                                      
147 For example:  Article 11 (footnote 21) cross-refe rs to "paragraph 3 of Article 9";  Article 11 
(footnote 22) cross-refers to "subparagraph 3.1 of Article 9";  Article 9.3.3 cross-refers to "paragraph 3 of 
Article 2";  Article 9.4 cross-refers to "paragraph  10 of Article 6", "paragraph 8 of Article 6" and 
"subparagraph 10.2 of Article 6";  Article 4.4 cross-re fers to "paragraph 6 of Article 3";  Article 10.1 cross-
refers to "paragraph 1 of Article 7" and "paragraph 1 of Article 9".   
148 For example:  Article 11.4 cross-refe rs to "The provisions of Article 6 regarding evidence and 
procedure  …";  Article 7.5 cross-refers to " The relevant provisions of  Article 9 …".   
149 For example:  Article 11.5 cross-refers to Article 8 " mutatis mutandis ";  Article 12.3 cross-refers to 
Articles 11 and 10 " mutatis mutandis ".   
150 Appellate Body Report, US – Softwood Lumber V , paras 93 ("… which includes, of course, 
Article 2.4.2. …") and 99 ("… Moreover, according to Ar ticle VI:2 of the GATT 1994  and Article 9.2 of the 
Anti-Dumping Agreement , an anti-dumping duty can be levied only on a dumped product.  For all these 
purposes , the product under investigation is treated as a whole …").   
151 US First Written Submission, para. 121.   
152 Panel Report, Argentina – Poultry , para. 7.364.   WT/DS350/R 
Page C-54  
 
  253. The United States further submits that the Eu ropean Communities' position that investigating 
authorities cannot make asymmetrical comparisons in  assessment proceedings is contradicted by the 
fact that Article 9 provides for comparisons betw een weighted average normal values and individual 
export transactions, in particular in Article 9.4(ii).
153   
 
254. Article 9.4(ii) relates to sampling and has t hus no relevance to the present dispute, in which 
sampling is not an issue.    255. Even if Article 9.4(ii) of the Anti-Dumping Agreement is taken as a confirmation that 
Members may apply a system of so-called "variable duties", by which a duty may be imposed if and 
to the extent by which the price of an export transaction is below a prospective  normal value, the 
essential fact remains that the provision refers to a prospective  normal value.  Thus, the provision 
does not mean, and cannot be taken to mean, that in a final assessment of anti-dumping duties, based 
on actual  (contemporaneous) exporter-specific margins of dumping, the basic disciplines governing 
the calculation of a margin of dumping, contained in Article VI of the GATT 1994  and Article 2 of 
the ADA , no longer apply.  The collection of anti-dumping duties on the basis of prospective  normal 
values is only an intermediate stage of collecti on, since it is subject to final assessment under 
Article 9.3.1 and "a prompt refund, upon request" und er Article 9.3.2.  Members must ensure that the 
obligations in Article 9.3 are complied with, par ticularly whenever the "amount of the anti-dumping 
duty is assessed on a prospective b asis";  and there is nothing in Article 9.4 that releases authorities 
from the obligations in Article 9.3, including Articles 9.3.1 and 9.3.2.  In short, the possibility for 
Members to use a variable duty system such as that referred to in Article 9.4(ii), based on a 
prospective  normal value, offers no support for the position of the United States.   
 256. The United States then argues that "the cal culation of transaction-specific anti-dumping duties 
in assessment reviews has been found consistent with the ADA"
154 and refers again to the panel's 
report in Argentina – Poultry  in that respect.   
 257. However, in Argentina – Poultry , the panel has never stated that the calculation of 
transaction-specific anti-dumping duties in assessment reviews was consistent with the Anti-Dumping 
Agreement .  In that case, the question arose as to whether the fact that anti-dumping duties are 
collected by reference to a margin of dumping estab lished at the time of collection was consistent 
with the Anti-Dumping Agreement .  The Panel concluded that the imposition of variable duties were 
consistent with the Anti-Dumping Agreement , referring inter alia  to Article 9.4(ii) of the Anti-
Dumping Agreement  which, according to the panel, "is descr ibing the use of variable anti-dumping 
duties, which are calculated by comparing actual (i.e . at the time of collection) export price with a 
prospective normal value".
155  However, the Panel clearly clarifies that "a properly designed variable 
duty system would include a refund mechan ism consistent with Article 9.3.2".156  In addition, the 
Panel expressly noted that it does not examine whet her the anti-dumping duties actually collected by 
the Argentinean authorities exceed ed the margin of dumping (prevailing at the time of duty 
collection) since Brazil had not made this claim before the panel.157  The panel has thus admitted that 
one issue is whether the fact that variable anti- dumping duties may be collected, i.e. on a transaction-
basis level and another issue is whether such an ti-dumping duties do not exceed the relevant dumping 
margin.   
 258. The United States further submits that "the obligation set forth in Article 9.3 to assess no 
more in anti-dumping duties than the margin of dum ping, is similarly applicable at the level of 
                                                     
 
153 US First Written Submission, para. 124.   
154 US First Written Submission, para. 126.   
155 Panel Report, Argentina – Poultry , para. 7.359.   
156 Panel Report, Argentina – Poultry , para. 7.362.   
157 Panel Report, Argentina – Poultry , para. 7.364.    WT/DS350/R 
 Page C-55 
 
 
  individual transactions".158 The United States quotes various findings of panels in US – Zeroing (EC)  
and US – Zeroing (Japan)  to support its contention that in duty assessment proceedings, the term 
"margin of dumping" can be interpreted as applying on a transaction-specific basis.159   
 259. However, this is contradicted by the text and context of the Anti-Dumping Agreement .  
Article 6.10 of the Anti-Dumping Agreement  provides relevant context for the interpretation of the 
term "margin of dumping".  It provides that "[t]he authorities shall, as a rule, determine an individual 
margin of dumping for each known exporter or producer concerned for the product under 
investigation".  Therefore, under Article 6.10, ma rgins of dumping for a product must be established 
for exporters or foreign producers.  The text of Ar ticle 6.10 does not limit the application of this rule 
to original investigations and is  thus relevant to duty assessment proceedings governed by Article 9.3 
of the Anti-Dumping Agreement  and Article VI:2 of the GATT 1994 .  As noted by the Appellate Body 
in US – Zeroing (EC) :   
 
We note that in Mexico – Anti-Dumping Measures on Rice , the Appellate Body 
confirmed that the term "margin of dumping" in the Anti-Dumping Agreement in 
general refers to the margins of dump ing for exporters or foreign producers.
230  The 
Appellate Body made that observation in re lation to the interpretation of the term 
"margin of dumping" in Article 5.8 of the Anti-Dumping  Agreement .  The Appellate 
Body also referred to a previous report, US – Hot-Rolled Steel , where the Appellate 
Body indicated, in the contex t of Article 2.4.2 of the Anti-Dumping Agreement , that 
the term "margin of dumping" "means the i ndividual margin of dumping determined 
for each of the investigated exporters and producers of the product under investigation, for that particular product".  In US – Corrosion-Resistant Steel Sunset 
Review , the Appellate Body stated, in the context of sunset reviews under 
Article 11.3 of the Anti-Dumping Agreement , that, "should investigating authorities 
choose to rely upon dumping margins in  making their ... determination, the 
calculation of these margins must conform to the disciplines of Article 2.4."
232  The 
Appellate Body noted that there are "no other provisions in the Anti-Dumping 
Agreement according to which Members may calculate dumping margins".   The 
Appellate Body made it clear in US – Hot-Rolled Steel , in the context of 
Article 2.4.2, that the term "margin of dumping" refers to margins of dumping for 
exporters and foreign producers .  Therefore, the Appellate Body's findings in US – 
Corrosion-Resistant Steel  Sunset Review imply that the margins of dumping that 
might be established in a sunset review under Article 11.3 are margins of dumping for exporters or foreign producers.  Esta blishing margins of dumping for exporters 
or foreign producers is consistent with th e notion of dumping, which relates to the 
foreign producer's or exporter's pricing beha viour.  Indeed, it is the exporter, not the 
importer, that engages in practices that result in situations 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.160   
 
260. By stating that "the amount of the anti-dum ping duty shall not exceed the margin of dumping 
as established under Article 2", Article 9.3 sets a requirement regarding the amount of the assessed 
anti-dumping duties.161  However, it does not prescribe any specific methodology according to which 
the duties should be assessed.  In particular, it is not suggested that final anti-dumping duty cannot be 
assessed on a transaction- or importer-specific basis.   However, in any case, the anti-dumping duty 
                                                      
158 US First Written Submission, para. 127.   
159 US First Written Submission, paras. 129 – 132.   
160 Appellate Body Report, US – Zeroing (EC) , para. 129.   
161 Appellate Body Report, US – Zeroing (EC) , para. 130.   WT/DS350/R 
Page C-56  
 
  cannot exceed the dumping margin as established in acco rdance with Article 2.  As explained by the 
Appellate Body in 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 respect of  the sales made by an exporter.  To the 
extent that duties are paid by an importer, it is open to that importer to claim a refund if such a ceiling is exceeded.  Similarly, under its retrospective system of duty collection, the United States is free to assess duty liability on a transaction-
specific basis, but the total amount of anti-dumping duties that are levied must not 
exceed the exporters' or foreign producers' margins of dumping.
162   
 261. The United States further argues that an e xporter-based approach to Article 9.3 of the Anti-
Dumping Agreement  is unreasonable because importers for wh ich the amount of dumping is greatest 
will have an advantage over their competitors who import at fair value prices because they will enjoy 
the benefit of offsets that result from their competitors ' fairly priced imports.  This argument is based 
on one very obvious flaw:  exporters can dump (i .e. discriminate between normal value and export 
price);  importers cannot.  Therefore, only exporter s can have margins of dumping.  If an exporter has 
a dumping margin of zero, it may be that this margin  is composed of the aggregation of transactions 
with two importers with the first importer having a dumping amount of 5 and the second of -5.  In this 
situation, no duty can be collected from the firs t importer because the exporter has not dumped.   
 
262. The United States further refers to Article 9.4( ii) to support its contention that in a prospective 
system, the amount of liability for payment of an ti-dumping duties is determined at the time of 
importation on the basis of a comparison between the price of the individual export transaction and the prospective normal value.  According to the Unite d States, if in a prospective normal value system 
individual export transactions at prices less than nor mal value can attract liability for payment of anti-
dumping duties, without regard to whether or not  prices of other export transactions exceed normal 
value, there is no reason why liability for payment of anti-dumping duties may not be similarly assessed on the basis of export price less than normal value in the retrospective systems.
163   
 263. This argument is not convincing. As a ma tter of principle, 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 respect of the sales made by an exporter.  
To the extent that duties are paid by an importer, it is open to that importer to claim a refund if such a 
ceiling is exceeded.  The collection of anti-dumping duties on the basis of prospective  normal values 
is only an intermediate stage of collection, since it is subject to final assessme nt and "a pr ompt refund, 
upon request" under Article 9.3.2 of the Anti-Dumping Agreement.   Similarly, under its retrospective 
system of duty collection, the United States is fr ee to assess duty liability on a transaction-specific 
basis, but the total amount of anti-dumping duties th at are levied must not exceed the exporters' or 
foreign producers' margins of dumping.
164   
 264. Finally, the United States asserts that the pr ovisions of Article 2.4.2 apply when determining 
the existence of margins of dumping during the in vestigation phase and do not apply to Article 9.3 
proceedings.
165  In other words, the United States considers itself bound by the methodologies 
contained in Article 2.4.2 of the Anti-Dumping Agreement  when calculating the original duty rates 
(and establishing cash deposits accordingly) but, when  calculating the duties to be collected in 
assessment proceedings pursuant to Article 9.3, it can use any method.  Again, the 
                                                      
162 Appellate Body Report, US – Zeroing (Japan) , para. 162.   
163 US First Written Submission, par. 139.   
164 Appellate Body Report, US – Zeroing (Japan) , para. 162.   
165 Addendum:  US Answers to the EC's Questions, para. 16.     WT/DS350/R 
 Page C-57 
 
 
  European Communities notes that the interpretation s uggested by United States is flatly inconsistent 
with all elements of the agreed rules of interp retation in the Vienna C onvention.  The relevant 
provisions of the Anti-Dumping Agreement  cannot be interpreted so as to leave investigating 
authorities entirely free to decide the amount of duties to be collected.    3. Sunset Reviews 
265. In its First Written Submission, the sole de fence of the United States with respect to the 
claims of the European Communities concerning sunset  reviews is that "the EC has not demonstrated 
that a calculation done in accordance with th e EC's approach would result in zero or de minimis  
dumping margins in the cited cases, leading to a revocation of the order".
166   
 
266. The European Communities submits that to th e extent that it has demonstrated that the 
measures concerned were WTO inconsistent, it is  entitled to a finding in that respect and a 
recommendation that the United States brings its measur es into conformity with it.  The argument put 
forward by the United States that it is incumbent on the European Communities to demonstrate that 
the sunset reviews at issue would have resulted in  a different outcome in case dumping margins would 
have been calculated without zeroing is therefore irre levant.  It is sufficient to demonstrate that the 
United States used a method which systematical ly and inevitably makes it more likely to find 
dumping (or higher margins of dumping).    267. With respect to the sunset reviews contained in the Annex to the request for establishment of 
the Panel, the European Communities submitted that  the United States failed to comply with its 
obligations under the Anti-Dumping Agreement  and the GATT 1994  by relying on dumping margins 
calculated in prior investigation proceedings using zeroing and that in so doing, the United States 
violated Articles 2.1, 2.4, 2.4.2, 11.1 and 11.3 of the Anti-Dumping Agreement .   
 IV. CONCLUSIONS 
268. In conclusion, the European Communities woul d respectfully re-iterate its request that the 
Panel make the findings and recommendations re quested in its first written submission.   
  
