WORLD TRADE  
ORGANIZATION  WT/DS322/AB/R 
9 January 2007 
 ( 07-0081 ) 
 Original: English 
    
 
     
 
    
 
   
UNITED STATES – MEASURES RELATING TO ZEROING 
AND SUNSET REVIEWS 
 
 
 
AB-2006-5 
    
 
    
 
 
 
Report of the Appellate Body 
 WT/DS322/AB/R 
 Page i 
 
I. Introduction................................................................................................................... .............1  
II. Arguments of the Participants and the Third Participants .........................................................5  
A. Claims of Error by Japan – Appellant............................................................................5  
1. Zeroing As Such in Transaction-to-Transaction Comparisons in 
Original Investigations......................................................................................5  
2. Zeroing As Such in Periodic Re views and New Shipper Reviews...................8  
3. Zeroing As Applied in Periodic Reviews and Sunset Reviews ......................10  
B. Arguments of the United States – Appellee.................................................................11  
1. Zeroing As Such in Transaction-to-Transaction Comparisons in 
Original Investigations....................................................................................11  
2. Zeroing As Such in Periodic Re views and New Shipper Reviews.................13  
3. Zeroing As Applied in Periodic Reviews and Sunset Reviews ......................15  
C. Claims of Error by the United States – Other Appellant .............................................15  
D. Arguments of Japan – Appellee...................................................................................18  
E. Arguments of the Third Participants............................................................................20  
1. China...............................................................................................................21  
2. European Communities...................................................................................22  
3. Korea...............................................................................................................24  
4. Mexico ............................................................................................................26  
5. Norway ...........................................................................................................28  
6. Thailand ..........................................................................................................30  
III. Issues Raised in This Appeal ................................................................................................... 31 
IV. Zeroing As Such in Original Investiga tions Based on Transaction-to Transaction and 
Weighted Average-to-Transaction Comparisons.....................................................................32  
A. The Measure at Issue ...................................................................................................34  
B. Japan's Request for Consultations................................................................................39  
V. Zeroing As Such in Original Investiga tions, Periodic Reviews, and New Shipper 
Reviews........................................................................................................................ .............42  
A. The Concepts of "Dumping" and "Margins of Dumping" ...........................................46  
B. Determination of Margins of Dumping Based on Transaction-to-Transaction 
Comparisons in Original Investigations.......................................................................49  
1. Article 2.4.2 of the Anti-Dumping Agreement ................................................49  
2. Article 2.1 of the Anti-Dumping Agreement  and Articles VI:1 and VI:2 
of the GATT 1994...........................................................................................57  
3. Article 2.4 of the Anti-Dumping Agreement ...................................................57  
C. Zeroing As Such in Periodic Re views and New Shipper Reviews..............................59  
1. Articles 9.3 and 9.5 of the Anti-Dumping Agreement  and Article VI:2 
of the GATT 1994...........................................................................................59  
2. Article 2.4 of the Anti-Dumping Agreement ...................................................65  WT/DS322/AB/R 
Page ii  
3.
 Articles 2.1, 9.1 and 9.2 of the Anti-Dumping Agreement  and 
Article VI:1 of the GATT 1994 ......................................................................66  
VI. Zeroing As Applied in  Periodic Reviews .................................................................................66  
VII. Margins of Dumping in Sunset Reviews ..................................................................................68  
VIII. Article 17.6(ii) of the Anti-Dumping Agreement ......................................................................70  
IX. Findings and Conclusions....................................................................................................... ..71 
 
 ANNEX I Notification of an Appeal by Japan  ANNEX II Notification of an Other Appeal by the United States 
 
ANNEX III Request for the Establishment of a Panel by Japan  WT/DS322/AB/R 
 Page iii 
TABLE OF CASES CITED IN THIS REPORT 
 
Short Title Full Case Title and Citation 
Australia – Salmon  Appellate Body Report, Australia – Measures Af fecting Importation of 
Salmon , WT/DS18/AB/R, adopted 6 November 1998, DSR 1998:VIII, 
3327 
Brazil – Aircraft  Appellate Body Report, Brazil – Export Financing Programme for 
Aircraft , WT/DS46/AB/R, adopted 20 August 1999, DSR 1999:III, 1161 
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, DSR 2001:V, 2049 
Mexico – Corn Syrup  (Article 21.5 – US)
  Appellate Body Report, Mexico – Anti-Dumping Investigation of High 
Fructose Corn Syrup (HFCS) from the United States – Recourse to 
Article 21.5 of the DSU  by the United States , WT/DS132/AB/RW, 
adopted 21 November 2001, DSR 2001:XIII, 6675 
US – Carbon Steel  Appellate Body Report, United States – Counter vailing Duties on  
Certain Corrosion-Resistant Carbon Steel Flat Products from Germany , 
WT/DS213/AB/R and Corr.1, adopted  19 December 2002, DSR 2002:IX, 
3779 
US – Corrosion-Resistant 
Steel Sunset Review  Appellate Body Report, United States – Sunset Review of Anti-Dumping 
Duties on Corrosion-Resistant Carbon Steel Flat Products from Japan , 
WT/DS244/AB/R, adopted 9 January 2004, DSR 2004:I, 3  
US - DRAMS Appellate Body Report, United States – Countervailing Duty 
Investigation on Dynamic Random Access Memory Semiconductors 
(DRAMS) from Korea , WT/DS296/AB/R, adopted 20 July 2005 
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, 
DSR 2002:I, 55 
US – Offset Act  (Byrd Amendment
 ) Appellate Body Report, United States – Continued Dumping and Subsidy 
Offset Act of 2000 , WT/DS217/AB/R, WT/DS234/AB/R, adopted 
27 January 2003, DSR 2003:I, 375 
US – Oil Country Tubular Goods Sunset Reviews Appellate Body Report, United States – Sunset Reviews of Anti-Dumping 
Measures on Oil Country Tubul ar Goods from Argentina , 
WT/DS268/AB/R, adopted 17 December 2004 
US – Softwood Lumber V  Appellate Body Report, United States – Final Dumping Determination on 
Softwood Lumber from Canada , WT/DS264/AB/R, adopted 31 August 
2004, DSR 2004:V, 1875 
US – Softwood Lumber V  
(Article 21.5 – Canada) Panel Report, United States – Final Dump ing Determination on Softwood 
Lumber from Canada – Recourse to Article 21.5 of the DSU by Canada , 
WT/DS264/RW, adopted 1 September 20 06, reversed by Appellate Body 
Report, WT/DS264/AB/RW 
US – Softwood Lumber V  
(Article 21.5 – Canada) Appellate Body Report, United States – Final Dumping Determination on 
Softwood Lumber from Canada – Recourse to Article 21.5 of the DSU by 
Canada , WT/DS264/AB/RW, adop ted 1 September 2006 
US – Upland Cotton Appellate Body Report, United States – Subsidies on Upland Cotton , 
WT/DS267/AB/R, adopted 21 March 2005 WT/DS322/AB/R 
Page iv  
Short Title Full Case Title and Citation 
US – Zeroing (EC) Appellate Body Report, United States – Laws, Regulations and 
Methodology for Calculating Dumping Margins , WT/DS294/AB/R, 
adopted 9 May 2006 
US – Zeroing (Japan) Panel Report, United States – Measures Relati ng to Zeroing and Sunset 
Reviews , WT/DS322/R, circulated to WTO Members 20 September 
2006 
 WT/DS322/AB/R 
 Page v 
 
LIST OF ABBREVIATIONS USED IN THIS REPORT 
 
Abbreviation Description 
Anti-Dumping Agreement Agreement on Implementation of Article VI of the General Agreement on 
Tariffs and Trade 1994  
DSB Dispute Sett lement Body 
DSU Understanding on Rules and Procedures Governing the Settlement of 
Disputes  
GATT 1994 General Agreement on Tariffs and Trade 1994  
Panel Report Panel Report, US – Zeroing (Japan)  
Panel request United States – Measures Relating to  Zeroing and Sunset Reviews , 
Request for the Establishment of a Panel by Japan, WT/DS322/8 
SCM Agreement Agreement on Subsidies and Countervailing Measures  
T-T Transaction-to-transaction (compa rison) of export price and normal 
value 
Tariff Act Tariff Act of 1930, codified in Title 19 of the United States Code  
TRIPS Agreement Agreement on Trade-Related Aspects of Intellectual Property Rights  
USDOC United States Department of Commerce 
USITC United States International Trade Commission 
W-W Weighted average normal value- to-weighted average export price 
(comparison) 
Working Procedures  Working Procedures for Appellate Review , WT/AB/WP/5, 
4 January 2005 
W-T Weighted average normal value-to-prices of individual export 
transactions (comparison) 
WTO World Trade Organization 
WTO Agreement  Marrakesh Agreement Establishi ng the World Trade Organization   
 
    WT/DS322/AB/R 
 Page 1 
 
 
WORLD TRADE ORGANIZATION  
APPELLATE BODY 
 
United States – Measures Relating to Zeroing and 
Sunset Reviews  
Japan, Appellant/Appellee  
United States, Appellant/Appellee  
 
Argentina, Third Participant 
China, Third Participant   
European Communities, Third Participant 
Hong Kong, China,  Third Participant  
India, Third Participant  
Korea, Third Participant 
Mexico, Third Participant 
New Zealand, Third Participant 
Norway, Third Participant 
Thailand, Third Participant 
  AB-2006-5 
 
 Present:   Sacerdoti, Presiding Member  Abi-Saab, Member 
 Ganesan, Member 
 
  
I. Introduction  
1. Japan and the United States each appeals certa in issues of law and legal interpretations 
developed in the Panel Report, United States – Measures Relating to Zeroing and Sunset Reviews  
(the "Panel Report").
1  The Panel was established to consid er a complaint by Japan concerning the 
calculation of margins of dumping by the United States based on a methodology that disregards the 
amounts by which the export prices are above the normal value in certain transactions.2  
2. Before the Panel, Japan challenged, under the Agreement on Implementation of Article VI of 
the General Agreement on Tariffs and Trade 1994 (the " Anti-Dumping Agreement "), the General 
Agreement on Tariffs and Trade 1994 (the "GATT 1994"), and the Marrakesh Agreement 
Establishing the World Trade Organization  (the " WTO Agreement "):  
                                                      
1WT/DS322/R, 20 September 2006. 
2See Panel Report, paras. 2.1 and 7.1.  The Panel noted that, "with regard to periodic reviews and new 
shipper reviews, Japan challenges zeroing not only with respect to the calculation of margins of dumping  but 
also with respect to the calculation of assessment rates ." (Panel Report, footnote 630 to para. 7.1) (original 
emphasis) WT/DS322/AB/R 
Page 2  
 
(a) the United States' "zeroing procedures"
3 and the "standard zeroing line"4, "as such", in 
the context of "original investigations"5, "periodic reviews"6, "new shipper reviews"7, 
"changed circumstances reviews"8, and "sunset reviews"9;  and 
(b) the application of the "zeroing proce dures" in one "original investigation"10, in 
11 "periodic reviews"11, and in two "sunset reviews".12  
3. In the Panel Report, circulated to Members of the World Trade Organization (the "WTO") on 
20 September 2006, the Panel made the followi ng findings in respect of "model zeroing"13 and 
"simple zeroing"14:   
                                                      
3Before the Panel, Japan used the term "zeroing" to denote the methodology under which the United 
States Department of Commerce (the "USDOC") "dis regards intermediate negative dumping margins ... through 
the USDOC's AD Margin Calculation Computer Programme and other related procedures, in the process of 
establishing the overall dumping margin for the product as a whole". (Panel Report, footnote 668 to para. 7.45, 
quoting Request for the Establishment of a Panel by Japan, para. 1(a)-(d) (attached as Annex III to this Report))  The Panel used the term "zeroing procedures" to refer to "the zeroing methodology per se , as distinguished from 
the standard zeroing line". ( Ibid., para. 7.47) 
4The term "standard zeroing line" is used in the Pa nel Report to refer to a specific line of computer 
programming code used by the USDOC when it develops a specific computer program to calculate a margin of 
dumping in a particular anti-dumping proceeding. (See Panel Report, paras. 4.17 and 7.20, and footnote 644 to para. 7.20) 
5In our discussion, we use the term "original inves tigations" to refer to investigations within the 
meaning of Article 5 of the Anti-Dumping Agreement .     
6In our discussion, we use the term "periodic review" to describe the periodic review of the amount of 
anti-dumping duty, as required by Section 751(a) of the Tariff Act of 1930 (the "Tariff Act"). 
7In our discussion, we use the term "new shipper review" to describe the review to establish an 
individual weighted-average dumping margin for the exporter or foreign producer, as required by 
Section 751(2)(B)(i)(II) of the Tariff Act.  That provi sion requires the USDOC to review and determine the 
individual dumping margin for an exporter or foreign producer that did not export the product during the original period of investigation. 
8In our discussion, we use the term "changed circumstances review" to describe the review of a final 
affirmative dumping determination or su spension agreement, as required by Section 751(b) of the Tariff Act.  
That provision requires the USDOC to review a final dumping determination or a suspension agreement based 
upon a request by an interested party demonstrating th at changed circumstances warrant a review of such a 
determination. 
9In our discussion, we use the term "sunset review" to describe the review of an anti-dumping duty 
order at the end of five years, as required by Section 751(c) of the Tariff Act.  That provision requires the 
USDOC to conduct a review to determine whether revocation of the anti-dumping duty order would likely lead 
to continuation or recurrence of dumpi ng and of material injury five years after the date of publication of an 
anti-dumping duty order.     
10See Exhibit JPN-10 submitted by Ja pan to the Panel;  further details may be found in Panel Report, 
para. 2.3.  
11The 11 periodic reviews challenged by Japan are lis ted in Exhibits JPN-11 through JPN-21 submitted 
by Japan to the Panel;  further details may be found in Panel Report, para. 2.3.    
12The two sunset reviews challenged by Japan are listed in Exhibits JPN-22 and JPN-23 submitted by 
Japan to the Panel;  further details may be found in Panel Report, para. 2.3.  WT/DS322/AB/R 
 Page 3 
 
 
(a) By maintaining model zeroing procedures in the context of original investigations, 
the United States Department of Commerce (t he "USDOC") acts inconsistently with 
Article 2.4.2 of the Anti-Dumping Agreement .  
(b) By using model zeroing in the anti-dumping i nvestigation of imports of cut-to-length 
carbon quality steel products from Japan, the USDOC acted inconsistently with 
Article 2.4.2 of the Anti-Dumping Agreement .  
(c) By maintaining simple zeroing procedures in  the context of original investigations, 
the USDOC does not act inconsistently with Articles 1, 2.1, 2.4, 2.4.2, 3.1-3.5, 5.8, and 18.4 of the Anti-Dumping Agreement , Articles VI:1 and VI:2 of the GATT 1994, 
and Article XVI:4 of the WTO Agreement .   
(d) By maintaining simple zeroing procedures in the context of periodic reviews and new 
shipper reviews, the USDOC does not act inconsistently with Articles 1, 2.1, 2.4, 
2.4.2, 9.1-9.3, 9.5, and 18.4 of the Anti-Dumping Agreement , Articles VI:1 and VI:2 
of the GATT 1994, and Article XVI:4 of the WTO Agreement .  
(e) By applying simple zeroing in the 11 periodic reviews listed in Exhibits JPN-11 
through JPN-21, the USDOC did not act inconsis tently with Articles 1, 2.1, 2.4, 2.4.2, 
and 9.1-9.3 of the Anti-Dumping Agreement  and Articles VI:1 and VI:2 of the 
GATT 1994. 
                                                                                                                                                                    
 
13The Panel used the term "model zeroing" to refe r to the methodology wh ereby the USDOC "makes 
[weighted] average-to-[weighted] aver age [("W-W")] comparisons of expor t price and normal value within 
individual 'averaging groups' established on the basis of physical characteristics ('models') and disregards any 
amounts by which average export prices for particular models exceed normal value in aggregating the results of 
these multiple comparisons to calculate a weighted average margin of dumping." (Panel Report, para. 7.2) (footnote omitted)   
14The Panel used the term "simple zeroing" to refer to the methodology whereby the USDOC 
"determines a weighted average margin of dumping based on [weighted] average-to-transaction [("W-T")] or transaction-to-transaction [("T-T")] comparisons between export price and normal value and disregards any 
amounts by which export prices of individual transactions exceed normal value in aggregating the results of 
these multiple comparisons." (Panel Report, para 7.3) WT/DS322/AB/R 
Page 4  
 
(f) Japan has failed to make a prima facie  case that, by maintaining zeroing procedures 
in the context of changed circumstances re views and sunset reviews, the USDOC acts 
inconsistently with Articles 2 and 11 of the Anti-Dumping  Agreement . 
(g) By relying on dumping margins calculated in  previous proceedings in the sunset 
reviews of corrosion-resistant carbon steel from Japan and of anti-friction bearings from Japan, the United States International Trade Commission (the "USITC") and the 
USDOC did not act inconsistently with Articles 2 and 11 of the Anti-Dumping  
Agreement .
15   
4. On 11 October 2006, Japan notified the Dispute Se ttlement Body (the "DSB") of its intention 
to appeal certain issues of law covered in the Pane l Report and certain legal interpretations developed 
by the Panel, pursuant to Article 16.4 of the Understanding on Rules and Procedures Governing the 
Settlement of Disputes (the "DSU"), and filed a Notice of Appeal16 pursuant to Rule 20 of the Working 
Procedures for Appellate Review (the " Working Procedures ").17  On 18 October 2006, Japan filed an 
appellant's submission.18  On 23 October 2006, the United States notified the DSB of its intention to 
appeal certain issues of law covered in the Panel Re port and certain legal inte rpretations developed by 
the Panel, pursuant to Article 16.4 of th e DSU, and filed a Notice of Other Appeal19 pursuant to 
Rule 23 of the Working Procedures .  On 26 October 2006, the United States filed an other appellant's 
submission.20  On 6 November 2006, Japan and the Un ited States each filed an appellee's 
submission21 and China, the European Communities, Korea, Mexico, Norway, and Thailand each 
filed a third participant's submission.22  On the same day, Argentina, Hong Kong, China, India, and 
New Zealand each notified its intention to appear at the oral hearing as a third participant and to make 
an oral statement.23 
                                                      
15See Panel Report, paras. 7.258-7.259.  The Panel decided to exercise judicial economy and did not 
rule on Japan's claim that maintaining model zeroing procedures in the context of original investigations was 
inconsistent with Articles 1, 2.1, 2.4, 3.1-3.5, 5.8, and 18.4 of the Anti-Dumping Agreement , Articles VI:1 
and VI:2 of the GATT 1994, and Article XVI:4 of the WTO Agreement .  The Panel also decided to exercise 
judicial economy and did not rule on Japan's claim that the use of model zeroing in the anti-dumping 
investigation of imports of cut-to-length carbon qua lity steel products from Japan was inconsistent with 
Articles 1, 2.4, and 3.1-3.5 of the Anti-Dumping Agreement . (Ibid., para. 7.260) 
16WT/DS322/12 (attached as Annex I to this Report). 
17WT/AB/WP/5, 4 January 2005. 
18Pursuant to Rule 21 of the Working Procedures . 
19WT/DS322/13 (attached as Annex II to this Report). 
20Pursuant to Rule 23(3) of the Working Procedures . 
21Pursuant to Rules 22 and 23(4) of the Working Procedures . 
22Pursuant to Rule 24(1) and (3) of the Working Procedures . 
23Pursuant to Rule 24(2) of the Working Procedures .  WT/DS322/AB/R 
 Page 5 
 
 
5. By letter dated 20 October 2006, Japan request ed authorization from the Appellate Body 
Division hearing the appeal to correct a clerical error in its appellant's submission, pursuant to 
Rule 18(5) of the Working Procedures .  On 23 October 2006, the Division invited, pursuant to 
Rule 18(5), all participants and third participants to comment on Japan's request.  No objection to 
Japan's request was received and, on 25 October 2006, the Division authorized Japan to correct the 
clerical error in its appellant's submission.  
6. The oral hearing in this appeal was held on 20 November 2006.  The participants and the third 
participants (with the exception of Argentina, H ong Kong, China, and India) presented oral arguments 
and responded to questions posed by the Members of the Division hearing the appeal. 
II. Arguments of the Participants  and the Third Participants 
A. Claims of Error by Japan – Appellant 
1. Zeroing As Such in Transaction-to-Transaction Comparisons in Original 
Investigations  
7. Japan submits that the Appellate Body should reverse the Panel's finding that the zeroing 
procedures are not "as such" inconsistent w ith Articles 2.1, 2.4, and 2.4.2 of the Anti-Dumping 
Agreement  and Articles VI:1 and VI:2 of the GATT 199 4 when used in transaction-to-transaction 
("T-T") comparisons of export price and normal value in original investigations.  Japan's appeal is 
based on several arguments. 
8. First, Japan submits that zeroing is inconsis tent with the definitions of "dumping" and 
"margins of dumping" in Article 2.1 of the Anti-Dumping Agreement  and Articles VI:1 and VI:2 of 
the GATT 1994.  Pursuant to these provisions, "'dumpi ng' and 'margins of dumping' must be defined 
in relation to the 'product' under investigation as a whole."24  Thus, if an investigating authority 
conducts multiple comparisons for individual trans actions or for groups of transactions, it must 
aggregate "the results of all of the multiple comparisons, including those where the export price 
exceeds the normal value".25  The requirement in Article 2.1 to aggregate multiple comparison results 
to produce a margin of dumping for the "product" as a whole applies to all types of comparisons, 
including when an investigating authority conducts model-specific weighted average normal value-to-
weighted average export price ("W-W") comparis ons, transaction-specific weighted average normal 
                                                      
24Japan's appellant's submission, para. 9 (referring to Appellate Body Report, US – Softwood Lumber V 
(Article 21.5 – Canada) , paras. 89 and 91;  Appellate Body Report, US – Zeroing (EC) , paras. 126-129;  
Appellate Body Report, EC – Bed Linen , para. 53;  and Appellate Body Report, US – Softwood Lumber V , 
para. 99).   
25Appellate Body Report, US – Zeroing (EC) , para. 127 (quoted in Japan's appellant's submission, 
para. 81). WT/DS322/AB/R 
Page 6  
 
value-to-prices of individual export transacti ons ("W-T") comparisons, and T-T comparisons.
26  Japan 
argues that, by disregarding negative comparison re sults, "the United States' 'dumping' determination 
excludes an entire category of the export transactions that form part of the 'product'".27  According to 
Japan, the United States therefore "makes a 'dumpi ng' determination solely for a part of the 
investigated product, not for the product as a whole."28 
9. Japan underscores that the Panel erred in finding that Article 2.1 of the Anti-Dumping 
Agreement  and Article VI:1 of the GATT 1994 do not re quire that dumping be defined on a "product-
wide" basis.29  Referring to the Appellate Body Report in US – Softwood Lumber V (Article 21.5 – 
Canada) , Japan asserts that "no inference could be drawn from the fact that [the] phrase ['all 
comparable export transactions'] does not appear in relation to the [T-T] methodology", because, 
under T-T comparisons, export transactions  are not sub-divided into models.30  Japan further notes 
that the Appellate Body found, in that case, that th e reference to "export prices" and "a comparison" in 
the text of Article 2.4.2 "suggests an overall cal culation exercise involving aggregation of these 
multiple transactions"31 and therefore provides "a textual basis for the product-wide definition of 
'dumping' and 'margins of dumping' in the cont ext of [T-T] comparisons in Article 2.4.2."32  Japan 
also dismisses the Panel's "'difficulty' in understa nding the phrase 'multiple comparisons ... at an 
intermediate stage'"33 as requiring an aggregation of intermediate comparisons, claiming that the 
Appellate Body's finding in US – Zeroing (EC)  clarified that this phrase means that aggregation is 
required whenever "multiple model- or transaction-specific comparisons are made".34 
10. Secondly, Japan contends that the Panel erred in  accepting the United St ates' argument that, if 
zeroing is prohibited in the context of the W-T comparison methodology set out in the second sentence of Article 2.4.2 of the Anti-Dumping Agreement , "the use of this [methodology] will 
necessarily  always  yield a result identical to that of a [W-W] comparison" methodology under the 
                                                     
 
26Japan's appellant's submission, para. 82 (referring to Appellate Body Report, US – Softwood 
Lumber V , paras. 97-98;  Appellate Body Report, US – Zeroing (EC) , para. 132;  and Appellate Body Report, 
US – Softwood Lumber V (Article 21.5 –  Canada) , paras. 89 and 122). 
27Ibid., para. 11. 
28Ibid. 
29Ibid., para. 96. 
30Ibid., para. 98 (quoting Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , 
para. 91). 
31Ibid., para. 101 (quoting Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , 
para. 87). 
32Ibid., para. 102. 
33Ibid., para. 104 (referring to Panel Report, para. 7.100). 
34Ibid., para. 111 (referring to Appellate Body Report, US – Zeroing (EC) , para. 127).  WT/DS322/AB/R 
 Page 7 
 
 
first sentence.35  Japan notes that the Appellate Body  rejected a similar argument made by the United 
States in US – Softwood Lumber V (Article 21.5 – Canada) .36  In doing so, the Appellate Body noted 
that the second sentence, "[b]eing an exception, cannot determine the interpretation of the two 
methodologies provided in the first sentence".37  The Appellate Body further noted the "considerable 
uncertainty regarding how precisely th e third methodology should be applied"38, observing that, in 
that case, Japan had suggested that the W-T comp arison methodology should be  applied only to those 
transactions that make up the pricing pattern.  In the same case, the United States had argued that it 
would apply the W-T comparison methodology to tho se transactions falling within the pricing pattern 
and the W-W comparison methodology to the remain ing export transactions.  However, Japan points 
out, "the United States failed to explain how precisely the results of the two comparison 
methodologies would be combined".39  
11. Turning to the requirement to make a "fair comp arison" in the first sentence of Article 2.4 of 
the Anti-Dumping Agreement , Japan argues that the Appellate Body addressed, in US – Softwood 
Lumber V (Article 21.5 – Canada) , "the fairness of the United States' zeroing procedures under 
Article 2.4"40, and notes that "[t]he zeroing procedures at i ssue in that dispute are the same as those at 
issue in the current dispute."41  Like the Panel in this case, "the panel in US – Softwood Lumber V 
(Article 21.5 – Canada) ruled that zeroing was 'fair' under Article 2.4 because it was permitted under 
the 'more specific provisions of Article 2.4.2'."42  Japan notes that the Appellate Body disagreed, 
stating, inter alia , that "the introductory clause to Article 2.4.2 expressly makes it '[s]ubject to the 
provisions governing fair comparison' in Article 2.4."43  In Japan's view, "like the panel in US – 
Softwood Lumber V (Article 21.5 – Canada) , the Panel in this dispute misinterpreted the relationship 
                                                      
35Panel Report, para. 7.127 (quoted in Japan's appe llant's submission, para. 116). (emphasis added) 
36Japan's appellant's submission, para. 117 (referring to Appellate Body Report,  US – Softwood 
Lumber V (Article 21.5 – Canada) , para. 97). 
37Appellate Body Report,  US – Softwood Lumber V (Article 21.5 – Canada) , para. 97 (quoted in 
Japan's appellant's submission, para. 117). 
38Japan's appellant's submission, para. 118 (quoting Appellate Body Report, US – Softwood Lumber V 
(Article 21.5 – Canada) , para. 98).  
39Ibid. 
40Ibid., para. 128.  
41Ibid. 
42Ibid., para. 129 (referring to Panel Report, US – Softwood Lumber V (Article 21.5 – Canada) , 
para. 5.75). 
43Ibid. (quoting Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 136). WT/DS322/AB/R 
Page 8  
 
between Articles 2.4 and 2.4.2."
44  According to Japan, "[t]he Panel should have commenced its 
analysis under Article 2.4, not under Article 2.4.2."45 
12. Japan refers to the reasoning of the Appellate Body in US – Softwood Lumber V (Article 21.5 
– Canada)  and submits that, on the same grounds, th e Appellate Body should find that the 
maintenance of the United States' zeroing procedures is  "as such" inconsistent with Article 2.4 in this 
case.  In addition, Japan submits that the salient features of the zeroing procedures further support the 
Appellate Body's conclusion that zeroing is unfair.46  Japan recalls that, "[u]nder the zeroing 
procedures, the United States makes an initial comp arison for all comparable export transactions, but 
in aggregating the comparison results into an  overall margin, it includes solely the positive 
comparison results, disregarding negative results .  However, the dumping determination resulting 
from this 'partial' comparison of selected transactions  is then applied to all export transactions on a 
product-wide basis for purposes of:  [making] an inju ry determination;  deciding whether to terminate 
or pursue an investigation;  justifying the im position of duties;  and assessing the amount of duties 
due."47  Japan concludes that, "[i]n light of these featur es, the 'partial' comparis on that occurs pursuant 
to the zeroing procedures is 'inherently biased' and not 'fair'."48   
2. Zeroing As Such in Periodic Reviews and New Shipper Reviews  
13. Japan also requests that the Appellate Body reverse the Panel's finding that zeroing, as it 
relates to periodic revi ews and new shipper revi ews, is not "as such"  inconsistent with Articles 2.1, 
2.4, 9.1-9.3, and 9.5 of the Anti-Dumping Agreement  and Articles VI:1 and VI:2 of the GATT 1994. 
14. In relation to periodic reviews, Japan submits that the chapeau of Article 9.3 requires a  
comparison of "'the anti-dumping duties collected on all entries of the subject product from a given 
exporter or foreign producer with that exporter's or foreign producer's margin of dumping for the 
product as a whole' to ensure that the total am ount of the former does not exceed the latter."49  
Pursuant to Article 11.1 of the Anti-Dumping Agreement  and Article VI:2 of the GATT 1994, "anti-
dumping duties may be imposed 'to counteract dumping ', which arises because of a 'foreign producer's 
                                                      
