Document: WT/DS382/R Page F-1 BCI deleted, as indicated [[XX]] ANNEX F EXECUTIVE SUMMARIES OF THE PARTIES' STATEMENTS AT THE SECOND SUBSTANTIVE MEETING OF THE PANEL Contents Page Annex F-1 Executive Summary of the Oral Opening Statement of Brazil F-2
Document codes: WT/DS382/R
Complainant: Brazil
Respondent: U.S.
Third parties: Argentina, EU, Japan, South Korea, Mexico, Taiwan, Thailand
Dispute stage: Mutually Agreed Solution
Agreements cited: Art. 2.1, 2.4.2, 2.4, 2  Anti-dumpingArt. VI:1, VI:2, II:1  GATT 1994Art. XVI:4  Agreement Establishing the World Trade OrganizationArt. 9.3  Anti-dumping

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ANNEX F

EXECUTIVE SUMMARIES OF THE PARTIES' STATEMENTS AT THE
SECOND SUBSTANTIVE MEETING OF THE PANEL

Contents Page
Annex F-1 Executive Summary of the Oral Opening Statement of Brazil F-2
Annex F-2 Executive Summary of the Oral Opening Statement of
the United States F-9

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ANNEX F-1

EXECUTIVE SUMMARY OF THE ORAL OPENING
STATEMENT OF BRAZIL

I. INTRODUCTION

1. Zeroing has now been condemned in eight dispute settlement cases. Unfortunately, the
United States continues to resist the rulings in these cases, and repeats yet again arguments that have
already been rejected by the Appellate Body. Br azil is therefore compelled to address again a large
number of interpretive points that should, by now, be accepted by all WTO Members.
1

II. DEFINITIONS OF THE CONCEPTS OF DUMPING AND MARGIN OF DUMPING

A. D UMPING IS DEFINED IN RELATION TO THE PRODUCT AS A WHOLE

2. Contrary to the United States' assertion, Brazil has explained in great detail 2 that the text of
Article 2 of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the General Agreement on
Tariffs and Trade 1994 ("GATT 1994") shows that "dumping" and "margin of dumping" are defined
in relation to the "product" as a whole, and not in relation to individual export transactions. Dumping,
therefore, involves an "exporter's pricing behavior as reflected in all of its transactions over a period
of time".3 Such dumping may cause injury to the domes tic industry – not on a transaction-specific
basis, but through the exporter's pricing behavior over time. Brazil has shown that its interpretation of
the terms "dumping" and "margin of dumping" is confirmed by the context in Articles 2, 3, 5.8, 6.10,
8.1, 9.1, 9.3, and 9.5 of the Anti-Dumping Agreement.

3. Given the interconnectedness of all aspect s of anti-dumping proceedings, with anti-dumping
duties justified only "as long as and to the extent necessary to counteract dumping which is causing
injury"4, the Appellate Body's conclusion that the cr ucial notion of "dumping" should be defined
uniformly throughout the Agreement – as Article 2.1 of the Anti-Dumping Agreement explicitly
provides – is inescapable.

4. The United States disregards the very lucid, text-based, reasoning of the Appellate Body, and
replaces it with an à la carte interpretation.5

B. T
HE UNITED STATES' ARGUMENTS ARE CONTRARY TO THE BASIC PRINCIPLES CONCERNING
THE DETERMINATION OF DUMPING

5. The US argument that "dumping" and "margi n of dumping" have different meanings in
different proceedings, or even within the same type of proceedings, is unavailing.

6. The different proceedings at issue all concern a determination of the margin – or magnitude –
of dumping, because anti-dumping duties involve a justified departure from Members' bound tariffs
only so long as and to the extent necessary to counteract "dumping". The different procedural steps at

1 See Appellate Body Report, US – Continued Zeroing, para. 312.
2 See Brazil's First Opening Statement, paras. 12 – 37; Brazil's FWS, paras. 49 – 61.
3 Appellate Body Report, US – Stainless Steel (Mexico), para. 98.
4 Anti-Dumping Agreement, Article 11.
5 See, e.g., Appellate Body Report, US – Zeroing (Japan) , paras. 108 – 115; and Appellate Body
Report, US – Stainless Steel (Mexico), paras. 82 – 99.

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which such magnitude is measured do not, therefore, justify a change in the definition of what is being
measured, i.e., dumping. At all stages, whether the existence and extent of the right to counter
dumping is being determined in an or iginal investigation; whether the extent of that right is being
determined in an administrative review; or whether the duration of that right is being determined in a
sunset review, a Member's right to take counter measures is determined by reference to the same
concept of "dumping". The existence, extent, and duration, of the right must be measured in the same
way. The Appellate Body has made this point in no uncertain terms.6

7. The United States also argues that the existe nce of different systems for the assessment of
duties justifies different interpretations of the concepts of "dumping" and "margin of dumping". At its
core, the US argument is wrong because it confuses duty collection with the determination of the
margin of dumping .
7 If the US argument were accepted, then a Member's administrative choices on
how to collect duties would become the decisive consider ation in how "dumping" is defined for each
Member.

8. The United States adds that the multilateral character of the Anti-Dumping Agreement
actually " undermines" the conclusion that "dumping" and "margin of dumping" have a single
definition for purposes of the Agreement, because having multiple, open-ended meanings of terms is
better suited to multilateral agreements, so as to " accommodate" the interpretation and practices of a
large number of parties.
8

9. The notion that the more parties there are to an agreement, the more the agreement's terms
should be interpreted to accommodate all Members' practices, is absurd. This approach to treaty
interpretation would unravel multilateral disciplines, replacing them with unilateralism based on the
diverse practices of up to 153 Members.

10. The United States argues that the treaty inte rpreter should give meaning to "constructive
ambiguity".
9 This confuses a negotiating tactic – i.e., employing language that might seem to lend
itself to a range of interpretations – with the task of treaty interpretation. Just because certain
negotiators might resort to so-called "constructiv e ambiguity" as a negotiating tactic does not mean
that the ordinary meaning of the ensuing agreem ent is incapable of being ascertained through the
customary rules of treaty interpretation.

