WT/DS244/R
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ANNEX C
Second Written Submissions by the Parties
Contents Page
Annex C-1 Executive Summary of the Second Written Submission by Japan C-2
Annex C-2 Executive Summary of the Second Written Submission by the
United StatesC-12WT/DS244/R
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ANNEX C-1
EXECUTIVE SUMMARY OF THE
SECOND WRITTEN SUBMISSION OF JAPAN
I. INTRODUCTION
1. This submission responds to the First Written Submission of the Government of the
United States (the "USG") filed with the Panel on 7 October 2002, and the USG’s Oral Statementpresented at the Panel’s first meeting.
II. GENERAL PRACTICE
2. Article 18.4 of the AD Agreement and Article XVI:4 of the WTO Agreement explicitly
require that each WTO Member conform its statutes, regulations, and "administrative procedures" toits WTO obligations.  Therefore, the WTO Agreement and the AD Agreement contemplate general
practice claims regarding a Member’s WTO-inconsistent administrative procedures.
3. The USG argues that if an "administrative procedure" is discretionary it cannot be challenged.
The USG claims that the Sunset Policy Bulletin is a non-binding statement by the agency that carriesthe same weight as other agency determination precedent.  The USG, however, conveniently ignores
the origins of the Sunset Policy Bulletin.  The Sunset Policy Bulletin establishes rules for the conduct
of sunset reviews and was crafted precisely to narrow the scope of sunset reviews in accordance with
the Statement of Administrative Action("SAA").
4. The rationale of previous panels supports the argument that the Sunset Policy Bulletin  is
subject to this Panel’s review under Article 18.4 of the AD Agreement and Article XVI:4 of the WTO
Agreement.  The panel in US – Steel Plate from India  indicated that "pre-established rules" are
"administrative procedures" under Article 18.4 of the AD Agreement.  The Sunset Policy Bulletin was
published on 16 April 1998 in the Federal Register, more than two months before the initiation of the
first sunset review by the USG.  Further, not unl ike other USDOC rules establishing "administrative
procedures", the Sunset Policy Bulletin requested public comments.  Therefore, the Sunset PolicyBulletin  could only be amended like other "administrative procedures" through the notice and
comment requirements of US administrative law.  These characteristics distinguish the Sunset Policy
Bulletin from ordinary USDOC practice in which US DOC is able to deviate from its practice in an
individual proceeding by simply explaining its reasoning.  The Sunset Policy Bulletin represents a
pre-established codification of USDOC’s "general practice."
5. Further, the Sunset Policy Bulletin is a concrete independently operational instrument, and
therefore, as interpreted by the panel in US – Export Restraint, is able to give rise independently to a
violation of WTO obligations.  USDOC has rigidly applied the Sunset Policy Bulletin  to all prior
228 sunset reviews in which the domestic industry participated, and found that dumping was "likely"to continue in every single case.  This fact demonstrates the directives of the Sunset Policy Bulletin
are essentially mandatory provisions.
6. The panel in US – Countervailing Measures  found that the mere appearance of executive
discretion alone is insufficient to find a law WTO-consistent.  "[W]hat is important is whether thegovernment has effective discretion to interpret and apply its legislation in a WTO-consistent
manner."  USDOC’s continued adherence to the Sunset Policy Bulletin establishes a complete lack of
any "effective discretion" on the part of USDOC.WT/DS244/R
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7. This reasoning is further supported by the panel’s findings in US – Section 301 .  The panel in
US – Section 301  analyzed that administrative procedures may be WTO-inconsistent even where the
statutory provisions grant discretion to the authorities to act consistently with its WTO obligations.
The nature of the Sunset Policy Bulletin is id entical to procedures the panel analyzed in US –
Section 301 .
8. Finally, the Appellate Body in the US – CVD Sunset  case has implicitly stated that
"information as to the number of sunset reviews that have been conducted, the methodology
employed by USDOC in other reviews, and the overall results of such reviews" can establish a
"consistent practice" challengeable before the panel.  Japan has satisfied these requirements.
III. SUBSTANTIVE CLAIMS
A. AUTOMATIC SELF-INITIATION
9. Japan showed in its first submission that the US statute and regulations mandated automatic
initiation of sunset reviews without any evidence, and thus is inconsistent with Article 11.3.  The
USG, however, believes there is no such requirement in Article 11.3 because there is no explicit use
of the phrase "sufficient evidence" or a direct cross reference to Article 5.6.  This is simply wrong.The sufficient evidence requirements of Article 5.6 are incorporated within Article 11.3 through
Article 12.1 and 12.3.
10. The primary objective of Article 11.3 is that all anti-dumping duties terminate after five years.
Article 11.3 only allows continuation of an anti-d umping duty in the exceptional circumstance where
a sunset review is properly initiated a nd conducted.  The Appellate Body in the US – CVD Sunset  case
has confirmed this interpretation in the context of Article 21.3 of the SCM Agreement stating that
"{a}n automatic time-bound termination of countervailing duties that have been in place for five years
from the original investigation or a subsequent comprehensive review is at the heart of this provision.
Termination of a countervailing duty is the rule and its continuation is the exception."
11. Perhaps the most important explicit textual and contextual link is provided by Article 12.
Although Article 12.1 does not itself "create" substantive obligations, the language does reflect the
substantive obligations imposed by Article 5 to justify initiation by providing "sufficient evidence."
12. The USG offers no explanation for how the first clause of Article 12.1 could not apply to
sunset reviews – as set forth in Article 12.3 – without reflecting the sufficient evidence standard forinitiating such reviews.  Even the USG in its first submission in this case recognizes that the
provisions of Article 12 "shall apply mutatis mutandis  to the initiation and completion of reviews
pursuant to Article 11."
13. The USG, however, blurs the difference between "sufficient evidence" to begin the sunset
review and the factual basis needed to make the final determination.  Under the USG’s interpretation,
the authorities need no evidentiary showing at all to  trigger the sunset review proceeding.  "Sufficient
evidence" merely reflects the need for some threshold showing to justify the action.  The finding that
dumping is likely  to continue is for the final determination of a sunset review.  Articles 11.3 and 12,
however, require the authorities have some factual basis to initiate a sunset review.  Initiation is not anempty or automatic decision.
14. The USG tries to dismiss the explicit textual link of Article 5, claiming that the provision
"pursuant to Article 5" in Article 12.1 does not incorporate Article 5 into Article 12.3,
notwithstanding the mutatis mutandis  language.  This is wrong.  The mutatis mutandis  application of
one provision requires interpreters to apply all the obligations of one article to the other.  It makes no
sense not to apply the obligations of Article 5 to Article 11.3 in light of the operation of Article 12.3.WT/DS244/R
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15. The USG improperly focused its interpretation of Article 5.6 only in the context of Article 5
by asserting that the use of the term "investigation" in Article 5.6 indicates that the obligations of the
Article only apply to investigations.  The language in Article 12.1 and Article 12.3 indicates,
however, that Article 5.6 does apply to sunset reviews through the mutatis mutandis  language of
Article 12.3.  Japan is arguing that the mutatis mutandis  language is evidence of the existence of the
"sufficient evidence" standard within Article 11.3.
16. Footnote 1 further provides a textual link fr om Article 5.6 to Article 11.3, as argued below.
17. The USG tries to distinguish the imposition of duties in the original investigation from the
continuation of duties in a sunset review.  In both instances, however, the authority is decidingwhether a duty should exist.  The issue before the Panel is whether there is a need to establish a
threshold level of evidence before initiating at all.  Thus, the initiation decision, in the original
investigation and the sunset review is functionally equivalent.  The USG also ignores the fact that the
original investigation, which is now more than five years old, has little relevance to predicting the
future.