                                                     
 
166 US First Written Submission, para. 154. WT/DS350/R 
Page C-58  
 
  ANNEX C-2 
 
SECOND WRITTEN SU BMISSION OF THE  
UNITED STATES 
 
 
 
TABLE OF CONTENTS 
 
  Page  
 
I. INTRODUCTION ..................................................................................................................6 1 
II. THE PANEL SHOULD GRANT THE US REQUEST FOR PRELIMINARY 
RULINGS ........................................................................................................................ ........62  
A. THE EC'S PANEL REQUEST CONTAINED MEASURES THAT WERE NOT IDENTIFIED IN 
ITS REQUEST FOR CONSULTATIONS ..........................................................................................62  
B. THE EC'S "18 MEASURES " FAIL FOR A LACK OF SPECIFICITY ..................................................65  
C. THE EC'S REQUEST INCLUDED MEASURES WHICH WERE NOT FINAL AT THE TIME OF 
ESTABLISHMENT .......................................................................................................................67  
III. THE PANEL SHOULD REJECT THE EC'S ARGUMENTS CONCERNING 
THE METHODOLOGIES IN ASSE SSMENT PROCEEDINGS .....................................69  
A. US ASSESSMENT REVIEWS ARE DISTINCTIVELY DIFFERENT FROM INVESTIGATIONS .............69  
B. THE EC FAILED TO ESTABLISH THAT ARTICLE 2.4.2  APPLIES OUTSIDE OF AN 
INVESTIGATION .........................................................................................................................71  
C. ARTICLE 9.3.1  DOES NOT REQUIRE AN "EXPORTER -ORIENTED " ANALYSIS ...........................74  
D. THE EC'S CHALLENGE WITH RESPECT TO AN ASYMMETRICAL METHOD OF 
COMPARISON WITHOUT JUSTIFICATION IS NOT APPARENT FROM THE EC'S PANEL 
REQUEST AND FIRST WRITTEN SUBMISSION ............................................................................77  
E. BECAUSE THE CHALLENGED MEASURES ARE BASED ON A PERMISSIBLE 
INTERPRETATION , THE PANEL SHOULD FIND THEM TO BE IN CONFORMITY WITH THE 
AD AGREEMENT .......................................................................................................................77  
IV. THE EC HAS DISTORTED THE NEGOTIATING HISTORY OF THE 
AD AGREEMENT .................................................................................................................77  
V. CONCLUSION ..................................................................................................................... ..84 
  WT/DS350/R 
 Page C-59 
 
 
  TABLE OF REPORTS  
 
 
Short Form Full Citation 
Argentina – Footwear 
Safeguard (Panel)  Panel Report , Argentina – Safeguard Measures on Imports of 
Footwear , WT/DS121/R, adopted 12 January 2000, as modified by 
the Appellate Body Report, WT/DS121/AB/R 
Argentina – Poultry (Panel)  Panel Report, Argentina – Definitive Anti-Dumping Duties on Poultry 
from Brazil , WT/DS241/R, adopted 19 May 2003 
Brazil – Aircraft (AB)  Appellate Body Report, Brazil – Export Financing Programme for 
Aircraft , WT/DS46/AB/R, adopted 20 August 1999 
Chile – Price Band System 
(Panel)  Panel Report, Chile – Price Band System and Safeguard Measures 
Relating to Certain Agricultural Products , WT/DS207/R, adopted 
23 October 2002, as modified by the Appellate Body Report, 
WT/DS207/AB/R 
EC – Audiocassettes  GATT Panel Report, EC – Anti-Dumping Duties on Audio Tapes in 
Cassettes Originating in Japan , ADP/136, circulated 28 April 1995 
(unadopted) 
EC – Bed Linen  
(Article 21.5) (AB)  Appellate Body Report, European Communities – Anti-Dumping 
Duties on Imports of Cotton-Type Be d Linen from India – Recourse to 
Article 21.5 of the DSU by India , WT/DS141/AB/RW, adopted 
24 April 2003 
EC – Cotton Yarn  GATT Panel Report, EC – Imposition of Anti-Dumping Duties on 
Imports of Cotton Yarn from Brazil , ADP/137, adopted 
30 October 1995 
Guatemala – Cement I (AB)  Appellate Body Report, Guatemala – Anti-Dumping Investigation 
Regarding Portland Cement from Mexico , WT/DS60/AB/R, adopted 
25 November 1998 
Japan – Film  Panel Report, Japan – Measures Affecti ng Consumer Photographic 
Film and Paper , WT/DS44/R, adopted 22 April 1998 
Mexico – HFCS   Panel Report, Mexico – Anti-Dumping Investigation of High-Fructose 
Corn Syrup (HFCS) from the United States , WT/DS132/R, adopted 
24 February 2000 
Mexico – Rice (AB)  Appellate Body Report, Mexico – Definitive Anti-Dumping Measures 
on Beef and Rice; Complaint with Respect to Rice , WT/DS295/AB/R, 
adopted 20 December 2005 
US – Carbon Steel (Panel)  Panel Report, United States – Carbon Steel , WT/DS213/R and Corr.1, 
adopted 19 December 2002, as modified by the Appellate Body 
Report, WT/DS213/AB/R and Corr.1 
US – Carbon Steel (AB)  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  
US – Certain EC Products 
(AB)  Appellate Body Report, United States – Import Measures on Certain 
Products from the European Communities , WT/DS165/AB/R, adopted 
10 January 2001 
US – Corrosion-Resistant Steel Sunset Review (AB)  Appellate Body Report, United States – Sunset Review of Anti-
Dumping Duties on Corrosion-Resistant Carbon Steel Flat Products 
from Japan , WT/DS244/AB/R, adopted 9 January 2004 WT/DS350/R 
Page C-60  
 
  Short Form Full Citation 
US – Softwood Lumber 
Dumping (Article 21.5) 
(Panel)  Panel Report, United States – Final Dumping Determination on 
Softwood Lumber from Canada – Rec ourse to 21.5 of the DSU by 
Canada , WT/DS264/RW, adopted 1 September 2006, as modified by 
the Appellate Body Report, WT/DS264/AB/RW 
US – Zeroing (EC) (Panel)  Panel Report, United States – Laws, Regulations and Methodology for 
Calculating Dumping Margins , WT/DS294/R, adopted 9 May 2006, 
as modified by the Appellate Body Report, WT/DS294/AB/R 
US – Zeroing (Japan)  (Panel)  Panel Report, United States – Measures Relating to Zeroing and 
Sunset Reviews , WT/DS322/R, adopted 23 January 2007, as modified 
by the Appellate Body Report, WT/DS322/AB/R 
US – Zeroing (Mexico) 
(Panel)  Panel Report, United States – Final Anti-Dumping Measures on 
Stainless Steel from Mexico , WT/DS344/R, circulated  to WTO 
Members 20 December 2007 (on appeal) 
  WT/DS350/R 
 Page C-61 
 
 
  I. INTRODUCTION 
1. In this dispute, the European Communities ("EC ") has asked this Panel to read an obligation 
into the Agreement on Implementation of Article VI of the General Agreement on Tariffs and 
Trade 1994 ("AD Agreement") and the General Agreement on Tariffs and Trade 1994 
("GATT 1994"), notwithstanding the lack of any textua l basis for the obligation that the EC proposes.  
The EC also would like the Panel to consider as binding Appellate Body reports finding "zeroing" in 
certain contexts inconsistent with the covered agreements, despite the absence of stare decisis in 
the WTO dispute settlement system.  The EC goes so far as to argue that Article XVI:4 of the Agreement Establishing the World Trade Organization ("WTO Agreement") imposes on the 
United States some sort of continuing intern ational obligation to eliminate "zeroing".   
 
2. At the same time that the EC uses terms like "good faith" it presents the Panel with a wildly 
inaccurate version of the negotiating history of the AD  Agreement, as discussed more fully below.  In 
particular, not only did the EC never agree to an y of the Uruguay Round proposals that would have 
limited or eliminated zeroing, the EC was one of th e participants in the nego tiations that had defended 
the use of zeroing under the similar language in the Tokyo Round Code and continued to use it after 
the WTO came into force.  Indeed, the EC de fended the use of zeroing under the WTO in the Bed 
Linen dispute.  The United States is unsure which prospect it finds more disturbing, that the EC has 
knowingly presented this incorrect negotiating history, or that it did not bother to check the actual negotiating history before making its representati ons to the Panel.  Far from a "unilateral" 
interpretation of the AD Agreement
1, the interpretation that the EC di sparages is one that the EC itself 
held and advocated.   
 3. The United States has asked that this Panel re main faithful to its obligation under Article 11 
of the Understanding on Rules and Procedures Governing the Settlement of Disputes ("DSU"), which 
calls on each panel to make its own objective asse ssment of the matter before it, including an 
objective assessment of the facts and the applicability  of and conformity with the relevant covered 
agreements.  Moreover, the United States has empha sized that under Articles 3.2 and 19.2 of the DSU 
the Panel cannot add to or diminish the rights and obl igations provided for in the covered agreements.  
Acceptance of the EC's interpretation of th e AD Agreement, the GATT 1994, and the WTO 
Agreement would improperly add to the obliga tions of the United States under the covered 
agreements.  Such a result would undermine the ve ry security and predictability of the multilateral 
trading regime that the WTO dispute settlement system is designed to preserve.   
 4. The United States is confident that the Pa nel will conduct an objective assessment of the 
matter before it, and find that there is no gene ral obligation to provide offsets for non-dumped 
transactions in assessment reviews.  We believe that  the Panel should find persuasive the reasoning of 
panels in four other disputes – US – Zeroing (EC), US – Softwood Lumber Dumping (Article 21.5) , 
US – Zeroing (Japan) and US – Zeroing (Mexico)  – which all conducted an objective assessment as 
required by Article 11 and found that "zeroing" w as not inconsistent with the covered agreements 
outside the context of weighted average-to-weight ed average comparisons in investigations.   
 5. In this rebuttal, the United States first responds  to the EC's arguments against the US request 
for preliminary rulings.  As the United States s hows, the EC has added 14 measures to its panel 
request that were not identified in its consultations  request.  Under Articles 4 and 6 of the DSU, these 
measures cannot fall within the Panel's terms of re ference.  The EC's attempted reliance on prior 
Appellate Body reports cannot s upport its position that it was entitle d to add 14 new measures to its 
panel request.   
 
                                                     
 
1 EC Opening Statement at the First Substantive Meeting with the Parties, para. 14 ("EC First Opening 
Statement").   WT/DS350/R 
Page C-62  
 
  6. The United States also addresses the EC's attempt to include 18 measures, identified as the 
application or continued applicati on of antidumping duties in 18 cases listed in the Annex to its panel 
request.  These alleged measures were the subject of c onsiderable debate at the first meeting with the 
Panel.  As the United States explains, the EC fa iled to specifically identify these 18 "measures" as 
required by Article 6.2 of the DSU.  The EC is tryi ng to reach indefinite subsequent proceedings that 
were not identified in its panel request and that were  not in existence at the time of that request.  It 
now would like the Panel to treat any duties in th e 18 cases as some type of free-standing measure, 
divorced from the underlying determinations.  Such an approach is inconsistent with the requirement 
to identify the specific measures at issue.    
7. The United States also objects to the EC's ch allenge to four preliminary measures.  Under 
Article 17.4 of the AD Agreement, only those m easures where "final action has been taken by the 
administering authorities" may be referred to a pane l.  The EC claims that the Panel should allow 
these preliminary measures, even th ough it has not demonstrated that the exception under Article 17.4 
applies here.  In fact, the EC asks the Panel to ta ke into account so-called "specific circumstances" of 
this case that are not contained in the AD Agreemen t or anywhere else in the covered agreements.   
 8. The United States also addresses several argume nts that the EC made in its first written 
submission, at the first substantive meeting with the parties, and in its answers to the Panel's questions 
concerning methodologies in assessment proceedings.  At the meeting with the Panel, the EC seemed 
almost singularly focused on its flawed argument that Article 2.4.2 of the AD Agreement applies 
outside the context of investigations.  In this submission, the United States demonstrates that, based 
on the application of customary rules of treaty inte rpretation, the phrase "the existence of margins of 
dumping during the investigation phase" in Article 2.4.2 is inextricably and uniquely linked to 
Article 5 investigations to de termine the "existence, degree and effect" of dumping.  The 
United States further rebuts the EC's assertion that Article 9.3.1 of the Antidumping Agreement 
requires an exporter-oriented analysis, and shows th at the undesirable outcome of such a requirement 
would be to reward importers involved in the transact ions priced furthest below normal value.  Lastly, 
the United States demonstrates that it is not at all cl ear that the EC made a claim against the alleged 
use of the "third methodology" in Article 2.4.2 in assessment reviews.    
II. THE PANEL SHOULD GRANT THE US  REQUEST FOR PRELIMINARY RULINGS 
A. T
HE EC'S PANEL REQUEST CONTAINED MEASURES THAT WERE NOT IDENTIFIED IN ITS 
REQUEST FOR CONSULTATIONS  
9. The United States objects to the EC's addition of measures in its panel request that were not 
contained in its request for consultations.  As  the United States explained in its first written 
submission and at the first meeting with the Panel,  a measure cannot fall within a panel's terms of 
reference unless it was first identified in the request for consultations.2  Under Article 7.1 of the DSU, 
a panel's terms of reference are based on the comp laining party's request for the establishment of a 
panel.  In turn, Article 6.2 of the DSU provides that a panel request must "identify the specific 
measures at issue " in a dispute.3  Under DSU Article 4.7, however, a Member may only request the 
establishment of a panel with regard to a meas ure upon which the consultations process has run its 
course.  Finally, Article 4.4 of the DSU requires that  the request for consultations state the reasons for 
the request, "including identification of the measures at issue ".4  There is thus a clear progression 
                                                      
