Document: WT/DS382/R Page A-1 BCI deleted, as indicated [[XX]] ANNEX A EXECUTIVE SUMMARY OF THE FIRST WRITTEN SUBMISSIONS OF THE PARTIES Contents Page
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 A

EXECUTIVE SUMMARY OF THE FIRST WRITTEN
SUBMISSIONS OF THE PARTIES

Contents Page
Annex A-1 Executive Summary of the First Written Submission of Brazil A-2
Annex A-2 Executive Summary of the First Written Submission of the
United States A-8
Annex A-3 Executive Summary of Brazil's Response to the United States'
Requests for Preliminary Rulings A-17

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ANNEX A-1

EXECUTIVE SUMMARY OF THE FIRST WRITTEN
SUBMISSION OF BRAZIL

I. THE SUBJECT OF THE DISPUTE

1. This is yet another dispute in a long line of WTO challenges concerning the United States'
"zeroing procedures". Including the present one, there have now been eleven disputes brought against
the United States regarding zeroing, by eight different WTO Members, and, in each one so far
decided, zeroing has been found to be WTO-inconsistent.

2. The current dispute concerns the United States' application of its zeroing procedures in the
original anti-dumping investigation and administra tive reviews of the anti-dumping duty order on
certain orange juice from Brazil ("Orange Juice Order").
1 In the original investigation, in calculating
the margin of dumping, the United States Depart ment of Commerce ("USDOC") included its "model
zeroing" procedures, under which the amount by wh ich any model's average export price exceeded
the average normal value for that model was eliminated or, in effect, set at zero ("zeroed").

3. In two administrative reviews of anti-dumping duties conducted since the issuance of the
Orange Juice Order, the USDOC applied its "sim ple zeroing" procedures, under which the amount by
which an individual export price exceeded normal va lue was ignored or zeroed. Individual export
transactions with prices below normal value were treated under US law as having "dumping margins"
or, in WTO parlance, "positive comparison results" in the amount of the difference. On the other
hand, the zeroing of the transactions with export pr ices above normal value means that the "negative
comparison results" on these export sales are disregarded.

4. This dispute also concerns the USDOC's deliberate and continued use of its zeroing
procedures in successive anti-dumping proceedings under the Orange Juice Order, including the
original investigation and any subsequent admini strative reviews, by which duties are applied and
maintained over a period of time. This "ongoing conduct" continues to this day, as the USDOC is
now imposing duties on entries of merchandise covere d by the Orange Juice Order pursuant to the
results of the second administrative review, and as it is conducting its third administrative review
under the Orange Juice Order, again using zeroing.

5. The Appellate Body has, on numerous occasions, found that both model zeroing in
investigations and simple zeroing in administrative reviews are inconsistent with the obligations of the
GATT 1994 and the Anti-Dumping Agreement.

6. In light of the Appellate Body's consiste nt findings regarding the WTO-inconsistency of
zeroing, Brazil's claims in this dispute are simple a nd straightforward. Brazil asks this Panel to find
that (i) the two administrative reviews completed to date in respect of imports subject to the Orange
Juice Order are inconsistent with Article VI:2 of the GATT 1994 and Article 9.3 of the Anti-Dumping
Agreement due to the application of the zeroing procedures. Brazil also asks this Panel to rule that (ii)
the continued use of the US zeroing procedures in successive anti-dumping proceedings in relation to
the Orange Juice Order, including the original investigation and any subsequent administrative
reviews, by which duties are applied and maintain ed over a period of time, is inconsistent with
Article VI:2 of the GATT 1994 and Articles 2.4.2 and 9.3 of the Anti-Dumping Agreement.

1 71 Fed. Reg. 12183 (9 March 2006). Exhibit BRA-3.

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II. ZEROING IS PROHIBITED UNDER THE GATT 1994 AND THE ANTI-DUMPING
AGREEMENT

A. The Concepts of Dumping and Margins of Dumping under the GATT 1994 and the
Anti-Dumping Agreement

7. According to the Appellate Body, there are three key elements to the definition of the
concepts of "dumping" and "margin of dumping".2 First, these linked concepts are defined in terms of
a "product"; second, dumping determinations for the "product" are made with respect to an exporter
or foreign producer; and, third, the WTO ag reements are not concerned with "dumping" per se, but
with injurious dumping.

8. Addressing these elements in greater detail, first, Article VI:I of the GATT 1994 defines
dumping as occurring when " products" of one country are sold at less than the normal value of the
"products". This definition of "dumping" is carried into the Anti-Dumping Agreement by Article 2.1,
which states that "a product" is "dumped" if it is exported at less than the comparable price of the like
"product". The definition of "dumping" in Article VI:1 of the GATT 1994 is an important element of
the context of Article VI:2, which refers to th e "margin of dumping", inasmuch as Article VI:2
clarifies that the "margin of dumping" is determined in respect of a dumped "product".

9. Second, the elements of the definition of "dumping" in Article VI:1 of the GATT 1994 and
Article 2.1 of the Anti-Dumping Agreement indicate that these provisions address the pricing practice
of an exporter or foreign producer. The definition provides that "dumping" occurs when a product is
"introduced into the commerce of another country " at an " export price " that is less than the
"comparable price for the like product in the exporting country". These and other provisions of the
GATT 1994 and the Anti-Dumping Agreement make clear that a dumping determination focuses on
the pricing behavior of individual exporters or foreign producers with a view to calculating a single
margin for them with respect to the product as a whole.

10. Third, the Anti-Dumping Agreement and the GATT 1994 are not concerned with dumping per
se, but with dumping that causes or threatens to cau se material injury to th e domestic industry.
Further, it is evident from Article 3.1 that the vol ume of transactions matters: injury cannot be found
to exist in relation to individual transactions, but only for the product as whole.

11. On the basis of these three intertwining strands of analysis, the Appellate Body concluded that
the concepts of "dumping" and "margin of dumpi ng" are defined in relation to a product under
investigation as a whole, encompassing all of the e xport transactions of the product pertaining to an
investigated exporter, and they cannot be found to exist only for a type, model or category of a
product. Thus, although an in vestigating authority may undertake multiple comparisons using
averaging groups or models, the results of these comparisons are not "margins of dumping", but rather
intermediate comparison results that must be aggreg ated to establish, for each exporter, a margin of
dumping for the product under investigation as a whole.

B. Zeroing Is Prohibited under Article 9.3 of the Anti-Dumping Agreement and Article VI:2
of the GATT 1994

12. The opening phrase of Article 2.1 of the Anti-Dumping Agreement – "[f]or the purpose of this
Agreement" – makes clear that the term "dumping" has the same meaning in all provisions of the
Agreement and for all types of anti-dumping proceedings, including administrative reviews under
Article 9.3. This understanding is confirmed by the text of Article 9.3, which provides that the

2 Appellate Body Report, US – Zeroing (Japan), paras. 108 – 116.

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"amount of the anti-dumping duty shall not exceed the margin of dumping as established under
Article 2".

