WORLD TRADE  
ORGANIZATION  WT/DS294/AB/R 
18 April 2006 
 (06-1768) 
 Original:   English 
  
 
     
 
    
 
    
 
UNITED STATES – LAWS, REGULATIONS AND 
METHODOLOGY FOR CALCULATING 
DUMPING MARGINS ("ZEROING") 
 
  
AB-2006-2 
  
 
    
 
    
Report of the Appellate Body 
  WT/DS294/AB/R 
 Page i 
 
 
 
I. Introduction................................................................................................................... ..............1  
II. Arguments of the Participants and the Third Participants ..........................................................5  
A. Claims of Error by the European Communities – Appellant .........................................5  
1. Article 9.3 of the  Anti-Dumping Agreement   and Article VI:2 of the 
GATT 1994.......................................................................................................5  
2. Article 2.4 of the  Anti-Dumping Agreement ....................................................7  
3. Article 2.4.2 of the  Anti-Dumping Agreement .................................................8  
4. Other Claims...................................................................................................11  
B. Arguments of the United States – Appellee ..................................................................14  
1. Article 9.3 of the  Anti-Dumping Agreement , Article VI:2 of the GATT 
1994, and Article 2.4.2 of the Anti-Dumping Agreement ...............................14  
2. Article 2.4 of the  Anti-Dumping Agreement ..................................................17  
3. Other Claims...................................................................................................20  
C. Claims of Error by the United States – Appellant .......................................................22  
D. Arguments of the European Communities – Appellee .................................................25  
E. Arguments of the Third Participants ............................................................................27  
1. Argentina ........................................................................................................27  
2. Brazil...............................................................................................................27  
3. China...............................................................................................................29  
4. Hong Kong, China ..........................................................................................30  
5. India ................................................................................................................30  
6. Japan ...............................................................................................................30  
7. Korea...............................................................................................................33  
8. Mexico ............................................................................................................35  
9. Norway ...........................................................................................................37  
10. Separate Customs Territory of Ta iwan, Penghu, Kinmen, and Matsu ...........38  
III. Issues Raised in This Appeal ................................................................................................... .40 
IV. "As Applied" Claims Brought on Appeal by the European Communities ...............................42  
A. Article 9.3 of the Anti-Dumping Agreemen t and Article VI:2 of the GATT 1994 ........42  
1. Assessment and Collection of Anti-dumping Duties in the United 
States...............................................................................................................43  
2. Panel Report....................................................................................................44  
3. Submissions of the Participants ......................................................................46  
4. Analysis ..........................................................................................................49  
B. Article 2.4 of the Anti-Dumping Agreement ................................................................56  
1. Fair Comparison .............................................................................................56  
2. Whether Zeroing is an Impermissible Allowance or Adjustment under 
Article 2.4 .......................................................................................................60  
C. Article 2.4.2 of the Anti-Dumping Agreement ..............................................................65  WT/DS294/AB/R 
Page ii  
 
D.
 Articles 11.1 and 11.2 of the Anti-Dumping Agreement ..............................................66  
E. Articles 1 and 18.4 of the Anti-Dumpin g Agreement and Article XVI:4 of the 
WTO Agreement ...........................................................................................................67  
V. Consistency of Zeroing "As Such" ...........................................................................................68  
A. The Panel's Consideration of the Sta ndard Zeroing Procedures, the Anti-
Dumping Manual, and the "Practice or Methodology" of Zeroing .............................68  
B. The Zeroing Methodology "As Such" – Other Appeal by the United States ................72  
1. Whether the Zeroing Methodology Ca n be Challenged, As Such, in 
Dispute Settlement Proceedings .....................................................................72  
2. Article 11 of the DSU .....................................................................................80  
3. Prima Facie  Case............................................................................................83  
4. Conclusion ......................................................................................................85  
C. The Anti-Dumping Manual – Appeal by the European Communities ..........................85  
D. Other Claims by the European Communities Regarding the Zeroing 
Methodology ................................................................................................................86  
E. Conditional Appeal by the European Communities .....................................................87  
1. The Standard Zeroing Procedures...................................................................87  
2. The "Practice" of Zeroing "As Such" .............................................................88  
VI. Other Claims ................................................................................................................... ..........89  
A. Section 351.414(c)(2) of the USDOC Regulations ......................................................89  
B. Judicial Economy .........................................................................................................92  
C. Article 11 of the DSU ...................................................................................................94  
VII. Findings and Conclusions....................................................................................................... ..97 
 
 
ANNEX I Notification of an App eal by the European Communities 
 
ANNEX II Notification of an Other Appeal by the United States   WT/DS294/AB/R 
 Page iii 
 
 
CASES CITED IN THIS REPORT 
 
Short Title Full Case Title and Citation 
Canada – Dairy  
(Article 21.5 – New Zealand 
and US II)  Appellate Body Report, Canada – Measures Affecting the Importation of Milk 
and the Exportation of Dairy Products – Second Recourse to Article 21.5 of  
the DSU by New Zealand and the United States , WT/DS103/AB/RW2, 
WT/DS113/AB/RW2, adopted 17 January 2003, DSR 2003:I, 213  
Dominican Republic – Import 
and Sale of Cigarettes Appellate Body Report, Dominican Republic – Measures Affecting the 
Importation and Internal Sale of Cigarettes , WT/DS302/AB/R, adopted 19 
May 2005  
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 
EC – Export Subsidies on 
Sugar  Appellate Body Report, European Communities – Export Subsidies on Sugar , 
WT/DS265/AB/R, WT/DS266/AB/R, WT/DS283/AB/R, adopted 19 May 2005 
EC – Hormones  Appellate Body Report, EC Measures Concerning Meat and Meat Products 
(Hormones) , WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998, 
DSR 1998:I, 135 
EC – Poultry  Appellate Body Report, European Communities – Measures Affecting the 
Importation of Certain Poultry Products , WT/DS69/AB/R, adopted 
23 July 1998, DSR 1998:V, 2031 
Japan – Agricultural 
Products II Appellate Body Report, Japan – Measures Affecting Agricultural Products , 
WT/DS76/AB/R, adopted 19 March 1999, DSR 1999:I, 277 
Japan – Apples  Appellate Body Report, Japan - Measures Affecting the Importation of Apples , 
WT/DS245/AB/R, adopted 10 December 2003, DSR 2003:IX, 4391 
Japan – Film  Panel Report, Japan – Measures Affecting Consumer Photographic Film and 
Paper , WT/DS44/R, adopted 22 April 1998, DSR 1998:IV, 1179 
Mexico – Anti-Dumping 
Measures on Rice Appellate Body Report, Mexico – Definitive Anti-Dump ing Measures on Beef 
and Rice, Complaint with Respect to Rice , WT/DS295/AB/R, adopted 20 
December 2005 
Thailand – H-Beams  Appellate Body Report, Thailand – Anti-Dumping Duties on Angles, Shapes and 
Sections of Iron or Non-Alloy Steel and H-Beams from Poland , 
WT/DS122/AB/R, adopted 5 April 2001, DSR 2001:VII, 2701 
Thailand – H-Beams  Panel Report, Thailand – Anti-Dumping Duties on Angles, Shapes and Sections 
of Iron or Non-Alloy Steel and H-Beams from Poland , WT/DS122/R, adopted 
5 April 2001, as modified by Appellate Body Report, WT/DS122/AB/R, DSR 
2001:VII, 2741 
US – Anti-Dumping Measures on Oil Country Tubular Goods Appellate Body Report, United States – Anti-Dumping Measures on Oil Country 
Tubular Goods (OCTG) from Mexico , WT/DS282/AB/R, adopted 28 November 
2005 
US – Carbon Steel  Appellate Body Report, United States – Countervailing Duties on Certain 
Corrosion-Resistant Carbon Steel Flat Products from Germany , 
WT/DS213/AB/R and Corr.1, adopted 19 December 2002, DSR 2002:IX, 3779 
US – Corrosion-Resistant 
Steel Sunset Review  Appellate Body Report, United States – Sunset Review of Anti-Dumping Duties 
on Corrosion-Resistant Carbon Steel Flat Products from Japan , 
WT/DS244/AB/R, adopted 9 January 2004 
US – Countervailing Measures 
on Certain EC Products Appellate Body Report, United States – Countervailing Measures Concerning 
Certain Products from the European Communities , WT/DS212/AB/R, adopted  
8 January 2003, DSR 2003:I, 5 WT/DS294/AB/R 
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Short Title Full Case Title and Citation 
US – Countervailing Measures 
on Certain EC Products  Panel Report, United States – Countervailing Measures Concerning Certain 
Products from the European Communities , WT/DS212/R, adopted 8 January 
2003, as modified by Appellate Body Report, WT/DS212/AB/R, DSR 2003:I, 73 
US – DRAMS  Panel Report, United States – Anti-Dumping Duty on Dynamic Random Access 
Memory Semiconductors (DRAMS) of One Megabit or Above from Korea , 
WT/DS99/R, adopted 19 March 1999, DSR 1999:II, 521 
US – Gambling Appellate Body Report, United States – Measures Affecting the Cross-Border 
Supply of Gambling and Betting Services , WT/DS285/AB/R, adopted 20 April 
2005 
US – Hot-Rolled Steel  Appellate Body Report, United States – Anti-Dumping Measures on Certain 
Hot-Rolled Steel Products from Japan , WT/DS184/AB/R, adopted 23 August 
2001, DSR 2001:X, 4697 
US – Oil Country Tubular 
Goods Sunset Reviews Appellate Body Report, United States – Sunset Reviews of Anti-Dumping 
Measures on Oil Country Tubular Goods from Argentina , WT/DS268/AB/R, 
adopted 17 December 2004 
US – Shrimp Appellate Body Report, United States – Import Prohibition of Certain Shrimp 
and Shrimp Products , WT/DS58/AB/R, adopted 6 November 1998, 
DSR 1998:VII, 2755 
US – Softwood Lumber V  Appellate Body Report, United States – Final Dumping Determination on 
Softwood Lumber from Canada , WT/DS264/AB/R, adopted 31 August 2004 
US – Steel Safeguards Appellate Body Report, United States – Definitive Safeguard Measures on 
Imports of Certain Steel Products , WT/DS248/AB/R, WT/DS249/AB/R, 
WT/DS251/AB/R, WT/DS252/AB/R, WT /DS253/AB/R, WT/DS254/AB/R, 
WT/DS258/AB/R, WT/DS259/AB/R, adopted 10 December 2003, DSR 
2003:VII, 3117 
US – Wool Shirts and Blouses Appellate Body Report, United States – Measure Affecting Imports of Woven 
Wool Shirts and Blouses from India , WT/DS33/AB/R and Corr.1, adopted 
23 May 1997, DSR 1997:I, 323 
US – Zeroing (EC) Panel Report, United States – Laws, Regulations and Methodology for 
Calculating Dumping Margins ("Zeroing") , WT/DS294/R, 31 October 2005 
US – Zeroing (Japan) United States – Measures Relating to Zeroing and Sunset Reviews , WT/DS322 
  WT/DS294/AB/R 
 Page v 
 
 
ABBREVIATIONS USED IN THIS REPORT 
 
Abbreviation Definition 
Anti-Dumping Agreement  Agreement on Implementation of Article VI of the General Agreement 
on Tariffs and Trade 1994   
DSB Dispute Settlement Body 
DSU Understanding on Rules and Procedures Governing the Settlement of 
Disputes  
GATT 1994 General Agreement on Tariffs and Trade 1994  
Anti-Dumping Manual 1997 edition of the Import Administration Antidumping Manual  
(Exhibit EC-36 submitted by the European Communities to the Panel), available at:  http://ia.ita .doc.gov/admanual/index.html 
Panel Report Panel Report, United States – Laws, Regulations and Methodology 
for Calculating Dumping Margins ("Zeroing") , WT/DS294/R,  
31 October 2005 
Section 351.414(c)(2) Section 351.414(c)(2) is found in United States Federal Register , 
Vol. 62, No. 96 (19 May 1997), Rules and Regulations, p. 27415 
(Exhibit EC-35.3 submitted by the European Communities to the 
Panel), codified in United States Code of Federal Regulations , Title 19, 
Section 351.414(c)(2) 
SPB Sunset Policy Bulletin 
Tariff Act Tariff Act of 1930, codified in Title 19 of the United States Code of 
Federal Regulations  
USDOC  United States Department of Commerce  
Vienna Convention Vienna Convention on the Law of Treaties , done at Vienna,  
23 May 1969, 1155 UNTS 331;  8 In ternational Legal Materials 679  
Working Procedures  Working Procedures for Appellate Review , WT/AB/WP/5,  
4 January 2005  
WTO World Trade Organization 
WTO Agreement  Marrakesh Agreement Es tablishing the World Trade Organization  
 
  WT/DS294/AB/R 
 Page 1 
 
 
WORLD TRADE ORGANIZATION  
APPELLATE BODY 
 
 United States – Laws, Regulations and 
Methodology for Calculating Dumping Margins ("Zeroing") 
 European Communities, Appellant/Appellee  
United States, Appellant/Appellee  
 Argentina, Third Participant  
Brazil, Third Participant  
China, Third Participant   
Hong Kong, China  Third Participant  
India, Third Participant  
Japan, Third Participant  
Korea, Third Participant 
Mexico, Third Participant  
Norway, Third Participant  
Separate Customs Territo ry of Taiwan, Penghu, 
Kinmen, and Matsu, Third Participant   AB-2006-2 
  Present:  
 Sacerdoti, Presiding Member 
 Janow, Member  Taniguchi, Member  
  I. Introduction 
1. The European Communities and the United States each appeals certain issues of law and legal 
interpretations develope d in the Panel Report, United States – Laws, Regulations and Methodology for 
Calculating Dumping Margins ("Zeroing")  (the "Panel Report").
1  The Panel was established to 
consider a complaint by the European Communities concerning the application by the United States 
of the so-called "zeroing methodology" when determining dumping margins in anti-dumping proceedings, including proceedings resulting in the imposition of anti-dumping measures as well as 
proceedings relating to the collection of anti-dumping duties.
2 
2. Before the Panel, the European  Communities challenged, under the Agreement on 
Implementation of Article VI of the Ge neral 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/DS294/R, 31 October 2005. 
2Panel Report, para. 2.1. WT/DS294/AB/R 
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(a) Sections 731, 751(a)(2)(A)(i)-(ii), 771(35)(A )-(B), and 777A(d) of the Tariff Act  
of 1930 (the "Tariff Act")
3;  Section 351.414(c)(2) of the United States Department  
of Commerce ("USDOC") Regulations ("Section 351.414(c)(2)")4;  certain provisions 
of the 1997 edition of the Import Administration Antidumping Manual  (the "Anti-
Dumping Manual")5;  the "Standard AD Margin Program"6, which includes the 
"Standard Zeroing Procedures"7;  and the United States' "practice or methodology" of 
zeroing; 
(b) the use of "model zeroing"8 in certain "original investigations"9;  and 
(c) the use of "simple zeroing"10 in certain "anti-dumping duty administrative reviews".11 
                                                      
3These provisions are codified in United States Code of Federal Regulations , Title 19, Sections 1673, 
1675, and 1677, respectively (Exhibit EC-33 submitted by the European Communities to the Panel). 
4Section 351.414(c)(2) is found in United States Federal Register , Vol. 62, No. 96 (19 May 1997), 
Rules and Regulations, p. 27415 (Exhibit EC-35.3 su bmitted by the European Communities to the Panel), 
codified in United States Code of Federal Regulations , Title 19, Section 351.414(c)(2). 
5See Exhibit EC-36 submitted by the European Communities to the Panel.  The Anti-Dumping Manual 
is available at:  http://ia.ita.doc.gov/admanual/index.html.  
6The "Standard AD Margin Program" consists of computer programming used by the USDOC to 
calculate margins of dumping.  More specifically, the US DOC uses lines of computer code contained in the 
"Standard AD Margin Program" whenever it develops a specific computer program to  calculate a margin of 
dumping in a particular anti-dumping proceeding. (See Exhibits EC-43 and EC-46 submitted by the European 
Communities to the Panel) 
7The term "Standard Zeroing Procedures" is used in the Panel Report to refer to certain lines of 
programming code contained in the USDOC's Standard AD Margin Program.  More specifically, it refers to 
certain lines of programming code that incorporate the zeroing methodology by selecting (for inclusion in the numerator of the overall dumping margin) only those resu lts of multiple comparisons that are greater than zero 
for purposes of calculating the aggregate amount of du mping. (European Communities' first written submission 
to the Panel, paras. 125 and 129)  The term "Standard  Zeroing Procedures" is not used in United States anti-
dumping laws and regulations. (See Panel Report, paras. 7.71-7.72) 
8The term "model zeroing" refers to the methodology described in paras. 2.3 and 2.10 of the Panel 
Report.  
9In our discussion, we use the term "original inves tigations" to refer to investigations within the 
meaning of Article 5 of the  Anti-Dumping Agreement .  The original investigations challenged by the European 
Communities are listed in Exhibits EC-1 through EC-15 submitted by the European Communities to the Panel.  Further details may be found in para. 2.6 and footnote 119 to para. 7.9 of the Panel Report. 
10The term "simple zeroing" refers to the methodology described in paras. 2.5 and 2.12 of the Panel 
Report.   
11In our discussion, we use the term "administrative review" to describe the "periodic review of the 
amount of anti-dumping duty" as required by Section 751(a) of the Tariff Act.  That provision requires the USDOC to review and determine the amount of any anti-dumping duty at leas t once during each 12-month 
period beginning on the anniversary of the date of publication of an anti-dumping duty order if a request for 
such a review has been received. (Panel Report, footnote 236 to para. 7.142)  The administrative reviews challenged by the European Communities are listed in Exhibits EC-16 through EC-31 submitted by the 
European Communities to the Panel.  Further details may be found in para. 2.6 and footnote 202 to para. 7.110 
of the Panel Report.   WT/DS294/AB/R 
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3. In the Panel Report, circulated to Members of the World Trade Organization (the "WTO") on 
31 October 2005, the Panel made the following findings: 
(a) The United States acted inconsistently with Article 2.4.2 of 
the [ Anti-Dumping ] Agreement when in the anti-dumping 
investigations listed in Exhibits EC-1 to EC-15 USDOC did 
not include in the numerator used to calculate weighted average dumping margins any amounts by which average export prices in individual averaging groups exceeded the average normal value for such groups. 
(b) Sections 771(35)(A) and (B), 731 and 777(A)(d) of the Tariff 
Act are not as such inconsistent with Articles 2.4, 2.4.2,  5.8, 9.3, 1 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 with respect to the use of a zeroing 
methodology in the calculation of margins of dumping in 
original investigations. 
(c) The United States' zeroing methodology, as it relates to 
original investigations, is  a norm which, as such, is 
inconsistent with Article 2.4.2 of the [ Anti-Dumping ] 
Agreement . 
(d) The United States did not act inconsistently with 
Article 2.4.2 of the [ Anti-Dumping ] Agreement when, in the 
administrative reviews listed in  Exhibits EC-16 to EC-31, 
USDOC used a methodology that involved asymmetrical comparisons between export price and normal value and in 
which no account was taken of any amount by which export 
prices exceeded normal value. 
(e) The United States did not act inconsistently with Article 2.4 
of the [ Anti-Dumping ] Agreement when in the administrative 
reviews listed in Exhibits EC-16 to EC-31 USDOC calculated dumping margins by comparing average monthly 
normal value with prices of individual export transactions 
and did not include in the numerator of the dumping margins any amounts by which export prices of individual transactions exceeded the normal value. 
(f) The United States did not act inconsistently with Articles 9.3, 
11.1 and 11.2, 1 and 18.4 of the [ Anti-Dumping ] Agreement , 
Articles VI:1 and VI:2 of GATT 1994 and Article XVI:4 of the WTO Agreement in the administrative reviews listed in Exhibits EC-16 to EC-31. WT/DS294/AB/R 
Page 4  
 
(g) The Standard Zeroing Procedures used by the United States 
in administrative reviews or the United States practice or methodology of zeroing and S ections 771(35)(A) and (B), 
731, 777A(d) and 751(a)(2)(i) and (ii) of the Tariff Act and Section 351.414(c)(2) of the USDOC Regulations are not as 
such inconsistent with Articles 2.4, 2.4.2, 9.3, 11.1 and 11.2, 
1 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. 
(h) The Standard Zeroing Procedures used or relied upon by the 
United States in new shipper re views, changed circumstances 
reviews and sunset reviews a nd Sections 771(35)(A) and (B), 
731, 777A(d) and 715(a)(2)(i) and (ii) of the Tariff Act and Section 351.414(c)(2) of the USDOC Regulations are not as such inconsistent with Articles 2.4, 2.4.2, 9.3, 9.5, 11.1,  
11.2, 11.3, 1 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.
12 (footnotes omitted) 
4. On 17 January 2006, the Eur opean Communities notified the Di spute Settlement Body (the 
"DSB") of its intention to appeal certain issues of  law covered in the Panel Report and certain legal 
interpretations developed by the Pane l, pursuant to Article 16.4 of the Understanding on Rules and 
Procedures Governing the Settlement of Disputes  (the "DSU"), and filed a Notice of Appeal13 
pursuant to Rule 20 of the Working Procedures for Appellate Review (the " Working Procedures ").14  
On 24 January 2006, the European Communities filed an appellant's submission.15  On that same day, 
Japan filed a third participant's submission.16  On 30 January 2006, the United States notified the DSB 
of its intention to appeal certain issues of la w covered in the Panel Report and certain legal 
interpretations developed by the Panel, pursuant to  Article 16.4 of the DSU, and filed a Notice of 
                                                      
12Panel Report, para. 8.1.  The Panel decided to exercise judicial economy and did not rule on the 
European Communities' claim that the application of model zeroing in the investigations listed in Exhibits EC-1 
through EC-15 was inconsistent with Articles 1, 2.4, 3.1, 3.2, 3.5, 5.8, 9.3, and 18.4 of the Anti-Dumping 
Agreement , Articles VI:1 and VI:2 of the GA TT 1994, and Article XVI:4 of the WTO Agreement .  The Panel 
also exercised judicial economy on the European Communities' claim that the Standard Zeroing Procedures used 
by the USDOC in original investigations are inconsistent, as such, with Articles 1, 2.4, 3.1, 3.2, 3.5, 5.8, 9.3, and 18.4 of the Anti-Dumping Agreement , Articles VI:1 and VI:2 of the GAT T 1994, and Article XVI:4 of the 
WTO Agreement . (Ibid., para. 8.2) 
13WT/DS294/12 (attached as Annex I to this Report). 
14WT/AB/WP/5, 4 January 2005. 
15Pursuant to Rule 21 of the Working Procedures . 
16Pursuant to Rule 24(1) and (3) of the Working Procedures .  Concerning the timing of its submission, 
Japan stated that, given that it has brought its own dispute regarding the United States' zeroing methodology 
(US – Zeroing (Japan) , WT/DS322), "its interests in this appeal are, essentially, those of an appellant, even 
though it is a third participant."  Japan went on to say that  it was, therefore, taking "t he unusual step of filing its 
third participant's submission on the same day as the a ppellant, that is, considerably 'within 25 days after the 
date of filing of the Notice of  Appeal'." (Japan's third participant's submission, para. 3)  WT/DS294/AB/R 
 Page 5 
 
 
Other Appeal17 pursuant to Rule 23(1) and (2) of the  Working Procedures .  On 1 February 2006,  
the United States filed an other appellant's submission.18  On 13 February 2006, the European 
Communities and the United States each filed an appellee's submission19 and Brazil, China, Korea, 
Mexico, Norway, and the Separate Customs Terr itory of Taiwan, Penghu, Kinmen, and Matsu each 
filed a third participant's submission.20  On the same day, Argentina, India, and Hong Kong, China 
each notified its intention to appear at the oral h earing as a third participant and to make an oral 
statement.21   
5. The oral hearing in this appeal was held on 1 and 2 March 2006.  The participants and third 
participants presented oral arguments and respond ed to questions posed by the Members of the 
Appellate Body Division hearing the appeal. 
 
II. Arguments of the Participants  and the Third Participants 
A. Claims of Error by the European Communities – Appellant 
1. Article 9.3 of the  Anti-Dumping Agreement   and Article VI:2 of the GATT  
1994  
6. The European Communities requests the Appellate Body to reverse the Panel's finding that 
the United States did not act inconsistently with Article 9.3 of the  Anti-Dumping Agreement , and 
Article VI:2 of the GATT 1994.  The European Communities notes that Article 9.3 provides that the amount of anti-dumping duty shall not exceed the ma rgin of dumping established under Article 2.  
The European Communities claims th at, in the administrative reviews at issue, the United States did 
not correctly establish the anti-dumping duty amount or the margin of dumping because the Untied 
States did not comply with its obligation to ensure  that the amount of anti-dumping duty collected did 
not exceed the margin of dumping. 
7. For the European Communities, the disagreement between the parties flows, in essence, from 
their respective interpretations of the terms "dumping" and "margin of dumping" in the  Anti-Dumping 
Agreement , and whether these terms apply at the level of the product as a whole, or at the level of a 
comparison between a weighted-average normal va lue and an individual export transaction.  The 
European Communities submits that these terms are defined in relation to a product  as a whole .  
                                                     
 
17WT/DS294/13 (attached as Annex II to this Report).   
18Pursuant to Rule 23(3) of the Working Procedures . 
19Pursuant to Rules 22 and 23(4) of the Working Procedures . 
20Pursuant to Rule 24(1) and (3) of the Working Procedures . 
21Pursuant to Rule 24(2) of the Working Procedures .  WT/DS294/AB/R 
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Thus, "dumping" and "margin of dumping" within the meaning of the  Anti-Dumping Agreement  
cannot, according to the European Communities, be found to exist only for a type, model, or category 
of that product, including a "category"
22 consisting of one or more relatively low-priced export 
transactions. 
8. The European Communities undersco res that it is clear that an  investigating authority may 
undertake multiple intermediate comparisons betw een a weighted-average "normal value" and 
individual export transactions.  However, the results of such multiple comparisons are not "margins of 
dumping", but, rather, reflect only intermediate calcula tions made by an investigating authority in the 
context of establishing margins of dumping for the pr oduct as a whole. The investigating authority is 
under the obligation to aggregate all of the results  of these multiple intermediate comparisons.  The 
European Communities maintains that, aside from the exception provided for by the second sentence 
of Article 2.4.2, as well as by Articles 2.2.1, 2.7, and 9.4 of the  Anti-Dumping Agreement , there is no 
basis in the  Anti-Dumping Agreement   that would justify taking into account the results of some 
multiple comparisons, in the process of calculating ma rgins of dumping, while disregarding others.   
9. According to the European Communities, the Pa nel erred in concludi ng that the Appellate 
Body's findings in  EC – Bed Linen 23 and US – Softwood Lumber V  24 were based on Article 2.4.2 of 
the  Anti-Dumping Agreement  and limited to the consistency of zeroing as applied in the original 
proceedings.  The European Communities submits that the view that "dumping" and "margins of dumping" can only be established for the product under investigation as a whole is in consonance with 
the need for consistent treatment of a product in  an anti-dumping proceeding.  For the European 
Communities, it is clear that the obligations that apply when a margin of dumping is calculated or 
relied upon are the same throughout the Anti-Dumping Agreement , and this use of zeroing by the 
United States in the present case is inconsistent with the  Anti-Dumping Agreement . 
10. The European Communities argues that the United States' calculation of a revised cash 
deposit rate is identical in all relevant respects to  the margin calculation performed in the original 
proceedings.  For the European  Communities, there is no basis on which the United States can 
plausibly argue that zeroing, which is prohibited in original proceedings, somehow becomes permitted 
when done in an administrative review. 
                                                     
 
22European Communities' appellant's submission, paras. 59 and 61. 
23See Appellate Body Report, EC – Bed Linen , para. 53. 
24See Appellate Body Report, US – Softwood Lumber V , paras. 91-103.  WT/DS294/AB/R 
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11. According to the European Communities, the u se of zeroing in the calculation of either the 
cash deposit rate or the amount of duty finally assessed "systematically" 25 inflates the amount of the 
anti-dumping duty.  The European Communities claims that, as a result of the use of zeroing in the 
administrative reviews at issue, the amount of the anti-dumping duty assessed exceeds the margin of 
dumping determined for the product as a whole and, ther efore, the use of zeroing is inconsistent with 
Article 9.3 of the  Anti-Dumping Agreement  and Article VI:2 of the GATT 1994. 
2. Article 2.4 of the  Anti-Dumping Agreement  
12. The European Communities claims that the Pane l erred in finding that the United States did 
not act inconsistently with the first sentence of Article 2.4 of the  Anti-Dumping Agreement .  The 
European Communities first indicates that it agrees with the Panel that Article 2.4 establishes an 
"overarching and i ndependent obligation"26 to make a fair comparison between normal value and 
export price.  However, the European Communitie s contends that the Panel erred because—absent 
targeted dumping—a comparison between normal value and export price that does not fully take into 
account all export transactions does not result in the calculation of a margin of dumping for the 
product as a whole and "is therefore not a fair comparison within the meaning of Article 2.4, first sentence."
27  Furthermore, the European Communities contends that the methodology employed by 
the USDOC in the administrative reviews at issue is inconsistent with Article 2.4, because it inflates 
the margin of dumping and, therefore, is inherently  biased.  The European Communities also refers to 
the Appellate Body's statement in  EC – Bed Linen  that "the practice of 'zeroi ng' at issue in this dispute 
... is  not  a 'fair comparison' between export price and normal value, as required by Article 2.4 and by 
Article 2.4.2." 28  In the European Communities' view, the findings of the Appellate Body in  US – 
Corrosion-Resistant Steel Sunset Review 29 and  US – Softwood Lumber V  30 also confirm that the 
zeroing methodology is unfair and, therefore, inconsiste nt with the first sentence of Article 2.4 of the 
Anti-Dumping Agreement .   
13. With respect to the third to fifth sentences of  Article 2.4, the European Communities appeals 
the Panel's finding that zeroing is not an impermissi ble allowance or adjustment for a difference other 
than one affecting price comparability.  For the Euro pean Communities, the thir d to fifth sentences of 
                                                      
25European Communities' appellant's submission, para. 68. 
26Ibid., para. 71.  
27Ibid., para. 75. 
28Appellate Body Report, EC – Bed Linen , para. 55 (original emphasis) (quoted in European 
Communities' appellant's submission, para. 95). 
29See Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , paras. 127-128, 130, 
and 135. 
30See Appellate Body Report, US – Softwood Lumber V , paras. 93, 96-97, 99, and 101. WT/DS294/AB/R 
Page 8  
 
Article 2.4 do not only impose obligations on Members to make adjustments for differences that 
affect price comparability, but also impose an obligati on not to make an adjustment when there is no 
such difference.  The European Co mmunities adds that, if the third to fifth sentences of Article 2.4 
refer to certain differences for which adjustments are to be made, the list is illustrative, with the 
implication that the types of differences and adjust ments referred to in the third to fifth sentences are 
not exhaustive.  According to the European Communities, zeroing should be construed as an 
adjustment or allowance falling within the scope of the third sentence of Article 2.4, because the 
effect of the zeroing adjustment is to reduce the price at which particular export transactions were in fact made.  For the European Communities, the Pa nel erred because, irrespective of whether the 
simple zeroing adjustment is conceptually differe nt from the elements of the illustrative list of 
Article 2.4, third to fifth sentences, it is not an adjustment made for a "difference affecting price 
comparability"
31 and, therefore, it is inconsistent with  Article 2.4, third to fifth sentences.  
14. The European Communities submits that "[t]he sco pe of the obligations contained in the third 
to fifth sentences of Article 2.4 is not limited acco rding to the point in time, or the stage of the 
calculation, at which the adjustment or allowance is  introduced into the calculation of the margin of 
dumping."32  Furthermore, the European Communities ar gues that the Panel erred when it stated  
that the European Communities' argument cannot be reconciled with Article 2.4.2;  in the European 
Communities' view, the Panel failed to take into account the opening words of Article 2.4.2:   
"Subject to the provisions governing fair comparison in paragraph 4".  According to the European 
Communities, it is clear, in particular, from the opening words of the second sentence of Article 2.4, 
that the third to fifth sentences of Article 2.4 are provisions "governing fair comparison".  According 
to the European Communities, it follows that Article 2.4.2 is "subject to" the provisions in the third to 
fifth sentences of Article 2.4. 
15. Finally, the European Communities submits that the "targeted dumping" provision in 
Article 2.4.2 need not be considered in resolving th e legal issues in this case, and that, in any event, 
this provision does not support the Panel's finding th at zeroing is not an impermissible allowance or 
adjustment for a difference other than a difference affecting price comparability. 
3. Article 2.4.2 of the  Anti-Dumping Agreement  
16. The European Communities "conditionally" appeals the Panel's finding that the United States 
did not act inconsistently with Article 2.4.2 of the  Anti-Dumping Agreement  by using, in the 
administrative reviews at issue, a methodology that involves asymmetrical comparisons between 
                                                      