2 US First Written Submission, paras. 47-65;  US Opening Statement at the First Substantive Meeting 
with the Parties, paras. 13-18. ("US First Opening Statement").   
3 Emphasis added.   
4 Emphasis added.    WT/DS350/R 
 Page C-63 
 
 
  from consultations request to panel request, and me asures not identified in the consultations request, 
but later identified in the panel request, cannot prope rly form part of the panel's terms of reference.5   
 10. The EC would have this Panel apply legal st andards that are not found in the DSU.  The EC 
asserts that there is no need for measures in the pa nel request to be identified in the request for 
consultations, as long as they "involve essentially the sa me matter" or "relate to the same matter" as 
those identified in the request for consultations.
6  Moreover, provided the additional measures have a 
"direct relationship" with the measures in the request  for consultations, the EC claims that they are 
properly before the Panel.7  The EC's interpretation disregards the text of Articles 4 and 6 of 
the DSU – a panel's terms of reference cannot include  measures that were not the subject of a request 
for consultations – and should be rejected.   
 11. Here, the EC added 14 new proceedings, as we ll as an imprecise reference to the application 
and continued application of antidumping duties in 18 cases, to its panel request.
8  These measures 
were not identified anywhere in its consultations re quest, and pursuant to Articles 4 and 6 of the DSU, 
they are not within this Panel's te rms of reference.  This  finding is supported by the Appellate Body in 
US – Certain EC Products , which agreed that the scope of measures subject to establishment of a 
panel is defined by the consulta tions request, and that new, lega lly distinct measures may not be 
added in the panel request.9   
 12. The EC erroneously relies on the Appellate Body report in Brazil – Aircraft , which is 
distinguishable from the matter before this Panel.
10  In that case, the Appellate Body considered 
whether certain regulatory instruments relating to  the Brazilian regional aircraft export subsidies 
program PROEX were properly before the panel.11  Canada had included new regulatory measures 
under PROEX in its panel request, but not in its requ est for consultations.  The Appellate Body found 
that the new regulations "did not ch ange the essence" of the export subs idies that were at issue in the 
dispute and included in the request for consultations, and that they therefore were properly before the 
panel.12   
 13. The critical question here is whether the me asures added to the panel request are in essence 
the same measures as those identified in the consultations request.  In Brazil – Aircraft , the new 
regulatory instruments were simply periodic re-e nactments of the identical measures that were 
specified in a consultations request as part of Ca nada's challenge to payments under those measures.  
In this dispute, however, the EC identified in its  consultations request separate antidumping measures 
that are legally distinct under US law, and added new and legally distinct antidumping measures to its 
panel request.  The four new administrative revi ew determinations and 10 new sunset review 
                                                     
 
5 The AD Agreement imposes parallel requirements in Articles 17.3-17.5.  US First Written 
Submission, paras. 56-58.   
6 EC Response to the US.  Request for Preliminary Rulings, paras. 17, 21, 22, 24, 29 ("EC Response").   
The EC fails to understand what "matter" means for purposes of dispute settlement.  The Appellate Body has 
stated that the "matter" consists of two elements:  "the specific measures at issue and the legal basis for the 
complaint (or the claims )".  Guatemala – Cement I (AB) , para. 72.  The EC, however, describes the "matter" for 
purposes of its legal standard as "the application of zeroing methodologies when calculating the dumping 
margins in the specific anti-dumping proceedings with respect to a particular product originating from one 
specific country".  EC Response, para. 17.  This is not the "matter".  The EC's definition does not encompass the 
specific measures, nor does it encompass the legal basis fo r the complaint.  In short, the EC would also like the 
Panel to apply a standard that relies on an erroneous view of what the "matter" is.   
7 EC Response, paras. 25, 29.   
8 US First Written Submission, paras. 49-50, pr ovides a specific list of the new "measures".   
9 US – Certain EC Products (AB) , paras. 70, 82.   
10 EC Response, paras. 18-19.   
11 Brazil – Aircraft (AB) , paras. 127-29.   
12 Brazil – Aircraft (AB) , para. 132.   WT/DS350/R 
Page C-64  
 
  determinations, even if they involve the same s ubject merchandise as the measures listed in the 
consultations request, resulted from completely diff erent proceedings than those identified in the 
consultations request.  They each involve different  time frames, and different calculations using 
different information and data.  The results from one  administrative review do not apply to entries of 
subject merchandise for any other administrative revi ew.  Moreover, a sunset review results in a 
determination about whether an antidumping orde r should be revoked going forward, and does not 
affect the results of an administrative review, whic h is conducted independently  of a sunset review.  
The EC's reference to the "continued application,  or application" of antidumping duties in 18 cases 
also appeared for the first time in its panel request, and is legally distinct from the separate challenge 
to the "zeroing methodology" as applied in separate antidumping proceedings that was identified in 
the consultations request.  None of the new "measu res" can be considered a mere "re-enactment" of 
identical measures identified in the consultation request, as in Brazil – Aircraft .   
 14. The EC also invokes the Appellate Body report in Mexico – Rice as supporting its view that 
there is "no need for identity betw een the specific measures that were  the subject of the request for 
consultations and those subject of  the Panel request provided that they involve essentially the same 
matter".
13  In Mexico – Rice , however, the question was whether pr ovisions of the covered agreements 
that the United States added to its claims against Me xico in its panel request were within the panel's 
terms of reference.14  Here, the EC has not added to the legal basis for its complaint;  rather, it added 
to the measures at issue that were identified in its consultations request.   
 
15. The EC relies on the panel report in Chile – Price Band System to support its assertion that 
"the inclusion of new measures which amount to an extension or a modification of measures 
previously mentioned in the request for consulta tions do not affect the c onsistency of the panel 
request with the consultations ca rried out between the parties".15  In Chile – Price Band System , Chile 
promulgated a regulation which extende d the period of application of a definitive safeguard measure.  
The extension was not identified in the consultations  request.  The panel, examining the text of the 
Agreement on Safeguards, considered that the exte nsion was not a distinct measure, and instead a 
mere continuation in time of the definitive safeguard  measure that was identified in the consultations 
request.  The panel concluded that the extended saf eguard measure fell within the panel's terms of 
reference.16   
 
16. The EC's reliance on the panel report in Chile – Price Band System is misplaced.  The EC's 
challenge does not pertain to a safeguard measure whose "duration" has been extended.  The EC 
explicitly listed determinations fro m original investigations, administrative reviews, and sunset 
reviews in its consultations request.  Its focus was on the determinations in the individual proceedings 
in which the alleged "zeroing methodology" was applied.   The EC then tried to expand the number of 
proceedings by adding 10 new sunset review determinations, as well as four new administrative 
review determinations, to its panel request.  Each  of these measures is separate and legally distinct, 
and not a mere "extension" or "modification" of another identified antidumping determination.   
 17. The EC has relied on semantics ("essentially th e same matter", "direct relationship") and has 
asked the Panel to consider Appellate Body and pane l reports that do not sup port its position in this 
dispute.  Nothing the EC does, however, can avoid the logical outcome of a proper analysis under 
Articles 4 and 6 of the DSU:  the specific proceedings  identified in the EC's panel request for the first 
time – 14 new antidumping determinations and the app lication or continued application of duties in 
18 cases – cannot properly fall within the panel's terms of reference.   
                                                     
 
13 EC Response, paras. 20-21.   
14 Mexico – Rice (AB) , para. 133.   
15 EC Response, para. 23.   
16 Chile – Price Band Systems (Panel) , paras. 7.110-7.120.    WT/DS350/R 
 Page C-65 
 
 
  B. T HE EC'S "18 MEASURES " FAIL FOR A LACK OF SPECIFICITY  
18. Under Article 6.2, a panel request must identify the " specific measures at issue" in the 
dispute17, and a panel's terms of reference under Article 7.1 are limited to those specific measures.  
The EC in its panel request identified as "measures"  the "continued application of, or the application 
of the specific anti-dumping duties resulting from th e anti-dumping orders enumerated from I to 
XVIII in the Annex to the present request as calculate d or maintained in place pursuant to the most 
recent administrative review or, as the case may be, original proceeding or changed circumstances or 
sunset review proceeding".  The United States objects to  the EC's failure to specifically identify these 
"18 measures" as required by Article 6.2 of the DSU.18  As the United States explained at the first 
meeting with the Panel, these "measures" have  been the source of considerable confusion19;  armed 
with further attempted clarifications from the EC , we would like to explain why these measures do not 
meet the specificity requirement and why they are not within this Panel's terms of reference.   
 19. In its October 5 Response to the US Request  for Preliminary Rulings, the EC admitted the 
broad, indeterminate nature of the 18 measures when  it noted that its panel request pertained to all 
"subsequent measures" adopted by the United States  with respect to the 18 measures, and to "any 
subsequent modification of the measures ( i.e., the duty levels)".
20  In its response to the Panel's 
questions, the EC also asserted that the term "continued application" reaches "subsequent 
proceedings".21   
 20. Under the DSU, such "subsequent measures" , "subsequent proceedings", and "subsequent 
modifications" cannot be subject to dispute settle ment – among other things, they were not in 
existence at the time of the Panel's establishment.
22  Each determination that sets a margin of dumping 
for a defined period of time is distinct and separat e, and under Article 6.2 of the DSU, the EC must 
identify each such measure in its panel request.23  The EC is improperly trying to include the 
application or continued application of duties resu lting from determinations that have not yet been 
made – the EC even admits that these "measures" have "a life stretching an indeterminate time into 
the future".24  As we stated at the first meeting with th e Panel, the United States is unable to determine 
when these determinations were or will be made, wh at calculations they did or will include, what duty 
rates they have established or will establish, and wh at individual companies they did or will cover.25    
 21. The EC invokes several Appellate Body a nd panel reports to support its argument that 
"subsequent measures" are properly before the Panel.
26  In these disputes, a law of general application, 
or framework law, was identified in a panel requ est, and the subsequent implementing regulations 
                                                      
17 Emphasis added.   
18 US First Written Submission, paras. 66-71;  US First Opening Statement, paras. 19-22;  US Closing 
Statement at the First Substantive Meeting with the Pa rties ("US First Closing Statement"), paras. 7-15.   
19 US First Closing Statement, paras. 7-15.  The Panel itself has asked for clarification about the 
description of the "18 measures" that the EC identified in its panel request.  See Panel Question 1.   The EC, 
despite all indications to the contrary, still considers the 18 measures "simpler to understand and conceptualise".  
EC Answer to Panel Question 2, para. 13.   
20 EC Response, paras. 47-48.   
21 EC Answer to Panel Question 1(b), para. 10.  The EC claims that variation in the phrasing 
"application or continued application" throughout its firs t written submission "is for eas e of reference", but that 
it "has no incidence on the legal assessment to be conducted by the Panel".  However, that very phrasing, and 
any variations thereto, is related to the way in which th e EC described the 18 measures, and is directly relevant 
to how the Panel analyzes the specifi city of those alleged measures.   
22 US First Closing Statement, para. 9.   
23 US First Written Submission, para. 67.   
24 EC Answer to Panel Question 3, para. 20.   
25 US First Opening Statement, para. 21.   
26 EC Response, paras. 37, 43-47.   WT/DS350/R 
Page C-66  
 
  issued after the panel request were considered to fall within the panel's terms of reference.  For 
example, in Japan – Film , the United States discussed various measu res for the first time in its written 
submission.  Japan objected on the grounds th at these measures were not identified in the 
United States' panel request and that the United St ates had therefore failed to meet the specificity 
requirement of Article 6.2 of the DSU.  The pa nel found that subsequent measures promulgated under 
a framework law that was identifie d in the panel request fell within its terms of reference.  It 
considered these measures "subsidiary" or "so closel y related" to the law of general application 
specifically identified that the responding party coul d reasonably be found to have received adequate 
notice of the scope of the claims.
27   
 
22. Unlike Japan – Film  and the other reports, this dispute does not involve subsequent 
regulations issued under a law of general application.  The EC instead is asking this panel to consider 
any and all subsequent antidumping measures rela ted to 18 specified cases.  Such subsequent 
measures, however, are not "subsidiary" or "so closel y related" to all of the antidumping proceedings 
that were identified in the panel request.  The a pplication or continued application of antidumping 
duties results from distinct legal proceedings leadin g to a final determination.  Each proceeding, 
whether an original investigation, administrative review, or sunset review, involves different time 
periods, different entries of merchandise, and differe nt information and data.  The EC's challenge to 
application or continued application of duties rela ted to all subsequent and previously unidentified 
proceedings is not the equivalent of a challe nge to regulations prom ulgated under the general 
authority of a framework law after a panel request has been made.   
 