13. Pursuant to these provisions, the Appellate B ody has held that, "[i]n a review proceeding
under Article 9.3.1, the authority is required to en sure that the total amount of anti-dumping duties …
does not exceed the total amount of dumping found in all sales made by the exporter or foreign
producer, calculated according to the margin of dumping established for that exporter".
3 I n o t h e r
words, "under Article VI:2 and Article 9.3, the ma rgin of dumping established for an exporter in
accordance with Article 2 operates as a ceiling for the total amount of anti-dumping duties that can be
levied on the entries of the subject merchandise from that exporter".4

14. The United States contravenes this obligati on, because it does not calculate a margin of
dumping for each exporter based on all the export transactions made by the exporter, and as a result, it
does not ensure that the total margin of dum ping for each exporter functions as a ceiling on the
amount of anti-dumping duties that are levied on en tries of that exporter's subject merchandise.
Rather, the USDOC includes only those intermediate comparison results for export transactions with
prices below normal value. Any export transactions with prices greater than normal value are
disregarded, or "zeroed" when calculating the aggregate amount of the price differences.

15. By disregarding or treating as zero those comparison results for export prices that are greater
than normal value, the USDOC's use of zeroing necessarily results in dumping margins that are
higher than they would be if all export transacti ons were taken into account. This is because those
price comparisons that generate "negative" comp arison results – where export prices are higher than
normal value – are not considered in the aggregate of the comparison results. They therefore cannot
reduce the "positive" comparison results generated by those export transactions below normal value.
By systematically excluding transactions with prices above normal value, the USDOC's use of zeroing
generates dumping margins that are greater than the margins properly determined for "the product
under investigation as a whole". Hence, the US DOC's use of zeroing in administrative reviews
violates Article VI:2 of GATT 1994 and Article 9.3 of the Anti-Dumping Agreement.

16. This conclusion is confirme d by a consistent series of Appellate Body decisions. The
Appellate Body first addressed the USDOC's practice of zeroing in administrative reviews in US –
Zeroing (EC). In that instance, the Appellate Body found that, by disregarding, "at the aggregation
stage", all comparisons where "the export pri ce exceeded the contemporaneous average normal
value", the USDOC's methodology "is inconsistent with Article 9.3 of the Anti-Dumping Agreement
and Article VI:2 of the GATT 1994".
5

17. In at least four further rulings since US – Zeroing (EC), the Appellate Body has affirmed its
ruling that the use of zeroing in administrative reviews is inconsistent with the GATT 1994 and the
Anti-dumping Agreement .6 Among these rulings, the Appellate Body, in US – Stainless Steel
(Mexico), stated the conclusion succinctly: "We see no b asis in Article VI:2 of the GATT 1994 or in
Articles 2 and 9.3 of the Anti-Dumping Agreement for disregarding the results of comparison where
the export price exceeds the normal value when calc ulating the margin of dumping for an exporter". 7
In light of this long line of decisions by the Appe llate Body, there is no doubt that USDOC's use of

3 Appellate Body Report, US – Zeroing (Japan), para. 156.
4 Appellate Body Report, US – Stainless Steel (Mexico) , para. 102. Original emphasis. See also
Appellate Body Report, US – Zeroing (EC), para. 130.
5 Appellate Body Report, US – Zeroing (EC), para. 133.
6 In addition to Appellate Body Report, US – Zeroing (EC), para. 135: Appellate Body Reports, US –
and US – Zeroing (Japan) (21.5), paras. 195 and 197.
7 Appellate Body Report, US – Stainless Steel (Mexico), para. 103.

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zeroing in administrative reviews is in consistent with the GATT 1994 and the Anti-dumping
Agreement.

III. THE UNITED STATES VIOLATED ITS OBLIGATIONS BY USING ZEROING IN
TWO ADMINISTRATIVE REVIEWS

18. The USDOC has completed two administrative reviews of exports of certain orange juice
from Brazil since the anti-dumping duty order on this product was fist issued. The first administrative
review covered exports by Cutrale and Fischer, the principal exporters of this product, for the period
between 24 August 2005 a nd 28 February 2007. The second admi nistrative review covered exports
by Cutrale and Fischer between 1 March 2007 and 29 February 2008.

19. In the first administrative review the USDOC applied zeroing to exports by both Cutrale and
Fischer, despite written objections from both co mpanies that this practice violated the Anti-Dumping
Agreement and the GATT 1994. In its Issues and Decision Memorandum in that review, the USDOC
stated explicitly that "the Department has con tinued to deny offsets to dumping based on export
transactions that exceed NV in this review".
8 Thus, the USDOC admitted that it used zeroing to
exclude negative comparison results, derived fro m export transactions with prices above normal
value, in its calculation of the overall dumping margin for each exporter.

20. This conclusion is confirmed by the com puter program logs containing the computer
programming language used by the USDOC to cal culate cash deposit and duty assessment rates for
both Cutrale and Fischer
9, and by the computer outputs generated in carrying out this calculation. 10
These documents show that the USDOC's programs excluded all negative comparison results – where
export transaction prices were at or above normal va lue – despite the fact that for both companies
these negative comparison results constituted a major ity of the transactions under review. The "cash
deposit rates" and the "importer-specific assessment rates" applied to both Cutrale and Fischer
therefore overstated the dumping margins for both companies by failing to include all export
transactions in the calculations.

21. In the second administrative review the Depa rtment again applied its policy of zeroing over
the protests of both Cutrale and Fischer. In its Issues and Decision Me morandum, the Department
stated even more explicitly than it had in th e previous review, that it had excluded from its
calculations those sales with negative comparison r esults. The Department said that it applied the
policy "by aggregating all individual dumping margins, each of which is determined by the amount by
which NV exceeds EP or CEP, and dividing this amount by the value of all sales. At no stage of the
process is the amount by which EP or CEP exceed the NV permitted to offset or cancel out the
dumping margins found on other sales".
11

22. Responding to Cutrale's and Fischer's cl aims that this methodology violated the Anti-
Dumping Agreement and the GATT 1994, the USDOC stated flatly that "Congress did not intend for
WTO reports to automatically trump the exercise of the Department's discretion in applying the
statute". Therefore, the USDOC said that it "has continued to deny offsets to duping based on CEP
transactions that exceed NV in this review".

8 Exhibit BRA-28.
9 Exhibits BRA-29 and BRA-30.
10 Exhibits BRA-34 and BRA-35. See also Exhibit BRA-31, an expert affidavit that explains the
USDOC's procedures and, in partic ular, the specific portions of the USDOC's computer program logs and
outputs showing the use of zeroing.
11 Exhibit BRA-43.

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23. Again, the computer logs and outputs ge nerated during the second administrative review
confirm the USDOC's statements that it applied zeroing to exclude price comparisons where export
prices were at or above normal value. 12 They show that the USDOC ignored the comparison results
for a significant number of export transactions for Cutrale, and for the vast majority of export
transactions for Fischer. The exclusion of these export transactions resulted in higher cash deposit
and importer-specific assessment rates than would have been calculated for Cutrale had all export
transactions been included in the calculation. For Fischer, the positive comparisons were too small in
number to generate a margin of dumping, and the cash deposit rate was zero.

24. Since the USDOC has admitted that it applied zeroing in both administrative reviews to
exclude transaction comparisons where the export price was at or above normal value, and since the
computer program logs submitted by Brazil in both administrative reviews confirm this result, as do
the outputs also submitted by Brazil, there is no doubt that the USDOC applied zeroing in both
administrative reviews. Equally, there is no doubt, as the Appellate Body has said repeatedly, that the
USDOC's practice of zeroing in administrative revi ews is inconsistent with Article 9.3 of the Anti-
Dumping Agreement and Article VI:2 of the GATT 1994.