18. The Appellate Body’s decision in the U.S – CVD Sunset  case is not controlling here.  The
Appellate Body’s decision with respect to the US G’s automatic initiation of sunset reviews without
sufficient evidence, did not benefit from an analysis of the significance of the cross reference from
Article 5 to Article 11.3 in footnote 1 of the AD Agreement (the corollary to footnote 37 of theSCM Agreement).  Absent this analysis, the Appell ate Body mistakenly found that the drafter of the
SCM Agreement did not intend the evidentiary standard s for self-initiation of investigations to apply
to self-initiation of sunset reviews.
19. Footnote 1 of the Agreement defines the term "initiated" to mean the procedures a Member
employs pursuant to Article 5 to commence an action.  It also explicitly provides that this definition of
"initiated" applies to the entire AD Agreement.  Article 11.3 then provides that a sunset review is "a
review initiated."  Consequently, the use of the term "initiated" in Article 11.3 demonstrates that the
AD Agreement contemplates that a sunset review must be initiated in accordance with the procedural
requirements under Article 5, including the sufficient evidence requirement in Article 5.6.
B. P
ROPER PROSPECTIVE LIKELIHOOD DETERMINATION
20. USDOC’s regulations and the Sunset Policy  Bulletin prevent USDOC from making truly
prospective determinations.  The "likely" standard under Article 11.3 requires a "determination" based
on a prospective analysis of positive evidence.  The Appellate Body in US – CVD Sunset  supports this
conclusion.  Yet, USDOC focuses on retrospective evidence when making its sunset review
determinations.  Consequently, USDOC acts inc onsistently with the USG’s obligations under
Article 11.3.
1. Section 351.222(i)(1)(ii) of USDOC Regulations
21. Japan demonstrated that section 351.222(i)(1)(ii) of USDOC’s regulations is inconsistent on
its face with the USG’s obligations under Article 11.3.  Previous panels have determined that the term"likely" in Article 11.3 requires that an administering authority must find that dumping will probably
continue or recur upon revocation. 
 The "likely" standard requires a much greater degree of certainty
than a standard requiring that dumping be "not likel y" to occur in the future.  Notwithstanding these
previous panel decisions and the USG’s own accep tance of the panel decision, the USG continues to
maintain the "not likely" standard in USDOC’s  regulations with respect to sunset reviews.WT/DS244/R
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22. The USG tries to hide completely behind the wording of the statute.  The USG argued that
since the statute uses the word "likely", there is no issue.  The USG also claims that
section § 351.222(i)(1)(ii) is ministerial in nature.  These arguments are inconsistent with the USG’s
own statement in the Sunset Regulations "Procedures  for Conducting Five-year ("Sunset") Reviews",
the text of the regulations, and its own previous explanation.  The preamble and the text of theregulations demonstrate that USDOC will only revoke an anti-dumping duty order where it
determines that dumping is "not likely."  No other provisions of the Sunset Regulations provide any
other situations in which USDOC will revoke an anti-dumping duty order.  The USG explained in US
– Export Restraint , at para. 8.111 that the preamble to USDOC’s regulations evidences "an agency’s
contemporaneous understanding of its proposed rules", which "may be consulted to determine the
proper interpretation of an agency’s regulations."  The text of  the regulations incorporated this
intention.  USDOC confirmed this in Brass Sheet and Strip from the Netherlands , stating "the
Department is required to revoke the order if, based on the record of the proceeding, the Department
determines that dumping is not likely to recur."
23. This "not likely" standard is imbedded in the Sunset Policy Bulletin.  The Sunset Policy
Bulletin in section II.A.4, sets forth a single scenario in which USDOC will determine that dumping is"not likely", while section II.A.3 sets forth three other scenarios in which USDOC will determine that
dumping is "likely."  No other scenarios are provided for in the Sunset Policy Bulletin.  These
scenarios show that USDOC distinguishes the "not  likely" standard from the "likely" standard.
Consistent with the regulations, the "not likely" scenar io is the only scenario in which satisfaction of it
will result in revocation.
24. The fact that statutory section 751(c) of the Act uses the term "likely" does not insulate
USDOC’s regulation from WTO challenge.  The USG conveniently ignores its own history with
respect to Article 11.2 reviews and section 351.222(b) in connection with the panel’s determination in
US – DRAMs , finding that USDOC’s "not likely" regulations were WTO-inconsistent.  The USG
accepted the panel’s determination, and amended its regulations to reflect "likely" standard.
2. The Sunset Policy Bulletin
25. Article 11.3 calls for a careful, prospective analys is of the prospects of the likelihood of future
dumping.  Both the panel and the Appellate Body in the US – CVD Sunset  case confirmed that the
authorities are obligated to take an active role in  collecting evidence in sunset reviews.  The Sunset
Policy Bulletin, however, de facto  mandates that USDOC examine past dumping margins and import
volumes without conducting a prospective analysis.  The Bulletin takes a retrospective approach by
restricting USDOC to such historical data.
26. By mechanically examining only historical facts and not collecting or examining other
positive evidence, the provisions of the Sunset Policy Bulletin ignore the USG’s WTO obligations.  Adetermination based on "positive evidence" requires more than simply reviewing a respondent’s past
import volume and previously calculated dumping margins.  The three scenarios in section II.A.3 of
the Sunset Policy Bulletin, which are based only on import volumes and dumping margins, create the
"presumption" that dumping is likely to continue or recur, as USDOC admitted.  USDOC will not
even consider "positive evidence", or as the USG calls it "other factors", unless respondents submitsuch information to establish "good cause."  By shifting the burden to respondents to rebut the
presumption and then excessively restricting respondents’ ability to present "other factors" (or some
sort of "positive evidence"), the Sunset Policy Bulletin creates an irrebutable presumption that
dumping is likely to continue or recur.
27. The most revealing piece of evidence is the sheer number of times USDOC has found that
dumping is likely to continue.  In every single case among all 228 sunset reviews in which the
domestic industry actively participated, USDOC found dumping was "likely" to continue or recur.  InWT/DS244/R
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all of these cases USDOC followed the provisions of the Sunset Policy Bulletin.  This also means that
nearly every case fit one of the three "likely" factual scenarios.  This confirms that USDOC’s concrete
and de facto  binding requirements contained in the Sunset Policy Bulletin do not allow USDOC to
deviate from the presumption.
3. Application of the Sunset Policy Bulletin to this Case
28. As in the other 228 sunset reviews, USDOC ac ted inconsistently with its WTO obligations in
this sunset review because it strictly applied the Sunset Policy Bulletin, and the "not likely" standard
under section 351.222(i)(1)(ii).  USDOC based its determination on only past import volumes and
dumping margins without making any effort to cons ider other information.  USDOC stated "the fact
that NSC reduced its dumping margins during the same time that its import levels have remained
stable does not lead us to conclude that dumping is unlikely  to occur in the future."  The USG claimed
that, even if USDOC had considered other factors presented by NSC, "the factors do not provide
sufficient evidence that NSC is not likely  to dump in the future."  Such a statement does not mitigate
the USG’s WTO-inconsistent practice.  In fact , it shows that USDOC would ignore any changed
circumstance and adhere to the preconceived notion that where  dumping has existed at all for the past
five years dumping is likely to continue in the future.  This application of the Sunset Policy Bulletin ,
which is based only on historical import volumes and dumping margins, without considering any
other factors is inconsistent with Article 11.3.
