WT/DS335/R 
 Page A-1 
 
 
   
 
ANNEX A 
 
 
SUBMISSIONS OF ECUADOR 
 
 
Contents Page 
Annex A-1 Written Submission of Ecuador (19 October 2006)  A-2 
Annex A-2 Oral Statement of Ecuador (3 November 2006)  A-5 
Annex A-3 Answers of Ecuador to Questions from the Panel (6 November 2006)  A-6 
Annex A-4 Answers of Ecuador to Questions from the Panel (13 November 2006)  A-8 WT/DS335/R 
Page A-2 
 
 
                                                     ANNEX A-1 
 
WRITTEN SUBMISSION OF ECUADOR 
 
19 October 2006 
 
 
I. INTRODUCTION 
 
1. In this dispute, the Government of Ecuador contends that the final determination, amended final determination, and anti-dumping duty order of the United States Department of Commerce 
("DOC") are inconsistent with US obligations unde r the first sentence of Article 2.4.2 of the Anti-
Dumping Agreement because the DOC, in using the average-to-average calculation in this investigation, engaged in "zeroing."   
 
2. As noted in Ecuador's panel request, "zer oing" for purposes of this dispute means the 
following:  (1) different "models," i.e., types, of products are identified us ing "control numbers" that 
specify the most relevant product characteristics; (2 ) weighted average prices in the US and weighted 
average normal values in the comparison market ar e calculated on a model-specific basis for the entire 
period of investigation; (3) the weighted average normal value of each model is compared to the 
weighted average US price for that same model; (4 ) in order to calculate the dumping margin for an 
exporter, the amount of dumping for each model is  summed and then divided by the aggregated 
US price for all models; and (5) before summing the total amount of dumping for all models, all 
negative margins on individual models are set to zero.   
 
3. The United States and Ecuador agreed to expedited procedures in an agreement dated 
24 July 2006 ("Agreement on Procedures").1  Ecuador's claim is limited to the calculation of margins 
for Promarisco S.A. and Exporklor e S.A. and the "all others" rate. 
 
4. The United States has agreed not to contest Ec uador's claim. Therefore, Ecuador requests that 
the Panel find that the DOC acted inconsistently with  the requirements of Article 2.4.2, first sentence, 
when it calculated the anti-dumping margin s in its anti-dumping investigation of Certain Frozen 
Warmwater Shrimp from Ecuador .  The parties further agree that, should the Panel make this finding, 
and only this finding, with respect to one or more of the challenged measures, then the United States 
will bring its measure into conformity within six months from the date on which the Dispute 
Settlement Body ("DSB") adopts the Panel report. 
 
5. Since time is of the essence, Ecuador asks the Panel to act expeditiously to issue its final 
report. 
 
II.  FACTUAL BACKGROUND 
 
6. In calculating the anti-dumping margins for the two Ecuadorian exporte rs identified in the 
two Notices as having above de minimis  margins, the DOC "zeroed" as described above.  These two 
Notices are the measures that Ecuador here challenges, although Ecuador's claim is limited to the margins calculated for Promarisco S.A. and Exporklore S.A. and the "all others" rate. 
 
7. The DOC initiated its anti-dumping investiga tion against certain frozen warmwater shrimp 
from Ecuador on 27 January 2004 (69 Fed. Reg. 3876). 
 
 
1 The agreement is submitted as Exhibit Ecu-1. 
   WT/DS335/R 
 Page A-3 
 
 
                                                     8. The DOC published its final margin determination on 23 December 2004 (69 Fed. 
Reg. 76913).2  The DOC published an amended final marg in determination and anti-dumping duty 
order on 1 February 2005 (70 Fed. Reg. 5156).3  The DOC's final margin determination and amended 
final margin determination, as well as its anti- dumping duty order, reflected and contained anti-
dumping margins that were calculated by using "zeroing." 
 
9. The DOC used zeroing in determining the final anti-dumping margins for the two Ecuadorian exporters for which anti-dumping margins above the 2 per cent de minimis  level were calculated in 
both the final and amended final affirmative determ ination of sales at less than fair value in the 
investigation of Certain Frozen Warmwater Shrimp from Ecuador , cited above, as well as for "all 
other" Ecuadorian exporters that were not separately investigated. 
 