IV. THE USDOC'S CONTINUED USE OF ZEROING AND ITS APPLICATION OF
DUTIES CALCULATED USING ZEROING IS INCONSISTENT WITH THE GATT
1994 AND THE ANTI-DUMPING AGREEMENT

25. The USDOC has, to date, used its zeroing pro cedures in the first three proceedings that have
taken place on this product – (1) the original anti-du mping investigation; (2) the first administrative
review; and (3) the second administrative review. Moreover, it has used zeroing in reaching its
preliminary determination in the third administrative review.
13 Together, these successive
determinations constitute an "ongoing conduct" inconsistent with the requirements of the Anti-
Dumping Agreement and the GATT 1994.

26. In the original anti-dumping investigati on, the USDOC calculated the "dumping margin"
using a comparison of weighted-average prices of ea ch model sold in the United States to the normal
value of that model. At the time when the final de termination was made in th e original investigation,
the USDOC systematically applied this "model" zeroing to its price comparisons. The computer
program used in the original investigation, as shown by the computer program logs submitted as
Exhibits BRA-32 and BRA-33, provided for th e exclusion from the calculation of negative
comparison results where the weighted-average export price exceeded normal value.

27. The original investigation has been followed by two completed administrative reviews to
date. In both of these reviews, as discussed above , the USDOC applied "simple zeroing" to exclude
any US transactions whose price comparisons showed export prices at or above normal value. A third
administrative review is currently in progress, and to date it has resulted in a preliminary
determination in which the USDOC again applied simp le zeroing. Accordingly, use of zeroing is
common to all the successive stages of the case at issue, with the USDOC adopting a "string of
connected and sequential determinations"
14 in which it disregarded comparison results where the price
of the exports exceeded normal value. This stri ng of determinations has provided a continuing basis
for the United States to apply and maintain anti-du mping duties on imports of certain orange juice
from Brazil since 9 March 2006.

12 Exhibits BRA-36, BRA-38 (computer program logs), BRA-37 and BRA-39 (computer program
outputs).
13 See Exhibit BRA-20, "Summary of Information on the Use of Zeroing".
14 Appellate Body Report, US – Continued Zeroing (EC), para. 180.

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28. In US – Continued Zeroing (EC) , the Appellate Body found that the use of the zeroing
methodology in an original investigation and "su ccessive stages" of administrative reviews constitute
an "ongoing conduct" that amount to a "measure" subject to challenge in WTO dispute settlement. 15
The ongoing conduct at issue in that dispute is vi rtually identical to the ongoing conduct at issue in
this dispute. Both disputes concern the con tinued use of the zeroing methodology in successive
phases of an anti-dumping proceeding under a par ticular anti-dumping order whereby the USDOC
applies and maintains anti-dumping duties.

29. The USDOC's zeroing procedures, as used in the original investigation and in the
administrative reviews in this case, have repeatedly been found to be in consistent with Article VI:2 of
the GATT 1994 and Articles 2.4.2 and 9.3 of the Anti-Dumping Agreement . Consequently, the
continued use of zeroing in these consecutive anti- dumping determinations constitutes an ongoing
conduct that violates these provisions of the GATT 1994 and the Anti-Dumping Agreement.

15 Appellate Body Report, US – Continued Zeroing (EC), para. 185.

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ANNEX A-2

EXECUTIVE SUMMARY OF THE FIRST WRITTEN
SUBMISSION OF THE UNITED STATES

I. INTRODUCTION

1. In this dispute, Brazil asks this Panel to read an obligation into the Agreement on
Implementation of Article VI of the Ge neral Agreement on Tariffs and Trade 1994 ("AD Agreement")
and Article VI of the General Agreement on Tariffs and Trade 1994 ("GATT 1994"), notwithstanding
the fact that there is no textual basis for the oblig ation that Brazil proposes. This Panel should make
an objective assessment of the matter before it and refrain from adopting Brazil's interpretation.

2. Brazil also challenges two "measures" that are not within the Panel's terms of reference. The
United States requests that the Panel grant the reque sts for preliminary rulings with respect to these
"measures".

II. GENERAL PRINCIPLES

3. The burden of proving that an obligation has no t been satisfied is on the complaining party.
In a dispute involving the AD Agreement, a panel must also take into account the standard of review
set forth in Article 17.6(ii) of the AD Agreement. Article 17.6(ii) confirms that there are provisions
of the Agreement that "admit[] of more than one permissible interpretation". Where that is the case,
and where the investigating authorit y has relied upon one such interpretation, a panel is to find that
interpretation to be in conformity with the Agreement.

4. Article 11 of the Dispute Settlement Unders tanding ("DSU") requires a panel to make an
objective assessment of the matter before it, including an objective assessment of the facts and the
applicability of and conformity with the relevant covered agreements. The Appellate Body has
explained that the matter includes both the facts of the case (and the specific measures at issue in
particular) and the legal claims raised.

5. Articles 3.2 and 19.2 of the DSU contain the fundamental principle that the findings and
recommendations of a panel or the Appellate B ody, and the recommendations and rulings of the
Dispute Settlement Body ("DSB"), cannot add to or diminish the rights and obligations provided in
the covered agreements. While prior adopted pa nel and Appellate Body reports create legitimate
expectations among WTO Members, the Panel is not bound to follow the reasoning set forth in any
Appellate Body report. The rights and obligations of the Members flow, not from panel or Appellate
Body reports, but from the text of the covered agreements.

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III. REQUESTS FOR PRELIMINARY RULINGS

A. The Second Administrative Review

6. A Member may only file a panel request with respect to a measure upon which the
consultations process has run its course. Article 4.7 of the DSU provides that a complaining party
may request establishment of a panel only if "the cons ultations fail to settle a dispute". Article 4.4 of
the DSU, in turn, provides that a request for cons ultations must state the reasons for the request,
"including identification of the measure at issu e and an indication of the legal basis for the
complaint". These rules apply with equal force to disputes brought under the AD Agreement, which
contains parallel requirements in Articles 17.3 through 17.5.

7. In this dispute, Brazil seeks the establishment of a panel with respect to "[t]he 2007-2008
anti-dumping duty administrative review on certa in orange juice from Brazil (the 'Second
Administrative Review')". However, the final results of the second administrative review were issued
after Brazil's request for consultations. As such , at the time of Brazil's consultations request, the
second administrative review did not constitute a "mea sure" within the meaning of Article 4.4 of the
DSU. As it was not, and could not have been, subject to consultations, the second administrative
review is not within the Panel's terms of reference.

B. The "Continued Use of the US 'Zeroing Procedures'"

8. Under Article 6.2 of the DSU, a panel request must identify the " specific measure at issue in
the dispute", and a panel's terms of reference under Ar ticle 7.1 are limited to those specific measures.
Brazil's identification of the "continued use of the US 'zeroing procedures' in successive anti-dumping
proceedings, in relation to the anti-dumping duty order issued in respect of imports of certain orange
juice from Brazil" as a "measure" in its panel requ est fails to meet this requirement. A general
reference to an indeterminate number of potential measures does not satisfy the requirement that a
panel request identify the " specific measure at issue". Brazil is merely speculating as to what may
happen in the future, and such speculation is not id entification of a specific measure. There is no
basis to conclude, for example, that the results of any future antidumping proceeding with respect to
orange juice from Brazil would reflect "zeroing".

9. By including this purported measure in its pa nel request, Brazil appears to be challenging an
indeterminate number of potential measures. Howeve r, measures that are not yet in existence at the
time of panel establishment are not within a pane l's terms of reference under the DSU. It is
impossible for Members to consult on a measure that does not exist, and a non-existent measure
cannot meet the requirement of Article 4.2 of the DSU that the measure be "affecting" the operation of
a covered agreement.