31European Communities' appellant's submission, para. 132. 
32Ibid., para. 129.  WT/DS294/AB/R 
 Page 9 
 
 
monthly "normal values" established on a weighted  average basis and prices of individual export 
transactions.  The second sentence of Article 2.4.2 provides that such asymmetrical comparisons may 
be made "if the authorities find a pattern of expor t prices which differ significantly among different 
purchasers, regions or time periods, and if an explan ation is provided as to why such  differences 
cannot be taken into account appropriately by the u se of a weighted average-to-weighted average or 
transaction-to-transaction comparison."  According to the European Communities, the United States 
acted inconsistently with this provision becau se it used the asymmetrical comparison method even 
though the conditions for the application of the second  sentence of Article 2.4.2 were not fulfilled.   
17. The European Communities underlin es, however, that the Appellate Body need not consider 
the appeal on this issue if it agrees with the Eu ropean Communities' appeal from the Panel's findings 
on Article 9.3 of the  Anti-Dumping Agreement , Article VI:2 of the GATT 1994, Article 2.4, first 
sentence, or Article 2.4, third to fifth sentences, of the  Anti-Dumping Agreement . 
18. In the European Communities' view, the refere nce in Article 2.4.2 to "the existence of 
margins of dumping during the investigation phase"  requires investigating authorities to establish 
margins of dumping "on the basis of data arising during the investigation period".33  The European 
Communities claims that, in rejecting this view, th e Panel failed to properly consider the ordinary 
meaning of Article 2.4.2 "as a whole".  In partic ular, the Panel erred in finding that the terms  
"period" and "phase" cannot be equated.  The European Communities underscores that "during the 
investigation phase" refers to the "existence" and no t to the "establishment" of margins of dumping.  
Therefore, according to the Eur opean Communities, "the phrase refers to a distinct period in which 
margins of dumping  exist, i.e. an investigation period;  and not  ... a period of time in which margins 
of dumping are established "34 and thus does not limit the applicability of Article 2.4.2 to original 
proceedings.  Furthermore, the term "investigation" describes a "systematic examination or inquiry or 
a careful study of or research into a particular subject"35;  in Article 2.4.2, that particular subject is 
"margins of dumping".   
19. In the European Communities' view, the Panel in correctly read the phrase at issue as "the  
establishment  of margins of dumping during the investigation phase".36  The European Communities 
adds that the term "investigation" is not synonym ous with the term "investigation to determine the 
existence, degree and effect of any alleged dumping".37  The ordinary meanings of the terms "during 
                                                      
33European Communities' appellant's submission, para. 317. 
34Ibid., para. 175. (original emphasis) 
35Ibid., para. 186. 
36Ibid., paras. 176, 184, and 207. 
37Ibid., para. 159.  WT/DS294/AB/R 
Page 10  
 
the ... period" and "during the ... phase" coincide, indicating a determinate temporal stage in the 
passage of time, or "a distinct period".
38  In the European Communities' view, the Panel put too much 
emphasis on the word "phase":  it erre d by "selectively and subjectively  beginning  with this word 
and  mechanistically  elevating it to a position of such para mount and overwhelming importance in its 
analysis".39 
20. Relying on the context of Article 2.4.2, the European Communities argues that the use of the 
term "margins of dumping" in the phrase "the existence of margins of dumping during the 
investigation phase", together with the defined te rm "margin of dumping" in Article VI:2 of the 
GATT 1994, support its position that the requirements set  out in the first sentence of Article 2.4.2 do 
not apply only to original proceedings.  In addition,  Articles 9.3 and 9.3.3 confirm its interpretation of 
the phrase because the reference to Article 2 in these pr ovisions must be taken to be a reference to the 
whole of Article 2.  The European Communities also argues that Articles 1, 5, and 18 provide no 
support for the position that the application of Articl e 2.4.2 is limited to original proceedings.  The 
European Communities also relies on the  Anti-Dumping Agreement  as a whole in arguing that the 
term "investigation phase" in Article 2.4.2 does not have the particular meaning ascribed to it by the 
Panel. 
21. The European Communities argues that the word  "normally" in Article 2.4.2 "is at odds 
with"40 the Panel's interpretation of that provision.  In addition, the Eur opean Communities asserts 
that the Panel's interpretation of the phrase "during th e investigation phase" is inconsistent with rules 
of English grammar.  In support of its claim, th e European Communities provides a list of references 
to grammatical units, phrases, and elements of an English sentence or clause, accompanied by citations to extracts of an English grammar text.
41 
22. With respect to the object and purpose of the Anti-Dumping Agreement , the European 
Communities takes issue with the Panel's view that  the limited application of Article 2.4.2 to 
proceedings under Article 5 results from qualitativ e differences between the purpose of original 
proceedings and the purpose of anti-dumping duty assessment proceedings.  The European Communities also argues that the Panel confused the "import-specific" argument and the "importer-specific" argument, which are fundamentally differe nt.  While Article 9.3 may allow duty assessment 
on an importer-specific basis, it does not permit zero ing when aggregating the results of comparisons 
between weighted-average normal values and the prices of individual export transactions for a 
                                                     
 
38European Communities' appellant's submission, paras. 203-204. 
39Ibid., para. 204. (emphasis added) 
40Ibid., para. 220. 
41Ibid., paras. 163, 177, and 180.  WT/DS294/AB/R 
 Page 11 
 
 
particular importer.  In this regard, the European Communities cons iders that "[i]t is perfectly possible 
to make a calculation of a dumped amount in relation to each importer without zeroing  in such a way 
that the rule in Article 9.3 is respected."42  The European Communities su bmits that the United States 
failed to prove that WTO Members intended to impart  a "special meaning" on the term "investigation 
phase" in Article 2.4.2, within the meaning of Article 31(4) of the Vienna Convention on the Law of 
Treaties  (the " Vienna Convention ").43  The European Communities al so argues that subsequent 
practice and preparatory works do not support the Panel's interpretation. 
4. Other Claims  
23. First, the European Communiti es challenges the Panel's finding that Section 351.414(c)(2) of 
the USDOC Regulations, as it relates to administrati ve reviews, is not inconsistent, as such, with 
Articles 1, 2.4, 2.4.2, 9.3, 11.1, 11.2, 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 European Communities 
considers that Section 351.414(c)(2) is  inconsistent with Article 2.4.2 because "it permits the use of an 
asymmetrical method without any of the cumulative conditions set out in Article 2.4.2 having been 
met", and because "it provides that the normal rule is asymmetry, when Article 2.4.2 provides that the 
normal rule is symmetry."44 
24. The European Communities also appeals the Panel's finding that Section 351.414(c)(2), as it 
relates to new shipper reviews, changed circum stances reviews, and sunset reviews, is not 
inconsistent, as such, with Articles 1, 2.4, 2.4.2, 9.3, 9.5, 11.1, 11.2, 11.3, 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 . 
25. Secondly, the European Communities argues that the Panel erred in finding that the zeroing 
methodology used or relied upon by the United States in administrative reviews is not, as such, inconsistent with Articles 1, 2.4, 2.4. 2, 9.3, 11.1, 11.2, 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 European 
Communities further contends that the Panel erre d in finding that the zeroing methodology used or 
relied upon by the United States in new shipper review s, changed circumstance s reviews, and sunset 
reviews, is not, as such , inconsistent with Articles 1, 2.4, 2.4.2,  9.3, 9.5, 11.1, 11.2, 11.3, and 18.4 of 
the  Anti-Dumping Agreement , Articles VI:1 and VI:2 of the GATT 1994, and Article XVI:4 of the  
                                                     
 
42European Communities' appellant's submission, para. 288. (original underlining) 
43Done at Vienna, 23 May 1969, 1155 UNTS 331;  8 International Legal Materials 679. 
44European Communities' appellant's submission, para. 347. WT/DS294/AB/R 
Page 12  
 
WTO Agreement .  According to the European Communities, the zeroing methodology is inconsistent 
with the stated provisions because it reflect s the instruction "to zero systematically ".
45 
26. Thirdly, the European Communities appeals the Panel's exercise of judicial economy with 
respect to the question whether administrative revi ews based on model zeroing are inconsistent with 
Article 9.3 of the  Anti-Dumping Agreement .  The European Communities argues that, in cases where 
there is no request for an administrative review, th e USDOC issues assessment instructions to United 
States Customs to collect final anti-dumping duties at the cash deposit rate, that is at the rate that was 
set in the original investigation using model zero ing.  The European Communities contends that, in 
such cases, the application of model zeroing in an assessment review will necessarily be inconsistent 
with Article 9.3 of the  Anti-Dumping Agreement .  The European Communities refers, in particular, to 
the first sample case presented by the European Communities to the Panel regarding anti-dumping 
duties on stainless steel from Italy.46  According to the European Communities, the final anti-dumping 
duties in that case were assessed, in part, on the basis of a margin of dumping established by using 
model zeroing. 
27. The European Communities also appeals the Pa nel's decision to exercise judicial economy 
with respect to the question of whether model zeroi ng, as applied in the original investigations at 
issue, is inconsistent with Article 2.4 of the  Anti-Dumping Agreement .  
28. The European Communities further argues that the Panel erred in exercising judicial economy 
with respect to the question of whether the An ti-Dumping Manual is a measure that is, as such, 
inconsistent with Articles 1, 2.4, 2.4.2, 5.8,  9.3, 9.5, 11.1, 11.2, 11.3, 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 .  In 
support of its claim, the European Communities subm its that "[t]he parties agree that the [Anti-
Dumping] Manual is a measure."47  The European Communities further explains that the Anti-
Dumping Manual "directs the use of the Standard  Zeroing Procedures, Methodology and Practice 
[and] provides a link between the relevant provision s of the Tariff Act and the Regulations, and the 
Standard Zeroing Procedures, Methodology and Practice."48  
29. Fourthly, the European Communities "conditio nally" appeals the Panel's conclusions 
regarding the Standard Zeroing Procedures and requests the Appellate Body "to complete the 
                                                      
45European Communities' appellant's submission, para. 341. 
46See Panel Report, para. 2.9.  
47European Communities' appellant's submission, para. 343 and footnote 340 to para. 342 (referring to 
United States' first written submission to the Panel, para. 84). 
48Ibid., para. 343.   WT/DS294/AB/R 
 Page 13 
 
 
analysis"49 by finding that the Standard Zeroing Pro cedures are, as such, inconsistent with  
Articles 1, 2.4, 2.4.2, 5.8, 9.3, 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 European Communities' request is 
conditioned on the Appellate Body reversing the Panel's finding that the zeroing methodology is 
inconsistent, as such, with Article 2.4.2.  Accordi ng to the  European Communities, its request would 
also be triggered if the Appellate Body consid ers that the Standard Zeroing Procedures are not 
"condemned" (as a result of the Panel's finding on the zeroing methodology, as such) in the sense that 
"compliance [by the United States] would necess itate modification of the Standard Zeroing 
Procedures".50  The European Communities also "conditio nally" appeals the Panel's exercise of 
judicial economy with respect to the United States' "practice" of zeroing in original investigations, administrative reviews, new shipper reviews, chan ged circumstances reviews, and sunset reviews.  
This appeal is triggered if the European Communities does not prevail on appeal with respect to either 
its claim regarding the zeroing methodology or its clai m regarding the Standard Zeroing Procedures.   
30. Fifthly, the European Communities argues that th e Panel acted inconsistently with Article 11 
of the DSU by "demonstrat[ing] insufficient reasoning,  or internal inconsistency, or the making of a 
case"
51 for the United States.  In the alternative, the European Communities submits  that, to the extent 
that the Panel's findings can be considered finding s of fact, the Panel acted inconsistently with 
Article 11 of the DSU in that it did not make an objective assessment of the facts.   
31. Finally, the European Communities submits that the Panel erred in concluding that, in the 
administrative reviews at issue, the USDOC did not act inconsistently with Articles 11.1 and 11.2 of 
the  Anti-Dumping Agreement .  The European Communities argues th at, contrary to what the Panel 
stated, its challenge under Articles 11.1 and 11.2 of the  Anti-Dumping Agreement   does not pre-
suppose that its claims under Articles 2.4 and 2. 4.2 would succeed.  The European Communities 
submits that "[t]he re-investigation of the cash depo sit rate, which is carried out in conjunction with 
the retrospective assessment proceeding, must ... be consistent with the obligations set out in 
Articles 11.1 and 11.2."52  According to the European Communities, "[t]hose provisions go to the 
question of the re-investigation of the margin of  dumping calculated during the original proceeding"53 
and do not allow an investigating authority to ch ange the basic methodology for calculating a margin 
                                                      
49European Communities' appellant's submission, paras. 374 and 376. 
50Ibid., para. 372.  
51Ibid., para. 370 and footnote 360 thereto (referring to European Communities' replies to questions 
posed by the Panel at the first Panel meeting, para. 1;   and European Communities' second written submission to 
the Panel, para. 18). 
52Ibid., para. 365.  
53Ibid.  WT/DS294/AB/R 
Page 14  
 
of dumping, as defined in Article VI of the GATT 1994 and in Article 2 of the Anti-Dumping 
Agreement .   
B. Arguments of the United States – Appellee 
1. Article 9.3 of the  Anti-Dumping Agreement , Article VI:2 of the GATT 1994,
 
and Article 2.4.2 of the Anti-Dumping Agreement  
32. The United States requests the Appellate Body to  dismiss the European Communities' appeal 
concerning Article 9.3 of the  Anti-Dumping Agreement .  The main issue, in the United States' view, 
is whether, pursuant to Article 9.3, the United States was required to reduce the amount of dumping 
duties levied on particular import transactions to  account for other import transactions in which 
merchandise was sold at more than normal value.  The  Anti-Dumping Agreement  does not, according 
to the United States, require such  an offset when assessing anti-dumping duties with respect to a 
particular importer. 
33. The United States agrees with the Panel that "t he concept of 'margin of dumping' in GATT 
Article VI is defined in terms of a  price difference  in a situation in which a product is introduced into 
the commerce of another country at less than its nor mal value i.e. when the export price of the product 
is less  than the normal value of the product."54  According to the United States, the "product" must be 
the "product as a whole" when the "price" in volves the average of "all comparable export 
transactions."  However, when a Member uses a comparison methodology other than the average-to-
average methodology, the price of an individual export transaction is the price that is compared to the 
normal value.  Thus, during the investigation phase, Article 2.4.2 authorizes the use of transaction-to-
transaction comparisons, or, in specified circumstances, comparisons of individual export transactions 
to weighted-average normal values.  In either case,  the "price" is the price of an individual export 
transaction.   According to the United States, in these circumstances, the "product" being introduced 
into the commerce of the importing Member is the product involved in the particular export 
transaction.  Moreover, Article 2.4.2 does not require that the results of those multiple comparisons be 
aggregated to represent what the European Commun ities would consider the "product as a whole", or 
to be expressed as a percentage. 
34. Regarding the findings of the Appellate Body in  US – Softwood Lumber V , the United States 
notes that "the Appellate Body expressly recognized that the only issue before it was whether offsets 
were required under the average-to-average comparison method found in Article 2.4.2."55  The United 
                                                      
54Panel Report, para. 7.59. (original emphasis) 
55United States' appellee's submission, para. 175 (referring to Appellate Body Report, US – Softwood 
Lumber V , paras. 104-105 and 108).  WT/DS294/AB/R 
 Page 15 
 
 
States further points out that the Appellate Body clarified in that case that the terms "all comparable 
export transactions" and "margins of dumping" should be interprete d "in an integrated manner".56  
Accordingly, the Appellate Body's conclusion that there was an obligation to calculate a margin of 
dumping for the product as a whole was limited to the use of the average-to-average comparison 
method during the investigation phase.   
35. Moreover, the United States argues that the fact that the "margin of dumping" need not 
always refer to a calculation for the "product as a whole," as the European Communities claims, is 
confirmed by the text of the first paragraph of Ad  Article VI:1 of the GATT 1994.  That provision 
uses the term "margin of dumping" in a manner that can reasonably be interpre ted as applying only on 
a transaction-specific basis. 
36. The United States argues that Article 2.4.2 applies on ly to investigations and, by virtue of its 
text, is limited to the establishment of the existe nce of margins of dumping during the investigation 
phase.  The Panel correctly concluded that the refe rence to Article 2 in Article 9.3 does not override 
any limitation contained in Article 2.4.2 itself.  In  the United States' view, the Panel also properly 
interpreted the ordinary meaning of the phrase "t he existence of margins of dumping during the 
investigation phase".  The analysis of the limitation in Article 2.4.2 must consider the entire term 
"investigation phase" and not only the word "investig ation".  In the United States' view, the term 
"investigation phase" refers to that  stage in which an authority estab lishes the existence of margins of 
dumping, namely, the phase pursuant to Article 5, which, in comparison with other "phases", has a 
"unique function".57  The Appellate Body has previously recognized that the purpose of an 
investigation is different from the purpose of other proceedings that follow th e investigation phase.  
The United States submits that the function of an investigation is "to determine whether injurious 
dumping exists so as to warrant the imposition of an antidumping duty", and the function of an 
assessment proceeding is "to determine the amount  of antidumping duties that should be assessed".58  
As an example of the different nature of investig ations and assessment proceedings, the United States 
argues that, once an anti-dumping duty is imposed, even if the level of dumping falls below de minimis , a Member is not automatically  obligated to terminate an anti-dumping duty.  Contrary to 
the European Communities' arguments, the use of  different methodologies in investigations and 
assessment proceedings does not lead to an "intolerab le inconsistency"
59 in the concept of dumping 
that would apply in different stages of the proceedings.   
                                                      
56Appellate Body Report, US – Softwood Lumber V ,  para. 85. 
57United States' appellee's submission, para. 57.  
58Ibid., para. 62.  
59Ibid.   WT/DS294/AB/R 
Page 16  
 
37. The United States considers that its view is s upported by the use of the term "investigation" 
throughout the  Anti-Dumping Agreement .  Articles 5.7 and 5.8 expressly refer to the "investigation".  
For instance, Article 5.8, requiring the terminat ion of an "investigation" where the authorities 
determine that the margin of dumping is  de minimis , applies only to the investigation phase and not 
also to some subsequent action, such as sunset re views.  As another example, the United States points 
to Article 6, which concerns "evidence" and uses the word "investigations".  The United States then 
refers to Article 11.4, which "specifically cro ss-references the obligations concerning evidence and 
procedure contained in Article 6".
60  In the United States' view, if th e obligations of Article 6 were to 
apply to all proceedings under the  Anti-Dumping Agreement , such a cross-reference would serve no 
purpose.     
38. The United States submits that, in contrast  to investigations, Article 9.3 assessment 
proceedings are not investigations and are not conc erned with the "existentia l question" of whether 
injurious dumping exists.  Instead, Article 9 assessment proceedings are concerned with the 
measurement of dumping in order to establish the precise amount of an anti-dumping duty that an importer must pay.  If, during an assessment proceed ing, the margin of dumping is determined to be 
zero, the Member is not entitled to assess, but is obligated to refund, the amount of anti-dumping 
duties for the import transactions subject to that proceeding.  Given the different functions of an Article 5 investigation and an Article 9 assessment pr oceeding, obligations that apply with respect to 
an Article 5 investigation do not necessarily appl y to an Article 9 assessment proceeding.   
39. The United States also takes the view that the Panel correctly examined and considered the 
ordinary meaning of Article 2.4.2 in its context and in the light of the object and purpose of the  Anti-
Dumping Agreement .   The Panel also correctly applied prior panel and Appe llate Body reports, 
notably, US – Carbon Steel , EC – Bed Linen , and US – Corrosion-Resistant Steel Sunset Review .  
These reports support the Panel's finding that there ar e distinctions, "both in legal obligations and in 
purpose"
61, between original investigations, on the on e hand, and other actions in anti-dumping or 
countervailing duty proceedings, on the other hand.   Contrary to the European Communities' 
arguments, the Panel did not treat any of the reports as determinative of the issue before it, but rather 
recognized a pattern throughout these reports consis tent with its own findings.  The Panel also 
correctly rejected the European Communities' alternative interpre tations of the phrase "during the 
investigation phase" in Article 2.4.2, that is, that th is phrase refers to the "period of investigation".   
In the United States' view, there is no reason why,  after using the term "period of investigation" 
several times in Article 2, the drafters would not have  used the same term in Article 2.4.2 if they had 
                                                      
60United States' appellee's submission, para. 67. 
61Ibid., para. 78.  WT/DS294/AB/R 
 Page 17 
 
 
wished to refer to the same concep t.  With respect to the European Communities' argument that the 
phrase places a limit on the amount of time in which the investigating authority must make its 
determination, the United States argues that the Panel correctly found that Article 2 does not address 
procedural aspects, such as the timing of determinations.   
40. Furthermore, in the United States' view, the Panel was correct in rejecting the European 
Communities' arguments relating to the obj ect and purpose of Article 9.3 and the  Anti-Dumping 
Agreement .  The United States argues that only a treaty can have an object and purpose as understood 
under the customary rules of interpretation;  the purpose or function of a specific provision can be determined only by ascertaining what the provision means, a process that requires a consideration of 
the treaty's object and purpose.  Furthermore, th e European Communities' approach to Article 9.3—
namely, that the purpose of a duty assessment proceedi ng under Article 9.3.1 is simply "to update the 
temporal frame for normal value" and that, ther efore, there is no reason to apply a different 
comparison methodology in an assessment procee ding—would prohibit the assessment of anti-
dumping duties on an importer- or import-specific b asis.  According to the United States, the Panel 
also correctly rejected the European Communities'  arguments concerning subsequent practice;  the 
evidence adduced by the European Communities fails to demons trate a uniform intention that the 
obligations contained in Article 2.4.2 apply beyond  Article 5 investigations.  The Panel was also 
correct in rejecting the European Communities' ar guments concerning supplementary means of treaty 
interpretation.   
41. The United States also requests the Appellate Body to reject the European Communities' 
additional arguments regarding Article 2.4.2.  Conc erning the use of the word "normally" in the first 
sentence of Article 2.4.2, the United States argues th at, contrary to the European Communities' view, 
the use of that word does not undermine the Panel's in terpretation of Article 2.4.2.  The fact that the 
"normal" rule for investigations might not be th e "normal" rule for assessment proceedings, sunset 
reviews, and other reviews, does not detract from it being the "normal" rule for investigations.  
Finally, the "rules of grammar" referred to by the European Communities, do not, in the United States' 
view, invalidate the Panel's interpretation of Article 2.4.2:  there is no basis or rule that the phrase 
"during the investigation phase" must modify the word  "existence" rather than "establishment" of the 
margin of dumping. 
2. Article 2.4 of the  Anti-Dumping Agreement
 
42. The United States requests the Appellate Body to  reject the European Communities' appeal 
concerning Article 2.4.  The United States argues that the issue of whether a certain methodology is fair must be determined "based upon the substantive rules contained within the [ Anti-Dumping ] WT/DS294/AB/R 
Page 18  
 
Agreement."
62  Article 2.4 is not "indeterminate";  the el ements of what constitutes a fair comparison 
are contained in Article 2.4.  The United States considers it "not credible"63 that WTO Members 
would have agreed that Article 2.4 requires what the United States terms "offsets"64, but decided not 
to mention this agreement expressly in the text of Article 2.4.  Moreover, the simple fact that one 
methodology results in a higher dumping margin than a nother is an insufficient basis to conclude that 
the first methodology is "unfair" within the meaning of  Article 2.4.  Rather, the term "fair" must be 
interpreted in a manner consistent with  other obligations contained in the  Anti-Dumping Agreement . 
43. The United States submits that the text of Article 2.4 does not require the calculation of a 
dumping margin with respect to the "product as a whol e".  Such a requirement cannot be read into the 
concept of "fair comparison".  The obligation to calculate margins of dumping for the product as a whole is limited to the use of the averag e-to-average comparison methodology during the 
investigation phase under Article 2.4.2.  If the fair comparison requirement were interpreted so as to 
impose the same obligation, the first sentence of Article 2.4.2 would be redundant.  The Appellate 
Body, in the United States' view, has never found an obligation to provide for "offsets" stemming 
from the "fair comparison" requirement in Article 2.4, and its report in  EC – Bed Linen  contains no 
textual analysis of the "fair comparison" requirement  or a finding with respect to Article 2.4.  The 
United States also refers to the Appellate Body Reports in  EC – Bed Linen , US – Corrosion-Resistant 
Steel Sunset Review , and  US – Softwood Lumber V   as providing no basis for a conclusion that "the 
fair comparison requirement establishes an i ndependent obligation to provide offsets."
65  
44. The European Communities' interpretative appr oach to Article 2.4 would, in the United 
States' view, nullify the second sentence of Article 2. 4.2.  The comparison method in that sentence is 
an exception to the methods in the first sentence, but it is not an exception to the "fair comparison" 
requirement in Article 2.4.  If Article 2.4 requir es offsets, then offsets must be made under the 
targeted dumping provision of the second sentence of Article 2.4.2.  However, according to the United 
States, the average-to-transaction comparison method with offsets will yield mathematically the same 
result as the average-to-average comparison method.   The European Communities' interpretation, 
argues the United States, denies the second sentence of  Article 2.4.2 "the very function for which it 
was created".66 
                                                      
62United States' appellee's submission, para. 116.  
63Ibid., para. 117.   
64Ibid. 
65Ibid., para. 140.   
66Ibid., para. 150 (quoting Panel Report, para. 7.266).   WT/DS294/AB/R 
 Page 19 
 
 
45. Next, the United States contends that "the denial  of offsets is not an undue price adjustment"67 
pursuant to Article 2.4.  If the denial of offsets is  considered an undue price adjustment, it would be 
an undue adjustment for all three comparison methods described in Article 2.4.2.  However, again, 
such an approach would have the effect of nullifying the second sentence of Article 2.4.2.  
Concerning the European Communities argument—th at Article 2.4.2, second sentence, does not 
specify in every detail how an investigating author ity might conduct its targeted dumping analysis and 
that, if an authority finds a significant pattern of ex port price differences with respect to two regions, 
the authority could simply calculate a margin of dumping for the region in which the pattern occurs—
the United States argues that there is no textua l support for the European Communities' suggestion 
that a WTO Member may calculate separate anti- dumping duty margins based on subsets of export 
transactions.68 
46. The United States further argues that there is  no obligation relating to the "product as a 
whole" that requires "offsets" in assessment pr oceedings.  The European Communities is seeking  
"to elevate a phrase that has been discussed in cer tain dispute settlement reports in one specific 
context"69, but that is not contained in the  Anti-Dumping Agreement , into an obligation that informs 
the interpretation of numerous other provisions of th at Agreement.  In the United States' view, the 
Panel did not err in its interpretation of the ob ligation to determine the margin of dumping and 
correctly found that the term "margin of dumping" could be applied on a transaction-specific basis.  
The United States further submits that the fact that, in an investigation, an individual margin of 
dumping must be calculated on an exporter- or produ cer-specific basis, does not preclude, in the 
context of Article 9, that the margin of dumpi ng may be calculated on an importer- or import-specific 
basis.   
47. The United States further takes the view that the  Anti-Dumping Agreement  does not 
recognize "negative" margins of dumping.  In that Ag reement, the word "margin" is modified by the 
word "dumping", giving it a special meaning—th e price difference when a product has been 
"introduced into the commerce of an importing country at  less than   its normal value."70  Thus, if the 
price of the export transaction exceeds normal value, there is no margin of dumping.  The United States finds support for its view in Article 9.4 and the use of the terms "zero and  de minimis  
margins" therein.  Finally, the United States argues that the special standard of review applicable 
according to Article 17.6(ii) of the  Anti-Dumping Agreement  confirms the permissibility of the 
                                                     
 
67United States' appellee's submission, section IV.C.4, pp. 74-78. 
68Ibid., para. 160. 
69Ibid., para. 167. 
70Ibid., para. 191 (quoting Article VI:1 of the GATT 1994). (emphasis added by the United States) WT/DS294/AB/R 
Page 20  
 
United States' approach.  The United States requests th e Appellate Body to consider that "there may 
be multiple permissible interpretations  of particular provisions in the [ Anti-Dumping ] Agreement and 
that, at a minimum, the [United States'] approach  to assessment proceedings is a permissible one."
71 
3. Other Claims  
48. The United States argues that the Panel properly rejected the European Communities' "as 
such" claims that Section 351.414(c)(2) of the USDOC Regulations as well as the zeroing 
methodology are inconsistent with Articles 1, 2.4, 2. 4.2, 9.3, 9.5, 11.1, 11.2, 11.3, 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 .  In the United States' views, the Panel co rrectly found that the European Communities' 
claims were dependent on a finding of an inconsistency with Articles 2.4 and 2.4.2.  Given that the 
Panel properly rejected that interp retation, it also correctly rejected these "dependent" claims of the 
European Communities.  The United States point out  that the European Communities does not take 
issue with the Panel's characteriza tion of these claims as "dependent"72 upon a finding of breach of 
Article 2.4 and/or Article 2.4.2. 
49. Even if the Appellate Body were to rever se the Panel's findings concerning Articles 2.4 
and 2.4.2 with respect to the assessment proceedings  at issue, the United States submits that the 
Appellate Body should decline to complete the Pa nel's legal analysis and should not examine the 
European Communities' "as such" claims.  The Appella te Body has previously declined to complete a 
panel's analysis in circumstances where doing so would involve addressing claims "which the panel has not addressed at all".
73  Moreover, completing the legal analysis is "particularly inappropriate"74 
where a party has failed to establish a  prima facie  case, such as in the present case. 
50. Next, according to the United States, the Pane l properly exercised judicial economy with 
respect to the consistency of "model zeroing" with Article 9.3 of the Anti-Dumping Agreement .  The 
United States takes issue with th e European Communities' argument th at a finding on this issue was 
necessary "in order to effectively reso lve the dispute between the parties"75, because, when the 
European Communities requests the United States to br ing the measure at issue into conformity with 
Article 2.4.2, the United States "will respond that the measure at issue is already in conformity with 
                                                      
71United States' appellee's submission, para. 198. 
72Ibid., para. 200.  
73Appellate Body Report, EC – Export Subsidies on Sugar , para. 337 (quoted in United States' 
appellee's submission, para. 201).   
74United States' appellee's submission, para. 202.  
75European Communities' appellant's submission, para. 356.  WT/DS294/AB/R 
 Page 21 
 
 
Article 9.3."76  According to the United States, this ar gument "simply invites speculation as to how 
the United States might implement the recommendations and rulings of the ... DSB"77;  the European 
Communities has not explained or demonstrated why a finding on this point is necessary to resolve 
the dispute. 
51. Concerning the Panel's exercise of judici al economy with respect to the European 
Communities' claim that model zeroing, as applied in the original investigations at issue, is 
inconsistent with Article 2.4, the United States rejects the European Commu nities' contention that 
further findings on this matter are necessary because the United States might implement by "switching"
78 to a different comparison methodology, thereby potentially introducing an adjustment 
that is inconsistent with Article 2.4.  In the Un ited States' view, the Appellate Body should not opine 
on how "any potentially changed measure"79 could be WTO-inconsistent. 
52. The United States further argues that the Appe llate Body should decline to rule on the 
European Communities' conditional claim regard ing the Panel's exercise of judicial economy 
regarding the United States' "practice" of zeroing in  original investigations, administrative reviews, 
new shipper reviews, changed circumstances revi ews, and sunset reviews.  The United States 
emphasizes that the European Comm unities simply alleges error on the part of the Panel without any 
argumentation or citation to arguments contained in its submissions to th e Panel, and thus failed to set 
out a "precise statement" of the grounds for its  appeal, as required by Rule 21(2)(b) of the Working 
Procedures . 
53. The United States furthermore requests the Appellate Body to reject the European 
Communities' claim under Article 11 of the DSU.  According to the United States, the European 
Communities did not properly identify this claim in its Notice of Appeal and did not provide requisite 
notice to the United States, the third participants, and the Appellate Body.  Secondly, the European 
Communities' appellant's submission is "devoid"80 of any arguments in support of its claim.  Thirdly, 
the European Communities does not reference "a  single Panel finding that evinces the asserted 
flaws"81, and has therefore not substantiated its claim th at the Panel failed to act consistently with 
Article 11 of the DSU.  
                                                      
76European Communities' appellant's submission, para. 355. 
77United States' appellee's submission, para. 211.    
78Ibid., para. 214 (quoting European Communities' appellant's submission, para. 363).   
79Ibid., para. 214. 
80Ibid., para. 227.   
81Ibid., para. 230.   WT/DS294/AB/R 
Page 22  
 
54. The United States furthermore rejects the Eur opean Communities' contention that the Panel 
erred in concluding that, in the administrative revi ews at issue, the USDOC did not act inconsistently 
with Articles 11.1 and 11.2 of the  Anti-Dumping Agreement .  The European Communities does not 
explain what it perceives to be the obligations set forth in Articles 11.1 and 11.2 and how those obligations relate to Article 9.3 assessment pro ceedings.  Furthermore, the European Communities 
"never reconciled"
82 its claims under Articles 11.1 and 11.2 with its own recognition that the duty 
assessment proceedings conducted by the Un ited States "correspond to and fit within"83 Article 9.3 of 
the  Anti-Dumping Agreement . 
C. Claims of Error by the United States – Appellant 
55. The United States appeals the Panel's finding that the zeroing methodology is inconsistent, as 
such, with Article 2.4.2 of the  Anti-Dumping Agreement .  The United States' appeal is based on four 
main arguments. 
56. First, according to the United States, the Panel erred in finding that the zeroing methodology 
is a measure that can be challenged, as such, in  dispute settlement proceedings.  The United States 
emphasizes that the Panel's conclusion is not supported by the text of the DSU or by previous rulings 
by the Appellate Body regarding the types of meas ures that can be challenged, as such, in dispute 
settlement proceedings.  The United States refers, in  particular, to Article 3.3 of the DSU which 
speaks of "measures taken by another Member".  Th e United States further recalls that the Appellate 
Body has previously recognized that, "[i]n principle, any act or omission attributable to a WTO Member can be a measure of that Member for purposes of dispute settlement proceedings."
 84  Thus, 
according to the United States, "a measure may exist where, at a minimum, a Member acts, or where 
it fails to act where it has an obligation to do so."85  The United States acknowledges that measures 
can "consist[ ] not only of particular acts applied only to a specific situation, but also of acts setting forth rules or norms that are intended to have general and pros pective application."
86  The United 
States argues, however, that it is clear from these prev ious rulings of the Appellate Body that there is 
a distinction between an act, or instrument, on th e one hand, and rules or norms, on the other hand.  
The latter, in the sense of a principle or standard, are not themselves "measures".   
                                                      