44Japan's appellant's submission, para. 130 (referring to Panel Report, US – Softwood Lumber V 
(Article 21.5 – Canada) , para. 5.75). 
45Ibid., para. 130. 
46Ibid., para. 134.  
47Ibid. (referring to Appellate Body Report, US – Softwood Lumber V , para. 99). 
48Ibid., para. 134.  
49Ibid., para. 142 (referring to Appellate Body Report, US – Zeroing (EC) , para. 132).  WT/DS322/AB/R 
 Page 9 
 
 
or exporter's pricing behaviour', and not that of an importer."50  In other words, "[a]lthough duties may 
be imposed on and collected from importers , margins of dumping are determined for foreign 
exporters or producers ."51  Japan points out that the Appellate Body has found that "when multiple 
comparisons are made in a periodic review in a retrospective assessment system, the results of all comparisons must be aggregated to establish the margin of dumping", and that it reached a similar 
conclusion regarding the refund of duties under a prospective system.
52  According to Japan, "[t]he 
Panel, therefore, erred in finding that the im position of duties on individual import transactions 
constitutes the determination of a margin of dum ping for those transactions, and it incorrectly 
examined the broader contextual implications of Article 9 ... in the context of a [prospective normal 
value] system."53  Japan submits that Article 9.3 requir es investigating authorities to calculate a 
margin of dumping for the product as a whole for a gi ven exporter or foreign producer, and to ensure 
that the total amount of duties imposed does not exceed that margin of dumping.54  According to 
Japan, the United States violates these requirements by virtue of zeroing, which causes "the total amount of dumping [to be] overstated by the amount of excluded negative values".
55  In consequence, 
the United States collects "mor e definitive anti-dumping duties than it would absent zeroing".56  Japan 
submits, therefore, that the United States acts inconsiste ntly with Articles 2.1, 2.4, 9.1, 9.2, and 9.3 of 
the Anti-Dumping Agreement  and Articles VI:1 and VI:2 of the GATT 1994 by applying a zeroing 
methodology that results in "amounts of assessed  anti-dumping duties that exceed[] the foreign 
producers' or exporters' margins of dumping".57 
15. In a similar vein, with respect to new shipper reviews, Japan underscores that the Panel erred 
in finding that, when the margin of dumping for a new shipper review is de termined by using a W-T 
comparison, "there is no general requirement to  determine dumping and margins of dumping for the 
product as a whole".58  Japan emphasizes that, under Article 9.5, an authority must "aggregate the 
results of all of the multiple comparisons, includi ng those where the export price exceeds the normal 
                                                      
50Japan's appellant's submission, para. 155 (referring to Appellate Body Report, US – Zeroing (EC) , 
para. 129). (emphasis by Japan) 
51Ibid. (original emphasis) 
52Ibid., para. 159 (referring to Appellate Body Report, US – Zeroing (EC)  para. 132;  and Appellate 
Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 112). 
53Ibid., para. 161. (footnote omitted) 
54Ibid., para. 166. 
55Ibid., para. 167. 
56Ibid., para. 171 (referring to Appellate Body Report, US – Zeroing (EC) , para. 133). 
57Ibid., para. 147 (quoting Appellate Body Report, US – Zeroing (EC) , para. 133). 
58Ibid., para. 181 (quoting Panel Report, para. 7.194). WT/DS322/AB/R 
Page 10  
 
value."
59  According to Japan, such "interpretation [is]  also based on the definition of 'dumping' in 
Article VI:1 of the GATT 1994 and of 'margin of dumping' in Article VI:2."60  Accordingly, Japan 
requests the Appellate Body to reverse the Panel's finding that the zeroing procedures are not "as 
such" inconsistent with Articles 2.1, 2.4, and 9.5 of the Anti-Dumping Agreement  and Articles VI:1 
and VI:2 of the GATT 1994, when maintained for use in new shipper reviews.61 
3. Zeroing As Applied in Periodic Reviews and Sunset Reviews  
16. For the same reasons as those set out above, Japan  submits that the Panel erred in finding that 
zeroing, as applied by the USDOC in the 11 periodic revi ew determinations at issue in this case, is not 
inconsistent with Articles 2.1, 2.4, 9.1, 9.2, and 9.3 of the Anti-Dumping Agreement  and Articles VI:1 
and VI:2 of the GATT 1994.  Japan therefore requests the Appellate Body to reverse these findings and to find, instead, that the United States acted inconsistently with its obligations under these 
provisions.
62   
17. Japan further requests the Appellate Body to re verse the Panel's finding that the two specific 
sunset review determinations identified in Exhi bits JPN-22 and JPN-23 are not inconsistent with 
Articles 2 and 11 of the Anti-Dumping Agreement .  According to Japan, the Panel's only reason for 
rejecting Japan's "as applied" sunset review cl aims was its "incorrect finding that zeroing is 
permissible in periodic reviews under Article 9.3".63  Japan disputes this finding and argues, instead, 
that these sunset review determinations are w ithout "proper foundation", because the USDOC relied 
on "legally flawed" margins from periodic reviews calculated using zeroing.64  Japan requests the 
Appellate Body to reverse the Panel's finding that the United States was entitled to rely on margins of 
dumping calculated in periodic reviews using zeroing in  the two sunset reviews at issue in this case 
and to find, instead, that the United States act ed inconsistently with Article 11.3 of the Anti-Dumping 
Agreement .65  Furthermore, "[b]ecause the violations of  Article 11.3 stem from the reliance upon 
margins of dumping calculated using the zeroing procedures that violated Articles 2.1 and 2.4 of the 
                                                      
59Japan's appellant's submission, para. 182 (quoting Appellate Body Report, US – Zeroing (EC) , 
para. 127). 
60Ibid. 
61Ibid., para. 190. 
62Ibid., para. 178.   
63Ibid., para. 196. 
64Ibid., paras. 191 and 193. 
65Ibid., paras. 197.  WT/DS322/AB/R 
 Page 11 
 
 
Anti-Dumping Agreement  and Articles VI:1 and VI:2 of the GATT 1994, Japan submits the two 
challenged sunset reviews also violate these provisions."66 
B. Arguments of the United States – Appellee 
1. Zeroing As Such in Transaction-to-Transaction Comparisons in Original 
Investigations  
18. The United States argues that the Panel was correct  in finding that Articles 2.1, 2.4, and 2.4.2 
of the Anti-Dumping Agreement  and Articles VI:1 and VI:2 of the GATT 1994 do not establish a 
general prohibition of zeroing.  In the United Stat es' view, Japan's interpretation of these provisions 
contradicts, for several reasons, the ordinary m eaning, the negotiating history, and the Appellate 
Body's interpretation of the relevant treaty texts.    
19. First, the United States considers that the Pane l was correct in concluding that Article 2.1 of 
the Anti-Dumping Agreement and Article VI of the GATT 1994 do not require that investigating 
authorities establish margins of dumping "for the 'product' under investigation as a whole".67  T h e  
United States disagrees with Japan's ar gument that the Appellate Body, in US – Softwood Lumber V 
(Article 21.5 – Canada) , found that "dumping" and "margins of dumping" cannot occur at a 
transaction-specific level, because the phrases "pr oduct as a whole" and "product under investigation 
as a whole" did not form part of the Appellate Body's reasoning in that case.68  The United States 
further submits that "because the phrase 'all comparable  export transactions' in Article 2.4.2 is limited 
to the [W-W] [comparison] context, the 'product as a whole' rationale for precluding zeroing in the 
original US – Softwood Lumber [V] report is likewise limited to the [W-W] context."69  For the United 
States, "the terms 'dumping' and 'margin of dum ping' do not necessarily requi re the aggregation of 
[T-T] comparisons and the provision of an offset for one transaction against another."70  Therefore, 
according to the United States, the Panel was correct in finding that the ordinary meaning, context, 
and negotiating history of Article 2.1 of the Anti-Dumping Agreement  and Article VI of the 
GATT 1994 "provide[] no basis for concluding that zer oing is prohibited by requiring an examination 
of aggregated transactions."71 
                                                      
66Japan's appellant's submission, para. 197. (footnote omitted) 
67United States' appellee's submission, para. 11. 
68Ibid., para. 11 (referring to Japan's appellant's submission, para. 92). 
69Ibid., para. 13 (referring to Panel Report, footnote 715 to para. 7.92). 
70Ibid., para. 18. 
71Ibid., para. 19 (referring to Panel Report, para. 7.107). WT/DS322/AB/R 
Page 12  
 
20. Secondly, the United States considers that the Panel's textual analysis of Article 2.4.2 "rests 
on a permissible interpretation" of the Anti-Dumping Agreement .
72  The United States submits that the 
Panel was correct in concluding that dumping can occu r at a transaction-specific level, since "a [T-T] 
comparison is inherently conducted at the level of an individual transaction, and Article 2.4.2 does not 
speak to the methodology for converting those indi vidual comparisons into 'margins of dumping'".73  
The United States considers that the use of the pl ural in "margins of dumping" in the text of 
Article 2.4.2 implies that "there is one comparis on of normal value and export price, that each such 
comparison is a margin of dumping, and that all su ch comparisons constitute 'margins of dumping'".74 
Therefore, according to the United States, "there is no basis for concluding that a [T-T] comparison 
must produce one margin, or that in calculating any such margin, the negative results from one 
comparison must be offset against the positive results from another."75   
21. In addition, the United States submits that th e Panel was correct in finding that a general 
prohibition of zeroing would deprive the me thodology provided under the second sentence of 
Article 2.4.2 of its effectiveness.  For the United States, the Panel correctly concluded that "the 
principle of effective treaty interpretation mean t that zeroing had to be permitted [in W-T 
comparisons] in order to avoid rendering the [W-T] comparison a nullity"76, given that, absent 
zeroing, W-T and W-W comparisons would produce the same results.  The United States recalls that 
Japan tried to rebut this argument before the Panel by stating that the "results of a[] [W-W] and [W-T] 
comparison would differ because the inves tigating authority would only examine a  subset  of export 
transactions in a[] [W-T] comparison."77  When confronted with ev idence that the USDOC "would 
examine all transactions, along with the Panel's interim re port which explained that there is no basis 
in Article 2.4.2 for examining a subset of such transactions, Japan withdrew its 2.4.2 claim, rather 
than substantiate it."78  Further, the United States dismisses Japan's argument that the "mathematical 
equivalence" argument rests on an "untested hypothesis"79, by referring to evidence in the US – 
                                                      
72United States' appellee's submission, para. 24. (footnote omitted) 
73Ibid., para. 25 (referring to Panel Report, para. 7.119). 
74Ibid., para. 29. (footnote omitted) 
75Ibid., para. 32. (footnote omitted) 
76Ibid., para. 35 (referring to Panel Report, para. 7.127). 
77Ibid., para. 39 (referring to Japan's oral statement at the first Panel meeting, para. 52). (original 
emphasis) 
78Ibid., para. 41. (original emphasis) 
79Ibid., para. 37 (referring to Japan's appellant's submission, para. 117, where Japan quotes the 
Appellate Body Report in US – Softwood Lumber V (Article 21.5 – Canada) , at para. 97, as rejecting the so-
called "mathematical equivalence" argument on the basis that it "rests on a non-tested hypothesis").    WT/DS322/AB/R 
 Page 13 
 
 
Softwood Lumber V (Article 21.5 – Canada)  dispute that demonstrates, according to the United States, 
that the European Communities has actually used the W-T comparison in investigations.80     
22. Thirdly, the United States disagrees with Japan 's argument that the Panel concluded that 
zeroing in T-T comparisons was not inconsistent with  the "fair comparison" requirement in Article 2.4 
because zeroing was permitted under the "more specific" provisions of Article 2.4.2.81  For the United 
States, the Panel  examined the fair comparison requirement in Article 2.4 as an "independent legal 
obligation"82, and, on that basis, reasoned that "a gene ral prohibition on zeroing in Article 2.4 was not 
a proper interpretation of the [ Anti-Dumping Agreement ] because it would render the second sentence 
of Article 2.4.2 inutile."83  The United States dismisses Japan's argument that zeroing is unfair 
because it "artificially inflates the magnitude of  dumping", as predicated on the assumption that 
zeroing is prohibited.84  According to the United States, zer oing does not produce an "artificially 
inflated" magnitude of dumping but, rather, the correct magnitude of the margin of dumping.85  The 
United States further submits that the "fair comparis on" requirement must be neutrally defined, as the 
Appellate Body itself has recognized "the 'need' to balance ... the rights and obligations of respondents 
with those of other interested parties", including the domestic industry.86 
2. Zeroing As Such in Periodic Reviews and New Shipper Reviews  
23. The United States requests the Appellate Body to uphold the Panel's finding that zeroing is 
consistent with Ar ticle 9.3 of the Anti-Dumping Agreement .  The United States agrees with the Panel's 
conclusion that "Article 9.3 cont ains no language requiring such an  aggregate examination of export 
transactions in determining the final liability fo r payment of anti-dumping duties under Article 9.3.1 
or in determining the amount, if an y, of refund due under Article 9.3.2."87  In the United States' view, 
the Panel took note of the "important contextual s upport" provided by Article  9.4(ii) and prospective 
normal value systems in its examination of Article 9.88  The United States agrees with the Panel's 
rejection of Japan's argument that "in a prospective normal value system final liability for payment of 
                                                      
80United States' appellee's submission, para. 44 (referring to Case T-274/02, Ritek Corp. and Prodisc 
Technology Inc. v. Council of the European Union , 24 October 2006, para. 94, annexed as Attachment-1 to the 
United States' appellee's submission).  
81Ibid., para. 48. 
82Ibid., para. 49. 
83Ibid., para. 50. 
84Ibid., para. 51. 
85Ibid. 
86Ibid., para. 52 (referring to Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , 
para. 243). 
87Ibid., para. 54 (quoting Panel Report, para. 7.199). 
88Ibid., para. 55. WT/DS322/AB/R 
Page 14  
 
antidumping duties must be determined through a review under Article 9.3.2."
89  Like the Panel, the 
United States believes that it would be "inconsistent with the prospective  nature of such a system" if 
the liability for duty payments "were calculated on the basis of a retrospective examination of 
transactions".90  Therefore, according to the United States,  "[t]he margin of dumping and the ceiling 
on the liability for antidumping duties are mathematically equivalent".91  This, for the United States, 
corroborates the Panel's conclusion that "margins [of dumping] may be calculated on the basis of a 
single transaction, rather than an aggregation of transactions."92  
24. The United States considers that Japan's argum ents on appeal are based on the "product as a 
whole" theory, which the Panel correctly found to  be limited to W-W comparisons in original 
investigations.93  Contrary to Japan's assertion, the Un ited States argues that the Panel made no 
finding that margins of dumping under Article 9.3 are determined on an im porter-specific basis.  
Rather, the United States submits that the Panel conc luded that Article 9 does not require aggregation 
of multiple export transactions, because "there is no indication in the text of the Anti[-D]umping 
Agreement that the drafters intended to create a sy stem of duty liability on the part of importers by 
establishing the ceiling for such liability on the totality  of transactions by exporters."94  The United 
States also challenges Japan's assertion that the Pa nel confused margins of dumping with the amount 
of anti-dumping liability.  According to the Unite d States, "[t]he Panel carefully examined the 
difference between the margin of dumping and the amount of the duty, particularly noting that in a prospective normal value system, final liability for pa yment of antidumping duties attaches at the time 
of importation, rather than retrospectively ."
95   
25. The United States further submits that "Japan's  arguments [with respect to] Article 2.4 in 
assessment reviews are the same as those [with resp ect to] investigations, and for the same reason, 
they [should] fail."96 
26. The United States agrees with Japan  that the reasons that led the Panel to conclude that the 
use of zeroing in periodic reviews is consistent with Article 9.3 of the Anti-Dumping Agreement also 
led to the conclusion that zeroing in new shi pper reviews is consiste nt with Article 9.5.97  The United 
                                                      
89United States' appellee's submission, para. 55 (referring to Panel Report, para. 7.204). 
90Ibid. (quoting Panel Report, para. 7.204). 
91Ibid., para. 56. 
92Ibid., para. 60. 
93Ibid., para. 61. 
94Ibid., para. 64. (original emphasis) 
95Ibid., para. 67 (referring to Panel Report, para. 7.205). (original emphasis) 
96Ibid., para. 69. 
97Ibid., para. 70 (referring to Japan's appellant's submission, para. 180).  WT/DS322/AB/R 
 Page 15 
 
 
States, however, disagrees with Japan that the Panel failed to analyze the impact of the text, 
"determining individual margins of dumping for any exporters or producers"  who have not exported 
during the period of investigation, in Article 9. 5 when concluding that zeroing was permitted in the 
context of new shipper reviews.98  For the United States, the Panel did precisely that when it expressly 
found that, even "in conjunction with a requirement  to establish margins of dumping for exporters or 
foreign producers", "there is no general requireme nt to determine dumping and margins of dumping 
for the product as a whole."99  The United States further submits that "[n]othing in the text of 
Article 9.5 implies that the 'individual margins of  dumping' are necessarily and always a 'single' 
dumping margin determined on the basis of the 'pr oduct as a whole' for each exporter or producer."100 
3. Zeroing As Applied in Periodic Reviews and Sunset Reviews  
27. The United States requests the Appellate Body to  uphold the Panel's findings that it did not 
act inconsistently with Articles 2.1, 2.4, 9.1, 9.2, and 9.3 of the Anti-Dumping Agreement  in applying 
zeroing in the 11 periodic reviews challenged by Japan.101  The United States considers that these 
findings are merely consequential to Japan's appeal with respect to the Panel's findings that zeroing in 
the context of duty assessment proceedings is not " as such" inconsistent with  these provisions.  For 
the same reasons as those adduced with respect to Japan's appeal of the Panel's "as such" findings 
under Articles 2.1, 2.4, 9.1, 9.2, and 9.3 of the Anti-Dumping Agreement , the United States submits 
that the Panel's conclusions with respect to Japan's "as applied" claims in the 11 periodic reviews at 
issue in this dispute "should be affirmed".102 
28. Regarding zeroing "as applied" in the context of the two sunset review proceedings at issue in 
this dispute, the United States contends that the Panel did not err in its conclusion that zeroing is 
permissible in determining margins of dumping in assessment reviews.  On this basis, the United 
States submits that the Panel's conclusions with r espect to Japan's "as app lied" claims in the two 
sunset reviews at issue in this dispute "should be affirmed".103 
C. Claims of Error by the United States – Other Appellant 
29. The United States challenges the Panel's finding that the zeroing procedures used by the 
USDOC, as they relate to original investigations in which margins of dumping are calculated on the 
                                                      
98See United States' appellee's submission, para. 71. 
99Ibid., para. 70 (quoting Panel Report, para. 7.194). 
100Ibid., para. 73. 
101See Exhibits JPN-11 through JPN-21 submitted by Japan to the Panel. 
102United States' appellee's submission, para. 74. 
103Ibid., para. 75. WT/DS322/AB/R 
Page 16  
 
basis of T-T or W-T comparisons, constitute a me asure that can be challenged "as such" in WTO 
dispute settlement.  The United States' challenge is based on several arguments. 
30. First, the United States contends that the Panel failed to make an objective assessment of the 
matter before it—including an objective assessment of  the facts of the case—as required by Article 11 
of the DSU, by concluding that a single unwritten ru le or norm exists by virtue of which the USDOC 
will apply zeroing in any anti-dumping proceeding, regardless of the comparison methodology used.  
In the United States' view, the evidence relied on by  the Panel "does not support the proposition that 
there are rules or norms taken by the United States concerning the use of zeroing as it relates to [T-T] 
and [W-T] comparisons in investigations."
104  In support of its view, the United States points out that 
it has never applied the W-T comparison methodology in original investigations, and has only once applied the T-T comparison methodology, after the Pane l in this dispute was established.  Moreover, 
the USDOC has "never pronounced on how it would conduct such comparisons, including whether it 
would or would not 'zero' in connection with those comparisons."
105   
31. Referring to the Appellate Body Report in US – Zeroing (EC) , the United States further 
emphasizes that, "particularly when the measure alle ged is unwritten, the evidence of the existence of 
a measure must in fact relate to the full scope of  the measure claimed, and that there can be no finding 
of such a measure where su ch evidence does not exist."106  The United States argues that, "[j]ust as a 
single measure may often consist of elements that may themselves be considered measures, the Panel's error may be viewed either as having fa iled to identify the precise content of a single 
measure—that is, whether any 'zeroing procedures' ma intained by [the USDOC] actually relate to 
[T-T] and [W-T] comparisons in investigations—o r as having failed to establish the existence of 
separate [USDOC] 'zeroing procedures' as they re late to each of these comparison[] [methodologies] 
in investigations."
107  The United States notes in this regard th at "the approach taken by the panel and 
Appellate Body in US – Zeroing (EC) , and by Japan in its consultation request [in this dispute], was to 
consider the existence of sepa rate measures for each context."108   
32. The United States also submits that the Panel di d not discuss the types of investigations in 
which the W-W, T-T, and W-T comparison methodol ogies can be used, and whether the USDOC has 
                                                      
104United States' other appellant's submission, para. 26.  The United States does not challenge the 
Panel's finding regarding zeroing procedures as they  relate to original investigations based on W-W 
comparisons.  The United States acknowledges that "there is at least an evidentiary record in connection with 
those questions". ( Ibid., para. 3)   
105Ibid., para. 2. 
106Ibid., para. 14. (footnote omitted) 
107Ibid., footnote 22 to para. 14.   
108Ibid.    WT/DS322/AB/R 
 Page 17 
 
 
engaged in any of these comparisons in investiga tions, periodic reviews, and changed circumstances 
reviews.  Moreover, according to the United Stat es, the Panel Report provides no evidence that the 
USDOC's comments in the periodic review of anti -friction bearings, to which the Panel referred, 
pertain to T-T or W-T pro ceedings in investigations.109 
33. The United States further notes that the statements  made by the United States Department of 
Justice that the Panel relied on were made in c onnection with cases that did not involve T-T or W-T 
comparisons in investigations.110  Moreover, "none of [these] statements does anything more than 
describe what [the USDOC] had done in the p ast—in connection with [W-W] comparisons in 
investigations and [W-T] comparisons in reviews."111  According to the United States, the same 
applies to the statements cited by the Panel from the United States Congress and the United States 
Court of International Trade.112 
34. The United States concludes that "[t]he eviden ce put forward by Japan in this proceeding 
simply does not support the Panel's finding that [t he USDOC] maintains an unwritten zeroing measure 
regardless of the basis of the dumping comparison and in all antidumping proceedings."113  Moreover, 
"[t]he Panel made no effort to 'carefully examin e the concrete instrumentalities that evidence the 
existence of the purported "rule or norm"' relating to  [the USDOC]'s use of zeroing in the context of 
[T-T] and [W-T] comparisons in investigations , because there are no such instrumentalities."114  As a 
result, the United States argues that the Panel "faile d to make an objective assessment of the matter", 
as required by Article 11 of the DSU.115   
35. The United States further notes that the Panel re lied on the criteria set forth by the Appellate 
Body in US – Zeroing (EC)  to determine the existence of a measur e that is challengeable "as such":  
whether the rule or norm embodied in that measur e is attributable to the responding Member; the 
precise content of the rule or norm; and whethe r the rule or norm has general and prospective 
application.116  The United States submits that the term "a ttributable to" means "taken" by a Member 
within its territory, because Article 3.3 of the DS U refers to a measure "taken" by a Member and 
Article 4.2 refers to a measure "taken" within th e territory of a Member.  According to the United 
                                                      
109United States' other appellant's submission, para. 29 and footnote 45 thereto. 
110Ibid., para. 30. 
111Ibid. 
112Ibid. 
113Ibid., para. 31. 
114Ibid. (quoting Appellate Body Report, US – Zeroing (EC) , para. 198). 
115Ibid., para. 31. 
116Ibid., para. 4 (referring to Panel Report, para. 7.43;  and Appellate Body Report, US – Zeroing (EC) , 
para. 198). WT/DS322/AB/R 
Page 18  
 
States, this suggests that "as such" challenges of "a mere abstract pr inciple" are not contemplated by 
the DSU.
117  Thus, "the Panel exceeded its terms of re ference by including within the scope of the 
dispute measures not taken by the United States."118 
36. The United States further argues that the zeroing procedures as they relate to T-T and W-T 
comparisons in original investigations are not w ithin the Panel's terms of reference, because Japan 
failed to identify these measures in its request for consultations.119  The United States notes that it "did 
not raise this issue in the Panel proceedings because it was focusing on the fact that these 'measures' 
[did] not exist at all."120  However, "a failure to consult is a jurisdictional matter and, as such, can be 
raised at any time."121  
37. As a separate matter, the United States requests the Appellate Body to declare moot the 
Panel's findings regarding Articles 1, 2.1, 2. 4, 2.4.2, 3.1-3.5, 5.8, and 18.4 of the Anti-Dumping 
Agreement , Articles VI:1 and VI:4 of the GATT 1994, and Article XVI:4 of the WTO Agreement  as 
they apply to T-T comparisons in original investig ations, arguing that these findings were made in 
respect of a measure that did not fall within the Panel's terms of reference.122 
D. Arguments of Japan – Appellee 
38. Japan requests the Appellate Body to reject the United States' other appeal in its entirety and 
to uphold the Panel's finding that the zeroing proced ures constitute a measure that can be challenged 
"as such" in WTO dispute settlement proceedings , including as they relate to W-T and T-T 
comparisons in original investigations.  Japan cons iders that, in reaching its conclusion that a single 
rule or norm exists that mandates the application of  zeroing in all circumstances, the Panel conducted 
an assessment of the facts and evidence as required by Article 11 of the DSU, and acted within the 
limits of its discretion as the "trier of facts".  Jap an submits the following reasons in support of its 
contention.   
39. First, Japan contends that the United Stat es failed to produce any evidence showing that 
differences between the three specific comparison me thodologies exist as far as zeroing is concerned 
that required the Panel to undertake a comparison- specific assessment of the evidence before it.  
                                                      
117United States' other appellant's submission, para. 6 (referring to Appellate Body Report, US – 
Zeroing (EC) , footnote 342 to para. 198). 
118Ibid., para. 31. 
119Ibid., para. 18. 
120Ibid., footnote 29 to para. 18. 
121Ibid. (referring to Appellate Body Report, US – Carbon Steel , para. 123). 
122Ibid., para. 33.  WT/DS322/AB/R 
 Page 19 
 
 
According to Japan, the differences in comparis on methodologies and anti-dumping proceedings do 
not "imply any difference in the operation or appli cation of the zeroing procedures that requires an 
independent assessment whether a rule or norm exists for each setting."123  Thus, there was "no need 
for the Panel to have parsed the evidence as to each specific comparison method[ology] and 
procedural [context]" in its determination that there exists a single rule or norm that can be challenged 
as such.124  Japan argues that, instead of introducing evid ence that demonstrates that the content or 
operation of the zeroing measure would be different  in the W-T and T-T comparison methodologies in 
original investigations, the United States merely refe rs to statements by the Appellate Body, the Panel, 
and Japan to support its contention that the Pa nel should have assessed the evidence before it 
specifically for each type of proceeding and for each comparison methodology.125  Japan submits that 
none of these statements establish that the Panel should have assessed the ev idence exclusively with 
respect to the specific comparison methodology to which it related.   
40. Secondly, Japan submits that the evidence before  the Panel was sufficient for it to conclude 
that the zeroing rule or norm covers W-T and T-T comparisons in original investigations.  Japan 
maintains that "long-standing GATT and WTO jurispr udence holds that actual application of the rule 
or norm is not required", although th e Appellate Body recognized, in US – Zeroing (EC) , that 
"systematic application" may be relevant in determ ining that an unwritten rule or norm exists, and can 
be challenged as such.126  In any event, Japan argues that "[ t]he Panel had before it considerable 
evidence of the actual and ... systematic applica tion of the [United States'] zeroing procedures in 
numerous cases, across all procedural contexts that have arisen thus far."127  Specifically, Japan 
presented to the Panel evidence demonstrating that the USDOC included the zeroing procedures in the dumping determination in an investigation invo lving the W-W comparison methodology, in an 
investigation involving the T-T comparison met hodology, in 11 periodic reviews (involving W-T 
comparisons), in one new shipper review (involving the W-T comparison methodology), and in two 
sunset reviews (in which the USDOC relied on zeroe d margins of dumping calculated on the basis of 
W-W comparisons).  In each of these cases, the subs tantive content of the zeroing procedures applied 
by the USDOC was identical:  "the USDOC disregarded negative comparison results where export price exceeds normal value."
128  In these circumstances, Japan argues that "the Panel's reliance on the 
'systematic application' of the zeroing procedures in every procedural context that has arisen to date 
                                                      