11. Indeed, this is the very purpose of treaty inte rpretation; namely, whatever the subjective views
of this or that negotiator, the treaty interprete r must discern the common intent of the contracting
parties as expressed through the words used. 10 Moreover, as Article 3.2 of the DSU sets forth, the
purpose of dispute settlement is to resolve disput es regarding the existing covered agreements using
the customary rules of treaty interpretation. The United States would deny this purpose.

12. As already explained, the text, context, and object and purpose of the Agreement define
"dumping" uniformly "[f]or the purpose of [the] Agreement". The text of a treaty evidences the
common intent and consent of the parties
11, leaving no grounds for arguing that the parties' subjective

6 Appellate Body Report, US – Stainless Steel (Mexico), para. 96: "'dumping' and 'margin of dumping'
have the same meaning throughout the Anti-Dumping Agreement".
7 Appellate Body Report, US – Stainless Steel (Mexico) , para. 120; Appellate Body Report, US –
Zeroing (Japan), paras. 162 – 163; Appellate Body Report, US – Continued Zeroing, paras. 293 – 294.
8 US SWS, Section III:B and para. 28.
9 US Answers, para. 34.
10 See Appellate Body Report, EC – Computer Equipment, para. 84; and Appellate Body Report, EC –
Chicken Cuts, para. 239.
11 See, e.g., Isabelle van Damme, Treaty Interpretation by the WTO Appellate Body, Oxford University
Press, 2009, p. 36.

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intent was different from that ascertained through an analysis of this text, in light of its context, and of
the treaty's object and purpose.

C. T
HE UNITED STATES' CONTEXTUAL OBJECTIONS LACK MERIT

13. In support of its à la carte view of the Anti-Dumping Agreement, the United States reiterates
several contextual arguments that have already b een dismissed by the Appellate Body. Brazil is
therefore compelled to address these arguments again, together with some further objections that the
United States raises with regard to provisions that Brazil relies upon as context.

14. Ad Article VI:1 of the GATT 1994
: The United States argues that Ad Article VI:1 defines a
particular form of dumping in relation to indivi dual transactions, and therefore proves that dumping
can be transaction-specific. However, Ad Article VI:1 does not set out a definition of "dumping". It
is Article 2.1 of the Anti-Dumping Agreement that does so, "[f]or the purpose of [the] Agreement".

15. Article VII:3 of the GATT 1994 : As already noted, the United States refuses to acknowledge
that certain provisions on anti-dumping may provid e context for the interpretation of the terms
"dumping" and "margin of dumping". At the same ti me, it argues that the term "product" should have
the same meaning in Article VII:3, on customs valuation, and in the WTO provisions on anti-
dumping. Yet customs valuation is concerned with the establishment of the customs value of a single
transaction, with the aim of levying duties on that single transaction. Anti-dumping, on the other
hand, is concerned with establishing the marg in of dumping for a product as defined by the
investigating authority12, as a basis for levying duties on all subsequent entries of that product during
a particular period. Thus, the US attempts to assimilate the meaning of "product" from the customs
valuation context to the anti-dumping context are without basis.

16. Article 2.2 of the Anti-Dumping Agreement
: The United States also repeats its argument that
Article 2.2 supports a transaction-specific interpreta tion of "dumping". The US argument is without
merit. The Appellate Body has clarified that th e conditions in Article 2.2 for the construction of
normal value may be met on a model-specific basis, and model-specific intermediate comparisons
may be made under Article 2.4.2, provided that the results of all intermediate comparisons are
aggregated to determine "dumping" on a product-wide b asis to meet the definition in Article 2.1. It
does not exempt Members from the obligation to determine dumping for the product as a whole.
13

17. Mathematical equivalence under Article 2.4.2 of the Anti-Dumping Agreement
: The
United States argues that the mathematical implication of a "general prohibition on zeroing" is that the
second sentence of Article 2.4.2 "would be reduced to inutility", and therefore, there can be no general
prohibition on zeroing.14 But an exception such as that set out in the second sentence of Article 2.4.2,
which is, moreover, inapplicable to the facts at issu e in this dispute, cannot govern the interpretation
of the general rule regarding the determination of dumping. 15 Further, the US argument is premised
on the US interpretation of the third methodology set out in the second sentence, whereas "there is
considerable uncertainty regarding how precisely the third methodology should be applied".16

18. Article 5.8 of the Anti-Dumping Agreement: While the United Sates insists that the meaning
of "dumping" in Article 5.8 is unrelated to the meaning of "dumping" in other provisions of the Anti-

12 See, e.g., Appellate Body Report, US – Stainless Steel (Mexico), para. 115.
13 Appellate Body Report, US – Softwood Lumber V (21.5) , paras. 82 and 97. See Brazil's First
14 US SWS, paras. 74 – 79.
15 Brazil's First Opening Statement, paras. 52 – 58; Appellate Body Report, US – Softwood Lumber V
16 Appellate Body Report, US – Softwood Lumber V (21.5) , para. 98, cited in Brazil's Answers,
para. 58.

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Dumping Agreement , Brazil welcomes the United States' recognition that "in the context of an
Article 5 investigation" the term "margin of dumpi ng" "may refer to multiple transactions", by which
it seems to mean "product as a whole".17

19. Article 6.10 of the Anti-Dumping Agreement
: The United States' reliance on the Spanish
language version of the text of Article 6.10 in su pport of its contention that Article 6.10 leaves open
the possibility of establishing dumping in rela tion to individual transactions is based on a
mistranslation of this lang uage version ("a margin" in lieu of "the margin"). 18 Brazil's interpretation
gives meaning to the English, French and Spanish versions of Article 6.10.19

20. The Use of the Singular: According to the United States, Brazil overstates the significance of
the term "margin of dumping" in the singular in Articles 6.10, 8.1, 9.1 and 9.3 of the Anti-Dumping
Agreement. However, Brazil's interpretation is based on the text and context of the provisions relating
to "dumping" and "margin of dumping", and on the obj ect and purpose of the treaties in which these
provisions are set out.20 Brazil relies on the use of the singular as part of the textual choices made by
negotiators. The US also refers to US – OCTG from Mexico . But in that case, the language at issue
was the phrase " any anti-dumping duty", and the panel, upheld by Appellate Body, relied on the fact
that "any" was different from "an", in that the former has both singular and plural meanings.21