10. The DOC's unpublished Issues and Decision Memorandum, dated 23 December 2004, as well 
as other documents contained in the administrative r ecord of the investigation, including computer 
programmes, describe in more detail the DOC 's use of zeroing in the Ecuadorian shrimp 
investigation.4
 
11. The DOC's use of zeroing in the Ecuadorian sh rimp investigation appears to be similar or 
identical to the use of zeroing that was found to be inconsistent with the Article 2.4.2 of the Anti-
Dumping Agreement in United States - Final Du mping Determination on Softwood Lumber from 
Canada (Panel Report, WT/DS264/R, and Appe llate Body Report, WT/DS264/AB/R, adopted 
31 August 2004), and in United States - Laws, Re gulations and Methodology for Calculating 
Dumping Margins ("Zeroing") (Panel Report,  WT/DS294/R, and Appe llate Body Report, 
WT/DS294/AB/R, adopted 9 May 2006). 
 
III. PROCEDURAL BACKGROUND 
 
12. On 17 November 2005, Ecuador requested consultations with the United States under 
Article 4 of the Understanding on Rules and Pro cedures Governing the Settlement of Disputes 
("DSU"); Article XXII:1 of the General Agreemen t on Tariffs and Trade 1994 (the "GATT 1994"); 
and Articles 17.2 and 17.3 of the Agreement on implementation of Article VI of the General 
Agreement on Tariffs and Trade 1994 (the "AD Agreemen t") with regard to the use of zeroing in the 
determinations at issue.5
 
13. Consultations were held on 31 January 2006 and on several occasions thereafter.  These 
consultations allowed a better unde rstanding of the position of the pa rties but failed to achieve a 
mutually agreed solution of the dispute. 
 
14. On 8 June 2006, Ecuador requested the estab lishment of a panel.  At its meeting on 
19 July 2006, the Dispute Settlement Body ("DSB" ) established a Panel pursuant to the request of 
Ecuador in accordance with Article 6 of the DSU. 
 
15. At that meeting, the parties to the dispute also agreed that the Panel should have standard 
terms of reference.  The terms of reference are, therefore, the following: 
 
"To examine, in light of the relevant pr ovisions of the covered agreements cited by 
Ecuador in document WT/DS335/6, the matter referred to the DSB by Ecuador in that 
document, and to make such finding s as will assist the DSB in making the 
recommendations or in giving the rulings provided for in those agreements." 
 
2 This document is submitted as Exhibit Ecu-2. 
3 This document is submitted as Exhibit Ecu-3. 
4 An excerpt from the Issues and Decision Memorandum is submitted as Exhibit Ecu-4. 
5 WT/DS335/1 of 21 November 2005. 
  WT/DS335/R 
Page A-4 
 
 
 
16. On 24 July 2006, the parties entered into the Agreement on Procedures, as referenced above 
and submitted as Exhibit Ecu-1. 
 
IV. ARGUMENT 
 
17. The use of zeroing in the two challenged me asures to calculate the margins of dumping for 
the two exporters with margins above de minimis , which are Promarisco S.A. and Exporklore S.A., as 
well as for "all other" exporters, is inconsistent with the obligations of the United States under the 
Anti-Dumping Agreement.  Specifically, Ecuador cons iders that the measures are inconsistent with 
the first sentence of Article 2.4.2 of the Anti-Dumping Agreement. 
 
18. The parties have reached a procedural agreem ent, attached as Exhibit Ecu-1, providing that 
the DOC will issue a new anti-dumping margin determination under Section 129(b) of the Uruguay 
Round Agreements Act, 19 U.S.C. § 3538(b), provide d the other terms of the procedural agreement 
are met.   
 
19. As noted above, the United States has agreed not to contest Ecuador's claim in this dispute.  
As a result, it is unnecessary for Ecuador to recite here in detail the factual aspects of the DOC's 
application of zeroing in the cha llenged measures or the arguments as to why zeroing, as used in those 
measures, was inconsistent with Article 2.4.2, first sentence.   
 