4. Submission of all Information/Argument within 30 Days from Initiation
29. Japan argued that application of the 30-day requirement to submit all substantive
argumentation, in addition to information showing "good cause", impermissibly restricted the
respondent’s ability to properly defend its interests in this sunset review, and thus was inconsistent
with Articles 6.1, 6.2, and 6.6.  In response to Japan’s argument, the USG claimed that Japan had
"sufficient opportunity" to gather information and present its argument as well as any supporting
information including its "good cause" argument.  This argument ignores the facts of this case andfails to address Japan’s argument that the 30-day rule is unnecessarily restrictive.  Further, USDOC’s
conditional request for information without specifying what information is sufficient to show good
cause is inconsistent with Article 6.1.1 and the panel decision in Ceramic Tiles .
C. USDOC'
S USE OF IMPROPER DUMPING MARGINS
1. USDOC's Use of Pre-WTO Agreement Margin
30. Dumping margins established prior to the passage of the URAA were calculated in
accordance with methodologies, which are no longer consistent with the USG’s current obligations,
and therefore are not an appropriate basis to make de terminations with respect to sunset reviews.  The
USG has initiated all sunset reviews in or after 1998.  Therefore, all sunset reviews are "reviews of
existing measures" under Article 18.3.  The sunset review determination, thus, must be in accordance
with the current Agreement.  A dumping margin that was calculated pursuant to those oldmethodologies, therefore, may not be empl oyed in USDOC’s likelihood determination.
31. The USG argues that Article 11.3 does not require USDOC to quantify dumping margins.
We disagree.  Article 2, which is applicable throughout the AD Agreement, sets forth the
requirements for calculating dumping margins and defines how dumping must be determined.Article 2.1 provides that a product is considered dumped if the export price is lower than its normal
value.  The difference is the margin of dumping.  The existence of dumping could not be determined
unless the authorities calculate a dumping margin.  The authorities, therefore, could not find dumping
without quantifying the margin of dumping.WT/DS244/R
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32. The USG attempts to refute Article 18.3’s application to sunset reviews through the panel’s
findings in US – DRAMs .  The panel report specifically states that "the AD Agreement applies to
those parts of a pre-WTO measures that are include d in the scope of a post-WTO review."  A sunset
review determines, and therefore its scope is, the likelihood of "dumping" and "injury."  Thus, the
panel in US – DRAMs  supports Japan’s position that the basis for determining likelihood must be
WTO-consistent.
33. The USG assertion that Article 18.3 is simply a timing provision is baseless and wrong.
Article 18.3 dictates how and to what extent the obligations of the AD Agreement will be applicable
to existing anti-dumping duty orders.  Article 18.3.2, together with the chapeau of Article 18.3,
requires a Member to terminate the imposition of al l previously existing antidumping duties five years
after the effective date of the WTO Agreement, unless the Member conducts sunset reviews upon theexpiry of these measures.  As such, while this provision does have aspects of a timing provision to
transition from one regime to the next, it also carries substantive obligations.  Article 18.3 attempts to
avoid the situation of having all existing anti-dumping duties becoming WTO-inconsistent when the
WTO entered into effect.  Article 18.3, however, does not immunize those old anti-dumping duty
orders forever.
2. Zeroing and the Findings in EC – Bed Linens
34. Use of dumping margins with "zeroed-out" negative margins as the basis of sunset review
determinations is inconsistent with Article 2.4 and 11.3.  The practice of "zeroing" selectively
calculates margins only for those sales of products with a positive margin and rejects sales withnegative margins.  This methodology thus creates an artificially high margin.
35. The Appellate Body’s findings in EC – Bed Linens  clarified that authorities must make all
dumping determinations without "zeroing" negative dumping margins.  Article 2.4 sets forth how the
comparison should be made between the export price and normal value to establish the dumpingmargin.  Article 2, including Article 2.4, applies to all dumping determinations.  The dumping
margins in all proceedings, including sunset reviews,  thus must be established in accordance with the
fair comparison requirement under Article 2.4.
36. The Appellate Body in EC – Bed Linens  stated "from the wording {Article 2.1}, it is clear to
us that the Anti-Dumping Agreement concerns the dumping of a  product" ”  The report of the DSU
Article 21.5 recourse panel in EC – Bed Linens  confirmed that "the calculation of a dumping margin
pursuant to Article 2 constitute a determination of dumping."  The Appellate Body proceeded to
clarify that Article 2.1 informs the interpretation of Article 2.4 and the "fair comparison" and "price
comparability" requirements.  Essentially these requirements mean that the establishment of dumping
margins under Article 2.4 must be made by evaluating the product under consideration as a whole, not
just a portion of the product.  The practice of zeroing in establishing dumping margins, therefore, isinconsistent with Article 2.4 of the AD Agreement.
37. The Sunset Policy Bulletin, however, effectively mandates that USDOC apply  WTO-
inconsistent dumping margins calculated using the ze roing methodology in original investigations and
subsequent reviews.  As demonstrated in our first submission, USDOC has applied the zeroingmethodology to the calculation of dumping margins in original investigations and subsequent reviews.
The dumping margins used in sunset reviews by USDOC for its dumping determination and for the
magnitude of dumping are therefore skewed by zeroing and do not provide a "fair comparison"
between the prospective future export price and normal value.  The Sunset Policy Bulletin is therefore
inconsistent with Articles 11.3 and 2.4.WT/DS244/R
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38. The key point to EC – Bed Linens  is that the finding has little relevance with whether the "fair
comparison" is made on an average-to-average basis or an average-to-transaction basis.  Zeroing in
any type of comparisons is distortive and does not provide a fair comparison.
39. Importantly, if zeroing had not been applied in this case, NSC would have had a negative
dumping margin in its latest administrative review, thus affecting USDOC’s likelihood analysis.  As a
result, the USG’s determination of the likely magnitude of dumping in this sunset review based on
dumping margins that contained "zeroed-out" negative margins is inconsistent with Articles 2, 11.3,
and 18.3.
3. The De Minimis  Standard
40. The USG asserts that the 2.0 per cent de minimis  standard is not applicable to sunset reviews
because there is no direct textual link between Article 5.8 and Article 11.3.  The USG mistakenly
believes that Article 5.8 and Article 11.3 can be read in isolation.  The USG ignores the contextual
relevance, as well as the object and purpose of Articles 5.8 and 11.3.  Article 11.3 refers to both
"dumping" and "injury."  Because the de minimis  standard is inseparable from the concepts of
"dumping" and "injury", and Article 11.3 incorporates these concepts, the de minimis  standard is
incorporated within Article 11.3.
41. Further, the decision of the Appellate Body in US – CVD Sunset  does not control the decision
in this case because of the cross-reference by Article 5 to Article 11.3 through footnote 1, and the
differences in the treaty text and characteristics of de minimis  dumping and subsidization between the
SCM Agreement and the AD Agreement.  As the Appellate Body has so often noted, differences in
text must have some meaning.  The fact that the SCM Agreement has a limiting phrase but the AD
Agreement does not, and the fact that the limiting phrase was affirmatively removed from the AD
Agreement, strongly suggests that Article 5.8 of the AD Agreement has a different meaning.  Thescope of the de minimis  rule thus was "considered in the negotiations" regarding Article 5.8 and a
broad scope was affirmatively adopted.  That textual difference must be respected by this Panel.
42. First, the lack of the limiting phrase "for the purpose of this paragraph," which appears in
Article 11.9 of the SCM Agreement yet does not appear in the third sentence of Article 5.8,
distinguishes the AD Agreement from the SCM Agreem ent.  The negotiating history reveals that this
limiting phrase was once in several drafts, but was finally affirmatively removed from the final text of
the AD Agreement.