82United States' appellee's submission, para. 219. 
83Ibid.   
84Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 81. 
85United States' other appellant's submission, para. 11.  
86Ibid., para. 12 (quoting Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , 
para. 82).  WT/DS294/AB/R 
 Page 23 
 
 
57. In the United States view, the Panel erred in finding that the zeroing methodology is a "norm" 
and, thus, a "measure", even though it did not iden tify any act or instrument creating or containing 
this "norm".  "The standard applied by the Panel obvi ates the need for any sort of act or instrument ..., 
binding or non-binding."87  Moreover, under the Panel's sta ndard, according to the United States, 
"abstractions can be measures."88  The United States submits that this approach "would start the WTO 
dispute settlement system down the path of legi slating 'norms' rather than resolving disputes 
concerning measures." 89  The United States further submits that a  description   of what a WTO 
Member has "typically"90 done is not the same as a separate measure that  prescribes   that Member to 
act in that manner.  
58. Secondly, the United States argues that "the Pane l did not identify any act or instrument of the 
United States setting forth or creating that rule or norm"91 and there was no evidence that such acts or 
instruments exist.  The United States emphasizes that, the evidence relied upon by the Panel "was 
historical, and related to what the USDOC has done in the past, not what it does."92  The United States 
adds that the Panel's reliance on the past use of certain lines of computer code "does not help to 
identify the act or instrument, if any, th at is causing the use of these lines of code."93  Instead, the 
evidence before the Panel "did not suggest anything  other than that the decision-makers in past 
cases"94 simply considered zeroing to be an appropriate response to the facts.   
59. The United States also contends that the Pane l's reliance on the findings of the panel in  Japan 
– Film  is inapt.  In  Japan – Film , the United States challenged certa in laws and regulations, as well 
as "less formal or less concrete forms of governmental  action ."95  The question before the panel in 
that case was "whether informal 'action' , such as 'administrative guidance' ( gyôsei shidô ), could 
constitute a measure."96  The panel concluded that it could.  However, "'administrative guidance', even 
though informal, is still an 'act', and, thus, sa tisfies the minimum require ment for a 'measure'."97  The 
panel in Japan – Film   was not presented with the question of whether something other than an act or 
an instrument could constitute a measure.  Therefor e, according to the United States, the findings of 
                                                      
87United States' other appellant's submission, para. 27. 
88Ibid., para. 4. 
89Ibid. 
90Ibid., para. 19. 
91Ibid., para. 33. 
92Ibid., para. 36.    
93Ibid., para. 37. 
94Ibid. 
95Ibid., para. 40 (quoting Panel Report, Japan – Film , para. 10.42). 
96Ibid., para. 40.   
97Ibid. (footnote omitted) WT/DS294/AB/R 
Page 24  
 
the panel in that case provide no support for the Panel's conclusion that zeroing methodology is a 
measure.    
60. In sum, on this point, according to the United St ates, "the Panel neither attempted to identify 
an act or instrument of the United States that mi ght constitute a measure subject to an 'as such' 
challenge, nor did its analysis  reveal any such measure."
98   
61. Thirdly, the United States submits that, even assuming, arguendo , that the zeroing 
methodology could constitute a "measure", the Panel fa iled to apply the correct standard and failed to 
make an objective assessment of the matter as required under Article 11 of the DSU.   
62. The United States argues that, "[i]n order to conclu de that a measure, as such, is inconsistent 
with a WTO obligation, that measure must  mandate a breach of that obligation."99  The United States 
contends, moreover, that "[t]he standard for de termining whether a measure as such breaches a WTO 
obligation is that the measure either mandates WT O-inconsistent action or precludes WTO-consistent 
action."100  To the extent the Panel failed to apply the mandatory/discretionary distinction in analyzing 
and finding a breach of Article 2.4.2, the Panel erred. 
63. The United States notes that the Appellate Body has confirmed that "in order to determine 
whether a measure is 'as such' inconsistent, reliance solely on statistics or aggregate results is not 
enough."101  Nor is it enough, according to the United St ates, to say that resu lts are "predictable".102  
Instead, "it has to be established th at the measure causes the results."103  As the Appellate Body 
explained in US – Anti-Dumping Measures on Oil Country Tubular Goods , in the context of the 
Sunset Policy Bulletin (the "SPB"), it has to be "demonstrate[d] that the SPB  instructs  the USDOC 
to treat dumping margins and import volumes as c onclusive" and that the USDOC "made a final 
determination ... due to  the SPB".104  The United States underlines that the Panel engaged in no 
comparable analysis with respect to the zeroing methodology in the present case.  The United States 
                                                      
98United States' other appellant's submission, para. 41.   
99Ibid., para. 43. 
100Ibid., para. 44. 
101Ibid., para. 50 (referring to Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , 
para. 215;  and Appellate Body Report, US – Anti-Dumping Measures on Oil Country Tubular Goods , 
para. 202). 
102Ibid., para. 50. 
103Ibid. 
104Appellate Body Report, US – Anti-Dumping Measures on Oil Country Tubular Goods , para. 206.  WT/DS294/AB/R 
 Page 25 
 
 
emphasizes that the "lack of rigor" in the Panel's an alysis is "disturbing", in particular because the 
Panel itself recognized that "as such" challenges are "serious challenges".105   
64. Fourthly, according to the United States, the Pa nel erred in allocati ng the burden of proof 
regarding this claim and in finding that the European Communities had established a  prima facie  
case.  The Panel stated that it would consider "whe ther there exists what the European Communities 
terms methodology and whether this methodolo gy can be found to be WTO-inconsistent"106, even 
though the Panel did not explain what the European Communities "meant by 'methodology'"107;  the 
Panel, in the United States' view, could no t do so, because the European Communities never 
explained how "methodology" properly could be c onsidered a measure.  The Panel effectively 
relieved the European Communities from its burden to demonstrate, as part of its  prima facie   case, 
an act or instrument that required the USDOC  to "zero" in anti-dumping investigations. 
D. Arguments of the European Communities – Appellee 
65. The European Communities requests the Appellate Body to dismiss the United States' appeal 
that the Panel erred in finding that the zeroing met hodology is inconsistent, as such, with Article 2.4.2 
of the  Anti-Dumping Agreement .   
66. The European Communities disagrees with the Un ited States' arguments regarding the issue 
of "act or instrument".  A measure need not be an "act or instrument";  it can be an omission.  The 
Appellate Body has previously stated that there ar e no limitations on the types of measures that may, 
as such, be subject to WTO dispute settlement.108  In any event, the European Communities considers 
that the "Standard AD Margin Program", which c ontains the Standard Zeroing Procedures, is 
correctly characterized as an "act or instrument".109  In the European Communities' view, the Panel 
ultimately considered that the Standard Zeroing Procedures are an "instrument" and, in fact, a 
"measure", or "evidence of a measure".110 
67. Secondly, the European Communities requests the Appellate Body to reject the United States' 
claim under Article 11.  According to the Europe an Communities, the United States, in its other 
appeal, inappropriately focuses on the so-called ma ndatory/discretionary "rule", rather than  
addressing the question of whether the measure is  in conformity with WTO provisions.  The  
                                                      
105United States' other appellant's submission, para. 51 (quoting Panel Report, para. 7.102).  
106Panel Report, para. 7.98. 
107United States' other appellant's submission, para. 55. 
108Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , pars. 81-89. 
109European Communities' appellee's submission, para. 27. 
110Ibid.   WT/DS294/AB/R 
Page 26  
 
European Communities expresses doubts concerning the correctness and usefulness of the 
mandatory/discretionary rule. Referring to findings of the Appellate Body in US – Corrosion-
Resistant Steel Sunset Review , the European Communities states th at it does not agree with the United 
States that the mandatory/discretionary rule exis ts.  The European Communities suggests that the 
Appellate Body "could confirm, once and for all,  that there is, in truth, no such [rule]."
111  In the 
European Communities' view, this is what the Appe llate Body "has effectively done by finding that 
such a 'rule' is not to be mechanistically applied."112  Alternatively, according to the European 
Communities, the Appellate Body "may, in one suc cessive case after another, explain why the rule 
does not avert an 'as such' finding of in consistency in the particular case."113  For the European 
Communities, "[w]hether it's a quick execution or a slow and painful death, the end result is the same."
114  
68. The European Communities also submits that th ere are several reasons "why the mechanistic 
application of the mandatory/discretionary rule cannot avert a finding of inconsistency in this 
particular case."115  The European Communities argues that a municipal measure need not "be framed 
in the strongest 'compelling' language ... in  order to be found [WTO] inconsistent."116  In any event, in 
the European Communities' view, the measure at  issue is mandatory because the Anti-Dumping 
Manual directs the use of the computer progr ams, and the Standard Zeroing Procedures 
"automatically and directly"117 effect the zeroing methodology challenged by the European 
Communities.  The European Communities also sugg ests that the Standard Zeroing Procedures do 
not, in any event, provide for the exercise of discre tion:  "applied as they stand they will effect model 
zeroing."118 
69. In addition, in response to the United States' contention that the Panel relieved the European 
Communities of its burden of proof, the European Communities submits that the Panel also did not rely exclusively on evidence of past behaviour of the United States.  The European Communities 
further emphasizes that it set out with sufficient cl arity and precision its arguments before the Panel. 
                                                     
 
111European Communities' appellee's submission, para. 76 (referring to Appellate Body Report, US – 
Corrosion-Resistant Steel Sunset Review , para. 82).  
112Ibid., para. 76.  
113Ibid.  
114Ibid.  
115Ibid., para. 77.   
116Ibid., para. 79. 
117Ibid., para. 81.  
118Ibid., para. 85.   WT/DS294/AB/R 
 Page 27 
 
 
E. Arguments of the Third Participants 
1. Argentina  
70. Pursuant to Rule 24(2) of the  Working Procedures , Argentina chose not to submit a third 
participant's submission.  Argentina's statement at the oral hearing focused on Articles 9.3 and 2.4 of 
the  Anti-Dumping Agreement .   
2. Brazil  
71. Brazil argues that the Panel erred in finding  that zeroing is permitted in the various 
proceedings under the  Anti-Dumping Agreement .  According to Brazil, the principles established 
previously by Appellate Body rulings119 condemning zeroing in the context of original investigations 
apply equally to administrative and new shipper reviews.   Brazil, therefore, finds the Panel's view that 
zeroing is permitted in these reviews "rather astounding", given that "this is when the full effect of the 
duty is felt by the importer and the effect of zeroi ng is more pronounced than it is in an original 
investigation."120  Brazil further argues that the Panel failed to "determine whether its interpretation of 
Article 2.4.2 [of the Anti-Dumping Agreement ] made sense in light of the context, object, and purpose 
of the Agreement."121  The obligation to calculate a margin of dumping for the product as a whole and 
the principle of "fair comparison" "are not specific to original investigations"122 and, therefore, apply 
also to administrative and new shipper reviews.  The Panel's concerns over possible interference of 
such a conclusion with variable/prospective normal value systems are, according to Brazil, also 
groundless;  according to Brazil, under United States  law, duty assessment is determined "for all 
product entered by an importer at the same averag e rate;  there are no sale-specific duties assessed."123  
Because the USDOC calculates margins for the "p roduct as a whole" in administrative and new 
shipper reviews, the analysis of whether zeroing is permitted must be identical between these types of 
reviews and original investigations.   
72. Regarding changed circumstances and sunset revi ews, Brazil submits that the Panel did not 
truly address the question of whether zeroing is permitted in changed circumstances and sunset 
reviews because, instead of fully examining the vari ous issues associated with these types of reviews, 
                                                      
119See Brazil's third participant's submission, para s. 8-11 (referring to Appellate Body Report, US – 
Softwood Lumber V , paras. 93, 98, and 101;  and Appellate Body Report, EC – Bed Linen , paras. 53 and 55). 
120Ibid., para. 13. 
121Ibid. 
122Ibid., para. 15. 
123Ibid., para. 14.  WT/DS294/AB/R 
Page 28  
 
the Panel "chose simply to cross reference its analysis"
124 made in the context of administrative 
reviews.  In doing so, the Panel misunderstood  the purpose of these administrative reviews and 
ignored existing jurisprudence on the subject.  Brazil observes that the Appellate Body, in US – 
Corrosion-Resistant Steel Sunset Review , "made statements making quite clear its view on the 
applicability of various principles to sunset revi ews (and, by extension, changed circumstance[s] 
reviews)"125, which effectively prohibit the practice of zeroing in these reviews. 
73. Brazil further submits that the Appellate Body  should uphold the Panel's finding that zeroing 
in original investigations is inconsistent, as such, with the Anti-Dumping Agreement .  The United 
States' argument that the zeroing methodology is not a measure, but rather a mere "abstraction"126,  
is "disingenuous".127  Indeed, the Appellate Body should "go further" than the Panel and find that the 
zeroing methodology applied "in any context" is, as such, inconsistent with the  Anti-Dumping 
Agreement .128   
74. Regarding the issue of whether the zeroing methodology is challengeable, as such, Brazil 
contends that the United States erroneously interpre ts previous Appellate Body findings as confining 
challengeable practices to situations  where a Member has explicitly c odified a practice, "separate and 
apart from the case-specific decisions themselves".129  Brazil recalls that the Appellate Body stated, in 
US – Corrosion-Resistant Steel Sunset Review , that "any act or omission attributable to a WTO 
Member can be a measure of that Member fo r purposes of dispute settlement proceedings."130  
According to Brazil, the view that the zeroing me thodology is a measure is supported by Article 18.4 
of the  Anti-Dumping Agreement , which, according to the Appellate Body, covers "the entire body of 
generally applicable rules, norms, and standards adopted by Members in connection with the conduct 
of anti-dumping proceedings."131  Further, Brazil submits that, in US – Hot-Rolled Steel  and US – 
Countervailing Measures on Certain EC Products , the Appellate Body "reach[ed] the conclusion that 
a measure of general and prospective application— like the zeroing methodology—is inconsistent with 
                                                      
124Brazil's third participant' s submission, para. 16.  
125Ibid., para. 18 (referring to Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , 
paras. 109, 126-127, 130, and 135). 
126Ibid., para. 20 (quoting United States' other appellant's submission, para. 8). 
127Ibid., para. 20. 
128Ibid. 
129Ibid.,  para. 21. 
130Ibid. (quoting Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review, para. 81).  
131Ibid. (quoting Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 87).  WT/DS294/AB/R 
 Page 29 
 
 
WTO obligations."132  The zeroing methodology, according to Brazil, is no different from the "arm's 
length test or the 'same person' methodology"133, which were of concern in those two cases. 
3. China  
75. China argues that the Panel erred in finding that  the word "investigation" in Article 2.4.2 of 
the  Anti-Dumping Agreement  refers only to original investigations pursuant to Article 5, and that, 
consequently, the disciplines contained in Article 2. 4.2 apply only to those investigations.  China 
submits that the meaning of the word "investigatio n" in Article 2.4.2 should be determined with 
reference to the ordinary meaning of the word, wh ich suggests "systematic examination" or "careful 
study of a particular subject".134  Moreover, in China's view, the phrase "the existence of margins of 
dumping during the investigation phase" in Article 2.4.2, when read as a whole, cannot limit the application of Article 2.4.2 to original investiga tions.  Absent any explicit "qualification or cross-
reference"
135, the word "investigation" in Article 2.4.2 s hould be read as referring to the entire anti-
dumping investigation, including reviews.  China also disagrees that it is only in original 
investigations that the investigating authority needs to determine the "existence of margins of 
dumping".  In administrative reviews, the United States assesses the final lia bility for payment of  
anti-dumping duty amounts, but at the same time de termines the new cash-deposit rate.  In such a 
proceeding, the investigating authority must al so determine the existence and magnitude of  
dumping margins.  In China's view, the "existen ce" and "magnitude" of dumping are not "mutually 
exclusive".136 
76. China also argues that the term "margins of  dumping" should be applied consistently 
throughout the  Anti-Dumping Agreement .  Thus, the correct interpretation of Article 2.4.2 is that any 
investigation  with respect to margins of dumping should be  subject to the rules of comparison set 
forth in that provision.  China further ar gues that the Appellate Body ruled, in  US – Corrosion-
Resistant Steel Sunset Review 137, that an anti-dumping proceedin g relying upon dumping margins 
must conform to the disciplines of Article 2.4. 
                                                      
132Brazil's third participant's submission, para . 23 (referring to Appellate Body Report, US – 
Countervailing Measures on Certain EC Products , paras. 137, 147, and 151;  and Appellate Body Report,  
US – Hot-Rolled Steel , pars. 131, 148, and 158). 
133Ibid., para. 25. 
134China's third participant's submission, para. 8 (quoting dictionary definitions from The New Shorter 
Oxford English Dictionary , L. Brown (ed.) (Clarendon Press, 1993)). 
135Ibid., para. 9.  
136Ibid., para. 11.  
137See Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 127 (quoted in 
China's third participant' s submission, para. 13). WT/DS294/AB/R 
Page 30  
 
77. China submits that the cross-references contained in the texts of Articles 2 and 9.3 of the Anti-
Dumping Agreement  demonstrate that the disciplines of Article 2 apply to Article 9.3 assessment 
proceedings.  Furthermore, the reference in Article 9.4(ii) of the  Anti-Dumping Agreement   to the 
calculation of anti-dumping duties based on pros pective normal value does not exclude the 
applicability of Article 2 to assessment proceedings  under Article 9.3.  The chapeau of Article 9.4 
indicates that Article 9.4 is "a special provi sion applying in a particular situation"
138—that is, with 
respect to sampling and prospective assessments—with respect to particular subject matters, namely, 
imports from exporters or producers not included in the examination.  Article 9.4(ii) should be interpreted in the light of Article 2.4, which sets fo rth certain "general principles";  the "export prices 
of exporters or producers not individually examin ed", referred to in Article 9.4(ii) should be 
interpreted as referring to average export prices of su ch exporters or producers.  China observes that, 
"even if a provisional duty might be collected on the basis of [an] asymmetrical comparison under 
Article 9.4(ii)"
139, final duty liability must be determined  in accordance with the provisions of 
Article 2 of the  Anti-Dumping Agreement , including Article 2.4.2. 
4. Hong Kong, China  
78. Pursuant to Rule 24(2) of the  Working Procedures , Hong Kong, China chose not to submit a 
third participant's submission.  Hong Kong, Ch ina's statement at the oral hearing focused on 
Articles 2.4 and 2.4.2 of the  Anti-Dumping Agreement . 
5. India  
79. Pursuant to Rule 24(2) of the  Working Procedures , India chose not to submit a third 
participant's submission.  India's statement at th e oral hearing focused on Article 2.4.2 of the  Anti-
Dumping Agreement . 
6. Japan  
80. Japan submits that the Appellate Body should  reverse the Panel's finding that the United 
States did not act inconsistently with Articles 2.4, 9.3, and 18.4 of the  Anti-Dumping Agreement  and 
Articles VI:1 and VI:2 of the GATT 1994 by a pplying the zeroing methodology in duty assessment 
proceedings under Article 9.3 of the  Anti-Dumping Agreement . 
81. Japan asserts that zeroing methodology necessarily prevents a determination of the margin of 
dumping for the product as a whole and, therefore, is  inconsistent, as such, with Article 2.1 of the 
                                                      
138China's third participant' s submission, para. 17. 
139Ibid., para. 20.  WT/DS294/AB/R 
 Page 31 
 
 
Anti-Dumping Agreement  and Article VI of the GATT 1994.  Th e inclusion of solely positive results 
means that the determination of the amount of "dumpi ng" is made for a sub-group of transactions that 
comprises only a part of the product, and not for the product as a whole.  In Japan's view, the 
requirement that a margin of dumping be determined for the product as a whole applies to the entire  
Anti-Dumping Agreement .  Consequently, the zeroing methodology  is inconsistent with Article 9.3 
when applied in duty assessment pro ceedings;  with Article 9.5 when applied in new shipper reviews;  
with Article 11.2 when applied in changed circum stances reviews;  and with Article 11.3 when 
applied in sunset reviews.   
82. Japan argues that the text, context,  and the object and purpose of the Anti-Dumping 
Agreement , as well as the Appellate Body's ruling in US – Softwood Lumber V , confirm that the 
existence and amount of "dumping" are defined, in Article 2.1, for the product as a whole and not for 
individual transactions or group of transactions. 
83. Furthermore, according to Japan, the definition of  dumping in Article 2.1 applies to all types 
of reviews.  The Panel failed to recognize that a uniform definition of dum ping exists and governs the 
determination of the existence a nd amount of dumping in all forms of  reviews and, thus, erroneously 
rejected the "product as a whole" definition for duty assessment proceedings.  The Panel's finding that 
zeroing is permissible in duty assessment proceedings w as based, to a large extent, on its finding that 
the purpose of original investigations is differe nt from the purpose of duty assessment proceedings.  
Japan submits that the purpose of a duty assessment pr oceeding is not to determine the amount of duty 
on "particular import transactions"140;  rather, it is to determine "whether the amount of duties  
initially   imposed  on the product  is appropriate"141 in the light of the amount of dumping for the 
review period.  Moreover, a dumping margin dete rmination in any anti-dumping proceeding involves 
a determination whether dumping exists, even if the legal consequences of the determination in 
original investigations and duty assessment proceedings may differ.  
84. Japan also submits that the Panel incorrectly rejected an exporter-oriented approach.  The 
Panel did so on the basis of what Japan consider s to be the Panel's mistaken perception that 
"dumping" is determined, and duties are imposed, on individual transactions and not on the product as 
a whole.  Contrary to the Panel, Japan does not c onsider that the rules in Article 9.4(ii) of the  
Anti-Dumping Agreement  on the imposition of variable anti-dum ping duties demonstrate that margins 
of dumping can be determined for individual transactions.   
                                                      
140Japan's third participant's submission, para. 89 (quoting Panel Report, para. 7.274). 
141Ibid.,  para. 89. (original emphasis) WT/DS294/AB/R 
Page 32  
 
85. Finally, Japan argues that the Panel was also  wrong in rejecting the "product as a whole" 
definition for new shipper reviews, changed circumst ances reviews, and sunset reviews.  Even if the 
Panel's findings regarding the purpose of duty assessme nt proceedings were correct, the Panel would 
still be wrong in assuming that this purpose appli es to new shipper reviews, changed circumstances 
reviews, and sunset reviews.  In Japan's view, in  a new shipper review, the investigating authority 
determines whether a producer or exporter that was not shipping during the original investigations is 
engaging in "dumping".  If this is found to be the case, the investigating authority imposes duties 
based on individually determined dumping margins.  For the new shipper, this determination is 
similar to the dumping determination made in th e original investigations for the individually 
examined producers and exporters.  The word "dumpi ng" also has the same meaning in Article 2.1 
and Articles 11.2 and 11.3 of the Anti-Dumping Agreement —the provisions governing changed 
circumstances reviews and sunset reviews.  
86. Japan submits that the Appellate Body should  reverse the Panel's finding that "zeroing is 
consistent with Article 2.4 in all reviews".
142  In Japan's view, zeroing does not involve a "fair 
comparison" within the meaning of Article 2.4.   
87. In Japan's view, the Panel erred in finding th at the "fair comparison" requirement does not 
create any obligations additional to the express requi rements of Article 2.  According to Japan, the 
ordinary meaning of the word "fair" requires the investigating authority to conduct an unbiased, even-
handed comparison that does not favour particular inter ests or outcomes, or otherwise distort the facts, 
in particular, to the detriment of exporters or foreign producers.143  In contrast, zeroing excludes all 
negative multiple comparison results produced by hi gh-priced export transactions, thereby making an 
affirmative dumping determination considerably more  likely, as well as inflating the level of any such 
determination.  Japan points to several consequen ces of zeroing:  it "may lead to an affirmative 
determination of dumping" where no determination of dumping would have been made in the absence 
of zeroing;  it "inflates" any dumping margin because the excluded negative values would otherwise 
reduce the amount of dumping;  and it treats the e xport prices in excluded transactions as if they were 
less than what they are in reality.144 
88. Japan argues that, furthermore, the zeroing met hodology involves a form of adjustment to the 
prices compared that is not permitted under the thir d sentence of Article 2.4.  According to Japan, 
zeroing is "unfair" when used in any kind of proceedings.  Japan bases its assertion on the fact that the 
Appellate Body has held that Article 2.4 a pplies to duty assessment proceedings and sunset 
                                                      
142Japan's third participant's submission, heading VI, p. 42.  
143Ibid., para. 157. 
144Ibid., para. 158.    WT/DS294/AB/R 
 Page 33 
 
 
reviews.145  Japan submits that the absence of a formal finding by the Appellate Body that zeroing is 
not "fair" within the meaning of Article 2.4 is not du e to the "fairness" of zeroing;  rather, in previous 
disputes, particular circumstances prevented or obvi ated the need for the Appellate Body to make a 
formal ruling under Article 2.4.  Japan finally adds  that, because the Panel incorrectly articulated the 
purpose of duty assessment proceedings, it also erred in  finding that zeroing is "fair" in the light of 
that alleged purpose. 
89. In Japan's view, contrary to the Panel's findi ng, the second sentence of Article 2.4.2 does not 
permit an authority to engage in zeroing.  The second sentence does not prescribe how the average-to-
transaction comparison should be structured;  however , "the distinguishing features of the comparison 
must be rooted in the particular conditions that justify its use."146  That comparison methodology is 
based on a targeted selection of the export transactions  that constitute a particular pricing pattern.  
Japan suggests that the use of such a comparison methodology does not prescribe the treatment of 
transactions outside that pattern;  nonetheless, zeroi ng is prohibited in those circumstances.  Japan 
maintains that, even if, arguendo , the second sentence allowed zeroing, such zeroing would be 
permitted exclusively when the conditions in the sec ond sentence of Article 2.4.2 are satisfied.  The 
Panel failed to explain why it is appropriate to ex tend the alleged permissibility of zeroing from the 
second sentence of Article 2.4.2 to all reviews under Articles 9 and 11.   
90. Although, in Japan's view, the Appellate Body could decline to rule on whether zeroing is 
permitted under the second sentence of Article 2.4.2,  a finding that zeroing is not permitted under the 
second sentence of Article 2.4.2 would, in its view , assist the parties in the implementation of the 
DSB's recommendations and rulings in this dispute. 
7. Korea  
91. Korea agrees with the Panel th at the zeroing methodology is a measure inconsistent, as such, 
with Article 2.4.2 of the  Anti-Dumping Agreement .  However, Korea disagrees with the Panel that 
zeroing is permitted in administrative reviews.  In Korea's view, the zeroing methodology must be prohibited in all types of anti-dumping proceedings—i ncluding original investigations as well as 
administrative reviews—because that methodology constitutes a violation of Articles 2.4 and 2.4.2 of 
the  Anti-Dumping Agreement , as held previously by the Appellate Body in EC – Bed Linen ,  
US – Corrosion-Resistant Steel Sunset Review , and  US – Softwood Lumber V .   
                                                     
 
145Japan's third participant's submission, para. 176 (referring to Appellate Body Report, US – 
Corrosion-Resistant Steel Sunset Review , paras 127 and 135).  
146Ibid., para. 191.    WT/DS294/AB/R 
Page 34  
 
92. Korea submits that the amount of the anti-dum ping duty must never exceed the margin of 
dumping.  As a result, an investigating authority,  in calculating a dumping margin, must consider the 
entire set of data from the investigation period and must calculate a margin of dumping for the 
"product as a whole".  The investigating authorit y may compare only normal value and export price 
adjusted for differences affecting price comparability.   Korea argues that an investigating authority 
must conform to these rules in all types of anti-dumping proceedings "in which a margin of dumping 
is investigated or relied on, whether it is an original investigation or subsequent reviews."
147  
Therefore, one cannot argue that the authority is exempt, in the course of an administrative review, 
from the obligation to ensure that the amount of the anti-dumping duty does not exceed the margin of 
dumping.  Hence, the Panel erred in finding that differe nt sets of rules apply to original investigations 
and to administrative reviews.  Moreover, it "defies common sense"148 to prohibit zeroing in original 
investigations, but to permit it in administrative re views, when the latter "constitutes an extension of 
the former".149  In Korea's view, applying what it considers to be "two different rules" in an original 
investigation, on the one hand, and in an administ rative review, on the other hand, "would render the 
key principle of the [ Anti-Dumping ] Agreement simply meaningless."150 
93. Korea also submits that the "fair comparison" re quirement of Article 2.4 is an "overarching 
and independent obligation"151 that goes beyond the obligation to make "due allowances" described  
in the other sentences of Article 2.4 and that applies to all dumping calculations.  This is confirmed by 
the negotiating history of the  Anti-Dumping Agreement , and by the fact that the first sentence of the 
corresponding provision of the Tokyo Round Anti-Dump ing Code read "in order to effect a fair 
comparison";  it should not be presumed that the draf ters of the new agreement would have made this 
change without a specific intent.  As a result, the wording of Article 2.4 of the  Anti-Dumping 
Agreement , in contrast, contains "a separate and explicit command"152 requiring a "fair comparison".  
By virtue of zeroing, the investigating authority methodically fails to take into account all export 
transactions for the product as a whole, which, ther efore, inevitably leads to an "unfair comparison", 
contrary to Article 2.4.  Korea further argues that, "[t]o the extent that a dumping margin is effectively 
calculated"153, the "fair comparison" requirement is also applicable in administrative reviews.   
                                                      
147Korea's third participant' s submission, para. 13. 
148Ibid., para. 15. 
149Ibid.  
150Ibid., para. 14.   
151Ibid., para. 17.  
152Ibid., para. 20.  
153Ibid., para. 24.   WT/DS294/AB/R 
 Page 35 
 
 
94. Finally, Korea submits that reviews under Artic le 9.3 are part of "the investigation phase" 
referred to in Article 2.4.2.  The ordinary meaning of the word "investigation" indicates "a systematic 
examination or inquiry or a careful study or research into a particular subject"154, rather than referring 
to the original investigation.  This is not a sp ecialized meaning of the word, as argued by the United 
States.  Korea also submits that several panel and Ap pellate Body reports have used the term "original 
investigations"—as opposed to "investigations"—to re fer to Article 5.1 investigations, and that the 
adjective "original" carries some specific meaning in all these instances.155  Rather, it is the United 
States itself, in Korea's view, that has failed to pr ove the more special meaning it seeks to ascribe to 
this word.  Moreover, in Korea's vi ew, the Appellate Body's findings in US – Corrosion-Resistant 
Steel Sunset Review  suggest that the term "investigation phase"  in Article 2.4.2 refers to the portion 
of any proceeding—original investigation or revi ew—in which an authority "investigates" whether 
dumping has occurred. 
8. Mexico  
95. Mexico argues that the Panel failed to take  proper account of the meaning of the terms 
"dumping" and "margin of dumping" as used in Article VI of the GATT 1994 and in the Anti-
Dumping Agreement .  Mexico notes that, in  EC – Bed Linen 156 and  US – Softwood Lumber V 157, the 
Appellate Body held that dumping can be found only fo r the product "as a whole", and that the results 
of intermediate comparisons are not actually "margins of dumping".  At the same time, Mexico argues 
that the Appellate Body's analysis in  EC – Bed Linen  is not limited to Article 2.4.2 of the Anti-
Dumping Agreement , or to any particular type of proceeding governed by that  Agreement.  The 
United States' and the Panel's insistence that "mar gins" and "margins of dum ping" may be determined 
at the level of individual import transactions in administrative reviews are "totally unsupported"158 in 
the text and context of the Anti-Dumping Agreement .  According to Mexico, the definitions of 
"margins" and "margin of dumping" also apply in ad ministrative reviews.  The Panel's contrary view 
does not even reflect the real nature of the measur es applied by the United States, which, according to 
Mexico, are not "import-specific", because, "for both assessment purposes and for purposes of 
                                                      