21. Prospective Normal Value ("PNV") Systems
: The United States repeats that "margin of
dumping" must have a transaction-specific meaning because, in PNV systems, a margin of dumping is
established for each import entry of the goods subject to measures. As explained by the Appellate
Body, this argument is unfounded, because the United States is confusing the method for duty
collection with the determination of the margin of dumping.
22 The United States argues that Brazil's
interpretation transforms PNV systems into retrosp ective systems. This is not correct. Under PNV
systems, duties on importation are still collected on the basis of a PNV. However, to ensure that the
amount of duty collected is not excessive, the Anti-Dumping Agreement provides for a refund
mechanism based on the product as a whole. The Un ited States also argues that Brazil's view would
discourage importers from requesting refund review s under Article 9.3.2, because they could, as a
result, "find out that [their] dumping liability increased". 23 This too is wrong. In a prospective duty
assessment, based on the text, the outcome of a refund review is: (i) a refund; or (ii) no action. Even
if the authority establishes that "the actual marg in of dumping" was higher than that established
prospectively, it may not, as a result, retrospectiv ely increase the anti-dumping duty liability, because
the treaty refers to a "refund" procedure. Fina lly, the United States relies on the practice of one
Member operating a PNV system, arguing that it gives preference to transaction-specific refunds.
Yet, the practice of one – or even some – Member s does not establish the proper interpretation of a
treaty counting 153 parties.24

III. ARTICLE 2.4 OF THE ANTI-DUMPING AGREEMENT IMPOSES AN OBLIGATION
TO CONDUCT A FAIR COMPARISON, AND IS NOT LIMITED TO ISSUES OF
PRICE COMPARABILITY

22. The United States argues that "Article 2.4 a ddresses only the required adjustments that must
be made to export price and normal value in orde r to account for 'differences which affect price

17 US SWS, para. 34.
18 US SWS, para. 41.
19 See Appellate Body Report, US – Stainless Steel (Mexico), footnote 200.
20 Brazil's FWS, paras. 49 – 69; and Brazil's First Opening Statement, paras. 6 – 34.
21 Panel Report, US – OCTG from Mexico, para. 7.149; and Appellate Body Report, US – OCTG from
Mexico, paras. 146 – 147.
22 Brazil's First Opening Statement, paras. 47 – 49; and Brazil's SWS, para. 5.
23 US SWS, para. 73.
24 See, e.g., Appellate Body Report, EC – Chicken Cuts, paras. 258 ff.

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comparability'".25 This arguments overlooks the text of Ar ticle 2.4, as well as the case law setting out
the proper interpretation of this provision.

23. Article 2.4 consists of a series of distinct sen tences, the first of which states succinctly: "A
fair comparison shall be made between the export price and the normal value". Thus, the panel in
Egypt – Steel Rebar, for example, held that the "fair compar ison" requirement in Article 2.4 generally
concerns "the nature of the comparison of export price and normal value"
26, with the first sentence
explicitly focused on the "the fairness of the comparison". Only the third, fourth and fifth sentences
of Article 2.4 address issues relating to "price comparability".27

24. The Appellate Body conf irmed this understanding in US – Zeroing (EC) . It saw "nothing
incorrect" in the reasoning of the panel in that case. The Appellate Body "also agree[d] with the Panel
that the legal rule set out in the first sentence of Article 2.4 is expressed in terms of a general and
abstract standard", noting that "[o]ne implication of th is is that this requirement is also applicable to
proceedings governed by Article 9.3". 28 Contrary to the US arguments, the Appellate Body has
repeatedly held that the use of zeroing in admi nistrative reviews is inconsistent with the fair
comparison requirement of Article 2.4.29

25. The negotiating history of the Anti-Dumping Agreement confirms that Article 2.4 imposes an
independent obligation to conduct a fair comparison between export price and normal value. This
conclusion is compelled by the fact that the drafters of the Anti-Dumping Agreement explicitly
modified the text of this provision – as compared to that of the prior Anti-Dumping Codes
30 – to
separate the "fair comparison" requirement in the first sentence of Article 2.4 into a stand-alone
obligation.

IV. THE USE OF ZEROING IS INCONSISTENT WITH ARTICLES 2.4 AND 9.3 OF
THE ANTI-DUMPING AGREEMENT , AND ARTICLE VI:2 OF THE GATT 1994,
REGARDLESS OF ITS IMPACT

26. Brazil has demonstrated that the USDOC used zeroing in the First and Second Administrative
Reviews, and that it continues to use zeroing under the Orange Juice Order.
31 The United States has
not contested that it used or continues to use zeroi ng in these instances; rather, it has argued that the
use of zeroing had no impact on one of the exporters in the First Administrative Review ( i.e., Cutrale)
and on one of the exporters in the Second Administrative Review ( i.e., Fischer). In all other
situations, it has no defence. But even in the two limited situations it identifies, the use of zeroing is
inconsistent with Articles 2.4 and 9.3, and Article VI:2 of the GATT 1994, regardless of its impact.

A. A RTICLE 9.3 OF THE ANTI-DUMPING AGREEMENT AND ARTICLE VI:2 OF THE GATT 1994

27. Article 9.3, which parallels Article VI:2, sets forth two requirements: (i) that a margin of
dumping be established in accordance with Article 2 of the Anti-Dumping Agreement; and (ii) that
the amount of the anti-dumping duty not exceed the margin so established.

25 US SWS, para. 4 and Section II.A.
26 Panel Report, Egypt – Steel Rebar , paras. 7.333 – 7.335 (emphasis added). See also Panel Report,
Argentina – Poultry, para. 7.265; and Panel Report, EC – Tube or Pipe Fittings, para. 7.140.
27 Panel Report, Egypt – Steel Rebar, para. 7.333 (original emphases).
28 Appellate Body Report, US – Zeroing (EC), para. 146.
29 Appellate Body Report, US – Softwood Lumber V (21.5) , para. 138; Appellate Body Report, US –
Corrosion-Resistant Steel Sunset Review , para. 135; and Appellate Body Report, US – Zeroing (Japan) ,
paras. 190(c) and 190(e).
30 Article 2(f) of the Kennedy Round Anti-Dumpi ng Code and Article 2.6 of the Tokyo Round Anti-
Dumping Code.
31 See Brazil's FWS, paras. 62 – 97, 98 – 104, and 114 – 117; and Brazil's First Opening Statement,
paras. 66 – 69 and 74 – 75.