43. Second, unlike the SCM Agreement, the AD Agreement has only the single de minimis
standard in Article 5.8.  The 2  per cent standard in the AD Agreement applies to all respondents in all
cases.  The Appellate Body in US – CVD Sunset  gave weight to Articles 27.10 and 27.11 of the SCM
Agreement, and stated "this unreasonable implication casts further doubt on the ‘rationale’ attributedby the Panel to Article 11.9’s de minimis  standard."  The Appellate Body’s rationale does not apply to
the AD Agreement.
44. Third, the Appellate Body was not given the chance to review the significance of footnote 37
of the SCM Agreement (the corollary to the footnote 1 of the AD Agreement).  As discussed above,the definition of the term "initiated" in footnote 1 provides an explicit cross-reference to Article 5 and
to sunset reviews "initiated" under Article 11.3.  The Appellate Body in US – CVD Sunset , however,
without having a chance to review the significan ce of footnote 37, concluded "we attach significance
to the absence of any textual link between Article 21.3 reviews and the de minimis  standard set forth
in Article 11.9." (emphasis added).  In this case, there is such a textual link.
45. Finally, the definition of footnote 1 also influences the proper interpretation of the term
"cases" in Article 5.8 of the AD Agreement.  The cross-reference further shows that this term meansWT/DS244/R
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not only investigations but also sunset reviews.  The Appellate Body report in US – CVD Sunset   does
not address the role of this textual guidance.
D. USDOC' S REPORTING OF IMPROPER MARGINS TO THE USITC
46. As effectively mandated by the Sunset Policy Bulletin, USDOC never reports probable future
dumping margins to the USITC for its injury dete rmination in sunset reviews, including in this
specific case.  USDOC usually reports to the USITC dumping margins from the original investigation.
The Appellate Body report in US – CVD Sunset  pointed out, that the "{m}ere reliance by the
authorities on the injury determination made in th e original investigation will not be sufficient."
These WTO-inconsistent dumping margins taint the USITC’s injury determinations and are
inconsistent with Article 11.3.
47. The USG asserts that there is no requirement within Article 11.3 that limits how the margin
likely to prevail must be identified.  This argument  would require the USITC to determine injury in a
vacuum and is directly contrary to the obligations of Article 3 and 11.3.  Footnote 9 provides that
Article 3 applies to all injury determinations.  Article 3.4 specifically requires the authorities to
consider "the magnitude of margins of dumping" in injury determinations.  The authorities must findsome factual basis to link the magnitude of dumping in a particular case to the injury being suffered.
The magnitude of dumping, therefore, is directly relevant to the USITC’s analysis of the future
"effects" of dumping in a sunset review under Article 11.3.
E. USDOC'
S LIKELIHOOD DETERMINATION ON A ORDER -WIDE BASIS
48. Japan submitted that USDOC was under an obligation to make company-specific dumping
determinations in sunset reviews.  Article 6.10 explicitly directs the authorities to "determine an
individual margin of dumping for each known export er."  Article 11.4 then expressly incorporates this
obligation into Article 11.3.  The Sunset Policy Bulletin, however, expressly mandates that USDOC
"will make its determinations of likelihood on an or der-wide basis."  USDOC follows this instruction
rigidly and always makes an order-wide determ ination.  Therefore, USDOC’s general practice of
making its likelihood determination on an order-wide basis, and applying that practice in this case, is
inconsistent with the USG’s WTO obligations under Article 11.3.
49. The USG attempts to refute Japan’s argument by claiming that the text of Article 11.3
contemplates a review on only an order-wide basis and that the "substantive" requirements of
Article 6.10 do not apply to Article 11.  All of the pr ovisions of Article 6, however, establish different
types of procedural requirements to some degree.  The USG is effectively arguing that, even though
all of the provisions of Article 6 have various proc edural aspects, Article 6.10 should not be applied to
sunset reviews because its procedural aspects will substantively alter how the USG conducts its sunset
reviews.  Contrary to the USG’s argument, the mere fact that some of those procedural requirements,
when applied to other provisions, have substantive implications does not foreclose their proceduraleffect.
50. Previous panels and the Appellate Body support the conclusion that the dumping
determination must be made on a company-specific basis.  The Appellate Body report in US – CVD
Sunset  has confirmed that the provisions of Article 6 generally apply to sunset reviews.  The report of
the DSU Article 21.5 recourse panel in EC – Bed Linens further clarified that the dumping
determination must be made on a company-specific basis.
51. Further, Articles 9.2 and 11.1 provide contextual support for this conclusion.  Article 9.2
provides that anti-dumping duties are to be imposed on all sources  that are found to be dumped.
Article 11.1 of course requires that anti-dumping duties be imposed only to the "extent necessary to
counteract dumping."  Contrary to the USG’s a llegation, therefore, taking these two provisionsWT/DS244/R
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together, if there is no likelihood that an individual company will dump in the future, then
continuation of the anti-dumping duty order is no longer necessary to counteract the injurious effect of
that company’s dumping.
F. USITC' S DECISION TO CUMULATE IMPORTS WITHOUT ASSESSING NEGLIGIBILITY
52. Japan demonstrated in its first submission that the obligations in Articles 3.3 and 5.8 are
included in sunset reviews under Article 11.3.  The USG accuses Japan of a convoluted interpretation.
In fact, Japan’s interpretation is quite straightforward.  Since Article 3 is titled "determination of
injury", and since footnote 9 requires that "injury" is to be applied consistently throughout the
Agreement, the same concept must apply to sunset reviews.  The Appellate Body in US – CVD Sunset
has confirmed our position.  Thus, the USITC’s cumulative analysis without considering whether
Japanese imports were negligible under Articles 3.3 and 5.8 was inconsistent with the USG’sobligations under Articles 3.3, 5.8, and 11.3.
53. The USG claims that application of Article 3.3 is limited to original investigations.  This is
incorrect.  Article VI:1 of GATT 1994 states that imports from one country  may be condemned if
such imports cause material injury to the domestic industry of the importing country.  The basicconcept of  an injury determination is thus on an individual country basis.  Article 3.1 of the
AD Agreement confirms this.  The only exception to this rule is the narrowly defined circumstances
in Article 3.3.  If Article 3.3 applies to investigations only, then there is no permission under the
AD Agreement for the authorities to cumulate imports at all in sunset reviews.
54. The USG claimed that no quantification of import volumes is required for the injury
determination in sunset reviews.  This argument ignores the fact that Article 3.3 refers to "assessing
the effects of such imports."  Article 3.1 requires that the injury determination be based on the volume
of the dumped imports.  Article 3.4 also requires the authorities to consider "the magnitude of
dumping" and the "effect of the dumped import."  Article 3.5 then requires the authorities to considerwhether the dumped imports injure the domestic i ndustry "through the effects of dumping."  These
concepts are inseparable and must be evaluated in conjunction with one another.  Indeed, how could
the authorities cumulatively assess the effects of dumping from multiple countries without quantifying
the import volume from the respective countries?
55. The USITC has considerable experience collecting and assessing data related to future injury
through its threat of injury determination.  Therefore, there is no reason why the USITC could not alsocollect data to prospectively evaluate a country’s potential future negligibility.