123Japan's appellee's submission , para. 68. 
124Ibid., para. 67. 
125See Ibid., paras. 72-85. 
126Ibid., para. 92. 
127Ibid., para. 93. 
128Ibid., para. 95. WT/DS322/AB/R 
Page 20  
 
was objective and well within the bounds of its discretion."
129  Japan also considers that the Panel 
acted within its discretion in relying on ot her evidence presented by Japan—which included, inter 
alia, statements by government agencies and courts in the United States—to support its conclusion 
that "the zeroing procedures are always an element in [United States] anti-dumping proceedings, no 
matter what the procedural context or comparison method[ology] employed."130 
41. Thirdly, Japan disputes the United States' asserti on that Japan's request for consultations did 
not identify the zeroing procedures in the context of T-T and W-T comparisons in original 
investigations.  According to Japan, its request fo r consultations "broadly identifies, as one of the 
'measures' subject to consultati ons, the United States' practice of 'zeroing', or the treatment of 
'transactions with negative dumping margins as having margins equal to zero in determining weighted 
average dumping margins'."131  Therefore, in identifying the m easure subject to consultations, Japan 
did not limit its request to any particular compar ison methodology.  Japan concludes that the zeroing 
procedures as they relate to T-T and W-T comparisons  in original investigations were properly within 
the Panel's terms of reference in this dispute.132   
42. Finally, Japan contests the United States' request  for the Appellate Body to declare moot the 
Panel's findings with respect to the consistency of the zeroing procedures in T-T comparisons in 
original investigations with Articles 1, 2.1, 2.4, 2.4.2, 3.1-3.5, 5.8, and 18.4 of the Anti-Dumping 
Agreement .  
E. Arguments of the Third Participants 
43. Pursuant to Rule 24(2) of the Working Procedures , Argentina, Hong Kong, China, India, and 
New Zealand chose not to submit a third participant' s submission but attended the oral hearing.  New 
Zealand, in its statement at the oral hearing, addr essed issues relating to Articles 2.4.2, 3, and 3.1 of 
the Anti-Dumping Agreement .  New Zealand argued, inter alia , that a general prohibition of zeroing 
would deprive the three comparison methodologies set out in Article 2.4.2 of their full effect.  New Zealand also argued that non-dumped transactions should be treated consistently throughout the 
investigation, including for purposes of calculating margins of dumping and making an injury 
determination under Article 3. 
                                                     
 
129Japan's appellee's submission, para. 101. (footnote omitted) 
130Ibid., para. 108. (footnote omitted) 
131Ibid., para. 21. 
132Ibid., para. 22. (footnote omitted)  WT/DS322/AB/R 
 Page 21 
 
 
1. China  
44. China argues that the Panel erred in finding th at the zeroing procedures are not "as such" 
inconsistent with Articles 2.1, 2.4, and 2.4.2 of the Anti-Dumping  Agreement and Articles VI:1 
and VI:2 of the GATT 1994 when used in T-T compar isons in original investigations.  China submits 
that the T-T comparison methodology fulfils the same function as the W-W comparison methodology, 
and "also involves multiple comparisons if the produ ct under investigation has more than one export 
transaction."133  Referring to the Appellate Body Report in US – Softwood Lumber V , China 
emphasizes that Articles 2.1 and 2.4.2 of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of 
the GATT 1994 require that "dumping" and "margins  of dumping" be established "for the product 
under investigation as a whole ".134  In China's view, this indicates that investigating authorities are 
required to aggregate intermediate comparison results  to establish a margin of dumping for a product.  
China further argues that the term "margins of dum ping" has "the same meaning for [W-W] and [T-T] 
comparisons"135, and that prohibiting zeroing in the context of W-W comparisons while permitting it 
in T-T comparisons "is illogic[al]".136   Moreover, China maintains th at the zeroing procedures in the 
context of T-T comparisons in original investiga tions are inconsistent with the "fair comparison" 
requirement of Article 2.4, because zeroing introduces an "inherent bias" that may not only distort the 
magnitude of a dumping margin, but may also lead to a wrongful finding of the very existence of 
dumping.137 
45. China further argues that the requirement im posed by Article 2.1 that "dumping" and 
"margins of dumping" must be established for the product as a whole applies to the entire Anti-Dumping Agreement .  Referring to the findings of the Appellate Body in US – Zeroing (EC) , 
China submits that Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994 
establish that the margin of dumping for the product as a whole "operates as a 'ceiling' for the [total] 
amount of [anti-dumping duties]" that may be collected in periodic reviews.
138  China argues that, by 
systematically disregarding all negative comparison results, the zeroing procedures result in an assessment of an anti-dumping duty that exceeds th e foreign producers' or exporters' margins of 
dumping.  This, according to China, is inconsistent  with Articles 2.1, 9.1, 9.2, and 9.3 of the 
Anti-Dumping  Agreement  and Articles VI:1 and VI:2 of the GATT 1994.   
                                                     
 
133China's third participant' s submission, para. 23. 
134Ibid., para. 25. (original emphasis) 
135Ibid., para. 30. 
136Ibid., para. 31. 
137Ibid., para. 45 (quoting Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , 
para. 135).  See also para. 48.  
138Ibid., para. 58. WT/DS322/AB/R 
Page 22  
 
46. China further submits that "the USDOC['s] zeroing procedures in new shipper reviews are 
inconsistent with Articles 2.1 and 9.5 of the [ Anti-Dumping ] Agreement and Articles VI:1 and VI:2 of 
the GATT 1994."
139  The term "individual margins of dumping" under Article 9.5 also refers to a 
margin of dumping that "must be established for the product under investigation as a whole".140   
2. European Communities  
47. The European Communities argues that the Pa nel erred in concluding that zeroing is 
permissible when calculating margins of dumping on the basis of T-T comparisons in original investigations.  For the European Communities, Articles 2.1, 2.4, and 2.4.2 of the Anti-Dumping 
Agreement require that dumping margins are always calculated for the product as a whole and, 
therefore, when only "certain export transactions" are selected, the dumping margin is not calculated 
"for the product as a whole".
141  In this regard, the European Communities underscores that "[t]he 
results of [T-T] intermediate comparisons  are not margins of dumping for the product as a whole."142  
48. The European Communities submits that the W-T comparison methodology in the second 
sentence of Article 2.4.2 is an exception to the "normal"  rule in the first sentence of that provision.  It 
provides three criteria for identifying a pattern when dumping is targeted to certain purchasers, 
regions, or time periods.143  According to the European Comm unities, this exceptional methodology 
"contains within it the possibility of focusing on the export transactions making up the targeted 
dumping pattern."144  However, the European Communities subm its that, in aggregating intermediate 
results to calculate a margin of dumping for the produ ct as a whole, "an investigating authority cannot 
effectively select certain export transactions as th e basis for the calculation of the dumping margin, 
excluding others, in whole or in part, other than on the basis of the three express targeted dumping 
criteria."145     
49. The European Communities further argues that the Panel erred in finding that zeroing was 
permissible under the T-T comparison methodolog y, because it did not consider properly the 
Appellate Body Report in US – Softwood Lumber (Article 21.5 – Canada) .  The European 
Communities points out that, in that case, the Appellate Body found that the use of zeroing when 
using the T-T methodology in original proceedings is  inconsistent with Artic les 2.4 and 2.4.2 of the 
                                                      
139China's third participant' s submission, para. 15. 
140Ibid., para. 68. 
141European Communities' third participant's submission, para. 2. (emphasis omitted) 
142Ibid., para. 5. (original emphasis) 
143See Ibid., paras. 6-7. 
144Ibid., para. 7. 
145Ibid.  WT/DS322/AB/R 
 Page 23 
 
 
Anti-Dumping  Agreement .146  Similarly, the European Communities argues that the Panel erred in 
finding that zeroing in the context of duty assessment proceedings is not inconsistent with Article 9.3 
of the Anti-Dumping Agreement and Article VI:2 of the GATT 199 4, because the Appellate Body 
concluded in US – Zeroing (EC)  that the use of zeroing when applying the W-T comparison 
methodology in assessment proceedings is inconsistent with those provisions.147 
50. Noting that Japan does not appeal the Panel's fi ndings with respect to Article 2.4.2 of the 
Anti-Dumping Agreement  in the context of duty assessment proceedings, the European Communities 
argues that the provisions of Article 2.4.2 apply whenever an investigating authority determines 
margins of dumping, including duty assessment pro ceedings.  The European Communities draws this 
conclusion from the ordinary meaning of the phrase "the existence of margins of dumping during the 
investigation phase" in Article 2.4.2, which "r efers to a period of time during which a dumping 
margin exists  (that is, an investigation period), not a period of time during which it is established."148  
The European Communities finds additi onal support for this position in "the immediate context  of 
Article VI:2  of the GATT 1994, which defines the term 'margin of dumping' [as] a unitary concept" 
throughout the Anti-Dumping Agreement .149  
51. The European Communities further asserts that Articles 5, 11.4, and 18, as well as numerous 
cross-references between Articles 5, 3.3, 7, and 10 of the Anti-Dumping Agreement , provide no 
support for the position that the word "investigati on" is to be interpreted as having a "special 
meaning" limited to original investigations under Article 5.150  For the European Communities, "there 
is no reason why the unitary concept of 'margi n of dumping' should change during an assessment 
proceeding, when a contemporaneous margin of dumping for each exporter is investigated and 
determined".151  For the same reason, the European Communities maintains that "zeroing in 
newcomer proceedings under Article 9.5 of the Anti-Dumping Agreement , whether using the [W-T] 
method[ology] or some other method[ology], is inc onsistent with Articles 9.5, 2.1 and 2.4 of the 
Anti-Dumping Agreement , and Articles VI:1 and VI:2 of the GATT 1994."152 
52. With respect to prospective normal value sy stems, the European Communities argues that 
"[t]he possibility of imposing duties on the basi s of a prospective normal value indicated in 
                                                      
146European Communities' third participant's submission,  para. 10 (referring to Appellate Body Report, 
US – Softwood Lumber V (Article 21.5 – Canada) , para. 147). 
147Ibid., para. 11 (referring to Appellate Body Report, US – Zeroing (EC) , para. 135). 
148Ibid., paras. 12 and 13. (original emphasis) 
149Ibid., para. 15. (original emphasis) 
150Ibid., para. 16. 
151Ibid., para. 17. (original emphasis) 
152Ibid., para. 18. WT/DS322/AB/R 
Page 24  
 
Article 9.4(ii)  is subject always to the possibility of refund under Article 9.3.2."
153  For the European 
Communities, this shows that investigating author ities may initially capture targeted dumping, subject 
to the possibility of refunds under Article 9.3.2. 
53. The European Communities agrees  with Japan that "any measure adopted following a sunset 
proceeding in which the investigating authority determines or relies on a margin of dumping calculated using zeroing is inconsistent with Articles 11.3, 2.1 and 2.4 of the Anti-Dumping 
Agreement ."
154  For the European Communities, this is pa rticularly true in this case, because the 
United States' investigating authority relied on ma rgins of dumping calculated with the use of zeroing 
procedures in assessment review proceedings.    
54. The European Communities further submits  that the Appellate Body has, in US – Zeroing 
(EC) , already made findings regarding the existence a nd precise content of an "as such" United States' 
measure, namely, the "zeroing methodology".155  The European Communities argues that, in the 
present dispute, "the Panel has made all the necessar y factual findings concerning the existence and 
precise content of the 'as such' [United States'] measure with respect to original proceedings, 
assessment proceedings and newcomer proceedings."156  Finally, the European Communities argues 
that "the factual and evidential situation with respect to zeroing is remarkable" because of the 
existence of a written print-out of a computer progr am that contains the zeroing rule, and because of 
the mathematical character of the zeroing rule, "which eliminates all scope for ambiguity or 
interpretation in its implementation".157  
3. Korea  
55. Korea argues that the Panel erred in finding th at zeroing in T-T comparisons in original 
investigations and in subsequent reviews is consistent with the Anti-Dumping Agreement .  In Korea's 
view, zeroing is prohibited "in all anti-dumping pr oceedings and dumping calculations since the 
methodology constitutes a direct violation of Articles 2.4.2 and 9.3 of the [ Anti-Dumping ] 
Agreement ."158  Korea agrees with the Panel that zero ing procedures are measures that can be 
challenged "as such", but disagrees with the Pane l's conclusion that margins of dumping can be 
defined for a single export transaction.159  According to Korea, "[w]hen the investigating authorities 
                                                      
153European Communities' third participant's submission, para. 15. (original emphasis) 
154Ibid., para. 19. 
155Ibid., para. 22. 
156Ibid. 
157Ibid., para. 24 (referring to Exhibits JPN-6 and JPN-7 submitted by Japan to the Panel). 
158Korea's third participant' s submission, para. 5. 
159Ibid., para. 7.  WT/DS322/AB/R 
 Page 25 
 
 
choose to engage in multiple comparisons, they are required to combine the results of those 
comparisons to determine the overall dump ing margin for the product as a whole."160  Korea refers to 
the Appellate Body statement in US – Softwood Lumber V (Article 21.5 – Canada)  that "Article 2.4.2 
does not admit an interpretation that would allo w the use of zeroing under the [T-T] comparison 
methodology."161  Korea emphasizes that zeroing "[systemati cally] excludes certain results in a [T-T] 
comparison, [and, as such,] it is inconsistent with Article 2.4.2"162, and therefore "must be prohibited" 
in all anti-dumping proceedings.163 
56. Korea further submits that the chapeau of Ar ticle 9.3 does not permit the use of zeroing in 
subsequent reviews.  Referring to th e rulings of the Appellate Body in US – Zeroing (EC) , Korea 
argues that "in subsequent reviews, the investig ating authority must compare the anti-dumping duties 
collected on all entries of the subject product from a given exporter or foreign producer with that 
exporter's or foreign producer's margin of dumping for the product as a whole  taking into account all 
intermediate comparisons made."164  Korea claims that "to set a clear and reasonable legal standard 
applicable to both original investigations and s ubsequent reviews, the zeroing methodology's arbitrary 
exclusion of certain data in subseque nt reviews must also be prohibited."165 
57. For all these reasons, Korea requests the Appellate  Body "to follow its own logic" and find 
that the zeroing methodology is inconsistent with the Anti-Dumping Agreement  and "prohibited in all 
anti-dumping proceedings".166  In Korea's view, zeroing is inconsistent with the "fair comparison" 
requirement in Article 2.4.  In support of its ar gument, Korea refers to previous findings of the 
Appellate Body167, including the finding that the use of zeroing under the T-T comparison 
methodology "artificially inflates the magnitude of dumping, resulting in higher margins of dumping 
and making a positive determina tion of dumping more likely".168  Korea agrees with this finding and 
submits that, "by disregarding 'negative' dumping ma rgins and including solely the 'positive' dumping 
                                                      
160Korea's third participant' s submission, para. 8. 
161Ibid., para. 9 (quoting Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , 
para. 123). 
162Ibid. 
163Ibid. 
164Ibid., para. 10 (referring to Appellate Body Report, US – Zeroing (EC) , para. 132). 
165Ibid. 
166Ibid., para. 11. 
167Ibid., para. 13 (referring to Appellate Body Report, EC – Bed Linen , paras. 55 and 59;  Appellate 
Body Report,  US – Corrosion-Resistant Steel Sunset Review , para. 134;  Appellate Body Report, US – 
Softwood Lumber V , para. 63;  and Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , 
para. 138). 
168Ibid., para. 14 (quoting Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , 
paras. 138 and 142). WT/DS322/AB/R 
Page 26  
 
margins, 'zeroing' in all dumping calculations and proceedings creates a partial result in favo[u]r of a 
finding of dumping."
169  According to Korea, "such systematic exclusions of negative comparisons do 
not ensure a 'fair comparison' as required by Articles 2.4 and 2.4.2".170 
4. Mexico  
58. Mexico agrees with Japan that the Panel erre d in finding that zeroing in the context of T-T 
comparisons in original investigati ons is consistent "as such" with Ar ticles 2.1, 2.4, and 2.4.2 of the 
Anti-Dumping Agreement and Articles VI:1 and VI:2 of th e GATT 1994.  Mexico notes that the 
Appellate Body has found, in previous cases, that Article 2.1 of the Anti-Dumping Agreement  and 
Articles VI:1 and VI:2 of the GATT 1994 "define th e terms 'dumping' and 'margins of dumping' in 
relation to the product under inves tigation or review 'as a whole'".171  Mexico agrees with Japan that 
the zeroing procedures "necessarily disregard all negative comparison results, under any comparison 
method[ology]", thereby excluding "an entire category of the export transactions that form part of the 
'product'".172  Mexico submits that the Panel wrongly assu med that the requirement to calculate a 
margin of dumping for the "product as a whole" was derived solely from the reference to "all 
comparable export transactions" in Article 2.4.2, and applies only to W-W comparisons in original 
investigations.173  Mexico underscores that, in US – Softwood Lumber V (Article 21.5 – Canada) , the 
Appellate Body dismissed this view.174   
59. Mexico further argues that the Panel's fi ndings with respect to the "mathematical 
equivalence" between the W-W and W-T comparis on methodologies are also erroneous.  Mexico 
submits that the assumption of "mathematical equivalence" "is demonstrably false as a matter of mathematics, and is also erroneous as a matter of proper legal interpretation."
175  For Mexico, "the 
mathematical equivalence on which the Pane l relies does not apply if the monthly [W-T] 
methodology is employed."176   
                                                      
169Korea's third participant's submission, para. 15. (original emphasis) 
170Ibid. 
171Mexico's third participant's submission, para. 8 (referring to Appellate Body Report, US – Zeroing 
(EC) , para. 126, in turn, quoting Appellate Body Report, US – Softwood Lumber V , paras. 92-93);  see also 
Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , paras. 89 and 91;  and Appellate 
Body Report, EC – Bed Linen , para. 53).  
172Ibid., para. 12 (quoting Japan's appellant's submission, para. 11). 
173Ibid., para. 15. 
174Ibid., para. 18. 
175Ibid., para. 19. 
176Ibid., para. 20.  WT/DS322/AB/R 
 Page 27 
 
 
60. Mexico also claims that the Panel erred in finding that zeroing does not violate the "fair 
comparison" requirement of Article 2.4.  In this  regard, Mexico points to the statement of the 
Appellate Body in US – Softwood Lumber V (Article 21.5 – Canada) that "zeroing under the [T-T] 
comparison methodology is difficult to reconcile w ith the notions of impartiality, even-handedness, 
and lack of bias reflected in the 'fair comparison' requirement in Article 2.4."177   
61. Mexico further argues that the Panel erroneously  concluded that the requirement to calculate 
margins of dumping for the product as a whole does not  apply to periodic reviews under Article 9.3.  
Mexico asserts that this requirement extends to  periodic reviews not only because of the express 
reference to Article 2 in the chapeau of Article 9. 3, but also because the definitions of "dumping" and 
"margins of dumping" in Article 2.1 of the Anti-Dumping Agreement and Article VI of the 
GATT 1994 apply "throughout" the Anti-Dumping Agreement .178  Referring to the Appellate Body's 
findings in US – Zeroing (EC) , Mexico considers that it is not possible to interpret the term "margins 
of dumping" "as applying on a transaction-specific basis in periodic reviews".179  In Mexico's view, 
this would be contrary to the obligation "to compare the anti-dumping duties collected on all entries 
of the subject product from a given exporter or fo reign producer with that exporter's or foreign 
producer's margin of dumping for the product as a whole ".180  Mexico claims that "there is a clear 
distinction between the assessment or collection of  duties and the margin of dumping that establishes 
the ceiling on the amount of duties that can be assessed or collected."181  Mexico adds that, while there 
is "a prohibition on determining margins of du mping at the sub-level of individual import 
transactions, it is clearly permissible to assess  duties on an import- or importer-specific basis as long 
as the amount of duties assessed does not exceed  the margin of dumping for the product, as 
established for the exporter or foreign producer."182 
62. Finally, Mexico submits that the Panel erred in finding that zeroing in the context of new 
shipper reviews and sunset reviews is not in consistent with Articles 9.5 and 11.3 of the Anti-Dumping 
Agreement .  In Mexico's view, the requirement of Arti cle 2.1 to establish the margin of dumping for 
the product as whole, and the "fair comparison" re quirement in Article 2.4, apply to the entire 
                                                      
177Mexico's third participant's submission, para. 36 (quoting Appellate Body Report, US – Softwood 
Lumber V (Article 21.5 – Canada) , para. 138). 
178Ibid., paras. 42 and 43 (quoting Appellate Body Report, US – Softwood Lumber V , para. 93;  and 
Appellate Body Report, EC – Bed Linen , para. 51). 
179Ibid., para. 47. (footnote omitted) 
180Ibid., para. 49 (quoting Appellate Body Report, US – Zeroing (EC) , para. 132). (emphasis added by 
Mexico) 
181Ibid., para. 51. 
182Ibid., para. 52 (referring to Appellate Body Report, US – Zeroing (EC) , paras. 130-131). WT/DS322/AB/R 
Page 28  
 
Anti-Dumping Agreement , including in the context of new shipper reviews and sunset reviews.
183  
Mexico relies on the Appellate Body Report in US – Corrosion-Resistant Steel Sunset Review to 
support its position that "the United States' relia nce upon these [dumping] margins [calculated with 
zeroing] in connection with sunset reviews also is  inconsistent with the 'fairness requirement' under 
Article 2.4."184 
5. Norway  
63. Norway submits that the prohibition of zeroing is not limited to original investigations in 
which margins of dumping are calculated on the basis of W-W comparisons.  Instead, "all forms of 
zeroing in all forms of proceedings" under the Anti-Dumping Agreement are prohibited, because 
zeroing results in margins that are not es tablished for the "product as a whole".185  Norway asserts that 
Articles 2.1, 5.8, 6.10, 9.2, 9.3, and 9.5 of the Anti-Dumping Agreement , as well as Articles VI:1 
and VI:2 of the GATT 1994, define "dumping" and "mar gins of dumping" in relation to a "product".  
Moreover, in Norway's view, the Appellate Body's fi ndings in past cases make it clear that margins of 
dumping must be calculated for the product as a whole in all proceedings under the Anti-Dumping 
Agreement .186   
64. Norway submits that the Appellate Body's ru ling that zeroing in the W-W methodology does 
not result in a margin of dumping for the product as a whole "applies equally to other forms of 
zeroing and to other forms of  [anti-dumping] proceedings".187  Norway agrees with Japan that "the 
requirement in Article 2.1 ... to aggregate multip le comparison results to produce a margin of 
dumping for the product as a whole applies both when  an authority conducts ... model-specific [W-W] 
comparisons, ... transaction-specific [W-T] comparisons and multiple [T-T] comparisons."188  Norway 
concludes that it would be "illogical" to interpret the Anti-Dumping Agreement  in a manner that would 
                                                      
183Mexico's third participant's submission, paras. 58-61. 
184Ibid., para. 63. 
185Norway's third participant's submission, pa ra. 7 (referring to Appellate Body Report, EC – Bed 
Linen, para. 53;  Appellate Body Report, US – Softwood Lumber V , para. 99;  Appellate Body Report, US – 
Zeroing (EC), para 127;  and Appellate Body Report, US –  Softwood Lumber V (Article 21.5 – Canada), 
paras. 89 and 122). 
186Ibid., paras. 10-20 (referring to Appellate Body Report, EC – Bed Linen, para. 53;  Appellate Body 
Report, US – Softwood Lumber V , paras. 93 and 99;  Appellate Body Report, US – Zeroing (EC), para 126;  and 
Appellate Body Report, US –  Softwood Lumber V (Article 21.5 – Canada), paras. 105, 107, and 108). 
187Ibid., para. 24 (referring to Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review,  
para. 135;  and Appellate Body Report, US – Softwood Lumber V, para. 98). 
188Ibid., para. 27 (referring to Japan's appellant's submission, para. 82).  WT/DS322/AB/R 
 Page 29 
 
 
"allow the investigating authorities to apply a duty in a review, where the requirements of the Anti-
[D]umping Agreement would have made it illegal to impose [such] a duty in the first place."189 
65. Norway further argues that the Panel erred in fi nding that the use of zeroing procedures is not 
inconsistent with the "fair comparison" requirement in Article 2.4 of the Anti-Dumping Agreement.  
Norway emphasizes that "the Panel erred when considering Article 2.4 as lex specialis in regard to 
Articles 2.4.2 and 9.3" of the Anti-Dumping Agreement.190  Norway submits that previous Appellate 
Body findings indicate that "there is an inherent bias in a zeroing methodology" and that zeroing is 
not a "fair comparison".191  Although Norway acknowledges that the Appellate Body made these 
findings in connection with W-W and T-T comparisons in original investigations, this interpretation 
should also be extended to W-T comparisons gi ven the "overarching role" of the chapeau of 
Article 2.4.192 
66. Similarly, with respect to periodic reviews, Norw ay is of the view that there is an obligation 
to calculate one single margin for the product as a w hole.  Norway submits that zeroing is prohibited 
in periodic reviews by virtue of the "fair comparison" requirement in Article 2.4.193  Since the 
"[a]greement-wide" definition of dumping also applie s to the definition of "margins of dumping" for 
purposes of new shipper reviews, Norway concl udes that the prohibition of zeroing, based on 
Articles 2.1 and 2.4 "logically extends to Article 9.5".194    
67. Norway concludes that, since zeroing is contrary to  Article 2.4, it follows that sunset reviews 
relying on dumping margins calculated by usi ng zeroing procedures may be contrary to both 
Article 2.4 and Article 11.3.195  Norway disagrees with the distinction drawn by the Panel between 
"margins from original investigations [and] those from any periodic review"196, and considers that 
"[t]he key issue is whether the margin that the investigating authorities relied upon [was] calculated 
with or without zeroing."197 
                                                      
189Norway's third participant's submission, para. 30. 
190Ibid., para. 32. 
191Ibid., para. 34 (referring to Appellate Body Report, EC – Bed Linen , para. 55;  Appellate Body 
Report, US – Corrosion-Resistant Steel Sunset Review , para. 135;  and Appellate Body Report, US – Softwood 
Lumber V (Article 21.5 – Canada),  para. 142). 
192Ibid., para. 35. 
193Ibid., para. 37 (referring to Appellate Body Report, US – Zeroing (EC) , para. 133). 
194Ibid., para. 39.  
195Ibid., para. 38. 
196Ibid. (referring to Panel Report, para. 7.256). 
197Ibid., para. 38. WT/DS322/AB/R 
Page 30  
 
6. Thailand
 
68. Thailand argues that the Panel erred in finding th at the use of zeroing in T-T comparisons or 
in the context of periodic, new shipper, and sunset  reviews is consistent with Articles 2.1, 2.4, 
and 2.4.2 of the Anti-Dumping Agreement .  According to Thailand, the Panel's finding that zeroing is 
permitted in certain circumstances is based on its e rroneous assumption that there is no requirement in 
the Anti-Dumping Agreement  to calculate a margin of dumping for the product under investigation as 
a whole.  Thailand asserts that the Panel's findings "are inconsistent both with the express language of 
the Anti-Dumping Agreement  and the previous jurisprudence of the Appellate Body."198  Thailand 
submits that the Appellate Body has held that, "whe never an investigating authority uses intermediate 
comparisons between subgroups of export prices and normal values—whether on a model-by-model, 
[T-T] or any other basis—as a step to arrive at  the overall dumping margin for that product, the 
investigating authority may not, in aggregating tho se intermediate comparisons, 'zero' the results of 
some of those comparisons."199 
69. Thailand also considers that the Panel misinterpr eted the 1960 Report of the Group of Experts  
by reading a single sentence "out of context".200  In Thailand's view, the Group of Experts' Report, 
when read in full, does not suggest that "it is permissible to determine dumping with respect to a 
different universe of goods than is used to determine injury or, in doing so, to 'zero' the export prices 
for the goods under investigation."201  To the contrary, according to Th ailand, it is entirely consistent 
with the interpretation that dumping must be de termined for the "product" under investigation.  
Thailand notes that the Group of Experts' Re port emphasizes that "a determination of both dumping 
and injury ... made for each importation" would be the "ideal method".202  In that circumstance, "there 
would be symmetry between the universe of goods with respect to which the determination of 
dumping and injury would be made and, therefore, th e determinations could also be said to be made 
with respect to the same 'product'."203  Therefore, Thailand claims that "[n]othing in the Group of 
Experts' Report suggests that it may be permissible, in determining dumping margins on a 'product' 
                                                      