23. The EC also seems to indicate, as it did at  the hearing, that the 18 measures cover the 
application or continued application of the "zeroi ng" methodology in 18 cases.  The EC tells the Panel 
that the word "continued" in the description of the 18 measures "reflects the fact that the US continues 
to use the zeroing methodology throughout the va rious proceedings in the 18 anti-dumping cases".28  
Moreover, the EC claims that "[t]he 18 measures  are instances of the application of the zeroing 
methodology".29  To the extent the EC is saying that it is challenging the application or continued 
application of zeroing in 18 cases (a description not found anywhere in its panel request), that 
"measure" lacks specificity.  The EC cannot make a generalized reference to the application of 
zeroing in 18 broadly-defined cases without indicati ng the exact determinations where "zeroing" was 
applied.   
 
24. In response to the Panel's questions, the EC has put further spin on its description of the 
18 measures.  It now speaks of the concept of "duty as measure".30  To the EC, the 18 measures 
contain a methodology that is "like a computer virus replicating itself"31 and "have a life which 
stretches, at least potentially, further in to the future than the 52 measures".32  Moreover, the EC 
incorrectly analogizes the duties to "a subsidy programme under the SCM Agreement "33, without even 
explaining the exact nature of the analogy.    25. The EC's analysis of the 18 measures, when defined in this way, does not assist its position.  
It is entirely circular for the EC to suggest that  it has described measures with specificity because it 
asserts that "duties" are "measures".  In the firs t place, to repeat the terms of the Antidumping 
Agreement (as the EC does in paragraphs 2 through 3 of its answers) tells the Panel nothing about 
specifically what measures the EC is challenging in this dispute .  Moreover, the EC ignores the fact 
                                                     
 
27 Japan – Film (Panel) , paras. 10.8-10.14.   
28 EC Answer to Panel Question 1(b), para. 10.   
29 EC Answer to Panel Question 3, para. 20.   
30 EC Answer to Panel Question 1(a), para. 7.   
31 EC Answer to Panel Question 1(a), para. 4.   
32 EC Answer to Panel Question 2, para. 17;  see also EC Answer to Panel Question 2, para. 13;  
EC Answer to Panel Question 3, para. 20;  EC Answer to Panel Question 5(b), para. 28.   
33 EC Answer to Panel Question 1(a), para. 5;  EC Answer to Panel Question 3, para. 20.   WT/DS350/R 
 Page C-67 
 
 
  that, for any given importation, the antidumpi ng duty assessed depends on a particular underlying 
administrative determination, whether that be an  original investigation, assessment review, new 
shipper review, or changed circumstances review, while the continuation of that duty depends on an 
underlying sunset review.34  The EC must identify the specific de termination leading to the particular 
application or continued application of an antidum ping duty, and cannot merely refer to "duty" in a 
general and detached way.   
 26. The EC's description also appears to demonstr ate what the EC asserted at the first meeting 
with the Panel – that the 18 measures are some sort of "as applied/as such" measures.
35  B y  
considering a duty to be the equivalent of a s ubsidy program, the EC seems to think that it can 
challenge "as such" a duty resulting from the applica tion of "zeroing".  It is difficult to understand 
how the EC could be making an "as such" claim when it has defined the measure as "the application  
or the continued application " of antidumping duties.  Moreover, the EC has explicitly stated that it 
decided not to make an "as such" claim in this dispute.36  The United States still is unsure whether 
the EC is trying make "as such" claims.   
 
27. Apparently then, the EC is not seeking to challe nge particular measures, but rather to have the 
Panel make a general, ove rall pronouncement with respect to the fu ture and "zeroing" without regard 
to whether such a pronouncement would apply to real measures that were in existence at the time of 
the consultations request or even at the time of the Panel's findings.37  The EC cannot ignore the 
specificity requirement of Article 6.2 of the DSU and define "measures" in such a way so as to reach 
indeterminate future an tidumping determinations.38  The Panel should reject the EC's attempt to 
expand the scope of this proceeding beyond what is permissible under the DSU.    28. The EC also claims that the Panel request  adequately informs the United States of the 
challenged measures.
39  According to the EC, "the United St ates has failed to show that the Panel 
request is so flawed that the defending part y's rights of defence are prejudiced . . .".40  The implication 
of this argument is that even with a failure to id entify the specific measures at issue, those measures 
can be considered by the Panel, as long as the r esponding party is not prejudiced.  (Apparently the EC 
is not concerned with the rights of Members whose decision as to whether to participate as a third 
party is based on which measures are specifically iden tified in the EC's panel request.)  This prejudice 
requirement, however, is not found in Article 6.2 of the DSU, or anywhere else in the covered 
agreements.  The requirements of the DSU are clear:  the complaining party must specifically identify 
the measures at issue, or those measure cannot prope rly fall within a panel's terms of reference.   
 C. T
HE EC'S REQUEST INCLUDED MEASURES WHICH WERE NOT FINAL AT THE TIME OF 
ESTABLISHMENT  
29. The United States has asked the Panel to ex clude from consideration four measures which 
were not final at the time of the EC's request for panel establishment.41  Under Article 17.4 of the AD 
Agreement, only those measures where "final action has been taken by the administering authorities" 
                                                      
34 AD Agreement, Articles 1, 5, 7, 9, 11.   
35 US First Closing Statement, paras. 12-13.   
36 EC First Written Submission, para. 2, 115.   
37 EC Answer to Panel Question 4(b), paras. 25-26;   EC First Written Submission, paras. 127-28.   
38 As the EC acknowledges, "findings concerning th e 18 measures will have a broader impact than 
those concerning the 52 measures".  EC Answer to Panel Question 1(a), para. 8.   
39 EC Response, paras. 40-42.   
40 EC Response, para. 42.   
41US First Written Submission, paras. 72-74;  US  First Opening Statement, paras. 23-24.   WT/DS350/R 
Page C-68  
 
  may be referred to a panel.
42  As the United States explained in the first written submission, the EC 
added three on-going sunset reviews, and one on- going administrative review to its request for 
establishment.  Therefore, under Article 17.4 of th e AD Agreement, the four preliminary measures in 
the EC's panel request cannot properly form pa rt of the Panel's terms of reference.   
 
30. In rebutting the United States, and in r esponding to the Panel's questions, the EC has 
complicated an issue which is not very complicated at all.  The EC first claims that its challenge to the 
application or continued applica tion of antidumping duties in 18 cases includes "subsequent measures, 
including preliminary determinations setting out the duty levels (wrongly calculated by applying 
zeroing) and insofar as those duties are still in place"43, and that therefore the preliminary measures 
are properly before the Panel.  Aside from the funda mental problem with the EC's attempt to include 
"subsequent measures" in its panel request44, the United States fails to see how preliminary measures 
in existence at the time of panel request are "subsequent measures".  Moreover, neither on-going 
administrative reviews, nor on-going sunset reviews, can be the basis for the "application or continued 
application" of antidumping duties, as the EC seems  to think.  A preliminary determination in an 
administrative review does not affect the cash deposit rate or the assessment rate – those rates are set 
in the final determination, and until then, the rate s in effect from the prior administrative review 
remain in effect.  In addition, a sunset review can only result in the continuation of an order beyond 
the five-year sunset period once a final determina tion has been made by both the US Department of 
Commerce and the US International Trade Commission.  Most importantly, the EC's argument ignores the plain text of Article 17.4.  The investiga ting authority must take final action by the time of 
the panel request, which has not happened here;  otherwise, the antidumping measure cannot fall 
within the panel's terms of reference.
45   
 31. The EC attempts to confuse the Pa nel by citing to the panel report in Mexico – HFCS  and 
asserting that other panels have allowed claims against preliminary measures.
46  Mexico – HFCS 
involved a claim that Mexico had applied a provi sional measure for longer than six months, and 
thereby violated Article 7.4 of the AD Agreement.   Mexico argued that because the United States 
failed to identify the provisional measure in its pa nel request, the claim concerning that measure fell 
outside the panel's terms of reference.  The Un ited States, however, had identified the definitive 
antidumping duty in its panel request, and argued that  it was asserting a violation of Article 7 not with 
reference to the provisional measure as a "measure" in the dispute, but rather as one of its legal claims 
related to the final antidumping measure.  The pane l concluded that the claim was related to the 
definitive antidumping duty identified in the panel re quest and therefore fell within the scope of the 
proceeding.47   
 32. Unlike the United States in Mexico – HFCS , the EC has not even challenged a final 
determination in any of the four proceedings, so there is no question as to whether the preliminary 
determination is somehow related to the final measu re.  There is no textual basis under which the EC 
can bring these claims, when it can wait until the i ssuance of final results and challenge those as 
                                                     
 
42 Under Article 17.4, a provisional measure may only be challenged when it "has a significant impact 
and the Member that requested consultations considers that the measure was taken contrary to the provisions of 
paragraph 1 of Article 7".  The EC has not demonstrated the applicability of this exception.   
43 EC Response, para. 50;  EC Response to Panel Question 6, para. 29.   
44 See Part II.B, supra .   
45 The EC also challenges 52 determinations, among which are four preliminary determinations.  
The EC's alleged defence neglects to address the fact that the EC is making separate claims as to these 
preliminary determinations.  It now appears that the EC  is abandoning its claims with respect to the four 
preliminary measures insofar as they  are part of its claims against zer oing as applied in 52 antidumping 
proceedings.   
46 EC Response, para. 53.   
47 Mexico – HFCS (Panel) , paras. 7.44-7.55.    WT/DS350/R 
 Page C-69 
 
 
  inconsistent with the AD Agreement.  The plain text of  Article 17.4 is clear:  the EC's specific claims 
against preliminary measures are outside this Panel's terms of reference.    33. The Panel asked the EC whether the exception to the finality requirement under Article 17.4 
of the AD Agreement was applicable in this dispute as to the four preliminary measures identified by 
the EC.
48  The EC's response is anything but clear, and does violence to the text of Article 17.4.  The 
EC first seems to be saying that the conditions "are in any event met in this case", but then contradicts 
itself in the very next sentence by claiming that  "the EC is however not challenging provisional 
measures in the sense of Article 17.4".49  It is difficult to see how the exception could be applicable, if 
the exception requires that the measures be provisional within the meaning of Article 17.4.  Moreover, 
the EC does not demonstrate that it is making a claim under Article 7.1 of the AD Agreement, as 
required by the terms of Article 17.4.    34. The EC also asks the Panel "to take into account the specific circum stances of this case".
50  
To the EC, these include the "fact that the EC is complaining about what is essentially a mathematical 
formula that is essentially identical" wherever it is used;  the alleged response of the United States to 
Appellate Body reports on "zeroing" in wholly unrelated disputes;  and the nonsensical reasoning that Article 17.1 refers to Article 7.1 and Article 7. 5 refers to Article 9 of the AD Agreement, the 
"provision that the US has already been found to have infringed".
51  The EC asserts that these 
"specific circumstances" have a "significant imp act" on the EC, and that it is "within the Panel's 
discretion" to exercise jurisdiction.52   
 
35. These EC essentially would like the Panel to act as  a court of equity.  However, this Panel is 
bound by the terms of the DSU and the covered agre ements, which do not accord it the authority to 
assume jurisdiction over a matter which otherwise would not be within the Panel's terms of reference.  
It is improper to take into account "specific circum stances" that are nowhere to be found in the text of 
Article 17.4.  Most egregiously, the EC is asking the Panel to consider the alleged US response to 
prior Appellate Body reports on "zeroing", which is  another manifestation of the EC's attempt to 
improperly bring into this dispute for what allege dly has happened in separate, distinct disputes.  
The EC, however, cannot escape the fact that it is challenging preliminary measures, and that under Article 17.4, such measures are not within the Panel's terms of reference.    III. THE PANEL SHOULD REJECT THE EC'S ARGUMENTS CONCERNING THE 
METHODOLOGIES IN ASSESSMENT PROCEEDINGS 
A. US
 ASSESSMENT REVIEWS ARE DISTINCTIVELY DIFFERENT FROM INVESTIGATIONS  
36. The EC's proposed approach in this dis pute fails to appreciate what is happening in 
investigations and assessment reviews.  The Unite d States would like briefly to discuss for the Panel 
how investigations and administrativ e reviews operate under US law.   
 37. In the investigation phase, US law provi des that the US Department of Commerce 
("Commerce") will normally use the average-to-average method for comparing transactions during the period of investigation.  US law also authori zes the use of transaction-to-transaction comparisons 
                                                     
 
48 Panel Question 6.   
49 EC Answer to Panel Question 6, para. 29.   
50 EC Answer to Panel Question 6, para. 30.   
51 EC Answer to Panel Question 6, para. 30.   
52 EC Answer to Panel Question 6, para. 30.  The EC attempts to create confusion by using the 
"significant impact" language of the exception under Article 17.4.  However, as demonstrated above, the EC is 
not even challenging a provisional measure under Article 7.1 of the AD Agreement, so the exception is not 
applicable in the first instance.   WT/DS350/R 
Page C-70  
 
  and, provided that there is a pattern of prices that differs significantly by region or time period, among 
other things, the average-to-transaction method.    38. In the second phase of a US antidumping proceeding – the "assessment phase"– Commerce's 
focus is on the retrospective calculation and assess ment of antidumping duties on individual customs 
entries covered by an antidumping order.  While an antidumping investigation typically covers a 
broad range of exporters, forei gn producers, and US importers, antidumping duties are paid by US 
importers, who become liable when they enter goods into the United States.  Thus, the US 
retrospective assessment system seeks to calculate  the duty based on specific entries by importers 
during the period covered by the review.   
 