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28. With respect to the first requirement, the oblig ation to comply with Article 2 in determining
margins of dumping is independent of any other aspect of the anti-dumping proceeding or of the
outcome of that proceeding in terms of duty collec tion. A failure to comply with Article 2 in
determining the margin vitiates a determination made under Article 9.3, irrespective of the amount of
duties that is ultimately collected.32

29. In US – Zeroing (Japan) (21.5) , the United States argued that Japan had not proven the
impact of zeroing in the challenged administrative reviews, and that therefore Japan's challenge had to
fail. The panel rejected the U.S. argument. 33 The United States did not appeal this aspect of the
panel's findings, and the Appellate Body upheld the panel's finding that the application of zeroing in
these reviews was inconsistent with Article 9.3 of the Anti-Dumping Agreement , as well as
Article 2.4, and Article VI:2 of the GATT 1994.34

30. Further, in US – Continued Zeroing , the United States argued that the EU's "continued use"
claim failed because there was no evidence of the impact of zeroing in any specific determinations. In
particular, the United States argued that there was no evidence that there would be negative
comparison results that would be zeroed in each and every determination. The Appellate Body
rejected this argument, finding that the continued use of zeroing under a specific anti-dumping order
is inconsistent with, among others, Article 9.3 of the Anti-Dumping Agreement irrespective of the
outcome of the calculation.
35

B. A RTICLE 2.4 OF THE ANTI-DUMPING AGREEMENT

31. The United States' use of zeroing in the administrative reviews at issue is also inconsistent
with Article 2.4 of the Anti-Dumping Agreement, irrespective of its impact. As discussed earlier, the
"fair comparison" requirement in the firs t sentence of Article 2.4 concerns "the nature of the
comparison of export price and normal value"
36, and is focused on "the fairness of the comparison".37
Because the obligation concerns "the nature of the comparison" that is made by an anti-dumping
authority, it applies independently of the amount of anti-dumping duties that are collected by an
importing Member.

32. In terms of ordinary meaning, "[t]he term 'fair" [in Article 2.4] is generally understood to
connote impartiality, even-handedness, or lack of bias".
38 The Appellate Body has held that there "is
an inherent bias in a zeroing methodology". 39 It has also said that, as a " way of calculating" margins,
the zeroing methodology "cannot be described as impartial, even-handed, or unbiased".40 A panel and
the Appellate Body have, therefore, ruled that the maintenance and application of zeroing procedures
in administrative reviews is inconsistent with Article 2.4 of the Anti-Dumping Agreement.41

32 See, in particular, Panel Report, US – Zeroing (Japan) (21.5) , para. 7.162. See also Mexico's
Answers, paras. 21-23; the EU's Answers, para. 9; and Korea's Answers, para. 13.
33 Panel Report, US – Zeroing (Japan) (21.5), para. 7.162.
34 Appellate Body Report, US – Zeroing (Japan) (21.5), paras. 195 and 197.
35 Appellate Body Report, US – Continued Zeroing, para. 192.
36 Panel Report, Egypt – Steel Rebar , paras. 7.333 – 7.335 (emphasis added). See also Panel Report,
Argentina – Poultry, para. 7.265; and Panel Report, EC – Tube or Pipe Fittings, para. 7.140.
37 Panel Report, Egypt – Steel Rebar, para. 7.333 (original emphasis).
38 Appellate Body Report, US – Softwood Lumber V (21.5), para. 138.
39 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review, para. 135.
40 Appellate Body Report, US – Zeroing (Japan) , para. 146, quoting Appellate Body Report, US –
Softwood Lumber V (21.5), para. 142.
41 Panel Report, US – Zeroing (Japan)(21.5) , paras. 7.168 and 8.1(b); Appellate Body Report, US –
Zeroing (Japan)(21.5) , paras. 195, 197 and 213(c); and Appellate Body Report, US – Zeroing (Japan) ,
paras. 169, 176, 190(d) and 190(e).

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33. Thus, irrespective of impact, the use of zeroing in making determinations for all of the
companies in all of the measures at issue violates Article 2.4 of the Anti-Dumping Agreement because
it involves an unfair comparison.

V. THE CONTINUED USE OF ZEROING IS INCONSISTENT WITH ARTICLES 2.4
AND 9.3 OF THE ANTI-DUMPING AGREEMENT , AND ARTICLE VI:2 OF THE
GATT 1994

34. Brazil claims that the United States has violated Articles 2.4, 2.4.2 and 9.3 of the Anti-
Dumping Agreement, and Article VI:2 of the GATT 1994, also through the continued use of zeroing
under the Orange Juice Order.
42

35. The United States maintains that Brazil's "conti nued use" claim is not a measure that may be
subject to dispute settlement.
43 However, in US – Continued Zeroing , the Appellate Body found "no
reason to exclude ongoing conduct that consists of the use of the zeroing methodology from challenge
in WTO dispute settlement". 44 The US argument is also surp rising because the United States is
challenging a "continued use" measure in EC – Large Civil Aircraft, explicitly and extensively relying
on the Appellate Body's reasoning in US – Continued Zeroing , which it is nonetheless encouraging
this Panel to disregard.45

36. The United States also argues that Brazil has not made the evidentiary showings required for
an "as such" challenge. However, as Brazil has explained
46, a challenge to the "continued use" of
zeroing under the Orange Juice Order is narrower than a challenge to zeroing "as such" and, therefore,
not subject to the identical evidentiary requirements.