10. Article 3.3 of the DSU provides that

[t]he prompt settlement of situations in which a Member considers that any
benefits accruing to it directly or indi rectly under the covered agreements are
being impaired by measures taken by a nother Member is essential to the
effective functioning of the WTO and the maintenance of a proper balance
between the rights and obligations of Members.

Accordingly, in US – Upland Cotton , the panel found that a measure that had not yet been adopted
could not form part of its terms of reference, noting that such a "measure" could not have been
impairing any benefits because it was not in existence at the time of the panel request. Similarly, in
this case, indeterminate future measures that did no t exist at the time of Brazil's panel request, and
may in fact never exist, could not be impairing any benefits accruing to Brazil.

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IV. BRAZIL'S CLAIMS REGARDING A SSESSMENT PROCEEDINGS SHOULD BE
REJECTED

11. Brazil challenges the first and second administra tive reviews as inconsistent with Article VI:2
of the GATT 1994 and Article 9.3 of the AD Agre ement. The U.S. Department of Commerce
("Commerce") reviewed two companies in each of th ese reviews: Fischer and Cutrale. Aside from
the fact that the second administrative review is outsi de the Panel's terms of reference, Brazil's claims
with respect to these reviews should be rejected for the reasons below.

12. The AD Agreement provides no general obliga tion to consider transactions for which the
export price exceeds normal value as an offset to the amount of dumping found in relation to other
transactions at less than normal value. In US – Softwood Lumber Dumping (AB), the Appellate Body
found that the exclusive textual basis for an obligation to account for such non-dumping in calculating
margins of dumping appears in connection with the ob ligation in Article 2.4.2 that "the existence of
margins of dumping during the investigation phase shall normally be established on the basis of a
comparison of a weighted average normal value with a wei ghted average of prices of all comparable
export transactions ... ". This particular text of Article 2.4.2 applies only within the limited context of
determining whether dumping exists in the inves tigation phase when using the average-to-average
comparison methodology in Article 2.4.2. There is no textual basis for the additional obligations that
Brazil would have this Panel impose.

13. Subsequent to US – Softwood Lumber Dumping (AB) , several panels examined whether the
obligation not to "zero" when making average-to-a verage comparisons in an investigation extended
beyond that context. In making an objective assessme nt of the matter, these panels determined that
the customary rules of interpretation of public in ternational law do not support a reading of the
AD Agreement that expands the zeroi ng prohibition beyond average- to-average comparisons in an
investigation. This Panel should likewise find that, at a minimum, it is permissible to interpret the
AD Agreement as not prohibiting zeroing outside the context where the interpretation of "all
comparable export transactions" articulat ed in the Appellate Body report in US – Softwood Lumber
Dumping is applicable.

14. In US – Softwood Lumber Dumping (AB), the Appellate Body specifically recognized that the
issue before it was whether so-called "zeroing" was prohibited under the average-to-average
comparison methodology found in Article 2.4.2. Thus, the report found only that "zeroing is
prohibited when establishing the existence of marg ins of dumping under the weighted-average-to-
weighted-average methodology". The Appellate Body reached this conclusion by interpreting the
terms "margins of dumping" and "all comparable export transactions" as they are used in Article 2.4.2
in an "integrated manner". The obligation to provide offsets, therefore, was tied to text of the
provision addressing the use of the average-to-average comparison methodology in an investigation,
and did not arise out of any independent obligation to offset prices. An assertion by Brazil that there
is a general prohibition of "zeroing", or one specifica lly applicable to the more particular context of
assessment proceedings, cannot be reconciled with the interpretation articulated in US – Softwood
Lumber Dumping (AB). If there is a general prohibition of zer oing that applies in all proceedings and
under all comparison methodologies, the meaning ascrib ed to "all comparable export transactions" in
that dispute would be redundant of the general prohibition of zeroing.

15. The need to avoid such redundancy was recognized in US – Zeroing (Japan)(AB) when the
Appellate Body changed its interp retation of this phrase. In US – Softwood Lumber Dumping (AB) ,
"margins of dumping" and "all comparable export tr ansactions" were interpreted in an integrated
manner. The Appellate Body found that in aggreg ating the results of the model-specific comparisons,
"all" comparable export transactions must be account ed for. Thus, the phrase necessarily referred to
all transactions across all models of the product under investigation, i.e. the product "as a whole".
However, in US – Zeroing (Japan)(AB) , the Appellate Body reinterp reted "all comparable export

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transactions" to relate solely to all transactions w ithin a model, and not across models of the product
under investigation. In doing so, the Appellate Body abandoned the only textual basis for its
reasoning in US – Softwood Lumber Dumping (AB).

16. In addition, a general prohibition of zeroing that applies beyond the context of average-to-
average comparisons in investigations would be incons istent with the remaining text of Article 2.4.2,
which provides for an exceptional methodology that ma y be used in certain circumstances. This
methodology was drafted as an exception to the obligation to engage in symmetrical comparisons in
an investigation. The mathematical implication of a general prohibition of zeroing, however, is that
the exceptional clause would be reduced to inutilit y. That is because the exceptional methodology,
provided for in Article 2.4.2, mathematically mu st yield the same result as an average-to-average
comparison if, in both cases, non-dumped comparisons are required to offset dumped comparisons. In
this respect, a general prohibition of zeroing would render the exception in Article 2.4.2 a nullity.
Such an interpretation would be disfavoured un der a key tenet of customary rules of treaty
interpretation, that an interpretation must give meaning and effect to all the terms of a treaty.

17. In US – Zeroing (EC), US – Softwood Lumber Dumping (Article 21.5), US – Zeroing (Japan),
and US – Stainless Steel (Mexico) , each of the panels recognized that the customary rules of
interpretation of public internati onal law precluded an interpretati on that rendered the exceptional
provision of Article 2.4.2 redundant. Brazil has not offered any explanation as to how this defect is
avoided under its interpretation of the AD Agreement.

18. Despite the findings of the panels that the results of the exceptional methodology "will
necessarily always yield a result identical to that of an average-to-average comparison," under a
general prohibition of zeroing, the Appellate Body has found this concern to be "overstated". The
Appellate Body has asserted that mathematical equiva lence will occur only in "certain situations" and
represents "a non-tested hypothesis". These objections, however, are not persuasive. First, the panels
have specifically addressed all of the situati ons under which it was argued that mathematical
equivalence would not obtain and found these situ ations did not represent methodologies consistent
with the AD Agreement. The exceptional provisi on is rendered inutile if the only alternative
methodologies that do not result in mathematical equi valence are, themselves, not consistent with the
AD Agreement.

19. In US – Zeroing (Japan) , the Appellate Body dismissed the redundancy caused by
mathematical equivalence by concluding that it may be permissible to apply the exceptional
methodology to a subset of export transactions. The AD Agreement says nothing about selecting a
subset of transactions when conducting an analysis under the second sentence of Article 2.4.2. The
exception provides that, when certain conditions ar e met, Members are perm itted to compare average
normal values to transaction-specific export prices. If the Appellate Body is correct that dumping
may only be determined for the product as a whole (which the United States does not concede), there
is no textual basis for inferring that the comparison methodology in the second sentence of Article
2.4.2 is an exception to that provision (which, as Article 2.1 provides, applies throughout the AD
Agreement). The second sentence of Article 2.4.2 simply provides an exception to the average-to-
average or transaction-to-transaction comparison requirement of the first sentence of Article 2.4.2.
Consequently, the use of a subset of export tran sactions as a means of avoiding mathematical
equivalency would also appear to be inconsistent with the AD Agreement. The redundancy of the
second sentence of Article 2.4.2 occurs as a consequence of any interpretation that results in a general
prohibition of "zeroing".