20. In brief, Ecuador contends that in calcula ting the dumping margin in the investigation in 
question, the DOC:  (1) identified different "models," i.e., types, of products using "control numbers" 
that specify the most relevant product characteris tics; (2) calculated weighted average prices in the 
US and weighted average normal values in the comparison market on a model-specific basis for the 
entire period of investigation; (3) compared the we ighted average normal value of each model to the 
weighted average US price for that same model; (4 ) in order to calculate the dumping margin for an 
exporter, summed the amount of dumping for each model and then divided it by the aggregated 
US price for all models; and (5) before summing th e total amount of dumping for all models, set all 
negative margins on individual models to zero.  In  this regard, the calculation is the same as the 
calculation described in the Softwood Lumber cas e.  Ecuador considers this calculation to be 
inconsistent with Article 2.4.2 of the Anti-Dumpi ng Agreement on the grounds set forth in paragraphs 
62-117 of the Appellate Body report in the Softwood Lumber case. 
 
21. As noted above, the United States has agreed not to contest Ecuador's claim. 
 
V. CONCLUSION 
 
22. Ecuador respectfully requests that the Panel find that the United States acted inconsistently 
with Article 2.4.2, first sentence, of the Anti-Dumping Agreement when, in the anti-dumping 
investigation of shrimp from Ecuador, the DOC "zer oed" in the calculation of the dumping margins 
for two of the Ecuadorian exporte rs and the "all others" rate. 
 
   WT/DS335/R 
 Page A-5 
 
 
ANNEX A-2 
 
ORAL STATEMENT OF ECUADOR 
 
3 November 2006 
 
 
1. On behalf of Ecuador's delegation, I would like to thank you for agreeing to serve on this 
Panel and for acting so quickly to issue the work ing procedures and timetable in response to the 
Parties' joint request. 
 
2. As you know, Ecuador and the United States previously entered into an Agreement on 
Procedures.  This Agreement recognizes that the Appellate Body considered in the Canadian 
Softwood Lumber case the identical issue that Ecuador  has raised here.  That issue is whether the 
United States Department of Commerce acted in acco rdance with the first sentence of Article 2.4.2 of 
the Antidumping Agreement when it "zeroed" negative margins in calculating the margins of 
dumping in its final determination in its investig ation of Certain Frozen Warmwater Shrimp from 
Ecuador.  The Appellate Body held in the Ca nadian Softwood Lumber case that zeroing was 
inconsistent with this provision, and the United States has not contested the application of the 
Appellate Body's prior finding to th e facts in this case.  Accordingly,  we have asked the Panel in our 
written submission to issue a decision finding that, here again, the United States, has acted 
inconsistently with the firs t sentence of Article 2.4.2. 
 
3. We do not intend today to offer a lengthy statem ent that goes into the very detailed analysis of 
the decision given by the Appellate Body.  However, we are prepared to respond to the two questions 
that the Panel provided to us on Monday after the co nclusion of the opening statements.  We do want 
to make clear that the material facts in Ecuador's ca se are identical to the material facts in the Lumber 
case.  The United States agrees on this point. 
 
4. We want to express our hope that the third parties will not advance positions today that would interfere with the resolution of this proceeding in  a manner consistent with that set forth in the 
Agreement on Procedures.  We think that it is in the best interests of the third parties that the Panel 
issue its decision so that we can obtain an expedited recalculation of the dumping margins for Promarisco, Exporklore, and "all others" within the contemplated six month time frame after the DSB adopts the final Panel report. 
 
5. We have reviewed the third party submission a nd non of them are incons istent with Ecuador's 
view.  For example, the EC stated in paragraph 7 of its submission that it "does not object to the manner of proceeding chosen by the Parties."  We hope that other third parties will take this same 
position and thereby acknowledge that Ecuador has the right to choose the measures it will challenge and the basis upon which it will challenge them.  He re, we have brought a na rrow challenge, which is 
carefully crafted to mirror the Appellate Body holding in the Softwood Lumber case. 
 
6. Finally, Mr. Chairman and members of the Pa nel, that concludes our opening statement.  
We would be pleased to respond to  any questions that you may have. 
 
  WT/DS335/R 
Page A-6 
 
 
ANNEX A-3 
 
ANSWERS OF ECUADOR TO QUESTIONS 
FROM THE PANEL 
 
6 November 2006 
 
 
Q1. Could Ecuador provide a more elaborate d escription of the measures at issue and, in 
particular, of the methodology employed by the US  Department of Commerce in calculating the 
dumping margins for Promarisco S.A., Expo rklore S.A. and for the "all others" rate? 
 