37. Brazil has established that there is a suffici ent "density of factual findings", that is not
"fragmented" over time, showing that zeroing has been used in successive proceedings under the same
order.
47 As Brazil has demonstrated, the USDOC used zer oing in the original investigation; in the
First and Second Administrative Reviews; and in the Third Administrative Review. Indeed, with
regard to the latter review, Brazil notes that while the United States stated before the Panel that it
could not foretell whether it would continue to use zeroing under the Orange Juice Order, it then used
zeroing shortly after the first meeting with the Panel, in the Third Administrative Review. 48 Thus, the
United States has used zeroing with perfect consistency in every proceeding under the Orange Juice
Order, including very recently.49

42 See Brazil's FWS, paras. 98 – 117; Brazil's First Opening Statement, paras. 80 – 96; and Brazil's
Answers, paras. 7 – 20.
43 See U.S. SWS, paras. 83 – 87.
44 Appellate Body Report, US – Continued Zeroing, para. 181.
45 US Other Appellant's Submission, EC – Large Civil Aircraft , 23 August 2010, paras. 53-58,
available at http://www.ustr.gov/trade-topics/enf orcement/dispute-settlement-proceedings/wto-dispute-
settlement/measures-affecting-t-0.
46 See Brazil's Answers, paras. 3 – 6.
47 See Brazil's SWS, paras. 29 – 30 and Appellate Body Report, US – Continued Zeroing , paras. 191
and 194.
48 See Brazil's SWS, paras. 31 – 45.
49 See Brazil's SWS, para. 42. It has also repeatedly a ffirmed its intent to persist in this conduct under
the Orange Juice Order, despite WTO rulings. See IDM in the First Administrative Review, pp. 5 – 6; IDM in
the Second Administrative Review, pp. 4 – 6; and IDM in the Third Administrative Review, pp. 4 – 6. Exhibits
BRA-28, BRA-43 and BRA-50. On IDMs, see Appellate Body Report, U.S. – Continued Zeroing, footnote 767.

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ANNEX F-2

EXECUTIVE SUMMARY OF THE ORAL OPENING
STATEMENT OF THE UNITED STATES

1. In our statement today, we would like to fo cus on rebutting arguments made by Brazil in its
second written submission and in response to the Panel' s questions. We hope th at our oral statement
will clarify our views as Brazil's opening statement did not present them accurately. We first will
highlight that interpreting the terms "dumping" and "margin of dumping" to have meaning in relation
to individual transactions is a permissible a nd perfectly coherent interpretation of the Agreement on
Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 ("Antidumping
Agreement"). Brazil's proposed interpretation, in cont rast, has no textual basis. In addition, Brazil's
interpretation is inconsistent w ith the very concept of a prospective normal value system, both as
provided for in the text and as such systems are act ually used. Indeed, as we show in the exhibits
submitted with this oral statement, and contrary to Brazil's representations, Brazil's own use of
prospective normal value is inconsistent with Br azil's insistence that the Antidumping Agreement
prohibits a transaction-specific definition of dumping.

2. We will then respond to four other lines of argume nt in this dispute: First, with respect to
mathematical equivalence, as we demonstrated empi rically in our response to the Panel's questions,
Brazil's proposed interpretation of the Antidumpi ng Agreement would render the second sentence of
Article 2.4.2 meaningless. Second, with respect to "fair comparison" under Article 2.4, Brazil's
interpretation invites a subjective examination that is not based on the text. Third, Brazil's arguments
regarding cash deposits are similarly not based on the text of the Antidumping Agreement, which
plainly allows Members to collect a cash deposit as security for payment of antidumping duties.
Finally, with respect to its assertion that the "use" of "zeroing" is inconsistent with the covered
agreements regardless of whether any duties were co llected or whether there even were any negative
comparison results to "zero", Brazil's interpretation is completely inconsistent with the text. Brazil
has failed to demonstrate any basis for finding an inconsistent "continued use" measure, even were
such a measure within the Panel's terms of reference.

I. A TRANSACTION-SPECIFIC INTERPRETATION OF "DUMPING" AND
"MARGIN OF DUMPING" IS PERMISSIBLE

3. The text and context of the covered agreemen ts, interpreted in accordance with the customary
rules of interpretation of public international law, make clear that the terms "dumping" and "margin of
dumping" may have meaning for individual transactions . Brazil's interpretation, in contrast, is not
consistent with either the text, or with how prospective normal value systems operate.

A. S
TANDARD OF REVIEW

4. As we have noted previously, in a dispute involving the Antidumping Agreement, the relevant
standard of review includes that set forth in Ar ticle 17.6(ii) with respect to various permissible
interpretations of a provision of the Agreement.

5. The question under Article 17.6(ii) is whether an investigating authority's action rests upon a
permissible interpretation of the Antidumping Agreem ent. Article 17.6(ii) confirms that there are
provisions of the Agreement that "admit[] of more th an one permissible interpretation". Where that is
the case, and where the investigating authority's action rests upon one such interpretation, a panel is to
find the action consistent with the Agreement.

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6. The United States has argued – and multiple previous panels have agreed – that an
interpretation of the Antidumping Agreement that do es not require offsets is permissible. This
interpretation is permissible because the text and context of the Antidumping Agreement, interpreted
in accordance with customary rules of interpretation of public international law, make clear that the
terms "dumping" and "margin of dumping" may have meaning for individual transactions. The mere
fact that this interpretation differs from anot her interpretation is not a basis for finding it
impermissible.

7. An interpretation of the provisions of the Antidumping Agreement and the GATT 1994 that
not only is consistent with the text, but also re flects how business is conducted, how trade in goods
occurs, and the point at which duties are imposed – that is, in individual transactions – is hardly, as
Brazil alleges, "incoherent". Multip le previous panels, applying the customary rules of interpretation
of international law, have confirmed that this interpretation is permissible.

8. The interpretation by previous panels does not allow a Member to define dumping any which
way it wants. As noted earlier, there is a defin ition of "dumping" in Article 2.1 of the Antidumping
Agreement. The question is whether this definiti on, "the difference between normal value and export
price", can apply at the level of individual transactions or must be applied to "the product as a whole",
a term that does not even appear in the text. Brazil argues that the term "dumping margin" must
relate, solely and exclusively, to the "product as a whole" regardless of the text and context of the
provision in which the term is used. The United States argues – and previous panels have confirmed –
that "dumping margin" may be understood as relating to the "product" that is the subject of an
individual transaction, in accordance with the ordinary meaning of the word "product", and permits
the text and context of the relevant provisions to in form the appropriate interpretation of the term as it
is used.

B. T
HERE IS NO TEXTUAL BASIS FOR THE OBLIGATION THAT BRAZIL PROPOSES

9. To require, as Brazil asserts, that a Memb er calculate a "margin of dumping" only for the
"product as a whole" does not reflect a "harmonious " interpretation of the Antidumping Agreement.
There is no textual basis for such an obligation in either the Antidumping Agreement or the GATT
1994. Not surprisingly, then, in arguing that an in vestigating authority must calculate a margin of
dumping for the "product as a whole" in assessment pr oceedings, Brazil does not rely on the text of
the GATT 1994 or the Antidumping Agreement.