20. Article 2.1 of the AD Agreement and Article VI:1 of the GATT 1994 are definitional
provisions that do not impose independent obligations . Article 2.1 of the AD Agreement and Article
VI of the GATT 1994 do not define "dumping" and "margi ns of dumping" so as to require that export
transactions be examined at an aggregate level. The definition of "dumping" in these provisions

BCI deleted, as indicated [[XX]]

references "product ... introduced into the commerce of another country at less than its normal value".
This definition describes the real-world commerc ial conduct by which a product is imported into a
country, i.e., transaction by transaction.

21. In addition, the term "less than normal va lue" is defined as when the "price of the product
exported ... is less than the comparable price ...". This definition describes the real-world commercial
conduct of pricing such that one price is less than another price. The ordinary meaning of "price" as
used in the definition of dumping is the "payment in purchase of something". In US – Zeroing
(Japan), the panel found that this definition "can easily be applied to individual transactions and does
not require an examination of export transactions at an aggregate level".

22. There is nothing in the GATT 1994 or the AD Agreement that suggests that injurious
dumping that occurs with respect to one transact ion is mitigated by the occurrence of another
transaction made at a non-dumped price. Indeed, th e foreign producer or exporter itself exclusively
enjoys the benefit of the extent to which the price of a non-dumped export transaction exceeds normal
value.

23. In US – Zeroing (Japan) , the panel noted that "the record of past discussions in the
framework of GATT shows that historically the concept of dumping has been understood to be
applicable at the level of individual export tran sactions". Well before the recent debate about
"zeroing", a Group of Experts convened to consider i ssues with respect to the application of Article
VI of the GATT 1947. The Group of Experts considered that the "ideal method" for applying
antidumping duties "was to make a determination of both dumping and material injury in respect of
each single importation of the product concerned". The methodology of not offsetting dumping based
on comparisons where the export price was greate r than normal value was examined by two GATT
panels and found to be consistent with the Antidumping Code. In view of these findings, the Uruguay
Round negotiators actively discussed whether the use of "zeroing" should be restricted. The text of
Article VI of the GATT 1947, however, did not change as a result of the Uruguay Round agreements.
The normal inference one draws from the absence of a change in language is that the drafters intended
no change in meaning.

24. Brazil's claim ultimately depends on the reas oning set forth in Appellate Body reports that
rejected the notion that dumping may occur with re spect to an individual transaction in the absence of
the textual basis that was present in EC – Bed Linen (AB) and US – Softwood Lumber Dumping (AB) .
This interpretation relies on the term "product" as be ing solely and exclusively synonymous with the
concept of "product as a whole". It denies that the ordinary meaning of the word "product" or
"products" used in Article 2.1 of the AD Agreem ent and Article VI of the GATT 1994 admits of a
meaning that is transaction-specific. However, as the panel report in US – Zeroing (Japan) explained,
"[T]here is nothing inherent in the word 'product[ ]' (as used in Article VI:1 of the GATT 1994 and
Article 2.1 of AD Agreement) to suggest that this word should preclude the possibility of establishing
margins of dumping on a transaction-specific basis ...".

25. Examination of the term "product" as used throughout the AD Agreement and the GATT
1994 demonstrates that the term "product" in these provisions does not exclusively refer to "product
as a whole." Instead, "product" can have either a collective meaning or an individual meaning.
Therefore, the words "product" and "products" as they appear in Article 2.1 of the AD Agreement and
Article VI of the GATT 1994 cannot be understood to provide a textual basis for an interpretation
requiring that margins of dumping established in relation to the "product" must necessarily be
established on an aggregate basis for the "product as a whole".

26. Likewise, examination of the term "margi ns of dumping" itself provides no support for
Brazil's interpretation of the term as solely, and ex clusively, relating to the "product as a whole". As
the panel in US – Softwood Lumber Dumping (Article 21.5) observed:

BCI deleted, as indicated [[XX]]

[T]here is dumping when the export "price" is less than the normal value. Given
this definition of dumping, and the expr ess linkage between this definition and
the phrase "price difference", it would be permissible for a Member to interpret
the "price difference" referred to in Article VI:2 as the amount by which the
export price is less than normal value, a nd to refer to that "price difference" as
the "margin of dumping".

Thus, the panel saw "no reason why a Member may not ... establish the 'margin of dumping' on the
basis of the total amount by which transaction-spec ific export prices are less than the transaction-
specific normal values".

27. Additionally, the term "margin of dumpi ng", as used elsewhere in the GATT 1994 and the
AD Agreement, does not refer exclusively to the aggregated results of comparisons for the "product as
a whole". As used in the Note Ad Article VI:1, which provides for importer-specific price
comparison, the term "margin of dumping" cannot rela te to aggregated results of all comparisons for
the "product as a whole" because an exporter or fo reign producer may make export transactions using
multiple importers. As used in Article 2.2 of the AD Agreement, the term "margin of dumping"
would require the use of constructed value for the "product as a whole", even if the condition
precedent for using constructed value under Article 2.2 relates only to a portion of the comparisons.
The panel in US – Softwood Lumber Dumping (21.5) observed that this "would run counter to the
principle that constructed normal value is an alternat ive to be used only in the limited circumstances
provided for in Article 2.2".

28. Brazil argues that "'dumping and 'margin of dumping' are exporter-related concepts".
However, individual transactions are exporter-speci fic; dumping may be both exporter-specific and
transaction-specific at the same time. And, as explained above, the term "margin of dumping", as
defined in Article 2.1 of the AD Agreement and Article VI of the GATT 1994, may be applied to
individual transactions. This understanding of th e term "margin of dumping" is particularly
appropriate in the context of antidumping duty assessment. In administering antidumping regimes,
the individual transactions are both the means by wh ich less than fair value prices are established and
the mechanism by which the object of the transaction (i.e., the "pr oduct") is "introduced into the
commerce of the importing country". Likewise, antidumping duties are assessed on individual entries
resulting from those individual transactions. Thus, th e obligation in Article 9.3 to assess no more in
antidumping duties than the margin of dumping is si milarly applicable at the level of individual
transactions.

29. In Brazil's view, a Member breaches Article 9.3 of the AD Agreement and Article VI:2 of the
GATT 1994 by failing to provide offsets because Me mbers are required to calculate margins of
dumping on an exporter-specific basis for the product " as a whole " and, consequently, a Member is
required to aggregate the results of " all" "intermediate comparisons", including those for which the
export price exceeds the normal value. The term s upon which Brazil's interpretation rests are
conspicuously absent from the text of both Articles 2.1 and 9.3 and Article VI:2. Brazil's
interpretation is not mandated by the definition of dumping contained in Article 2.1, as described
above.

30. The panel in US – Zeroing (Japan) correctly rejected the conclusion that the "margin of
dumping under Article 9.3 must be determined on th e basis of an aggregate examination of export
prices during a review period in which export prices above the normal value carry the same weight as
export prices below the normal value ...". The pane l explained that the importer- and import-specific
obligation to pay an antidumping duty "lend[s] furthe r support to the view ... that there is no general
requirement to determine dumping and margins of dumping for the product as a whole, which, ...
entails a general prohibition of zeroing".