154Korea's third participant's submission, pa ra. 30 (citing dictionary definitions in The New Shorter 
Oxford English Dictionary , L. Brown (ed.) (Clarendon Press, 1993)). 
155Ibid., para. 31 (referring to Appellate Body Report, US – Oil  Country Tubular Goods Sunset Reviews 
(54 instances);  Panel Report, US – DRAMS , para. 2.3;  and Panel Report, US – Countervailing Measures on 
Certain EC Products , para. 7.114 and footnote 295). 
156See Mexico's third participant's submission, paras. 11-12 (referring to Appellate Body Report,  
EC – Bed Linen , paras. 51 and 53). 
157See ibid., paras. 13-15 (referring to Appellate Body Report, US – Softwood Lumber V , paras. 93 and 
96-103). 
158Ibid., para. 18. WT/DS294/AB/R 
Page 36  
 
updating the [cash-deposit rate] for future entries"
159, the United States calcula tes an average margin 
of dumping for the product as a whole.  
96. Mexico further argues that the Appellate B ody has "clearly established that the 'fair 
comparison' requirement of Article 2.4, which is e qually applicable in original investigations and 
administrative reviews, is sufficient in itself to condemn zeroing."160  Article 2.4 does not proscribe 
asymmetrical methods of comparison as "unfair".  Moreover, Article 2.4 also addresses zeroing, 
because failure to take into account all transactions in  calculating a "margin of dumping" is inherently 
"unfair" within the meaning of that provision.  Me xico argues that previous rulings of the Appellate 
Body have recognized the "inherent bias" in the pr actice of zeroing and, thus, contrary to what the 
Panel suggested, condemned zeroing not only under Ar ticle 2.4.2, but also under Article 2.4.   
97. Mexico next argues that zeroing, as applied in  administrative reviews, effectively constitutes 
an adjustment to the export price that is not authorized under the second through fifth sentences of 
Article 2.4 of the  Anti-Dumping Agreement .  Mexico also disagrees w ith the Panel that such 
"elimination of zeroing from the average-to-transaction methodology 'would as a matter of mathematics produce a result that was  identical  to that of the first, average-to-average, 
methodology.'"
161  Such mathematical equivalence does not apply if the monthly weighted-average-
to-transaction methodology is employed—which, according to Mexico, is the case in the present dispute.   
98. Finally, Mexico agrees with the European Comm unities that the application of Article 2.4.2 
of the  Anti-Dumping Agreement  is not restricted to original investigations but, rather, applies to all 
types of anti-dumping proceedings.  Mexico argues that a prohibition of zer oing in administrative 
reviews is not contingent upon whether Article 2.4. 2 is found to be applicable to administrative 
reviews.  This is because the obligation not "to zer o" negative results in aggregating the results of 
comparisons is derived from Article VI of the GATT 1994;  Article 2.1 of the Anti-Dumping 
Agreement ;  the requirement that margins of dumping be  calculated for the product as a whole;   
as well as from the "fair comparison" in Article 2.4 and the third through fifth sentences of Article 2.4 that permit adjustments only for differences af fecting price comparability—all independently of 
Article 2.4.2.  In any event, Mexico submits that  the ordinary meaning, the grammatical construction 
                                                     
 
159Mexico's third participant's submission, para. 33.  
160Ibid., para. 51 (referring to Appellate Body Reports in  EC – Bed Linen ;  US – Corrosion-Resistant 
Steel Sunset Reviews ;  and US – Softwood Lumber V ). 
161Ibid., para. 65 (quoting Panel Report, para. 7.266). (Panel's emphasis)  WT/DS294/AB/R 
 Page 37 
 
 
of "material terms", as well as the context of the phrase "during the investigation phase" suggest that 
the scope of application of Article 2.4.2 is not restricted to original investigations. 
9. Norway  
99. Norway argues that Articles 2.1, 6.10, and 9.3 of the  Anti-Dumping Agreement , Article VI of 
the GATT 1994, as well as previous findings of the Appellate Body  support its position that dumping 
must be calculated for the product "as a whole" in all proceedings under the Anti-Dumping 
Agreement , except for proceedings under the second and third method contemplated under 
Article 2.4.2.162  Exceptions to this principle must  be clearly provided for in the Anti-Dumping 
Agreement or in Article VI of the GATT 1994.  According to Norway, the only legal basis for 
deviating from establishing dumping margins based on the product as a whole can be found in the 
second sentence of Article 2.4.2 of the Anti-Dumping Agreement .  In the absence of such exceptions, 
"there is no basis for not calculating the dumping margin based on the product as a whole."163  
Furthermore, even where such exceptions apply, the calculations must fulfil the "fair comparison" 
requirement in Article 2.4, which also prohibits the practice of zeroing.    
100. The Appellate Body has previously found that model zeroing, used in the weighted-average-
to-weighted-average methodology, is prohibited.164  According to Norway, the same approach should 
be applied to other forms of zeroing, such as si mple zeroing, because this methodology results in 
margins that are not based on the product "as a w hole".  Norway further submits that zeroing is 
contrary to the requirement of "fair comparison" in Article 2.4 of the  Anti-Dumping Agreement .  A 
calculation of the dumping margin that is not b ased on the product as a whole, but, rather, based on 
"fractions" of the product, is "inherently unfair in itself."165  In this respect, Norway notes that the 
Appellate Body has already stated on two occasions that there is an "inherent bias" in the zeroing 
methodology, and that zeroing does not involve a "fair comparison".166  Moreover, according to 
Norway, Article 9.3.1 of the  Anti-Dumping Agreement  provides no textual basis for the Panel's 
conclusions concerning specific asymmetrical methodol ogies, or for an assertion that an asymmetrical 
methodology necessarily involves zeroing, or for an assertion that "Article 9.3.1 implies an importer 
                                                      
162See Norway's third participant's submission, paras. 16-17 (referring to Appellate Body Report,  
EC – Bed Linen , para. 53;  and Appellate Body Report, US – Softwood Lumber V , paras. 93 and 99). 
163Ibid., para. 24.  
164See ibid., paras. 26-27 (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 , para. 98). 
165Ibid., para. 32.   
166See ibid., paras. 33-34 (referring to Appellate Body Report, EC – Bed Linen , para. 55;  and Appellate 
Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 135). WT/DS294/AB/R 
Page 38  
 
focus".
167  In any event, Norway submits, "Article 9.3.1 ... cannot be used to override the 'fair 
comparison' requirement or lead to an interpre tation that permits zeroing in assessment reviews."168 
101. Furthermore, according to Norway, the Pa nel erred in permitting a methodology in 
administrative reviews based on importer-focused and asymmetrical comparisons with zeroing.  Regardless of the particular point in time at which the relevant determination is made, all 
determinations of dumping and a ll calculations of dumping margins must follow Article 2 of the Anti-
Dumping Agreement .  In other words, according to Norw ay, "[d]umping margins can only be 
established by applying the methodologies provided for in Article 2."
169  Calculating them differently 
in administrative reviews, Norway argues, "is a clear  violation of the chapeau of Article 9.3 [as well 
as] the basic principle of 'secu rity and predictability' in international trading relations".170   
102. Norway disagrees with what it considers to be an implication of the Panel's finding, namely, 
that "there are no specifics as to the methodologies to be applied in determining dumping margins in 
reviews and [this] effectively abolish[es] ... the 'due process rights' for the exporter."171  T h i s  i s  a  
"manifestly absurd"172 result, and is contrary to the object and purpose of the treaty.  Norway also 
notes that "[a]ll departures from Article 2 will be breaches of the [ Anti-Dumping Agreement ] as also 
specifically provided for in Article 18.1"173 of that Agreement.  Norway therefore disagrees with the 
Panel's interpretation that the phrase "the existen ce of margins of dumping during the investigation 
phase" limits the application of Article 2.4.2 to the original investigations and is not applicable to 
reviews, including administrative reviews under Article 9.3 of the  Anti-Dumping Agreement . 
10. Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu  
103. The Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu disagrees with the 
Panel's finding that Article 2.4.2 of the  Anti-Dumping Agreement  applies exclusively to original 
investigations, as opposed to the subsequent phases  of duty assessment proceedings and reviews.  The 
word "investigation" in this Article must be in terpreted in the light of its "specific context".174  The 
                                                      
167Norway's third participant's submission, para. 42 (referring to Panel Report, paras. 7.204-7.206). 
168Ibid., para. 55. 
169Ibid., para. 56. 
170Ibid. 
171Ibid., para. 63.  
172Ibid.  
173Ibid., para. 56. 
174Third participant's submission of the Separate Customs Territory of Taiwan, Penghu, Kinmen, and 
Matsu, para. 13.  WT/DS294/AB/R 
 Page 39 
 
 
term is used in a "large number"175 of provisions of the Anti-Dumping Agreement , but does not have 
the same meaning in all cases:  in certain provisions it must be interpreted "narrowly" (as referring 
only to original investigations);  in other provi sions it should be read as having a broader meaning 
(covering original investigations as well as duty asse ssment proceedings and reviews).  The Separate 
Customs Territory of Taiwan, Penghu, Kinmen, a nd Matsu observes that Article 2.1 of the  Anti-
Dumping Agreement  defines "dumping" "[f]or the purpose of this Agreement".  Therefore, "the 
purpose of Article 2 would be frustrated if Article 2,  including Articles 2.4 and 2.4.2, is not generally 
applicable."176   
104. Moreover, the Separate Customs Territory of  Taiwan, Penghu, Kinmen, and Matsu agrees 
with the dissenting opinion of one Panel member that the term "investigation phase" should be 
understood to mean "investigation period".  This is  supported by the fact that the existence of 
dumping is established not only in the original inv estigation, but also in duty assessment proceedings 
and reviews.  Moreover, the Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu 
submits that administrative reviews are periodic reviews of the amount of the anti-dumping duty, in which investigating authorities analyze past tran sactions that took place in a given period and 
ascertain "whether there was actually du mping and the amount of such dumping."
177 
105. The Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu disagrees with the 
Panel's finding that Article 2.4.2 of the  Anti-Dumping Agreement  does not apply to duty assessment 
proceedings pursuant to Article 9.3.  Article 9.3 makes an explicit reference to Article 2 of the  
Anti-Dumping Agreement .  Cross-references in the  Anti-Dumping Agreement , according to the 
Separate Customs Territory of Ta iwan, Penghu, Kinmen, and Matsu, are "highly relevant and should 
not be ignored".178  Furthermore, prohibiting zeroing in original investigations, but not in duty 
assessment proceedings, "would lead to absurd results"179 and undermine the effectiveness of 
Article 2.4.2.  The investigating authority would be  required  to determine dumping margins without 
using zeroing only in original investigations, but would be  allowed  to apply such zeroing in duty 
assessment proceedings with  respect to the same product in subsequent reviews.  The Separate 
Customs Territory of Taiwan, Penghu, Kinmen, and Ma tsu submits that the Appellate Body's ruling in 
 US – Corrosion-Resistant Steel Sunset Review  demonstrates that, "to the extent that investigating 
                                                      
175Third participant's submission of the Separate Customs Territory of Taiwan, Penghu, Kinmen, and 
Matsu, para. 11.  
176Ibid., para. 13. 
177Ibid., [second] para. 16.  
178Ibid., para. 19.   
179Ibid., para. 22. WT/DS294/AB/R 
Page 40  
 
authorities rely on dumping margins, they must c onform to the disciplines of Article 2.4, including 
Article 2.4.2."
180 
106. The Separate Customs Territory of Taiw an, Penghu, Kinmen, and Matsu furthermore 
disagrees that the obligation to make a "fair comparison" does not preclude zeroing in duty 
assessment proceedings under Article 9.3.  Article 2.4 of the  Anti-Dumping Agreement  embodies an 
overarching and independent principle that "mus t be followed in any dumping determination".181  The 
"fair comparison" requirement "necessarily implies an unbiased comparison"182, that is, a comparison 
that takes into account all data related to nor mal value and to the export price for purposes of 
calculating a margin of dumping for an exporter. 
 
III. Issues Raised in This Appeal 
107. The following issues are ra ised in this appeal: 
(a) with respect to the administrative reviews at issue in this case:  
(i) whether the Panel erred in finding that the United States did not act 
inconsistently with Article 9.3 of the Anti-Dumping Agreement  and 
Article VI:2 of the GATT 1994; 
(ii) whether the Panel erred in finding that the United States did not act 
inconsistently with the obligation in the first sentence of Article 2.4 of the  Anti-Dumping Agreement  to make a "fair comparison" 
between the export price and the normal value; 
(iii) whether the Panel erred in finding that zeroing is not an 
impermissible allowance or adjustment under Article 2.4 of the  Anti-
Dumping Agreement , third to fifth sentences; 
(iv) whether the Panel erred in finding that the United States did not act 
inconsistently with Article 2.4.2 of the Anti-Dumping Agreement 
when, in the administrative review s at issue, it used a methodology 
that involved asymmetrical comparisons between export prices and 
                                                     
 
180Third participant's submission of the Separate Customs Territory of Taiwan, Penghu, Kinmen, and 
Matsu, para. 25. 
181Ibid., para. 30. 
182Ibid., para. 32.   WT/DS294/AB/R 
 Page 41 
 
 
normal value, and in which no account was taken of any amount by 
which export prices exceeded normal value; 
(v) whether the Panel erred in finding that zeroing, as applied in the 
administrative reviews at issue, is not inconsistent with Articles 11.1 and 11.2 of the  Anti-Dumping Agreement ;  and 
(vi) whether the Panel erred in finding that the zeroing methodology,  
as applied in the administrative reviews at issue, is not inconsistent 
with Articles 1 and 18.4 of the Anti-Dumping Agreement  and 
Article XVI:4 of the WTO Agreement ; 
(b) whether, the Panel erred in finding that the zeroing methodology, as it relates to 
original investigations, is a "norm" that is  inconsistent, as such, with Article 2.4.2 of 
the  Anti-Dumping Agreement , specifically: 
(i) whether the Panel erred in finding that the zeroing methodology can be 
challenged, as such, in WTO dispute settlement; 
(ii) whether the Panel failed to conduct 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;  and 
(iii) whether the Panel erred in finding th at the European Communities had made 
out a  prima facie  case with respect to the zeroing methodology; 
(c) whether the Panel erred in finding that the zeroing methodology used by the United 
States in administrative reviews is not inconsistent, as such,  with Articles 1, 2.4, 
2.4.2, 9.3, 11.1, 11.2, 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) whether the Panel erred in finding that the United States' Standard Zeroing 
Procedures are not inconsistent, as such, with Articles 1, 2.4, 2.4.2, 9.3, 9.5, 11.1, 
11.2, 11.3, 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) whether the Panel erred in exercising judicial economy with respect to whether the 
1997 edition of the  Import Administration Antidumping Manual  (the "Anti-Dumping 
Manual") is a measure that is inconsistent, as such, with Articles 1, 2.4, 2.4.2, 5.8, WT/DS294/AB/R 
Page 42  
 
9.3, 9.5, 11.1, 11.2, 11.3, 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 ; 
(f) whether the Panel erred in exercising judi cial economy concerning the consistency of 
the United States' "practice" of zeroing; 
(g) whether the Panel erred in finding that Section 351.414(c)(2) of the United States 
Department of Commerce (the "USDOC") Re gulations, is not inconsistent, as such, 
with Articles 1, 2.4, 2.4.2, 9.3, 9.5, 11.1, 11.2, 11.3, 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 ; 
(h) whether the Panel erred in exercising judicial economy: 
(i) with respect to whether administrative review proceedings, based on "model 
zeroing"
183, are consistent with Article 9.3 of the  Anti-Dumping Agreement ;  
and 
(ii) with respect to whether zeroing, as applie d in the original investigations at 
issue, is inconsistent with Article 2.4 of the  Anti-Dumping Agreement ;  and 
(i) whether the Panel acted inconsistently with  Article 11 of the DSU by failing to make 
an objective assessment of the matter before  it, including an objective assessment of 
the facts of the case.   
 
IV. "As Applied" Claims Brought on Appeal by the European Communities 
A. Article 9.3 of the Anti-Dumping Agreemen t and Article VI:2 of the GATT 1994 
108. We examine, first, the issue of whether the Pa nel erred in finding that the United States did 
not act inconsistently with the requirement, in Article 9.3 of the  Anti-Dumping Agreement   and 
Article  VI:2 of the GATT 1994, that the amount of the anti-dumping duty "shall not exceed" or be 
"greater in amount than" the margin of dumping.  This issue relates to th e European Communities' 
challenge of the zeroing methodology, as applied by the United States in the administrative reviews of 
anti-dumping duty orders listed in Exhibits EC-16 through EC-31.  This zeroing methodology is one 
aspect of the assessment and collection of anti-dumping duties in the United States.  
                                                      
183See supra , footnote 8.  WT/DS294/AB/R 
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1. Assessment and Collection of Anti-dumping Duties in the United States  
109. The assessment and collection of anti-dumping dut ies in the United States can be broadly 
described in the following terms.184  The United States system of duty assessment operates on a 
retrospective basis.  Under this system, the Unite d States collects security in the form of a cash 
deposit at the time a product enters the United Stat es, and determines the amount of duty due on the 
entry at a later date.  Specifically, once a year (dur ing the anniversary month of the order) interested 
parties may request an administrative review, that is to say, a review to determine the amount of 
duties owed on entries made during the previous year.185  The amount of anti-dumping duties owed by 
each individual importer is calculated on the basis of a comparison of the price of each individual 
export transaction with a monthly average normal valu e.  The results of these comparisons are then 
aggregated and expressed as a percentage of each im porter's United States imports.  This constitutes 
the assessment rate that is then applied to the entries that occurred during the period reviewed.  The 
amount of dumping found on all imports from a given e xporter is also used to derive a cash-deposit 
rate that will apply on future entries from that expor ter.  If no administrative review is requested, the 
cash deposits made on the entries during the previous year are automatically assessed as the final duties and serve as the basis for the cash deposit fo r the following period.  Final anti-dumping duty 
liability for past entries and the new cash-deposit rate  for future entries are calculated by the USDOC 
and published in a Notice of Final Results of Antidumping Duty Administrative Reviews.  
110. When assessing an importer's final liability fo r paying anti-dumping duties and any future 
cash-deposit rate, the United States applies a methodolo gy that the European Co mmunities refers to as 
"simple zeroing".
186  When comparing a weighted-average normal value with the price of an 
individual export transaction, the amount by which the normal value exceeds the export price is 
considered to be the "dumped" amount for that ex port transaction.  If the export price exceeds normal 
value, the result of that particular comparison is considered to be zero.  The total amount of dumping 
for each importer is calculated by aggregating the results of each comparison for which the average 
normal value exceeds the export price.187  For each importer, the assessment rate is expressed as a 
                                                      
184This description is based on the description contai ned in paragraphs 2.4-2.5 of the Panel Report.  
185The period of time covered by the USDOC's dut y assessment proceedings is normally 12 months.  
However, in the case of the first assessment proceedin g following the issuance of the Notice of Antidumping 
Duty Order, the period of time may extend to a period of up to 18 months in order to cover all entries that may 
have been subject to provisional anti-dumping measures.  
186See supra , footnote 10. 
187In other words, while the value of all export tran sactions is included in the denominator of the 
fraction used to calculate an overall margin of dumping, the results of the comparisons for which export prices 
exceed the average normal value are excluded from the numerator of  that fraction.  WT/DS294/AB/R 
Page 44  
 
percentage of the value of all of its imports.  The importer is liable to pay the final anti-dumping duty 
so assessed.   
2. Panel Report
 
111. As the Panel noted, it is not disputed that ad ministrative reviews fall within the scope of 
Article 9 of the  Anti-Dumping Agreement   ("Imposition and Collection of Anti-Dumping Duties") 
and, in particular, Article 9.3.  Article 9.3 provi des that "[t]he amount of the anti-dumping duty shall 
not exceed the margin of dumping as established unde r Article 2."  The Panel considered that "the 
threshold legal question before [it] is whether the obligations contained in Article 2.4.2 apply to duty 
assessment proceedings provided for in Article 9.3."188  According to the Panel, finding a violation of 
Article 9.3 presupposes that the zeroing methodology  applied by the USDOC in the administrative 
reviews at issue is inconsistent with Ar ticle 2.4 and/or Article 2.4.2 of the  Anti-Dumping 
Agreement .189  The Panel was of the view that the obligations contained in Article 2.4.2 do not apply 
to duty assessment proceedings provided for in Article 9.3.190  The Panel also found that, in the 
administrative reviews at issue, the United States di d not act inconsistently with Article 2.4 of the 
 Anti-Dumping Agreement .191  Accordingly, the Panel found that the USDOC did not act 
inconsistently with the requirement set out in Article  9.3.  On the basis of this reasoning, the Panel 
came to the conclusion that the United States also did not act inconsistently with the requirement 
contained in Article VI:2 of the GATT 1994, that an anti-dumping duty shall not be "greater in 
amount than the margin of dumping".192   
112. The Panel considered that the rules for determ ining the existence of margins of dumping are 
distinct and separate from the rules for the impos ition and collection of anti-dumping duties, and that 
the amount of duty to be assessed in a proceeding under Article 9.3 is the amount of duty payable on 
                                                      
188Panel Report, para. 7.145. 
189Ibid., para. 7.287. 
190Ibid., para. 7.220.  In analyzing the issue of whether the obligations contained in Article 2.4.2 apply 
to duty assessment proceedings provid ed for in Article 9.3, the Panel exam ined the phrase "the existence of 
margins of dumping during the investigation phase sha ll normally be established on the basis of [certain 
comparison methods]" in Article 2.4.2.  For the Panel, th e term "investigation phase" in Article 2.4.2 is the key 
term and should be read as referring to the concept of "investigation" as used in Article 5.  The Panel also 
reviewed the use of "investigation" and "investigations " in Articles 1, 3, 6, 7, 8, 10, and 12 of the  Anti-Dumping 
Agreement .  From this review of the context, the Panel c oncluded that, where these wo rds refer to a proceeding 
or a phase of a proceeding, they ar e limited to investigations within the meaning of Article 5.1 of the  Anti-
Dumping Agreement , and that the Anti-Dumping Agreement typically does not use the words "investigation" and 
"investigations" in relation to procee dings that take place after an anti-du mping measure has been imposed. (See 
also Section IX of the Panel Report for the dissenting opinion of one member of the Panel on the interpretation of Article 2.4.2) 
191Ibid., para. 7.284.  For a summary of the Panel's reasoning, see infra , paras. 138-141 and 150.  
192Panel Report, paras. 7.287-7.288.  WT/DS294/AB/R 
 Page 45 
 
 
imports of the product subject to the anti-dumping orde r (the "subject product").  For the Panel, the 
three methods for establishing the existence of marg ins of dumping set out in Article 2.4.2 apply only 
in the context of an investigation within the mean ing of Article 5, and this may be explained by 
qualitative differences between the purpose of an i nvestigation under Article 5 and the purposes of 
subsequent phases of anti-dumping proceedings.193  The Panel reasoned that considerations relevant to 
an appropriate comparison methodology in investig ations to determine whether dumping exists "may 
not apply with equal force to the design of a methodology for determining the final liability for 
payment of anti-dumping duties."194  According to the Panel, th e fact that, in an assessment 
proceeding under Article 9.3, the margin of dumpi ng must be related to the liability incurred in 
respect of particular import transactions, distingui shes Article 9.3 proceedings from investigations 
within the meaning of Article 5.  The Panel reasone d that, in an investigation within the meaning of 
Article 5, the focus is on the overall pricing be haviour of exporters, because the objective is to 
determine whether dumping exists in order to c onclude whether or not the imposition of an anti-
dumping measure is justified.  The Panel consider ed that investigations carried out pursuant to 
Article 5 must be contrasted with proceedings gov erned by Article 9.3, in which "the extent of 
dumping found with respect to a particular exporter mu st be translated into an amount of liability for 
payment of anti-dumping duties by importers in respect of specific import transactions."195 
113. The Panel rejected the European Communities' argument that "Ar ticle 9.3 must be interpreted 
in light of Article 2.4.2 and therefore prohi bits duty assessment on a transaction-specific and 
importer-specific basis [and] that all export transacti ons that fall within the time period covered by a 
review must be treated as a whole rather than being treated individually."196  The Panel reasoned that 
if this contention were accepted, an importer might  incur liability for payment of anti-dumping duties 
on an individual import transaction when the expor ter's average export price is below the average 
normal value, regardless of the export price of that particular transaction.197  The Panel considered that 
there is no textual support in Article 9.3 for the view that the  Anti-Dumping Agreement   requires an 
exporter-oriented assessment of anti-dumping duties198, and that, if that were the case, an importer 
would be liable to pay anti-dumping duties on an import of the subject product when the export price in that transaction exceeds the average normal value.
199 
                                                      
193Panel Report, para. 7.200. 
194Ibid., para. 7.201. 
195Ibid. 
196Ibid., para. 7.203. 
197Ibid. 
198Ibid., para. 7.204. 
199Ibid., para. 7.207. WT/DS294/AB/R 
Page 46  
 
3. Submissions of the Participants
 
114. On appeal, the European Communities challe nges the Panel's findings with respect to 
Article 9.3 of the  Anti-Dumping Agreement  and Article VI:2 of the GATT 1994.  For the European 
Communities, the disagreement between the part ies flows, in essence, from their respective 
interpretations of the terms "dumping"  and "margin of dumping" in the  Anti-Dumping Agreement , 
and whether these terms apply at the level of the pr oduct as a whole, or at the level of a comparison 
between a weighted-average normal valu e and an individual export transaction.200  The European 
Communities contends that the terms "dumping" and "margin of dumping" are defined in relation to a 
product as a whole, and that, accordingly, these terms cannot, in principle, apply only for a type, 
model, or category of that product, including a "cat egory" of one or more relatively low-priced export 
transactions.201 
115. According to the European Communities, an investigating authority may undertake multiple 
intermediate comparisons when establishing marg ins of dumping.  However, the European 
Communities argues that, because th e margins of dumping must be established for the product under 
investigation as a whole, the investigating authority is  required to aggregate the results of all of these 
multiple intermediate comparisons.  According to the European Communities, not taking into account 
the full amounts by which the individual export pr ice exceeds normal value in the aggregation process 
is tantamount to disregarding these results.  The European Communities maintains that, aside from the 
exception for targeted dumping in the second sentence of Article 2.4.2, there is no basis in the  Anti-
Dumping Agreement   that would justify taking into account the results of some of the multiple 
comparisons, while disregarding others.202 
116. The European Communities contends that the Pa nel erred in concluding that the Appellate 
Body's findings on zeroing in  EC – Bed Linen  and US – Softwood Lumber V   were limited to the 
issue of the use of model zeroing in original inv estigations when the margin of dumping is calculated 
using the weighted-average-to-wei ghted-average methodology provided  for in the first sentence of 
Article 2.4.2.203  The European Communities submits that "dumping" and "margins of dumping" can 
only be established for the product under investigation as a whole, and that this is in consonance with 
the need for consistent treatment of a product in an anti-dumping proceeding.204  For the European 
                                                      
200European Communities' appellant's submission, para. 57. 
201Ibid., paras. 59-61. 
202Ibid., paras. 62-63. 
203Ibid., paras. 64-65 (referring to Appellate Body Report, EC – Bed Linen , para. 53;  and Appellate 
Body Report, US – Softwood Lumber V , paras. 91-103). 
204Ibid., para. 66.  WT/DS294/AB/R 
 Page 47 
 
 
Communities, it is clear that "the obligations and methodologies that apply when a margin of dumping 
is investigated or relied upon are the same for the entire [ Anti-Dumping Agreement ], including 
'administrative review' proceedings, and that the use of zeroing by the [United States] in the 
[administrative reviews] at issue is thus inconsistent with the [ Anti-Dumping Agreement ]".205 
117. The European Communities recalls that the United States' calculation of revised margins of 
dumping in administrative reviews, for purposes of est ablishing the cash-deposit rates, is identical in 
all relevant respects to the margin calculation perform ed in original investigations.  For the European 
Communities, there is no basis on which the United St ates can plausibly argue that zeroing, which is 
prohibited in original investigations, somehow b ecomes permitted when the same calculation is 
carried out in administrative reviews.206 
118. According to the European Comm unities, the use of zeroing, in the computation of either the 
margin of dumping for cash-deposit purposes, or the amount of duty in the final assessment, inflates 
the amount of the anti-dumping duty, as compared to a computation without zeroing.207  T h e  
European Communities claims that, as a result of th e use of zeroing in the administrative reviews at 
issue, the amount of the anti-dumping duty exceeds the margin of dumping for the product as a whole.  
Therefore, the use of zeroing constitutes a violation of Article 9.3 of the Anti-Dumping Agreement   
and Article VI:2 of the GATT 1994.208 
119. The United States requests the Appellate Body to  dismiss the European Communities' appeal 
concerning Article 9.3 of the  Anti-Dumping Agreement .  The main issue, in the United States' view, 
is whether, pursuant to Article 9.3, the United States was required to reduce the amount of dumping 
duties levied on particular import transactions to  account for other import transactions in which 
merchandise was sold at more than norma l value.  For the United States, the  Anti-Dumping 
Agreement   does not require such an "offset" when asses sing anti-dumping duties.  As a result, the 
United States considers that it is permitted to determine such duties on an import-specific basis.209 
120. The United States agrees with the Panel that "t he concept of 'margin of dumping' in GATT 
Article VI is defined in terms of a  price difference  in a situation in which a product is introduced into 
the commerce of another country at less than its nor mal value i.e. when the export price of the product 
                                                      
205European Communities' appellant's submission, para. 68. 
206Ibid., para. 69. 
207Ibid., para. 68. 
208Ibid., para. 70. 
209United States' appellee's submission, para. 40. WT/DS294/AB/R 
Page 48  
 
is  less  than the normal value of the product."
210  According to the United States, the "product" must 
be the "product as a whole" when the "price" involves the average of "all comparable export 
transactions".  However, when a Member uses a comparison methodology other than the average-to-
average methodology, the "price" to which normal valu e is compared is the price of an individual 
export transaction.  More specifically, during the investigation phase, Article 2.4.2 authorizes the use of transaction-to-transaction comparisons, or, in sp ecified circumstances, comparisons of individual 
export transactions to weighted-avera ge normal values.  In either case, the "price" is the price of an 
individual export transaction.  According to the Un ited States, in these circumstances, the "product" 
being introduced into the commerce of the importing Member is the product involved in the particular 
export transaction.  Moreover, Article 2.4.2 does not require that the results of those multiple 
comparisons be aggregated to represent what the European Communities would consider the "product 
as a whole", or to be expressed as a percentage.
211 
121. Regarding the findings of the Appellate Body in  US – Softwood Lumber V , the United States 
notes that the Appellate Body expressly recognized that  the only issue before it was whether "offsets" 
were required under the average-to-average comp arison method found in Article 2.4.2.  For the 
United States, the Appellate Body's findings in that  case were limited to the use of the weighted-
average-to-weighted-average comparison methodology during the investigation phase.212  
122. The United States argues that Article 2.4.2 is lim ited to the establishment of the existence of 
margins of dumping during the investigation phase.   For the United States, the Panel correctly 
concluded that the reference to Article 2 in Article  9.3 does not override any limitation contained in 
Article 2.4.2 itself.213  The United States submits that, in contrast to investigations, Article 9.3 
assessment proceedings are not investigations and ar e not concerned with the "existential question" of 
whether injurious dumping exists.  Instead, Article  9 assessment proceedings are concerned with the 
measurement of dumping in order to establish the precise amount of an anti-dumping duty that an 
importer must pay.214  Given the different functions of an Article 5 investigation and an Article 9 
assessment proceeding, obligations that apply with  respect to an Article 5 investigation do not 
necessarily apply to an Article 9 assessment proceeding.215  For the United States, the European 
Communities' approach to Article 9.3—namely, that the purpose of a dut y assessment proceeding 
                                                      
210Panel Report, para. 7.59 (quoted in United States' appellee's submission, para. 171). (original 
emphasis) 
211United States' appellee's submission, paras. 174 and 176. 
212Ibid., para. 175. 
213Ibid., paras. 47-50. 
214Ibid., para. 73. 
215Ibid., para. 75.  WT/DS294/AB/R 
 Page 49 
 
 
under Article 9.3.1 is simply "to update the temporal  frame for the normal value" and that, therefore, 
there is no reason to apply a different comp arison methodology in an assessment proceeding216—
would improperly prohibit the assessment of anti- dumping duties on an importer- or import-specific 
basis.217 
4. Analysis  
123. The claim brought by the European Communities raises the question whether the Panel erred 
in finding that, in the administrative reviews at issu e, the United States did not act inconsistently with 
the requirement in Article 9.3 of the  Anti-Dumping Agreement   and Article VI:2 of the GATT 1994 
that the amount of the anti-dumping duty shall not exceed  or be greater in amount than the margin of 
dumping.  These provisions provide, in relevant part: 
Article 9 218 
Imposition and Collection of Anti-Dumping Duties 
... 
9.3 The amount of the anti-dumping duty shall not exceed the 
margin of dumping as established under Article 2. 
                                                      
216Panel Report, para. 7.199. 
217United States' appellee's submission, paras. 91-93. 
218Articles 9.3.1 and 9.3.2 of the  Anti-Dumping Agreement  provide: 
9.3.1 When the amount of the anti-dumping duty is assessed on a 
retrospective basis, the  determination of the final liability for payment of anti-dumping duties shall take place as soon as possible, normally within 
12 months, and in no case more than 18 months, after the date on which a 
request for a final assessment of the amount of the anti-dumping duty has been made.  Any refund shall be made promptly and normally in not more  
than 90 days following the determination of final liability made pursuant to 
this sub-paragraph.  In any case, where a refund is not made within 90 days, the authorities shall provide an explanation if so requested. (footnote 
omitted) 
9.3.2 When the amount of the anti-dumping duty is assessed on a 
prospective basis, provision shall be made for a prompt refund, upon 
request, of any duty paid in excess of the margin of dumping.  A refund of any such duty paid in excess of the act ual margin of dumping shall normally 
take place within 12 months, and in no ca se more than  18 months, after the 
date on which a request for a refund, duly supported by evidence, has been made by an importer of the product subject to the anti-dumping duty.  The 
refund authorized should normally be made within 90 days of the 
above-noted  decision. WT/DS294/AB/R 
Page 50  
 