39. In the US system
53, while an antidumping duty liability attaches at the time of entry, duties 
are not actually assessed at that time.  Instead, the United States collects a security in the form of a 
cash deposit at the time of entry.  Once a year (durin g the anniversary month of the orders) interested 
parties may request a "periodic review" to determ ine the final amount of duties owed on each entry 
made during the previous year.54  Antidumping duties are calculated on a transaction-specific basis, 
and are paid by the importer of the transaction.   If the final antidumping duty liability exceeds the 
amount of the cash deposit, the importer must pa y the difference.  If the final antidumping duty 
liability is less than the cash deposit, the difference is  refunded.  If no periodic review is requested, the 
cash deposits made on the entries during the previous year are automatically assessed as the final duties.  To simplify the collection of duties calcula ted on a transaction-specific basis, the absolute 
amount of duties calculated for the transactions of each importer are summed up and divided by the 
total entered value of that importer's transactions, in cluding those for which no duties were calculated.  
US customs authorities then apply that rate to the entered value of the imports to collect the correct 
total amount of duties owed.  A similar calculation is performed for each exporter to derive a new 
estimated antidumping duty deposit rate.   
 
40. The US retrospective duty assessment system  is more complex to operate, and requires a 
larger expenditure of administrative resources and personnel.  However, it allows US authorities to 
closely calibrate the imposition of antidumping dut ies to the actual levels of dumping during the 
period covered by a periodic review.  In addition,  it encourages exporters and importers to adjust 
prices on their own – either through the exporter reduc ing prices in their home market to bring down 
the "normal value", the importer and exporter agreeing to a higher "export price", or in the case of a 
related importer, if the importer raises its US sales price – in order to eliminate dumping margins and 
avoid paying antidumping duties.  Thus, in the United States the level of antidumping duties actually collected from importers typically declines sharply during the period covered by an order.
55  T h i s  
means that prices in the market place can adjust without the actual collection of duties.   
 
41. In contrast, while a prospective assessment system is more predictable (because the duty does not change)
56, it is also more punitive and inflexible becau se an importer generally is subject to the 
original ad valorem rate or reference price found in an original  investigation or sunset review for the 
next five-year period, regardless of price fluctu ations or changing competitive conditions in the 
market.  While refunds are theoretically availa ble under Article 9 in such systems , antidumping 
                                                      
53 See US – Zeroing (Mexico) , paras. 7.98-7.100.   
54 The period of time covered by U.S. assessment proceedings is normally twelve months.  However, in 
the case of the first assessment proceeding following the investigation, the period of time may extend to a period 
of up to 18 months in order to cover all entries that may have been subject to provisional measures during the 
investigation.   
55 On average, margins in the US system decline by approximately 75-80 per cent.  This, of course, 
varies by case, and there are exceptions, such as wher e the respondents do not cooperate and margins must be 
calculated on the basis of  the facts available.   
56 The main advantage of the pros pective assessment system is that an importer knows its maximum 
antidumping liability in advance – for better or worse.    WT/DS350/R 
 Page C-71 
 
 
  authorities often tend to strongly "discourage" requests for a refund, and most sophisticated importers 
are well aware of the "risks" of seeking one (or si mply discover that no ref und procedure exists under 
the antidumping law, e.g. India).  A prospective ad valorem system also typically results in the 
collection of much higher amounts of duties from a revenue standpoint, since the antidumping duty effectively serves as an additional tariff for th e five-year period, as opposed to being adjusted 
annually as in the United States.   
 B. T
HE EC FAILED TO ESTABLISH THAT ARTICLE 2.4.2  APPLIES OUTSIDE OF AN INVESTIGATION  
42. The EC focused much attention at the fi rst meeting with the Panel on its arguments 
concerning its allegedly proper reading of Article 2. 4.2 of the AD Agreement.  It is the EC's position 
that any time a Member makes "a systematic examina tion or inquiry" as to dumping, that Member is 
conducting an investigation subject to the disciplines of Article 2.4.2.57  The United States has fully 
demonstrated in its first written submis sion and response to the Panel's questions58, that Article 2.4.2 
does not apply to each and every segment of an antidumping proceeding that happens to involve a 
systematic examination or inquiry.   
 
43. A critical examination of each of the word s in the phrase "the existence of margins of 
dumping during the investigation phase", independent  of one another, support the US position.  
Additionally, when the phrase is considered in its  entirety, it is clear that the obligations in 
Article 2.4.2 do not extend beyond an investig ation within the meaning of Article 5.   
 
44. An Article 5 investigation is a sui generis  proceeding that resolves the threshold question of 
"the existence, degree, and effect" of dumping.  An  analysis of the relationship between Article 2.4.2 
and an Article 5 investigation begins with the text of Article 1, which provides as follows:   
 
An anti-dumping measure shall be applie d only under the circumstances provided 
for in Article VI of GATT 1994 and pursuant to investigations initiated1 and 
conducted in accordance with the provisions of this Agreement ... . _____ 
1 The term " initiated " as used in this Agreement m eans the procedural action by 
which a Member formally commences an investigation as provided in Article 5.59   
 
45. The text of Article 1, when read with its footnote, provides that "investigations initiated and 
conducted in accordance with the provisions of this  Agreement" are investigations initiated pursuant 
to Article 5.  Article 5 defines the nature of the investigation for which it provides:   
 
[A]n investigation to determine the existence , degree and effect of any alleged 
dumping shall be initiated. . . .60   
 46. Thus, Article 1 defines the "i nitiation" of the investigation ph ase that leads to an antidumping 
measure as "the procedural action by which a Me mber formally commences an investigation as 
provided in Article 5".  Article 5.1, in turn, prov ides that investigations are initiated upon a written 
application, or pursuant to other specified conditi ons, to determine the "existence, degree and effect" 
of alleged dumping.  Consequently, there is no am biguity as to the nature of the "investigations 
initiated and conducted" pursuant to Article 1.  There is only one type of investigation provided for in 
Article 5, and footnote 1 to Article 1 explicitly refe rs to "an investigation as provided in Article 5", 
thus, Article 1 can only be referring to Article 5 investigations.   
                                                     
 
57 EC First Written Submission, paras. 213-216;  EC Answer to Panel Question 9, paras. 54-65.   
58 See US First Written Submission, para. 107-110, see also US Answer to Panel Question 9, paras. 18-
19 (discussing, among other things, the meaning of the word "phase").   
59 AD Agreement, Article 1 (emphasis added).   
60 AD Agreement, Article 5.1 (emphasis added).   WT/DS350/R 
Page C-72  
 
  47. Additionally, the term "existence" must be c onsidered as it is a necessary part of an Article 5 
investigation which may lead to applying an an tidumping measure consistent with Article 1.  
"Existence" is used in connection with the term dumping in only one other place in the AD Agreement besides Article 5.1:  Article 2.4.2.  Article 2.4.2 provides for the manner in which the 
"existence" of dumping margins is to be established, "[T]he existence  of margins of dumping during 
the investigation phase shall normally be estab lished on the basis of a comparison . . . ".
61  T h e  
ordinary meaning of the word "existence" according to The New Shorter Oxford English Dictionary  is 
"the fact or state of existing;  actual possession of bei ng;  a mode or kind of existing;  dealing with the 
existence of a mathematical or philosophical entit y".  The word "existence" before the phrase "of 
margins of dumping" indicates that Members are to de termine the "existence of [the] mathematical or 
philosophical entity" referred to as "margins of dumping".   
 48. The drafters' intent to limit Article 2.4.2 excl usively to Article 5 inv estigations is further 
demonstrated by the use of the definite  article "the" before the term "investigation phase", rather than 
the indefinite article "an".  According to The New Shorter Oxford English Dictionary , the ordinary 
meaning of the article "the" is "designating one or  more persons or things already mentioned or 
known, particularized by context, or circumstan ces, inherently unique, familiar or otherwise 
sufficiently identified".  If, as the EC contends, the te rm "investigation" in the context of Article 2.4.2 
may be interpreted in generic terms, rather than as a term of art referring to the Article 5 phase, the drafters would have used the indefinite  article "an".   
 
49. The EC has argued that ordinary rules of grammar compel its reading of "during the 
investigation phase" as any investigation (in the sense of an inquiry) undertaken by the investigating 
authority.  For the reasons given above, the United St ates disagrees.  In this regard, it is notable that 
the Appellate Body itself has used the phrase "the  investigation phase" in order to describe how 
obligations in Article 11 of th e SCM Agreement (the parallel provision to Article 5 of the 
AD Agreement)
62 are limited to original investigations and do  not apply to any reviews.  In particular, 
in the dispute United States – Carbon Steel , in rejecting a claim by the EC that the de minimis  
standard in Article 11.9 applied also to sunset re views pursuant to Article 21.3, the Appellate Body 
noted:    
Although the terms of Article 11.9 are deta iled as regards the obligations imposed 
on authorities thereunder, none of the words in Article 11.9 suggests that the de 
minimis  standard that it contains is applicable beyond the investigation phase  of a 
countervailing duty proceeding.
63   
 Indeed, before the panel in that dispute, the EC itself  used the phrase "the investigation phase" to 
mean the initial investigation and not any reviews.
64  The EC was not acting contrary to the ordinary 
rules of grammar but rather used the phrase accord ing to its ordinary, and grammatical, sense.   
                                                      
61 Emphasis added.   
62 Article 11 of the SCM Agreement is entitled "Initia tion and Subsequent Investigation".  Article 5 of 
the AD Agreement is entitled "Initiation and Subsequent Investigation".   
63 US – Carbon Steel (AB) , para. 68 (italics added;  footnote omitted);  see id. , para. 68 n. 58 ("We do 
not subscribe to the view, expressed by Japan, that the use of the word "cases " (rather than the word 
"investigation") in the second sentence of Article 11.9 means that the application of the de minimis standard set 
forth in that provision must be applied in all phases of countervailing duty proceedings - not only in 
investigations.  The use of the word "cases" does not a lter the fact that the terms of Article 11.9 apply the 
de minimis  standard only to the investigation phase .") (italics added);  id., para. 89 ("For these reasons, we 
consider that the non-app lication of an express de minimis  standard at the review stage, and limiting the 
application of such a standard to the investigation phase  alone, does not lead to irrational or absurd results.") 
(italics added).   
64 US – Carbon Steel (Panel) , para. 5.97 (reproducing EC oral statement at the first panel meeting:  
"The US also draws (at para. 67) the wrong conclusions from the distinction between the investigation  phase  
and the review  phase of a CVD proceeding.") (italics added;  underlining in original).    WT/DS350/R 
 Page C-73 
 
 
  50. The limited application of Article 2.4.2 to th e investigation phase is further consistent with 
the divergent functions of investigations and other proceedings under the AD Agreement.  The 
Appellate Body has already recognized that in vestigations and other proceedings under the 
AD Agreement serve different purposes and have diffe rent functions, and therefore are subject to 
different obligations under the Agreement.65  Contrary to the EC's contention, the AD Agreement 
does not require Members to examine whether margin s of dumping "exist" in the assessment phase.  
Article 9 assessment proceedings are not concerned with the existential question of whether injurious 
dumping "exists" above a de minimis  level such that the imposition of antidumping measures is 
warranted.  That inquiry would have already been resolved in the affirmat ive in the investigation 
phase.  Instead, Article 9, by its terms, focuses on the amount of duty to be assessed on particular 
entries, an exercise that is sep arate and apart from the calculation of an overall dumping margin 
during the threshold investigation phase of an antidumping proceeding.    51. Even the EC recognizes that "different typ es of proceedings have different purposes and are 
not all subject to all the provisions of the Anti-Dumping Agreement ".
66  Thus, as the panel in US – 
Zeroing (EC)  found, the qualitative differences between Ar ticle 5 and Article 9.3 make reasonable an 
interpretation that different methodologies could be  applied to address the different purposes of the 
separate and distinct proceedings.67   
 52. Among the various alternative definitions that  the EC posits for the meaning of "during the 
investigation phase" in Article 2.4.2, it claims th at the phrase may be read as synonymous with the 
term "period of investigation".
68  However, this suggested interpretation denies meaning to the 
drafters' decision to utilize the unique "investigation ph ase" terminology in Article 2.4.2.  As the panel 
in Argentina – Poultry  found:  "Article 2.4.2, uniquely among the provisions of Article 2, relates to 
the establishment of the margin of dum ping 'during the i nvestigation phase'".69  Numerous provisions 
in the AD Agreement refer to a "period of investigation",70 and the drafters' use of the different term 
"the investigation phase" was deliberate and must be given separate meaning.   
 53. Furthermore, the EC's argument that duties calculated in assessment proceedings are subject 
to Article 2.4.2 because "margin of dumping" has only one meaning, is premised on the incorrect 
presumption that margins of dumping must be calcu lated for the product as a whole in all contexts, 
and that transaction-specific margins are not permitted.
71  No confusion or inconsistency is present if, 
as the AD Agreement provides, transaction-specific ma rgins are permitted.  In Article 9 assessment 
proceedings, because it is the importers that will incur liability for duties, it is appropriate to 
determine liability on an importer- and transaction-speci fic basis.  Additionally, the general reference 
to Article 2 in Article 9.3 necessarily includes an y limitations found in the text of Article 2.  
Article 2.4.2 by its own terms is limited explic itly to the investigation phase, whereas Article 9 
contains certain procedural obligatio ns applicable in assessment reviews72, but does not prescribe 
methodologies for assessment proceedings such as those established in Article 2.4.2 for the 
                                                      
