UNITED STATES – LAWS, REGULATIONS AND METHODOLOGY FOR CALCULATING DUMPING MARGINS ("ZEROING")
Document: Recourse to Article 22.2 of the DSU by the European Union
Date: 2 February 2010
Document codes: WT/DS294/35
Complainant: EU
Respondent: U.S.
Third parties: Argentina, Brazil, China, Taiwan, Hong Kong, India, Japan, South Korea, Mexico, Norway, Thailand, Turkey
Dispute stage: Implementation & Compliance
Agreements cited: Art. 1, 2.1, 2.4, 5.8, 9.1, 9.3, 9.5, 11  Anti-dumpingArt. VI  GATT 1994Art. 18.4  Anti-dumpingArt. XVI:4  Agreement Establishing the World Trade OrganizationArt. 3  Anti-dumping

UNITED STATES – LAWS, REGULATIONS AND METHODOLOGY FOR
CALCULATING DUMPING MARGINS ("ZEROING")

Recourse to Article 22.2 of the DSU by the European Union

 The following communication, dated 29 January 2010, from the delegation of the European
Union to the Chairman of the Dispute Settlement Bo dy, is circulated pursuant to Article 22.2 of the
DSU.

 The European Union hereby requests to circulat e the attached request for authorization from
the Dispute Settlement Body to suspend the applica tion of concessions or othe r obligations under the
covered agreements pursuant to Article 22.2 of the Understanding on Rules and Procedures
Governing the Settlement of Disputes ("DSU"), in DS294 United States – Laws, Regulations and
Methodology for Calculating Dumping Margin – ("Zeroing").

World Trade Organisation
Panel Proceedings

United States – Laws, Regulations and Methodology for
Calculating Dumping Margin ("Zeroing")

Request by the European Union for authorisation from the DSB to suspend the application to
the United States of concessions or other obligations under the covered agreements, pursuant to
Article 22.2 of the Understanding on Rules and Procedures Governing the Settlement of Disputes
(DSU)

 On 9 May 2006, by DSB action,
1 the DSB adopted the Appellate Body Report 2 and the Panel
Report3 as modified by the Appellate Body Report in finding certain measures to be
inconsistent with the Anti-Dumping Agreement and the GATT 1994 . On 11 June 2009, by DSB
action,4 the DSB adopted the Appellate Body Report 5 and the Panel Report 6 as modified by the
Appellate Body Report in : Recourse to Article 21.5 of the DSU by the European Communities
finding that the United States failed to bring certa in measures found to be inconsistent with the Anti-
Dumping Agreement and the GATT 1994 into compliance; failed to comply with the recommendations
and rulings of the DSB within the reasonable period of time determined pursuant to Article 21.3 of the
DSU; and adopted or maintained certain measures inconsistent with the Anti-Dumping Agreement and
the GATT 1994. In this respect, the following Members have to-date invoked the dispute settlement
procedures as third parties: Argentina; Brazil; Ch ina; Hong Kong, China; India; Japan; Korea;
Mexico; Norway; Chinese Taipei; Thailand; and Turkey.

 On 23 January 2007, by DSB action,
7 the DSB adopted the Appellate Body Report 8 and the
Panel Report9 as modified by the Appellate Body Report in – United States – Measures Relating to
Zeroing and Sunset Reviews finding certain measures to be inconsistent with the Anti-Dumping
Agreement and the GATT 1994. On 31 August 2009, by DSB action, 10 the DSB adopted the Appellate
Body Report11 and the Panel Report 12 as modified by the Appellate Body Report in United States –
Measures Relating to Zeroing and Sunset Review s: Recourse to Article 21.5 of the DSU by Japan
finding that the United States failed to bring certa in measures found to be inconsistent with the Anti-
Dumping Agreement and the GATT 1994 into compliance; failed to comply with the recommendations
and rulings of the DSB within the reasonable period of time determined pursuant to Article 21.3 of the
DSU; and adopted or maintained certain measures inconsistent with the Anti-Dumping Agreement and

1 WT/DS294/17, 15 May 2006.
2 WT/DS294/AB/R and Corr. 1.
3 WT/DS294/R.
4 WT/DS294/33, 18 June 2009.
5 WT/DS294/AB/RW and Corr. 1.
6 WT/DS294/RW.
7 WT/DS322/15, 30 January 2007.
8 WT/DS322/AB/R.
9 WT/DS322/R.
10 WT/DS322/35, 7 September 2009.
11 WT/DS322/AB/RW.
12 WT/DS322/RW.

the GATT 1994. In this respect, the European Union i nvoked the dispute settlement procedures as a
third party.