Article VI 
219 
Anti-dumping and Countervailing Duties 
... 
2. In 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.  For the purposes 
of this Article, the margin of dumping is the price difference determined in accordance with the provisions of paragraph 1.  (footnote omitted) 
124. We begin our analysis with an examination of  the meaning of the term "margin of dumping" 
in Article 9.3 of the  Anti-Dumping Agreement   and Article VI:2 of the GA TT 1994.  Article 9.3 refers 
to the margin of dumping as established unde r Article 2.  Article 2.1 of the  Anti-Dumping Agreement , 
which is part of the context of Article 9.3 of the  Anti-Dumping Agreement , provides: 
Determination of Dumping  
2.1 For the purpose of this Agreement, a product is to be 
considered as being dumped, i.e. introduced into the commerce of another country at less than its normal value, if the export price of the product exported from one country to another is less than the comparable price, in the ordinary course of trade, for the like product 
when destined for consumption in the exporting country. 
                                                     
 
219Article VI:1 of the GATT 1994 reads: 
Members recognize that dumping, by which products of one country are 
introduced into the commerce of anothe r country at less than the normal 
value of the products, 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. For the purposes of this 
Article, a product is to be considered  as being introduced into the commerce 
of an importing country at less than its normal value, if the price of the product exported from one country to another 
(a) is less than the comparable pri ce, in the ordinary course of 
trade, for the like product when destined for consumption in the exporting country, or, 
(b) in the absence of such domestic price, is less than either 
(i) the highest comparable price for the like product 
for export to any third country in the ordinary 
course of trade, or 
(ii) the cost of producti on of the product in the 
country of origin plus a reasonable addition for 
selling cost and profit. 
Due allowance shall be made in each case for differences in conditions and 
terms of sale, for differences in taxation, and for other differences affecting 
price comparability. (footnote omitted)  WT/DS294/AB/R 
 Page 51 
 
 
125. The Appellate Body stated, in US – Softwood Lumber V , that "the opening phrase of 
Article 2.1—'[f]or the purpose of this Agreemen t'—indicates that the definition of 'dumping' as 
contained in Article 2.1 applies to the entire Agreement".220  The Appellate Body also indicated that 
"the term 'margin of dumping' refe rs to the magnitude of dumping".221  F u r t h e r m o r e ,  w e  n o t e  t h a t  
Article VI:1 of the GATT 1994 defines "dumping" as occurring where "products of one country are 
introduced into the commerce of another country at less than the normal value of the products".  This 
definition of dumping in Article VI:1 of the GATT 199 4 is an element of the context of Article VI:2, 
which refers to the "margin of dumping".  In Article VI:2, the correspondence between "dumping" 
and "margin of dumping" is clear because Article VI:2  provides that "[i]n order to offset or prevent  
dumping , a Member may levy on any dumped product an anti-dumping duty not greater in amount 
than the  margin of dumping   in respect of such product." (emphasis added)   
126. In  EC – Bed Linen  and  US – Softwood Lumber V , the Appellate Body indicated that, under 
the  Anti-Dumping Agreement  and Article VI of the GATT 1994,  "dumping" and "margins of 
dumping" must be established for the product under investigation as a whole.  In particular, in US – 
Softwood Lumber V , the Appellate Body ruled on a claim re garding the calculation of a margin of 
dumping in an original investigation based on the weighted-average -to-weighted-average 
methodology as provided for in the first sentence of Article 2.4.2.222  The Appellate Body confirmed 
that the text of Article 2.1 of the Anti-Dumping Agreement , as well as the text of Article VI:1 of the 
GATT 1994 (which, as we mentioned above, defines dumping as occurring where "products of one 
country are introduced into the commerce of anothe r country at less than the normal value of the 
products") indicate clearly that "dumping is defined in relation to a product as a whole".223  T h e  
Appellate Body specified that, while an inves tigating authority may choose to undertake multiple 
comparisons or multiple averaging at an intermedia te stage to establish margins of dumping, "it is 
only on the basis of aggregating  all  these 'intermediate values' that an investigating authority can 
establish margins of dumping for the product under investigation as a whole."224  The Appellate Body 
added that, in the context of the weighted-avera ge-to-weighted-average methodology, there is no 
justification for "taking into account the 'results' of only some multiple comparisons in the process of 
                                                      
220Appellate Body Report, US – Softwood Lumber V , para. 93.  Similarly, the Appellate Body had 
previously stated in  US – Corrosion-Resistant Steel Sunset Review  that, as a result of the opening words of 
Article 2.1, the word "dumping", as used in Article 11.3 of the  Anti-Dumping Agreement  (a provision regarding 
sunset reviews), has the meaning described in Article 2.1. (Appellate Body Report, US – Corrosion-Resistant 
Steel Sunset Review , paras. 108-109 and 126-127) 
221Appellate Body Report, US – Softwood Lumber V , para. 96. 
222Ibid., paras. 63 and 76. 
223Ibid., paras. 92-93. 
224Ibid., para. 97. (original emphasis) WT/DS294/AB/R 
Page 52  
 
calculating margins of dumping, while disregarding other 'results'."
225 Thus,"[i]f an investigating 
authority has chosen to undertake multiple compar isons, the investigating authority necessarily has to 
take into account the results of  all  those comparisons in order to establish margins of dumping for 
the product as a whole under Article 2.4.2."226  Although, in US – Softwood Lumber  V, the Appellate 
Body dealt with a claim regarding the determina tion of a margin of dumping in an original 
investigation when using the weighted-average-to- weighted-average methodology provided for in the 
first sentence of Article 2.4.2, it stated unambi guously that "the terms 'dumping' and 'margins of 
dumping' in Article VI of the GATT 1994 and the  Anti-Dumping Agreement  apply to the product 
under investigation as a whole".227  This finding was based not only on Article 2.4.2, first sentence, 
but also on the context found in Article 2.1 of the  Anti-Dumping Agreement . 
127. We note that Article 9.3 refers to Article 2.  It follows that, under Article 9.3 of the  Anti-
Dumping Agreement  and Article VI:2 of the GATT 1994, the amount of the assessed anti-dumping 
duties shall not exceed the margin of dumping as established "for the product as a whole".228  
Therefore, if the investigating authority establis hes the margin of dumping on the basis of multiple 
comparisons made at an intermediate stage, it is re quired to aggregate the results of all of the multiple 
comparisons, including those where the export price exceeds the normal value.  If the investigating 
authority chooses to undertake multiple comparisons at an  intermediate stage, it is not allowed to take 
into account the results of only some multiple comp arisons, while disregarding others.  We recall 
however, that in  US – Softwood Lumber V , the Appellate Body stated that the investigating authority 
is required to take into account the results of all multiple comparisons in orde r to establish margins of 
dumping for the product as a whole in the specific context of the weighted-average-to-weighted-
average methodology, and that it did not address the issue of zeroing in the context of the other 
methodologies set out in Article 2.4.2.   
                                                      
225Appellate Body Report, US – Softwood Lumber V , para. 98.   
226Ibid. (original emphasis)  
227Ibid., para. 102. 
228See also ibid., para. 99, where 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[.] (original emphasis)  WT/DS294/AB/R 
 Page 53 
 
 
128. We move now to the Unites States' contention that, in duty assessment proceedings, the term 
"margins of dumping" can be interpreted as applying on a transaction-specific basis.229  We disagree 
with this contention.  Article 6.10 of the Anti-Dumping Agreement  provides relevant context for the 
interpretation of the term "margin of  dumping" in Article 9.3 of the  Anti-Dumping Agreement  and 
Article VI:2 of the GATT 1994.  Article 6.10, which is part of the context of Article 9.3, provides that "[t]he authorities shall, as a rule, determine an individual margin of dumping for each known exporter 
or producer concerned of the product under investig ation."  Therefore, under the first sentence of 
Article 6.10, margins of dumping for a product must be  established for exporters or foreign producers.  
The text of Article 6.10 does not limit the application of  this rule to original investigations, and we see 
no reason why this rule would not be  relevant to duty assessment proceedings governed by Article 9.3 
of the  Anti-Dumping Agreement  and Article VI:2 of the GATT 1994.   
129. We note that in  Mexico – Anti-Dumping Measures on Rice , the Appellate Body confirmed 
that the term "margin of dumping" in the  Anti-Dumping Agreement  in general refers to the margins 
of dumping for exporters or foreign producers.
230  The Appellate Body made that observation in 
relation to the interpretation of the term "margin of dumping" in Article 5.8 of the Anti-Dumping 
Agreement .  The Appellate Body also re ferred to a previous report, US – Hot-Rolled Steel , where the 
Appellate Body indicated, in the context of Article 2.4.2 of the Anti-Dumping Agreement , that the 
term "margin of dumping" "mean s the individual margin of dumpi ng determined for each of the 
investigated exporters and producers of the product un der investigation, for that particular product."231  
In  US – Corrosion-Resistant Steel Sunset Review , the Appellate Body stated, in the context of sunset 
reviews under Article 11.3 of the Anti-Dumping Agreement , that, "should investigating authorities 
choose to rely upon dumping margins in making th eir ... determination, the calculation of these 
margins must conform to the disciplines of Article 2.4."232  The Appellate Body noted that there are 
"no other provisions in the  Anti-Dumping Agreement  according to which Members may calculate 
dumping margins".233  The Appellate Body made it clear in  US – Hot-Rolled Steel , in the context of 
Article 2.4.2, that the term "margin of dumping"  refers to margins of dumping for exporters and 
foreign producers.  Therefore, the Appellate Body's findings in  US – Corrosion-Resistant Steel 
Sunset Review  imply that the margins of dumping that might be established in a sunset review under 
Article 11.3 are margins of dumping for exporters or foreign producers.  Establishing margins of 
dumping for exporters or foreign producers is co nsistent with the notion of dumping, which is 
                                                      
229United States' appellee's submission, paras. 171-178;  United States' response to questioning at the 
oral hearing.  
230Appellate Body Report, Mexico – Anti-Dumping Measures on Rice , paras. 208 and 217.   
231Appellate Body Report, US – Hot-Rolled Steel , para. 118. (footnote omitted) 
232Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 127. 
233Ibid. WT/DS294/AB/R 
Page 54  
 
designed to counteract the foreign producer's or e xporter's pricing behaviour.  Indeed, it is the 
exporter, not the importer, that engages in practices that result in situations of dumping.  For all of 
these reasons, under Article 9.3 of the  Anti-Dumping Agreement  and Article VI:2 of the GATT 1994, 
margins of dumping are established fo r foreign producers or exporters.   
130. Thus, pursuant to 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 shall not exceed the margin of 
dumping established for that exporter.  In other words, 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 pr oduct (from that exporter) covered by the duty assessment 
proceeding.   
131. Although Article 9.3 sets out a requirement regarding the amount of the assessed anti-
dumping duties, it does not prescribe a specific methodology according to which the duties should be assessed.  In particular, 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 assessing final anti-dumping duty liability, provided that the total amount 
of anti-dumping duties that are levied does not exceed  the exporters' or foreign producers' margins of 
dumping.
234   
132. We move now to the question of whether the zeroing methodology applied by the USDOC in 
the administrative reviews at issue is consistent with Article 9.3 of the  Anti-Dumping Agreement  and 
Article VI:2 of the GATT 1994.  It follows from our anal ysis that, in order to ma ke this determination, 
it is necessary to compare the anti-dumping duties co llected on all entries of the subject product from 
a given exporter or foreign producer with that expor ter's or foreign producer's margin of dumping for 
the product as a whole.  We recall that, 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 authority can establis h margins of dumping for the product as a whole.  
Therefore, the margins of dumping with which the assessed anti-dumping duties have to be compared 
                                                      
234We understand that, under the methodology currently applied by the USDOC to assess anti-dumping 
duties, the aggregation of the results of the multiple comp arisons performed at an intermediate stage might result 
in a negative value, for a given importer, if zeroing is not allowed.  Of course, this would 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).  
Nor does it mean that liability for payment of anti-dumping duties may not be based on a prospective normal 
value as contemplated by Article 9.4(ii) of the Anti-Dumping Agreement .  WT/DS294/AB/R 
 Page 55 
 
 
under Article 9.3 of the  Anti-Dumping Agreement  and Article VI:2 of the GATT 1994 are foreign 
producers' or exporters' margins of dumping that refl ect the results of all of the multiple comparisons 
carried out at an intermediate stage of the calculation. 
133. Furthermore, we recall that, in the administra tive reviews at issue, the USDOC assessed the 
anti-dumping duties according to a methodology in which, 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 result of this individual comparison.  Because 
results of this type were systematically disreg arded, the methodology applied by the USDOC in the 
administrative reviews at issue re sulted in amounts of assessed anti- dumping duties that exceeded the 
foreign producers' or exporters' margins of dum ping with which the anti-dumping duties had to be 
compared under Article 9.3 of the  Anti-Dumping Agreement  and Article VI:2 of the GATT 1994.  
Accordingly, the zeroing methodology, as applied by  the USDOC in the admi nistrative reviews at 
issue, is inconsistent with Article 9.3 of the  Anti-Dumping Agreement  and Article VI:2 of the 
GATT 1994.  
134. In our analysis of whether the zeroing methodology, as applied by United States in the 
administrative reviews at issue, is inconsistent with Article 9.3 of the  Anti-Dumping Agreement  and 
Article VI:2 of the GATT 1994, we have been mi ndful of the standard of review set out in 
Article 17.6(ii) of the  Anti-Dumping Agreement .  Article 9.3 of the  Anti-Dumping Agreement , and 
Article VI:2 of the GATT 1994, when interpreted in  accordance with customary rules of interpretation 
of public international law, as required by Article 17.6(ii), do not, in our view, allow the use of the 
methodology applied by the United States in the admini strative reviews at issue.  This is so because, 
as explained above, the methodology applied by the USDOC in the administrative reviews at issue 
results in amounts of assessed anti-dumping duties th at exceed the foreign producers' or exporters' 
margins of dumping.  Yet, Article 9.3 clearly stipulates that "the amount of the anti-dumping duty shall not exceed the margin of dumping as established under Article 2."  Similarly, Article VI:2 of the 
GATT 1994 provides that "[i]n order to offset or prevent dumping, a Member may levy on any 
dumped product an anti-dumping duty not greater in amount than the margin of dumping in respect of such product." 
135. In the light of the above, we  reverse   the Panel's finding, in paragr aphs 7.288 and 8.1(f) of the 
Panel Report, that the United States did not act inconsistently with Article 9.3 of the  Anti-Dumping 
Agreement  and Article VI:2 of the GATT 1994 in the administrative reviews at issue, and find, WT/DS294/AB/R 
Page 56  
 
instead, that the United States acted inconsistently  with those provisions.  We note that the Panel 
made a finding on Article VI:1 of the GATT 1994, a nd that this finding was consequential to its 
finding on Article VI:2 of the GATT 1994.  Accordingl y, we declare moot, and of no legal effect, the 
Panel's finding, in paragraphs 7.2 88 and 8.1(f) of the Panel Report, that the United States did not act 
inconsistently with Article VI:1 of the GATT 1994.   
B. Article 2.4 of the Anti-Dumping Agreement 
1. Fair Comparison
 
136. We turn now to the issue of whether the Pane l erred in finding that, in the administrative 
reviews at issue, the USDOC did not act inconsiste ntly with the obligation in the first sentence of 
Article 2.4 of the  Anti-Dumping Agreement  to make a "fair comparison" between the export price 
and the normal value. 
137. The first sentence of Article 2.4 of the  Anti-Dumping Agreement  provides: 
A fair comparison shall be made between the export price and the 
normal value. 
138. The Panel found that the United States did not act inconsistently with the requirement set out 
in the first sentence of Article 2.4 when, in the calculation of margins of dumping and anti-dumping duties in the administrative reviews at issue, the USDOC compared, at an intermediate stage of the 
calculation, the average monthly normal value with prices of individual expo rt transactions, and did 
not include in the calculation any amounts by which export prices of individual transactions exceeded 
the normal value.   
139. The Panel was of the view that the "fair co mparison" language in the first sentence of 
Article 2.4 creates an independent obligation with  the implication that this "fair comparison" 
requirement is not defined exhaustively by the specific requirements set out in the remainder of that 
paragraph.
235  Relying on the Appellate Body's finding in  EC – Bed Linen  that the obligation to make 
a fair comparison under the first sentence of Article 2. 4 is a "general obligation" that "informs all of 
Article 2"236, the Panel considered that the scope of app lication of this "fair comparison" requirement 
is not limited to the general subject matter expr essly addressed by paragraph 4 (how to ensure price 
comparability by selecting comparable transactions or making appropriate adjustments).  For the 
                                                      
235Panel Report, para. 7.253. 
236Appellate Body Report, EC – Bed Linen , para. 59.  WT/DS294/AB/R 
 Page 57 
 
 
Panel, the scope of application of the "fair compar ison" requirement extends beyond paragraph 4;  in 
particular, it applies to the issue of the calculation of margins of dumping.237 
140. Moving to the substantive meaning of the term  "fair comparison" in the first sentence of 
Article 2.4, the Panel noted that this sentence sets out a standard that, by its very nature, is "more 
abstract and less determinate" than most other rules in the  Anti-Dumping Agreement .238  According to 
the Panel, "[t]he meaning of 'fair' in a legal rule  must necessarily be determined having regard to the 
particular context within which that rule operates."239  In the light of these considerations, the Panel 
was of the view that, in order to determine what is "fair" under the  Anti-Dumping Agreement  in 
relation to the calculation of margins of dumping, the analysis must take into account Article 2.4.2 of 
that Agreement, which specifically addresses the s ubject of methods of determining margins of 
dumping, as well as the relevant rules and conc epts in Article 9 regarding the imposition and 
collection of anti-dumping duties.240 
141. The Panel noted that the second sentence of Ar ticle 2.4.2 expressly permits the use of an 
asymmetrical average-to-transaction method of comparing export price and normal value as an 
exception to the symmetrical comparison methods in the first sentence of Article 2.4.2.  The Panel 
also recalled its previous finding that the app lication of Article 2.4. 2 does not extend beyond 
investigations within the meaning of Article 5 of the  Anti-Dumping Agreement .  On that basis, the 
Panel reasoned that, although zeroing effectivel y is prohibited under the average-to-average 
methodology in the first sentence of Article 2.4.2, "the non-application of Article 2.4.2 outside 'the 
investigation phase' shows that zeroing was not  treated as a practice to be banned in all 
circumstances."241  The Panel noted that "Article 9 of the [ Anti-Dumping ] Agreement  clearly permits 
the use of an asymmetrical method of comparing normal value and individual export prices in the context of a system of variable anti-dumping duties, which necessarily involves zeroing."
242  In the 
light of these considerations, the Panel expressed the view that the "fair comparison" requirement in 
Article 2.4 cannot be interpreted to entail a prohib ition of asymmetry and zeroing.  The Panel added 
that, given its previous finding that Article 2.4.2 is limited in its application to investigations within 
the meaning of Article 5 of the  Anti-Dumping Agreement  by virtue of the phrase "the existence of 
margins of dumping during the investigation ph ase", "[t]o interpret Article 2.4 as prohibiting 
asymmetry and zeroing not only in investigations with in the meaning of Article 5 but also in duty 
                                                      
237Panel Report, para. 7.255. 
238Ibid., para. 7.260. 
239Ibid. 
240Ibid., para. 7.262.   
241Ibid., para. 7.263. 
242Ibid., para. 7.264.   WT/DS294/AB/R 
Page 58  
 
assessment proceedings under Article 9 ..., would render  ineffective the language in Article 2.4.2 that 
limits its scope of application to investigations."
243  
142. On appeal, the European Communities challenges the Panel's finding that the United States 
did not act inconsistently with the fi rst sentence of Article 2.4 of the  Anti-Dumping Agreement .  The 
European Communities indicates that it agrees with  the Panel that Article 2.4 establishes an 
overarching and independent obliga tion to make a fair comparison between normal value and export 
price.  Also, the European Communities does not take issue with the Panel's view that the 
"fair  comparison" obligation is not limited to para graph 4 of Article 2.  However, the European 
Communities contends that the Panel erred because,  "absent targeted dumping, a comparison between 
normal value and export price that does not fully take into account all export transactions does not 
result in the calculation of a margin of dumping for the product as a whole, and is therefore not a fair 
comparison within the meaning of Article 2.4, first sentence."244  Furthermore, the European 
Communities argues that the USDOC did not make fair comparisons because the methodology it used was performed at the transaction level, which is  inconsistent with the logic resulting from the 
"temporal parameters" the USDOC itself fixed in defining the investigation period for the 
administrative reviews at issue.
245 
143. The European Communities contends that the methodology employed by the USDOC in the 
administrative reviews at issue is inconsistent with the first sentence of Article 2.4 because it inflates 
the margin of dumping and, therefore, is inhere ntly biased.  For the European Communities, an 
inherent bias is built into the methodology used by the USDOC because, "when an exporter makes 
some sales above normal value and some sales belo w normal value, the use of zeroing will inevitably 
result in a margin higher than would otherwise be  calculated, including in the original proceeding."246  
The European Communities adds that the methodolog y at issue is also unfair because it introduces 
"unjustified ... discrimination" be tween exporters or producers that are assessed at the rate resulting 
from the original proceedings and those that are assess ed at a rate calculated in administrative reviews 
on the basis of the methodology at issue.247  The European Communities refers to the Appellate 
Body's statement in EC – Bed Linen  that "the practice of 'zeroing' at  issue in this dispute ... is  not  a 
'fair comparison' between export price and norma l value, as required by Article 2.4 and by 
                                                      
243Panel Report, para. 7.267. 
244European Communities' appellant's submission, para. 75. (footnote omitted) 
245Ibid., para. 80. 
246Ibid., para. 86. 
247Ibid., para. 92.  WT/DS294/AB/R 
 Page 59 
 
 
Article 2.4.2."248  In the European Communities' view, findings of the Appellate Body in US – 
Corrosion-Resistant Steel Sunset Review 249 and  US – Softwood Lumber V 250 also confirm that the 
methodology used by the USDOC in this case is unfai r and, therefore, inconsistent with the first 
sentence of Article 2.4 of the  Anti-Dumping Agreement .   
144. The United States requests the Appellate Body to reject the European Communities'  
appeal concerning Article 2.4.  For the United States,  the simple fact that one methodology results in a 
higher dumping margin than another is an insufficien t basis to conclude that the first methodology is 
"unfair" within the meaning of Article 2.4.  Rather , the term "fair" must be  interpreted in a manner 
consistent with other obligations in the  Anti-Dumping Agreement .251 The United States submits that 
the text of Article 2.4 does not require the calculation of a margin of dumping with respect to the "product as a whole", because such a requirement cannot be read into the concept of "fair 
comparison", and the obligation to calculate margin s of dumping for the product as a whole is limited 
to the use of the average-to-average compar ison methodology during the investigation phase under 
Article 2.4.2.  If the fair comparison requireme nt were interpreted so as to impose the same 
obligation, the United States argues, the first sentence of Article 2. 4.2 would be redundant.
252   
145. For the United States, the comparison method in  the second sentence of Article 2.4.2 is an 
exception to the methods in the first sentence, but  it is not an exception to the "fair comparison" 
requirement in Article 2.4.  If Article 2.4 requires "offsets", as the United States contends, then "offsets" must be made under the targeted dumping provision of the second sentence of Article 2.4.2.  
However, according to the United States, applyi ng the average-to-transaction comparison method 
with "offsets" will yield mathematically the sa me result as the average-to-average comparison 
method.  Thus, the European Communities' interpreta tive approach to Article 2.4 would, in the United 
States' view, nullify the second sentence of Article 2.4.2.
253 
146. We recall that the Panel found, first, that the "fair comparison" language in the first sentence 
of Article 2.4 creates an independent obligation, and,  secondly, that the scope of this obligation is not 
exhausted by the general subject ma tter expressly addressed by paragraph 4 (that is to say, the price 
                                                      
248Appellate Body Report, EC – Bed Linen , para. 55 (quoted in European Communities' appellant's 
submission, para. 95). (original emphasis) 
249Appellate Body Report, US – Corrosion Resistant-Steel Sunset Review , paras. 127-128, 130, and 135 
(referred to in European Communities' appellant's submission, paras. 96-97). 
250Appellate Body Report, US – Softwood Lumber V , paras. 93, 96-97, 99, and 101 (referred to in 
European Communities' appellant's submission, para. 99). 
251United States' appellee's submission, para. 118. 
252Ibid., paras. 135-136. 
253Ibid., paras. 143-150. WT/DS294/AB/R 
Page 60  
 
comparability).  The European Co mmunities agrees with these two Pa nel findings and,  accordingly, 
does not challenge them on appeal.  For our part, we see nothing incorrect in the Panel's reasoning 
with respect to these two specific findings.
254  On the substantive meaning of the term "fair 
comparison", we also agree with the Panel that the le gal rule set out in the first sentence of Article 2.4 
is expressed in terms of a general and abstract st andard.  One implication of this is that this 
requirement is also applicable to pr oceedings governed by Article 9.3. 
147. We have already found that zeroing, as app lied by the USDOC in the administrative reviews 
at issue, is inconsistent with Article 9.3 of the  Anti-Dumping Agreement  and Article VI:2 of the 
GATT 1994.  Therefore, an additional finding that the use of the same methodology in the administrative reviews at issue is inconsistent with  the "fair comparison" requirement contained in the 
first sentence of Article 2.4 of the  Anti-Dumping Agreement   does not appear to us necessary for 
solving this dispute.  Accepting the European Comm unities' claim with respect to Article 2.4, first 
sentence, would lead to the same result that we have reached after examining zeroing, as applied by 
the USDOC in the administrative reviews at i ssue, in the light of Article 9.3 of the  Anti-Dumping 
Agreement   and Article VI:2 of the GATT 1994.  Theref ore, we decline to rule on whether the Panel 
erred in finding that zeroing, as applied by the USDOC  in the administrative reviews at issue, is not 
inconsistent with the "fair comparison" requirement contained in the first sentence of Article 2.4 of 
the  Anti-Dumping Agreement .  Moreover, the Panel's reasoning with respect to the first sentence of 
Article 2.4 depends to a large extent on it s findings on Article 2.4.2 and Article 9.3.
255  We recall that 
we reversed the Panel's finding on Article 9.3.  In these circumstances, we declare moot, and of no 
legal effect, the finding of the Panel, in paragraphs  7.284 and 8.1(e) of the Panel Report, that zeroing, 
as applied by the USDOC in the administrative review s at issue, is not inconsistent with the first 
sentence of Article 2.4 of the  Anti-Dumping Agreement . 
2. Whether Zeroing is an Impermissi ble Allowance or Adjustment under 
Article 2.4  
148. We turn now to the issue of whether the United States acted inconsistently with Article 2.4, 
third to fifth sentences, of the  Anti-Dumping Agreement  in the administrative reviews at issue.  On 
appeal, the European Communities ar gues that the Panel erred in rejecting its argument that, in 
attributing a value of zero to results of compar isons for which the export price exceeds the normal 
value, the USDOC makes an allowance or adju stment for a difference not affecting price 
comparability and, therefore, acts inconsistently with  Article 2.4, third to fifth sentences, of the  Anti-
Dumping Agreement . 
                                                      
254The Panel's reasoning is set out in paragraphs 7.253-7.258 of the Panel Report. 
255Panel Report, para. 7.275.  WT/DS294/AB/R 
 Page 61 
 
 
149. The appeal of the European Comm unities with respect to this issue refers to Article 2.4, third 
to fifth sentences, which read as follows: 
Due allowance shall be made in each case, on its merits, for 
differences which affect price comparability, including differences in 
conditions and terms of sale, taxati on, levels of trade, quantities, 
physical characteristics, and any other differences which are also demonstrated to affect price comparability.  In the cases referred to in paragraph 3, allowances for co sts, including duties and taxes, 
incurred between importation and resale, and for profits accruing, 
should also be made.  If in these cases price comparability has been 
affected, the authorities shall establish the normal value at a level of trade equivalent to the level of trade of the constructed export price, or shall make due allowance as warranted under this paragraph. 
(footnote omitted) 
150. The Panel rejected the argument of the Europ ean Communities that zeroing is inconsistent 
with Article 2.4 of the  Anti-Dumping Agreement  because it is an allowanc e or adjustment for a 
difference other than a difference affecting price comparability.  The Panel was of the view that 
differences in price comparability in Article 2.4 ar e differences between the product as sold in the 
export market and the product as sold in the domestic ma rket with respect to f actors such as level of 
trade, taxation, or quantities
256, and that zeroing is conceptually  different from the allowances or 
adjustments falling within the scope of the third to fi fth sentences of Article 2.4.  For the Panel, "the 
argument that zeroing is an impermissible allowance or adjustment for a difference not affecting price 
comparability cannot be reconciled with the fact th at Article 2.4.2 specifically does not deal with 
zeroing other than in the context of original investigations and that the second sentence of 
Article 2.4.2 specifically permits an asymmetri cal comparison method that would be without any 
useful effect if zeroing were prohibited."257  If zeroing is characterized as an impermissible allowance 
or adjustment, the Panel reasoned, "there is no rational basis to explain why an allowance or 
adjustment that is prohibite d because it does not correspond to a difference affecting price 
comparability is no longer prohibited in the context of the asymmetrical comparison method provided 
for in the second sentence of Article 2.4.2 or in  the context of a duty assessment proceeding under 
Article 9."258 
151. The European Communities appeals the Panel's fi nding that zeroing is not an impermissible 
allowance or adjustment for a difference other than  a difference affecting pr ice comparability.  For the 
European Communities, the third to fifth sentences  of Article 2.4 do not only impose obligations on 
                                                      
256Panel Report, para. 7.279. 
257Ibid., para. 7.277. 
258Ibid. WT/DS294/AB/R 
Page 62  
 
Members to make an adjustment for a difference that  affects price comparability, they also impose an 
obligation not to make an adjustment  when there is no such difference.
259  The European 
Communities adds that, if Article 2.4,  third to fifth sentences, refer to  certain differences for which an 
adjustment is to be made, the list is illustrative, w ith the implication that th e types of differences and 
adjustments referred to in the third to fifth sentences are not exhaustive.260  According to the European 
Communities, zeroing should be construed as an adju stment or allowance falling within the scope of 
the third sentence of Article 2.4, because the effect of  the zeroing adjustment is to reduce the price at 
which particular export transactions were in fact made.261  The European Communities adds that it is 
"clear that the simple zeroing adjustment ... is not made for a 'difference affecting price comparability'."
262  For the European Commun ities, the Panel erred because, irrespective of whether 
the simple zeroing adjustment is conceptually diffe rent from the elements of the illustrative list of 
Article 2.4, third to fifth sentences, it is an adju stment not made for a "difference affecting price 
comparability" and, therefore, it is inconsistent  with Article 2.4, third to fifth sentences.263  
152. The European Communities submits that "[t]he sco pe of the obligations contained in the third 
to fifth sentences of Article 2.4 is not limited acco rding to the point in time, or the stage of the 
calculation, at which the adjustment or allowance is  introduced into the calculation of the margin of 
dumping."264  Furthermore, the European Communities argu es that the Panel erred when it stated that 
the European Communities' argument cannot be re conciled with Article 2.4.2, because the Panel 
failed to take into account the opening words of th at provision:  "Subject to the provisions governing 
fair comparison in paragraph 4".  For the Eur opean Communities, these opening words imply that, 
assuming there is a conflict between, on the one hand, Ar ticle 2.4.2 and, on the other hand, the third to 
fifth sentences of Article 2.4 (a conflict that th e European Communities assumes but of which it does 
not recognize the existence), this c onflict should be settled in favour of the third to fifth sentences of 
Article 2.4.265  Also, the European Communities submits that the second sentence of Article 2.4.2, 
relating to targeted dumping, does not support the Pa nel's finding that zeroing is not an impermissible 
allowance or adjustment for a difference other than a difference affec ting price comparability.266 
                                                      
259European Communities' appellant's submission, para. 114. 
260Ibid., para. 125. 
261Ibid., para. 128. 
262Ibid., para. 134. 
263Ibid., para. 132. 
 264Ibid., para. 129. 
265Ibid., paras. 136-137. 
266Ibid., paras. 141-142.  WT/DS294/AB/R 
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153. The United States contends that the denial of  "offsets" is not an undue price adjustment 
pursuant to Article 2.4, third to fifth sentences.  If it were, it would be an undue adjustment for all 
three comparison methods described in Article 2.4.2.   However, such an approach would have the 
effect of nullifying the second sentence of Article 2.4.2.267  For the United States, Article 2.4, third to 
fifth sentences, should be interpreted narrowly "t o address pre-comparison price adjustments that 
affect the comparability of prices between markets."268  The United States contends that an adjustment 
is an addition or subtraction made to a specific price due to some characteristic of the sale in order to 
make the price comparable to some other price.269   
154. The United States argues that, in the assessment proceedings at issue, no price adjustments 
were made to account for the extent to which an export price was greater than normal value.  The 
United States adds that the USDOC could not have known if a particular export transaction was sold 
at a price greater than normal value until it had co mpared that price with another price, after 
adjustments had been made for conditions affecti ng price comparability.  For the United States, the 
USDOC was simply determining which export transacti ons were sold at less than normal value, and 
thus, which export transactions gave rise to anti- dumping duties for which the importer was liable.  
Not reducing that duty because other sales were made at greater than normal value, the United States 
argues, is not a price adjustment.270 
155. The European Communities' challenge is based mainly on the third sentence of Article 2.4, 
according to which "[d]ue allowance shall be made ... for differences  which affect price 
comparability". (emphasis added)  Although the Europ ean Communities refers also to the fourth and 
fifth sentences of Article 2.4, these sentences constitute specific variants of the principle set out in the 
third sentence.  Accordingly, we will focus in our  analysis on the third sentence of Article 2.4. 
156. We begin our analysis with the question whether the third sentence of Article 2.4 implies that 
due allowance should not be made for differences that  do not affect price comparability.  In our view, 
if allowances could be made for differences not affecting price comparability, the purpose of the 
requirement of the third sentence of Article 2.4 woul d be undermined.  Therefore, we are of the view 
that the third sentence of Article 2.4 also applies  a contrario :  this sentence implies that allowances 
should not be made for  differences that do not affect price comparability.  Having said that, the 
principle set out in the third sentence of Article 2.4, including its  a contrario  application, does not 
                                                      