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31. Although dumping involves differential pricing behavior of exporters or producers between
its export market and its normal value, dumping ne vertheless occurs at the level of individual
transactions. Moreover, the remedy for dumping provided for in Article VI:2 of GATT 1994, i.e.,
antidumping duties, are applied at the level of individual entries for which importers incur the
liability. This way, the importer may be induced to raise resale prices to cover the amount of the
antidumping duty, thereby preventing the dumping from having further injurious effect. If, instead,
the amount of the duty must be reduced to account for the amount by which some other transaction
was sold at above normal value, possibly invo lving an entirely different importer, then the
antidumping duty will be insufficient to have th e intended effect. The importer of the dumped
product would remain in a position to profitably rese ll the product at a price that continues to be
injuriously dumped. For this reason, if Brazil's in terpretation of the margin of dumping is adopted as
the sole permissible interpretation of Article 9.3, the remedy provided under the AD Agreement and
the GATT 1994 will be prevented from addressing in jurious dumping. If a Member is unable to
calculate and assess the duties on a transaction-specifi c basis, importers of the merchandise for which
the amount of dumping is greatest will actually have an advantage over their competitors who import
at fair value prices because they will enjoy the bene fit of offsets that result from their competitors'
fairly priced imports.

32. Brazil's argument that "dumping" must cau se or threaten injury does not preclude an
interpretation that dumping can occur at the le vel of individual transactions in assessment
proceedings. No Article 3 injury determination is required in Article 9.3 assessment proceedings.
Article 9, by its terms, focuses on the amount of duty to be assessed on particular entries, an exercise
that is distinct from the determination of injury or threat of injury that would have already been
addressed in the affirmative in the investigation phrase.

33. Brazil's interpretation of Article 9.3, requi ring that antidumping duty liability be determined
for the product "as a whole", is also inconsiste nt with the specific provision in Article 9 that
recognizes the existence of prospective normal value systems of assessment. Because in a prospective
normal value system, liability for antidumping duties is incurred only to the extent that prices of
individual export transaction are below the normal value, the panel in US – Zeroing (Japan)
concluded, "the fact that express provision is made in the AD Agreement for this sort of system
confirms that the concept of dumping can apply on a transaction-specific basis to prices of individual
export transactions below the normal value and th at the AD Agreement does not require that in
calculating margins of dumping the same significan ce be accorded to export prices above the normal
value as to export prices below the normal value". And, as the panel in US – Stainless Steel
(Mexico) found, if in a prospective normal value system individual export transactions at prices less
than normal value can attract liability for payment of antidumping duties, without regard to whether
or not prices of other export transactions exceed normal value, there is no reason why liability for
payment of antidumping duties may not be similarl y assessed on the basis of export prices less than
normal value in a retrospective system.

34. The Appellate Body has disagreed, stating that the duty collected at the time of importation
under a prospective normal value system does not represent the margin of dumping within the
meaning of Article 9.3 and noting such duty is subj ect to review under Article 9.3.2. But, to the
extent that (as the Appellate Body suggests) Artic le 9.3 requires consideration of the "product as a
whole", an importer seeking a refund in a prospect ive normal value system would have to provide
evidence that relates to the "product as a whole", not just its own entries. This would make it
difficult, if not impossible, for an importer to obtain a refund. Further, accepting Brazil's
interpretation that a Member must aggregate the results of " all" comparisons on an exporter-specific
basis would require that retrospective reviews be conducted, even in a prospective normal value
systems, in order to take into account " all" of the exporters' transactions. This result is contrary to the
very concept of the prospective normal value system.

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35. For all of these reasons, because the conclu sion that there is no general prohibition of
"zeroing" in assessment proceedings is, at a minimum, a permissible interpretation of the covered
agreements, the Panel should reject Brazil's claims.

36. Even under Brazil's interpretation of the scope of a Member's obligations, Brazil has not met
its burden of proof as a factual matter. In the first administrative review, Commerce determined a de
minimis margin of dumping for Cutrale. In the second administrative review, Commerce determined
a zero margin of dumping and assessed no antidumping duties for Fischer. A zero or de minimis
margin of dumping cannot exceed any "ceiling" Brazil argues is provided for in the covered
agreements, and, where no duties are assessed, no du ties are imposed in excess of the margin of
dumping, even under Brazil's interpretation of the ob ligations of those agreements. Additionally,
Brazil has failed to meet its burden of proof to show that "zeroing" was used in the first administrative
review with respect to Fischer. Brazil provided a margin program log that was generated after the
first administrative review had been completed, wh ich must have been run by someone other than
Commerce.

V. BRAZIL'S CLAIMS REGARDING "CONTINUED USE" SHOULD BE REJECTED

37. As noted above, the "continued use of 'zeroing' " is not a measure within the Panel's terms of
reference under Article 6.2 of the DSU. Should the Panel conclude otherwise, however, Brazil's
claims that such "continued use" violates Article VI:2 of the GATT and Articles 2.4.2 and 9.3 of the
AD Agreement should be rejected for multiple reasons.

38. Brazil's claim with respect to this purported "measure" is premised on dumping margins
calculated in the original investigation, final resu lts of the first and second administrative review, and
preliminary results of the third administrative revi ew. Neither the second nor the third administrative
review is within the Panel's terms of reference as they were not consulted upon, and, with respect to
the third administrative review, the calculations Braz il references are merely preliminary results and
do not constitute a "final action" that can be challenged.

39. Moreover, Brazil's evidence with respect to the investigation indicates that "zeroing" had no
impact on the margin calculations in the investigati on. In particular, this evidence shows that there
were no negative comparison results, meaning that the necessary condition for activating the
"zeroing" line of the program was not satisfied, a nd the "zeroing" operation was not applied. The
margins calculated as a result could not and did not exceed the margins contem plated by the covered
agreements, even under Brazil's interpretation. With respect to the reviews, as noted above, in the
first administrative review, the margin of dumping for Cutrale was de minimis. With respect to the
second administrative review, the margin of dumping and assessment rate for Fischer was zero. As
such, like the investigation, they do not provide a basis for a claim that the United States has
continuously acted inconsistently with its obligations by "inflating" the margins via "zeroing".

40. Brazil's assertion that the facts of this case ar e "virtually identical" to the facts of cases found
to be WTO-inconsistent by the Appellate Body in the US – Zeroing II (EC) dispute is not accurate. In
that dispute, the Appellate Body found that the r ecord supported findings of inconsistency where "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". Here, in contrast, there have been no
sunset reviews, and Brazil's own evidence fails to establish that "zeroing" was applied to, or had any
impact on, any margin in the investigation or first administrative review, one of the two margins in the
second administrative review, or one of the two margins in the preliminary results of the
third administrative review. This does not c onstitute "a string of determinations, made
sequentially ... over an extended period of time" and does not provide a basis for concluding that
"zeroing" would likely continue to be applied in successive proceedings.

BCI deleted, as indicated [[XX]]

41. Brazil's argument that the alle ged "continued use of zeroing" is even a measure that can be
challenged, as well as a violation of the covered agreements, is premised on its assertion that such
"continued use" constitutes "ongoing conduct". Even were this a c ognizable claim, as detailed above,
the facts belie a conclusion that any such "ongoing conduc t" exists or is likely to continue in the order
that is at issue in this dispute.

42. In addition, with respect to Brazil's claim th at the "continued use" violates Article 2.4.2 of
the AD Agreement, the express terms of Article 2.4. 2 limit its application to the "investigation phase"
of a proceeding. To require the application of Article 2.4.2 to assessment proceedings, or the
amorphous "continued use" of "zeroing" in su ccessive proceedings, would read out of the
AD Agreement the express limitation to investigations . Such a result would be inconsistent with the
principle of effectiveness, under which all the te rms of an agreement s hould generally be given
meaning wherever possible.