G. A
RTICLE X:3( A) OF GATT 1994
56. The following GATT 1994 Article X:3(a) inconsistencies have occurred in the US
administration of its sunset review statute, regulations, and rules:  (1) USDOC’s automatic initiationof sunset reviews, which is both "unreasonable" and "partial", as it reduces the burden on domestic
parties at the expense of respondents;  (2) USDOC ’s refusal to accept and consider other evidence
outside of a respondent’s substantive response, which was both "unreasonable" and "partial", as
USDOC demands respondents provide more informat ion in less time; and (3) USDOC’s approach to
termination decisions under Article 11.2 and Article 11.3, which is "non-uniform", as both previouspanels and US courts recognize the same "likely" standard exists in both reviews.
57. The USG asserts that the examination of measures under Article X:3(a) of the GATT 1994 is
limited to the overall application of those measures and not to the specific results of those measures in
the current proceeding.  Japan, however, does not argue that the specific substantive results in thissunset review are inconsistent with the Article X:3(a).  Japan has demonstrated in its first submissionWT/DS244/R
Page C-11
that all three of the issues for which Japan has raised Article X:3(a) claims involves administration of
substantive sunset review rules.
IV. CONCLUSION
58. For these reasons, Japan respectfully requests that the Panel:  (1) find that specific USG
statutory provisions, regulations, and determinat ions are inconsistent with various enumerated
provisions of the AD Agreement, GATT 1994 and the WTO Agreement; (2) recommend that the
Dispute Settlement Body request that the USG amend its sunset statute, regulations, and the Sunset
Policy Bulletin  to conform with its obligations; and (3) find that compliance with its WTO obligations
requires that the USG terminate the anti-dumping  duty order on corrosion-resistant steel products
from Japan.WT/DS244/R
Page C-12
ANNEX C-2
EXECUTIVE SUMMARY OF THE
SECOND WRITTEN SUBMISSION OF THE UNITED STATES
I. INTRODUCTION
1. The United States will use this submission to highlight the major legal and factual errors
underlying Japan's claims.  In addition, the United States will emphasize the significance of theAppellate Body’s recent report in United States – Countervailing Duties on Certain Corrosion-
Resistant Carbon Steel Flat Products from Germany  (“Corrosion-Resistant Steel from Germany ”), in
which the Appellate Body rejected many of the same arguments Japan presents here.
2. At the outset, the United States reiterates that Japan has misconstrued the appropriate scope of
review under WTO law and practice.  Japan claims that review by this Panel “extends to
administrative procedures that ignore relevant WTO obligations,” including the Statement of
Administrative Action (“SAA”) accompanying the Uruguay Round Agreements Act and the Policies
Regarding the Conduct of Five-Year (“Sunset”) Reviews of Antidumping and Countervailing Duty
Orders; Policy Bulletin (“Sunset Policy Bulletin”).  Japan calls these its “general practice” claims.Japan’s arguments in this regard ignore the well-established principle that in order for a measure as
such to breach an obligation of the Marrakesh Ag reement Establishing the World Trade Organization
and/or the Agreement on Implementation of Articl e VI of the General Agreement on Tariffs and
Trade 1994 (“AD Agreement”), that measure must mandate WTO-inconsistent action or preclude
WTO-consistent action.  Japan has made no effort to demonstrate that the “general practices” itpurports to identify mandate WTO-inconsistent action or preclude WTO-consistent action.
Consequently, those claims cannot be sustained.
3. Most of the remainder of Japan’s claims fail because they rely on obligations not found in
Article 11.3 of the AD Agreement.  Japan asserts that the following obligations must be read into
Article 11.3 and applied in sunset reviews:  (1) the initiation standards and de minimis  requirement of
Article 5 of the AD Agreement, (2) restrictions on the permissible methodology for calculatingaggregate dumping margins found by the Appellate Body in European Communities – Anti-Dumping
Duties on Imports of Cotton-Type Bed Linen from India  (“EC – Bed Linen ”), and (3) the strict
quantitative negligibility assessment that is required in investigations for the cumulation of imports.
These assertions, however, find no support in the AD Agreement and run afoul of basic principles of
treaty interpretation as reflected in Article 31 of the Vienna Convention on the Law of Treaties(“Vienna Convention”), which “neither require nor condone the imputation into a treaty of words that
are not there[.]”  The Panel should reject Japan’s claims and refuse to impute into Article 11.3 of the
AD Agreement “words that are not there.”
4. Japan is also wrong with respect to its cl aims that (1) the Department of Commerce’s
(“Commerce”) regulations establish a “not likely”  standard for likelihood of dumping determinations
and (2) Commerce failed to apply the substantive and procedural requirements of the AD Agreement
in the instant sunset review.  In fact, the “likely” standard required under Article 11.3 of the AD
Agreement is fully implemented under US law.  Moreover, in determining that dumping was likely to
continue or recur in the event of revocation, Commerce followed the substantive and proceduralrequirements of the AD Agreement.  Commerce found, based on the results of two completed
assessment reviews,  that Japanese producers/exporters had continued to dump throughout the life of
the order and that import volumes were significantly lower than pre-order volumes.WT/DS244/R
Page C-13
A. SELF-INITIATION OF SUNSET REVIEWS IS NOT INCONSISTENT WITH ARTICLE 11.3 OF THE AD
AGREEMENT
5. Japan alleges that the provisions of US law providing for the automatic self-initiation ofsunset reviews by Commerce are inconsistent with the AD Agreement.  The Appellate Body,
however, recently affirmed a panel’s rejection of a similar claim by the EC that the provisions of USlaw providing for the automatic self-initiation of sunset reviews by Commerce are inconsistent with
Article 21.3 of the Agreement on Subsidies and Countervailing Measures (“SCM Agreement”).
Although that case, Corrosion-Resistant Steel from Germany , dealt with Article 21.3 and other
provisions of the SCM Agreement, the relevant provisions of the AD Agreement are essentially
identical to those of the SCM Agreement, and the Appellate Body’s reasoning is equally valid in this
proceeding.
6. Specifically, the Appellate Body found that, “when a provision refers, without qualification,
to an action that a Member may take, this serves as an indication that no limitation is intended to be
imposed on the manner or circumstances in which such action may be taken.”  The United States
observes that both Article 21.3 of the SCM Agreement and Article 11.3 of the AD Agreement refer,
without qualification, to the self-initiation of sunset reviews.
7. The Appellate Body also referred to the lack of any explicit cross-reference to evidentiary
rules relating to initiation, and found that the negotiators of the AD Agreement did not intend to make
such rules applicable to the self-initiation of reviews under Article 21.3 of the SCM Agreement.  The
same may be said of Article 11.3 of the AD Agreement, which is the parallel provision of Article 21.3of the SCM Agreement and which also contains no explicit cross-reference to evidentiary rules
relating to initiation.
8. In analyzing the context of Article 21.3 of the SCM Agreement – Articles 21.2 and 21.4,
which are paralleled in the AD Agreement by Articles 11.2 and 11.4 – the Appellate Body found noreason for applying any rules for initiation in the co ntext of sunset reviews.  The Appellate Body also
looked at Article 22 of the SCM Agreement, and f ound that none of its provisions establishes any
evidentiary standards applicable to the initiation of sunset reviews.  The United States notes that
Article 12 of the AD Agreement is perfectly analogous to Article 22 of the SCM Agreement, and
neither do any of its provisions establish any evidentiary standards applicable to the initiation of
sunset reviews.
9. Finally, the Appellate Body turned to Article 11 of the SCM Agreement and found no
indication of an intent to apply evidentiary requir ements for the initiation of investigations to the
ability of authorities to self-initiate sunset reviews.  The same conclusion applies to the analogous
provision in the AD Agreement, Article 5.