10. To accept Brazil's argument would mean that the major users of dumping remedies, which
were not granting offsets at the time the WTO Agreemen ts were negotiated, agreed to an obligation to
provide offsets without including an express provisi on for such an obligation in the Antidumping
Agreement and the GATT 1994. In fact, there were negotiating proposals to restrict "zeroing", but
these proposals were not adopted. The major users of dumping remedies continued to use "zeroing"
after the agreements came into effect. If the negotiators of the Uruguay Round agreements intended
to make such a fundamental change in the meaning of "margin of dumping" as to require offsets, they
would have been clear about it. As we noted in our first written submission, in settling disputes
among Members, panels and the Appe llate Body cannot add to or diminish the rights and obligations
provided in the covered agreements.

11. A panel should not build an interpretation on terms that do not appear in the covered
agreements, such as "product as a whole". Prior panels have found that there is no textual basis in the
Antidumping Agreement for the obligation that Br azil proposes today. All these panels made an
objective assessment of the matter before them and came to the same conclusion that no offsets are
required in assessment proceedings. We respectfu lly request that this Panel reach the same
conclusion in this proceeding.

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C. B RAZIL'S ARGUMENTS ARE INCONSISTENT WITH BOTH THE CONCEPT OF , AND ITS OWN
APPLICATION OF, A PROSPECTIVE NORMAL VALUE SYSTEM

12. The United States has demonstrated that the obligation that Brazil seeks to impose on
Members is contrary to the very concept of a pros pective normal value system provided for in Article
9 of the Antidumping Agreement. Under such a system, the amount of liability for payment of
antidumping duties is determined at the time of importation on the basis of a comparison between the
price of the individual export transaction and the pr ospective normal value. For example, an importer
who imports a product the export price of which is equal to or higher than the prospective normal
value cannot incur liability for payments of antidumpi ng duties. The converse is also true. A liability
for a dumped sale would be determined by comparing the price of an individual export transaction
with a prospective normal value and the prices of other transactions have no relevance to this
determination. As the panel in US – Zeroing (Japan) found, "there is no text ual support in Article 9
for the proposition that export prices in other transactions are of any relevance".

13. The United States has provided evidence that demonstrates how prospective normal value
systems operate and that the refund mechanism under a prospective normal value system normally
addresses specific individual transactions. In c ontrast, there is no evidence to support the assertions
that a refund mechanism must recalculate a margin of dumping based on an aggregation of all
comparisons. Indeed, Brazil acknowledged that it h as never granted a single refund when collecting
antidumping duties on the basis of a prospective normal value.

14. Brazil nonetheless argues that an obligation to calculate the margin of dumping with respect
to "product as a whole" is consistent with prosp ective normal value systems. In its answers to the
Panel's Questions, Brazil asserts that when it has a pplied prospective normal value, "the collection of
the duty was limited to a dumping margin dete rmined in accordance with Article 2 of the Anti-
Dumping Agreement ". A review of the facts, however, raises questions about how this assessment
comports with Brazil's proposed interpretation of the Antidumping Agreement.

15. Brazil has used prospective normal value to collect antidumping duties on products from at
least seven countries: the United States, Mexico, Ro mania, Germany, France, Spain, and the United
Kingdom. In each case, Brazil calculated the antidumping duty as the absolute difference between the
normal value (or reference price) and the adjusted export price of a specific transaction. Brazil
assessed the antidumping duty in instances where the price of the imported product (an entry) was
lower than the established normal value. Howe ver, Brazil assessed no duty if the result of the
comparison was less than or equal to zero. And, Brazil has never provided a refund or an offset based
on non-dumped transactions.

16. The way that Brazil has collected duties on imports of polyvinylchloride from the United
States and Mexico, for example, does not appear consistent with the arguments that Brazil made in
this dispute. In that case, Braz il assessed duties on a transaction- specific basis without providing any
offsets for non-dumped transactions. In addition, Brazi l's Official Gazette specifically states that the
antidumping duty is calculated on a transaction-specific basis:

The anti-dumping duty is calculated on th e basis of the absolute difference
between the reference price and the price at which the transaction by which the
product is imported from the USA or Mexico is executed, as the case may be.
The anti-dumping duty will be charged only in a case in which the price of the
imported product is lower than the proposed reference price.

17. There is no reason why liability for paymen t of antidumping duties in the retrospective
system applied by the United States may not be si milarly assessed on the basis of transaction-specific
export prices. Accepting the interpretation that a Member must aggregate the results of "all"

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comparisons on an exporter-specific basis would requ ire that retrospective reviews be conducted even
in a prospective normal value system. This result is contrary to the very concept of a prospective
normal value system.

18. Despite its arguments that Members have an affirmative and fundamental obligation to
determine the antidumping liability for the "product as a whole" regardless of the context, Brazil has
never conducted a review under Article 9.3.2. Brazi l suggests this is because no importer has ever
asked for a review or a refund. As we explained previously, however, it is difficult to see why an
importer would request such a review when the im porter does not have information for the "product
as a whole" and as such does not know if the importer's liability could actually increase. And, when
importers do not request refunds, no offsets are provided.

19. It should be noted that Brazil's arguments in this respect are entirely inconsistent with its
arguments regarding cash deposits. Under Brazil's argument, the supposed obligation to calculate a
margin for the "product as a whole" in a prospectiv e normal value system is apparently only triggered
when someone requests a refund. In the meantime, duties are collected on a transaction-specific basis
without providing offsets for non-dumped transactions. Of course, in a retrospective system such as
that operated by the United States, cash deposits are expressly not a final assessment of duties. Cash
deposits are only a security pending the final assessment of duties, which occurs later in a review
initiated upon a request. Yet according to Brazil, cash deposits that similarly do not reflect offsets for
non-dumped transactions are themselves WTO-inconsistent.

20. Before moving on, we would like to make one final but important point on the topic of
prospective normal value systems: It is implausibl e to think that the negotiators of the Antidumping
Agreement would provide explicitly for a prospec tive normal value system and at the same time,
without making any textual provision whatsoever, re quire that such systems conduct retrospective
assessment proceedings that aggregate all the tran sactions occurring over some unspecified period of
time. Articles 9.3, 9.3.1, and 9.3. 2 are silent as to the period of review for any such proceeding.
These articles include no requirements with respect to whether an assessment proceeding must cover a
time period of a certain length or even that assessment proceeding coverage be time-based at all.