VI. CONCLUSION

43. The United States requests that the Panel grant the requests for preliminary rulings and reject
Brazil's claims.

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ANNEX A-3

EXECUTIVE SUMMARY OF BRAZIL'S RESPONSE
TO THE UNITED STATES' REQUESTS FOR
PRELIMINARY RULINGS

I. INTRODUCTION

1. The United States has requested a preliminary ruling that the following two measures are not
within the Panel's terms of reference: (i) th e 2007-2008 anti-dumping duty administrative review on
certain orange juice from Brazil (the "Second Administrative Review")
1; and (ii) the continued use of
the US zeroing procedures in successive anti-dumpi ng proceedings in rela tion to the anti-dumping
duty order issued in respect of imports of certain orange juice from Brazil.2

2. Nearly identical objections were raised by the United States, and rejected, in US – Continued
Zeroing.3

II. THE SECOND ADMINISTRATIVE REVIEW FALLS WITHIN THE PANEL'S
TERMS OF REFERENCE

A. F ACTUAL BACKGROUND

3. Brazil filed its first request for cons ultations in the present proceedings on
27 November 2008. The request mentioned, in particular, the 2005-2007 anti-dumping administrative
review on certain orange juice from Brazil (the "Fir st Administrative Review"), and "any on-going or
future antidumping administrative reviews, and the fi nal results thereof, related to the imports of
certain orange juice from Brazil (case no. A-351-840)".
4 On 6 April 2009, the United States adopted
preliminary results in the Second Administrative Review. On 22 May 2009, Brazil filed an addendum
to its request for consultations. This additional re quest for consultations indicated, among others, that
Brazil wished to consult with the United States on the Second Administrative Review.5

4. On 11 August 2009, the United States adopted th e final results in the Second Administrative
Review. On 20 August 2009, Brazil filed the request for establishment of this Panel, listing the
Second Administrative Review among the measures at issue, and specifically referring to the final
results in this review.6

1 US First Written Submission ("FWS"), paras. 37 – 48.
2 US FWS, paras. 38 and 49 – 52.
3 Panel Report, US – Continued Zeroing , paras. 7.11 – 7.13, 7.16; and Appellate Body Report, US –
Continued Zeroing, paras. 156 – 157 and 217; and paras. 172 (a nd the reasoning in paras. 159 – 171) and 236
(and the reasoning in paras. 220 – 235).
4 Request for Consultations by Brazil, 27 November 2008, WT/DS382/1, p. 1.
5 Request for Consultations by Brazil, Addendum, 22 May 2009, WT/DS382/1/Add.1, para. 5 (3).
6 Request for the Establishment of a Panel by Brazil, 20 August 2009, p. 2.

BCI deleted, as indicated [[XX]]

B. T HE UNITED STATES' OBJECTIONS UNDER ARTICLE 6.2 OF THE DSU

5. The United States argues that because final r esults in the Second Administrative Review had
not yet been adopted at the time of consultations , these were not the subject of consultations and,
therefore, cannot fall within the Panel's terms of reference under Article 6.2 of the DSU.
7

C. T HE REQUIREMENTS OF ARTICLE 6.2 OF THE DSU

6. A panel's terms of reference ar e determined by the panel request
8, which must be consistent
with Article 6.2 of the DSU. Although Article 6. 2 requires that consultations be held, it does not
require that the measures identified in the panel requ est be identical to the measures identified in the
consultations request. In several disputes, the Appe llate Body has held that Article 4 and 6 of the
DSU "do not ... require a precise and exact identity between the specific measures that were the
subject of consultations and the specific measures id entified in the request for the establishment of a
panel".9

7. Panels and the Appellate Body have consistently held that a panel's terms of reference may
include a measure properly identified in the panel re quest, even if that measure was not included in
the consultations request, provided that doing so did not change the "essence" of the dispute, or in
other words, that it did not "expand the scope" of the dispute.10

8. For example, in US – Continued Zeroing , the United States took a similar position to its
position in this dispute, objecting to the inclusion in the panel's terms of reference of 14 anti-dumping
reviews that were included in the European Commun ities' panel request, but not in its consultations
request.11 These 14 additional reviews were issued under anti-dumping duty orders included in the
consultations request. The panel and the Appellate Body recalled that there is no need for strict
identity between the consultations and panel re quests, and that measures not included in a
consultations request may form part of the terms of reference if they do not change the essence of the
dispute.12 The Appellate Body upheld the panel's findi ngs that the 14 reviews fell within the panel's
terms of reference.13 The panel said that:

… as long as the consultations request and the panel request concern the same
matter, or dispute, claims raised in connection with measures identified in the

7 US FWS, paras. 37 and 39 – 48. These same arguments were made by the United States in US –
Continued Zeroing , and rejected by both the panel and the Appellate Body. Panel Report, US – Continued
Zeroing, paras. 7.17 – 7.28; Appellate Body Report, US – Continued Zeroing, paras. 220 – 236.
8 See, e.g., Appellate Body Report, US – Continued Zeroing, para. 161 ("... a panel's terms of reference
are established by the claims raised in panel requests...").
9 Appellate Body Report, Brazil – Aircraft , para. 132. See also, e.g. , Panel Report, US – Continued
Zeroing, para. 7.23; Appellate Body Report, US – Continued Zeroing , para. 222; and Appellate Body Report,
US – Upland Cotton, para. 285, 293.
10 Panel Report, Canada – Aircraft, para. 9.14; Panel Report, Brazil – Aircraft, para. 7.11; Appellate
Body Report, Brazil – Aircraft, para. 132; Appellate Body Report, Chile – Price Band System, para. 139; Panel
Report, Dominican Republic – Import and Sale of Cigarettes , para. 7.15, 7.21; Appellate Body Report, EC –
Chicken Cuts, para. 157; Appellate Body Report, US – Continued Zeroing , in particular paras. 222 and 228;
Appellate Body Report, US – Upland Cotton, para. 293.
11 See, e.g., Appellate Body Report, US – Continued Zeroing, para. 223.
12 Panel Report, US – Continued Zeroing, paras. 7.22 – 7.23; Appellate Body Report, US – Continued
Zeroing, in particular paras. 222 and 228.
13 Appellate Body Report, US – Continued Zeroing , paras. 235 – 236 and Panel Report, US –
Continued Zeroing, para. 7.28.

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complaining Member's panel request would fall within a panel's terms of reference
even if those precise measures were not identified in the consultations request.14

9. Thus, Panels and the Appella te Body assess the scope of a panel's jurisdiction on the basis of
the substantive connections between the measures that were, and the measures that allegedly were not,
part of the terms of reference. The Appellate Bo dy has stated that this approach – which properly
promotes substance over form – is "supported" by "the object and purpose of the WTO dispute
settlement system."
15

10. Additional support for this approach can be found in the Appellate Body's consideration of
the scope of a panel's jurisdiction under Article 21.5 of the DSU.
16

11. In sum, the case-law shows that a series of closely linked measures adopted over time –
starting with measures identified in a consultations request, continuing with measures adopted during
consultations
17, the original proceedings 18, and into implementation 19 – may all relate to
"fundamentally the same 'dispute'" 20 such that jurisdiction is conferred, provided the measures share
the same "essence" 21 or close substantive connections 22, and together manifest a common "problem"
that the complaining Member's claims are seeking to "fix".23

D. T
HE SECOND ADMINISTRATIVE REVIEW IS WITHIN THE PANEL'S TERMS OF REFERENCE

12. At the outset, Brazil recalls that its consu ltations and panel requests both identify the Second
Administrative Review, which was ongoing wh en the consultations request was filed 24, and was
adopted before the panel request was filed.