198Thailand's third participant's submission, para. 7. 
199Ibid., paras. 8 and 9 (referring to Appellate Body Report, US – Softwood Lumber V (Article 21.5 – 
Canada) , para. 94). 
200Ibid., para. 14 (referring to GATT Second Report of the Group of Experts, Anti-Dumping and 
Countervailing Duties , L/1141, adopted 27 May 1960, BISD 9S/194). 
201Ibid., para. 15. 
202Ibid., paras. 14 and 15. (original emphasis) 
203Ibid., para. 15.  WT/DS322/AB/R 
 Page 31 
 
 
basis, to reduce systematically the prices of certa in importations in a manner that makes it more likely 
that the 'product' will be found to be dumped."204 
70. Finally, Thailand disagrees with the Panel's d escription of the "fair comparison" requirement 
of Article 2.4 as "indeterminate" and reflec ting a "somewhat subjective" determination.205  T h e  
concept of fairness is, in Thailand's view, essentially  "an objective standard, designed to reduce, if not 
eliminate, subjectivity from the investigating authority's determination."206  Thailand concludes that 
zeroing is inconsistent with Article 2.4,  not because of its effect on the outcome per se , but because its 
use deprives the exporter of its "equal ch ance of success" in the investigation.207   
III. Issues Raised in This Appeal 
71. The following issues are ra ised in this appeal: 
(a) whether the Panel erred in finding that the United States' "zeroing procedures", 
inasmuch as they relate to the calculation of margins of dumping on the basis of 
transaction-to-transaction and weighted  average normal value-to-transaction 
comparisons in original investigations, cons titute a measure that can be challenged, as 
such, in WTO dispute settlement;  and, in so doing, whether the Panel failed to make 
an objective assessment of the matter before it, as required by Article 11 of the DSU; 
(b) whether the Panel erred in finding that th e United States does not act inconsistently 
with Articles 2.1, 2.4, and 2.4.2 of the Anti-Dumping Agreement and Articles VI:1 
and VI:2 of the GATT 1994, by maintaining "zeroing procedures" when calculating margins of dumping on the basis of transaction-to-transaction comparisons in original investigations; 
                                                     
 
204Thailand's third participant's submission, para. 18. 
205Ibid., para. 19 (quoting Panel Report, para. 7.158). 
206Ibid. 
207Ibid., para. 20. WT/DS322/AB/R 
Page 32  
 
(c) whether the Panel erred in finding that th e United States does not act inconsistently 
with Articles 2.1, 2.4, and 9.1-9.3 of the Anti-Dumping Agreement and Articles VI:1 
and VI:2 of the GATT 1994, by maintaining "zeroing procedures" in periodic 
reviews; 
(d) whether the Panel erred in finding that th e United States does not act inconsistently 
with Articles 2.1, 2.4, and 9.5 of the Anti-Dumping Agreement and Articles VI:1  
and VI:2 of the GATT 1994, by maintaining "zeroing procedures" in new shipper 
reviews; 
(e) whether the Panel erred in finding that the United States did not act inconsistently 
with Articles 2.1, 2.4, and 9.1-9.3 of the Anti-Dumping Agreement and Articles VI:1 
and VI:2 of the GATT 1994, in applying "zeroing procedures" in the 11 periodic 
reviews at issue in this appeal;  and 
(f) whether the Panel erred in finding that th e United States did not act inconsistently 
with Articles 2 and 11 of the Anti-Dumping Agreement in the sunset reviews at issue 
in this appeal, by relying on margins of dumping calculated in previous proceedings 
using "zeroing procedures".  
IV. Zeroing As Such in Original Investigations  Based on Transaction-to-Transaction and 
Weighted Average-to-Transaction Comparisons 
72. We first examine the preliminary issue of whet her the Panel erred in finding that the United 
States' "zeroing procedures", inasmuch as they rela te to the calculation of margins of dumping on the 
basis of transaction-to-transaction ("T-T") and wei ghted average normal value-to-prices of individual 
export transactions ("W-T") comparisons in original investigations
208, constitute a measure that can be 
challenged, as such, in WTO dispute settlement.  This is the subject of the United States' other appeal.     
73. The measures challenged by Japan before the Panel were the "zeroing procedures" and the 
"standard zeroing line".209  Japan claimed before the Panel th at these "measures" were, as such, 
inconsistent with various provisions of the Anti-Dumping Agreement  and the GATT 1994 in the 
                                                      
208In our discussion, we use the term "original investigations" to refer to investigations within the 
meaning of Article 5 of the Anti-Dumping Agreement . 
209The term "standard zeroing line" is used in the Pa nel Report to refer to a specific line of computer 
programming code used by the USDOC when it develops a specific computer program to calculate a margin of 
dumping in a particular anti-dumping proceeding. (See Panel Report, paras. 4.17 and 7.20, and footnote 644 
thereto)  WT/DS322/AB/R 
 Page 33 
 
 
context of original investigations, periodic revi ews, new shipper reviews, changed circumstances 
reviews, and sunset reviews.210     
74. The Panel first reviewed the nature and scope of  "measures" that may be subject to "as such" 
challenges in WTO dispute settlement.  The Pa nel recalled the Appellate Body's finding in US – 
Corrosion-Resistant Steel Sunset Review  that, "[i]n principle, any act or omission attributable to a 
WTO Member can be a 'measure' of that Me mber for purposes of WTO dispute settlement 
proceedings."211  The Panel further recalled the Appellate Bo dy's statement that measures that can be 
subject to WTO dispute settlement include not only acts applying a law in a specific situation, but also 
"acts setting forth rules or norms that are intende d to have general and pr ospective application."212  
The Panel also noted the conclusion of the Appellate Body in that case that, in principle, there is no 
bar to "non-mandatory measur es" being challenged as such.213 
75. For purposes of determining the existence of su ch a rule or norm, the Panel recalled the 
Appellate Body's finding, in US – Zeroing (EC) , that a "panel must not lightly assume the existence of 
a 'rule or norm' constituting a measure of general and prospective application, especially when it is not 
expressed in the form of a written document"214, and that, when a challenge is brought against such a 
rule or norm, "a complaining party must clear ly establish, through arguments and supporting 
evidence, at least that the alleged 'rule or norm' is  attributable to the responding Member;  its precise 
content;  and indeed, that it does have  general and prospective application."215  On this basis, the Panel 
concluded that the question it was required to addr ess in this dispute was whether it is possible to 
identify the precise content of the zeroing procedur es, whether the zeroing procedures are attributable 
to the United States, and whether they can be cons idered to be a "rule or norm" intended to have 
general and prospective application.216   
76. On the basis of an assessment of the evidence before it, the Panel concluded that "a rule or 
norm exists providing for the application of zeroi ng whenever [the] USDOC calculates margins of 
                                                      
210The term "zeroing procedures" is used in the Pane l Report to refer to the United States' "zeroing 
methodology" per se , as distinguished from the "standard zeroing line". (See Panel Report, para. 7.47)  The 
Panel concluded that the "standard zeroing line" is not  a measure that can be challenged as such. (See Ibid., 
para. 7.46)  This finding of the Panel is not appealed by Japan.  For a description of the United States' "zeroing 
procedures", see supra , footnote 3. 
211Ibid., para. 7.37 (referring to Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , 
para. 81). 
212Ibid. (quoting Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 82).  
213Ibid., para. 7.39 (referring to Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , 
para. 88). 
214Ibid., para. 7.43 (quoting Appellate Body Report, US – Zeroing (EC) , para. 196). 
215Ibid. (quoting Appellate Body Report, US – Zeroing (EC) , para. 198). 
216Ibid., para. 7.45. WT/DS322/AB/R 
Page 34  
 
dumping or duty assessment rates."
217  The Panel noted that the eviden ce before it was "sufficient to 
identify the precise content of what Japan terms as  'zeroing procedures', that these procedures are 
attributable to the United States, and that they  are a rule or norm of general and prospective 
application".218  The Panel therefore found that the United States' "zeroing procedures" constitute "a 
measure which can be challenged as such."219    
77. Before examining the participants' arguments on appeal, we note that the United States' other 
appeal is limited to the question whether "zeroing  procedures" constitute a measure that can be 
challenged as such, inasmuch as they relate to T-T and W-T comparisons in original investigations;  
the United States does not appeal the Panel's finding regarding "zeroing procedures", as far as weighted average normal value-to-weighted averag e export price ("W-W") comparisons in original 
investigations are concerned.
220  The United States "acknowledges that there is at least an evidentiary 
record" in connection with W-W comparisons.221  The United States also does not  appeal the Panel's 
finding inasmuch as it relates to "zeroing procedures"  in the context of periodic reviews and new 
shipper reviews.222   
A. The Measure at Issue 
78. The United States contends that the Panel failed to make an objective assessment of the 
matter before it—including an objective assessment of  the facts of the case—as required by Article 11 
of the DSU, when it concluded that a single rule or  norm exists by virtue of which the USDOC will 
apply zeroing in any anti-dumping proceeding, regardless of the comparison methodology used.  According to the United States, the evidence relie d on by the Panel "does not support the proposition 
that there are rules or norms taken by the United St ates concerning the use of zeroing as it relates to 
[T-T] and [W-T] comparisons in investigations."
223  In support of its view, the United States points 
out that, in original investigations, it has ne ver applied the W-T comparison methodology and has 
only once applied the T-T comparison methodology.  Moreover, the USDOC has "never pronounced on how it would conduct such comparisons, includi ng whether it would or would not 'zero' in 
connection with those comparisons."
224  The United States therefore submits that measures that did 
                                                      
217Panel Report, para. 7.50. 
218Ibid., para. 7.55. 
219Ibid., para. 7.58. 
220United States' other appellant's submission, para. 3. 
221Ibid. 
222United States' response to questi oning at the oral hearing.  
223United States' other appellant's submission, para. 26. 
224United States' other appellant's submission, para. 2.  WT/DS322/AB/R 
 Page 35 
 
 
not exist at all have been found by the Panel to be "measures" that can be  challenged, as such, in 
WTO dispute settlement. 
79. The United States emphasizes that, "particularly when the measure alleged is unwritten, the 
evidence of the existence of a measure must in fact  relate to the full scope of the measure claimed, 
and that there can be no finding of such a measure where such ev idence does not exist."225  The 
United States argues that, "[j]ust as a single measure may often consist of elements that may 
themselves be considered measures, the Panel's erro r may be viewed either as having failed to identify 
the precise content of a single measure—that is, whet her any 'zeroing procedures ' maintained by [the 
USDOC] actually relate to [T-T] and [W-T] compar isons in investigations—or as having failed to 
establish the existence of separate [USDOC] 'zeroi ng procedures' as they relate to each of these 
comparison[] [methodologies] in investigations."226 
80. According to the United States, "[t]he eviden ce put forward by Japan in this proceeding 
simply does not support the Panel's finding that [t he USDOC] maintains an unwritten zeroing measure 
regardless of the basis of the dumping comparison and in all antidumping proceedings."227  Moreover, 
the Panel has made "no effort to 'carefully exam ine the concrete instrume ntalities that evidence the 
existence of the purported "rule or norm"' relating to  [the USDOC]'s use of zeroing in the context of 
[T-T] and [W-T] comparisons in investigations , because there are no such instrumentalities."228   
81. In contrast, Japan maintains that "[t]he Panel had before it considerable evidence of the actual 
and, indeed, systematic application of [zeroing] in numerous cases, across all procedural contexts that 
have arisen thus far."229  Japan emphasizes that, in each of th ese cases, the substantive content of the 
zeroing procedures was identical:  the USDOC disregarded comparison results where the export price exceeded the normal value.
230  Japan also points out that the United States failed to produce any 
evidence to demonstrate that differences in comp arison methodologies, or differences in anti-dumping 
proceedings, would "imply any difference in the op eration or application of  the zeroing procedures 
that requires an independent assessment whethe r a rule or norm exists for each setting."231  Thus, there 
was "no need for the Panel to have parsed the evidence as to each specific comparison [methodology] 
                                                      
225Ibid., para. 14. (footnote omitted) 
226Ibid., footnote 22 to para. 14.   
227Ibid., para. 31. 
228Ibid. (quoting Appellate Body Report, US – Zeroing (EC) , para. 198). 
229Japan's appellee's submission, para. 93. 
230See Ibid., para. 95. 
231Japan's appellee's submission , para. 68. WT/DS322/AB/R 
Page 36  
 
and procedural [context]" in its de termination that there exists a single rule or norm that can be 
challenged as such.
232 
82. As we see it, the United States' challenge under Article 11 of the DSU is directed at the 
Panel's appreciation and weighing of the evidence.   The Appellate Body has stated on several 
occasions that panels enjoy a certain margin of di scretion in assessing the credibility and weight to be 
ascribed to a given piece of evidence.233  At the same time, the Appellate Body has underscored that 
Article 11 of the DSU requires panels "to take acc ount of the evidence put before them and forbids 
them to wilfully disregard or distort such evidence."234  Moreover, panels must  not "make affirmative 
findings that lack a basis in the ev idence contained in the panel record."235  Provided that a panel's 
assessment of evidence remains with in these parameters, the Appellate Body will not interfere with 
the findings of the panel.236   
83. The evidence before the Panel in this case in cluded model computer programs used by the 
USDOC that serve as a basis for programs used in  specific original investigations and periodic 
reviews.  These programs include an instructi on to apply zeroi ng through the "standard zeroing 
line".237  The Panel also had evidence before it regardi ng the application of the zeroing procedures in 
16 different anti-dumping proceedings, in cluding four original investigations238, one new shipper 
review239, and 11 periodic reviews.240   
84. Although the Panel did not consider the "standa rd zeroing line" to be a measure in itself 241, it 
found that zeroing has been a "constant feature of [the] USDOC's practice for a considerable period of
                                                      
232Ibid., para. 67. 
233See Appellate Body Report, EC – Hormones , para. 132.  See also Appellate Body Report, EC – 
Sardines , para. 299. 
234Appellate Body Report, US – Carbon Steel , para. 142.  See also Appellate Body Report, EC – 
Hormones , para. 133. 
235Ibid.  See also Appellate Body Report, US – Wheat Gluten , paras. 160-162. 
236See Appellate Body Report, US – Gambling , para. 330. 
237Exhibits JPN-6, at 15, and JPN-7, at 16, submitted by Japan to the Panel.   
238Exhibits JPN-8, JPN-10 A, JPN-22A, JPN-22B, and JPN-23C submitted by Japan to the Panel. 
239Exhibit JPN-9 submitted by Japan to the Panel.   
240Exhibits JPN-11 through JPN-21 submitted by Japan to the Panel;  further details may be found in 
Panel Report, para. 2.3. 
241Panel Report, para. 7.46.  WT/DS322/AB/R 
 Page 37 
 
 
time".242  The Panel further found that the "standard zeroing line" "has been included in the vast 
majority  of computer program[s] used by [the] USDOC to  calculate margins of dumping ... and [even] 
where the line has not been included , [the] USDOC has used other methods  to exclude export prices 
higher than the normal value from the numerator of the weighted average margin of dumping."243  In 
addition, the Panel noted that the United States had "not identified a single case  in which a decision 
was taken to provide such an offset."244   
85.   Moreover, the Panel observed that the evidence before it "shows that what is at issue goes 
beyond the simple repetition of the applicati on of a certain methodology to specific cases."245  
According to the Panel, "[t]he manner in which [t he] USDOC's use of zeroing has been characterized 
in statements by [the] USDOC [and] other United Stat es' agencies and courts ... confirms that [the] 
USDOC's consistent application of zeroing reflects a deliberate policy."246  For the Panel, the USDOC 
"has repeatedly stated that '[it does] not allow' e xport sales at prices above normal value to offset 
dumping margins on other export sales, has referred to  its 'practice' or 'methodology' of not providing 
for offsets for non-dumped sales, has pointed out th at the United States Court of Appeals for the 
Federal Circuit has ruled that the 'zeroing practice' ... is a reasonable interpretation of the law, that the 
US Congress was aware of [the] USDOC's me thodology when it adopted the Uruguay Round 
Agreements Act, and that not granting an offset  for non-dumped sales 'has consistently been an 
integral part of the [USDOC]'s [W-W] analysis'."247  The Panel added that "the United States 
Department of Justice has stated that the USDOC 'h as consistently applied its practice of treating non-
dumped sales as sales with a margin of zero since the implementation of the [Uruguay Round 
Agreements Act]' and has referred to [the] USDO C's 'long-standing methodology' and to 'the zeroing 
practice, which has been followed for at least 20 y ears' and which 'predated the passage of the latest 
major amendment of the Anti-dumping law'."248  Finally, the Panel noted that the "United States Court 
of International Trade has stat ed that '[the USDOC's] zeroing methodology in its calculation of 
dumping margins is grounded in long-standing practice'."249  
                                                      
242Panel Report, para. 7.51. 
243Ibid. 
244Ibid. 
245Ibid., para. 7.52. 
246Ibid. 
247Ibid. (footnotes omitted) 
248Ibid. (footnote omitted) 
249Ibid. WT/DS322/AB/R 
Page 38  
 
86. The United States argues that the statements whic h the Panel deemed to reflect a "deliberate 
policy" consist "primarily of quot ations from one assessment review".
250  Although this may be so, we 
cannot fault the Panel for concluding that these stat ements, when considered in conjunction with the 
other evidence before the Panel, lend support to the conclusion that a single rule or norm of general 
and prospective application that provides for disreg arding negative comparison results exists.  As the 
Appellate Body has previously said, the appreciation of "a given piece of evidence is part and parcel 
of the fact-finding process and is, in principle, left to the discretion of a panel as the trier of facts."251 
87. The thrust of the United States' argument is that context-specific evidence is required to 
demonstrate the existence of the zeroing proce dures in T-T and W-T comparisons in original 
investigations.252  In other words, according to the United States, the existence of a rule or norm 
requiring the application of zeroing must be examined separately for each comparison methodology 
and for each type of anti-dumping proceeding.  Japan submitted evidence to the Panel indicating that 
zeroing is a constant feature whenever a margin of dumping is calculated regardless of the comparison methodology used.  In contrast, the United States did not adduce evidence of a single case in which 
zeroing was not applied.
253  Nor did it indicate how the use of alternative comparison methodologies 
would make a difference in the operation or appli cation of the zeroing procedures.  Moreover, the 
United States did not explain why the rati onale underlying the zeroing procedures in W-W 
comparisons in original investigations, or W-T comparisons in periodic reviews254, does not apply to 
the calculation of margins of dumping on the basis of T-T and W-T comparisons in original 
investigations.  The fact that the consistency of  zeroing may be challenged in relation to a specific 
comparison methodology, or a specific type of anti-dumping proceeding, does not necessarily mean 
that the existence of a general rule or norm dire cting its use must be established through evidence of 
                                                      
250United States' other appellant's submission, para. 29. (footnote omitted) 
251Appellate Body Report, EC – Hormones , para. 132. 
252United States' other appellant's submission, para. 14 and footnote 22 thereto. 
253Panel Report, para. 7.51. 
254The United States acknowledges that there is an evidentiary record to support a finding as to the 
existence of the "zeroing procedures" in these contexts. (United States' response to questioning at the oral 
hearing.  See also United States' other appellant's submission, para. 3)  WT/DS322/AB/R 
 Page 39 
 
 
the actual application of  those procedures in all possible situations, as long as they were applied 
every time the occasion arose.255   
88. In sum, we agree with the Panel's unders tanding of the Appellate Body's previous 
jurisprudence and the manner in which the Panel frame d the question before it.  We also consider that 
the Panel had sufficient evidence before it to conc lude that the "zeroing procedures" under different 
comparison methodologies, and in different stages of anti-dumping proceedings, do not correspond to 
separate rules or norms, but simply reflect different manifestations of a single rule or norm.256   The 
Panel also examined ample evidence regarding the preci se content of this rule or norm, its nature as a 
measure of general and prospective application, and its attribution to the United States.  In our view, 
the Panel properly assessed this evidence.  We theref ore disagree with the United States that the Panel 
did not assess objectively the issue of whether a single rule or norm exists by virtue of which the 
USDOC applies zeroing "regardless of the basis upon which export price and normal value are 
compared and regardless of the type of pr oceeding in which margins are calculated."257    
B. Japan's Request for Consultations 
89. In support of its claim under Article 11 of th e DSU, the United States asserts that Japan's 
request for consultations258 did not include a reference to any " zeroing measure" in the context of W-T 
or T-T comparisons in original investigations.259  The United States argues that "Japan's failure to 
consult on any such measures means that they are no t within the terms of reference of this dispute, 
and the Appellate Body should reverse the Panel's fi nding as to the existence of such [United States] 
                                                      
255The United States attributes significance to the fact  that Japan abandoned its claim before the Panel 
regarding the consistency of zeroing in the context of W-T comparisons in original investigations.  According to 
the United States, this confirms that Japan "appreciated that the evidence [before the Panel] did not support the 
existence of a [United States] unwritten measure" as it re lates to W-T comparisons in original investigations. 
(United States' other appellant's submission, para. 23)  Before the Panel, Japan rejected the notion that the 
withdrawal of its claim regarding the use of zeroing under the second senten ce of Article 2.4.2 indicated a lack 
of evidentiary basis upon which to conclude that the zeroing procedures apply in the context of the W-T comparisons in original investigations.  Japan claimed, instead, that "there is a single  [zeroing ] measure  that 
applies to [W-W] comparisons, [T-T] comparisons and [W-T] comparisons, used in any type of anti-dumping 
proceeding" and that "[w] ith respect to [that] single zeroing measure , Japan makes a series of claims ." (Panel 
Report, para. 6.19) (original emphasis)   
256See Panel Report, footnote 688 to para. 7.53. 
257Ibid., para. 7.53. (footnote omitted) 
258See Request for Consultations by Japan, WT/DS322/1, 29 November 2004. 
259United States' other appellant's submission, para. 17.  The United States referred to Articles 6.2 
and 7.1 of the DSU in its Notice of Other Appeal and in its other appellant's submission.  However, at the oral 
hearing, the United States explained that it is not requesting the Appellate Body to make a specific finding that 
the Panel failed to comply with these provisions.  Inst ead, the United States refers to those provisions as 
arguments in support of its cl aim that the Panel acted inconsistently with Article 11 of the DSU.  We understand 
the references to Articles 3.3 and 4.2 in the United States' Notice of Other Appeal and in the United States' other 
appellant's submission in the same way. WT/DS322/AB/R 
Page 40  
 
measures on that basis."
260  The United States explains that "[it] did not raise this issue in the Panel 
proceedings because it was focusing on the fact  that these 'measures' do not exist at all"261, but adds 
that a failure to consult is a jurisdictional matter that can be raised at any time.   
90. Japan disagrees with the United States for two reaso ns.  First, Japan asserts that its request for 
consultations did identify the zeroing procedures as a single "measure" on which it wished to consult, 
without limitation as to its application in any particular comparison methodology.  Secondly, Japan 
argues that the United States' failure to object before  the Panel to the alleged lack of consultations 
means it relinquished its right to consult, and that  the Panel was not required to explore the issue on 
its own initiative.   
91. A panel's terms of reference are circumscribed  by the "specific measures at issue" and the 
"legal basis of the complaint" (that is, "claims") set out in the complaining party's request for the 
establishment of a panel.262  Japan's panel request identifies th e measures subject to an "as such 
challenge" in the following terms: 
In original investigations, periodic reviews, new shipper reviews, 
sunset reviews, and changed circumstances reviews  where the 
redetermination of margins of dumping occurs, the United States Department of Commerce ("USDO C") disregards intermediate 
negative dumping margins calculated by comparing normal value and 
export price, including on a weighted average-to-weighted average 
basis, weighted average-to-trans action basis, and transaction-to-
transaction basis , through the USDOC's AD Margin Calculation 
computer program and other related procedures, in the process of establishing the overall dumping margin for the product as a whole 
("hereinafter collectively referred to as "Zeroing").
263 (emphasis 
added) 
92. Japan's panel request, thus, refers to zeroing in the context of all types and stages of 
anti-dumping proceedings, and in all comparison methodologies.  The United States does not appear to dispute this.  Rather, the United States argues that, because Japan's request for consultations does 
not include a reference to zeroing in the contex t of all comparison methodologies in original 
investigations, zeroing in the context of T-T and W-T comparisons in original investigations is outside 
the Panel's terms of reference.  
                                                     
 
260United States' other appellant's submission, para. 18. 
261Ibid., para. 18 and footnote 29 thereto. 
262Article 7.1 of the DSU.  Article 6.2 of the DSU provides that a panel request shall "identify the 
specific measures at issue and provide a brief summary of the legal basis of the complaint sufficient to present 
the problem clearly."   
263Request for the Establishment of a Panel by Japan, WT/DS322/8, 7 February 2005 (attached as 
Annex III to this Report), p. 2, item B.1.(a).  WT/DS322/AB/R 
 Page 41 
 
 
93. Japan's request for consultations re fers, in the relevant part, to: 
... certain measures imposed by the United States including:  (1) the 
zeroing practice by which the United States Department of Commerce ("USDOC") treats transactions with negative dumping margins as having margins equal to  zero in determining weighted 
average dumping margins in anti-dumping investigations, administrative reviews, and sunset reviews, and also in assessing the 
final anti-dumping duty liability on entries upon liquidation ... 
... 
(6) the methodology of the United States for determining dumping 
margins and material injury in anti-dumping investigations ...
264 
94. We do not agree with the United States' readi ng of Japan's request for consultations.  A 
careful examination of this request indicates that th e use of "zeroing procedures" in the context of all 
types and stages of anti-dumping proceedings, and regardless of the comparison methodology used, 
was covered by that request. 
95. The language in Japan's request for consultations should, in our view, have sufficiently alerted 
the United States to the fact that Japan wished to consult on zeroing in the context of all comparison 
methodologies, including T-T and W-T comparisons in original investigations.  Put differently, the 
measure upon which Japan wished to consult was the United States' "methodology ... for determining 
dumping margins ... in [original] investigations".265  That "zeroing procedures" may manifest 
themselves differently when calculating a margin of dumping under the W-W, T-T, and W-T 
comparison methodologies does not necessarily mean that these manifestations of zeroing would have to be listed in a request for consultations.
266   
96. For these reasons, we disagree with the Un ited States' contention that the "zeroing 
procedures", inasmuch as they relate to T-T and W-T comparisons in original investigations, were not 
within the Panel's terms of reference.267  In these circumstances, we  need not rule on Japan's 
contention that the "United States' failure to rai se the alleged lack of consultations on its zeroing 
                                                      
264Request for Consultations by Japan, WT/DS322/1, 29 November 2004, p. 1. 
265Ibid., p. 2, item (6). 
266Articles 4 and 6 of the DSU do not "require a precise and exact identity between the specific 
measures that were the subject of consultations and th e specific measures identified in the [panel] request" 
(Appellate Body Report, Brazil – Aircraft , para. 132 (emphasis in original)), as long as the complaining party 
does not expand the scope of the dispute.  Requiring such an identity "would substitute the request for 
consultations for the panel request." (Appellate Body Report, US – Upland Cotton , para. 293)  We need not 
reach this question because we have found above that the use of "zeroing procedures" in the context of all types 
of anti-dumping proceedings, and regardless of the comparison methodology used, was covered in both the 
request for consultations and in the panel reques t, which defines a panel's terms of reference. 
267United States' other appellant's submission, para. 18. WT/DS322/AB/R 
Page 42  
 
procedures in the context of [W T] and [T-T] compar isons in original investig ations until this appeal 
means that it 'consented to the lack of consulta tions' on these measures, and 'relinquished whatever 
right to consult it may have had'."
268  Accordingly, we uphold  the Panel's finding, in paragraph 7.58 of 
the Panel Report, that the "zeroing procedures" c onstitute a measure which can be challenged as such 
and, therefore, dismiss  the United States' claim that the Panel acted inconsistently with Article 11 of 
the DSU by concluding that the zeroing procedures, as they relate to original investigations based on 
transaction-to-transaction and weighted averag e normal value-to-prices of individual export 
transactions comparisons, constitute a measure that  can be challenged, as such, in WTO dispute 
settlement.     
97. The United States additionally requests the Appe llate Body to declare moot the Panel's 
finding that the "zeroing procedures", inasmuch as they relate to T-T comparisons in original 
investigations, are consistent w ith various provisions of the Anti-Dumping Agreement  and the 
GATT 1994.269  This request is premised on our reve rsing the Panel's finding that the "zeroing 
procedures" in T-T comparisons in original investig ations constitute a measure  that can be challenged 
as such.  Given that this condition is not met, we need not rule on this request of the United States.270 
V. Zeroing As Such in Original Investigations , Periodic Reviews, and New Shipper Reviews 
98. We turn now to certain issues ra ised by Japan in this appeal.271  Before the Panel, Japan 
referred to both "model zero ing" and "simple zeroing"272 procedures, and claimed that the USDOC's 
"zeroing procedures", as they relate, inter alia , to original investigations , periodic reviews, and new 
shipper reviews, are inconsistent, as such, with certain provisions of the Anti-Dumping Agreement  and 
the GATT 1994. 
99. The Panel found that, by maintaining "model ze roing procedures" when calculating margins 
of dumping on the basis of W-W comparisons in original investigations, the United States acted inconsistently with Article 2.4.2 of the  Anti-Dumping Agreement .
273  The United States does not 
appeal this finding of the Panel. 
                                                      