Reply  
 
 There are three measures at issue – (1) the original final margin determination of the 
US Department of Commerce (DOC) in its investig ation of Certain Frozen Warmwater Shrimp from 
Ecuador; (2) the revised final margin determinati on of the DOC; and (3) the antidumping order that 
implements the revised final margin determination.  Thus, Ecuador's challenge is limited to the DOC's 
use of zeroing in an original investigation.  It is not here challenging such use in an annual 
administrative review proceeding or in any other type of proceeding. 
 
 In the revised final determin ation and order, the DOC calculated an antidumping margin of 
2.48 per cent for one Ecuadorian shrimp producer, called Exporklore S.A., and 4.42 per cent for 
another producer, called Promarisco, S.A.  Each of these two margins was slightly changed from the 
initial final margin determination.  The amended final weighted average of these two margins was 3.58 per cent, which applies to all non-investigat ed Ecuadorian producers that export to the United 
States. 
 
 In calculating the final margins and amended final margins of Exporklore and Promarisco, the 
DOC used zeroing.  Ecuador descr ibed the DOC's zeroing procedure in paragraph no. 2 of its First 
Submission, and the United States has agreed in paragraph no. 5 of its own First Submission that 
Ecuador's description of what the DOC did is accurate.   
 
 As Exhibit Ecu-4 to its First Submission, Ecuador provided an excerpt from an official DOC document known as an Issues and Decision Memorandum that further describes the challenge to the 
DOC's use of zeroing that Promarisco and Exporklore raised in the original investigation.  On page 8 
of this Memorandum, in the first paragraph under the heading of "Comment 1," the DOC stated that it 
"followed our standard methodology of not using non-dumped sales comp arisons to offset or reducing 
the dumping found on other sales comparisons."  This is another way of saying that the DOC set negative antidumping margins at zero. 
 
 The DOC stated in this sa me document in the first paragraph under the heading of 
"Department's Position" that it had "made model-specific comparisons of weighted average EPs with weighted average NVs of comparable merchandise.  . . . We then combined the dumping margins 
found based upon these comparisons, without permitti ng non-dumped comparisons to reduce the 
dumping margins found on distinct models of subject  merchandise, in order to calculate the weighted 
averaged dumping margin." 
 
 Thus, in these statements, the DOC expressly acknowledged that:  (1) it had used the weighted average to weighted av erage comparison methodology that is authorized by the first 
sentence of Article 2.4.2; (2) it had made multiple comparisons on a model specific basis; and 
(3) it had ignored negative margins when calculati ng the weighted average margin for the product 
under investigation as a whole. 
   WT/DS335/R 
 Page A-7 
 
 
 
Q2. Could Ecuador elaborate on the similariti es between its claims in the present dispute 
and the findings of the Appellate Body in previous cases, in particular US – Softwood Lumber V  
(WT/DS264/AB/R), and explain why the Appellate Body's findings in these cases are applicable 
to Ecuador's claims in the present dispute?" 
 
Reply  
 
 As noted in the final paragraph of the preceding answer, the methodology that the DOC 
described in its Issues and Decision Memorandum in the case of Shrimp from Ecuador is identical to 
the methodology considered by the Appellate Body that the DOC used in Softwood Lumber from Canada. 
 
 First, the AB in Lumber noted in paragra ph 63 that Canada's challenge to the methodology 
incorporating the practice of zeroing was limited to an  "as applied" challenge.  The same is true of 
Ecuador's challenge. 
 
 Second, the AB in Lumber also noted in paragraph 63 that Canada's challenge was "limited to the consistency of zeroing when used in calculating margins of dumping on the basis of a comparison of a weighted average normal value with a weight ed average of prices of all comparable export 
transactions."  The same is true of Ecuador's challenge as noted in the DOC's description of the 
methodology that it applied in the shrimp investigation. 
 
 Third, Ecuador's challenge is limited to a challenge to the consistency of the DOC's 
methodology with the first sentence of Article 2.4.2, which is the same issue that the AB considered 
in Lumber. 
 