21. In its responses to the Panel's questions, Brazil suggested that the period of review for refund
proceedings is specified in footnote 4 to Article 2.2.1. Article 2.2.1 specifies certain conditions under
which a Member may choose to disregard sales at prices below the per unit cost of production in the
domestic market of the home country or a third country if "such sales are made within an extended
period of time in substantial quantities and at pric es which do not provide for the recovery of all
costs". Footnote 4 specifies that "extended period of time" is "normally one year but shall in no case
be less than six months". Contrary to Brazil's suggestion, footnote 4 specifies what constitutes an
"extended period of time ". It does not specify the length of a "period of review" or "refund
proceeding". Moreover, Article 2.2.1 and footnote 4 only apply in specific circumstances, when a
Member decides to disregard certain below-cost sales. They do not apply in any other context.

22. If the drafters of the Antidumping Agreement had intended to adopt an obligation to provide
an "offset" for non-dumped transactions, one would ha ve expected the drafters also to agree on an
obligation for assessment proceedings to cover so me established time period over which transactions
must be aggregated. Otherwise a Member's obligations might have differed in a significant,
substantive fashion depending solely upon whether it elects to cover more or fewer entries, or more or
less time, in conducting its assessment proceedings. Thus, Brazil's assertion that the Antidumping
Agreement imposes, with no textual basis, an oblig ation to grant offsets for non-dumped transactions
implies that the drafters neglected to provide fo r an essential element of the obligation, namely, the
time period over which such an offset would be granted. Such an interpretation should not be adopted
by the Panel.

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II. BRAZIL'S INTERPRETATION RENDERS THE SECOND SENTENCE OF
ARTICLE 2.4.2 OF THE ANTIDUMPING AGREEMENT A NULLITY

23. The United States would recall that it has de monstrated that Brazil's interpretation of the
Antidumping Agreement does not fit with the text of Article 2.4.2 of the Antidumping Agreement.
This is because the exceptional methodology provide d for in the second sentence of Article 2.4.2
mathematically must yield the same result as an average-to-average comparison as provided for in the
first sentence of Article 2.4.2 if, in both cases, non-dumped comparisons are required to offset
dumped comparisons. Accordingly, Brazil's interpre tation would be disfavored under a key tenet of
customary rules of treaty interpretation, namely, as explained by the Appellate Body in US –
Gasoline, that an "interpretation must give meaning and effect to all the terms of the treaty".

24. The United States demonstrated the mathematic al equivalency empirically in its response to
the Panel's questions. Brazil's only response to th e mathematical equivalenc y argument is to cite
certain Appellate Body reports. These reports are not persuasive because their reasoning is not based
upon the text of the Antidumping Agreement and does not adequately resolve the problem of
mathematical equivalency. Panels have specifically addressed all of the situations under which it was
argued that there would not be mathematical equi valence and found these situations did not represent
methodologies consistent with the Antidumping Agreem ent. The United States has demonstrated that
if all export transactions are taken into account, and " zeroing" is prohibited, average-to-average and
average-to-transaction comparisons produce the same result.

III. BRAZIL'S BROAD INTERPRETATION OF ARTICLE 2.4 OF THE ANTIDUMPING
AGREEMENT SHOULD BE REJECTED

25. As the United States has explained, Brazil's arguments under Article 2.4 of the Antidumping
Agreement – like its other interpretations of the Antidumping Agreement – require reading into the
text of the Agreement words that are not there an d were never agreed. There is no obligation in
Article 2.4 to offset any negative differences between normal value and export price. The
United States cannot be found to have violated an obligation that does not exist. Moreover, if
Article 2.4 required offsets, there would be no need for such a requirement in Article 2.4.2 (which was
the basis for the Appellate Body's finding in US – Softwood Lumber Dumping).

26. Brazil's proposed interpretation that Article 2.4 applies to the results of comparisons between
export price and normal value is erroneous . As the Appellate Body stated in US – Hot-Rolled Steel ,
"an examination of whether USDOC acted consistently with Article 2.4 of the Anti-Dumping
Agreement must focus on ... whether there were 'diffe rences', relevant under Article 2.4, which
affected the comparability of export price and normal value". Contrary to Brazil's assertions, because
the "fair comparison" obligation in Article 2.4 refe rs to the required price adjustments, it does not
create an obligation with respect to how the results of those comparisons are treated. Assessment of
antidumping duties in the amount by which the normal value exceeded the export price on a
transaction-specific basis does reflect a "fair comp arison" made for each export transaction. The
phrase "fair comparison" in Article 2.4 simply has no thing to do with the a ggregation of comparison
results, and Brazil has not explained how an off set to the dumping found on one export transaction as
a result of a distinct export transaction having been sold at above normal value would be considered
an adjustment or other comparison criterion that falls under Article 2.4.

27. Instead, Brazil would have the Panel use Article 2.4 to examine any and all antidumping
calculations to determine whether they are "impartial, even-handed, or unbiased". However, such an
open-ended approach would result in disputes that ar e nearly impossible to r esolve in any principled,
text-based way. The Panel should reject an e xpansive interpretation of a "fair comparison"
requirement that requires a subjective evaluation of what is "fair" or "unfair".

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IV. CASH DEPOSITS ARE A SECURITY, NOT DUTIES

28. The United States explained in its First Wr itten Submission and in its responses to Panel
questions that cash deposits are not duties covere d by Article 9 of the Antidumping Agreement, but
rather a security governed by separate provisions of the GATT 1994. The Ad Note to paragraphs 2
and 3 of GATT Article VI expressly provides that a Member may collect a "reasonable security (bond
or cash deposit) for the payment of anti-dumping duty .. . pending final determination of the facts". In
the retrospective system used by the United Stat es, cash deposits are held as a security pending
determination of the antidumping duty to ensure that funds are available to pay the duties. None of
the cash deposit rates at issue in this dispute were applied as assessment rates.