65 US – Corrosion-Resistant Steel AD Sunset Review (AB) , para. 87.   
66 EC First Written Submission, para. 223.   
67 US – Zeroing (EC) (Panel) , paras. 7.113-7.223 (considering and rejecting arguments the EC raises 
here in connection with the term "investigation phase").  The Appellate Body "[did] not express [] any view" on 
the Panel's analysis of Article 2.4.2.  US – Zeroing (EC) (AB) , paras. 160-164.    
68 EC Answer to Panel Question 9, para. 53.   
69 Argentina – Poultry (Panel) , para. 7.357.   
70 See, e.g. , AD Agreement, Articles 2.2.1, 2.2.1.1, 2.2.1.1 n.6, 2.4.1.   
71 EC Answer to Panel Question 9, para. 58.   
72 Argentina – Poultry , para. 7.355 ("The primary focus of Article 9.3, read together with sub-
paragraphs 1-3, is to ensure that final anti-dumping dutie s shall not be assessed in excess of the relevant margin 
of dumping, and to provide for duty refund in cases where excessive anti-dumping duties would otherwise be 
collected").   WT/DS350/R 
Page C-74  
 
  investigation phase.  Thus, there is no basis in  Article 9 for ignoring the explicit language in 
Article 2.4.2, limiting its reach to investigations.    54. The Appellate Body in EC – Bed Linen  found that there is no connection between Article 9.3 
and Article 2.4.2, and that the "requirements of Article 9 do not have a bearing on Article 2.4.2, 
because 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".
73  As the panel in Argentina – Poultry  
concluded, if "the drafters of the AD Agreement had intended to refer exclusively to Article 2.4.2 in 
the context of Article 9.3, the latter provision would have stated that 'the amount of the anti-dumping 
duty shall not exceed the margin of dumping as established under Article 2.4.2'".74 
 
55. Finally, the EC's arguments related to the negotiated placement of various terms within the 
phrase "the existence of margins of dumping dur ing the investigation phase shall normally be 
established" are based on mere speculation.75  The negotiating history does not define "investigation 
phase" and does not comment on the reason for moving the text.  Further, as the Panel observed in 
US – Zeroing (EC) (Panel) , moving the text could have been a compromise to limit ability to impose 
an order, but to maintain the ab ility to extend an order once in place.76   
 C. A
RTICLE 9.3.1  DOES NOT REQUIRE AN "EXPORTER -ORIENTED " ANALYSIS  
56. The EC's assertions that an exporter-ori ented approach to Article 9.3.1 assessment 
proceedings is appropriate because "exporte rs can dump [and] . . . importers cannot"77 is unsupported 
by the plain text of the AD Agreement because it ignores that it is importers who participate in export 
transactions and are ultimately liable for the antidum ping duties.  By its terms, the function of an 
Article 9.3.1 assessment proceeding is to determin e "the final liability for payment of anti-dumping 
duties".  This function is fundamentally different from that of Article 2.4.2, which sets forth the 
comparison methodologies to be used to establish the "existence of margins of dumping during the 
investigation phase".   
 57. Although, as stated by the Appellate Body in US – Zeroing (Japan),  dumping involves 
differential pricing behaviour of exporters or producers between its export market and its normal 
value
78, in the real world dumping occurs at the level of  an importer's individual transactions.  It is the 
importer who negotiates the "export price" when purchasing a product from a foreign producer or 
exporter, or, in a related-party transaction, when se lling to an unrelated purchaser in the United States.  
Thus, while the foreign producer may control the "normal value" by virtue of its sales prices in its home market, it is the importer who actually helps determine whether a product is "dumped" in the 
United States by agreeing on an "export" price and thus becoming liable for any resulting antidumping duties.  Moreover, under both prospec tive and retrospective assessment systems, the 
remedy for dumping in Article VI:2 of GATT 1994, i.e., antidumping duties, is applied at the level of 
individual customs entries and paid by importers who thereby incur liability for the additional duties.   
 58. The US retrospective assessment system is designed to ensure that an individual importer's liability reflects the actual level of dumping associat ed with its transactions.  Put another way, an 
importer should not pay duties because another importer has bought dumped goods, or escape liability 
because another importer has bought non-dumped goods.  In addition, one of the underlying goals of 
the US retrospective assessment system is not to collect large amounts of antidumping duties from importers, but to encourage exporters  and importers to adjust prices on their own to bring them in line 
                                                     
 
73 EC – Bed Linen (Article 21.5) (AB) , paras. 123-124 (emphasis in original).   
74 Argentina – Poultry (Panel), para. 7.358 (emphasis added).   
75 EC Answer to Panel Question 9, para. 57.   
76 US – Zeroing (EC) (Panel) , paras. 7.212, 7.219.   
77 EC Answer to Panel Question 8, para. 45.   
78 US – Zeroing (Japan) (AB) , para. 156.   WT/DS350/R 
 Page C-75 
 
 
  with fair market value.  Thus, upon issuance of a US order, sophisticated exporters and importers 
typically will work together to adjust either the ho me market price or US export price to eliminate the 
dumping margins and avoid future liability for antidumping duties.  Thus, the US system encourages importers to raise resale prices (or exporters to reduce prices in their home market) to cover the 
amount of the antidumping duty liability, thereby el iminating injurious dumping.  This achieves the 
goals of the US antidumping law (and GATT Artic le VI) of preventing injurious dumping, while 
avoiding subjecting importers  to additional duties.   
 59. If under US – Zeroing (EC) (AB) and US – Zeroing (Japan) (AB),  the amount of one 
importer's antidumping margin must be aggregated with other importers to account for the amount by 
which some other transaction involving an entirely di fferent importer was sold at above normal value, 
and vice versa , then an importer could be subjected to liability for dumped impor ts made by another 
importer over whom he or she has no control.  This also means the importer who is engaged in 
dumped transactions would receive a windfall, because he or she may escape antidumping duties, or have his or her liability sharply reduced throug h the actions of another importer who behaved 
responsibly by eliminating its dumping margin.   
 60. No panel that has considered this issue h as agreed that it is reasonable for one importer's 
liability to be reduced because another importer paid a "less dumped" price.
79  The panel in US – 
Zeroing (Japan)  observed that mandating an exporter-orien ted approach in Article 9.3 assessment 
reviews, where assessment liability is determined  based on the product as a whole, would mean WTO 
Members with retrospective assessment systems "may be precluded from collecting anti-dumping 
duties in respect of particular export transactions at prices less than normal value to a particular 
importer at a particular point of time because of pr ices of export transactions to other importers at a 
different point in time that exceed normal value".80  The panel in US – Zeroing (Mexico) agreed that 
such "competitive disincentive to engage in fair trad e could not have been intended by the drafters of 
the Antidumping Agreement and should not be accepted . . . as consistent with a correct interpretation 
of Article 9.3'".81   
 61. Furthermore, an exporter-ori ented approach, where assessment liability is determined for the 
product as a whole, makes no sense in the contex t of a prospective normal value duty assessment 
system, because the "margin of dumping" at issue is  a transaction-specific price difference calculated 
for a specific import transaction.  Under Article 9.4(ii), in a prospective normal value system
82, the 
importer's liability for payment of antidumping duties must be determined at the time of importation 
on the basis of a comparison between the pri ce of the individual export transaction and the 
prospective normal value.83  As a result, an importer who imports a product, the export price of which 
is equal to or higher than the prospective normal va lue, cannot be subjected to liability for payments 
of antidumping duties.  If other comparisons fo r the product as a whole were somehow relevant, 
offsets would have to be provided for non-dumpe d transactions, with the result that one importer 
could request a refund on the basis of a margin of dumping calculated by reference to non-dumped 
transactions made by other importers.84   
 
                                                      
79 US First Written Submission, paras. 133-136,  quoting  US – Zeroing (Japan)(Panel) , para. 7.199 and 
US – Softwood Lumber Dumping (Article 21.5) (Panel) , paras. 5.54-5.57;  see also  US – Zeroing (Mexico) , 
para. 7.146.   
80 US – Zeroing (Japan) (Panel) , para. 7.199.   
81 US – Zeroing (Mexic) , para. 7.146 , quoting Oral Statement of the United States at the Second 
Meeting, para. 18.   
82 US – Zeroing (Japan) (Panel) , para. 7.201.   
83 US – Zeroing (Japan) (Panel) , para. 7.201;  See also  US – Softwood Lumber Dumping (Article 21.5) 
(Panel) , para. 5.53.   
84 US – Softwood Lumber Dumping (Article 21.5) (Panel) , paras. 5.54-5.57.   WT/DS350/R 
Page C-76  
 
  62. It would be manifestly absurd to interpret Article 9 as requiring offset s between importers in a 
retrospective assessment system while capping the im porter's liability based on individual transactions 
in a prospective system.
85  As the panel in US – Zeroing (Japan)  concluded, "the fact that express 
provision is made in the AD Agreement for this sort  of system confirms that the concept of dumping 
can apply on a transaction-specific basis to pri ces of individual export transaction below the normal 
value and that the AD Agreement does not require that in calculating margins of dumping the same 
significance be accorded to export prices above the normal value as to export prices below the normal 
value".86  If in a prospective normal value system indi vidual export transactions at prices less than 
normal value can lead to liability for antidumping duties, without regard to whether or not prices of other export transactions exceed normal value, the cl ear implication is that liability for payment of 
antidumping duties can be similarly assessed on the b asis of individual export prices for less than 
normal value in the retrospective syst em applied by the United States.   
 63. The EC's exporter-oriented approach suggest s that investigating authorities must assess 
antidumping duties based on the aggregated pricing behaviour of exporters, without regard to the 
actual margin of dumping associated with the particular import transaction.
87  This approach turns 
Article 9.3 on its head as it divorces the amount of antidumping duty assessed with respect to an import from the dumping margin associated with that import transaction, and is inconsistent with the 
importer- and import-specific character of the obligation to pay an anti-dumping duty.
88  Nothing in 
the text or context of Article 9.3.1 supports such a result.  This argument reflects the EC's effort to 
force the requirements of Article 2.4.2 with respect to the existence of margins of dumping during the 
investigation phase, into Article 9.3, with its focus on duty liability .  However, as we fully set forth 
above, and in our first written submissi on and answers to the Panel's questions89, the provisions of 
Article 2.4.2 are irrelevant to Ar ticle 9.3.1 assessment proceedings.   
 64. Furthermore, the EC's proposed "solution"
90 only serves to demonstrate the absurdity of its 
argument.  The EC suggests that even though some importers import subject merchandise at less than 
normal value, the importing Member should only be permitted to assess a partial amount of the duties 
owed on those transactions.  The panel in US – Zeroing (Japan) , correctly observed that the 
"[i]mplication of such an interpretation is that a Member . . . may be precluded from collecting anti-
dumping duties in respect of particular export tran sactions at prices less than normal value to a 
particular importer at a particular point of tim e because of prices of export transactions to other 
importers at a different point in time that exceed normal value".91  Such a result would be inconsistent 
with the notion that injurious dumping is to be condemned and may be remedied under the 
Antidumping Agreement.    65. Finally, the EC's contention that importer-specific dumping duties are unnecessary because 
the targeted dumping provision is available when lo w-price exporter transactions are attributable to 
only one importer
92 does not resolve the mathematical equi valency problem discussed in our first 
written submission and in our answer to the Panel Qu estion 10.  Nor, has the EC, in its answers to 
Question 10, provided a viable solution to the fact  that the targeted dumping provision is rendered 
inutile  by its suggested interpretation.  On the contrary, despite its asserted concern with the 
customary rules of treaty interpretation, the EC states  that the fact that the mathematical equivalence 
                                                      
85 US – Zeroing (Mexico) , para. 7.133.   
86 US – Zeroing (Japan) (Panel) , para. 7.205;  see also  US – Zeroing (EC) (Panel) , para. 7.206.   
87 EC Answer to Panel Question 8, para. 45 ("only an exporter can have a dumping margin").   
88 US – Zeroing (Japan)(Panel) , para. 7.199.   
89 US First Written Submission, paras. 99-111;  119- 28;  US Answer to Panel Question 119(c) & (d), 
paras. 31-34.   
90 EC Answer to Panel Question 8, para 49.   
91 US – Zeroing (Japan) (Panel) , para. 7.199   
92 EC Answer to Panel Question 8, para. 48.    WT/DS350/R 
 Page C-77 
 
 
  caused by a general prohibition on zeroing in all contexts renders an entire provision in the 
Agreement redundant, "doesn't matter".93 
 
D. T HE EC'S CHALLENGE WITH RESPECT TO AN ASYMMETRICAL METHOD OF COMPARISON 
WITHOUT JUSTIFICATION IS NOT APPARENT FROM THE EC'S PANEL REQUEST AND FIRST 
WRITTEN SUBMISSION  
66. The United States disagrees that the EC made "very clear" that it intended to make a separate 
claim that the "use of the third methodology in pe riodic reviews" violates Article 2.4.2 of the 
Antidumping Agreement.94  The EC's citations to its panel request in support of its assertion that it 
made such a claim are, at best, veiled references.   Moreover, the EC provided no discussion in support 
of this claim in its first written submission.  Given that the EC's panel request was unclear, and that it 
did not attempt to make a prima facie case in its first written submission, it is hardly meaningful that 
the United States did not respond more fully in its fi rst written submission to such an alleged claim by 
the EC.   
 