 Fourth, the AB in Lumber provided in paragraph 64 a "brief description of zeroing as applied 
by the United States Department of Commerce in this  case."  A comparison of that description to the 
description of zeroing in Ecuador's first submission reveals that they are substantially similar.  
Moreover, the US has not contested Ecuador's assert ion in paragraph 11 of its First Submission that 
the DOC's implementation of zeroing in Shrimp from Ecuador "appears to be similar or identical to 
the use of zeroing" in Softwood Lumber from Canada. 
 
 In summary, the material facts applicable to the use of zeroing are the same or very similar between Softwood Lumber from Canada and Shrimp from Ecuador.  Moreover, Ecuador has raised the identical challenge as the AB considered in Softwood Lumber, i.e., that the use of zeroing in 
calculating margins in an original investigation using the weighted average to weighted average 
method of model specific comparisons is inconsistent  with the first sentence of Article 2.4.2 of the 
Antidumping Agreement.  Thus, this Panel has the f actual and legal basis to conclude that Ecuador 
has presented a prima facie  case.  Moreover, it has provided as sufficiently detailed description of the 
measures that it has challenged that incorporate and adopt the methodology of calculating antidumping margins that includes the practice of zeroing. 
 
  WT/DS335/R 
Page A-8 
 
 
ANNEX A-4 
 
ANSWERS OF ECUADOR TO QUESTIONS 
FROM THE PANEL 
 
13 November 2006 
 
 
Q1. Bearing in mind that adopted Appellate Body reports, including the Appellate Body 
Report in Softwood Lumber V  are not, stricto sensu , binding (expect with respect to resolving the 
particular dispute between the parties to that dispute), could Ecuador please explain why, in its 
view, the US measures at issue are inconsistent with the US' obligation under Article 2.4.2 of the Anti-Dumping Agreement  (i.e. what is the legal reasoning underlying Ecuador's claim of 
inconsistency)? 
 
Reply  
 
 The legal reasoning that underlies Ecuador's claim that the three measures at issue here are 
inconsistent with Article 2.4.2 due to the use of zer oing is identical to the reasoning that the Appellate 
Body (AB) used in its Report in Softwood Lumber V .  Although the Appellate Body's decision is not 
binding on this Panel, Ecuador submits th at the analysis that the AB used in Softwood Lumber V  is 
persuasive, especially in light of the fact that the zeroing (as defined in this dispute) that the 
US Department of Commerce (DOC) used  in its antidumping investigation of Frozen Warmwater 
Shrimp from Ecuador  is identical to that which the DOC u sed in its original investigation in Softwood 
Lumber from Canada .  Moreover, the United States has expressly agreed in paragraph no. 3 of the 
Agreement on Procedures with Ecuador not to contest Ecuador's claim that the three measures are inconsistent with Article 2.4.2 on the grounds that the AB stated in Softwood Lumber V . 
 
 The AB's rationale, which Ecuador urges this Panel to adopt here, is in summary as follows: 
 
(1) The DOC used "multiple averaging" in Softwood Lumber , just as it did in Frozen Warmwater 
Shrimp ; 
 
(2) The DOC set to zero any margin that it foun d to be less than zero after making each of its 
weighted average to weighted average comparisons of export price to normal value; 
 
(3) The DOC calculated the antidumping margin for an exporter or producer by summing the 
results of each of the comparisons in which nor mal value exceeded the export price, and then 
divided by the aggregated US price for all models; 
 
(4) The term "margins of dumping" in Article 2.4.2, when interpreted in an integrated manner 
with the term "all comparable export transactions ," does not refer to margins of dumping that 
are determined for individual product types; 
 
(5) Rather, the calculation for an individual produc t type reflects only an intermediate calculation 
made by an investigating authority in the context of establishing margins of dumping for the product under investigation; 
 
(6) As a result, dumping cannot be found to exist only for a type, model or category of that 
product.  It is only on the basis of aggregating all of the intermediate  values for all product 
types (including those intermediate values wher e normal value exceeded export price) that an 
investigating authority can establish the margin of dumping for the product under investigation; 
   WT/DS335/R 
 Page A-9 
 
 
 
(7) Here, the product was frozen warmwater shrimp from Ecuador; 
 
(8) Thus, dumping could not be determined by onl y considering the positive intermediate values 
for certain types or models of frozen warmwa ter shrimp, which is how the DOC calculated 
the weighted-average dumping margin for Promarisco S.A. and Exporklore S.A. in the 
contested measures.  All intermediate values had to be included; 
 
Thus, the United States breached Article 2.4.2 with respect to the measures in question by failing to 
take into account all comparable export transactions  in calculating the weighted-average margins of 
dumping in the investigation. 
 