29. In response to the US showing that cash de posits are a security, Brazil relies on the Appellate
Body report in the United States – Shrimp Bonding dispute. That report, however, is inapposite to the
issue in this dispute regarding cash deposits. In Shrimp Bonding, the Appellate Body analyzed the
WTO-consistency, including the "reasonableness", of an extra bonding requirement that applied
above cash deposits. The purpose of this extra requi rement was to secure potential additional liability
that might arise if the margin of dumping was determ ined to be greater than the cash deposit – that is,
to address defaults on that portion of the duties that exceed the amount of cash deposited as a security.
That is not an issue in this dispute, nor is it the standard for whether or not cash deposits are in fact a
security.

V. BRAZIL'S ARGUMENTS REGARDING THE "USE" OF ZEROING HAVE NO
BASIS IN THE TEXT

30. In the last meeting with the Panel, and in its second written submission, Brazil insists that the
"use" of "zeroing" violates various provisions of the Antidumping Agreement and the GATT 1994,
regardless of whether any duties were collected, and regardless of whether any transaction-specific
comparisons were in fact "zeroed". To be clear, we have a defense to all of Brazil's claims as there is
no basis in the text of the agreements for the obligations Brazil seeks to impose. However, in
response to Brazil's claims on this point we would like to explain further how these assertions with
respect to the "use" of "zeroing" are inconsistent with the text of the relevant provisions.

31. In this dispute, Brazil's allegations of WT O-inconsistency based on its "zeroing" theories
extend to certain instances in which the United Stat es in fact assessed no antidumping duties. As the
United States has explained, where no antidumping du ties have been assessed, there can be no breach
of Article 9.3 of the Antidumping Agreement or Article VI:2 of the GATT.

32. In its second written submission, Brazil asserts that Article 9.3 and Article VI:2 – both of
which expressly refer to the amount of the antidumping duty – can be violated "irrespective of the
amount of duties that is ultimately collected". The United States fails to see how, as Brazil argues, it
makes sense to find a violation of an obligation not to collect duties, when no duties are collected.
Article VI:2 allows a Member to "levy on any dumped product an anti-dumping duty not greater in
amount than the margin of dumping ...". Article 9.3 directs that "[t]he amount of the anti-dumping
duty shall not exceed the margin of dumping as establis hed under Article 2". Finding a violation of
these provisions where no antidumping duties are le vied and the antidumping duty is zero would
render meaningless the provisions' references to "le vy ... an anti-dumping duty" and "[t]he amount of
the anti-dumping duty".

33. Brazil's meaning of the term "use" is differe nt from what was at issue in prior panel and
Appellate Body reports. Brazil claims that "use" re fers to the line in the computer program. Prior
reports refer to the final duties assessed. Consequently, those earlier reports do not support Brazil.

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34. Brazil does not address the fact that these pr ovisions specifically address the amount of the
duty. Instead, Brazil's only support for its argument that there could be a violation even when no
duties are assessed is (i) a cite to the Appellate Body report in Continued Zeroing and (ii) an argument
that the chapeau of Article 9.3 refers to Article 2.

35. With regard to the Continued Zeroing report, it is not pertinent to the issue in this dispute. In
particular, it does not address the argument in this case that there can be no violation of Article 9.3 or
GATT Article VI:2 where a Member assesses no duties. That dispute involved the issue of whether
alleged "continued use" was outside of the terms of reference because it purported to capture future
measures. However, the argument in this case is not only about what might happen in the future. In
this dispute, Brazil's own evidence demonstrates that zeroing had no effect in certain of the
proceedings at issue.

36. Brazil's argument as to the chapeau is based solely upon the fact that the chapeau mentions
Article 2. However, Brazil fails to cite the actual text of the chapeau, which states that "the amount of
the anti-dumping duty shall not exceed the margin of dumping as established under Article 2". The
text is clear that the obligation is based upon "the amount of duty" not exceeding the margin of
dumping. Where the United States has applied an assessment rate of zero, "the amount of duty" is
zero, which cannot exceed the margin of dumping.

37. The United States fails to see how there can be a violation of an alleged obligation to provide
offsets for non-dumped transactions when there ar e no non-dumped transactions. As just noted,
unlike in the Continued Zeroing dispute, in this dispute we are not just presented with a request to find
an inconsistency with respect to measures that do not exist even though we do not know whether there
will be any non-dumped transactions. We are also pr esented with a request to base a finding of future
inconsistency on a proceeding in which the ev idence shows there actually were no non-dumped
transactions. Zeroing is not and cannot be "used" in such circumstances. It is mathematically
impossible. In such circumstances, the compar isons made, and the amount of duties collected, are
exactly the same as they would have been if there were no "zeroing" line in the computer program.
Brazil's own evidence indicates the United States cal culated the dumping margins in the orange juice
investigation on the basis of all comparable transactions.

VI. ASIDE FROM THE FACT THAT IT IS OUTSIDE THE TERMS OF REFERENCE,
BRAZIL'S CLAIMS WITH RESPECT TO THE "CONTINUED USE" MEASURE
FAIL

38. Even if Brazil's "continued use" claim were properly before this Panel, it must fail because
there is no evidence that zeroing affected any margin in the investigation, nor certain rates in the
assessment proceedings at issue. Brazil has relie d heavily upon the Appellate Body's report in
Continued Zeroing , and the United States has explained why th at reliance is misplaced. We have
demonstrated that the Appellate Body's analysis in Continued Zeroing does not apply here. In that
dispute, the Appellate Body found an inconsistenc y only in circumstances that included zeroing in the
initial less than fair value investigation, zeroi ng in four successive administrative reviews, and
reliance in a sunset review upon rates determined using the zeroing methodology.

39. In response to the US arguments, Brazil atte mpts to distinguish the circumstances in the
current dispute from the cases in which the Appe llate Body declined to find a violation in Continued
Zeroing by arguing that the evidence of zeroing was "fra gmented" in those cases. However, in this
dispute, Brazil's own evidence shows that there wa s no zeroing in the investigation, zeroing had no
effect on certain rates in the assessment proceedings, a nd there has been no sunset review. This is not
a case where, to quote the Appellate Body report in Continued Zeroing , "the zeroing methodology
was repeatedly used in a string of determinations made sequentially in periodic reviews and sunset
reviews over an extended period of time". Moreover, as explained earlier, there is no textual basis for

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finding a violation where no duties are collected, or where there were no non-dumped transactions.
Individual proceedings that are not inconsistent cannot be the basis of a finding of "ongoing"
inconsistency stretching indefinitely into the future.