E. B ECAUSE THE CHALLENGED MEASURES ARE BASED ON A PERMISSIBLE INTERPRETATION , 
THE PANEL SHOULD FIND THEM TO BE IN CONFORMITY WITH THE AD AGREEMENT  
67. With respect to the EC's substantive arguments , the Panel should reject the EC's request that 
this Panel create an obligation to reduce antidumping duties on dumped imports by the amounts by which any other imports covered by the same assessment proceeding exceed normal value, notwithstanding the absence of any textual basis for su ch an obligation.  For the reasons set forth in 
the US first written submission, the United States respectfully requests the Panel to refrain from 
reading into the AD Agreement  and Article VI of the GATT 1994 an ob ligation that is not reflected in 
the text.  Furthermore, for the reasons discussed above, interpreting "the existence of margins of 
dumping during the investigation phase" under Article  2.4.2 as referring to an investigation under 
Article 5 is a permissible interpretation because it fo llows from the application of the customary rules 
of interpretation of public international law to the text of the AD Agreement.  Therefore, the 
United States requests that this Pa nel remain faithful to the standard  of review under Article 17.6(ii) 
of the AD Agreement by finding that the US actions  in the assessment proceedings at issue rest upon 
a permissible interpretation of the AD Agreemen t under the customary rules of interpretation of 
public international law.    IV. THE EC HAS DISTORTED THE NEGOTIATING HISTORY OF THE 
AD AGREEMENT 
68. The EC stated at the first meeting with the Panel that " all of the interpretive elements in the 
Vienna Convention support the position of the EC".
95  Among these elements is the recourse to 
negotiating history.  The EC, however, relies on an inaccu rate and revisionist version of that history to 
support its argument that "zeroing" is prohibited in all contexts.  The United States would like to set 
the record straight and discuss the proper version of the negotiating history of the AD Agreement.    69. Zeroing is not a new subject for the GATT/WT O system.  It was discussed extensively during 
the Uruguay Round.  It was also the subject  of two major disputes under the Tokyo Round 
Antidumping Code.  On July 8, 1991, Japan initia ted a dispute settlement proceeding challenging an 
EC antidumping decision in EC – Audiocassettes.
96  A short time later, in November 1991, Brazil 
requested consultations regarding an EC antidumping decision in EC – Cotton Yarn .97  Both cases 
                                                      
93 EC Answer to Panel Question 10, para. 66.   
94 EC Answer to Panel Question 11(b), para. 73.   
95 EC First Opening Statement, para. 22.   
96 EC – Audiocassettes , para. 360.   
97 EC – Cotton Yarn,  para. 502.   WT/DS350/R 
Page C-78  
 
  challenged numerous aspects of th e EC's antidumping methodology, including zeroing.  Both Japan's 
and Brazil's zeroing claims turned on a now familiar argument that zeroing violated the "fair comparison" requirement of Article 2.6 of the Tokyo Round Antidumping Code, the predecessor to 
Article 2.4 of the AD Agreement.  In both cases, the panels rejected Japan's and Brazil's claims.  The 
panels found no basis in Article 2.6 of the Toky o Round Antidumping Code to support an expansive 
reading of "fair comparison".  As a result, they concluded that the EC's zeroing practices were not a 
violation of the Code.  As the EC – Cotton Yarn  panel stated:   
 
In the view of the Panel the argument of Brazil was that the requirement to make due 
allowance for differences affecting price comp arability had to be interpreted in light 
of the object and purpose of Article 2.6, which was to effect a fair comparison.  
However Brazil had not made any independe nt arguments designed to establish that 
apart from the requirements of the first sen tence, and the allowances required by the 
second sentence of Article 2.6, there was a further requirement that any comparison 
of normal value and export price must be "f air".  The Panel was of the view that 
although the object and purpose of Article 2.6 is to effect a fair comparison, the 
wording of Article 2.6 "[i]n order to effect a fair comparison" made clear that if the 
requirements of that Article were to be  met, any comparison thus undertaken was 
deemed to be "fair".   
 70. In this regard, Brazil noted at the outset that it "was not arguing against zeroing per se".
98  
Instead, Brazil conceded that "zeroing" is normally pe rmissible, but argued that in an environment of 
high inflation like Brazil the EC's zeroing methodology had an especially prejudicial effect on the calculation of dumping margins.
99   
 71. The Panel, however, rejected Brazil's expansive reading of "fair comparison".  Instead, it read 
"fair comparison" narrowly as relating stric tly to allowances and adjustments:   
 
The Panel noted that the first sentence of Article 2.6 concerned the actual comparison of prices at the same level of trade and in respect of sales made as nearly as possible the same time.  The Panel c onsidered that the second sentence of 
Article 2.6 concerned allowances to be ma de for the relevant differences in the 
factors that affected price determination in  the respective markets sufficient to ensure 
the required comparability of prices.  The Panel took the view that the second sentence of Article 2.6 required that a llowances necessary to eliminate price 
comparability be made prior to the actual comparison of the prices, in order to eliminate the differences which could affect  the subsequent comparison.  The Panel 
considered that "zeroing" did not arise at the points at which the actual determination 
of the relevant prices was undertaken pursua nt to the second sentence of Article 2.6.  
In the Panel's view, "zeroing" was undert aken subsequently to the making of 
allowances necessary to ensu re price comparability in acco rdance with the obligation 
contained in the second sentence of Article 2.6.   It related to the subsequent stage of 
comparison of prices;  a stage which was not governed by the second sentence of 
Article 2.6.  Therefore, the Panel dismissed Brazil's argument that the EC had failed 
to make due allowances for the effects of its so-called "zeroing" methodology.
100   
 
                                                      
98 EC – Cotton Yarn , para. 486.   
99 The Panel noted:  "Brazil argued that even if so-called "zeroing" could be defended in most 
circumstances, it could not be defended in cases where due to high inflation very high fluctuations in positive 
and negative dumping margins occurred".  EC – Cotton Yarn , para. 498.   
100 EC – Cotton Yarn , para. 500.    WT/DS350/R 
 Page C-79 
 
 
  72. In other words, the EC – Cotton Yarn  panel did not agree with Brazil's contention that the 
term "fair comparison"  in Article 2.6 of Tokyo Round Antidumping Code101 incorporates a broad 
prohibition zeroing.  Instead, the panel interprete d "fair comparison" as referring only to the use of 
adjustments or allowances for purposes of facilitating price comparability.   
 
73. In sum, these panel decisions provide impor tant context on the meaning of the term "fair 
comparison" in the Tokyo Round Code.  In these disputes, Tokyo Round An tidumping Code panels 
did not interpret identical language in the Code  as a prohibition on zeroing or a requirement to 
average negative antidumping margins.  Both panels re jected Japan's and Brazil's attempts to give this 
term the expansive meanings sought by the EC in this case.  It is also noteworthy that Brazil was 
prepared to admit at the outset that zeroing is permissible in "most" cases, and thus did not challenge 
zeroing per se.   In short, a prohibition on zeroing, if it exists, must have come into being in the 
Uruguay Round, since it did not exist in the Tokyo Round Antidumping Code.  This would have required a textual change, but where is that cha nge?  As we now show, the Uruguay Round did not 
result in any new "common understanding" on a broad-based zeroing prohibition.  Instead, the key 
textual provisions that have been cited by the Appellate Body in its previous findings remained 
virtually unchanged  from GATT 1947 Article VI, the Kenne dy Round Antidumping Code, and the 
Tokyo Round Antidumping Code, including such phr ases as "product", "products", "margin of 
dumping", and "fair comparison".    74. During the Uruguay Round negotiations, Japan, Norway, Hong Kong, and Singapore 
repeatedly sought to add a ban on "zeroing" to the draft AD Agreement text.  They argued vehemently 
that zeroing is inherently unfair;  provided lengt hy negotiating proposals discussing the treatment of 
"negative dumping" and "non-dumped sales" under GATT Article VI and the Tokyo Round 
Antidumping Code;  and submitted de tailed textual proposals to ban zer oing or require consideration 
of non-dumped sales.  Their proposals, however, were strongly opposed at that time by the EC, the 
United States, and Canada, and were not incorporated  into the final AD Agreement.  As a result, as 
we now show, careful analysis of the negotiatin g history pursuant to Article 32 of the Vienna 
Convention demonstrates conclusively that the AD Agreement does not incorporate a broad ban on 
zeroing or a requirement to aggregate individual transactions under Article 9.3.    75. In September 1987, Japan submitted an in itial proposal to the Uruguay Round Negotiating 
Group on MTN Agreements and Arrangements ("MT N Negotiating Group"), which had jurisdiction 
over the Tokyo Round Antidumping Code.  The Japa nese proposal called attention to the need to 
build a "common understanding" to address the role of "non-dumped" sales in calculating the "export 
price", as follows:    
Although the Code states that, in order to effect a fair comparison between export 
price and domestic price, two prices are to be compared at the same level of trade and due allowance be made for the differe nces in conditions of sale, it is still 
susceptible of authority's subjective discretion.   To clarify elements to be counted for 
adjustment in order to assure the same leve l of trade and to enumerate the content of 
the differences in conditions of sale would help the authorities to assure a fair 
comparison.   
 Certain Signatories use the weighted aver age of prices in all transactions in 
calculating the "normal value" whereas they  use the weighted average of dumped 
prices exclusively in calculating the "export pr ice".  There is a need, therefore, to 
                                                      
101 This provision was incorporated in Article 2.4 of the AD Agreement, which deals with 
adjustments.   WT/DS350/R 
Page C-80  
 
  build a common understanding on the calcula tion of dumping margin in order to 
eliminate such an arbitrary calculation .102   
 
76. The Japanese submission is noteworthy beca use it underscores that at that time Japan 
fully recognized that:  (1) there was no "commo n understanding" on zeroing and (2) the Tokyo 
Round language on "fair comparison" did not incorporate a "common understanding" to 
prohibit "zeroing" or to require the inclusion of "non-dumped sales" in the export price.    77. Japan submitted a second "zeroing" propos al to the Uruguay Round Negotiating Group 
on MTN Agreements and Arrangements in June 1988:   
 
In cases where sales prices vary among many transactions, certain signatories, 
using the weighted-average of domestic sales price as the normal value with which each export price is compared, ca lculate the average dumping margin in 
such a way that the sum of the dumping margins of transactions the export prices of 
which are lower than normal value is divide d by total amount of export prices.  In 
this method, however, negative dumping ma rgins, i.e., the amount by which export 
price exceeds normal value, are ignored .   
 
Consequently, dumping margins occur in cases where export prices vary over 
time … or where export prices vary due to different routes of sale …, even if the 
average level of export prices is equal to that of domestic sales prices.103   
 Accordingly, the second Japanese proposal explicitly  referenced the role of "negative dumping 
margins".   
 
78. In July 1989, Hong Kong s ubmitted a competing proposal to address "zeroing" in what was 
then Article 2.6 of the "Carlisle draft"
104 (and would later become Article 2.4 of the AD Agreement) 
as follows:105   
 
Negative dumping margin (Article 2.6) 
 14. In calculating the overall dumping margin of the producer under investigation, certain investigating auth orities compare the normal value (calculated 
on a weighted average basis) with the export price on a transaction by transaction 
basis.  For transactions where normal value is higher than the export price 
(i.e. dumping occurs), the dumping margin by which the normal value exceeds the 
export price of each transaction in value te rms will be added up.  The grand total 
will then be expressed as a percentage of  the total value of the transactions under 
investigation.  This will then represent the overall dumping margin in percentage 
terms.  For transactions where normal valu e is lower than the export price (i.e. no 
dumping occurs) the "negative" dumping margin by which the normal value falls 
below the export price in value terms will be treated as zero instead of being added 
to the other transactions to offset the dumping margin.  As a result, it would be 
technically easy to find dumping with an inflated overall dumping margin in 
percentage terms .   
 