268Japan's appellee's submission, para. 18 (quoting Appellate Body Report, Mexico – Corn Syrup 
(Article 21.5 – US) , para. 63). 
269United States' other appellant's submission, paras. 32-33 and 34(b).  
270We examine the WTO-consistency of zeroing under the T-T comparison methodology below. 
271These issues are described, supra , in para. 71(b)-(d). 
272For a description of "model zeroing" and "simple zeroing" see, supra , footnotes 13 and 14. 
273Panel Report, para. 7.86.  WT/DS322/AB/R 
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100. The Panel, however, rejected Japan's claims regarding "simple zeroing procedures" in T-T 
comparisons in original investigations.  The Panel took the view that it is "permissible" to interpret 
Articles 2.1 and 2.4.2 of the Anti-Dumping Agreement , as well as Article VI of the GATT 1994, to 
mean that "there is no general requirement to determine dumping and margins of dumping for the 
product as a whole."274  According to the Panel, "the fact that the terms 'dumping' and 'margin of 
dumping' in Article 2.1 of the Anti-Dumping Agreement  and Articles VI:1 and VI:2 of the 
GATT 1994 are defined in relation to 'product' and 'products' does not warrant the conclusion that 
these terms, by definition, cannot apply to indi vidual transactions and inherently require an 
examination of export transactions at an aggregate level in which the same weight is accorded to 
export prices that are above normal value as to export prices that are below normal value."275  I n  
addition, the Panel reasoned that, because "'dumping' occurs when the export price of a product is less 
than its normal value, the fact that Article 2.4. 2 expressly permits the use of a [T-T] comparison 
[methodology] ... logically means that a Member may tr eat transactions in which export prices are less 
than normal value as being more relevant than transactions in which export prices exceed normal 
value."276  The Panel further held that "in the context of the [T-T comparison] methodology in the first 
sentence of Article 2.4.2 the term 'margins of du mping' can be understood to mean the total amount 
by which transaction-specific export prices are less than transaction-specific normal values."277  
101. As contextual support for its line of reasoning,  the Panel also examined what it called the 
"logical impossibility of reconciling a general prohibi tion of zeroing with the express provision for the 
use of [a W-T comparison methodology] in the second sentence of Article 2.4.2."278  The Panel took 
the view that such a "general prohibition" of zeroing under all the three methodologies listed in 
Article 2.4.2 would be contrary to the principle of  effective treaty interpretation, because it would 
mean that the application of the W-T compar ison methodology provided in the second sentence of 
Article 2.4.2 would "necessarily always yield" the sam e mathematical result as the application of the 
W-W comparison methodology provided in the first sentence of the same provision.279  In addition, 
the Panel saw no basis in the text of Article 2. 4.2 to support the view that zeroing, while not 
prohibited under the W-T comparison methodol ogy, is prohibited under the T-T comparison 
methodology.280 
                                                      
274Panel Report, para. 7.142. 
275Ibid., para. 7.112.  
276Ibid., para. 7.119.  
277Ibid. 
278Ibid., para. 7.114.  
279Ibid., para. 7.127.  
280See Ibid., para. 7.139. WT/DS322/AB/R 
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102. On this basis, the Panel concluded that, "b y maintaining simple zeroing procedures in the 
context of original investigations", the USDOC does not act inconsistently with Articles 2.1 and 2.4.2 
of the  Anti-Dumping Agreement  and Articles VI:1 and VI:2 of the GATT 1994.
281 
103. With regard to Article 2.4 of the Anti-Dumping Agreement , the Panel took the view that the 
"'fair comparison' requirement may not be interpre ted in a manner that renders [the] more specific 
provisions of the [ Anti-Dumping ] Agreement  completely inoperative."282  Because the Panel had 
found that zeroing was permissible in T-T comparis ons under Articles 2.4.2 and 9, it concluded that 
zeroing does not breach the "fair comparison" requirement in Article 2.4.283   
104. The Panel applied the same line of reasoning in rejecting Japan's claims relating to zeroing in 
the context of periodic reviews and new shipper reviews.284 
105. Japan challenges these findings on appeal.  Japan argues that, pur suant to Article 2.1 of the 
Anti-Dumping Agreement  and Articles VI:1 and VI:2 of the GATT 1994, "'dumping' and 'margins of 
dumping' must be defined in relation to th e 'product' under investigation as a whole."285  Japan 
emphasizes that the definition of "dumping" in Artic le 2.1 and the "fair comparison" requirement in 
Article 2.4 "are overarching rules in the Anti-Dumping Agreement  that an authority must respect when 
it makes a determination of 'dumping' in any anti-dumping proceeding."286  Because the zeroing 
procedures lead to addressing only a "sub-part" of  the product in a dumping determination, they 
violate Articles 2.1, 2.4, and 2.4.2 of the Anti-Dumping Agreement , as well as Articles VI:1 and VI:2 
of the GATT 1994.287  Similarly, in periodic reviews under Article  9.3, in order to ensure that the total 
amount of duties collected does not exceed the margin  of dumping, as required by that provision, an 
authority must establish a dumping margin for the expor ter or foreign producer consistently with the 
definitions of "dumping" and "margin of dumping" in Article 2.1 of the Anti-Dumping Agreement , 
and Articles VI:1 and VI:2288 of the GATT 1994, and with the "fair comparison" requirement in 
Article 2.4 of the Anti-Dumping Agreement .  Japan adds that "[a]n authority must also determine 
                                                      
281Panel Report, para. 7.143.   
282Ibid., para. 7.158. 
283See Ibid., para. 7.159. 
284See Ibid., paras. 7.210, 7.211, 7.216, 7.218 and 7.219.  
285Japan's appellant's submission, para. 9. (footnote omitted) 
286Ibid., para. 15. 
287See Ibid., paras. 9 and 16. 
288Ibid., para. 16 (referring to Appellate Body Report, US – Zeroing (EC) , paras. 130-133).  WT/DS322/AB/R 
 Page 45 
 
 
'margins of dumping' in new shipper reviews  under Article 9.5 consistently with these 
requirements."289 
106. The United States argues that these findings of the Panel should be upheld.  According to the 
United States, the Panel correctly c oncluded that Article 2.1 of the Anti-Dumping Agreement and 
Article VI of the GATT 1994 do not require investigating authorities to establish margins of dumping for a "product as a whole".
290  For the United States, "the terms 'dumping' and 'margin of dumping' do 
not necessarily require the aggregation of [T-T comparison results] and the provision of an offset for 
one transaction against another."291  According to the United States, the Panel correctly concluded that 
the prohibition of zeroing in W-W comparisons in or iginal investigations does not apply to T-T or 
W-T comparisons and, thus, cannot serve as the source  of any alleged general prohibition of zeroing.  
The United States also dismisses Japan's argument th at zeroing is "unfair" because it "artificially 
inflates the magnitude of dumping", as this argument is predicated on the assumption that zeroing is 
prohibited in T-T comparisons.292  According to the United States, zeroing does not produce an 
"artificially inflated" magnitude of dumping but, rather, the correct magnitude of the margin of 
dumping.293  The United States further agrees with the Panel that Article 9.3 of the Anti-Dumping 
Agreement  "contains no language requiring such an aggr egate examination of export transactions in 
determining the final liability for payment of  anti-dumping duties under Article 9.3.1 or in 
determining the amount, if any, of  refund due under Article 9.3.2."294  In relation to new shipper 
reviews, the United States adds that "[n]othing in th e text of Article 9.5 implies that the 'individual 
margins of dumping' are necessarily and always a 's ingle' dumping margin determined on the basis of 
the 'product as a whole' for each exporter or producer."295 
107. Our analysis begins with a discussion of the fundamental disciplines that apply under the 
Anti-Dumping Agreement  and the GATT 1994 to all anti-dumping proceedings, including original 
investigations, periodic reviews, and new shipper revi ews.   We will then examine Japan's claim that 
zeroing in T-T comparisons in original investigations  is, as such, inconsistent with Articles 2.1, 2.4, 
and 2.4.2 of the Anti-Dumping Agreement  and Articles VI:1 and VI:2 of the GATT 1994.  Finally, we 
examine Japan's claim that zeroing in periodic reviews and new shipper reviews is, as such, 
                                                      
289Japan's appellant's submission, para. 17. (original emphasis) 
290United States' appellee's submission, para. 18. 
291Ibid. 
292Ibid., para. 51. 
293Ibid. 
294Ibid., para. 54 (quoting Panel Report, para. 7.199). 
295United States' appellee's submission, para. 73. WT/DS322/AB/R 
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inconsistent with Articles 2.1, 2.4, 9.1-9.3, and 9.5 of the Anti-Dumping Agreement  and Articles VI:1 
and VI:2 of the GATT 1994.   
A. The Concepts of "Dumping" and "Margins of Dumping" 
108. First, we recall that dumping is defined in Article VI:1 of the GATT 1994 as occurring when 
a "product" of one country is introduced into the commerce of another country at less than the normal 
value of the "product".  Consistent with this de finition, Article VI:2 provides for the levying of 
anti-dumping duties in respect of a "dumped product" in order to offset or prevent the injurious effect 
of dumping.    
109. This definition of dumping is carried over into the  Anti-Dumping Agreement  by Article 2.1.  
Furthermore, by virtue of the opening phrase of Article 2.1—"[f]or the purposes of this Agreement"—
this definition applies throughout the Agreement.
296  Thus, the terms "dumping", as well as "dumped 
imports", have the same meaning in all provisions of the Agreement and for all types of anti-dumping proceedings, including original investigations, new shipper reviews, and periodic reviews.  In each 
case, they relate to a product  because it is the product that is intr oduced into the commerce of another 
country at less than its normal value in that country.    
110. Article VI:2 defines "margin of dumping" as the difference between the normal value and the 
export price and establishes the link between "dumping" and "margin of dumping".
297  The margin of 
dumping reflects the magnitude of dumping.  It is also one of the factors to be taken into account to determine whether dumping causes or threatens material injury.
298  Article VI:2 lays down 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."  Thus, the margin of 
dumping also is defined in relation to a "product". 
111. Secondly, the Anti-Dumping Agreement  prescribes that dumping determinations be made in 
respect of each exporter or foreign producer  examined.  This is because dumping is the result of the 
pricing behaviour of individual e xporters or foreign producers.  Ma rgins of dumping are established 
accordingly for each exporter or foreign producer on the basis of a comparison between normal value 
and export prices, both of which relate to the prici ng behaviour of that exporter or foreign producer.  
In order to assess properly the pricing behaviour of an individual exporter or foreign producer, and to 
determine whether the exporter or foreign producer is in fact dumping the product under investigation 
                                                      
 296See Appellate Body Report, US – Softwood Lumber V , para. 93.  See also Appellate Body Report, 
US – Corrosion-Resistant Steel Sunset Review , paras. 109 and 127. 
 297See Appellate Body Report, US – Zeroing (EC) , para. 125.  
298Article 3.4 of the Anti-Dumping Agreement .  WT/DS322/AB/R 
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and, if so, by which margin, it is obviously necessar y to take into account the prices of all the export 
transactions of that exporter or foreign producer. 
112. Other provisions of the Anti-Dumping Agreement  also make it clear that "dumping" and 
"margins of dumping" relate to the exporter or fore ign producer.   Article 6.10 requires, "as a rule", 
that investigating authorities determine "an indivi dual margin of dumping for each known exporter or 
producer".299  Similarly, Article 9.4 of the Anti-Dumping Agreement  refers to situations where 
anti-dumping duties are applied to exporters or foreign producers not examined individually in an investigation, and provides that such duties sha ll not exceed "the weighted average margin of 
dumping established with respect to the selected exporter s".   In addition, Article 9.5 indicates that the 
purpose of new shipper reviews is to determine "i ndividual margins of dumping for any exporters or 
producers  in the exporting country in question who have not exported the product" and refers to a 
"determination of dumping in respect of such producers or exporters".   
113. Thirdly, the Anti-Dumping Agreement  and the GATT 1994 are not concerned with dumping 
per se , but with dumping that causes or threatens to cause material injury to the domestic industry.
300  
Article 3.1 stipulates that a determination of injury  shall be based on an objective examination of both 
the volume of the dumped imports and the effect of the dumped imports on prices in the domestic market for like products, and the consequent imp act of these imports on domestic producers of such 
products.  Furthermore, Article 3.5 of the Anti-Dumping Agreement  lays down that "[t]he authorities 
shall also examine any known factors other than the dumped imports which at the same time are 
injuring the domestic industry and the injuries caused by these other factors must not be attributed to 
dumped imports."  Among the non-attribution factors lis ted in this Article are "the volume and prices 
of imports not sold at dumping prices".   
114. Thus, it is evident from the design and architecture of the Anti-Dumping Agreement  that: 
(a) the concepts of "dumping" and "margins of dumpi ng" pertain to a "product" and to an exporter or 
foreign producer;  (b) "dumping" and "dumping marg ins" must be determined in respect of each 
known exporter or foreign producer examined;  (c) anti-dumping duties can be levied only if dumped 
                                                     
 
299In certain cases, however, an investigating authority may, in accordance with Articles 6.10 and 9.4 of 
the Anti-Dumping Agreement , determine an anti-dumping duty rate to be applied to exporters and foreign 
producers who were not individually examined.  Article 8.1 also speaks of voluntary undertakings in relation to 
exporters.   
300In this regard, Article VI:1 of the GATT 1994 states that dumping "is to be condemned if it causes or 
threatens material injury to an established industry in  the territory of a Member or materially retards the 
establishment of a domestic industry".  Article VI:6(a) al so stipulates that no anti-dumping duty shall be levied 
unless the importing Member "determines that the effect of  the dumping ... is such as to cause or threaten 
material injury to an established domestic industry, or is such as to retard materially the establishment of a 
domestic industry."  Article 11.1 of the Anti-Dumping Agreement  further provides that "[a]n anti-dumping duty 
shall remain in force only as long as  and to the extent necessary to counter act dumping which is causing injury." WT/DS322/AB/R 
Page 48  
 
imports cause or threaten to cause material inju ry to the domestic industry producing like products;  
and (d) anti-dumping duties can be levied only in an amount not exceeding the margin of dumping 
established for each exporter or foreign producer.
301  These concepts are interlinked.  They do not 
vary with the methodologies followed for a determin ation made under the various provisions of the 
Anti-Dumping Agreement . 
115. A product under investigation may be defined by an investigating authority.302  B u t  
"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.303  
Nor, under any comparison methodology, can "dumping" and "margins of dumping" be found to exist 
at the level  of an individual transaction.304  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.305  Rather, they are merely 
"inputs that are [to be] aggregated in order to establish the margin of dumping of the product under investigation for each exporter or producer."
306 
116. Having reviewed certain fundamental concepts of the Anti-Dumping Agreement  relevant to 
this appeal, we turn to examine Japan's claim that zeroing, in relation to the T-T comparison 
methodology in original investigations, is, as such, inc onsistent with Articles 2.1, 2.4, and 2.4.2 of the  
Anti-Dumping Agreement  and Articles VI:1 and VI:2 of the GATT 1994. 
                                                      
301We note in this regard that Article 9.1 of the Anti-Dumping Agreement  encourages levy of 
anti-dumping duties at less than the margin of dumping if such lesser duty would be adequate to remove the 
injury to the domestic industry. 
302This definition is usually made in the light of an application under Article 5.2 of the Anti-Dumping 
Agreement  or, in special circumstances, under Article 5.6 of the Anti-Dumping Agreement . 
303See Appellate Body Report, US – Softwood Lumber V , paras. 93 and 96. 
304See Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , paras. 87-93.  See 
also Appellate Body Report, US – Softwood Lumber V , paras. 93 and 96. 
305Appellate Body Report, US – Softwood Lumber V , para. 97;  Appellate Body Report, US – Softwood 
Lumber V (Article 21.5 – Canada) , para. 87. 
306Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 87.  See also 
paras. 94 and 114 (quoting Appellate Body Report, US – Softwood Lumber V , para. 98).  WT/DS322/AB/R 
 Page 49 
 
 
B. Determination of Margins of Dumping Based on Transaction-to-Transaction 
Comparisons in Original Investigations 
1. Article 2.4.2 of the Anti-Dumping Agreement  
117. We note at the outset that, although Japan withdr ew, at the interim revi ew stage, its claim 
regarding the W-T comparison methodology provid ed for in the second sentence of Article 2.4.2307, 
the Panel drew guidance from that sentence for its in terpretation of the first sentence of Article 2.4.2, 
as well as Articles 2.1, 2.4, and 9.3 of the  Anti-Dumping Agreement  and Articles VI:1 and VI:2 of the 
GATT 1994. 
118. Article 2.4.2 sets out three comparison methodol ogies that investigating authorities may use 
to calculate margins of dumping.  The first sentence  of Article 2.4.2 provides for two comparison 
methodologies (W-W and T-T) involving symmetrical comparisons of normal value and export price.  
Article 2.4.2 stipulates that these two methodologi es "shall normally" be used by investigating 
authorities to establish margins of dumping.  As an exception to the two normal methodologies, the 
second sentence  of Article 2.4.2 sets out a third comparison methodology which involves an 
asymmetrical comparison between we ighted average normal value and prices of individual export 
transactions.  This methodology may be used only if the following two conditions are met:  (i) that the 
authorities find a pattern of export prices that differ significantly among different purchasers, regions, 
or time periods;  and (ii) that an explanation is  provided as to why such differences cannot be taken 
into account appropriately by the use of a W-W or T-T comparison. 
(a) The First Sentence of Article 2.4.2 of the Anti-Dumping Agreement  
119. Under the T-T comparison methodology at issue in this appeal, the margin of dumping is 
established by a comparison between the normal value and the export price in individual transactions.  
The issue before us is whether zeroing procedures are,  as such, inconsistent with the first sentence of 
Article 2.4.2 in the context of T-T comp arisons in original investigations.  
120. Recently, in US – Softwood Lumber V (Article  21.5 – Canada) , the Appellate Body dealt for 
the first time with a determination of margins of  dumping based on T-T comparisons in an original
                                                      
307The Panel noted that the withdrawal of Japan's claim under the second sentence of Article 2.4.2 
"does not in any way detract from the significance of this sentence as an important contextual element that must 
necessarily be taken into account in any analysis of the issue of zeroing." (Panel Report, para. 7.127 and 
footnote 765 thereto)  We agree that the second senten ce of Article 2.4.2 may be relevant for the interpretation 
of the first sentence, irrespective of the withdrawal by Japan of its claim under that sentence.  WT/DS322/AB/R 
Page 50  
 
investigation.  For the Appellate Body, the refere nce in the first sentence of Article 2.4.2 to "'a 
comparison' in the singular suggest[ed] an overall calculation exercise involving aggregation of these 
multiple transactions."
308  Therefore, "[t]he transaction-specific results are mere steps in the 
comparison process" and the "individual transaction comparisons are not the final results of the calculation, but, rather, are inputs for the overall calculation exercise."
309  Thus, the text of 
Article 2.4.2 indicates that the calculation of a margin of dumping using the T-T comparison 
methodology is a "multi-step exercise in which the results of transaction-specific comparisons are 
inputs that are [to be] aggregated in order to establish the margin of dumping of the product under investigation for each exporter or producer."
310  The Appellate Body found that, in aggregating the 
results of transaction-specific comparisons, "an invest igating authority must consider the results of all 
of the comparisons and may not disregard the results  of comparisons in which export prices are above 
normal value."311  The Appellate Body concluded, theref ore, that zeroing, as applied in the 
determination made on the basis of the T-T comparison methodology at issue in that case, was inconsistent with Article 2.4.2 of the Anti-Dumping Agreement . 
121. We see no reason to depart from the Appellate Body's reasoning in US – Softwood Lumber V 
(Article 21.5 – Canada) , which is in consonance with the Appe llate Body's approach in the earlier 
case of US – Softwood Lumber V  and is consistent with the funda mental disciplines that apply under 
the Anti-Dumping Agreement  and Articles VI:1 and VI:2 of the GATT 1994, as highlighted above.  In 
the latter case, the Appellate Body held that, "[i]f an investigating authority has chosen to undertake 
multiple comparisons, the investigating authority n ecessarily 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 under 
Article 2.4.2."
312  The Appellate Body addressed there the issue of model zeroing under the W-W 
comparison methodology in an original investigation.  That methodology involved the division of the product under investigation into sub-groups of identical, or similar, product types.  In aggregating the 
results of the sub-group comparisons to calcu late the dumping margin for the product under 
investigation, the USDOC had treated as zero the r esults of the sub-groups in which weighted average 
normal value was equal to or less than the weighted  average export price.  Thus, zeroing did not occur 
                                                     
 
308Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 87.  The Appellate 
Body explained that the reference in the first sentence of Article 2.4.2 to "export prices", in the plural, in the phrase "a comparison of normal value and export prices  on a [T-T] basis" "suggests that the comparison will 
generally involve multiple transactions". ( Ibid.)  
309Ibid. 
310Ibid. 
311Ibid., para. 122. 
312Appellate Body Report, US – Softwood Lumber V , para. 98. (original emphasis)  WT/DS322/AB/R 
 Page 51 
 
 
within the sub-groups but occurred across the sub-gr oups in the process of aggregating the results of 
the sub-group comparisons.313 
122. The Appellate Body held that dumping and marg ins of dumping can be found to exist only for 
the product under investigation as a whole, and that th ey cannot be found to exist for a type, model, or 
category of that product.  The comparisons at the sub-group level are not margins of dumping within 
the meaning of Article 2.4.2.  It is only on the basi s of aggregating all these "intermediate values" that 
an investigating authority can establish margins of dumping for the product under investigation as a 
whole.  The Appellate Body therefore found th at the model zeroing was inconsistent with 
Article 2.4.2 of the Anti-Dumping Agreement .314   
123. We fail to see why, if, for the purpose of establis hing a margin of dumping, such a product is 
dealt with under the T-T comparison methodology in an original investigation, zeroing would be 
consistent with Article 2.4.2 of the Anti-Dumping Agreement .  If anything, zeroing under the T-T 
comparison methodology would inflate the margin of dumping to an even greater extent as compared 
to model zeroing under the W-W comparison methodol ogy.  This is because zeroing under the T-T 
comparison methodology disregards the result of each comparison involving a transaction in which 
the export price exceeds the normal value, wherea s under the W-W comparison methodology, zeroing 
occurs, as noted above, only across the sub-gr oups in the process of aggregation.  
124. We do not consider that the absence of the phr ase "all comparable export transactions" in the 
context of the T-T comparison methodology suggests that zeroing should be permissible under that 
methodology.   Because transactions may be divi ded into groups unde r the W-W comparison 
methodology, the phrase "all comparable export tran sactions" requires that each group include only 
transactions that are comparable and that no expo rt transaction may be left out when determining 
margins of dumping under that methodology.  Furthermore, the W-W comparison methodology involves the calculation of a weighted average export price.  By contrast, under the T-T comparison 
methodology, all export transactions are taken into account on an individual basis and matched with 
the most appropriate transactions in the domestic  market.  Therefore, the phrase "all comparable 
export transactions" is not pertinent to the T-T comp arison methodology.  Con sequently, no inference 
may be drawn from the fact that these words do not appear in relation to this methodology.
315 
                                                      
313See Appellate Body Report, US – Softwood Lumber V , para. 64. 
314The Panel in this dispute adhered to the finding of the Appellate Body in Softwood Lumber V , and 
concluded that the model zeroing procedures of the United States in W-W comparisons in  the context of original 
investigations are, as such, incons istent with Article 2.4.2 of the Anti-Dumping Agreement . (Panel Report, 
para. 7.85)  The United States has not appealed this finding of the Panel. 
315See Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 91. WT/DS322/AB/R 
Page 52  
 
125. We acknowledge that the W-W and T-T comparis on methodologies are distinct and may not 
produce identical results.  However, as the Appellate Body stated in US – Softwood Lumber V 
(Article 21.5 – Canada) , the W-W and T-T comparison methodologies "fulfil the same function", they 
are "alternative means for establishing margins of  dumping", and "there is no hierarchy between 
them".
316  It would therefore be "illogical to interpret the [T-T] comparison methodology in a manner 
that would lead to results that  are systematically different from those obtained under the [W-W] 
methodology".317  Indeed, if zeroing is prohibited under the W-W comparison methodology and 
permitted under the T-T comparison methodology, th e application of the T-T methodology would 
lead to results that are systematically different  from those obtained through the application of the 
W-W methodology.  Moreover, by systematically disregarding comparison results involving export 
transactions occurring at prices above the normal value, the zeroing methodology fails to establish 
margins of dumping for the product under investiga tion properly, as required under Article 2.4.2. 
126. We recall that the Anti-Dumping Agreement  requires the determination of an individual 
margin of dumping for each known exporter or foreign producer.318  If it is permissible to determine a 
separate margin of dumping for each transaction, th e consequence would be that several margins of 
dumping could be found to exist for each known exporter  or foreign producer.  The larger the number 
of export transactions, the greater the number of such transaction-specific margins of dumping for each exporter or foreign producer.  This would creat e uncertainty and divergences in determinations 
to be made in original investigations an d subsequent stages of anti-dumping proceedings.
319   
127. As we have stated, the Anti-Dumping Agreement  does not contemplate the determination of 
dumping or a margin of dumping at the mode l- or transaction-specific level.  The Anti-Dumping 
Agreement  contemplates the aggregation of all the comparisons made at the transaction-specific level 
in order to establish an individual margin of dumpi ng for each exporter or foreign producer examined.  
As we understand it, the position of the United States is that Article 2.4.2 does not address the issue of 
aggregation of transaction-specific comparison results, but if aggregation is performed, the results of 
comparisons where the export transactions occurred above normal value may be disregarded in the 
calculation of the margin of dumping, because such transactions do not involve dumping.   
                                                      
316Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 93. 
317Ibid.  See also Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , 
footnote 238 to para. 141. 
318See, supra , paras. 111, 112, and 114, and Articles 6.10 and 9.4 of the Anti-Dumping Agreement . 
319For example, when the investigating authority considers imports as being "dumped" for the purposes 
of an injury determination under Article 3;  and, when assessing the amount of anti-dumping duty to be levied 
on the "product" under Articles 9.2-9.5 of the Anti-Dumping Agreement , and Article VI:2 of the GATT 1994.  WT/DS322/AB/R 
 Page 53 
 
 
128. In this respect, we recall that the Anti-Dumping Agreement  deals with injurious dumping and 
that the "volume of dumped imports" is a critical factor in injury determination.320  As we understand 
it, under United States law, if an exporter or fore ign producer is found to be dumping, the USITC may 
include all imports from that exporter or forei gn producer in the volume of dumped imports for 
purposes of determining injury.321  If, as a consequence of zeroing, the results of certain comparisons 
are disregarded only for purposes of calculating marg ins of dumping, but taken into consideration for 
determining injury, this would mean that the sa me transactions are treated as "non-dumped" for one 
purpose, and as "dumped" for another purpose.  This is not in consonance with the need for consistent 
treatment of a product in an anti-dumping investigation.322 
129. For these reasons, we disagree with the Panel that dumping may be determined at the level of 
individual transactions, and that multiple comparison  results are margins of dumping in themselves.323  
We also disagree with the Panel that the terms "product" and "products" can apply to individual 
transactions and do not require an examination of export transactions at an aggregate level.324  Nor can 
we agree with the Panel that "a Member may treat transactions in which export prices are less than normal value as being more relevant than transacti ons in which export prices exceed normal value."
325  
Accordingly, we disagree with the Panel's finding th at, "in the context of the [T-T] methodology in 
the first sentence of Article 2.4.2, the term 'margi ns of dumping' can be understood to mean the total 
                                                      