10. Japan argues that the authorities should not be able to self-initiate reviews unless they have
first satisfied the evidentiary requirements for the initiation of an investigation under Article 5, citing
Article 12.1, footnote 1, and what makes “sense.”  As pointed out in Corrosion-Resistant Steel from
Germany , however, there is no textual link between Article 11.3 and the initiation standards in
Article 5.  Moreover, as the Appellate Body found in Corrosion-Resistant Steel from Germany , there
is no other link, express or implied, to any standard  that might limit the ability of authorities to self-
initiate sunset reviews.
11. Japan posits that the AD Agreement indirectly  incorporated a link between the investigation
and sunset review provisions.  The Members, however, found it necessary to provide a direct and
explicit link in Article 11.4 between Article 6 and the conduct of sunset reviews.  Plainly, the
Members chose not to incorporate by reference into Article 11.3 the initiation requirements of
Article 5.  The Panel should decline Japan’s request to create an evidentiary obligation for self-WT/DS244/R
Page C-14
initiation in sunset reviews conducted pursuant to Article 11.3 that has no basis in the text of the AD
Agreement.
B. US L AW IS CONSISTENT WITH THE OBLIGATION IN ARTICLE 11.3 OF THE AD A GREEMENT TO
DETERMINE WHETHER DUMPING IS LIKELY TO CONTINUE OR RECUR IN THE EVENT OF
REVOCATION
12. The statutory language governing the obligation to determine likelihood of dumping in sunset
reviews is found in section 751(c) of the Tariff Act of 1930, as amended (the “Act”).  That language is
essentially identical to the language in Article 11.3 of the AD Agreement and is therefore consistent
with Article 11.3.  In addition, US sunset review re gulations, as such, provide for a determination of
“likelihood” of continuation or recurrence of dumping.
13. The Appellate Body in Corrosion-Resistant Steel from Germany  found that the EC did not
satisfy its burden of showing that US law mandates Commerce to act inconsistently with Article 21.3
of the SCM Agreement, or that such law restricts in any way Commerce’s discretion to make a
determination consistent with Article 21.3.  The Appellate Body, therefore, upheld the panel finding
that, “US law is not inconsistent with Article 21.3 of the SCM Agreement with respect to theobligation that the investigating authorities determine the likelihood of continuation or recurrence of
subsidisation in a sunset review.”  The Panel should likewise find that US law is consistent with
Article 11.3 of the AD Agreement.
14. Japan, citing Commerce’s regulations at 19 C.F.R. 351.222(i)(1)(ii), claims that US law in
regard to sunset reviews requires the application of a “not likely,” as opposed to a “likely,” standard.
While it is true that section 351.222(i)(1)(ii) provides for revocation “where the Secretary determines
that revocation or termination is not likely to lead to continuation or recurrence of ... dumping,” the
provision is purely procedural in nature and does not in any way alter the substantive requirements of
the statute and regulations.
15. The final sunset determination in this case applied the principle set forth in the Sunset Policy
Bulletin that Commerce will normally determine that revocation of an antidumping order is likely to
lead to continuation or recurrence of dumping where:
(a) dumping continued at any level above de minimis  after the issuance of the order;
(b) imports of the subject merchandise ceased after issuance of the order; or
(c) dumping was eliminated after the issuance of the order and import volumes for the
subject merchandise declined significantly.
16. If there is evidence that dumping has continued under the discipline of the order, it is
reasonable for Commerce normally  to conclude that dumping will continue without the discipline of
the order.  This conclusion is not a presumption that dumping is likely to continue or recur in everycase until proven otherwise.  Rather, it is Commerce’s reasonable determination, based on evidence of
behaviour after the order was put in place, that this condition is indicative of future behaviour in the
absence of an order.
17. Japan argues that Commerce makes a retrospective, rather than a prospective, likelihood
determination and that the “good cause” standard for consideration of “other factors” in the likelihood
analysis precludes a prospective analysis.  Neither of these statements is an accurate representation of
the facts.  Commerce considers the behaviour of producers/exporters and whether that behaviour is
likely to continue or recur.  In the instant case, Japanese producers/exporters have continued to dump
since the imposition of the antidumping order.  Japan does not dispute this fundamental fact.WT/DS244/R
Page C-15
Furthermore, there was no evidence to support an inference that Japanese producers/exporters would
stop dumping if the discipline of the order were removed.  No such evidence was offered by any
party, and none was apparent to Commerce.  Japan’s arguments as to the “good cause” standard
cannot obscure this fundamental deficiency in the evidence presented to Commerce by the Japanese
companies, nor can they obscure the relevance of the evidence relied upon by Commerce, especiallythe evidence of continued dumping over the life of the order.
18. During the course of the sunset review pro ceeding, Nippon Steel Corporation (“NSC”), one of
the Japanese producers/exporters, did provide Commerce with evidence regarding the reduced import
volumes.  This evidence was not, however, presented in NSC’s substantive response.  Rather, NSC
waited until it submitted its case brief to present the evidence and never explained a “good cause”
basis for consideration, thus violating both of the requirements of 19 C.F.R. 351.218(d)(3)(iv).  Japanalso suggests that there was some other evidence in Commerce ’s records that Commerce should have
considered in connection with the likelihood determination. The United States, and the Panel, should
not be left to guess as to what that evidence might be.
19. Moreover, Japan suggests that whether dumping is likely to continue or recur in the event of
revocation is necessarily dependent on the magnitude or level of dumping.  This is not, in fact, the
case.  Commerce’s approach to the likelihood of dumping determination is qualitative, not
quantitative.  A qualitative approach is entirely consistent with the requirements of Article 11.3.
C. US L
AW, AS SUCH AND AS APPLIED BY COMMERCE , IS CONSISTENT WITH THE ARTICLE 6
OBLIGATION TO PROVIDE INTERESTED PARTIES WITH AMPLE OPPORTUNITY TO PRESENT
EVIDENCE WHICH THEY CONSIDER RELEVANT
20. There is no dispute that the procedural and evidentiary provisions of Article 6 of the AD
Agreement apply to sunset reviews under Article 11.3.  Thus, each of the procedural and evidentiary
requirements of Article 6 is reflected in US sunset review requirements.
21. Japan maintains that Commerce violated Article 6 by imposing unfair procedural burdens on
NSC.  Japan challenges, in particular, Commerce’s rejection of a claim by NSC regarding “other
factors” that allegedly accounted for, inter alia , the reduction in import levels since the imposition of
the antidumping duty order.  Japan’s challenge is without merit.
22. First, Commerce’s promulgation of a 30-day deadline for the submission of substantive
responses is entirely consistent with the AD Agreement.  Second, rather than discussing “other
factors” in its substantive response and explaining why “good cause” existed for their consideration –
as is required under 19 C.F.R. 351.218(d)(3)(iv) – NSC waited until the filing of its case brief to bring
its evidence to Commerce’s attention and, even at that late date, failed to provide a “good cause” basis
for consideration of that evidence.  Third, even if NSC had been uncertain as to what constitutes“good cause,” the facts of this case are that it made no effort  to establish grounds for considering its
“other factors” submission.
D. C
ONSISTENT WITH THE AD A GREEMENT , COMMERCE REPORTS THE MAGNITUDE OF THE
DUMPING MARGIN LIKELY TO PREVAIL IN THE EVENT OF REVOCATION TO THE US
INTERNATIONAL TRADE COMMISSION (“USITC”) FOR USE IN ITS INJURY ANALYSIS
23. In accordance with US law, in making its sunset injury determination, the USITC “mayconsider the magnitude of the margin of dumping.”  In order for the USITC to have the option of
doing this, Commerce must report the margin(s) likely to prevail in the event of revocation.