                                                      
102 Communication From Japan, MTN.GNG/NG8/W/11, at item II.1(4) (Sept. 28, 1987) 
(emphasis added).   
103 Communication From Japan, MTN.GNG/NG8/W/30, at item I.4(3) (June 20, 1988) (emphasis 
added).   
104 Referring to the then Deputy Director General of the GATT, Charles Carlisle.   
105 MTN.GNG/NG8/W/51/Add.1, p. 3 (22 Dec. 1989) (emphasis added).    WT/DS350/R 
 Page C-81 
 
 
  79. In a separate communication entitled "Princip les and Purposes of Anti-Dumping Provisions", 
Hong Kong discussed the imposition of duties on an individual transaction basis:    
The second way in which anti-dumping duties are imposed on goods which are not dumped, arises out of the tendency to apply an anti-dumping duty as though it were 
an import levy on all imports from a named country because certain suppliers from 
that country have been found to have dumped at some time in the past.  This ignores 
the fact that under Article VI, an anti-dumping duty is a levy on dumped imports of products, not on all such products from a na med source which may be been found to 
be dumping such products in the past.  By a strict interpretation, it would appear that 
only an entry-by-entry system is fully consis tent with Article VI;  and any variations 
to such a system to address administrative d ifficulties must be carefully assessed as 
to whether this basic requirement of Article VI is still met.
106   
 80. Similar concerns about "negative dumping" we re expressed by Singapore in a paper regarding 
"Proposed Elements for a Framework for Negotia tions, Principles and Objectives for Antidumping 
Rules".
107  Singapore argued that:  "In calculating dump ing margins, "negative"" dumping should be 
taken into account i.e. if certain transactions are so ld for more than the normal value in the foreign 
market, that excess should be balanced off against sal es of merchandise at less than normal value".   
 81. On November 15, 1989, the GATT Secretariat summarized the status of discussions in the 
Negotiating Group as follows:
108   
 
13. Use of weighted averages in the comparison of export price and normal value  
29. The following were among comments made:   
 - the problem arose from practices where the normal value, established on a weighted-average basis, was compared to  the export price on a transaction-by-
transaction basis.  Thereby, dumping might be found merely because a company's export price varied in the same way as its own domestic price.  Even when domestic 
profit margin was the same as in the export ma rket, any variations in the export price 
would, due to the disregard of negative dumping margins, cause dumping to be 
found, or a dumping margin to be increased ;   
 - if negative margins were included in th e calculation, one would not deal with 
instances in which dumping was targeted to a particular portion of a product line or 
to a particular region;  sales at fair value in one region or in one portion of a product 
line did not offset injury caused in the other ; 
 - given the definition of  like products in Article 2:2, it was difficult to see the relevance of the product line argument.  Injury to producer s in certain areas 
presupposed market segmentation which w as dealt with in Article 4:1(ii);   
                                                     
 
106 MTN.GNG/NG8/W/46, p.8 (underlining in original;  italics added).  This communication 
represents the view not just of one participant in the MTN Agreements negotiati ons, but the statement by a 
skilled and sophisticated WTO Member.  This Member's view that ideally the imposition of dumping should 
apply at an individual importer level based on individual entries suggests that the findings in US – Zeroing 
(EC) (AB) and US – Zeroing (Japan) (AB) that the calculation of a dumping margin must be done on the basis 
of the "product as a whole" are misplaced.   
107 MTN.GNG/NG8/W/55, p.7 (13 Oct. 1989).   
108 Meeting of 16-18 October 1989 of the Negotiating Group on MTN Arrangements , 
MTN.GNG/NG8/13, at para. 29 (Nov. 15, 1989) (emphasis added).   WT/DS350/R 
Page C-82  
 
  - the issue at stake was m asked, selective dumping, the effects of which could be 
considerable;    - an important question was whether non-dumped imports should also have to be included in the examination of injury.   
 
82. In short, there was no
 consensus.  The Secretariat's report underscores the lack of agreement 
within the Negotiating Group on modifying Article  2.6 to prohibit "zeroing".  While some 
participants, e.g. Japan, Hong Kong, Singapore, and the Nordics strongly supported such a proposal, 
others were concerned that it would facilitate "selec tive dumping" into specific markets or for specific 
product lines.   
 83. When the negotiations shifted to the drafting of a proposed text, the Nordic Countries submitted proposed amendments to the Code as follows:
109 
 
Due allowances and fair comparison 
 
Amend present Article 2.6 (i.e. new Article  2.7) to read as follows and add a 
footnote: In order to effect a fair comparison between the normal value, as 
determined in accordance with paragraphs  4 and 5 above and the export price, both 
prices shall be calculated in a uniform and consistent manner* 
 
. . .  
 
(Footnote) * A uniform and consistent ma nner of calculation implies that when 
normal value is determined, e.g. by calculating the weighted or arithmetical 
averages, the export price shall also be  determined by similar weighted or 
arithmetical average calculations. . .  
 Nothing even vaguely resembling the Nordic footnote a ppears in the final text of the AD Agreement.   
 84. An alternative proposal to revise Article 2.6 of the Tokyo Round Antidumping Code was 
offered by Singapore, as follows:   
 
E.  Determination of normal value a nd comparison between normal value and 
export price  
(a) [T]here should be no asymmetrical ad justment.  Comparisons between the 
export price and the normal value should be conducted on a fair and symmetrical 
basis in determining the dumping margin.    (b) Normal value should reflect the normal costs in the country of origin or exportation, plus profits which are commercially acceptable.   
 
(c) If Normal Value is to be constructe d, the investigating authorities should 
reflect as closely as possible the real conditions in the country of export.  In particular, they should reflect the actual production costs and the commercially accepted profit margin in that exporting country.  Cost allocation rules should follow 
the generally-accepted accounting practices in  the country of export.  Furthermore, 
the cost-of-production provisions should r ecognize the need to amortize "start-up" 
costs and extraordinary costs, su ch as R&D development costs.   
                                                     
 
109 MTN.GNG/NG8/W/76 (11 April 1990)  (underlining in original).    WT/DS350/R 
 Page C-83 
 
 
  (d) In calculating dumping margins, "negative" dumping should be taken into 
account i.e. if certain transactions are sold  for more than the normal value in the 
foreign market, that excess should be bala nced off against sales of merchandise at 
less than normal value . . . . 
 
Again, none of the language in Singapore's proposed text appears in the final Uruguay Round 
AD Agreement.    85. Finally, in December 1989, Hong Kong subm itted a textual proposal to address "negative 
dumping".  Like Japan's and Singapore's, the H ong Kong proposal was framed as a revision to 
Article 2.6 of the Tokyo Round Antidumping Code, wh ich became Article 2.4 of the AD Agreement, 
as follows:    
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 provision of Ar ticle VI:1(b) of the General Agreement, 
the prices shall be compared at the same le vel of trade, normally at the ex-factory 
level, and in respect of sales made at as nearly as possible the same time.  The investigating authorities shall give due a llowance [shall be made] in each case [on 
the merits] for the differences in conditions and terms of sale, for the differences in 
taxation, and for [the] all other differences affecting price comparability in order to 
put normal value and the export price on a comparable basis and effect a fair 
comparison.  In the cases referred to in paragraph 5 of Article 2 allowance for costs, including duties and taxes, incurred betw een importation and sale, and for profits 
accruing, should also be made.  Normal va lue and export price shall be established 
on a weighted average basis of all sales on the relevant markets for purposes of 
determining the dumping margin.   
 (Explanatory note – To ensure that comparison between the normal value and export price be made on an equal basis.  Plea se refer to paragraphs 15 and 15 of paper 
W/51/Add.1.)    Underlined text is new language pro posed by Hong Kong.  Bracketed language 
reflects deletions from Article 2.6 of the Tokyo Round Antidumping Code. 
 
Accordingly, like Japan and Singapore, Hong Kong did not view the existing Tokyo Round Antidumping Code provisions regarding "fair compar ison" or "margin of dumping" as incorporating a 
ban on zeroing, but instead sought to introduce new oblig ations to the text through the addition of new 
language.  Again, Hong Kong's language did not appear in the final AD Agreement text.   
 86. In sum, the negotiating history of the Urugua y Round shows that the negotiators were well 
aware of zeroing.  Japan and Brazil had already in itiated GATT disputes challenging the EC's zeroing 
practices under the Tokyo Round Antidumping Code.  Japan, Singapore, Hong Kong, and the Nordic 
Countries had submitted negotiating proposals to prohibit zeroing, and Japan,  Singapore, and the 
Nordic Countries had submitted textual language to implement such a ban.  The negotiators from 
Japan, Singapore, Hong Kong, Brazil, and the Nordic  Countries were some of the most skilled and 
sophisticated in the GATT.  Given past practice, they  were also well aware that  they needed to secure 
major changes in the existing language of GATT 1947 Article VI and the Tokyo Round Antidumping 
Code in order to achieve their objective of banni ng zeroing.  It was no secret that there was no
 
"common understanding" under GATT 1947 Article VI and the Tokyo Round Antidumping Code of 
such terms as "fair comparison", "margin of dumping" , "product", or "products".  As a result, they 
sought to introduce new obligations to the WTO Agreement through the a ddition of new textual 
provisions to mandate A-to-T comparisons and require  averaging in all contexts.  Unfortunately, none 
of the language cited above appeared in the final WTO AD Agreement.  Instead, the key terms of the WT/DS350/R 
Page C-84  
 
  WTO text (apart from the "all comparable export transactions" provision which is limited to A-to-A 
comparisons in investigations and is not at issue here) were virtually identical to GATT 1947 
Article VI and the Tokyo Round Antidumping Code.  A ccordingly, an analysis of the "preparatory 
work of the treaty and the circumstances of its c onclusion" for purposes of Article 32 of the Vienna 
Convention shows beyond doubt that there was no common understanding in the Uruguay Round to 
bar zeroing.   
 87. While the panel reports in EC – Cassettes and EC – Cotton Yarn were issued after the 
conclusion of the Uruguay Round, Japan, Brazil, Si ngapore, Hong Kong, and the Nordics were well 
aware that the EC was contesting Japan and Brazi l's claims that the Tokyo Round Code prohibited 
zeroing, because they, like other Members of th e Antidumping Code Committee, participated in 
discussions of the consultation request and the deci sions to establish Antidum ping Code Panels.  In 
other words, it would have been foolish for Japan , Brazil, Singapore, Hong Kong, and the Nordics to 
count on some "hidden meaning" in the text bei ng carried over to the WTO AD Agreement from the 
same terms in its GATT 1947/Tokyo Round predecesso rs, when they knew the meaning of these 
terms was cloudy and in dispute.  To the extent that they made a bet that they would succeed in 
inserting a zeroing prohibition into the existing "f air comparison" language of the Tokyo Round Code 
through the dispute settlement pr ocess, the panel reports in EC – Audiocassettes and EC – Cotton 
Yarn  indicate that this was a wager that they lost.  Indeed, the EC – Cotton Yarn  panel report, upon its 
adoption by the Antidumping Committee, represented an  important interpretation of the Tokyo Round 
Antidumping Code under the dispute settlement procedures in effect at that time.  This phrase, as 
discussed above, did not change in any material  way when it was carried over to the WTO AD 
Agreement.   88. In short, the lack of any explicit textua l reference in the Uruguay Round AD Agreement to 
prohibiting zeroing, or any meaningful elaboration on the longstanding GATT 1947 and Tokyo 
Round Antidumping Code terms relati ng to the "margin of dumping", "fair comparison", "product", or 
"products", speaks for itself.  No common unde rstanding was reached on zeroing in the Uruguay 
Round.  No consensus could be reached because despite extensive efforts by Japan, Hong Kong, 
Singapore, and the Nordic Countries, their proposals were firmly opposed by the EC, the United States and Canada
110, who had long used zeroing in their antidumping programs under GATT 
Article VI and the Tokyo Round Code, and continued to use zeroing after the WTO entered into force 
(and in the case of the EC and Canada continue to  use zeroing today, despite their protestations 
otherwise).  Any effort by the EC to read a "zeroing" prohibition into the WTO AD Agreement, 
therefore, flies in the face of reality.   
 
V. CONCLUSION 
89. For the reasons set forth above, along with those set forth in the United States' first written 
submission, oral statements at the first substantive meeting with the Panel, and responses to the Panel's questions, the United States requests that the Panel reject the EC's claims.     
_______________ 
 
 
                                                     
 
110 See e.g. , "Meetings of 31 January - 2 February and 19-20 February 1990, MTN/GNG/NG8/15, p. 19 
(15 March 1990) (discussing problem of targeted dumping);  Meeting of 23 July 1990 MTN/GNG/NG8/19, p. 5 
(US delegation expresses concern regarding "the us e of average export values");  Meeting of 16-
18 October 1989, pp. 13-14, MTN/GNG/NG8/13 (Nov. 15, 1989) (noting that negative comments included "if negative margins were included in the calculation, one could not deal with instances in which dumping was 
targeted to a particular portion of a product line or to a particular region" and another delegation commented that 
"the issue at stake was masked, selective dumping").