Q2. Would Ecuador please provide the Pane l with copies of the relevant documents 
explaining how the USDOC calculated the margins of dumping in the Preliminary Determination (Federal Register Notice and/or Issues and Decision Memoranda if any) and 
other relevant documents providing further explan ations as to the methodology used by the 
USDOC in establishing the margins of dumping in the Final and Amended Final 
Determinations? 
 
Reply  
 
 Ecuador is providing the following documents that explain how the USDOC calculated the 
margins of dumping in the Preliminary Determ ination and in the Fi nal and Amended Final 
Determination: 
 
 Federal Register Notice:  Preliminary Determination1
 
 Exhibit Ecu-1:  Notice of Preliminary Determination of Sales at Less Than Fair Value and 
Postponement of Final Determination: Certai n Frozen and Canned Warmwater Shrimp from 
Ecuador , 69 Fed. Reg. 47091 (Dep't of Commerce 4 August 2004). 
 
 Calculation Memoranda:  Preliminary Determination
 
 Exhibit Ecu-2:   US Dep't of Commerce, Memorandum to the File, Case No. A-331-802 
(Investigation), "Exporklore S.A., Preliminary Determination Notes and Margin Calculation," dated 28 July 2004. 
 
 Exhibit Ecu-3:  US Dep't of Commerce, Memorandum to the File, Case No. A-331-802 
(Investigation), Memorandum to the File, "Promari sco S.A. Preliminary Determination Notes and 
Margin Calculation," dated 28 July 2004. 
 
 Exhibit Ecu-4:  US Dep't of Commerce, Memorandum to Neal Halper, Director, Office of 
Accounting, Case No. A-331-802 (Investigation), "Cost of Production and Constructed Value 
Calculation Adjustments for the Preliminary Determ ination - Exporklore, S.A.," dated 28 July 2004. 
 
 Exhibit Ecu-5:  US Dep't of Commerce, Memorandum to Neal M. Halper, Director, Office 
of Accounting, Case No. A-331-802 (Investigatio n), "Cost of Production and Constructed Value 
Calculation Adjustments for the Preliminary Determ ination - Promarisco S.A.," dated 28 July 2004. 
 
                                                      
1 The Government of Ecuador's First Written Submission contained the DOC's Federal Register  notice 
of Final Determination and Amended Final Determination, as well as excerpts from the Issues and Decision 
Memorandum that accompanied the notice of Final Determination. 
  WT/DS335/R 
Page A-10 
 
 
 Exhibit Ecu-6:  US Dep't of Commerce, Memorandum to the File, Case No. A-331-802 
(Investigation), "Possible Error in Promarisco Prel iminary Determination Calc ulation Program," dated 
24 August 2004. 
 
 Calculation Memoranda:  Final Determination   
 
 Exhibit Ecu-7:   US Dep't of Commerce, Memorandum to the File, Case No. A-331-802 
(Investigation), "Exporklore S.A., Final Determ ination Notes and Margin Calculation," dated 
17 December 2004. 
 
 Exhibit Ecu-8:  US Dep't of Commerce, Memorandum to the File, Case No. A-331-802 
(Investigation), "Promarisco S.A., Final Determ ination Notes and Margin  Calculation," dated 
17 December 2004. 
 
 Exhibit Ecu-9:  US Dep't of Commerce, Memorandum to Neal Halper, Director, Office of 
Accounting, Case No. A-331-802 (Investigation), "Cost of Production and Constructed Value 
Calculation Adjustments for the Final Determina tion - Exporklore, S.A." dated 17 December 2004. 
 
 Exhibit Ecu-10:  US Dep't of Commerce, Memorandum to Neal M. Halper, Director, Office of Accounting, Case No. A-331-802 (Investigatio n), "Cost of Production and Constructed Value 
Calculation Adjustments for the Final Determina tion - Promarisco, S.A." dated 17 December 2004. 
 