320See, supra , paras. 113-114. 
321We recognize that the issue of injury determination is not before us in this case.  We are not 
suggesting that an injury determina tion would be vitiated if the volume  of imports involved in the zeroed 
transactions is not taken into account for th e purposes of the injury determination. 
322In US – Softwood Lumber V , the Appellate Body stated: 
Our 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 investigation.  
Thus, having defined the product under investigation, 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 anti-dumping duty can be levied only on a dumped product.  
For all these purposes, the product und er investigation is treated as a 
whole[.] 
(Appellate Body Report, US – Softwood Lumber V , para. 99) (original emphasis) 
323See Appellate Body Report, US – Softwood Lumber V , para. 97;  Appellate Body Report, US – 
Zeroing (EC ), para. 132;  and Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , 
paras. 87-93. 
324See Panel Report, para. 7.112. 
325Ibid., para. 7.119.    WT/DS322/AB/R 
Page 54  
 
amount by which transaction-specific export prices are less than transaction-specific normal 
values."
326 
(b) The Panel's Contextual Arguments Relating to the Second Sentence 
of Article 2.4.2 of the Anti-Dumping Agreement  
130. We turn next to the second sentence of Article 2.4.2 of the Anti-Dumping Agreement  from 
which the Panel drew contextual support for its  finding that zeroing is permitted under the T-T 
comparison methodology in original inv estigations.  This sentence reads: 
A normal value established on a weighted average basis may be 
compared to prices of individual export transactions if the authorities find a pattern of export prices which differ significantly among 
different purchasers, regions or time periods, and if an explanation is 
provided as to why such differences cannot be taken into account appropriately by the use of a wei ghted average-to-weighted average 
or transaction-to-transaction comparison. 
131. We recall that, under the first sentence of Artic le 2.4.2, an investigating authority is 
"normally" required to use either of the two sy mmetrical comparison methodologies provided for in 
that sentence.  The second sentence of Arti cle 2.4.2 provides an asymmetrical comparison 
methodology to address a pattern of "targeted" dumping found among certain purchasers, in certain 
regions, or during certain time periods.  By its term s, this methodology may be  used if two conditions 
are met:  first, that the investigating authoriti es "find a pattern of export prices which differ 
significantly among different purchasers, regions or time periods";  and secondly, that an 
"explanation" be provided as to why such differen ces in export prices cannot be taken into account 
appropriately by the use of either of the two symmetrical comparison methodologies set out in the first 
sentence of Article 2.4.2.  The second requirement t hus contemplates that there may be circumstances 
in which targeted dumping could be adequate ly addressed through the normal symmetrical 
comparison methodologies.  The asymmetrical methodology in the second sentence is clearly an exception to the comparison methodologies which normally are to be used. 
132. In its reasoning, the Panel assumed that there was a "logical impossibility of reconciling a 
general prohibition of zeroing with the express pr ovision for the use of a [W-T comparison 
methodology] in the second sentence of Article 2.4.2."
327  According to the Panel, if zeroing were 
prohibited under all comparison methodologies, app lication of the second sentence of Article 2.4.2 
would always yield results that would be "mathema tically equivalent" to those obtained by applying 
the W-W comparison methodology, thereby re ndering the second sentence of Article 2.4.2 inutile .  
                                                      
326Panel Report, para. 7.119.  
327Ibid., para. 7.114.  WT/DS322/AB/R 
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The Panel further assumed that, if zeroing were permitted under the W-T comparison methodology, it 
should, by logical implication, be permitted under the T-T comparison methodology as well.328 
133. We recall that the Appellate Body had occasion to discuss this "mathematical equivalence" 
argument in US – Softwood Lumber V (Article 21.5 – Canada) , but rejected it for several reasons.  
The Appellate Body said, inter alia , that "[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 fro m the application of a comparison methodology set out 
in another part of that provision."329  The Appellate Body also found that the mathematical 
equivalence argument is based on certain assumptions that may not hold good in all situations.  The 
Appellate Body further observed that the second sentence provides for an "exception", and as such, 
"the comparison methodology in the second sentence of Article 2.4.2 ([W-T]) alone cannot determine 
the interpretation of the two methodologies provid ed in the first sentence, that is, [T-T] and 
[W-W]."330  In addition, the Appellate Body noted th at, even if W-W and W-T methodologies were to 
yield equivalent results in certain situations, this  would not be sufficient to compel a finding that 
zeroing is permissible under the T-T comparison me thodology, because the mathematical equivalence 
argument does not relate to this methodology.331  The Appellate Body added that it could be argued, 
in reverse, that "the use of zeroing under the two comparison methodologies set out in the first 
sentence of Article 2.4.2 would en able investigating authorities to capture pricing patterns constituting 
'targeted dumping', thus rendering the third methodology inutile ."332 
134. As regards the relationship between th e T-T comparison methodology and the W-T 
comparison methodology of the second sentence of Article 2.4.2, the Panel's reasoning appears to assume that the universe of export transactions to  which these two comparison methodologies apply is 
the same, and that these two methodologies differ only in that, under the W-T comparison methodology, a normal value is established on a wei ghted average basis, while it is established on a 
transaction-specific basis under the T-T comparison methodology.  Thus, according to the Panel, if 
                                                     
 
328Panel Report, paras. 7.138 and 7.139. 
329Appellate Body Report, US – Softwood Lumber V (Article  21.5 – Canada) , para. 99. (emphasis 
added) 
330Ibid., para. 97. 
331See Ibid., para. 99. 
332Ibid., para. 100. (original emphasis)  See also Panel Report, para. 7.125.  There, the Panel recognized 
that "to interpret Article 2.4.2 as permitting the use of zeroing under the [T-T] method[ology] raises the question 
under what circumstances it would not be  possible to take account of a pattern of export prices described in the 
second sentence of Article 2.4.2 by using the [T-T] method[ology]."   WT/DS322/AB/R 
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zeroing is permitted under the W-T comparison methodol ogy in the second sentence of Article 2.4.2, 
it should logically be permitted under the T-T comparison methodology as well.
333 
135. We disagree with the assumption underlying th e Panel's reasoning.  The emphasis in the 
second sentence of Article 2.4.2 is on a "pattern", namely a "pattern of export prices which differs 
significantly among different purchasers, regions or time periods."  The prices of transactions that fall within this pattern  must be found to differ significantly from other export prices.  We therefore read 
the phrase "individual export transactions" in that sen tence as referring to the transactions that fall 
within the relevant pricing pattern.  This univer se of export transactions would necessarily be more 
limited than the universe of export transactions to which the symmetrical comparison methodologies 
in the first sentence of Article 2.4.2 would appl y.  In order to unmask targeted dumping, an 
investigating authority may limit the application of the W-T comparison methodology to the prices of 
export transactions falling within  the relevant pattern.   
136. For these reasons, we are unable to agree w ith the Panel that the second sentence of 
Article 2.4.2 provides contextual support for a finding that zeroing is permissible under the T-T comparison methodology.  We wish to emphasize, however, that our analysis of the second sentence 
of Article 2.4.2 is confined to addressing the cont extual arguments drawn by the Panel from that 
provision. 
(c) Conclusion 
137. In the light of our analysis of Article 2.4.2 of the Anti-Dumping Agreement , we conclude that, 
in establishing "margins of dumping" under the T-T comparison methodology, an investigating 
authority must aggregate the results of all the tr ansaction-specific comparisons and cannot disregard 
the results of comparisons in which export prices are above normal value.
334 
138. Accordingly, we reverse  the Panel's finding, in paragraphs  7.143 and 7.259(a) of the Panel 
Report, that the United States does not act in consistently with Article 2.4.2 of the Anti-Dumping 
Agreement by maintaining zeroing procedures when calculating margins of dumping on the basis of 
T-T comparisons in original investigations, and find , instead, that the United States acts inconsistently 
with that provision. 
                                                      
333See Panel Report, para. 7.139. 
334Appellate Body Report, US – Softwood Lumber V (Article  21.5 – Canada) , para. 122.  WT/DS322/AB/R 
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2. Article 2.1 of the Anti-Dumping Agreement  and Articles VI:1 and VI:2 of the 
GATT 1994  
139. As a consequence, we reverse  the Panel's findings, in paragraphs 7.143 and 7.259(a) of the 
Panel Report, that "simple zeroing" in original investig ations is not inc onsistent with Article 2.1 of the 
Anti-Dumping Agreement  and Articles VI:1 and VI:2 of the GATT 1994, because these findings are 
simply based on the Panel's findings and r easoning relating to Article 2.4.2 of the Anti-Dumping 
Agreement , which we have reversed.  The Panel o ffers no additional reasoning that could 
independently support its findi ngs under Article 2.1 of the Anti-Dumping Agreement  and Articles VI:1 
and VI:2 of the GATT 1994.   
140. We note that Japan requests the Appellate Body  not only to reverse the Panel's findings of 
consistency, but also to find that the United States acted inconsistently with these provisions in using 
zeroing in the context of T-T comparisons in origin al investigations.  At the oral hearing, Japan 
confirmed that it wished us to complete the Panel's legal analysis to this effect.  Article 2.1 of the 
Anti-Dumping Agreement and Article VI:1 of the GATT 1994 are definitional provisions.  They set 
out a definition of "dumping" for the purposes of the Anti-Dumping Agreement  and the GATT 1994.  
The definitions in Article 2.1 and Article VI:1 are no doubt central to the interpretation of other 
provisions of the Anti-Dumping Agreement , such as the obligations relating to, inter alia , the 
calculation of margins of dumping, volume of dumped imports, and levy of anti-dumping duties to counteract injurious dumping.
335  But, Article 2.1 and Article VI:1, read in isolation, do not impose 
independent obligations.  As we  have found that the United States acts inconsistently with 
Article 2.4.2 of the Anti-Dumping Agreement by maintaining zeroing procedures in original 
investigations on the basis of T-T comparisons, we  do not consider it necessary to make additional 
findings on Japan's claims under these provisions.  Japan has not explained why such additional 
findings under Article 2.1 of the Anti-Dumping Agreement  and Articles VI:1 and VI:2 of the 
GATT 1994 would be necessary to resolve this dispute.336   
3. Article 2.4 of the Anti-Dumping Agreement   
141. Next, we examine whether zeroing is inconsistent with the "fair comparison" requirement in 
Article 2.4 of the Anti-Dumping Agreement . 
                                                      
335See Appellate Body Report, US – FSC (Article 21.5 – EC) , para. 85.  See also Appellate Body 
Report, US – DRAMS , para. 205 and footnote 377 thereto.  
336Appellate Body Report, Australia – Salmon , para. 223.  We recognize that Article VI:2 of the 
GATT 1994 is not merely a definitional provision.  Nevertheless, given our finding under Article 2.4.2 of the 
Anti-Dumping Agreement , we do not consider it necessary to make an additional finding on Japan's claim under 
Article VI:2 of the GATT 1994 for purposes of resolving this dispute. WT/DS322/AB/R 
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142. Regarding the relationship between Articles 2. 4 and 2.4.2, the Panel stated that the 
"somewhat indeterminate standard of fairness underl ying the 'fair comparison' requirement may not 
be interpreted in a manner that renders more specific provisions of the [ Anti-Dumping] Agreement 
completely inoperative."
337   
143. On appeal, Japan submits that the Panel erred in making Article 2.4 subject to the allegedly 
"more specific" provisions of Article 2.4.2.  In Japan 's view, this is contrary to the introductory phrase 
of Article 2.4.2.  We agree with Japan that the Panel's reasoning implies that the "fair comparison" 
requirement in Article 2.4 is de pendent on Article 2.4.2.  The Pa nel appears to have considered 
Article 2.4.2 as lex specialis .  To the extent that it did, this w ould not be a correct representation of the 
relationship between the two provisions. Rather the introductory clause to Article 2.4.2 expressly 
makes it "[s]ubject to the provisions governing fair comparison" in Article 2.4.338  
144. Japan further argues that, "[u]nder the zeroing procedures, the United States makes an initial 
comparison for all comparable export transactions, but  in aggregating the comparison results into an 
overall margin, it includes solely the positive comparison results, disregarding negative results."339  
According to Japan, "the 'partial' comparison th at occurs pursuant to the zeroing procedures is 
'inherently biased' and not 'fair'"340 in T-T comparisons in original investigations. 
145. In contrast, the United States contends that zer oing does not produce an "artificially inflated" 
magnitude of dumping but, rather, the corr ect magnitude of the margin of dumping.341  The United 
States further submits that the "fair comparison" requirement must be neutrally defined, as the 
Appellate Body itself has recognized "the 'need' to balance ... the rights and obligations of respondents 
with those of other interested parties", including the domestic industry.342 
146. The Appellate Body has previously made it clear that the use of zeroing under the T-T 
comparison methodology distorts the prices of cer tain export transactions because the "prices of 
[certain] export transactions [m ade] are artificially reduced."343  In this way, "the use of zeroing under 
the [T-T] comparison methodology artificially infl ates the magnitude of dumping, resulting in higher 
                                                      
337Panel Report, para. 7.158. 
338Appellate Body Report, US – Softwood Lumber V (Article  21.5 – Canada) , para. 133. 
339Japan's appellant's submission, para. 134.  
340Ibid. 
341United States' appellee's submission, para. 51. 
342Ibid., para. 52 (referring to Appellate Body Report, US – Oil Country Tubular Goods Sunset 
Reviews , para. 243). 
343 Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 139.  WT/DS322/AB/R 
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margins of dumping and making a positive de termination of dumping more likely."344  The Appellate 
Body has further stated that "[t]his way of calcula ting cannot be described as impartial, even-handed, 
or unbiased."345  As the Appellate Body has previously fo und, under the first sentence of Article 2.4.2, 
"an investigating authority must c onsider the results of all the comparisons and may not disregard the 
results of comparisons in which export prices are above normal value."346  Therefore, we consider that 
zeroing in T-T comparisons in original investiga tions is inconsistent with the fair comparison 
requirement in Article 2.4. 
147. Accordingly, we reverse  the Panel's finding, in paragraphs  7.161 and 7.259(a) of the Panel 
Report, that the United States does not act inconsistently with Article 2.4 of the Anti-Dumping 
Agreement by maintaining zeroing procedures when calculating margins of dumping on the basis of 
T-T comparisons in original investigations, and find , instead, that the United States acts inconsistently 
with that provision. 
C. Zeroing As Such in Periodic Reviews and New Shipper Reviews 
148. We now examine Japan's claims  relating to zeroing, as such, in periodic reviews and new 
shipper reviews.  We first analyze Japan's appe al as it relates to Articles 9.3 and 9.5 of the 
Anti-Dumping Agreement  and Article VI:2 of the GATT 1994.  Next, we examine Japan's appeal 
relating to the "fair comparison" requirement set out in Article 2.4 of the Anti-Dumping Agreement .  
Finally, we review Japan's claims under Articles 2.1, 9.1, and 9.2 of the Anti-Dumping Agreement  and 
Article VI:1 of the GATT 1994.  
1. Articles 9.3 and 9.5 of the Anti-Dumping Agreement  and Article VI:2 of the 
GATT 1994  
149. The Panel found that the United States does not act  inconsistently with Articles 2.1, 2.4, 
9.1-9.3, and 9.5 of the Anti-Dumping Agreement  and Articles VI:1 and VI:2 of the GATT 1994 by 
maintaining "zeroing procedures"347 in periodic reviews and new shipper reviews.348 
150. In reaching this conclusion, the Panel re lied on its earlier reasoning regarding the 
permissibility of zeroing procedures in original in vestigations.  Its reasoning was also based on its 
understanding of the concept of "dumping" and "m argins of dumping", as well as on its interpretation 
                                                      
344Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 142. 
345Ibid. 
346See, supra , para. 137.  See also Appellate Body Report, US – Softwood Lumber V (Article 21.5 – 
Canada) , para. 122. 
347See, supra , footnote 3. 
348Panel Report, paras. 7.216, 7.219, 7.222, and 7.259(b).   WT/DS322/AB/R 
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of the second sentence of Article 2.4.2 of the Anti-Dumping Agreement .
349  Under the Panel's 
rationale, the terms "dumping" and "margins of dumping", as they appear in Article 9 of the 
Anti-Dumping Agreement , refer to results of transaction-specific comparisons.   
151. As we have stated350, "dumping" and "dumping margins" under the Anti-Dumping Agreement  
are defined in relation to the product under inv estigation.  Thus, "dumping" and "margins of 
dumping" can be found to exist only at the level of a "product":  they cannot be found to exist at the 
level  of a type, model, or category of a product under cons ideration;  nor can they be found to exist at 
the level of an individual transaction.351  Rather, "if a margin of dumping is calculated on the basis of 
multiple comparisons made at an intermediate stage,  it is only on the basis of aggregating all these 
intermediate results that an investigating aut hority can establish margins of dumping for the product 
as a whole."352  We therefore disagree with the Panel's a pproach, which is premised on the view that 
the terms "dumping" or "margins of dumping" can have different meanings under different provisions 
of the Anti-Dumping Agreement . 
(a) Periodic Reviews and Importer-Specific Duty Assessment 
152. We examine next the "important co nsiderations specific to Article 9"353 identified by the 
Panel as supporting its view that it is permissibl e to interpret Article VI of the GATT 1994 and 
relevant provisions of the Anti-Dumping Agreement  "to mean that there is no general requirement to 
determine dumping and margins of dumping for the product as a whole, which, by itself or in 
conjunction with a requirement to establish margin s of dumping for exporters or foreign producers, 
entails a general prohibition of zeroing."354 
153. The "important considerations" identified by the Panel relate to the ope ration of retrospective 
and prospective duty assessment systems under Articles 9.3.1 and 9.3.2 of the Anti-Dumping 
Agreement .  The Panel noted that these provisions specify how to implement the requirement in 
Article 9.3 "that  the amount of anti-dumping duty  not exceed the margin of dumping".355  The Panel's 
                                                      
349Panel Report, para. 7.194. 
350See, supra , paras. 108-115.  
351See Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 104;  Appellate 
Body Report, US – Zeroing (EC) , para. 126;  and Appellate Body Report, US – Softwood Lumber V , para. 93.   
352Appellate Body Report, US – Zeroing (EC) , para. 132.  Rather, they are merely "inputs that are 
aggregated in order to establish the margin of dumping of the product under inves tigation for each exporter or 
producer." (Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 87) 
353Panel Report, para. 7.196. 
354Ibid. 
355Ibid., para. 7.198. (original emphasis)  WT/DS322/AB/R 
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interpretative approach also relies on Article 9.4(ii), which refers to the calculation of the "liability for 
payment" of anti-dumping duties "on the basis of a prospective normal value".356 
154. The Panel stated that, under Articles 9.3.1 and 9.3.2, a margin of dumping is calculated for 
determining the final liability for payment of anti-dumping duties  in a retrospective duty assessment 
system, and for determining the amount of anti-dumping duty that must be refunded  in a prospective 
duty assessment system.357  The Panel added that "the obligation to pay an anti-dumping duty is 
incurred on an importer - and import -specific basis."358  For the Panel, "the importer- and import-
specific character of the payment of anti-dumping duti es must be taken into account in interpreting the 
meaning of 'margin of dumping.'"359  Under the Panel's rationale, if  certain export sales to a given 
importer  are made at prices above normal value, tho se sales do not need to be taken into account in 
determining the margin of dumping for the relevant exporter  that has made the sale to the importer.   
155. We are unable to agree with the reasoning of the Panel.  As the Appellate Body has stated 
previously, under Article 9.3 of the Anti-Dumping Agreement  and Article VI:2 of the GATT 1994, 
investigating authorities "are required to ensure that  the total amount of anti-dumping duties collected 
on the entries of a product from a given exporter sh all not exceed the margin of dumping established 
for that exporter"360, in accordance with Article 2.361  Put differently, "the margin of dumping 
established for an exporter or foreign producer operates as a ceiling  for the total amount of anti-
dumping duties that can be levied on the entries of  the subject product (from th at exporter) covered by 
the duty assessment proceeding."362  The Appellate Body has further emphasized that "[a]lthough 
Article 9.3 sets out a requirement regarding th e amount of the assessed anti-dumping duties, it does 
not prescribe a specific methodology according to which the duties should be assessed."363  I n  
                                                      
356Article 9.4(ii) provides that an anti-dumping duty applied to imports from exporters or foreign 
producers not examined individually shall not exceed, "where the liability for payment of anti-dumping duties is 
calculated on the basis of a prospec tive normal value, the difference between  the weighted average normal value 
of the selected exporters or producers and the export prices of exporters or producers not individually examined."   
357Panel Report, para. 7.198.  
358Ibid. (original emphasis) 
359Ibid., para. 7.199. 
360Appellate Body Report, US – Zeroing (EC) , para. 130.  
361The chapeau of Article 9.3 provid es that "[t]he amount of anti- dumping duty shall not exceed the 
margin of dumping as established in Article 2." 
362Appellate Body Report, US – Zeroing (EC) , para. 130. (original emphasis) 
363Appellate Body Report, US – Zeroing (EC) , para. 131.  The Appellate Body has stated that, "under 
the methodology currently applied by the USDOC to asse ss anti-dumping duties, the aggregation of the results 
of the multiple comparisons performed at an intermediate stage might result in a negative value, for a given importer, if zeroing is not allowed.  Of course, this wo uld not mean that the authorities would be required under 
the Anti-Dumping Agreement  or Article VI of the GATT 1994 to compensate an importer for the amount of that 
negative value (that is, when export prices exceed normal value)." ( Ibid., footnote 234 to para. 131) WT/DS322/AB/R 
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particular, the Appellate Body has underscore d that "a reading of Article 9.3 of the Anti-Dumping 
Agreement  and Article VI:2 of the GATT 1994 does not suggest that final anti-dumping duty liability 
cannot be assessed  on a transaction- or importer-specific basis, or that the investigating authorities 
may not use specific methodologies that reflect the distinct nature and purpose of proceedings 
governed by these provisions, for purposes of assessi ng final anti-dumping duty liability, provided 
that the total amount of anti-dumping duties that ar e levied does not exceed the exporters' or foreign 
producers' margins of dumping."
364   
156. Finally, the Panel expresses its concern that, if a Member applies a retrospective duty 
assessment system, it "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 prices of export transactions to other importers at a different point in time that exceed 
normal value."
365  This concern is not well founded.  The concept of dumping relates to the pricing 
behaviour of exporters or foreign producers;  it is  the exporter, not the importer, that engages in 
practices that result in situations of dumping.366  At the time of importation, an administering 
authority may collect duties, in the form of a cash deposit, on all export sales, including those 
occurring at above the normal value.  However, in  a review proceeding under Article 9.3.1, the 
authority is required to ensure that the total amount of anti-dumping duties collected from all the importers of that product does not excee d the total amount of dumping found in all sales made by the 
exporter or foreign producer, calculated accordi ng to the margin of dumping established for that 
exporter or foreign producer without zeroing.  The same "ceiling" applies in review proceedings under 
Article 9.3.2, because the introductory clause of Article 9.3 applies equa lly to prospective and 
retroactive duty assessment systems. 
(b) Arguments Related to Prospective Normal Value Systems   
157. Next, we examine the Panel's reasoning relating to Article 9.4(ii) of the Anti-Dumping 
Agreement , which deals with the calculation of the liability for payment of anti-dumping duties on the 
basis of a so-called "prospective normal value".
367 
                                                      
364Ibid. (original emphasis) 
365Panel Report, para. 7.199. 
366Appellate Body Report, US – Zeroing (EC) , para. 129. 
367In a prospective normal value system, the authorities announce in advance a prospective normal 
value that applies to future entries of a given product and anti-dumping duties are assessed on the basis of the 
difference between this "prospective norm al value" and the prices of individual export transactions for that 
product.  WT/DS322/AB/R 
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158. Before the Panel, Japan argued that the collec tion of a variable duty on an entry-by-entry 
basis under a prospective normal value system doe s not involve the establishment of margins of 
dumping with respect to individual export transactio ns, because the actual margin of dumping in such 
a system is only determined in a review under Artic le 9.3.2.  Moreover, according to Japan, in a 
prospective normal value system, "the final liability  for duties must be assessed in a review under 
Article 9.3.2".368 
159. The Panel disagreed, noting that Japan's argument was "inconsistent with the prospective  
nature of such a system".369  The Panel added that "[i]t is clear from the text of Article 9.4(ii) of the 
[Anti-Dumping ] Agreement  that in a prospective normal value system ' liability for payment of 
anti-dumping duties  is calculated on the basis of a prospective normal value'."370  Moreover, 
"[a]lthough Article 9.3.2 provides for a refund procedure when the amount of anti-dumping duties is 
assessed on a prospective basis, a requirement that arguably also applies to prospective normal value 
systems referred to in Article 9.4(ii), a refund pr ocedure in a prospective duty assessment system is 
not a determination of final liability fo r payment of anti-dumping duties ."371  The Panel further noted 
that "[t]he phrase 'determination of the final liabilit y for payment of anti-dumping duties' is used in 
Article 9.3.1 in connection with retrospectiv e duty assessment procedures but does not figure in 
Article 9.3.2."372 
160. The Panel stated that, "notwithstanding the po ssibility of a refund, liability for payment of 
anti-dumping duties is final in a prospective normal value system at the time of importation of a 
product."373  This may be so, but it does not mean that the anti-dumping duty collected at the time of 
importation represents a "margin of dumping".374  Nor does it mean that the total amount of 
anti-dumping duties that are levied can exceed the exporter's or foreign producer's "margin of dumping".  Under a prospective normal value syst em, exporters may choose to raise their export 
prices to the level of the prospective normal valu e in order to avoid liability for payment of anti-
dumping duties on each export transaction.  However, under Article 9.3.2, the amount of duties 
collected is subject to review so as to ensure that, pursuant to Article 9.3 of the Anti-Dumping 
Agreement , the amount of the anti-dumping duty collected does not exceed the margin of dumping as 
                                                     
 
368Panel Report, para. 7.202 (quoting Japan's oral statement at the second Panel meeting, para. 32). 
(emphasis added) 
369Ibid., para. 7.204. (original emphasis) 
370Ibid. (emphasis added by the Panel) 
371Ibid. (original emphasis) 
372Ibid. 
373Ibid., para. 7.205. 
374See, supra , para. 114. WT/DS322/AB/R 
Page 64  
 
established under Article 2.
375  It is open to an importer to request a refund if the duties collected 
exceed the exporter's margin of dumping.  Whether a refund is due or not will depend on the margin 
of dumping established for that exporter. 
161. The Panel stated that, in a prospective nor mal value system, "liability for payment of 
anti-dumping duties is incurred only to the extent that prices of individual export transactions are below normal value."
376  Therefore, Article 9.4(ii) "confirms that the concept of dumping can apply 
on a transaction-specific basis to prices of indivi dual export transactions below the normal value."377  
The Panel also stated that "[i]f in a prospective normal value system individual export transactions at 
prices less than normal value can attract liability for payment of anti-dumping duties, without regard 
to whether or not prices of other export transacti ons exceed normal value", there is no reason why 
duties may not be similarly assessed under the Unite d States' retrospective duty assessment system.378   
162. We are unable to agree.  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 clai m 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.
379   
163. The Anti-Dumping Agreement is neutral as between different systems for levy and collection 
of anti-dumping duties.  The Agreement lays down the "margin of dumping" as the ceiling for 
collection of duties regardless of the duty assess ment system adopted by a WTO Member, and 
provides for a refund if the ceiling is exceeded.  It is therefore incorrect to say that the Anti-Dumping 
Agreement favours one system, or places another system at a disadvantage.   
                                                      
375Panel Report, para. 7.198. 
376Ibid., para. 7.205. 
377Ibid. 
378Ibid., paras. 7.206. 
379See Appellate Body Report, US – Zeroing (EC) , para. 131.  WT/DS322/AB/R 
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(c) New Shipper Reviews 
164. The Panel's reasoning, which we rejected380, relates to periodic reviews under Article 9.3, as 
well as to new shipper reviews under Article 9.5.  On appeal, Japan not es in this regard that the Panel 
"gave no separate interpretive considerati on" to the latter types of reviews.381 
165. Article 9.5 of the Anti-Dumping Agreement  makes it clear that, upon request, investigating 
authorities "shall promptly carry out a review for the purpose of determining individual margins of dumping" for exporters or foreign producers that di d not ship the subject product during the period of 
investigation.
382  As noted above383, under the Anti-Dumping Agreement , dumping determinations 
relate to the exporter, and both "dumping" and "mar gins of dumping" relate to the pricing behaviour 
of the exporter.  Moreover, negative comparison r esults may not be disregarded when calculating a 
margin of dumping for an exporter.  For the same reasons, we consider that zeroing, in establishing 
"individual margins of dumping" for new shippers, is  also inconsistent with Article 9.5 of the 
Anti-Dumping Agreement . 
166. In the light of these considerations, we reverse  the Panel's finding, in paragraphs 7.222 
and 7.259(b) of the Panel Report, that the United States does not act inconsistently with Articles 9.3 
and 9.5 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994 by maintaining zeroing 
procedures in periodic reviews a nd new shipper reviews, and find , instead, that the United States acts 
inconsistently with these provisions. 
2. Article 2.4 of the Anti-Dumping Agreement   
167. We turn next to examine whether zeroing in pe riodic reviews and new shipper reviews is, as 
such, inconsistent with the "fair compar ison" requirement in Article 2.4 of the Anti-Dumping 
Agreement . 
168. If anti-dumping duties are assessed on the basis of a methodology involving comparisons 
between the export price and the normal value in a manner which results in anti-dumping duties being 
collected from importers in excess of the amount of the margin of dumping of the exporter or foreign producer, then this methodology cannot be viewed as involving a "fair comparison" within the 
                                                     