267United States' appellee's submission, paras. 143-150 and 154. 
268Ibid., para. 156. 
269Ibid., para. 157. 
270Ibid., para. 158. WT/DS294/AB/R 
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cover all adjustments, but only adjustments made fo r those differences that fall within the scope of 
that principle.   
157. The illustrative list in the third sentence of Article  2.4 provides indications as to the nature of 
the differences covered by the principle set out in that sentence, which refers to differences that 
include "differences in conditions and terms of sale, taxa tion, levels of trade, quantities, physical 
characteristics".  The elements of this list are all feat ures, or characteristics, of the transactions that are 
compared.  Although the list is illustrative and not e xhaustive, it suggests that the adjustments, or 
allowances, covered by the third sen tence are those that are made to take into account the differences 
relating to characteristics of the compared transactions (export transactions and domestic 
transactions).  Article 2.4 specifies that the diffe rences for which due allowance shall be made are 
those "which affect price comparability".  In our view , this refers to differenc es in characteristics of 
the compared transactions that have an impact, or are likely to have an impact, on the price of the 
transaction.  Likewise, the  a contrario   application of this principle prohibits only those adjustments 
made in relation to differences in characteris tics of the compared transactions that do  not  affect price 
comparability.  These are differences that do not have an impact, or are unlikely to have an impact, on 
the price of the transaction.  Therefore, adju stments or allowances made in relation to  differences in 
price  between export transactions and domestic  transactions—such as zeroing—cannot be 
adjustments or allowances covered by the third sentence of Article 2.4, including its a contrario   
application.  Indeed, whether or not a factor affects the price comparability between export and 
domestic transactions should be de termined before this comparis on is made, and not after.  
158. We recall that, in assessing anti-dumping duties,  the USDOC compares the export price of 
individual transactions with the normal value, and aggregates the results of these comparisons.  In the 
aggregation process, the USDOC disregards the results when the export price exceeds the normal 
value.  The European Communities contends that in doing so, the USDOC makes an allowance or an 
adjustment for a difference that does not affect pri ce comparability and, therefore, acts inconsistently 
with the third sentence of Article 2.4.  We disagr ee with this argument of the European Communities.  
In our view, disregarding a result when the export price exceeds the normal value (zeroing) cannot be characterized as an allowance or an adjustment cove red by the third sentence of Article 2.4, including 
its a contrario  application.  Indeed, this is not undertaken  to adjust to a difference relating to a 
characteristic of the export transaction in comparison with a domestic transaction.  Accordingly, we 
agree with the Panel that, conceptually, zeroing is not  an adjustment or an allowance falling within the 
scope of Article 2.4, third to fifth sentences.  WT/DS294/AB/R 
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159. In the light of the above, we  uphold   the Panel's finding, in paragraph 7.280 of the Panel 
Report, that zeroing is not an impermissible allowance or adjustment under Article 2.4, third to fifth 
sentences.  
C. Article 2.4.2 of the Anti-Dumping Agreement 
160. We turn now to the issue of whether the Pane l erred in finding that the United States did not 
act inconsistently with Article 2.4.2 of the Anti-Dumping Agreement  in the administrative reviews at 
issue.  
161. This appeal of the European Communities is c onditional.  In the event that we reverse the 
Panel's conclusions either  on Article 9.3 of the Anti-Dumping Agreement  (as well as Article VI:2 of 
the GATT 1994), or on Article 2.4 of the  Anti-Dumping Agreement , the European Communities does 
not appeal the Panel's findings on Article 2.4.2 of the Anti-Dumping Agreement . 
162. We recall that we reversed  the Panel's finding that the United States did not act inconsistently 
with Article 9.3 of the  Anti-Dumping Agreement  and Article VI:2 of the GATT 1994.  Thus, the 
condition on which the European Co mmunities' conditional appeal is predicated is not fulfilled.  
Accordingly, the issue raised by  the European Communities' conditi onal appeal under Article 2.4.2 of 
the  Anti-Dumping Agreement   is not before us. 
163. Having so concluded, we note that, before th e Panel, the parties argued at length on the 
applicability of Article 2.4.2 to administrative review s under Article 9.3.  We also note that the Panel 
made findings on this issue and that there was also a dissenting opinion on the interpretation of 
Article 2.4.2. 
164. We recognize that the issue of the applicability of  Article 2.4.2 to administrative reviews is an 
important issue, but we consider that the central focu s of this appeal is the issue of zeroing, both as it 
relates to original investigations and administrativ e reviews.  As our reasoning shows, we did not find 
it necessary to resolve the issue of zeroing in the ad ministrative reviews at issue in this case through 
an examination of Article 2.4.2.  We wish to em phasize that we are not expressing any view in this 
appeal as to whether Article 2.4.2 is applicable or  not to administrative reviews under Article 9.3.  
Thus, the Panel's findings, in paragraphs 7.223 a nd 8.1(d) of the Panel Report, should not be 
considered to have been endorsed by the Appellate Body. WT/DS294/AB/R 
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D. Articles 11.1 and 11.2 of the Anti-Dumping Agreement 
165. Before the Panel, the European Communities ar gued that, in the administrative reviews at 
issue, the USDOC acted inconsistently  with Articles 11.1 and 11.2 of the  Anti-Dumping Agreement  
"as a consequence of the unlawful zeroing method used" in the calculation of margins of dumping.
271  
The Panel concluded from this that the European  Communities' claims under Articles 11.1 and 11.2 
"are dependent in that they presuppose that th e zeroing method used by [the] USDOC in these 
administrative reviews is inconsistent with Article[] 2.4 and/or Article 2.4.2 of the [ Anti-Dumping ] 
Agreement ."272  Having found no violation of those provisions273, the Panel rejected the European 
Communities' claims under Articles 11.1 and 11.2 of the  Anti-Dumping Agreement  without further 
analysis.274 
166. The European Communities challenges the Pane l's finding on appeal.  According to the 
European Communities, its claims under Articles 11.1 and 11.2 do not  "presuppose" that zeroing, as 
applied by the USDOC in the administrative reviews at  issue, was inconsistent with Article 2.4 and/or 
Article 2.4.2 of the Anti-Dumping Agreement .275  The European Communities submits that "[t]he re-
investigation of the cash deposit rate, which is ca rried out in conjunction with the retrospective 
assessment proceeding"276, must be consistent with the obligati ons set out in Articles 11.1 and 11.2.  
On these grounds, the European Communities contends th at the Panel erred in concluding that, in the 
administrative reviews at issue, the USDOC did not act inconsistently with Articles 11.1 and 11.2 of 
the  Anti-Dumping Agreement .   
167. The United States rejects the European Commun ities' contention that the Panel erred in 
concluding that, in the administrative reviews at i ssue, the USDOC did not act inconsistently with 
Articles 11.1 and 11.2 of the  Anti-Dumping Agreement .  According to the United States, the 
European Communities does not explain what it pe rceives to be the obligations set forth in 
Articles 11.1 and 11.2 and how these obligations re late to Article 9.3 assessment proceedings.  
Furthermore, the European Comm unities "never reconciled" its claims under Articles 11.1 and 11.2 
                                                      
271European Communities' first written submission to the Panel, paras. 183-210.  
272Panel Report, para. 7.287.  
273Ibid., paras. 7.223 and 7.284.  
274Ibid., para. 7.288. 
275European Communities' appellant's submission, para. 368.  For instance, before the Panel, the 
European Communities argued th at the United States "periodic reviews"  of the amount of anti-dumping duties 
fall under Article 9.3 of the  Anti-Dumping Agreement .  The European Communities argued that "in relation to 
these matters, the United States was obliged to comply, in particular, with the provisions of Articles 2 and 9 of 
the  Anti-Dumping Agreement ." (European Communities' first written s ubmission to the Panel, paras. 183-186 
and 204-210) 
276European Communities' appellant's submission, para. 365.   WT/DS294/AB/R 
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with its own recognition that the duty assessment  proceedings conducted by the United States 
"correspond to and fit within" Article 9.3 of the  Anti-Dumping Agreement .277   
168. The European Communities has not, in our view, established that Articles 11.1 and 11.2 of 
the  Anti-Dumping Agreement   apply to the reassessment of the cash-deposit rate in the context of 
administrative reviews.278  In particular, we fail to see how the reassessment of a cash-deposit rate to 
be applied to future entries coul d constitute a review of whether the continued imposition of the anti-
dumping duty is necessary to counteract dumping that is causing injury.   
169. In the light of the above, we  uphold   the Panel's finding, in para graphs 7.288 an d 8.1(f) of the 
Panel Report, that zeroing, as applied by the USDOC in the administrative reviews at issue, is not 
inconsistent with Articles 11.1 and 11.2 of the  Anti-Dumping Agreement . 
E. Articles 1 and 18.4 of the Anti-Dumping Agreement and Article XVI:4 of the WTO 
Agreement 
170. Before the Panel, the European Communities ar gued that, in the administrative reviews at 
issue, the USDOC acted inconsistently with Articles 1 and 18.4 of the Anti-Dumping Agreement  and 
Article XVI:4 of the WTO Agreement  "as a consequence of the unlawful zeroing method used in the 
calculation of margins of dumping."279  The Panel concluded from this that the European 
Communities' claims under those provisions "are depe ndant in that they presuppose that the zeroing 
method used by [the] USDOC in these administrative re views is inconsistent with Article[] 2.4 and/or 
Article 2.4.2" of the Anti-Dumping Agreement .280  Having found no violation of Article 2.4 
or Article 2.4.2281, the Panel concluded that the United States had also not violated Articles 1 and 18.4 
of the Anti-Dumping Agreement  and Article XVI:4 of the WTO Agreement .282 
                                                      
277United States' appellee's submissi on, para. 219 (referring to European Communities' first written 
submission to the Panel, para. 183).   
278We note that, in any event, the European Communities argued before the Panel that administrative 
reviews are not subject to the provisions of Article 11.2 of the  Anti-Dumping Agreement .  Instead, they 
"correspond to and fit within" Article 9.3 of the Anti-Dumping Agreement .  The European Communities further 
emphasized that, in referring to Articles 11.1 and 11.2, it was "[a]ssuming, only for th e sake of argument, that 
part of the measure (the decision to apply a revised estimated anti-dumping duty deposit rate for the future)  ... was a 'review' within the meaning of Article 11.2 of the Anti-Dumping Agreement ." (See European 
Communities' first written submission to the Panel, paras. 183, 185 and 187)  
279Ibid., paras. 183-210.  
280Panel Report, para. 7.287.  
281Ibid., paras. 7.223 and 7.284.  
282Ibid., para. 7.288. WT/DS294/AB/R 
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171. The European Communities challenges the Pane l's finding on appeal.  According to the 
European Communities, the Panel erred in statin g that the European Communities' claims under 
Articles 1 and 18.4 of the Anti-Dumping Agreement
  and Article  XVI:4 of the WTO Agreement  were 
"dependent" on a finding of violation of Articles 2.4 and 2.4.2 of the Anti-Dumping Agreement .283  
Instead, according to the European Communities, it argued before the Panel that the United States' 
zeroing methodology "results, simultaneously, in the vi olation of several different obligations" in the 
covered agreements, including Articles 2.4, 2.4.2, and 9.3 of the Anti-Dumping Agreement , and 
Articles VI:1 and VI:2 of the GATT 1994.284     
172. Given that we have found that the zeroing methodology, as applied by the USDOC in the 
administrative reviews at issue, is in consistent with Article 9.3 of the Anti-Dumping Agreement  and 
Article VI:2 of the GATT 1994, it is not necessary, for purposes of resolving this dispute, for us to 
rule on whether the zeroing methodology, as applied in the administrative reviews at issue, is also 
inconsistent with Artic les 1 and 18.4 of the  Anti-Dumping Agreement and Article XVI:4 of the WTO 
Agreement .     
 
V. Consistency of Zeroing "As Such" 
A. The Panel's Consideration of the Standar d Zeroing Procedures, the Anti-Dumping 
Manual, and the "Practice or Methodology" of Zeroing 
173. Before the Panel, the European Communities ch allenged, as being inconsistent, as such, with 
Articles 1, 2.4, 2.4.2, 5.8, 9.3, 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 , a measure "consisting of or including"285 
the Standard Zeroing Procedures286, the United States' "practice or methodology" of zeroing, and the 
Anti-Dumping Manual. 
                                                      
283European Communities' appellant's submission, para. 368.  
284Ibid.;  European Communities' first written submission to the Panel, paras. 204-210.  
285European Communities' first written submission to the Panel, para. 125. 
286We briefly describe the "Standard Zeroing Proced ures" as identified by the European Communities 
in this case.  Standard programming used by the USDOC to calculate margins of dumping contains the 
following line of computer code:  "WHERE EMARGIN GT 0".  The European Communities explains that this 
line contains the instruction to select only the results of  intermediate comparisons that are positive, and to ignore 
those that are negative.  The European Communities furt her explains that this is "the key feature of the 
architecture that the [European Communities] refers to as 'zeroing'." (European Communities' appellee's 
submission, para. 14)  The European Communities describe s this line of computer code, along with the lines 
surrounding it as the "Standard Zeroing Procedures". (Panel Report, paras. 7.70 and 7.91;  European Communities' first written submission to the Panel, paras. 16, 21-22, 37-38;  European Communities' response 
to Question 51 posed by the Panel;  and European Communities' second written submission to the Panel, 
para. 69)  The Panel noted that the term "Standard Zeroing Procedures" is not used in United States anti-dumping laws and regulations. (Panel Report, para. 7.71)  WT/DS294/AB/R 
 Page 69 
 
 
174. The Panel began its analysis by reviewing the findings of the Appellate Body in  US – 
Corrosion-Resistant Steel Sunset Review .  The Panel recalled that the Appellate Body has found that 
"the entire body of generally applicable rules,  norms and standards adopted by Members in 
connection with the conduct of anti-dumping pro ceedings" can be challenged, as such, that is, 
independently from their application in specific cases.287  The Panel further noted that the Appellate 
Body has found that: 
... there is no basis either in the practice of the GATT and the WTO 
generally or in the provisions of the Anti-Dumping Agreement , for 
finding that only certain types of measures can, as such, be challenged in dispute settleme nt proceedings under the Anti-Dumping 
Agreement .
288   
175. Next, the Panel noted that the Appellate Body had confirmed, in US — Oil Country Tubular 
Goods Sunset Reviews  , that the USDOC's Sunset Policy Bulletin (the "SPB") is a measure that can be 
challenged, as such.289  For the Panel, it follows from the Appellate Body's reasoning in that case that 
a measure can be challenged as an "act" or "instrumen t", even where the measure in question is not "a 
legal instrument" under the law of the responding party and does not bind the relevant authorities.290  
On this basis, the Panel stated that: 
... to characterize the "Standard Ze roing Procedures" as an act or 
instrument that sets forth rules or norms intended to have general and prospective application is somewhat  difficult to reconcile with the 
fact that the "Standard Zeroing Procedures" are only applicable in a 
particular anti-dumping proceeding as a result of their inclusion in the computer program[] used in that particular proceeding.   The need to incorporate these lines of computer code into each 
individual program[] indicates that it is not the "Standard Zeroing Procedures" per se  that set forth rules or norms of general and 
prospective application.  For this reason, we also question whether 
these "Standard Zeroing Procedures" are "administrative procedures" within the ordinary meaning of that  term as used in Article 18.4 of 
the [Anti-Dumping ] Agreement .  The "Standard Zeroing Procedures" 
by themselves do not create anything and are simply a reflection of 
something else.
291 
                                                      
287Panel Report, para. 7.93 (quoting Appellate Body Report, US – Corrosion-Resistant Steel Sunset 
Review , para. 87).  
288Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review, para. 88 . 
289Panel Report, paras. 7.94-7.96 (referring to Appellate Body Report, US – Oil Country Tubular 
Goods Sunset Reviews, para. 187).   
290Ibid., para. 7.96.  
291Ibid., para. 7.97. WT/DS294/AB/R 
Page 70  
 
176. Although the Panel did not focus on the Standard Zeroing Procedures as a measure  per se , it 
considered that "they can be relevant eviden ce to ascertain the existence of a methodology."
292 
177. The Panel then turned to consider the Eur opean Communities' claim regarding the United 
States' "practice or methodology" of zeroing.  In doing so, the Panel proceeded, first, to consider 
whether there exists what the European Co mmunities terms "methodology", and whether this 
methodology can be found to be WTO-inconsistent.293  According to the Panel, if a non-binding 
policy instrument, such as the SPB, "is a measure that  can be challenged as such, it must logically also 
be possible to challenge as a measure a norm that is not expressed in the particular form of an official 
written statement but the existence of which is made manifest on the basis of other evidence."294  For 
the Panel, the objective of protecting the security a nd predictability of the multilateral trading system 
could be frustrated "if well-established norms that  systematically and predictably lead to WTO-
inconsistent actions cannot be cha llenged or if they can be challenged only if they are embodied in a 
particular type of instrument."295 
178. Based on these considerations, the Panel went on to determine whether "what is challenged 
by the European Communities as methodology cons titutes a norm that is WTO-inconsistent as 
such."296  The Panel underscored that "a finding that a norm is as such WTO-inconsistent must rest on 
solid evidence that enables a panel to determine th e precise content of that norm and the conduct to 
which that norm will necessarily give rise in [the] future."297  According to the Panel, "[i]n the case of 
the SPB, the necessary precision and predictability resu lted from the availability of an official policy 
statement that set out with a considerable degr ee of detail the methodology the USDOC intended to 
apply in certain situations."298  The Panel added, however, that ther e are also "other types of evidence 
that can be used to establish with the necessary degree of precision the content of a norm and the 
future conduct it will generate."299  
179. Turning to the evidence that was before it, the Panel found that "the instruction not to include 
comparison results with negative margins in the num erator of the dumping margin is reflected in 
certain lines of computer code that are always  included in the computer program[s] used by [the] 
                                                      
292Panel Report, para. 7.102. (footnote omitted) 
293Ibid., para. 7.98.  
294Ibid., para. 7.99.  
295Ibid., para. 7.100 (referring to Appellate Body Report, US – Corrosion-Resistant Steel Sunset 
Review , para. 82).  
296Ibid., para. 7.101.  
297Ibid., para. 7.102. 
298Ibid. 
299Ibid.  WT/DS294/AB/R 
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USDOC in anti-dumping proceedings."300  The Panel also noted that "the United States does not 
contest that the lines of computer code identified by the European Communities as 'Standard Zeroing 
Procedures' are  a constant feature  of the computer program[s] used by [the] USDOC to perform 
dumping margin calculations."301  On this basis, the Panel stated that the evidence before it "indicates 
that this exclusion of comparison results with ne gative margins has been invariably performed by 
[the] USDOC for an extended period of time."302   The Panel added that the United States had been 
"unable to identify any instance where [the] USDOC had given a credit for non-dumped sales"303 and 
that the United States "ha[d] not contested in this proceeding that [the] USDOC's zeroing 
methodology reflects a deliberate policy."304   
180. Based on this analysis, the Panel concluded th at "the zeroing methodology manifested in the 
'Standard Zeroing Procedures' represents a well-est ablished and well-defined norm followed by [the] 
USDOC and that it is possible based on this evidence to identify with precision the specific content of 
that norm and the future conduct that it will entail."305  For the Panel, the situation was "the same as in 
the case of the [SPB], except that the zero ing methodology is not expressed in writing."306  Against 
this background, and recalling its pr evious finding that the use of model zeroing in the original 
investigations at issue is inconsis tent with Article 2.4.2 of the  Anti-Dumping Agreement , the Panel 
found that the United States' zeroing methodology, as it relates to original investigations, is a "norm" 
that is inconsistent, as such, with Article 2.4.2 of the  Anti-Dumping Agreement .307 
181. Having reached this conclusion, the Panel dec lined to rule on the European Communities' 
claim that the Anti-Dumping Manual is WTO-inconsistent "as such".308  In doing so, the Panel 
explained that the Anti-Dumping Manual "ha[d] b een referred to by th e European Communities 
principally as evidence to confirm the 'standard' ch aracter of the 'Standard Zeroing Procedures'."309 
                                                      
300Panel Report, para. 7.103. (emphasis added) 
301Ibid. (emphasis added) 
302Ibid. 
303Ibid. 
304Ibid. 
305Ibid., para. 7.104. (footnote omitted) 
306Ibid. 
307Ibid., para. 7.106. 
308The parties agreed before the Panel that the Anti-Dumping Manual is a measure. (European 
Communities' appellant's submission, para. 342 and footnot e 340 thereto (referring to United States' first written 
submission to the Panel, para. 83))  In the words of the United States, "[f]or purposes of this dispute, the United 
States does not contest the [European Communities'] asse rtion that the [Anti-Dumping] Manual is a 'measure' 
for purposes of a WTO dispute." (United States' first written submission to the Panel, para. 83) 
309Panel Report, para. 7.107.  We examine the European Communities' appeal regarding the Panel's 
decision not to rule on the WTO-consistency of the Anti-Dumping Manual  infra , in paragraphs 223-225. WT/DS294/AB/R 
Page 72  
 
182. We turn next to address the claims raised  by the United States in its other appeal. 
B. The Zeroing Methodology "As Such" – Other Appeal by the United States 
183. The United States requests the Appellate Body to  reverse the Panel's finding that the United 
States' zeroing methodology, as it relates to original i nvestigations, is a "norm" that is inconsistent, as 
such, with Article 2.4.2 of the  Anti-Dumping Agreement .  The United States points to several alleged 
errors in the Panel's reasoning.
310  It argues, in particular, that:   
(i) the Panel erred in finding that the zeroi ng methodology is a measure that can be 
challenged, as such, in dispute settlement proceedings;  
(ii) 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;  
and 
(iii) the Panel erred in allocating the burden of proof regarding this claim and in finding 
that the European Communities had established a  prima facie  case.  
184. We examine each of these allegations in turn below.  We start by examining the issue of 
whether the zeroing methodology, as put forth by the European Communities in this dispute, can be 
challenged, as such, in dispute settlement proceedings. 
1. Whether the Zeroing Methodology Can be  Challenged, As Such, in Dispute 
Settlement Proceedings      
185. The United States claims that the Panel erred in finding that the zeroing methodology is a 
measure that can be challenged, as such, in disput e settlement proceedings.  According to the United 
States, the Panel's conclusion is not supported by th e text of the DSU or by previous rulings by the 
Appellate Body regarding the types of measures that  can be challenged, as such, in dispute settlement 
proceedings.311  In particular, the Panel erred in finding that the zeroing methodology is a "norm" and, 
thus, a "measure" even though it "did not identify an y act or instrument of the United States setting 
forth or creating that rule or norm."312  The United States further submits that the Panel applied an 
improper standard in assessing the types of measur es that can be subject to dispute settlement 
                                                      
310We note that the United States has not appeal ed the Panel's finding that "model zeroing",  as applied   
in the original investigations listed in Exhibits EC-1 th rough EC-15, is inconsistent  with Article 2.4.2 of the 
 Anti-Dumping Agreement .  Therefore, in this appeal, we are not requ ired to, and we do not address that issue. 
311United States' other appellant's submission, paras. 11-12 (referring to Article 3.3 of the DSU and to 
Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , paras. 81-82). 
312Ibid., para. 33.  WT/DS294/AB/R 
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proceedings, such that its analysis was not of th e kind required by the Appellate Body in previous 
disputes.  According to the United States, the evidence relied upon by the Panel to reach that 
conclusion was "historical"313 and "did not suggest anything other than that the decision-makers in 
past cases simply considered zeroing to be  an appropriate response to the facts."314 
186. In contrast, the European Communities underscor es that the Appellate Body has previously 
stated that there are no limitations on the types of  measures that may, as such, be subject to WTO 
dispute settlement.315  The European Communities also contest s the United States' assertion that the 
Panel relied exclusively on evidence of past beha viour to support its conclusion that the zeroing 
methodology is inconsistent, as such , with Article 2.4.2 of the  Anti-Dumping Agreement .  The 
European Communities emphasizes that the eviden ce before the Panel included the Anti-Dumping 
Manual, the standard programs used by the US DOC to calculate margins of dumping, and the 
Standard Zeroing Procedures.  In  addition, the European Communities points out that the Panel had 
before it other "supporting and corroborating" evidence, including the expert opinions316, and the "as 
applied" documents317, "which themselves systematically refe r to the [United States'] consistent 
methodology or practice".318   
187. We begin our analysis by examining the con cept of "measure".  Article 3.3 of the DSU 
provides that the dispute settlement system exists  to deal with "situations in which a Member 
considers that any benefits accruing to it directly or  indirectly under the cove red agreements are being 
impaired by measures  taken by another Member". (emphasis added)  As the United States correctly 
points out, the Appellate Body has previously stated  that "[t]his phrase identifies the relevant nexus, 
for purposes of dispute settlement proceedi ngs, between the 'measure' and a 'Member'."319   
188. In previous cases, the Appellate Body has addressed, in the context of the Anti-Dumping 
Agreement , the scope of "measures" that may, as such, be the subject of WTO dispute settlement.  In 
US – Corrosion-Resistant Steel Sunset Review ,  the Appellate Body indicated that, "[i]n principle, 
 any act or omission attributable to a WTO Member can be a measure of that Member for purposes of 
dispute settlement proceedings."320  The Appellate Body also noted that measures that can be subject 
                                                      
313United States' other appellant's submission, para. 36.    
314Ibid., para. 37. 
315European Communities' appellee's submission, para . 26 (referring to Appellate Body Report, US – 
Corrosion-Resistant Steel Sunset Review , para. 86).  
316Exhibits EC-44 and EC-46 submitted by the European Communities to the Panel. 
317Exhibits EC-1 through EC-31 submitted by the European Communities to the Panel. 
318European Communities' appellee's submission, para . 11. (original emphasis and footnote omitted) 
319Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 81. 
320Ibid. (emphasis added;  footnote omitted) WT/DS294/AB/R 
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to WTO dispute settlement can include, not only acts a pplying 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."
321 
Moreover, "instruments of a Member containi ng rules or norms could constitute a 'measure', 
irrespective of how or whether those rules or norms are applied in a particular instance."322  
189. In  US – Oil Country Tubular Goods Sunset Reviews , the Appellate Body emphasized the 
seriousness of "as such" claims: 
"[A]s such" challenges against a Me mber's measures in WTO dispute 
settlement proceedings are serious ch allenges.  By definition, an "as 
such" claim challenges laws, regulations, or other instruments of a Member that have general and pros pective application, asserting that 
a Member's conduct—not only in a particular instance that has occurred, but in future situations as well—will necessarily be 
inconsistent with that Member's WTO obligations.  In essence, 
complaining parties bringing "as such" challenges seek to prevent Members ex ante from engaging in certain conduct.  The implications 
of such challenges are obviously more far-reaching than "as applied" claims.
323 
In the same case, the Appellate Body further confir med its finding that "'acts setting forth rules or 
norms that are intended to have general and prospective applicati on' are measures subject to WTO 
dispute settlement".324  Applying this standard explicitly to th e issue of whether the SPB is a measure 
that can be challenged, as such, the Appellate Body found that: 
... the SPB has normative value, as it provides administrative 
guidance and creates expectations among the public and among private actors.  It is intended to have general application, as it is to 
apply to all the sunset reviews conduc ted in the United States.  It is 
also intended to have prospective application, as it is intended to 
apply to sunset reviews taking place after its issuance.  Thus, … the 
SPB, as such, is subject to WTO dispute settlement.
325 (footnote 
omitted) 
190. Having recalled the previous findings of the A ppellate Body regarding the types of measures 
that can be subject to an "as such" challenge , we now turn to examine whether the zeroing 
methodology, as framed by the European  Communities in this dispute, constitutes such a measure.  In 
                                                      
321Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 82. (footnote omitted) 
322Ibid., para. 82. 
323Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , para. 172. 
324Ibid., para. 187 (quoting Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , 
para. 82). 
325Ibid., para. 187.  WT/DS294/AB/R 
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particular, we consider whether the zeroing met hodology, which, as the Panel said, "is not expressed 
in writing"326, can be subject to dispute settlement under the  Anti-Dumping Agreement .   
191. In the context of the  Anti-Dumping Agreement , the Appellate Body has said that 
Article 17.3327 "underlines that a measure attributable to a Member may be submitted to dispute 
settlement  provided only that another Member has taken the view, in good faith, that the measure 
nullifies or impairs benefits accruing to it under the  Anti-Dumping Agreement ."328  In other words, 
"[t]here is no threshold requirement, in Article 17. 3, that the measure in question be of a certain 
type."329   
192. Article 18.4 of the  Anti-Dumping Agreement   is also relevant to the question of the type of 
measures that can, as such, be submitt ed to dispute settlement under the Anti-Dumping Agreement .  
That provision contains an explicit obligation for Me mbers to ensure that their "laws, regulations and 
administrative procedures" are in conformity with th e obligations set forth in that Agreement.  The 
phrase "laws, regulations and administrative proce dures" encompasses, in our view, "the entire body 
of generally applicable rules, norms and sta ndards adopted by Members in connection with the 
conduct of anti-dumping proceedings."330  As the Appellate Body has previously explained, the 
determination of the scope of "law s, regulations and administrative procedures" must be based on the 
"content and substance" of the alleged measure, and "not merely on its form."331  Accordingly, the 
mere fact that a "rule or norm" is not expressed in the form of a written instrument, is not, in our view, determinative of the issue of whether it can be cha llenged, as such, in dispute settlement proceedings.  
Rather, as the Appellate Body has stated, "there is no  basis, either in the practice of the GATT and the 
WTO generally or in the provisions of the  Anti-Dumping Agreement , for finding that only certain 
types of measure[s] can, as such, be challenge d in dispute settlement proceedings under the  Anti-
                                                     
 
326Panel Report, para. 7.104.  
327Article 17.3 of the  Anti-Dumping Agreement  provides, in relevant part: 
If any Member  considers  that any benefit accruing to it, directly or 
indirectly, under this Agreement is be ing nullified or impaired, or that the 
achievement of any objective is being impeded, by another Member or 
Members , it may, with a view to reaching a mutually satisfactory resolution 
of the matter, request in writing consu ltations with the Member or Members 
in question. (emphasis added) 
328Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 86. (emphasis added) 
329Ibid. 
330Ibid., para. 87 and footnote 87 thereto. 
331Ibid.  WT/DS294/AB/R 
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Dumping Agreement ."
332  This is, moreover, consistent with th e comprehensive nature of the right of 
Members to resort to dispute settle ment to "preserve [their] rights and obligations ... under the covered 
agreements, and to clarify the existing provisions of  those agreements" as provided for in Article 3.2 
of the DSU.   
193. For all these reasons, and based on our review of the DSU and the  Anti-Dumping Agreement , 
we see no basis to conclude that "rules or norms" can be challenged, as such,  only  if they are 
expressed in the form of a written instrument.   
194. We note that the participants in this case agree that an "as su ch" challenge can, in principle, 
be brought against a measure that is not expressed in the form of a written document.333  Thus, 
according to the European Communities, there is nothing in the covered agreements or in WTO 
jurisprudence to suggest that a measure must be in written form.334  The European Communities 
further argues that there are measures that can be ju st as effective, normative, and as much a rule that 
are not transposed into writing.335  In the present case, the European  Communities insists that, before 
the Panel, it had not relied merely on "repeat actio n" as evidence of the exis tence of an "as such" 
measure.336  Instead, referring, inter alia , to the standard programs u sed by the USDOC to calculate 
margins of dumping and the Standard Zeroing Pr ocedures, the European Communities suggests that, 
in this case, there is "overwhelming" evidence of the existence of the zeroing methodology as a 
"norm".337  
195. Although the United States agrees with the Eu ropean Communities that an unwritten measure 
can, in principle, be challenged, as such, it emph asizes that, to hold a WTO Member accountable for 
such a measure requires much more evidence and analysis than that in  which the Panel engaged in this 
case.338  The United States takes issue with the standa rd adopted by the Panel arguing that it would 
mean that "abstractions can be measures".339  Moreover, the Panel's approach would mean that when a 
Member does something in a particular instance, the Member's action results in a separate measure 
that may be subject to an "as such" challenge, at least if the Member repeats the action with some 
                                                      
332Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 88.  We note that 
Article XXVIII(a) of the General Agreement on Trade in Services  defines a "measure", for the purposes of that 
Agreement, to be "any measure by a Member, whether in the form of a law, regulation, rule, procedure, decision, administrative action, or any other form".  
333United States' and European Communities' responses to questioning at the oral hearing.   
334European Communities' response to questioning at the oral hearing.  
335Ibid. 
336Ibid.  
337Ibid.  
338United States' response to questi oning at the oral hearing. 
339United States' other appellant's submission, paras. 4 and 8.  WT/DS294/AB/R 
 Page 77 
 
 
indeterminate frequency.340  According to the United States, th is approach "would start the WTO 
dispute settlement system down the path of legi slating 'norms' rather than resolving disputes 
concerning measures." 341   
196. We agree with the United States that a panel mu st not lightly assume the existence of a "rule 
or norm" constituting a measure of general and pros pective application, especially when it is not 
expressed in the form of a written document.  If a panel were to do so, it would act inconsistently 
with its obligations under Article 11 of the DSU to  "make an objective asse ssment of the matter" 
before it.  
197. When an "as such" challenge is brought against a "rule or norm" that is expressed in the form 
of a written document—such as a law or regulation—th ere would, in most cases, be no uncertainty as 
to the existence or content of th e measure that has been challenged.  The situation is different, 
however, when a challenge is brought against a "rule or norm" that is  not  expressed in the form of a 
written document.  In such cases, the very exis tence of the challenged "rule or norm" may be 
uncertain.   
198. In our view, when bringing a challenge agains t such a "rule or norm" that constitutes a 
measure of general and prospective application, a complaining party must clearly establish, through 
arguments and supporting evidence, at least that th e alleged "rule or norm" is attributable to the 
responding Member;  its precise content;  and ind eed, that it does have general and prospective 
application.  It is only if the complaining party meets this high threshold, and puts forward sufficient 
evidence with respect to each of these elements, th at a panel would be in a position to find that the 
"rule or norm" may be challenged, as such.  This  evidence may include proof of the systematic 
application of the challenged "rule or norm".  Part icular rigour is required on the part of a panel to 
support a conclusion as to the existence of a "rule or norm" that is  not  expressed in the form of a 
written document.  A panel must carefully examine the concrete instrument alities that evidence the 
existence of the purported "rule or norm" in order to conclude that such "rule or norm" can be 
challenged, as such.342   
199. Turning to the specifics of this appeal, the Pa nel noted that the Standard Zeroing Procedures 
"can be relevant evidence to ascert ain the existence of a methodology."343  The Panel found that "the 
instruction not to include comparison results with  negative margins in the numerator of the dumping 
                                                      
340United States' opening statemen t at the oral hearing.  
341United States' other appellant's submission, para. 4. 
342This does not mean that a mere abstract principle would qualify as  a "rule or norm" that can be 
challenged, as such.  
343Panel Report, para. 7.102. (footnote omitted) WT/DS294/AB/R 
Page 78  
 
margin is reflected in certain lin es of computer code that are  always  included in the computer 
program[s] used by [the] USDOC in anti-dumping proceedings."
344  Furthermore, the Panel noted that 
"the United States [did] not contest that the lines  of computer code identified by the European 
Communities as 'Standard Zeroing Procedures' [were]  a constant feature  of the computer program[s] 
used by [the] USDOC to perform dumping margin calculations."345  On this basis, the Panel stated 
that the evidence before it "indicates that this excl usion of comparison results with negative margins 
has been  invariably  performed by [the] USDOC for an extended period of time."346   The Panel 
added that the United States had been "unable to identify any instance where [the] USDOC had given a credit for non-dumped sales"
347, and that the United States "ha[d] not contested in this proceeding 
that [the] USDOC's zeroing methodol ogy reflects a deliberate policy."348  
200. Based on its assessment of this evidence, the Panel concluded that "the zeroing methodology 
manifested in the 'Standard Zero ing Procedures' represents a well-established and well-defined norm 
followed by [the] USDOC and that it is possible b ased on this evidence to identify with precision the 
specific content of that norm and the future conduct that it will entail."349   
201. Based on our review, we observe that the evidence before the Panel consisted of the USDOC 
determinations in the "as applied" cases  challenged by the European Communities350, as well as the 
standard programs used by the USDOC  to calculate margins of dumping.351  Furthermore, the Panel 
had before it expert opinions regarding the use and the content of the zeroing methodology.352  I n  
addition, we note that the Panel had before it the Un ited States' recognition that it had been "unable to 
identify any instance where [the] USDOC had given a credit for non-dumped sales".353  The Panel 
noted that the United States "ha[d] not contested  in this proceeding that [the] USDOC's zeroing 
methodology reflects a deliberate policy."354  Furthermore, the United States indicated in its opening 
statement at the oral hearing that it will soon be publicly announcing that it no longer will engage in 
                                                      
344Panel Report, para. 7.103. (emphasis added) 
345Ibid. (emphasis added) 
346Ibid. (emphasis added) 
347Ibid. (footnote omitted) 
348Ibid., para. 7.103. 
349Ibid., para. 7.104. (footnote omitted) 
350Exhibits EC-1 through EC-15 submitted by the European Communities to the Panel. 
351Exhibits EC-43 and EC-46 submitted by the European Communities to the Panel. 
352Exhibits EC-44 and EC-46 submitted by the European Communities to the Panel. 
353Panel Report, para. 7.103. (footnote omitted) 
354Ibid., para. 7.103.  WT/DS294/AB/R 
 Page 79 
 
 
zeroing when using the weighted-average-to- weighted-average methodology for purposes of 
calculating margins of dumping in original investigations. 
202. The Anti-Dumping Manual has also been refe rred to by the European Communities as 
evidence of "the 'standard' character of  the 'Standard Zeroing Procedures'".355  The United States did 
not contest, before the Panel or on appeal, that  the Anti-Dumping Manual characterizes the programs 
used by the USDOC to calculate anti-dumping margin s as "standard", and explains that the USDOC's 
"calculation methodology" is "built into these programs".356  The Anti-Dumping Manual further states 
that "[c]alculation consistency occurs when ev ery program uses the same standard calculation 
methodology" and that "[c]onsistenc y is achieved by insuring that the standard programs conform 
with current AD calculation methodology."357     
203. Reviewing the Panel's reasoning, it is evident that there are sev eral features of the Panel's 
analysis that differ from our own.  First, the Pane l did not articulate the criteria for bringing an "as 
such" challenge in the same way as we have above.358  Moreover, the Panel did not, in its analysis, 
clearly distinguish between the issue of ascertaining the existence of the challenged measure, which is 
especially important when unwritten measures are at  issue, and the separate examination of its 
consistency with the relevant prov isions of the covered agreements.359  We are also of the view that 
the Panel did not articulate its ultimate conclu sion regarding the consistency of the "zeroing 
methodology" with Article 2.4.2 with sufficient precision.360  We wish to clarify, however, that we are 
not making any finding here with respect to the consistency of the zeroing methodology, as such, with 
the second or third methodology set forth in Article 2.4.2 for establishing the existence of margins of 
dumping.361   
                                                      
355Panel Report, para. 7.107.  
356Anti-Dumping Manual, chapter 9, p. 10. 
357Ibid., p. 8.  
358See  supra , para. 198. 
359We note that the Panel referred to the Report of the Appellate Body in US – Oil Country Tubular 
Goods Sunset Reviews , expressing the view that if "a non-legally binding policy instrument such as the SPB is a 
measure that can be challenged as such , it must logically also be possible to  challenge as a measure a norm that 
is not expressed in the particular form of an official  written statement but the existence of which is made 
manifest on the basis of other evidence." (Panel Report, para. 7.99)  The Appellate Body's analysis of the SPB does not, in our view, answer the question whether an  unwritten  "norm" can be challenged, as such. 
360In particular, we note that the Panel's finding, on its  face, is not clearly limit ed to a finding regarding 
the consistency of the zeroing methodology, as it relates to original investigations in which the weighted-average-to-weighted-average methodology contemplated in the first sentence of Article 2.4.2 is used to establish 
margins of dumping.  Nevertheless, this is what we understand the Panel to have meant.  (See Panel Report, 
para. 7.105) 
361We note that the United States has not app ealed the Panel's finding that "model zeroing"  as applied   
in the original investigations listed in Exhibits EC-1 through EC-15 is inconsistent with Article 2.4.2 of the 
 Anti-Dumping Agreement .  Therefore, in this appeal, we are not requ ired to, and we do not address that issue. WT/DS294/AB/R 
Page 80  
 
204. Notwithstanding these shortcomings in the Panel' s reasoning, we believe that, in the specific 
circumstances of this case, the evidence before th e Panel was sufficient to identify the precise content 
of the zeroing methodology;  that the zeroing methodology is attributable to the United States, and 
that it does have general and prospective application.   This evidence consisted of considerably more 
than a string of cases, or repeat action, based on  which the Panel would have simply divined the 
existence of a measure in the abstract.  We ther efore cannot agree with the United States that the 
Panel's approach, in this case, would mean that when a Member does something in a particular 
instance, the Member's action results in a separat e measure that may be subject to an "as such" 
challenge, at least if the Member repeats the action with some indeterminate frequency.
362   
205. In the light of these considerations, we conc lude, albeit for reasons different from those 
set out by the Panel, that the zeroing methodology, as it relates to original investigations in which the 
weighted-average-to-weighted-average comparison me thod is used to calculate margins of dumping, 
can be challenged, as such, in WTO dispute settlement.   
2. Article 11 of the DSU  
206. We turn next to consider the United States' cl aim that the Panel acted inconsistently with 
Article 11 of the DSU in finding that the zeroing me thodology, as it relates to original investigations 
in which the weighted-average-to-weighted-average  comparison method is used to calculate margins 
of dumping, is inconsistent, as such, with Article 2.4.2 of the  Anti-Dumping Agreement .  
207. The United States submits that, even assuming, arguendo , that the zeroing methodology could 
constitute a "measure", the Panel failed to make  an objective assessment of the matter as required 
under Article 11 of the DSU.  The United States advan ces two sets of arguments to support its claim.   
208. First, the United States argues that, "[i]n orde r to conclude that a measure, as such, is 
inconsistent with a WTO obligation, that measure  must mandate a breach of that obligation."363  The 
United States contends, moreover, that "[t]he st andard for determining whether a measure as such 
breaches a WTO obligation is that the measure eith er mandates WTO-inconsistent action or precludes 
WTO-consistent action."364   
                                                      
362United States' opening statemen t at the oral hearing.  
363United States' other appellant's submission, para. 43. 
364Ibid., para. 44.  WT/DS294/AB/R 
 Page 81 
 
 
209. Secondly, the United States argues that "in order to determine whether a measure is 'as such' 
inconsistent, reliance solely  on statistics or aggregate results is not enough."365  Instead, "it has to be 
established that the measure causes the results."366  The United States finds support for its position in 
the Appellate Body Report in US – Anti-Dumping Measures on Oil Country Tubular Goods , where 
the Appellate Body held, in the context of the SPB , that it had to be "demonstrate[d] that the SPB 
 instructs  the USDOC to treat dumping margins and import volumes as conclusive" and that the 
USDOC "made a final ... determination ... due to  the SPB".367  The United States argues that the 
Panel engaged in no comparable analysis with resp ect to the zeroing methodology in the present case.  
The United States also highlights the serious nature  of an "as such" challenge, and the particular 
rigour required in assessing such a challenge.  The Un ited States submits that the Panel failed to reach 
the requisite level of rigour and thus acted in consistently with Article 11 of the DSU.  
210. The European Communities contests the Unite d States' claim that the Panel acted 
inconsistently with Article 11 of the DSU in its anal ysis.  Referring to findings  of the Appellate Body 
in US – Corrosion-Resistant Steel Sunset Review , the European Communities argues that the 
mandatory/discretionary distinction has not been rec ognized in Appellate Body jurisprudence.  In any 
event, according to the European  Communities, there are several reasons why "the mechanistic 
application of the mandatory/discretionary rule cannot avert a finding of inconsistency in this 
particular case."368  The European Communities argues in this respect that  a measure need not "be 
framed in the strongest 'compelling' language ... in order to be f ound [WTO-]inconsistent".369  
Moreover, in the European Communities' view, the me asure at issue in this case is mandatory because 
the Anti-Dumping Manual directs the use of the computer programs and the Standard Zeroing Procedures "automatically and directly" effect the zeroing challenged by the European Communities.
370  In addition, according to the European Communities, the Panel's findings in this 
case were supported by uncontested facts and eviden ce, including the Standard Zeroing Procedures 
and other "supporting and corroborating evidence".371  The European Communities adds that the 
                                                      
365United States' other appellant's submission, para. 50 (referring to Appellate Body Report, US – Oil 
Country Tubular Goods Sunset Reviews , para. 215;  and Appellate Body Report, US – Anti-Dumping Measures 
on Oil Country Tubular Goods , para. 202). 
366Ibid., para. 50. 
367Appellate Body Report, US – Anti-Dumping Measures on Oil Country Tubular Goods , para. 206. 
(emphasis added) 
368European Communities' appellee's submission, para. 77.   
369Ibid., para. 79. 
370Ibid., para. 81.  
371Ibid., para. 11. WT/DS294/AB/R 
Page 82  
 
United States is, in fact, requesting the Appellate Body to reassess the evidence "and take a different 
view from that taken by the Panel".
372  
211. The Appellate Body explained in  US – Corrosion-Resistant Steel Sunset Review  that it had 
not, as yet, "pronounce[d] generally upon the continuing relevance or significance of the 
mandatory/discretionary distinction."373  The Appellate Body went on to observe that: 
... as with any such analytical tool, the import of the 
'mandatory/discretionary distinction' may vary from case to case.  For 
this reason, we also wish to caution against the application of this distinction in a mechanistic fashion.
374 
212. Based on our review of the Panel's analysis , we do not believe that the Panel acted 
inconsistently with its obligati ons under Article 11 of the DSU.  As the Appellate Body had said 
previously: 
... Article 11 requires panels to take account of the evidence put 
before them and forbids them to wilfully disregard or distort such evidence.  Nor may panels make affi rmative findings that lack a basis 
in the evidence contained in the panel record.
375 
213. It seems to us that the Panel took into account  all of the evidence placed before it and sought 
verification of its accuracy.  Moreover, the Panel set  out sufficiently the basis for its conclusions on 
the evidence.376  We disagree with the United States that  the Panel did not assess objectively the issue 
of whether the zeroing methodology, as it relates to original investigations in which the weighted-average-to-weighted-average comparison method is  used to calculate margins of dumping, is 
inconsistent, as such, with Article 2.4.2.  We al so disagree with the United States that the Panel's 
analysis "relie[d] on nothing more than the fact th at the USDOC has engaged in zeroing in the past 
using computers."
377  Instead, as discussed above378, the Panel had before it evidence including 
standard computer programs used by the USDOC to  calculate margins of dumping, the Anti-Dumping 
Manual, expert opinions, and the Standard Zeroing Procedures.  We therefore cannot agree with the 
                                                      
372European Communities' appellee's submission, para. 95.   
373Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 93.    
374Ibid. 
375Appellate Body Report, US – Carbon Steel , para. 142. (footnote omitted) 
376Although we have noted that there are areas in which the Panel's legal reasoning could have been 
more precise, we are not persuaded that the Panel failed to objectively assess the matter before it, as required under Article 11 of the DSU.  
377United States' other appellant's submission, para. 52. 
378See  supra , para. 199.  WT/DS294/AB/R 
 Page 83 
 
 
United States that the Panel analysis "relie[d] on nothing more than the fact that the USDOC has 
engaged in zeroing in the past using computers."379   
214. We, therefore, do not agree with the United States that the Panel erred simply because it did 
not apply the mandatory/discretionary distinction in analyzing and finding a violation of Article 2.4.2 
of the Anti-Dumping Agreement .380  As the Appellate Body has said, "the import of the 
'mandatory/discretionary distinc tion' may vary from case to case."381  In the light of the above, we 
conclude that the Panel did not act inconsistently with its obligations under Article 11 of the DSU.  
3. Prima Facie  Case  
215. The United States contends that the Panel erre d in allocating the burden of proof regarding 
this claim and in finding that the Eu ropean Communities had established a  prima facie  case.  The 
Panel stated that it would consider "whether th ere exists what the European Communities terms 
methodology and whether this methodology can be found to be WTO-inconsistent", even though the 
Panel did not explain what the European Commun ities "meant by 'methodology'".  The Panel, in the 
United States' view, could not do so, because the European Communities never explained properly 
how methodology could be considered a measure.382  The Panel effectively relieved the European 
Communities from its burden to demonstrate, as part of its  prima facie   case, an act or instrument that 
required the USDOC to "zero" in anti-dumping investigations.383 
216. In contrast, the European Communities emphasiz es that it set out with sufficient clarity and 
precision its arguments before the Panel and that the Panel did not rely exclusively on evidence of 
past behaviour of the United States. 
217. The Appellate Body has made clear that "a  prima facie  case is one which, in the absence of 
effective refutation by the defending party, requires a pa nel, as a matter of law, to  rule in favour of the 
complaining party presenting the  prima facie   case."384  Therefore, in determining whether the 
European Communities established a  prima facie  case that the zeroing methodology, as it relates to 
original investigations, is inconsistent , as such, with Article 2.4.2 of the  Anti-Dumping Agreement , 
we need to examine the evidence and arguments that the European Communities submitted to the 
                                                      
379United States' other appellant's submission, para. 52. 
380Ibid., para. 47. 
381Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 93. 
382United States' other appellant's submission, paras. 54-55 (referring to Panel Report, para. 7.98).  
383Ibid., para. 61.  
384Appellate Body Report, EC – Hormones , para. 104. (footnote omitted) WT/DS294/AB/R 
Page 84  
 
Panel in relation to this claim.
385  At a minimum, the European Communities' evidence and arguments 
must have been sufficient "to identify the cha llenged measure and its basic import, identify the 
relevant WTO provision and obligation contained th erein, and explain the basis for the claimed 
inconsistency of the measure with that provision."386 
218. The United States does not dispute that the Eu ropean Communities' ev idence and arguments 
were sufficient to "identify the relevant WT O provision and obligation contained therein".387  Instead, 
the United States emphasizes that the European Communities did not explain what it meant by 
"methodology", nor did it explain how a methodology  could constitute an act or instrument, and 
properly be considered a measure. 
219. In its submissions to the Panel, the European  Communities set out the main elements of the 
zeroing methodology used by the USDOC in both original investigations and periodic reviews.388  In 
addition, for both original investigations and pe riodic reviews, the European Communities described, 
in detail, "the method of comparing normal value and export price;  the zeroing method;  and the 
process of imposition and assessment."389  We therefore do not agree w ith the United States' assertion 
that the European Communities failed to expl ain what it meant by "zeroing methodology".   
220. Turning to the Panel's assessment of the evid ence and arguments, we note that both the 
European Communities and the United States presen ted arguments, before the Panel, regarding 
whether the zeroing methodology can be challenge d, as such, in dispute settlement proceedings.390  In 
the present dispute, the Panel rightly conducted its  own assessment of the evidence and arguments, 
rather than simply accepting the assertions of either party.391  In doing so, the Panel took into account 
and carefully examined the evidence and argumen ts presented by the European Communities and the 
United States. 
                                                      
385See Appellate Body Report, US – Wool Shirts and Blouses , p. 16, DSR 1997:I, 323, at 338;  
Appellate Body Report, Canada – Dairy (Article 21.5 – New Zealand and US II) , para. 66;  Appellate Body 
Report, US – Gambling , para. 141. 
386Appellate Body Report, US – Gambling , para. 141.  See also Appellate Body Report, US – Oil 
Country Tubular Goods Sunset Reviews , paras. 263-264. 
387Appellate Body Report, US – Gambling , para. 141. 
388Panel Report, paras. 2.1-2.12. 
389European Communities' first written submission to the Panel, paras. 12, 21-24, and 37.  See also 
Exhibit EC-42 submitted by the European Communities to the Panel. 
390See Panel Report, paras. 7.73-7.83. 
391See Appellate Body Report, Japan – Apples , para. 166;  and Appellate Body Report, Dominican 
Republic – Import and Sale of Cigarettes , para. 82.  WT/DS294/AB/R 
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221. Under these circumstances, we do not agree with  the United States' contention that the Panel 
erred in allocating the burden of proof regardin g this claim and in finding that the European 
Communities had established a  prima facie   case. 
4. Conclusion  
222. In the light of the above, we  uphold   the Panel's conclusion, in pa ragraphs 7.106 and 8.1(c) of 
the Panel Report, albeit for reasons different from those set out by the Panel, that the zeroing methodology, as it relates to original investigati ons in which the weighted-average-to-weighted-
average comparison method is used to calculate marg ins of dumping, is inconsistent, as such, with 
Article 2.4.2 of the  Anti-Dumping Agreement .   
C. The Anti-Dumping Manual – Appeal by the European Communities 
223. We turn next to the European Communities' contention that the Panel erred in exercising 
judicial economy with regard to whether the Anti-Du mping Manual is a measure that is inconsistent, 
as such, with certain provisions of the Anti-Dumping Agreement , the GATT 1994, and the WTO 
Agreement . 
224. The Panel found that the Anti-Dumping Manual "ha[d] been referred to by the European 
Communities principally as evidence to confirm th e 'standard' character of the 'Standard Zeroing 
Procedures'."
392  On this basis, the Panel concluded th at it was not necessary to make a finding on 
whether the Anti-Dumping Manual is WTO-inconsistent as such.393  The European Communities 
challenges this conclusion on appeal.   
225. We see no error in the approach taken by the Pa nel.  We note, moreover, that the European 
Communities has not provided specific arguments to support its claim that the Anti-Dumping Manual is inconsistent with Articles 1, 2.4, 2.4.2, 5.8,  9.3, 9.5, 11.1, 11.2, 11.3, 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 .  
Nor has the European Communities explained why additional findings regarding the Anti-Dumping 
Manual are necessary to resolve this dispute.  We also note that we have upheld here the Panel's 
finding that the zeroing methodology, as it relates to original investigations in which the weighted-average-to-weighted-average comparison method is  used to calculate margins of dumping, is 
inconsistent, as such, with Article 2.4.2 of the  Anti-Dumping Agreement .  In these circumstances, we 
                                                     
 
392Panel Report, para. 7.107. 
393Ibid.   WT/DS294/AB/R 
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find that the Panel did not err in exercising judici al economy by not making findings with regard to 
the European Communities' claims concerning the Anti-Dumping Manual.   
D. Other Claims by the European Communities Regarding the Zeroing Methodology 
226. We now move to the issue of whether the Panel erred in finding that the zeroing methodology 
used by the United States in administrative reviews is not inconsistent, as such, with Articles 1, 2.4, 
2.4.2, 9.3, 11.1, 11.2, 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 . 
227. These findings were consequential to the Panel fi nding that Article 2.4 and/or Article 2.4.2 of 
the  Anti-Dumping Agreement   do not prohibit zeroing in administrative reviews.
394  We recall that we 
reversed the Panel's findings on Article 9.3 of the  Anti-Dumping Agreement   and Article VI:2 of the 
GATT 1994.395  We also declared moot, and of no legal effect, the Panel's finding that zeroing is not 
inconsistent with the first sentence of Article 2.4 of the  Anti-Dumping Agreement 396, and we declined 
to rule on the European Communities' conditional a ppeal under Article 2.4.2.  In the light of the 
above, we declare moot, and of no legal effect, the Panel's finding, in paragr aph 8.1(g) of the Panel 
Report, that the zeroing methodology used by the United States in administrative reviews is not 
inconsistent, as such, with Articles 1, 2.4, 2.4.2, 9.3, 11.1, 11.2, 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 .  
228. This brings us to the question whether we can  complete the analysis and determine whether 
the zeroing methodology, as it relates to administrative reviews, is a measure that is inconsistent, as 
such, with the provisions of  Anti-Dumping Agreement , the GATT 1994, and the  WTO Agreement  
referred to by the European Communities.  We emphasi zed above that, to bring an "as such" challenge 
against a "rule or norm" that is  not  expressed in the form of a written document, a complaining party 
must clearly establish, through arguments and suppor ting evidence, at least that the alleged "rule or 
norm" is attributable to the responding Member, its precise content, and that it does have general and 
prospective application.397  As indicated above398, it is only if the complaining party puts forward 
sufficient evidence with re spect to each of these elements, that a panel would be in a position to find 
that the "rule or norm" may be challenged, as such .  Furthermore, we concluded that the zeroing 
methodology, as it relates to original investigati ons, can be challenged, as such, in WTO dispute 
                                                      
394Panel Report, para. 7.290.  
395See  supra , para. 135.  
396See  supra , para. 147. 
397See  supra , para. 198. 
398See  supra , para. 198.  WT/DS294/AB/R 
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settlement.399  However, as we see it, the Panel's analys is and findings in paragraphs 7.91 to 7.106 of 
the Panel Report relate only to the existence a nd the consistency of the zeroing methodology, as it 
relates to original investigations in which th e weighted-average-to-weighted-average comparison 
method is used to calculate margins of dumping.  In these circumstances, and in the absence of factual 
findings by the Panel or undisputed facts in the Panel record regarding whether the zeroing methodology, as it relates to administrative reviews, is a measure that can be  challenged, as such, we 
are unable to complete the analysis to determine whether the zeroing methodology, as it relates to 
administrative reviews, is inconsistent, as such, with Articles 1, 2.4, 2.4.2, 9.3, 11.1, 11.2, 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. Conditional Appeal by the European Communities 
229. The European Communities has brought conditiona l claims with respect to:   (1) the 
"Standard Zeroing Procedures";   and (2) the US DOC's "practice" of zeroing.  We examine these 
conditional claims below. 
1. The Standard Zeroing Procedures  
 
230. The European Communities appeals the Panel's conc lusions or the Panel's exercise of judicial 
economy regarding the Standard Zeroing Procedures400 and requests the Appellate Body "to complete 
the analysis" by finding first, that the Standard  Zeroing Procedures are a "measure" that can be 
challenged, as such, and secondly, that the Standa rd Zeroing Procedures are inconsistent, as such, 
with Articles 1, 2.4, 2.4.2, 5.8, 9.3, 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 .401  The European Communities' 
request is conditioned on the Appellate Body re versing the Panel's finding that the zeroing 
methodology is inconsistent, as such, with Article 2.4.2.  According to the European Communities, its 
request is also be triggered if we consider that  the Standard Zeroing Procedures are not "condemned" 
as a result of the Panel's finding regarding the zeroi ng methodology in the sense that "compliance [by 
the United States] would necessitate modifica tion of the Standard Zeroing Procedures".402  T h e  
European Communities also appeals the Panel's findi ng that the Standard Zeroing Procedures, as used 
in new shipper reviews, changed circumstances review s, and sunset reviews, are not inconsistent with 
                                                      
399See  supra , para. 205. 
400Panel Report, para. 7.97.  See also supra , footnote 286. 
401European Communities' appellant's submission, paras. 374 and 376. 
402Ibid., para. 372.  WT/DS294/AB/R 
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Articles 1, 2.4, 2.4.2, 9.3, 9.5, 11.1, 11.2, 11.3, 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 .
403 
231. The Panel found that "to characterize the 'S tandard Zeroing Procedures' as an act or 
instrument that sets forth rules or norms intended to have general and pros pective application is 
somewhat difficult to reconcile with the fact that the 'Standard Zeroing Procedures' are only 
applicable in a particular anti-dumping proceeding as a result of their inclusion in the computer 
program[] used in that particular proceeding."404  According to the Panel, "the need to incorporate 
these lines of computer code into each individual program[] indicates that it is not the 'Standard 
Zeroing Procedures' per se  that set forth rules or norms of general and prospective application."405  
We agree with the Panel.  Therefore, we find that the Standard Zeroing Procedures are not a measure that can be challenged, as such, in WTO dispute settlement. 
232. Because the Standard Zeroing Procedures are not a measure that can be challenged, as such, it 
follows that they cannot be found to be either cons istent or inconsistent with a Member's obligations 
under the covered agreements.  Accordingly, we d eclare moot, and of no legal effect, the Panel's 
findings, in paragraphs 7.291, 7.294,  8.1(g), and 8.1(h) of the Panel Report, that the Standard Zeroing 
Procedures are not inconsistent, as such, with the provisions of the  Anti-Dumping Agreement , the 
GATT 1994, and the WTO Agreement , referred to by the European Communities. 
2. The "Practice" of Zeroing "As Such"
 
233. We move next to the European Communities'  conditional appeal regarding the Panel's 
decision to exercise judicial economy with respect to  what it refers to as the United States' "practice" 
of zeroing, as such.406  This appeal is triggered if the European Communities does not prevail on 
appeal with respect to either its claim regardi ng the zeroing methodology, or its claim regarding the 
Standard Zeroing Procedures.   
                                                      
403We note that, in paragraph 348 of its appellant's submission, the European Communities refers to the 
"Standard Zeroing Methodology".  Because the Panel did not make any findings on the "Standard Zeroing 
Methodology", and because the references that the European Communities makes to paragraphs 7.292, 7.294, 
and 8.1(h) of the Panel Report—all of which speak of  the "Standard Zeroing Pro cedures"—we understand the 
European Communities' appeal to relate to the latter. 
404Panel Report, 7.97.  
405Ibid.  
406The European Communities' argument is simply that the Anti-Dumping Manual "directs the use of  
the 'Standard Zeroing Procedures', Methodology and Practice [and] provides a link between the relevant 
provisions of the Tariff Act and the Regulations, and the 'Standard Zeroing Procedures', Methodology and 
Practice." (European Communities' appellant's submission, para. 343)  WT/DS294/AB/R 
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234. We have upheld the Panel's finding that the zeroing methodology, as it relates to original 
investigations, is inconsistent, as such, with Article 2.4.2 of the Anti-Dumping Agreement  and 
Article VI:2 of the GATT 1994.  We have also d eclared moot, and of no legal effect, the Panel's 
finding that the zeroing methodology, as it relates to ad ministrative reviews, is  not inconsistent, as 
such, with Articles 1, 2.4, 2.4.2, 9.3, 11.1, 11.2, 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 .407  We note, 
moreover, that the European Communities did not set out any specific arguments to support this 
aspect of its appeal.  In these circumstances, we  decline to rule on the European Communities' 
conditional appeal regarding the United St ates' "practice" of zeroing, as such. 
 