 Calculation Memoranda:  Amended Final Determination
 
 Exhibit Ecu-11:  US Dep't of Commerce, Memorandum to the File, Case No. A-331-802 (Investigation), "Exporklore S.A. Amended Final Determination Margin  Calculation," dated 
26 January 2005. 
 
 Exhibit Ecu-12:  US Dep't of Commerce, Memorandum to the File, Case No. A-331-802 (Investigation), "Promarisco S.A. Amended Fina l Determination Margin Calculation," dated 
26 January 2005. 
 
 Verification Reports
 
 Exhibit Ecu-13:  US Dep't of Commerce, Memorandum to the File, Case No. A-331-802 (Investigation), "Sales Verification in Guaya quil, Ecuador of Exporklore S.A.," dated 
12 October 2004.  
 
 Exhibit Ecu-14:  US Dep't of Commerce, Memorandum to the File, Case No. A-331-802 (Investigation), "Sales Verification in Guayaquil, Ecuador of Promarisco S.A.," dated 14 October 2004. 
 
 Exhibit Ecu-15:  US Dep't of Commerce, Memorandum to Neal M. Halper, Director, Office 
of Accounting, Case No. A-331-802 (Investigation), "Verification Report on the Cost of Production 
and Constructed Value Data Submitted by Ex porklore S.A.," dated 18 October 2004. 
 
 Exhibit Ecu-16:  US Dep't of Commerce, Memorandum to Neal M. Halper, Director, Office 
of Accounting, Case No. A-331-802 (Investigation), "Verification Report on the Cost of Production 
and Constructed Value Data Submitted by Promarisco S.A.," dated 20 October 2004. 
 
 The DOC's calculation memoranda for the Prel iminary Determination, Final Determination, 
and Amended Final Determination describe each of the adjustments that the DOC made to Exporklore's and Promarisco's submitted sales and co st data in order to calculate each company's 
weighted average dumping margin.  Specifically, the Preliminary Determination memoranda 
   WT/DS335/R 
 Page A-11 
 
 
(Exhibits Ecu-2 through Ecu-5) identify changes that the DOC made on its own based on its 
analysis of the companies' submitted data .  The Final Determination memoranda ( Exhibits Ecu-7 
through Ecu-10) detail changes that the DOC made pursuant to its decisions on contested issues as 
set forth in the Issues and Decision Memorandum, as well as any corrections identified in each 
company's sales and cost verification reports ( Exhibits Ecu-13 through Ecu-16).  Finally, the 
Amended Final Determination ( Exhibits Ecu-11 and Ecu-12 ) memoranda reflect revisions that DOC 
made to correct certain ministerial errors in  the Final Determination calculation programmes. 
 
 Importantly, the DOC memoranda in Exhibits Ecu-2, Ecu-3, Ecu-7, Ecu-8, Ecu-11, and 
Ecu-12 contain the margin calculation programmes for E xporklore and Promarisco.  In these exhibits, 
Ecuador has included only Part 10-E of each DOC margin calculation program, which includes the 
following computer programming instructions that  DOC used to employ its zeroing methodology: 
 
  PROC MEANS NOPRINT DATA=MARGIN; 
   WHERE EMARGIN GT 0; 
   VAR EMARGIN MUSQTY USVALUE; 
   OUTPUT OUT = ALLPUDD (DROP = _FREQ_ _TYPE_) 
    SUM = TOTPUDD MARGQTY MARGVAL; 
 
 Through these instructions, the DOC included only those weighted average to weighted 
average comparisons of EP to NV that had positive  dumping margins, i.e., where the margin of 
dumping (or "EMARGIN") was greater than zero.  In doing so, the DOC's computer language effectively set those margins that were less than zero to zero when calculating the weighted average 
dumping margins for the product. 
 
Q3. In Ecuador's view, do the findings a nd reasoning of the Appellate Body in Softwood 
Lumber V  apply to the determination of an "all others" rate pursuant to Article 9.4?  Please 
explain why or why not?  If not, what is the basis for and reasoning underlying Ecuador's claim 
that the "all others" rate in the United States' shrimp investigation is in breach of Article 2.4.2? 
 