 
380See, supra , paras. 150 and 151. 
381Japan's appellant's submission, para. 180.  
382This is subject to the proviso that such new shippers "can show that they are not related to any of the 
exporters or producers in the exporting country who ar e subject to the anti-dumping duties on the product." 
(Article 9.5 of the Anti-Dumping Agreement ) 
383See, supra , paras. 111-112 and 114. WT/DS322/AB/R 
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meaning of the first sentence of Article 2.4.
384  This is so because such an assessment would result in 
duty collection from importers in excess of the margin of dumping established in accordance with 
Article 2, as we have explained previously.385 
169. Accordingly, we reverse  the Panel's finding, in paragraphs  7.219 and 7.259(b) of the Panel 
Report, that zeroing in the context of periodic reviews and new shipper reviews is not, as such, 
inconsistent with Article 2.4 of the Anti-Dumping Agreement , and find , instead, that zeroing, is, as 
such, inconsistent with that provision.   
3. Articles 2.1, 9.1 and 9.2 of the Anti-Dumping Agreement  and Article VI:1 of 
the GATT 1994  
170. As a consequence, we reverse  the Panel's findings, in paragra phs 7.216, 7.222, and 7.259(b) 
of the Panel Report, that zeroing is not, as such, in consistent with Articles 2.1, 9.1, and 9.2 of the 
Anti-Dumping Agreement  and Article VI:1 of the GATT 1994, because these findings are based on 
the Panel's findings and reasonings relating to Articles 2.4, 2.4.2, and 9.3 of the Anti-Dumping 
Agreement  and Article VI:2 of the GATT 1994, which we have reversed.  The Panel offers no 
additional reasoning that could independently suppor t its findings under Articles 2.1, 9.1, and 9.2 of 
the Anti-Dumping Agreement  and Article VI:1 of the GATT 1994.   
171. Japan requests us not only to reverse the Pane l's findings, but also to find that the United 
States acted inconsistently with these provisions.  Having found that the United States acts inconsistently with Articles 9.3 and 9.5 of the Anti-Dumping Agreement  and Article VI:2 of the 
GATT 1994 by maintaining zeroing procedures in peri odic reviews and new shipper reviews, we do 
not consider it necessary to ru le on Japan's claims under Articles 2.1, 9.1, and 9.2 of the 
Anti-Dumping Agreement  and Article VI:1 of the GATT 1994.
386 
VI. Zeroing As Applied in Periodic Reviews 
172. The Panel found that zeroing, as applied by the United States in the periodic reviews at issue 
in this appeal, is not inconsis tent with Articles 1, 2.1, 2.4, 2.4.2, and 9.1-9.3 of the Anti-Dumping 
Agreement  and Articles VI:1 and VI:2 of the GATT 1994.387  In support of its findings, the Panel 
referred to the reasoning that led it to conclude that zeroing, as it relates to periodic reviews, is not, as 
                                                      
384For our interpretation of Article 2.4 see, supra , para. 146. 
385See, supra , para. 155.  
386Our approach here is consistent with the Appellate Body's approach in US – Zeroing (EC) . (See 
Appellate Body Report, US – Zeroing (EC) , para. 147)   
387Panel Report, paras. 7.225-7.227.  WT/DS322/AB/R 
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such, inconsistent with certain provisions of the Anti-Dumping Agreement and Articles VI:1 and VI:2 
of the GATT 1994.388    
173. On appeal, Japan challenges the Panel's findi ngs under Articles 2.1, 2.4, 9.1-9.3 of the 
Anti-Dumping Agreement  and Articles VI:1 and VI:2 of the GATT 1994.  Japan requests the 
Appellate Body to reverse these findings and find, in stead, that the United States acted inconsistently 
with its obligations under these provisions.389  Japan does not, however, pursue its claims under 
Articles 1 and 2.4.2 of the Anti-Dumping Agreement .390 
174. We have found391 that zeroing, as it relates to periodic re views, is, as such, inconsistent with 
Articles 2.4 and 9.3 of the Anti-Dumping Agreement  and Article VI:2 of the GATT 1994.  We further 
recall that the Appellate Body has previously found zeroing, as applied in periodic reviews, to be inconsistent with Article 9.3 of the Anti-Dumping Agreement  and Article VI:2 of the GATT 1994, on 
the grounds that application of that methodology  "result[s] in amounts of assessed anti-dumping 
duties that exceed[ed] the foreign producers' or exporters' margins of dumping".
392  
175. In the periodic reviews at issue in this case,  the USDOC assessed the anti-dumping duties 
according to a W-T comparison methodology in whic h, for each individual importer, comparisons 
were carried out between the export price of each individual transaction made by the importer and a 
contemporaneous average normal value.  The resu lts of these multiple comparisons were then 
aggregated to calculate the anti-dumping duties owed  by each individual importer.  If, for a given 
individual transaction, the export price exceeded the contemporaneous average normal value, the 
USDOC, at the aggregation stage, disregarded the r esult of this individual comparison.  Because the 
results of such comparisons were systematica lly disregarded, the amount of anti-dumping duties 
collected in the periodic reviews at issue ex ceeded the exporters' proper margins of dumping. 
176. For these reasons, we reverse  the Panel's finding, in paragraphs 7.227 and 7.259(c) of the 
Panel Report, that zeroing, as applied by the United St ates in the 11 periodic review determinations at 
issue in this appeal, is not inconsistent with Articles 2.1, 2.4, 9.1, and 9.3 of the Anti-Dumping 
Agreement  and Articles VI:1 and VI:2 of the GATT 1994, and find , instead, that the United States 
acted inconsistently with its obliga tions under Articles 2.4 and 9.3 of the Anti-Dumping Agreement  
and Article VI:2 of the GATT 1994.   
                                                      
388Panel Report, para. 7.226. 
389Japan's appellant's submission, para. 178.   
390See Ibid. and footnote 213 thereto.  Japan also states that it is not pursuing its claim under 
Article 18.4 of the Anti-Dumping Agreement .  
391See, supra , paras. 166 and 169.  WT/DS322/AB/R 
Page 68  
 
177. In relation to Articles 2.1 and 9.1 of the Anti-Dumping Agreement  and Article VI:1 of the 
GATT 1994, we note that Japan requests us not only to  reverse the Panel's findings, but also to find 
that the United States acted inconsistently with these provisions.  At the oral hearing, Japan confirmed 
that it wished us to complete the Panel's legal an alysis to this effect.  However, having found that 
zeroing, as applied by the USDOC in the 11 periodic revi ew determinations at issue in this dispute, is 
inconsistent with Articles 2.4 and 9.3 of the Anti-Dumping Agreement and Article VI:2 of the 
GATT 1994, we do not consider it necessary to make  additional findings on Japan's claims under 
Articles 2.1 and 9.1 of the Anti-Dumping Agreement  and Article VI:1 of the GATT 1994 for the 
reasons set out earlier.
393 
VII. Margins of Dumping in Sunset Reviews 
178. Before the Panel, Japan argued that tw o specific sunset review determinations394 were 
inconsistent with Articles 11.1 and 11.3 of the Anti-Dumping Agreement , because they were based on 
margins of dumping that were calculated inconsiste ntly with Articles 2.1, 2.4, and 2.4.2 of the 
Anti-Dumping Agreement .  
179. The Panel agreed with Japan that the USDOC "relied on" margins of dumping established in 
prior proceedings when making its likelihood-of-dumping determination.395  Noting, however, that 
"the margins of dumping relied upon by [the] US DOC were margins calculated during periodic 
reviews"396, and recalling its previous finding that the Anti-Dumping Agreement  does not prohibit 
zeroing in the context of such reviews, the Pane l found that the USDOC did not act inconsistently 
with Articles 2 and 11 of the Anti-Dumping Agreement .397  
180. Japan challenges this finding on appeal.  Acco rding to Japan, the Panel's only reason for 
rejecting Japan's claim was the Panel's "incorrect finding that zeroing is permissible in periodic 
reviews under Article 9.3."398  Japan, therefore, requests the Appe llate Body to reverse the Panel's 
                                                                                                                                                                     
392Appellate Body Report, US – Zeroing (EC) , para. 133. 
393See, supra , para. 140. 
394"Final Results of Expedited Sunset Reviews:  Antifriction Bearings From Japan" (USDOC sunset 
review in case number A-588-804), United States Federal Register , Vol. 64, No. 213 (4 November 1999), 
p. 60275 (Exhibit JPN-22 submitted by Japan to the Panel) ;  "Final Results of Full Sunset Reviews:  Corrosion-
Resistant Carbon Steel Flat Products from Japan" (USDOC sunset review in case number A-588-826), United 
States Federal Register , Vol. 65, No. 149 (2 August 2000), p. 47380 (Exhibit JPN-23 submitted by Japan to the 
Panel). 
395See Panel Report, para. 7.255.  In our discussion, we refer to the USDOC's determination of 
continuation or recurrence of dumping as the "likelihood-of-dumping determination". 
396Ibid., para. 7.256.   
397See Ibid., para. 7.257.  
398Japan's appellant's submission, para. 196.  WT/DS322/AB/R 
 Page 69 
 
 
finding under Articles 2 and 11 of the Anti-Dumping Agreement  and to find, instead, that, in relying 
on these previously determined margins, the United States acted inconsistently with Article 11.3 of 
the Anti-Dumping Agreement .  Japan also claims that, "[b]ecause the violations of Article 11.3 stem 
from the reliance upon margins of dumping calculated using the zeroing procedures" that are inconsistent with Articles 2.1 and 2.4 of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of 
the GATT 1994, the underlying sunset reviews ar e also inconsistent with these provisions.
399  
181. In contrast, the United States argues that the Panel did not err in its conclusion that zeroing is 
permissible in determining margins of dumping in pe riodic reviews.  The United States, therefore,  
submits that the Panel's conclusions with respect to  Japan's "as applied" claims in the two sunset 
reviews at issue in this dispute should be affirmed.400 
182. The Appellate Body has previously indicated that the ordinary meanings of the terms 
"determine" and "review" in the text of Article 11.3 of the Anti-Dumping Agreement  requires a 
"reasoned conclusion on the basis of information gath ered as part of a process of reconsideration and 
examination" by an investigating authority.401  Moreover, a sunset re view determination under 
Article 11.3 must be on the basis of a "rigorous examination"402 leading to "reasoned and adequate 
conclusions"403, and be supported by "positive eviden ce" and a "sufficient factual basis".404   
183. In US – Corrosion-Resistant Steel Sunset Review , the Appellate Body explained that, "should 
investigating authorities choose to rely upon dumping margins in making their likelihood determination, the calculation of these margins mu st conform to the disciplines of Article 2.4."
405  The 
Appellate Body added that, "[i]f these margins were  legally flawed because they were calculated in a 
manner inconsistent with Article 2.4,  this could give rise to an incons istency not only with Article 2.4, 
                                                      
399Ibid., para. 197.  We note that, on appeal, Japan does not pursue its claims regarding Articles 1, 
2.4.2, 9.1-9.3, 11.1, and 18.4 of the Anti-Dumping Agreement  and Article XVI:4 of the WTO Agreement . (See 
Ibid., para. 197 and footnote 233 thereto)  We further note that Japan does not appeal the Panel's conclusion 
regarding the USITC's likelihood-of-injury determination.  Nor does Japan appeal the Panel's finding that Japan 
had failed to make a prima facie  case that, by maintaining zeroing pr ocedures in the context of changed 
circumstances and sunset reviews, the USDOC acted  inconsistently with Articles 2 and 11 of the Anti-Dumping 
Agreement .   
400See United States' appellee's submission, para. 75. 
401Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , para. 283 (quoting 
Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 111). 
402Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 113.  
403Ibid., para. 114 (quoting Panel Report in US – Corrosion-Resistant  Steel Sunset Review , para. 7.271).  
404Ibid.  
405Ibid., para. 127.  See also Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , 
para. 180. WT/DS322/AB/R 
Page 70  
 
but also with Article 11.3 of the Anti-Dumping Agreement ."
406  In such circumstances, "the 
likelihood[-of-dumping] determina tion could not constitute a proper foundation for the continuation 
of anti-dumping duties under Article 11.3."407 
184. In the present case, the Panel found, as a matter of fact, that, in its likelihood-of-dumping 
determination, the USDOC relied "on margins of dumping established in prior proceedings".408  The 
Panel further found that these margins were calculated  during periodic reviews "on the basis of simple 
zeroing".409  
185. We have previ ously concluded410 that zeroing, as it relates to periodic reviews, is inconsistent, 
as such, with Article 2.4 and Article 9.3.  As th e likelihood-of-dumping determ inations in the sunset 
reviews at issue in this appeal relied on margin s of dumping calculated inconsistently with the 
Anti-Dumping Agreement ,  they are inconsistent with Article 11.3 of that Agreement.   
186. For these reasons, we reverse  the Panel's finding, in paragr aphs 7.257 and 7.259(e) of the 
Panel Report, that the United States acted c onsistently with Articles 2 and 11 of the Anti-Dumping 
Agreement  by relying on margins of dumping calculated in previous proceedings in the sunset reviews 
at issue in this case, and find , instead, that the United States acted inconsistently with Article 11.3 of 
the Anti-Dumping Agreement . 
187. In these circumstances, we do not consider it necessary to rule on whether the same sunset  
review determinations are also inconsis tent with Articles 2.1 and 2.4 of the Anti-Dumping Agreement  
and Articles VI:1 and VI:2 of the GATT 1994.  Furthermore, Japan has not explained why additional 
findings under these provisions would be necessary to resolve the dispute.411 
VIII.  Article 17.6(ii) of the Anti-Dumping Agreement  
188. The Panel and the United States have referred to Article 17.6(ii) of the Anti-Dumping 
Agreement412, which provides: 
                                                      
406Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 127.  See also 
Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , para. 180;  and Appellate Body 
Report, US – Anti-Dumping Measures on Oil Country Tubular Goods , para. 181. 
407Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 130. 
408Panel Report, para. 7.255. 
409Ibid., para. 7.256. 
410See, supra , paras. 166 and 169.  
411Appellate Body Report, Australia – Salmon , para. 223.  See also Japan's responses to questions at the 
oral hearing. 
412See Panel Report, para. 7.142.  See also United States' appellee's submission, paras. 30 and 34.  WT/DS322/AB/R 
 Page 71 
 
 
(ii) the panel shall interpret the relevant provisions of the 
Agreement in accordance with cust omary 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 shall find the authorities' measure to be in 
conformity with the Agreement if it rests upon one of those 
permissible interpretations. 
189. In our analysis, we have been mindful of the st andard of review provided in Article 17.6(ii).  
However, we consider that there is no room for r ecourse to the second sentence of Article 17.6(ii) in 
this appeal.  This is because, in our view, Ar ticles 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 interpretation of public intern ational law, as required by the first sentence of 
Article 17.6(ii), do not admit of a nother interpretation of these provisions as far as the issue of zeroing 
before us is concerned. 
IX. Findings and Conclusions 
190. For the reasons set forth in this Report, the Appellate Body: 
(a) upholds  the Panel's finding, in paragraph 7.58 of the Panel Report, that the United 
States' "zeroing procedures" constitute a m easure which can be challenged as such 
and, therefore, dismisses  the United States' claim that the Panel acted inconsistently 
with Article 11 of the DSU by concluding th at the zeroing procedures, as they relate 
to original investigations based on tran saction-to-transaction and weighted average 
normal value-to-prices of individual expor t transactions comparisons, constitute a 
measure that can be challenged, as such, in WTO dispute settlement; 
(b) reverses  the Panel's finding, in paragraphs 7. 143, 7.161, and 7.259(a) of the Panel 
Report, that the United States does not act inconsistently with Articles 2.1, 2.4, 
and 2.4.2 of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the 
GATT 1994, and finds , instead, that the United Stat es acts inconsistently with 
Articles 2.4 and 2.4.2 of the Anti-Dumping Agreement  by maintaining zeroing 
procedures when calculating margins of dumping on the basis of transaction-to-
transaction comparisons in original investigations; 
(c) reverses  the Panel's findings, in paragraphs 7.216, 7.219, 7.222, and 7.259(b) of the 
Panel Report, that the United States does not act  inconsistently with Articles 2.1, 2.4, 
and 9.1-9.3 of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the 
GATT 1994, and finds , instead, that the United Stat es acts inconsistently with WT/DS322/AB/R 
Page 72  
 
Articles 2.4 and 9.3 of the Anti-Dumping Agreement  and Article VI:2 of the 
GATT 1994 by maintaining zeroing procedures in periodic reviews; 
(d) reverses
 the Panel's findings, in paragraphs 7. 216, 7.219, 7.222 and 7.259(b) of the 
Panel report, that the United States does not act  inconsistently with Articles 2.1, 2.4, 
and 9.5 of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the 
GATT 1994, and finds , instead, that the United Stat es acts inconsistently with 
Articles 2.4 and 9.5 of the Anti-Dumping Agreement  by maintaining zeroing 
procedures in new shipper reviews; 
(e) reverses  the Panel's findings, in paragraphs 7. 227 and 7.259(c) of the Panel Report, 
that the United States did not act inconsistently with Articles 2.1, 2.4, and 9.1-9.3 of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the GATT 1994, and 
finds
, instead, that the United States acted inc onsistently with Articles 2.4 and 9.3 of 
the Anti-Dumping Agreement  and Article VI:2 of the GATT 1994 by applying 
zeroing procedures in the 11 periodic reviews at issue in this appeal; 
(f) reverses  the Panel's finding, in paragraphs 7. 257 and 7.259(e) of the Panel Report, 
that the Unites States did not act inconsistently with Articles 2 and 11 of the 
Anti-Dumping Agreement  in the sunset reviews at issu e in this appeal, when it relied 
on margins of dumping calculated in previous proceedings through the use of zeroing, 
and finds , instead, that the United States acted in consistently with Article 11.3 of the 
Anti-Dumping Agreement . 
191. The Appellate Body recommends  that the DSB request the United States to bring its 
measures, found in this Report, and in the Panel Repor t as modified by this Report, to be inconsistent 
with the Anti-Dumping Agreement and with the GATT 1994, into conformity with its obligations 
under those Agreements.  WT/DS322/AB/R 
 Page 73 
 
 
Signed in the original in Geneva this 14th day of December 2006 by:  
 
    
_________________________ 
Giorgio Sacerdoti  
Presiding Member 
 
 
  
 _________________________ _________________________ 
 Georges Abi-Saab A.V. Ganesan 
 Member Member 
 
 WT/DS322/AB/R 
Page 74  
 
ANNEX I
 
 WORLD TRADE  
ORGANIZATION  WT/DS322/12 
11 October 2006 
 
 (06-4940) 
 Original:   English 
 
 
UNITED STATES – MEASURES RELATING TO ZEROING  
AND SUNSET REVIEWS 
 
Notification of an Appeal by Japan  
under Article 16.4 and Article 17 of the Understanding on Rules  
and Procedures Governing the Settlement of Disputes (DSU),  
and under Rule 20(1) of the  Working Procedures for Appellate Review  
  
 The following notification, dated 11 October 2006, from the Delegation of Japan, is being 
circulated to Members.  
_______________ 
 
 
 Pursuant to Articles 16.4 and 17 of the Understanding on Rules and Procedures Governing 
the Settlement of Disputes  ("DSU") and Rule 20 of the Working Procedures for Appellate Review , 
Japan hereby notifies its decision to appeal to the A ppellate Body certain issues of law covered in the 
Panel Report on United States – Measures Relating to Zeroing and Sunset Reviews  (WT/DS322/R) 
("Panel Report"), and certain legal interpretations developed by the Pa nel in this dispute.  Japan seeks 
review by the Appellate Body of the Panel's findings and conclusions that:  
1. By maintaining the zeroing procedures for use in original investigations under a transaction-
to-transaction comparison method , the United States acts consistently with Articles 2.1, 2.4 
and 2.4.2 of the Agreement on Implementation of Articl e VI of the General Agreement on 
Tariffs and Trade 1994  ("Anti-Dumping Agreement "), and Articles VI:1 and VI:2 of the 
General Agreement on Tariffs and Trade 1994 ("GATT 1994").413  This conclusion is based on 
an erroneous interpretation and application of these provisions.  In particular, the Panel erred 
in law in finding that: 
(i) Articles 2.1 and 2.4.2 and Articles VI :1 and VI:2 do not require that 
"dumping" and "margins of dumping" be  determined for the "product" under 
investigation as a whole and, instead, permit a determination of dumping for 
individual export transactions;414 
                                                      
413See Panel Report, paras. 7.143, 7.161 and 7.259(a). 
414See, for example , Panel Report, paras. 7.92 to 7.102, 7.104 to 7.112, 7.118 to 7.120, 7.139, and 7.141 
to 7.143.   WT/DS322/AB/R 
 Page 75 
 
 
(ii) Article 2.4.2 permits the use of the zeroing procedures under the transaction-
to-transaction comparison method set out in the first sentence of that provision;
415 and, 
(iii) Article 2.4 is subject to the allegedly "more specific" provisions of Articles 
2.4.2 and 9, and the zeroing procedures entail a "fair comparison" of export 
price and normal value.416 
2. By maintaining the zeroing procedures for use in periodic reviews , the United States acts 
consistently with Articles 2.1, 2.4, 9.1, 9.2 and 9.3 of the Anti-Dumping Agreement , and 
Articles VI:1 and VI:2 of the GATT 1994.417  This conclusion is based on an erroneous 
interpretation and application of these provisions.  In particular, the Panel erred in law in 
finding that: 
(iv) Articles 2.1, 9.1, 9.2 and 9.3, and Articles VI:1 and VI:2, do not require, for 
purposes of periodic reviews, that "dum ping" and "margins of dumping" be 
determined for the "product" under investigation as a whole and, instead, permit a determination of dumping for individual export transactions;
418 
(v) Articles 9.1, 9.2 and 9.3, and Articles VI:1 and VI:2, permit, as a 
consequence, the assessment of the maximum amount of anti-dumping duties payable on the basis of a transaction-specific margin of dumping, instead of a margin of dumping for the "product" as a whole, for the foreign exporter or producer;
419 and,  
(vi) Article 2.4 is subject to the "more spec ific" provisions of Articles 2.4.2 and 9, 
and the zeroing procedures involve a "fair comparison" of export price and 
normal value under this provision.420 
3. By applying the zeroing procedures in eleven periodic reviews  identified in Exhibits JPN-11 to 
JPN-21, the United States acted consistently with  Articles 2.1, 2.4, 9.1, 9.2 and 9.3 of the  Anti-
Dumping Agreement , and Articles VI:1 and VI:2 of the GATT 1994.421 This conclusion is 
based on an erroneous interpretation and app lication of these provisions, as described in 
paragraph 2 above.422 
4. By maintaining the zeroing proce dures for use in new shipper reviews , the United States acts 
consistently with Articles 2.1, 2.4 and 9.5 of the Anti-Dumping Agreement , and Articles VI:1 
and VI:2 of the GATT 1994.423  This conclusion is based on an erroneous interpretation and 
application of these provisions.  In particul ar, the Panel erred in law in finding that: 
                                                      
415See, for example , Panel Report, paras. 7.118 to 7.120, 7.127 to 7.143. 
416See, for example , Panel Report, paras. 7.157 to 7.161.   
417See Panel Report, paras. 7.216, 7.219, 7.222, and 7.259(b). 
418See, for example , Panel Report, paras. 7.194 to 7.209,  7.216, 7.221 and 7.222.  
419See, for example , Panel Report, paras. 7.194 to 7.209, 7.216, 7.221 and 7.222.  
420See, for example , Panel Report, paras. 7.218 and 7.219. See also  Panel Report, paras. 7.157 to 7.160, 
and 7.196 to 7.209.   
421See Panel Report, paras. 7.227 and 7.259(c). 
422See Panel Report, paras. 7.226 and 7.227. 
423See Panel Report, paras. 7.216, 7.219, 7.222, and 7.259(b). WT/DS322/AB/R 
Page 76  
 
(vii) Articles 2.1 and 9.5, and Articles VI:1 and VI:2, do not require that 
"dumping" and "margin of dumping" be determined for the "product" under investigation as a whole and, instead, permit a determination of dumping for 
individual export transactions;
424 and, 
(viii) Article 2.4 is subject to the "more spec ific" provisions of Articles 2.4.2 and 9, 
and the zeroing procedures involve a "fair comparison" of export price and 
normal value.425 
5. By relying, in the two sunset reviews  identified in Exhibits JPN-22 and JPN-23, on margins 
of dumping calculated using the zeroing procedur es in previous periodic reviews, the United 
States acted consistently with Articles 2.1, 2.4 and 11.3 of the Anti-Dumping Agreement .426 
This conclusion is in error because it is based  on the Panel's erroneous conclusion, described 
in paragraph 2 above, that the zeroing pr ocedures are permitted in periodic reviews.427 
 In sum, Japan considers that the Panel erred in law in the interpreta tion and application of 
Articles 2.1, 2.4, 2.4.2, 9.1, 9.2, 9.3, 9.5 and 11.3 of the Anti-Dumping Agreement , and Articles VI:1 
and VI:2 of the GATT 1994.  Japan requests that, u pon reversal of the Panel's erroneous findings and 
conclusions identified above, the A ppellate Body resolve this dispute promptly by finding that the 
United States violates these provisions by maintaining and applying the zeroing procedures.   
_______________ 
 
 
                                                     
 
424See, for example , Panel Report, paras. 7.194 to 7.209, 7.216, 7.221 and 7.222.  
425See, for example , Panel Report, paras. 7.218 and 7.219. See also  Panel Report, paras.7.157 to 7.160 
and 7.196 to 7.209. 
426See Panel Report, paras. 7.257 and 7.259(e). 
427See also  Panel Report, paras. 7.256 and 7.257.  WT/DS322/AB/R 
 Page 77 
 
 
ANNEX II  
 
 WORLD TRADE  
ORGANIZATION  WT/DS322/13 
23 October 2006  
 (06-5130) 
 Original:   English 
  
UNITED STATES – MEASURES RELATING TO ZEROING 
AND SUNSET REVIEWS 
 
Notification of an Other Appeal by the United States
 
under Article 16.4 and Article 17 of the Understanding on Rules  
and Procedures Governing the Settlement of Disputes (DSU),  
and under Rule 23(1) of the  Working Procedures for Appellate Review  
   The following notification, dated 23 October 2006, from the Delegation of the United States, 
is being circulated to Members.  
_______________ 
 
 
Pursuant to Rule 23 of the Working Procedures for Appellate Review , the United States 
hereby notifies its decision to appeal to the Appellate  Body certain issues of law covered in the Report 
of the Panel on  United States – Measures Relating to Zeroing and Sunset Reviews (WT/DS322/R) 
("Panel Report") and certain lega l interpretations developed by the Panel in this dispute. 
  The United States seeks review by the Appellate  Body of the Panel's finding and related legal 
interpretations that the United States maintains a measure referred to as "zeroing procedures" in 
transaction-to-transaction and average-to-transac tion comparisons in the context of original 
investigations.
428  This finding is in error and is based on an erroneous application of the law and 
related legal interpretations.  In  addition, the Panel failed to ma ke an objective assessment of the 
matter before it in connection with the issue of th e existence of "zeroing procedures" that may be 
challenged as such in transaction-to-transaction and average-to-transaction comparisons in the context 
of original investigations, including a failure to ma ke an objective assessment of the facts of the case, 
contrary to Article 11 of the Understanding on Rules and Procedures Governing the Settlement of 
Disputes ("DSU").  The Panel's finding and related lega l interpretations were also contrary to 
Articles 3.3, 4.2, 6.2, and 7.1 of the DSU.  
_______________ 
                                                     
 
428Panel Report, paras. 7.34 through 7.59, 7.90, 7.143, 7.161, 7.166, 7.170, 7.175, and 7.259(a). WT/DS322/AB/R 
Page 78  
 
ANNEX III
 
 
 WORLD TRADE  
ORGANIZATION  WT/DS322/8 
7 February 2005  
 (05-0498) 
 Original:   English 
  
UNITED STATES – MEASURES RELATING TO ZEROING 
AND SUNSET REVIEWS 
 
Request for the Establishment of a Panel by Japan
 
  
 The following communication, dated 4 February  2005, from the delegation of Japan to the 
Chairperson of the Dispute Settlement Body, is ci rculated pursuant to Article 6.2 of the DSU. 
 
_______________ 
 
 
 Upon instructions from my authorities, I hereby wish to convey the request of the 
Government of Japan for the establishment of a panel pursuant to Article XXIII of the General 
Agreement on Tariffs and Trade 1994 (the "GATT 1994"), Articles 4 and 6 of the Understanding on 
Rules and Procedures Governing the Settlement of Disputes (the "DSU"), and Article 17 of the 
Agreement on Implementation of Article VI of GATT 1994 (the "Anti-Dumping Agreement") 
regarding certain measures imposed by the United States.  
 
A. Consultations  
 
 On 24 November 2004, the Government of Japan requested consultations with the 
Government of the United States under Article 4 of the DSU, Article XXII:1 of the GATT 1994, and 
Article 17.2 of the Anti-Dumping Agreement.
429  Consultations were held on 20 December 2004, 
which allowed a better understanding of  the positions of the parties, but failed to achieve a mutually 
agreed solution of the dispute.  
B. Measures and Claims 
 
 Pursuant to Article 6 of the DSU and Article 17 of the Anti-Dumping Agreement, Japan considers that the specific measures identified in this  request are inconsistent with the United States' 
obligations under the Marrakesh Agreement Esta blishing the World Trade Organization (the 
"Marrakesh Agreement"), including the agreements a nnexed thereto. By infringing those obligations, 
the United States' measures nullify or  impair benefits accruing to Japan directly or indirectly under 
such agreements, as set forth in Article 3.8 of the DSU.  Specifically, the Un ited States has acted in a 
manner inconsistent with the provisions of th e Anti-Dumping Agreement, the GATT 1994, and the 
Marrakesh Agreement that are identified below.  
                                                     
 
429WT/DS322/1 (24 November 2004).  WT/DS322/AB/R 
 Page 79 
 
 
1. The Government of Japan considers that the United States measures including laws, regulations and administrative procedures, as such, are inconsistent with certain provisions of the 
Anti-Dumping Agreement, the GATT 1994, and the Marra kesh Agreement, for the following reasons.  
 