VI. Other Claims 
A. Section 351.414(c)(2) of the USDOC Regulations 
235. We turn now to the issue of whether the Panel erred in finding that Section 351.414(c)(2) of 
the USDOC Regulations ("Section 351.414(c)(2)")408 is not inconsistent, as such, with Articles 1, 2.4, 
2.4.2, 9.3, 9.5, 11.1, 11.2, 11.3, 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 .  
236. Section 351.414(c)(2) provides: 
In a review, the Secretary will normally use the average-to-
transaction method. 
237. Section 351.414(b)(3) specifies that the average-to-transaction method: 
... involves a comparison of the weighted average of the normal 
values to the export prices (or constr ucted export prices) of individual 
transactions for comparable merchandise. 
238. The Panel found that Section 351.414(c)(2) is not  inconsistent, as such, with Articles 1, 2.4, 
2.4.2, 9.3, 9.5, 11.1, 11.2, 11.3, 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 .409  The Panel considered that the 
                                                      
407In addition, we declared moot the Panel's findin g that the Standard Zeroing Procedures are not 
inconsistent, as such, with the provisions of the Anti-Dumping Agreement , the GATT 1994, and the WTO 
Agreement , referred to by the European Communities. 
408Section 351.414(c)(2) is found in United States Federal Register , Vol. 62, No. 96 (19 May 1997), 
Rules and Regulations, p. 27415 (Exhibit EC-35.3 su bmitted by the European Communities to the Panel), 
codified in United States Code of Federal Regulations , Title 19, Section 351.414(c)(2). 
409Panel Report, paras. 7.291, 7.294, 8.1(g), and 8.1(h).  WT/DS294/AB/R 
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European Communities' claim regarding Section 35 1.414(c)(2) was dependent upon a violation of 
Article 2.4 and/or Article 2.4.2, and that the claim of a violation of Article 2.4 and/or Article 2.4.2 
was based on an interpretation of these provisi ons as prohibiting zeroing and the use of an 
asymmetrical comparison of export price and normal value in reviews.  The Panel rejected that 
interpretation and found that Secti on 351.414(c)(2) was WTO-consistent.
410 
239. On appeal, the European Communities challenges the Panel's finding that 
Section 351.414(c)(2) is not inconsistent, as such, with Articles 1, 2.4, 2.4.2, 9.3, 9.5, 11.1, 11.2, 11.3, 
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 .  For the European Commun ities, the "fair comparison" 
requirement in Article 2.4 precludes a measure provi ding that the average-to-transaction method is the 
"norm".  The European Communities also considers that Section 351.414(c)(2) is inconsistent with 
Article 2.4.2 because "it permits the use of an asymmetrical method without any of the cumulative 
conditions set out in Article 2.4.2 having been met" , and because "it provides th at the normal rule is 
asymmetry, when Article 2.4.2 provides that the normal rule is symmetry."411 
240. For the United States, because the claims regarding Secti on 351.414(c)(2) are dependent upon 
a finding of a violation of Article 2.4 and/or Ar ticle 2.4.2, and because the Panel properly found that 
Article 2.4 and/or Article 2.4.2 neither require off sets nor prohibit the use of an average-to-transaction 
comparison method once an anti-dumping duty has been  imposed, the Appellate Body should reject 
the European Communities' claims regarding Section 351.414(c)(2).412  The United States adds that 
the completion of the legal analysis would be pa rticularly inappropriate because the European 
Communities failed to establish its  prima facie  case in the course of its submissions to the Panel.413  
In particular, the United States argues, the Eu ropean Communities failed to demonstrate that 
Section 351.414(c)(2) mandates asymmetry or precludes symmetry, and, therefore, the European Communities' evidence and arguments were insufficien t to explain the claimed inconsistency of the 
regulation with particular WTO provisions and obligations.
414 
241. We begin our analysis by noting that Sec tion 351.414(c)(2) does not concern the "zeroing" 
aspect of the zeroing methodology.  Section 351.414(c)(2) provides that the export price of an individual transaction should normally be compared with a normal value calculated on the basis of a 
contemporaneous weighted average of domestic prices.  It does not set out any rule that would require 
                                                     
 
410Panel Report, paras. 7.290 and 7.293. 
411European Communities' appellant's submission, para. 347. 
412United States' appellee's submission, para. 200. 
413Ibid., para. 202. 
414Ibid., para. 203.  WT/DS294/AB/R 
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the authorities to disregard the results of intermed iate comparisons when the export price exceeds the 
normal value.   
242. In essence, the Panel's finding concerning Secti on 351.414(c)(2) is consequential to its view 
that Article 2.4.2 does not apply to administ rative reviews, new shipper reviews, changed 
circumstances reviews, and sunset reviews.  Th e Panel reasoned that, because Article 2.4.2 does not 
apply to such reviews, comparisons between the export price of an individual transaction and a 
normal value calculated on the basis of a contemporaneous weighted average of domestic prices are 
not prohibited and, therefore, Section 351.414(c)(2) is  WTO-consistent.  We recall that we declined to 
rule on the European Communities' conditi onal appeal under Article 2.4.2 of the Anti-Dumping 
Agreement .415  Therefore, we declare moot, and of no legal effect, the Panel's finding, in paragraphs 
7.291, 7.294, 8.1(g), and 8.1(h) of the Panel Report,  that Section 351.414(c)(2) is not inconsistent, as 
such, with Articles 1, 2.4, 2.4.2, 9.3, 9.5, 11.1, 11.2, 11.3, 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 . 
243. This brings us to the question whether it is a ppropriate for us to complete the analysis, and 
assess whether Section 351.414(c)(2) is inc onsistent with the provisions of the  Anti-Dumping 
Agreement , the GATT 1994, and the WTO Agreement   referred to by the European Communities.  As 
we understand it, the European Communities' argume nt is based on the assumption that Article 2.4.2 
applies to all types of proceedings under the  Anti-Dumping Agreement .  We recall that we did not 
examine the issue of whether the scope of appli cation of Article 2.4.2 is limited to original 
investigations.  Furthermore, the European Communities'  appeal in relation to this issue is conditional, 
and the condition on which the appeal is predicated w as not fulfilled.  Therefore, we considered that 
the issue was not before us.  The Appellate Body has previously emphasized that "as such" challenges 
against a Member's measures in WTO dispute settlement proceedings are particularly "serious challenges" that seek to prevent a Member ex ante  from engaging in a certain conduct.
416   
The European Communities has submitted only lim ited arguments and evidence relating to the 
meaning of Section 351.414(c)(2), its scope of app lication, and its alleged inconsistency with the 
covered agreements.  We also note that the Pane l Report does not contain factual findings regarding 
the meaning of Section 351.414(c)(2).  In these circum stances, we decline to co mplete the analysis to 
determine whether Section 351.414(c)(2) is inconsistent, as such, with Articles 1, 2.4, 2.4.2, 9.3, 9.5, 
11.1, 11.2, 11.3, 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 . 
                                                      
415Supra , para. 162. 
416Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , para. 172. WT/DS294/AB/R 
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B. Judicial Economy  
244. The European Communities argues that the Panel erred in exercising judicial economy with 
respect to the question of whether administrative review proceedings based on model zeroing are 
inconsistent with Article 9.3 of the Anti-Dumping Agreement .  The European Communities also 
appeals the Panel's exercise of judicial economy w ith respect to whether zeroing "as applied" in the 
original investigations at issue is in consistent with Article 2.4 of the  Anti-Dumping Agreement .     
245. The United States contends that the Panel properly exercised judicial economy with respect to 
the consistency of model zero ing with Article 9.3 of the Anti-Dumping Agreement .  The United States 
takes issue with the European Communities' argument  that a finding on this issue was necessary "in 
order to effectively resolve the dispute between the parties"
417, because, when the European 
Communities requests the United States to bring th e measure at issue into conformity with 
Article 2.4.2, the United States "will respond that the measure at issue is already in conformity with 
Article 9.3."418  According to the United States, "[t]his argument simply invites speculation as to how 
the United States might implement the recommendations and rulings of the ... DSB"419;  the European 
Communities has not explained or demonstrated why a finding on this point is necessary to resolve 
the dispute. 
246. Concerning the Panel's exercise of judici al economy with respect to the European 
Communities' claim that model zeroing is inconsistent  with Article 2.4, the United States rejects the 
European Communities' contention that further findings on this matter are necessary because the 
United States might implement by "switching"420 to a different comparison methodology, thereby 
potentially introducing an adjustment that is inconsiste nt with Article 2.4.  In the United States' view, 
the Appellate Body should not opine on how "any potentially changed measure"421 could be WTO-
inconsistent. 
247. With respect to the European Co mmunities' claim that "model zeroing" applied in the original 
investigations at issue is inconsistent with Article 9.3 of the Anti-Dumping Agreement , the Panel 
stated that deciding that claim "would provide no ad ditional guidance as to the steps to be undertaken 
by the United States in order to implement [the Panel's] recommendation regarding the violation on 
which it is dependent."422  In other words, having found that "model zeroing" as applied by the United 
                                                      
417European Communities' appellant's submission, para. 356. 
418Ibid., para. 355. 
419United States' appellee's submission, para. 211.    
420Ibid., para. 214 (quoting European Communities' appellant's submission, para. 361).   
421Ibid., para. 214.  
422Panel Report, para. 7.34. (footnote omitted)  WT/DS294/AB/R 
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States is inconsistent with Article 2.4.2 of the  Anti-Dumping Agreement , the Panel took the view that 
an additional finding with respect to whether "model zeroing" is inconsistent with Article 9.3 of the  
Anti-Dumping Agreement   is not necessary to resolve the dispute. 
248. In challenging this finding on appeal, the Eu ropean Communities emphasizes that, in cases in 
which there is no request for an administrative revi ew, the USDOC issues assessment instructions to 
US Customs to collect final anti-dumping duties at the ca sh-deposit rate, that is at the rate that was set 
in the original investigation using "model zeroing".  The European Communities contends that, in 
such cases, the application of "model zeroing" in an assessment review, will necessarily be 
inconsistent with Article 9.3 of the  Anti-Dumping Agreement .  The European Communities refers, in 
particular, to the first sample case presented by  the European Communities to the Panel regarding 
anti-dumping duties on stainless steel from Italy.423  According to the European Communities, the 
final anti-dumping duties in that case were assesse d, in part, on the basis of a margin of dumping 
established by using model zeroing. 
249. With respect to the European Communities' cl aim that zeroing as applied in the original 
investigations at issue, is inconsistent with Article 2.4 of the Anti-Dumping Agreement , the Panel 
found that it was not necessary to address that claim given that it had found that the United States' 
zeroing methodology, as applied in the original inv estigations at issue, is inconsistent with 
Article 2.4.2 of the Anti-Dumping Agreement . 
250. We fail to see why additional findings on the European Communities' claims under Articles 
2.4 and 9.3 of the  Anti-Dumping Agreement   would be necessary to secure a "positive solution"424 to 
the dispute or a "satisfactory settlement of the matter".425  In our view, the Panel did not commit an 
error of law in deciding to exercise judicial econo my with regard to those claims, as it had already 
found that zeroing as applied by the United States in th e original investigations at issue is inconsistent 
with Article 2.4.2 of the  Anti-Dumping Agreement .  Thus, in our view, the Panel had made sufficient 
findings to resolve the dispute once it had made this finding under Article 2.4.2.426   
                                                      
423See Panel Report, para. 2.9.  
424Article 3.7 of the DSU. 
425Article 3.4 of the DSU. 
426We note that the United States has not app ealed the Panel's finding that "model zeroing"  as applied   
in the original investigations listed in Exhibits EC-1 through EC-15 is inconsistent with Article 2.4.2 of the 
 Anti-Dumping Agreement .    WT/DS294/AB/R 
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C. Article 11 of the DSU 
251. The European Communities argues that the Panel acted inconsistently with Article 11 of the 
DSU by "demonstrat[ing] insufficien t reasoning, or internal inconsis tency, or the making of a case" 
for the United States.
427  In the alternative, the European Comm unities submits that, to the extent that 
the Panel's findings can be considered findings of f act, the Panel acted inconsistently with Article 11 
of the DSU in that it did not make an objective assessment of the facts.   
252. The United States requests the Appellate Body to  reject the European Communities' claim 
under Article 11 of the DSU.  According to the Un ited States, the European Communities' claim was 
not properly notified and did not provide the re quisite notice to the United States, the third 
participants, and the Appellate B ody.  Secondly, the European Communities' appellant's submission is 
"devoid" of any arguments in support of its claim.428  Thirdly, the European Communities does not 
reference "a single Panel finding that evinces the asse rted flaws", and has therefore not substantiated 
its claim that the Panel failed to act c onsistently with Article 11 of the DSU.429 
253. The Appellate Body has previously underscored that a claim under Article 11 of the DSU is a 
"very serious allegation"430 and that: 
[a] challenge under Article 11 of the DSU must not be vague or 
ambiguous.  On the contrary, such a challenge must be clearly articulated and substantiated with specific arguments.  An Article 11 claim is not to be made lightly, or merely as a subsidiary argument or 
claim in support of a claim of a panel's failure to construe or apply 
correctly a particular provision of a covered agreement.
431 
254. We consider this finding apt and instructive in th is case.  We do not believe that the European 
Communities has "substantiated its claim" that the Pa nel acted inconsistently with Article 11.  Its 
allusion to "insufficient reasoning" by the Panel, or  "internal inconsistency", is vague and mentioned 
only in passing in its appellant's submission.  The same applies to th e European Communities' 
"alternative" argument regarding th e alleged failure of the Panel to  make "an objective assessment … 
                                                      
427European Communities' appellant's submission, para. 370 and footnote 360 thereto (referring to 
European Communities' response to Question 1 posed by th e Panel at the first Panel meeting;  and European 
Communities' second written submission to the Panel, para 18). 
428United States' appellee's submission, para. 227. 
429Ibid., para. 230. 
430Appellate Body Report, EC – Poultry , para. 133. 
431Appellate Body Report, US – Steel Safeguards , para. 498.  WT/DS294/AB/R 
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of the facts of the case."432  Moreover, "not every failure by the Panel in the appreciation of the 
evidence before it can be characterized as failure  to make an objective assessment of the facts".433  
255. We turn next to the European Communities' allegation that the Panel "made a case" for the 
United States.  To understand the specifics of this  claim, we look at the European Communities' 
rebuttal submission to the Panel and its response to th e first set of questions posed by the Panel, to 
which the European Communities refers in pa ragraph 370 of its appellant's submission. 
256. In its rebuttal submission, the European Communitie s argued that "the role of the Panel is not 
to make the case for either party, and that the Pa nel may pose questions only in order to clarify and 
distil the legal argument."434  According to the Eu ropean Communities, "[w]ith regard to certain 
questions (for example, questions 1 and 2) posed to the United States, it is not precisely clear to the European Communities what United States argument th e Panel was seeking to clarify or distil, and in 
relation to these matters the European Co mmunities fully reserves its legal position."
435  A s  w e  
understand it, the European Communities appears to suggest that the Panel "made the case" for the 
United States by asking these questions of the United States.436 
257. The Appellate Body observed, in Thailand – H-Beams , that "panels are entitled to ask 
questions of the parties that they deem relevant  to the consideration of the issues before them."437  The 
                                                      
432European Communities' appellant's submission, para. 371. 
433Appellate Body Report, Japan – Agricultural Products II , para. 141. 
434European Communities' second written submission to the Panel, para. 18 (referring to Appellate 
Body Report, Thailand – H-Beams , para. 136).  As a "preliminary remark", in its responses to the first set of 
questions posed by the Panel the European Communities st ated, in essence, the same thing as it did in its 
rebuttal submission. (See European Communities' re sponse to Question 1 posed by the Panel) 
435European Communities' second written submission to the Panel, para. 18 (referring to Appellate 
Body Report, Thailand – H-Beams , para. 136).   
436The questions posed by the Panel to the United States, to which the European Communities refers, 
read as follows:   
- Does the [United States] have any specific observ ations on the factual accuracy of the [European 
Communities'] description of [the United States'] anti-dumping laws and regulations and of the cases 
at issue in this dispute? 
- If, in the view of the [United States], the rules on the establishment of dumping margins in 
Article 2.4.2 do not apply to phases of an anti- dumping proceeding other than the investigation 
phase, what rules do apply?  What is the relevance of Article 9.3 and its reference to "margin of 
dumping established under Article 2"?  What is the relevance of the fact that identical language to that in Article 9.3 appeared in Article 8.3 of the Tokyo Round Anti-Dumping Code, which had no 
provision comparable to current Article 2.4.2? 
437Appellate Body Report, Thailand – H-Beams , para. 135.  WT/DS294/AB/R 
Page 96  
 
Appellate Body also noted that the panel in that cas e "did not err to the extent that it asked questions 
of the parties that it deemed necessary 'in order to clarify and distill the legal arguments'."
438 
258. In the present case, the Europ ean Communities has not explained why the questions posed by 
the Panel would have been inappropriate for pur poses of "clarify[ing] and distil[ing] the legal 
arguments" advanced by the parties in this dispute. 
259. Moreover, we note that the Appellate Body stated  in US – Shrimp  that: 
... the DSU accords to a panel established by the DSB, and engaged 
in a dispute settlement proceeding, ample and extensive authority to 
undertake and to control the process by which it informs itself both of the relevant facts of the dispute and of the legal norms and principles applicable to such facts.  That authority, and the breadth thereof, is indispensably necessary to  enable a panel to discharge its 
duty imposed by Article 11 of the DSU to "make an objective 
assessment of the matter before it, including an objective assessment of the facts of the case and the applicability of and conformity with the relevant covered agreements ...".
439  
260. Although the Appellate Body made these observatio ns in the context of examining the rights 
of panels under Articles 12 and 13 of the DSU, we be lieve that they are also relevant to the situation 
here.  The "ample and extensive" nature of a pa nel's authority "to undertake and control the process" 
by which it informs itself of the relevant facts of the dispute and of the legal norms and principles 
applicable to a case, would appear to suggest that  a panel also has broad authority to pose such 
questions to the parties as it deems relevant for pur poses of considering the issues that are before it.  
The asking of questions is, after all, part and parcel of the investigative function and duty of panels.    
261. We note, moreover, that, when referring, in  Japan – Agricultural Products II , to "making the 
case" for the complaining party, the Appellate Body  was speaking to a situation in which a panel 
makes a ruling "in favour of a complaining party which has not established a  prima facie  case of 
inconsistency based on specific legal claims asserted by it."440  In contrast, asking questions to clarify 
the meaning of an argument does not, in our view, amount to "making the case". 
262. For these reasons, we do not agree with the European Communities that the Panel acted 
inconsistently with its obligati ons under Article 11 of the DSU. 
 
                                                      
438Appellate Body Report, Thailand – H-Beams , para. 136 (referring to Panel Report, Thailand – H-
Beams , para. 7.50). 
439Appellate Body Report, US – Shrimp , para. 106. 
440Appellate Body Report, Japan – Agricultural Products II , paras. 129-130.  WT/DS294/AB/R 
 Page 97 
 
 
VII. Findings and Conclusions 
263. For the reasons set forth in this Report, the Appellate Body: 
(a) with respect to the administra tive reviews at issue in this case: 
(i) reverses  the Panel's finding, in paragra phs 7.288 and 8.1(f) of the Panel 
Report, that the United States did not act inconsistently with Article 9.3 of the  Anti-Dumping Agreement   and Article VI:2 of the GATT 1994, and finds
, 
instead, that the United States acted inc onsistently with those provisions;   
(ii) finds  it unnecessary, for purposes of resolving this dispute, to rule on whether 
the United States acted inconsistently with the obligation contained in the 
first sentence of Article 2.4 of the  Anti-Dumping Agreement   to make a "fair 
comparison" between the export price and normal value;  
(iii) upholds  the Panel's finding, in paragraph 7.280 of the Panel Report, that 
zeroing is not an impermissible allowan ce or adjustment under Article 2.4 of 
the  Anti-Dumping Agreement , third to fifth sentences;  
(iv) declines  to rule on the European Co mmunities' conditional appeal under 
Article 2.4.2 of the Anti-Dumping Agreement ; 
(v) upholds  the Panel's finding, in paragra phs 7.288 and 8.1(f) of the Panel 
Report, that the United States did not act inconsistently with Articles 11.1 
and 11.2 of the  Anti-Dumping Agreement ;  
(vi) finds  it unnecessary, for purposes of resolving this dispute, to rule on whether 
the zeroing methodology, as applied in the administrative reviews at issue, is 
inconsistent with Articles 1 and 18 of the Anti-Dumping Agreement  and 
Article XVI:4 of the WTO Agreement ;  and  
(vii) declares moot  the Panel's finding, in paragra phs 7.288 and 8.1(f) of the Panel 
Report, that the United States did not act inconsistently with Article VI:1 of the GATT 1994;  and the Panel's finding, in paragraphs 7.284 and 8.1(e) of 
the Panel Report, that the United States did not act inconsistently with the 
first sentence of Article 2.4 of the  Anti-Dumping Agreement ;  WT/DS294/AB/R 
Page 98  
 
(b) finds
, albeit for reasons different from those set  out by the Panel, that the zeroing 
methodology, as it relates to original inves tigations in which the weighted-average-to-
weighted-average comparison method is used to calculate margins of dumping, can 
be challenged, as such, in WTO dispute settlement;  and upholds  the Panel's 
conclusion, in paragraphs 7.106 and 8.1(c) of the Panel Report, that this methodology 
is inconsistent, as such, w ith Article 2.4.2 of the Anti-Dumping Agreement ; 
(c) with respect to the zeroing methodology, as it relates to administrative reviews: 
(i) declares moot  the Panel's finding, in paragra ph 8.1(g) of the Panel Report, 
that the zeroing methodology, as it relates to administrative reviews is not inconsistent, as such, with Articles 1, 2.4, 2.4.2, 9.3, 11.1, 11.2, 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 ;  and 
(ii) finds
 that it is unable to complete the analysis to determine whether the 
zeroing methodology, as it relates to admi nistrative reviews, is inconsistent, 
as such, with Articles 1, 2.4, 2.4.2, 9.3, 11.1 and 11.2, 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) finds  that the Standard Zeroing Procedures ar e not a measure than can be challenged, 
as such, and, accordingly, declares moot  the Panel's finding, in paragraphs 7.291, 
7.294, 8.1(g), and 8.1(h) of the Panel Repor t, that the Standard Zeroing Procedures 
are not inconsistent, as such, with Articles 1, 2.4, 2.4.2, 9.3, 11.1, 11.2, 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) finds
 that the Panel did not err in exercising judicial economy by not making findings 
with regard to whether the Anti-Dumping Manua l is a measure that is inconsistent, as 
such, with Articles 1, 2.4, 2.4.2, 5.8, 9.3, 9.5, 11.1, 11.2, 11.3, and 18.4 of the  Anti-
Dumping Agreement , Articles VI:1 and VI:2 of th e GATT 1994, and Article XVI:4 of 
the WTO Agreement ; 
(f) declines  to rule on the European Communities' conditional appeal regarding the 
United States' "practice" of zeroing;   WT/DS294/AB/R 
 Page 99 
 
 
(g) with respect to Section 351.414(c)(2): 
(i) declares moot  the Panel's finding, in paragraphs 7.291, 7.294, 8.1(g), and 
8.1(h) of the Panel Report, that Sec tion 351.414(c)(2) is not inconsistent, as 
such, with Articles 1, 2.4, 2.4.2, 9.3, 9.5, 11.1, 11.2, 11.3, 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 ;  
(ii) declines  to complete the analysis to decide whether Section 351.414(c)(2) is 
inconsistent, as such, with Articles 1, 2.4, 2.4.2, 9.3, 9.5, 11.1, 11.2, 11.3 
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 ;  and 
(h) finds  that the Panel did not err in exercising judicial economy by not making findings 
on whether administrative review proceedings based on model zeroing are 
inconsistent with Article 9.3 of the Anti-Dumping Agreement ; 
(i) finds  that the Panel did not err in exercising judicial economy by not making findings 
on whether zeroing "as applied" in the original  investigations at issue is inconsistent 
with Article 2.4 of the  Anti-Dumping Agreement ;  and 
(j) rejects  the European Communities' claim that th e Panel acted inconsistently with its 
obligations under Article 11 of the DSU by  failing to make an objective assessment 
of the matter before it, including an objective assessment of the facts of the case. 
264. The Appellate Body recommends  that the DSB request the United States to bring its 
measures, which have been found in this Report, an d in the Panel Report 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/DS294/AB/R 
Page 100  
 
 
Signed in the original in Geneva this 31st day of March 2006 by:  
 
    
_________________________ 
Giorgio Sacerdoti 
Presiding Member 
 
 
 
 
 _________________________ _________________________ 
 Merit E. Janow Yasuhei Taniguchi 
 Member Member 
  WT/DS294/AB/R 
 Page 101 
 
 
ANNEX I  
 
 WORLD TRADE  
ORGANIZATION  WT/DS294/12 
17 January 2006 
 (06-0246) 
 Original:   English 
   
UNITED STATES – LAWS, REGULATIONS AND METHODOLOGY 
FOR CALCULATING DUMPING MARGINS ("ZEROING") 
 
Notification of an Appeal by the European Communities
 
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 17 January  2006, from the Delegation of the European 
Commission, is being circulated to Members. 
 
_______________ 
 
Pursuant to Article 16.4 and Article 17 of th e DSU the European Communities hereby notifies 
to the Dispute Settlement Body its decision to app eal to the Appellate Body certain issues of law 
covered in the Panel report and cer tain legal interpretations devel oped by the Panel in the dispute 
United States – Laws, Regulations and Methodology for Calculating Dumping Margins ("Zeroing")  
(WT/DS294/R). Pursuant to Rule 20(1) of the Working Procedures for Appellate Review , the 
European Communities simultaneous files this Notice of  Appeal with the Appellate Body Secretariat. 
The European Communities considers that the Pa nel has failed to correctly apply customary 
rules of interpretation of public international la w, as required by Article 3.2 of the DSU and  
Article 17.6(ii) of the Agreement on Implementation of Article VI  of the General Agreement on Tariffs 
and Trade 1994  (Anti-Dumping Agreement ), particularly as reflected in Articles 31 and 32 of the 
Vienna Convention on the Law of the Treaties. 
For the reasons set out in its submissions to the Panel, and for the reasons to be further 
elaborated in its submissions to the Appellate B ody, the European Communities appeals, and requests 
the Appellate Body to modify or reverse the legal findings and conclusions of the Panel, with respect 
to the following errors : 
(a)  the Panel erred when it found that the Un ited States did not act inconsistently with 
Articles 9.3 and 2.4 of the Anti-Dumping Agreement  and Articles VI:1 and VI:2 of the 
GATT 1994, despite the fact that the United States did not ensure, in the measures at 
issue described in the third sen tence of para 2.6 of the Panel Report, in the context of 
the "administrative review" proceedings liste d in Exhibits EC-16 to EC-31, that the 
rate and amount of anti-du mping duty did not exceed the true margin of dumping 
established in accordance with Article 2, b ecause the United States did not calculate a 
margin of dumping for the product as whole
 (Panel Report, paras 8.1(f) and (e),  
and 7.288, 7.284 and 7.248 to 7.285); WT/DS294/AB/R 
Page 102  
 
(b)  the Panel erred when it found that the Un ited States did not act inconsistently with the 
obligation to make a fair comparison contai ned in the first sentence of Article 2.4
 of 
the Anti-Dumping Agreement  when, in the measures at is sue described in the third 
sentence of para 2.6 of the Panel Report, in the context of the "administrative review"  
proceedings listed in Exhibits EC-16 to EC -31, the United States used a methodology 
that, absent targeted dumping, involved asymmetrical comparison between "normal 
value" and "export price", in which, at an intermediate stage in the calculation of the 
margins of dumping, the prices at which export transactions above "normal value" were made were effectively adjusted down wards ("zeroing" any negative intermediate 
results)  (Panel Report, paras 8.1(e), 7.284, 7.248 to 7.275, 7.281 to 7.283 and 7.285); 
(c)  the Panel erred when it found that the Un ited States did not act inconsistently with the 
third to fifth sentences of Article 2.4
 of the Anti-Dumping Agreement  when, in the 
measures at issue described in  the third sentence of para 2.6 of the Panel Report, in 
the context of the "administrative review" proceedings listed in Exhibits EC-16 to 
EC-31, the United States used a methodology that involved, at an intermediate stage 
in the calculation of the margins of dumping, a zeroing adjustment not demonstrated 
to have been made for a difference affec ting price comparability (Panel Report,  
paras 8.1(e), 7.284, 7.276 to 7.283 and 7.285); 
(d)  the Panel erred when it found that the Un ited States did not act inconsistently with 
Article 2.4.2  of the Anti-Dumping Agreement  when, in the measures at issue described 
in the third sentence of para 2.6 of th e Panel Report, in the context of the 
"administrative review" proceedings listed in Exhibits EC-16 to EC-31, the United 
States used a methodology that involved asymmetrical comparison between "normal 
value" and "export price", and in which, at an intermediate stage in the calculation of 
the margins of dumping, the prices at whic h export transactions above "normal value" 
were made were effectively adjusted down wards ("zeroing" any negative intermediate 
amounts), without complying with the cond itions and obligations set out in that 
provision (Panel Report, paras 8.1(d), 7.223, 7.142 to 7.222 and 7.285); 
(e)  the Panel erred when it found that the Standard Zeroing Methodology  used by the 
United States in "administrative review" proceedings  is not inconsistent with Articles 
2.4, 2.4.2, 9.3, 11.1, 11.2, 1 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  (Panel Report, 
paras 8.1(g) and 7.289 to 7.291); 
(f)  the Panel erred when it exercised judicial economy on the question of whether the 
Manual  is a measure inconsistent with Articles 2.4, 2.4.2, 5.8, 9.3, 9.5, 11.1, 11.2, 
11.3, 1 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  (Panel Report, paras 7.107 and 7.289 
to 7.294); 
(g)  the Panel erred when it found, in the c ontext of "administrative review" proceedings , 
that Section 351.414(c)(2) of the Regulations  is not as such inconsistent with Articles 
2.4, 2.4.2, 9.3, 11.1, 11.2, 1 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  (Panel Report, 
paras 8.1(g) and 7.289 to 7.291); 
(h)  the Panel erred when it found, with r espect to new shipper proceedings, changed 
circumstances proceedings, and sunset proceedings , that the Standard Zeroing 
Methodology and Section 351.414(c)(2) of the Regulations are not as such inconsistent with Articles 2.4, 2.4.2, 9.3,  9.5, 11.1, 11.2, 11.3, 1 and 18.4 of the Anti- WT/DS294/AB/R 
 Page 103 
 
 
Dumping Agreement ; Articles VI:1 and VI:2 of th e GATT 1994; and Article XVI:4 of 
the WTO Agreement  (Panel Report, paras 8.1(h) and 7.292 to 7.294); 
(i)  the Panel erred when it exercised judicial economy  on the question of whether or not 
"administrative review" proceedings based  on model zeroing are consistent with 
Article 9.3 of the Anti-Dumping Agreement  (Panel Report, paras 6.4 to 6.6 and 7.34); 
(j)  the Panel erred when it exercised judicial economy  on the question of whether or not 
model zeroing is consistent  with Article 2.4 of the Anti-Dumping Agreement  (Panel 
Report, paras 8.2, 7.33 and 7.108); 
(k)  the Panel erred when it dismissed the EC's claims under Articles 11.1 and 11.2  of the 
Anti-Dumping Agreement  (Panel Report, paras 8.1(f), 7.143 and 7.286 to 7.288); 
(l)  the Panel erred when it dismissed other of the EC's claims, considered by the Panel to 
be "dependent " (Panel Report, paras 8.1(f), 8.2, 7.34, 7.109 and 7.286 to 7.288); and 
(m)  the Panel failed to make an objective assessment  of the matter before it, including (as 
appropriate) an objective assessment of the facts of the case and the applicability of and conformity with the relevant covered agreements, as required by Article 11 of the 
DSU. 
 The EC had also claimed before the Panel that the Standard Zeroing Procedures
 used by  
the United States are a measure  or part of a measure and are inconsistent  with Articles 2.4, 2.4.2, 5.8, 
9.3, 1 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. It appears to the EC that th e Panel has considered these 
Standard Zeroing Procedures  to be part of or a reflection of the methodology that it held to be as such 
inconsistent with the obligations of the US in the case of original proceedings (and consistent with the 
obligations of the US in the case of "administrat ive review" proceedings). However, this is not 
expressly stated by the Panel and if the Appellate Body should consider this not to be the case (and 
that bringing the methodology into conformity with the WTO obligations of the US would not necessarily require bringing the Procedures into co nformity), the EC conditionally appeals and asks 
the Appellate Body to find that  the Standard Zeroing Procedures
 are as such inconsistent with the 
obligations of the US in the case of original pr oceedings, "administrative review" proceedings, new 
shipper proceedings, changed circumstances proceed ings and sunset proceedings. (Panel Report,  
paras 8.1(c), 7.106 and 7.96 to 7.97; Panel Report, paras 8.1(g) and 7.289 to 7.291; and Panel Report, 
paras 8.1(h) and 7.292 to 7.294). 
 With regard to Practice , the EC appeals the exercise of judicial economy by the Panel with 
respect to the US Practice of zeroing in original  proceedings, "administra tive review" proceedings, 
new shipper proceedings, changed circumstan ces proceedings and sunset proceedings. 
 The EC also requests the Appellate Body to complete the analysis of the Panel where it 
reverses or modifies findings of the Panel and comp letion of the analysis is necessary to resolve this 
dispute. 
_______________ 
 
 WT/DS294/AB/R 
Page 104  
 
ANNEX II
 
 
 WORLD TRADE  
ORGANIZATION  WT/DS294/13 
1 February 2006 
 (06-0441) 
 Original:   English 
   
UNITED STATES – LAWS, REGULATIONS AND METHODOLOGY 
FOR CALCULATING DUMPING MARGINS ("ZEROING") 
 
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 Rule 23(1) of the Working Procedures for Appellate Review   
    The following notification, dated 30 January 20 06, from the Delegation of the United States, 
is being circulated to Members. 
 
_______________ 
 
 Pursuant to Article 16 of the Understanding on Rules and Procedures Governing the 
Settlement of Disputes ("DSU") and Rule 23(1) 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 in United States – Laws, Regulations and Methodology for 
Calculating Dumping Margins ("Zeroing")  (WT/DS294/R) ("Panel Report") and certain legal 
interpretations developed by the Panel in this dispute. 
 
 The United States seeks review of the Panel's legal conclusion that the United States 
maintains a "zeroing methodology" that, as it relates to  original investigations, is a norm which, as 
such, is inconsistent with Article 2.4.2 of the Agreement on Implementation of Article VI of the 
General Agreement on Tariffs and Trade 1994  ("AD Agreement").
1  This conclusion is in error and is 
based on erroneous findings on issues of law and related legal interp retations, including the following: 
 
1. The standard used by the Panel to identi fy "zeroing methodology" as a purported measure for 
purposes of determining whether there was a bre ach of Article 2.4.2 of the AD Agreement is 
erroneous as a matter of law.2   
 
2. The Panel's finding that "zeroing methodolog y" constituted a "measure" because it is a norm 
is erroneous, as is its subsequent finding that this "measure" breaches Article 2.4.2 of the AD 
Agreement.3 
                                                      
1The Panel's conclusion and the articulation of the reasons therefore are set forth in Panel Report, 
paragraphs 7.91-7.106 and 8.1(c). 
2The standard used by the Panel is set forth largely in Panel Report, paragraphs 7.98-7.100. 
3The Panel's finding is set forth largely in Panel Report, paragraphs 7.101-7.104.  WT/DS294/AB/R 
 Page 105 
 
 
 3. The Panel failed to apply a correct analysis in finding that a measure allegedly taken by the 
United States – the so-called "zeroing methodology" – is "as such" inconsistent with Article 2.4.2 of 
the AD Agreement, and, in any event, failed to make an objective assessment under Article 11 of the 
DSU.
4 
 
4. The Panel relieved the European Communities of its burden of proving the existence of a 
measure that is inconsistent with Article 2.4.2 of the AD Agreement.5 
 
__________ 
 
                                                      
4The Panel's "as such" analysis appears to be set forth in Panel Report, paragraphs 7.104-7.105. 
5This error is reflected in the Panel's overall analysis  set forth in Panel Report, paragraphs 7.91-7.106.