 The European Union hereby requests authorisa tion from the DSB to suspend the application
to the United States of concessions or other oblig ations under the covered agreements, pursuant to
Article 22.2 of the DSU.

 In considering what concessions or other oblig ations to suspend, the European Union has
applied the principles and procedures in Article 22.3 of the DSU.

 Consistent with Articles 22.3(a) and 22.3(f) of the DSU, the European Union seeks to suspend
concessions or other obligations with respect to th e same sector(s) as that in which the Panel or
Appellate Body has found a violation or other nulli fication or impairment, that is, with respect to
goods. The European Union will provide a list of pr oducts to be subject to the suspension when
making any request pursuant to Article 22.7 of the DSU and/or when publishing the suspending
measures.

 Consistent with Articles 22.3(a) and 22.3(g) of the DSU, the European Union seeks to
suspend concessions under the same agreement, that is, the agreements listed in Annex 1A of the
WTO Agreement, taken as a whole. Also consistent with Ar ticle 22.3 and particularly 22.3(a) of the
DSU, the European Union seeks to suspend concessions or other obligations with respect to the same
sector(s) under the DSU.

 Accordingly, this request is made pursuant to Article 22.3 as a whole, and in particular
Article 22.3(a) of the DSU.

 The nature of the concessions or other obligatio ns to be suspended will take into account (1)
the direct trade loss caused by the WTO inconsis tent measures (2) the amounts imposed by the WTO
inconsistent measures and (3) other nullification or impairment. It will take the form either of a
prohibitive tariff (such as, for example, 100 %) on a specified annual value of trade from the United
States to the European Union; or of an equivalent ad valorem tariff on an equivalent annual value of
trade.

 In the first case, the annual value of trade fro m the United States to the European Union to
which the prohibitive import tariff of 100 % will be applied is US$ 311 Million. In the second case, an
ad valorem import tariff of 13.18 % will be applied to an annual trade value of US$ 477 Million. The
European Union reserves the right to review the calculation as appropriate.

 In addition, the European Union requests au thorisation to suspend concessions or other
obligations under the DSU: as long as the United States does not withdraw, with respect to the
products covered by the above proceedings, its statement that the zeroing methodology used in review
investigations will not be brought into conformity with the covered agreemen ts, the European Union
will suspend all concessions and obligations under the DSU with respect to any application by the
United States of the zeroing methodology to the Europ ean Union with respect to products covered by
the above proceedings. With respect to any such ma tters the European Union will proceed directly to
the suspension of concessions or other obligations under the agreements listed in Annex 1A of the
WTO Agreement, taken as a whole; and under the DSU

 The level of the suspension of concessions or other obligations with respect to which the
European Union requests this authorisation is equiva lent to, or less than, the level of the nullification
or impairment.

 Pursuant to Article 1.1 of the DSU, this request complies with the rules and procedures set out
in Article 6 of the DSU. It is made in writing. No prior consultations were held with the United States.
It identifies the relevant measures and provides a brief summary of the legal basis of the complaint
sufficient to state the problem clearly. It states under which agreements suspension of concessions or
other obligations is sought; and it states the leve l of nullification or impairment. Any Article 22.6
DSU arbitration panel shall have the standard terms of reference, as they result from Article 22 of the
DSU, other relevant provisions of the DSU, and this request.

 Pursuant to Article 22.6 of the DSU, if the United States objects to the level of suspension
proposed, the matter shall be referred to the original panel, if members are available, which shall,
applying the rules and procedures of the DSU (pursuant to Article 1.1 of the DSU), settle any dispute
between the European Union and the United Stat es concerning their rights and obligations under
Article 22 of the DSU taken in isolation or in combination with any other covered agreement. The
Panel shall in particular determin e, to the extent requested, whethe r the principles and procedures of
Article 22.3 have been applied; whether the leve l of suspension is equivalent to the level of
nullification or impairment; and if the proposed su spension of concessions or other obligations is
allowed under the covered agreements.