24. In the instant case, Commerce found that, while dumping had continued throughout the life of
the order, import volumes had decreased.  This pattern indicated that changing prices in response toWT/DS244/R
Page C-16
the dumping order had likely harmed the exporters’ sales volumes.  Consequently, under US law,
there was no basis to report lower, more recently calculated margins to the USITC, and Commerce
therefore reported the margins from the original investigation.  This action was consistent with the
obligations of Article 11.3 of the AD Agreement.  Specifically, there is no provision of the Agreement
that requires or precludes the USITC from considering the magnitude of the margin of dumping likelyto prevail in the event of revocation, and there is no provision of the Agreement that limits how such a
margin might be determined.  Rather, under Article 11.3, the authorities must simply determine
whether “expiry of the duty would be likely to lead  to the continuation or recurrence of dumping and
injury.”  Article 11.3 plainly does not require the quantification of a dumping margin in sunset
reviews and does not include any specifications regarding the methodology or methodologies that
must be employed in such reviews.  Commerce reports the margin likely to prevail in the event of
revocation to the USITC purely as a matter of US domestic law.
25. Japan’s fallacious claim regarding the quantification of dumping margins forms the basis of
its claim regarding “zeroing.”  Japan’s reliance on EC Bed Linen  is unpersuasive for three reasons.
First, and most importantly, Japan ignores the fact that Article 11.3 of the AD Agreement does not
require administering authorities to calculate or  recalculate dumping margins in sunset reviews.
Second, Japan assumes incorrectly that the magnitude  of the dumping margins in the original
investigation and over the life of the antidumping order had an impact on Commerce’s analysis of the
likelihood of continuation or recurrence of dumping in this case.  Finally, EC Bed Linen  involved
(1) an investigation  subject to the AD Agreement, (2) average-to-average price comparisons under
Article 2.4.2 of the AD Agreement, and (3) consideration of the EC’s dumping calculationmethodology.  None  of those circumstances was present in the case at hand.
26. In sum, Japan’s claims regarding Commerce’s identification of the margin likely to prevail in
the event of revocation have no basis in the AD Agreement and should be rejected by the Panel.
E. T
HERE IS NO DE MINIMIS  STANDARD FOR SUNSET REVIEWS IN THE AD A GREEMENT
27. Japan claims that the de minimis  standard for antidumping investigations found in Article 5.8
of the AD Agreement is also applicable to sunset reviews under Article 11.3.  In Corrosion-Resistant
Steel from Germany , the Appellate Body rejected a similar claim by the EC that the de minimis
standard for countervailing duty investigations is also applicable to countervailing duty sunset
reviews.  In so doing, the Appellate Body reversed the panel on this point because a finding that “the
de minimis  standard of Article 11.9 is implied in sunset reviews under Article 21.3 would upset the
delicate balance of rights and obligations attained by the parties to the negotiations, as embodied in
the final text of Article 21.3.”
28. In examining the text of Article 21.3 of the SCM Agreement – which has a direct parallel in
the text of Article 11.3 of the AD Agreement – the Appellate Body recognized that “the fact that aparticular treaty provision is ‘silent’ on a specific issue ‘must have some meaning.’”  Thus, the lack of
any indication in the text of Article 21.3 that a de minimis  standard must be applied in sunset reviews
serves, at least at first blush, to indicate that no such requirement exists.  The Appellate Body also
examined the text of Article 11.9 of the SCM Agreement – which has its parallel in the text of
Article 5.8 of the AD Agreement, which establishes a de minimis  standard for antidumping
investigations –  and found no suggestion of applicability beyond the investigation stage.
29. The Appellate Body found further support for its conclusion in the lack of any textual link
between Articles 21.3 and 11.9 of the SCM Agreement; similarly, there is no textual link between
Articles 11.3 and 5.8 of the AD Agreement.  In analyzing the context of Article 21.3 of the SCM
Agreement – Articles 21.1 and 21.4, which are paralleled in the AD Agreement by Articles 11.1
and 11.4 – the Appellate Body also found no indication that the de minimis  standard applicable to
investigations is applicable to reviews.WT/DS244/R
Page C-17
30. The Appellate Body then went on to consider  the object and purpose of the SCM Agreement,
and concluded that, “[t]aken as a whole, the main object and purpose of the SCM Agreement is to
increase and improve GATT disciplines relating to the use of both subsidies and countervailing
measures.”  Given the similar structure and wording of the AD Agreement, it may be concluded thatan object and purpose of the AD Agreement is to increase and improve GATT disciplines related to
the use of antidumping duties.  Moreover, as the Appellate Body remarked with respect to the SCM
Agreement, it can similarly be said that, although the AD Agreement is aimed at striking a balance
between the right to impose antidumping duties and the obligations that Members must respect in
order to do so, this understanding of the purpose of the Agreement does not help in resolving the de
minimis  issue.
31. Turning to the panel’s analysis, the Appellate Body stated that it does “not believe that there
is a clear ‘rationale’ behind the 1 per cent de minimis  rule of Article 11.9 that must also apply in the
context of reviews carried out under Article 21.3.”   The Appellate Body also rejected the panel’s
finding that it would yield irrational results if the de minimis  standard applied to investigations but not
to sunset reviews, because of the fundamental contrast between the purpose of an originalinvestigation and the purpose of a sunset review.  Precisely the same analysis is applicable to the AD
Agreement.  There is no clear rationale behind the de minimis  rule of Article 5.8 that must also apply
in the context of sunset reviews; no irrational re sults follow from interpreting Article 11.3  according
to its plain meaning and not interpolating a de minimis standard; and the determination required under
Article 11.3 differs in certain essential respects from the nature of the determination to be made in anoriginal investigation.
32. The function of the de minimis  standard in Article 5.8 is to determine whether dumping
warrants the imposition of antidumping duties in the first instance, not to regulate likelihood
determinations in sunset reviews.  Japan’s claim that a de minimis  standard exists for sunset reviews
under Article 11.3 of the AD Agreement is without me rit.  Applying the customary rules of treaty
interpretation, the Panel should find that there is no de minimis  standard for sunset reviews in the AD
Agreement.
F. C
ONDUCT OF SUNSET REVIEWS ON AN ORDER -WIDE BASIS IS CONSISTENT WITH THE AD
AGREEMENT
33. As the United States explained in its first written submission, Commerce makes the likelihood
of dumping determination on an order-wide basis.  This approach is entirely consistent with the
requirements for sunset reviews under Article 11.3 of the AD Agreement.  The text of Article 11.3,
which contains the substantive requirements for antidumping sunset reviews, makes no reference to
determining the likelihood of dumping for individual companies.  Indeed, the text does not distinguish
between the specificity required for the likelihood of dumping determination and the specificityrequired for the likelihood of injury determination, and the latter determination is inherently  order-
wide.  Moreover, the provisions of Article 6 incorporated into Article 11 reviews by Article 11.4 are
not intended to have an impact on the substantive standards or criteria to be applied in sunset reviews.
Those provisions are only intended to have an impact on the manner  in which the substantive
standards or criteria are applied.  Consequently, there is nothing in Article 11 that even suggestsstandards or criteria for the likelihood of dumping determination focusing on individual companies’
likelihood of continuation or resumption of dumping.  Commerce’s order-wide approach is therefore
consistent with the AD Agreement.