Reply  
 
 Ecuador's position is that the findings and reasoning of the AB in Softwood Lumber V did not 
address the issue of whether Article 9.4 applies to the determination of the "all others" rate for all Ecuadorian exporters that were not separately investigated.  Moreover, Ecuador has not raised the issue of whether Article 9.4 applies in an investiga tion because Article 9, by its terms, applies to the 
"Imposition and Collection of Anti-Dumping Duties."  The imposition and collection of anti-dumping 
duties is a distinct phase of an anti-dumping proceed ing that is separate from the investigation phase, 
which is the phase at issue here. 
 
 In the investigation, the DOC calculated an amended final margin of 3.58 per cent for "all 
others."  This margin was determined by calcu lating the weighted average of the amended final 
margins that the DOC  calculated for Exporklore S.A. and Promarisco S.A.  See Exhibits Ecu-1 
through Ecu-16, which contain the DOC's calculation memora nda and other relevant documents that 
show how the DOC calculated the weighted averag e margins for Exporklore and Promarisco.  Since 
there is no disagreement that the margins for Expo rklore and Promarisco were determined using 
zeroing, the 3.58 per cent margin for "all others" di rectly incorporated the company-specific rates 
based on zeroing since the "all others" margin is an average of two individual company margins.  In 
confirmation of this point, we have attached the me moranda that contain the DOC's calculation of the 
final and amended fina l "all others" rate as Exhibits Ecu-17 and Ecu-18 .  We do not understand the 
United States to contest Ecuador's claim that the "a ll others" margin was determined using individual 
company-specific margins based on zeroing. 
 
  WT/DS335/R 
Page A-12 
 
 
                                                      In Softwood Lumber V , both the Panel and the Appellate Body considered the issue of zeroing 
as reflected in the DOC's April 2, 2002 Notice of Final Determination of Sales at Less Than Fair 
Value and its May 22, 2002 Notice of Amended Final Determination of Sales at Less Than Fair Value 
and Antidumping Duty Order, which are both attached in Exhibit Ecu-19 .  See Appellate Body 
Report at par. 2, which references these two DOC Notices.  The Panel will note that the latter Notice contains an amended "All Others" ra te of 8.43 per cent.  See 67 Fed. Reg. at 36069.  Thus, when the 
Panel and then the Appellate Body made their respective findings that the DOC's use of zeroing was 
inconsistent with Article 2.4.2, Commerce understo od that these findings necessarily affected the "all 
others" rate.  When the United States implemented the DSB recommendations and rulings in Softwood Lumber V, the Department calculated both the individual company rates and the "all others" 
rate, without a separate claim ha ving been made under Article 9.4.
2
 
Questions to the Parties and Third Parties 
 
Q5. What do the parties consider is the role of  the Panel in a case like this one, where there 
is no substantive disagreement between the Parties as to the inconsistenc y of a measure with one 
or more cited provisions of a covered Agreement?  Can the Panel limit itself to sanctioning the 
[mutual understanding] [agreement] of the parties, or must the Panel, on its own, determine 
whether the measure at issue is inconsistent with the cited provisions? 
 
 Ecuador considers that the role of a Panel in  a case like this one, where there is no substantive 
disagreement between the Pa rties as to the inconsistency of a measure with one or more cited 
provisions of a covered Agreement, is nevertheless to make an objective assessment of the matter, as 
required by Article 11 of the DSU, including an objective assessment of the facts of the case and the applicability of and conformity with the relevant covered agreements.  The matter before this Panel is 
a narrow one – whether DOC's calculation of the weighted average to weighted average margins of 
dumping for the two separately investigated Ecua dorian exporters and for "all other" exporters 
breaches the first sentence of Article 2.4.2.  Ther efore, the Parties are not asking the Panel to 
"sanction" their Agreement, but rather, to cons ider that the Agreement facilitates the Panel's 
assessment of the facts of the case and the applicability and conformity of the measures with the 
covered agreements.  Nevertheless, it is correct to  say that they are seeking a decision that would 
allow the rest of the provisions of  the Agreement to be implemented. 
 
 
2 Ecuador's reference to and reliance on the US implementation of the recommendations and rulings in 
Softwood Lumber V  is without prejudice to Ecuador's positio n regarding the comparison used in that 
implementation proceeding.