(a) In original investigations, periodic reviews,  new shipper reviews, sunset reviews and 
changed circumstances reviews where the redetermination of margins of dumping 
occurs, the United States Department of Commerce ("USDOC") disregards intermediate negative dumping margins cal culated by comparing normal value and 
export price, including on a weighted-avera ge-to-weighted-average basis, weighted-
average-to-transaction basis, and transac tion-to-transaction basis, through the 
USDOC's AD Margin Calculation computer program and other related procedures, in 
the process of establishing the overall dumping margin for the product as a whole (hereinafter collectively referred to as "Zeroing"). As a result, the USDOC artificially inflates the dumping margins.  Zeroing is inconsistent with:  
(i) Articles 2.1, 2.4 and 2.4.2 of the Anti-Dumping Agreement because the 
comparison of normal value and export price is not in conformity with those 
provisions;  
(ii) Articles 9.1, 9.2 and 9.3 of the Anti-Dumping Agreement through the 
imposition and collection of anti-dumping duties in excess of the margin or amount of dumping as properly determined pursuant to Article 2 of the Anti-Dumping Agreement;  
(iii) as to original investigations, Article  5.8 of the Anti-Dumping Agreement 
insofar as de minimis  dumping margins are determined to be greater than 
de minimis as a result of the impermissible use of the Zeroing procedure, and 
the Zeroing procedure results in the failure to immediately terminate an 
investigation;  
(iv) as to original investigations, Article  3.3 of the Anti-Dumping Agreement 
insofar as the Zeroing procedure result s in the cumulative assessment of the 
effect of imports for which dumping ma rgins are erroneously determined to 
be greater than de minimis ;  
(v) as to new shipper reviews, changed circumstances reviews and sunset 
reviews, Articles 9.5, 11.1, 11.2 and 11.3 of the Anti-Dumping Agreement to 
the extent that dumping margins calculated by using the impermissible 
Zeroing procedure results in erroneous determ ination; and 
(vi) Article 1 of the Anti-Dumping Agreement, and Articles VI:1 and VI:2 of the 
GATT 1994 to the extent that the Zeroing procedure and the resulting imposition and collection of anti-dumping duties are inconsistent with the 
Anti-Dumping Agreement.  
 
(b) Injury investigations by the United Stat es International Trade Commission ("USITC") 
are inconsistent with:  
(i) Article 3, including Articles 3.1, 3.2, 3.4 and 3.5, of the Anti-Dumping 
Agreement insofar as the injury and causation determinations are based on 
the examination of the inflated dumping margin and volume of "dumped 
imports" that include imports from companies which would have been 
excluded as non-dumped imports (due to the calculation of de minimis  or WT/DS322/AB/R 
Page 80  
 
zero margins) had the margins been ca lculated without using the Zeroing 
procedure; 
(ii) Article 3.3 of the Anti-Dumping Agreem ent insofar as the Zeroing procedure 
allows the cumulative assessment of th e effect of imports for which dumping 
margins are erroneously determined to be greater than de minimis ;  
(iii) Article 5.8 of the Anti-Dumping Agreement insofar as the volume of dumped 
imports or injury is determined not to be negligible as a result of the 
impermissible use of the Zeroing procedure, and the USITC consequently fails to immediately terminate the investigation; and  
(iv) Articles 1 of the Anti-Dumping Agreement, and Articles VI:1 and VI:2 of the 
GATT 1994 to the extent that the injury investigation and the resulting 
imposition and collection of anti-dumping duties are inconsistent with the 
Anti-Dumping Agreement.   
(c) In sunset reviews, the USDOC and the US ITC base their determinations that the 
expiry of an anti-dumping duty would be likel y to lead to continuation or recurrence 
of dumping and injury on margins previously  calculated using the Zeroing procedure. 
Thus, the sunset reviews by the US authorities are inconsistent with:  
(i) Articles 11.1 and 11.3 of the Anti-Dumping Agreement, insofar as the 
likelihood determinations in the sunset reviews are based on dumping margins determined using the Zeroing pr ocedure that is inconsistent with 
Article 2 including Articles 2.4 and 2.4.2 of the Anti-Dumping Agreement; 
and   
(ii) Article 1 of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the 
GATT 1994 to the extent that the sunset reviews and the resulting continued imposition and collection of anti-dumping duties are inconsistent with the 
Anti-Dumping Agreement. 
(d) Changed circumstances reviews are inconsistent with:  
(i) Articles 11.1 and 11.2 of the Anti-Dumping Agreement insofar as the 
determinations in the changed circumstances reviews are based on dumping margins determined using the Zeroing pr ocedure that is  inconsistent with 
Article 2, including Articles 2.4 and 2.4.2 of the Anti-Dumping Agreement; 
and 
(ii) Article 1 of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the 
GATT 1994 to the extent that the changed circumstances reviews and the resulting continued imposition and collection of anti-dumping duties are inconsistent with the Anti-Dumping Agreement. 
(e) By adopting and maintaining the WTO-inc onsistent measures identified above, the 
United States has violated its obligations under Article 18.4 of the Anti-Dumping 
Agreement and Article XVI:4 of the Marrakesh Agreement, because the United States has failed to take all necessary steps,  of a general or particular character, to 
ensure the conformity of its laws, regulations and administrative procedures with the provisions of GATT 1994 and the Anti-Dumping Agreement.  WT/DS322/AB/R 
 Page 81 
 
 
2. The Government of Japan also considers that the United States laws, regulations and 
administrative procedures described above were applied in the specific original investigation, periodic 
reviews and sunset reviews identified in the Annex to this panel request.  As a result of the application 
of the Zeroing procedure, the anti-dumping orders and determinations adopted in the proceedings 
identified in the Annex are inconsistent with  the following provisions of the Anti-Dumping 
Agreement, the GATT 1994, and the Marrakesh Agreem ent for the same reasons as set out in point 
B.1.(a)–(e) above:  
(a) in the original investigation: 
(i) Articles 1, 2.1, 2.4, 2.4.2, 3.1, 3.2, 3.3, 3.4, 3.5, 5.8, 9.1, 9.2 and 9.3 of the 
Anti-Dumping Agreement, and Articles VI:1 and VI:2 of the GATT 1994; 
and 
(ii) Article 18.4 of the Anti-Dumping Ag reement and Article XVI:4 of the 
Marrakesh Agreement ; and 
 
(b) in the periodic and sunset reviews: 
(i) Articles 1, 2.1, 2.4, 2.4.2, 9.1, 9.2, 9.3, 11.1 and 11.3 of the Anti-Dumping 
Agreement, and Articles VI:1 and VI:2 of the GATT 1994; and 
(ii) Article 18.4 of the Anti-Dumping Ag reement and Article XVI:4 of the 
Marrakesh Agreement. 
3. The foregoing measures include, and/or are a dopted or applied pursuant to, the following 
United States laws, regulations, and administrative procedures:   
  (1) the Tariff Act of 1930, as amended (in particular, by the Uruguay Round Agreements 
Act of 1994 (the "URAA")), in particular, sec tions 731, 751, 752, 771(7), 771(35)(A), 
771(35)(B) and 777A(d); 
 
(2) the Statement of Administrative Action that accompanied the URAA, H.R. Doc. No. 
103-316, vol. I; 
 (3) the implementing regulations of the USDOC, 19 C.F.R. section 351; and  
(4) the USDOC Import Administration's Antidumping Manual (1997 edition), including 
the AD Margin Calculation computer program(s) to which it refers. 
  The foregoing text identifies the specific meas ures at issue and describes in brief the legal 
bases for the Government of Japan's claims, and is without prejudice to any arguments that the 
Government of Japan may develop and present to th e Panel regarding the WT O-inconsistency of the 
measures at issue.  
* * * * * 
  Accordingly, the Government of Japan requ ests the establishment of a panel pursuant to 
Article XXIII of the GATT 1994, Articles 4 and 6 of  the DSU, and Article 17 of the Anti-Dumping 
Agreement.  The terms of reference shall be the te rms set out in Article 7 of the DSU and Article 17 
of the Anti-Dumping Agreement.  The Government of  Japan requests that the establishment of a panel 
in this matter be placed on the agenda of the meeting of the Dispute Settlement Body on 17 February 2005. WT/DS322/AB/R 
Page 82  
 
 
United States – Anti-Dumping Duties on Imports of Certain Cut-To-Length 
Carbon-Quality Steel Plate Products from Japan  
 
Specific Case No. 1
 
 
The measure  
  This case concerns the imposition of anti -dumping duties on Certain Cut-To-Length Carbon-
Quality Steel Plate Products ("CTL Plate") from Japan (USDOC c ase number A-588-847, 
64 FR 73215, 13 December 1999).  The rate of the ad valorem  anti-dumping duty was 10.78% for 
Kawasaki Steel Corporation and all others.  Use of Zeroing
 
 
In the United States Department of Commerce's ("USDOC's") original investigation of CTL 
Plate from Japan, the USDOC utilized the Zeroi ng procedure by which the USDOC disregards 
negative dumping margins calculated for averaging gr oups in the process of establishing the dumping 
margin for the product as a whole.     This procedure is functionally identical to the pr ocedure that was held to be inconsistent with 
the WTO Anti-Dumping Agreement in European Communities – Anti-Dumping Duties on Imports of 
Cotton-Type Bed Linen from India  (Panel Report, WT/DS141/R, and Appellate Body Report, 
WT/DS141/AB/R, adopted 12 March 2001), and also in United States – Final Dumping 
Determination on Softwood Lumber from Canada  (Panel Report, WT/DS264/R, and Appellate Body 
Report, WT/DS264/AB/R, adopted 31 August 2004). 
 
 In addition, in the United States Internati onal Trade Commission's ("USITC's") affirmative 
determination in Cut-to-Length Carbon Steel Plat e from Japan, Investigation No. 731-TA-820, the 
USITC, pursuant to Section 771(7) of the Act, relied on a "magnitude of dumping" and "volume of 
dumped imports," that were inflated by the use of the Zeroing procedure.   
Dumping margin without Zeroing
 
  By using the above procedure, the USDOC calculated a dumping margin of 10.58% for 
Kawasaki Steel Corporation, while without the Zero ing procedure (i.e. with the negative unit margins 
included), the dumping margin would have been [lower]. 
 
United States – Anti-Dumping Periodic Review on Imports of Tapered Roller Bearings, 
Four Inches or Less in Outside Diameter, and Components Thereof, From Japan 
 
Specific Case No. 2
 
 
The measure  
  This case concerns the imposition of anti-dum ping duties on Tapered Roller Bearings, Four 
Inches or Less in Outside Diameter, and Compone nts Thereof, From Japan (USDOC case number 
A-588-054, 66 Fed. Reg. 15078, 15 March 2001).  Th e period of review is 1 October 1998 through 30 
September 1999, and the rate of the ad valorem  anti-dumping duty was 14.86% for Koyo Seiko Co., 
Ltd.   WT/DS322/AB/R 
 Page 83 
 
 
Use of Zeroing  
  In this periodic review of Tapered Roller B earings, Four Inches or Less in Outside Diameter, 
and Components Thereof, From Japan, the USDOC utilized the Zeroing procedure by which the 
USDOC disregards negative dumping margins calculated for the export transactions under review in 
the process of establishing the dumping margin for the product as a whole.   
 Dumping margin without Zeroing
 
  By using this procedure, the USDOC calculated a dumping margin of 14.86% for Koyo 
Seiko Co., Ltd., while without the Zeroing procedur e (i.e. with the negative unit margins included), 
the dumping margin would have been [negativ e], and no anti-dumping duty would have been 
collected.  
United States – Anti-Dumping Periodic Review on Imports of Tapered Roller Bearings 
and Parts Thereof, Finished and Unfinished, From Japan 
 
Specific Case No. 3
 
 The measure
 
 
 This case concerns the imposition of anti-dum ping duties on Tapered Roller Bearings and 
Parts Thereof, Finished and Unfinished, From Japan (USDOC case number A-588-604, 65 Fed. Reg. 11767, 6 March 2000).  The period of  review is 1 October 1997 through 30 September 
1998, and the rate of the ad valorem  anti-dumping duty was 17.58% for NTN Corporation. 
 
Use of Zeroing
 
  In this periodic review of Tapered Roller Bearings and Parts Thereof, Finished and 
Unfinished, From Japan, the USDOC utilized the sa me zZeroing procedure as that used in Specific 
Case No. 2.  
Dumping margin without Zeroing
 
  By using this procedure, the USDOC calculated a dumping margin of 17.58% for NTN Corporation, while without the Zeroing procedure (i.e. with the negative unit margins included), the 
dumping margin would have been [negative], and no anti-dumping duty would have been collected. 
 
United States – Anti-Dumping Periodic Review on Imports of Tapered Roller Bearings 
and Parts Thereof, Finished and Unfinished, From Japan 
 
Specific Case No. 4
 
 
The measure  
  This case concerns the imposition of anti-dum ping duties on Tapered Roller Bearings and 
Parts Thereof, Finished and Unfinished, From Japan (USDOC case number A-588-604, 66 Fed. Reg. 15078, 15 March 2001).  The pe riod of review is 1 October 1998 through 
30 September 1999, and the rate of the ad valorem  anti-dumping duty was 17.94% for Koyo Seiko 
Co., Ltd.  WT/DS322/AB/R 
Page 84  
 
Use of Zeroing
 
  In this periodic review of Tapered Roller Bearings and Parts Thereof, Finished and 
Unfinished, From Japan, the USDOC utilized the same Zeroing procedure as that used in Specific 
Case No. 2. 
 
Dumping margin without Zeroing
 
  By using this procedure, the USDOC calculated a dumping margin of 17.94% for Koyo Seiko Co., Ltd., while without the Zeroing procedure (i .e. with the negative unit margins included), the 
dumping margin would have been [lower]. 
 
United States – Anti-Dumping Periodic Review on Imports of Ball Bearings 
and Parts Thereof From Japan  
 
Specific Case No. 5
 
 The measure
 
  This case concerns the imposition of anti- dumping duties on Ball Bearings and Parts Thereof 
From Japan (USDOC case number A-588-804, 65 Fed.  Reg. 49219, 11 August 2000).  The period of 
review is 1 May 1998 through 30 April 1999, and the rate of the ad valorem  anti-dumping duty was 
6.14% for NTN Corporation.  Use of Zeroing
 
 
 In this periodic review of Ball Bearings a nd Parts Thereof From Japan, the USDOC utilized 
the same Zeroing procedure as that used in Specific Case No. 2.  Dumping margin without Zeroing
 
  By using this procedure, the USDOC calculated a dumping margin of 6.14% for NTN 
Corporation, while without the Zeroing procedure (i.e. with the negative unit margins included), the 
dumping margin would have been [negative], and no anti-dumping duty would have been collected.  
United States – Anti-Dumping Periodic Review on Imports of Cylindrical 
Roller Bearings and Parts Thereof From Japan  
 
Specific Case No. 6
 
 The measure
 
  This case concerns the imposition of anti-dum ping duties on Cylindrical Roller Bearings and 
Parts Thereof From Japan (USDOC case number A-588-804, 65 Fed. Reg. 49219, 11 August 2000).  
The period of review is 1 May 1998 through 30 April 1999, and the rate of the ad valorem  
anti-dumping duty was 3.49% for NTN Corporation.  Use of Zeroing
 
 
 In this periodic review of Cylindrical Rolle r Bearings and Parts Thereof From Japan, the 
USDOC utilized the same Zeroing procedure as that used in Specific Case No. 2. 
  WT/DS322/AB/R 
 Page 85 
 
 
Dumping margin without Zeroing  
  By using this procedure, the USDOC calculated a dumping margin of 3.49% for NTN Corporation, while without the Zeroing procedure (i.e. with the negative unit margins included), the 
dumping margin would have been [negative], and no anti-dumping duty would have been collected. 
 
United States – Anti-Dumping Periodic Review on Imports of Spherical Plain 
Bearings and Parts Thereof From Japan  
 
Specific Case No. 7
 
 
The measure  
  This case concerns the imposition of anti-dumping duties on Spherical Plain Bearings and Parts Thereof From Japan (USDOC case number A-588-804, 65 Fed. Reg. 49219, 11 August 2000).  
The period of review is 1 May 1998 through 30 April 1999, and the rate of the ad valorem  
anti-dumping duty was 2.78% for NTN Corporation.  Use of Zeroing
 
  In this periodic review of Spherical Plain Bearings and Parts Thereof From Japan, the 
USDOC utilized the same Zeroing procedure as that used in Specific Case No. 2. 
 Dumping margin without Zeroing
 
  By using this procedure, the USDOC calculated a dumping margin of 2.78% for NTN 
Corporation, while without the Zeroing procedure (i.e. with the negative unit margins included), the 
dumping margin would have been [negative], and no anti-dumping duty would have been collected.  
United States – Anti-Dumping Periodic Review on Imports of Ball Bearings 
and Parts Thereof From Japan  
 
Specific Case No. 8
 
 The measure
 
  This case concerns the imposition of anti- dumping duties on Ball Bearings and Parts Thereof 
From Japan (USDOC case number A-588-804, 66 Fed.  Reg. 36551, 12 July 2001).  The period of 
review is 1 May 1999 through 30 April 2000, and the rates of the ad valorem  anti-dumping duty were 
10.10% for Koyo Seiko Co., Ltd., 9.16% for NTN Corporation, and 4.22% for NSK Ltd.  Use of Zeroing
 
 
 In this periodic review of Ball Bearings a nd Parts Thereof From Japan, the USDOC utilized 
the same Zeroing procedure as that used in Specific Case No. 2.  Dumping margin without Zeroing
 
 
 By using this procedure, the USDOC calculated dumping margins of 10.10% for Koyo Seiko 
Co., Ltd., 9.16% for NTN Corporation, and 4.22% for NSK Ltd., while without the Zeroing procedure (i.e. with the negative unit margins included), the dumping margins would have been [negative] for 
Koyo Seiko Co., Ltd., [negative] for NTN Corpor ation, and [negative] for NSK Ltd., and no 
anti-dumping duties would have been collected. 
 WT/DS322/AB/R 
Page 86  
 
 
United States – Anti-Dumping Periodic Review on Imports of Cylindrical 
Roller Bearings and Parts Thereof From Japan  
 
Specific Case No. 9
 
 
The measure  
  This case concerns the imposition of anti-dum ping duties on Cylindrical Roller Bearings and 
Parts Thereof From Japan (USDOC case number A- 588-804, 66 Fed. Reg. 36551, 12 July 2001).  The 
period of review is 1 May 1999 through 31 December 1999, and the rates of the ad valorem  
anti-dumping duty were 5.28% for Koyo Seiko Co., Ltd. and 16.26% for NTN Corporation.  Use of Zeroing
 
 
 In this periodic review of Cylindrical Rolle r Bearings and Parts Thereof From Japan, the 
USDOC utilized the same Zeroing procedure as that used in Specific Case No. 2. 
 Dumping margin without Zeroing
 
  By using this procedure, the USDOC calculated dumping margins of 5.28% for Koyo 
Seiko Co., Ltd. and 16.26% for NTN Corporation, wh ile without the Zeroing procedure (i.e. with the 
negative unit margins included), the dumping marg ins would have been [negative] for Koyo 
Seiko Co., Ltd. and [negative] for NTN Corpora tion, and no anti-dumping duties would have been 
collected.  
United States – Anti-Dumping Periodic Review on Imports of Spherical 
Plain Bearings and Parts Thereof From Japan  
 
Specific Case No. 10
 
 The measure
 
 
 This case concerns the imposition of anti-dumping duties on Spherical Plain Bearings and Parts Thereof From Japan (USDOC case number A- 588-804, 66 Fed. Reg. 36551, 12 July 2001).  The 
period of review is 1 May 1999 through 31 December 1999, and the rate of the ad valorem  
anti-dumping duty was 3.60% for NTN Corporation. 
 
Use of Zeroing
 
  In this periodic review of Spherical Plain Bearings and Parts Thereof From Japan, the USDOC utilized the same Zeroing procedure as that used in Specific Case No. 2. 
 
Dumping margin without Zeroing
 
  By using this procedure, the USDOC calculated a dumping margin of 3.60% for NTN Corporation, while without the Zeroing procedure (i.e. with the negative unit margins included), the 
dumping margin would have been [negative], and no anti-dumping duty would have been collected. 
  WT/DS322/AB/R 
 Page 87 
 
 
United States – Anti-Dumping Periodic Review on Imports of Ball Bearings 
and Parts Thereof From Japan  
 
Specific Case No. 11  
 
The measure  
  This case concerns the imposition of anti- dumping duties on Ball Bearings and Parts Thereof 
From Japan (USDOC case number A-588-804, 67 Fed. Reg. 55780, 30 August 2002, as amended by 
67 Fed. Reg. 63608, 15 October 2002).  The period of review is 1 May 2000 through 30 April 2001, 
and the rates of the ad valorem  anti-dumping duty were 6.07% for NSK Ltd., 2.51% for Asahi Seiko 
Co., Ltd., and 9.34% for NTN Corporation.  Use of Zeroing
 
 
 In this periodic review of Ball Bearings a nd Parts Thereof From Japan, the USDOC utilized 
the same Zeroing procedure as that used in Specific Case No. 2.  Dumping margin without Zeroing
 
  By using this procedure, the USDOC calculated dumping margins of 6.07% for NSK Ltd., 
2.51% for Asahi Seiko Co., Ltd., and 9.34% for NTN Corporation, while without the Zeroing 
procedure (i.e. with the negative unit margins in cluded), the dumping margins would have been 
[negative] for NSK Ltd., [negativ e] for Asahi Seiko Co., Ltd., and [negative] for NTN Corporation, 
and no anti-dumping duties would have been collected.  
United States – Anti-Dumping Periodic Review on Imports of Ball Bearings 
and Parts Thereof From Japan  
 
Specific Case No. 12
 
 The measure
 
 
 This case concerns the imposition of anti- dumping duties on Ball Bearings and Parts Thereof 
From Japan (USDOC case number A-588-804, 68 Fe d. Reg. 35623, 16 June 2003).  The period of 
review is 1 May 2001 through 30 April 2002, and the rates of the ad valorem  anti-dumping duty were 
4.51% for NTN Corporation and 2.68% for NSK Ltd. 
 
Use of Zeroing  
  In this periodic review of Ball Bearings a nd Parts Thereof From Japan, the USDOC utilized 
the same Zeroing procedure as that used in Specific Case No. 2.  
Dumping margin without Zeroing
 
  By using this procedure, the USDOC calculated dumping margins of 4.51% for NTN Corporation and 2.68% for NSK Ltd., while without the Zeroing procedure (i.e. with the negative unit 
margins included), the dumping margins would ha ve been [negative] for NTN Corporation and 
[negative] for NSK Ltd., and no anti-dumping duties would have been collected. 
 WT/DS322/AB/R 
Page 88  
 
United States – Anti-Dumping Periodic Review on Imports of Ball Bearings 
and Parts Thereof From Japan  
 
Specific Case No. 13
 
 
The measure  
  This case concerns the imposition of anti- dumping duties on Ball Bearings and Parts Thereof 
From Japan (USDOC case number A-588-804, 69 Fed. Reg. 55574, 15 September 2004).  The period 
of review is 1 May 2002 through 30 April 2003, and the rates of the ad valorem  anti-dumping duty 
were 5.56% for Koyo Seiko Co., Ltd., 2.74% for NTN Corporation, 2.46% for NSK Ltd., and 3.37% 
for Nippon Pillow Block Co., Ltd.  Use of Zeroing
 
 
 In this periodic review of Ball Bearings a nd Parts Thereof From Japan, the USDOC utilized 
the same Zeroing procedure as that used in Specific Case No. 2.  Dumping margin without Zeroing
 
  By using this procedure, the USDOC calcul ated dumping margins of 5.56% for Koyo Seiko 
Co., Ltd., 2.74% for NTN Corporation, 2.46% for NSK Ltd., and 3.37%   for Nippon Pillow Block 
Co., Ltd., while without the Zeroing procedure (i .e. with the negative unit margins included), the 
dumping margins would have been [negative] for Koyo Seiko Co., Ltd., [negative] for NTN Corporation, [negative] for NSK Ltd., and [negative] for Nippon Pillow Block Co., Ltd., and no anti-dumping duties would have been collected. 
 
United States – Sunset Review of Antifriction Bearings From Japan 
 
Specific Case No. 14
 
 The measure
 
 
 This case concerns the Final Results of th e USDOC in the Expedited Sunset Review of 
Antifriction Bearings from Japan, in which the USDOC found that revocation of the anti-dumping order on Ball Bearings from Japan would be likely to lead to continuation or recurrence of dumping 
(USDOC case number A-588-804, 64 Fed. Reg. 60275, 4 November 1999); and the Determination of 
the USITC in Certain Bearings from China, Fran ce, Germany, Hungary, Italy, Japan, Romania, 
Singapore, Sweden, and the United Kingdom, Inv estigations Nos. AA-1921-143, 731-TA-341, 731-
TA-343-345, 731-TA-391-397, and 731-TA-399 (Revie w), that revocation of the anti-dumping order 
on Ball Bearings from Japan would be likely to lead to continuation or recurrence of material injury 
within a reasonably foreseeable time.     
Use of Zeroing
 
  In making this determination, the USDOC speci fically relied on the "margins determined in 
the original investigation and s ubsequent periodic reviews," and c oncluded that because "dumping has 
continued over the life of the orde rs, the [USDOC] determines that dumping is likely to continue if 
the orders were revoked."  (64 Fed. Reg. at 60278.)  Japan submits th at because the USDOC's 
likelihood determination was based on margins in both the original investigation and subsequent 
periodic reviews that were calculated using the Zero ing procedure, which is inconsistent with the 
Anti-Dumping Agreement, the USDOC's decision not to revoke the anti-dumping order on Ball 
Bearings from Japan is equally inconsistent with the Anti-Dumping Agreement.  
  WT/DS322/AB/R 
 Page 89 
 
 
 In addition, Japan submits that because the USITC relied on a "magnitude of dumping" and 
"volume of dumped imports" that were inflated by the use of the Zeroing procedure,, the USITC's likelihood determination and the decision not to revoke the anti-dumping order on Ball Bearings from 
Japan are also inconsistent with the Anti-Dumping Agreement.    
 
United States – Sunset Review of Corrosion-Resistant 
Carbon Steel Flat Products From Japan 
 
Specific Case No. 15
 
 
The measure  
  This case concerns the Final Results of the USDOC in the Full Sunset Review of Corrosion-
Resistant Carbon Steel Flat Products From Japan, in which the USDOC concluded that revocation of 
the anti-dumping order on Corrosion-Resistant Carbon Steel Flat Products from Japan would be likely 
to lead to continuation or recurrence of dumping (USDOC case number A-588-826, 
65 Fed. Reg. 47380, 2 August 2000); and the Determ ination of the USITC in Certain Carbon Steel 
Products from Australia, Belgium, Brazil, Canada, Fi nland, France, Germany, Japan, Korea, Mexico, 
Netherlands, Poland, Romania, Spain, Sweden, Ta iwan, and United Kingdom, Investigations Nos. 
AA-1921-197, 701-TA-231, 319-320, 322, 325-328, 340,  342, and 348-350, and 731-TA-573-576, 
578, 582-587, 604, 607-608, 612, and 614-618 (Revie w), that revocation of the anti-dumping order on 
Corrosion-Resistant Carbon Steel Flat Products from Japan would be likely to lead to continuation or 
recurrence of material injury with in a reasonably foreseeable time.  
 Use of Zeroing
 
 
 In making this determination, the USDOC spec ifically relied on the margins determined in 
the investigation, and concluded that because "dum ping has continued to occur throughout the life of 
the order," dumping was likely to conti nue if the order was revoked.  USDOC, Issues and Decision 
Memo for the Full Sunset Review of Corrosion-Resistant Carbon Steel Flat Products from Japan; 
Final Results  at Comment 1 (2 August 2000).  Japan submits that because the USDOC's likelihood 
determination was based on margins in the original  investigation that were calculated using the 
Zeroing procedure, which is inc onsistent with the Anti-Dumping Agreement, the USDOC's decision 
not to revoke the anti-dumping order on Corrosion-Resistant Carbon Steel Flat Products From Japan is equally inconsistent with the Anti-Dumping Agreement.   
  In addition, Japan submits that because the USITC relied on a "magnitude of dumping" and 
"volume of dumped imports" that were inflated by the use of the Zeroing procedure, the USITC's 
likelihood determination and the decision not  to revoke the anti-dumping order on Corrosion-
Resistant Carbon Steel Flat Products from Japan are also inconsistent with the Anti-Dumping 
Agreement.   
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