34. Japan argues that one cannot make a clear distinction between the procedural/evidentiary
obligations and the substantive obligations of Article 6.   Japan’s argument, however, is at odds with
the Appellate Body’s findings in Corrosion-Resistant Steel from Germany .  In that case, the Appellate
Body made the distinction relied upon here by the United States, albeit in the context of interpretingWT/DS244/R
Page C-18
Article 12 of the SCM Agreement (which is parallel to Article 6 of the AD Agreement).  As the
Appellate Body found, “Article 12 sets out obligations, primarily  of an evidentiary and procedural
nature, that apply to the conduct of an investigation .”  Similarly, Article 11.4 of the AD Agreement is
only intended to incorporate for purposes of Article 11 reviews those provisions of Article 6 that are
of a procedural/evidentiary nature, not those of a substantive nature.  Japan’s request to haveArticle 6.10 incorporated by reference into Article 11.4 for substantive purposes  should therefore be
rejected by this Panel.
G. T
HE USITC’ S DECISION TO CUMULATE IMPORTS FROM THE VARIOUS COUNTRIES IN THIS
SUNSET REVIEW IS CONSISTENT WITH THE AD A GREEMENT
35. As the United States detailed in its first written submission, the AD Agreement does not
require application of a negligibility test in deciding whether to cumulate imports in sunset reviews.Specifically, the United States emphasized that in applying the basic rules of treaty interpretation
neither the text of the AD Agreement nor its object and purpose support Japan’s assertion that the AD
Agreement requires a negligibility assessment in Article 11.3 reviews.  Indeed, the Appellate Body in
Corrosion-Resistant Steel From Germany  rejected the panel’s conclusions that were premised on
arguments similar to those presented by Japan in this dispute.
36. In its oral statement at the first meeting with the Panel, Japan repeated its assertion that the
AD Agreement requires the same strict quantitative assessment in sunset reviews as it does in original
investigations.  In so doing, Japan relies on an interpretation of Articles 3, 5.8, and 11 of the AD
Agreement that cannot be reconciled with the text of these provisions.  In addition, Japan offersunpersuasive reasons as to why it believes the US position is incorrect.
37. Japan contends that sunset determinations under Article 11.3 are also subject to the provisions
of Article 3, in particular the conditions for cumulation under Article 3.3 and by cross-reference in
that paragraph, the negligibility requirements under Article 5.8.  Therefore, Japan asserts that theUSITC was required to address in its sunset review the threshold question of whether imports from
individual countries are negligible before reaching the issue of cumulation.
38. The Appellate Body in Corrosion-Resistant Steel from Germany  found that the de minimis
standard in Article 11.9 of the SCM Agreement, the counterpart provision to Article 5.8 of the AD
Agreement, did not apply to Article 21.3, the SCM provision pertaining to sunset reviews.  Applying
the same reasoning underlying the Appellate Body’s report compels the conclusion here that thenegligibility standards of Article 5.8 of the AD Agreement do not apply to Article 11.3 sunset
reviews.
39. Starting with the text, Article 11.3, on its face, does not contain a negligibility standard, nor is
there a reference to the negligibility concept anywhere in Article 11.  Furthermore, the plain terms ofArticle 11 neither implicitly nor explicitly incorporate the negligibility provisions of Article 3.3 or
Article 5.8.  Similarly, neither Article 3.3 nor Article 5.8 contains any cross-reference to Article 11.3.
40. Turning to context, the Appellate Body found no indication in Article 21.4 of the SCM
Agreement that the drafters intended the obligations  of Article 11 of the SCM Agreement to apply to
Article 21.3 countervailing duty sunset reviews.  Analogously, there is nothing in Article 11.4 of the
AD Agreement that would indicate that the drafters intended the obligations of Article 5 of the SCM
Agreement to apply to Article 11.3 antidumping duty sunset reviews.
41. Japan, in the alternative, contends that the negligibility standards of Article 5.8 are
incorporated into Article 11.3 reviews via footnote 9 to Article 3.  In Corrosion-Resistant Steel from
Germany , the Appellate Body found that the text of Article 15 of the SCM Agreement, including its
footnote 45, which is identical to footnote 9, does not support the conclusion that a de minimis  subsidyWT/DS244/R
Page C-19
is inherently non-injurious.  Likewise, Article 3 and its footnote 9 do not make any reference to any
specific level of dumped imports, and neither do any of the other provisions in the AD Agreement.
Moreover, the text of the AD Agreement as a whole provides no support for the view that a
negligibility assessment is an interpretation of injury or that negligible imports are equivalent to no
injury.
42. The Appellate Body also rejected the panel’s conclusion that an interpretation that the same
de minimis  rate could be considered injurious in the original investigation stage but not at the sunset
review stage would lead to irrational results, and observed that original investigations and sunset
reviews are distinct processes with different purposes, and that this may explain the absence of a
requirement to apply a specific de minimis  standard in a sunset review.
43. The negligibility standard in Article 5.8 simply is an agreed rule that if imports are found to
be negligible in an original investigation , authorities are obliged to terminate their investigation, with
the result that no antidumping duty be imposed on su ch imports.  Japan’s argument that the Article 5.8
negligibility requirements are applicable to Article 11.3 sunset reviews should be rejected by the
Panel.
44. Japan also contends that because the USITC does not make a quantitative negligibility
assessment in sunset reviews, the USITC does not engage in any quantitative analysis in sunset
reviews.  Japan’s contention is misplaced.
45. As an initial matter, in the context of this dispute, Japan has raised a challenge to the USITC’s
decision to cumulate Japanese imports with imports from other subject countries in the circumstances
of its corrosion-resistant sunset review.  Thus, any claims that Japan raises generally with respect to
the conduct of sunset reviews by the USITC, or spec ifically with respect to the corrosion-resistant
sunset review, that go beyond the decision to cumulate  are simply outside the Panel’s terms of
reference and should not be substantively decided by this Panel.
46. Moreover, as a factual matter, Japan is incorrect that the USITC does not engage in any
quantitative analysis in deciding whether to cumulatively assess the likely impact of dumped imports
in sunset reviews.  Under US law, the USITC “sha ll not cumulatively assess the volume and effects of
imports of the subject merchandise in a case in which it determines that such imports are likely to
have no discernible adverse impact on the domestic industry.”  As the USITC explained in itsdetermination, with respect to the “no discernible adverse impact” provision, it considers both “the
likely volume  of the subject imports and the likely impact of those imports on the domestic industry.”
In deciding that imports from Japan and other subject countries were likely to have “discernible
adverse impact” on the domestic industry, the USITC discussed the volume of subject imports and
cited to a table that identified the quantity  of subject imports for the original investigation period and
the years leading up to the sunset review.  Thus, Japan’s argument that the USITC does not consider
import volume in determining whether to cumulate imports from various countries is without merit.
H. T
HE US C ONDUCT AT ISSUE WAS CONSISTENT WITH THE OBLIGATION IN ARTICLE X:3( A) OF
GATT 1994 TO ADMINISTER ITS LAWS IN A UNIFORM , IMPARTIAL , AND REASONABLE
MANNER
47. The United States’ actions in this case were consistent with GATT Article X:3(a) because
Commerce and the USITC implemented by its terms and provisions  the US sunset review regime.
48. The United States notes that, to the extent that Japan is complaining about laws, regulations,
and rulings of general application, as contrasted with their administration, Japan’s complaint is not
properly founded in Article X:3(a).  As shown in our first written submission, Article X:3(a) is limitedWT/DS244/R
Page C-20
to the administration of certain laws, regulations, judicial decisions and administrative rulings of
general application, not to the laws, regulations, and administrative rulings themselves.
II. CONCLUSION
49. Based on the foregoing, the United States renews its request that the Panel reject Japan’s
claims in their entirety.
__________