13. The sole issue is whether it is decisive th at the Second Administrative Review was adopted
after the consultations request was filed. The case law just discussed shows that this factor is not
decisive. Panels and the Appellate Body have cons istently found that new measures, adopted after a

14 Panel Report, US – Continued Zeroing , para. 7.22. In US – Continued Zeroing , the panel and the
Appellate Body also rejected the argument, reiterated by the United States in this dispute, that the Appellate
Body's decision in US – Certain EC Products supports its position. Appellate Body Report, US – Continued
Zeroing, para. 60, 230-231; Panel Report, US – Continued Zeroing, paras. 7.26 and 7.27; also, Appellate Body
Report, US – Certain EC Products, paras. 76 – 77.
15 Appellate Body Report, Chile – Price Band System, para. 140, 144.
16 The Appellate Body has concluded that measures with "a particularly close relationship", or having
"sufficiently close links ", to measures that are indisputably w ithin the compliance panel's jurisdiction are
themselves subject to a comp liance panel’s jurisdiction. See, e.g., Appellate Body Report, US – Softwood
Lumber IV (Article 21.5 – Canada) , para. 77, 79; see also Panel Report, US – Zeroing (Japan) (21.5 – Japan) ,
para. 7.114; and Appellate Body Report, US – Zeroing (Japan) (21.5 – Japan), paras. 124 – 130.
17 Appellate Body Report, Brazil – Aircraft.
18 Appellate Body Report, Chile – Price Band System ; Panel Report, Dominican Republic – Import
and Sale of Cigarettes ; Panel Report, Argentina – Footwear (EC) , para. 8.45; and Appellate Body Report,
EC – Chicken Cuts.
19 Appellate Body Report, US – Softwood Lumber IV (Article 21.5 – Canada) ; Panel Report,
Australia – Salmon (Article 21.5 – Canada) , para. 6.5; and Panel Report, Australia – Automotive Leather II
(Article 21.5 – US), para. 7.10.
21 Appellate Body Report, Brazil – Aircraft , para. 132; Appellate Body Report, Chile – Price Band
System, para. 139; Panel Report, Dominican Republic – Import and Sale of Cigarettes , para. 7.21; Appellate
Body Report, EC – Chicken Cuts, para. 157.
22 Appellate Body Report, US – Softwood Lumber IV (Article 21.5 – Canada), para. 77.
23 Appellate Body Report, US – FSC (Article 21.5 – EC II), para. 95.
24 Request for Consultations by Brazil, Addendum, 22 May 2009, WT/DS382/1/Add.1, para. 5(3); and
Request for the Establishment of a Panel by Brazil, 20 August 2009, p. 2.

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consultations request was filed, may form part of a panel's terms of referen ce, if the new measures
were part and parcel of the same dispute.

14. The Second Administrative Review is properly regarded as part of the same dispute as the
other measures at issue. This measure has very cl ose substantive connections to – and, indeed, the
same essence as – the First Administrative Revi ew. These are successive annual administrative
reviews adopted under the same anti-dumping order rega rding certain orange juice from Brazil. They
involve the same type of determinations , made by the same US administering authority , concerning
the same products, the same exporters, and the same exporting country, and they provide succeeding
bases for the continued imposition of anti-dumping duti es under that order. These connections are
confirmed by the fact that, under the USDOC's Regul ations, all administrative (and other) reviews
occurring under a single order are mere " segments" of a single " proceeding" that continues until
revocation.
25

15. In addition to the close substantive simila rities between the First and Second Administrative
Reviews, the claims made regarding the two measures are also identical. Thus, the nature, or
"essence", of the dispute regarding the two measures is exactly the same, and the
Second Administrative Review properly falls within the panel's terms of reference.

16. Brazil also notes that, if the Second Administ rative Review were excl uded from the panel's
terms of reference, it would be difficult, if not impossible, to pursue WTO dispute settlement
regarding US administrative reviews. As Brazil has explained in its First Written Submission, the
United States typically conducts annual admi nistrative reviews under an anti-dumping order.
26 Thus,
every year, one administrative review is succeeded by another. If a complainant were required to file
a new consultations request for every administrative review, WTO dispute settlement would become a
"moving target", and the recommendations and rulings of the Dispute Settlement Body ("DSB") could
not address the latest measure. This would needless ly prevent the prompt settlement of disputes. As
noted, panels and the Appellate Body have rightly rejected this interpretation.

III. THE CONTINUED USE OF ZEROING IN SUCCESSIVE PROCEEDINGS UNDER
THE ORANGE JUICE ORDER FALLS WITHIN THE PANEL'S TERMS OF
REFERENCE

A. B
ACKGROUND

17. In addition to challenging individual re views in which zeroing was used, Brazil has
challenged "[t]he continued use of the US. "zeroing procedures" in successive anti-dumping
proceedings, in relation to the anti-dumping duty order issued in respect of imports of certain orange
juice from Brazil".
27 Brazil refers to this as the "Continued Use" measure.

B. T
HE UNITED STATES' OBJECTIONS UNDER ARTICLE 6.2 OF THE DSU

18. Like in US – Continued Zeroing, where its arguments were rejected, the United States objects
that the continued use of zeroing in successive an ti-dumping proceedings relating to the orange juice
order does not fall within the panel's terms of reference.
28

25 19 C.F.R. § 351.102. Exhibit BRA-44.
26 Brazil's FWS, paras. 19 – 21.
27 Request for the Establishment of a Panel by Brazil, 20 August 2009, p. 3, heading (d).
28 US FWS, paras. 50-52. This line of argument was rejected in US – Continued Zeroing . Appellate
Body Report, US – Continued Zeroing, paras. 159 – 172.

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C. T HE REQUIREMENTS OF ARTICLE 6.2 OF THE DSU

19. Article 6.2 of the DSU requires, among others, that a panel request "identify the specific
measures at issue".
29 If a measure is not specifically identified in the panel request, it does not fall
within the panel's terms of reference. In the words of the Appellate Body,

... the specificity requirement means that the measures at issue must be identified
with sufficient precision so that what is referred to adjudication by a panel may be
discerned from the panel request.30

20. In US – Continued Zeroing , the Appellate Body held that, under Article 6.2 of the DSU, the
European Communities had properly identified a "specific measure" that the Appellate Body
described as follows: "the use of the zeroing methodology in successive proceedings, in each of
the 18 [anti-dumping] cases, by which the anti-dumping duties are maintained".31

21. In reaching this conclusion, the Appellate B ody dismissed US arguments to the effect that
such a measure did not exist. It emphasized that, under Article 6.2, the issue is whether a measure has
been properly identified, adding that:

... the identification of the specific measures at issu e, pursuant to Article 6.2, is
different from a demonstration of the existence of such measures.
32

22. The Appellate Body also dismissed the US arguments that a measure involving ongoing
conduct in a series of anti-dumping determinations was of a type that could not be challenged in WTO
dispute settlement. 33 Furthermore, after finding that the panel request sufficiently identified a
"continued use" measure, the Appellate Body also held that, in certain instances, this measure violated
the Anti-Dumping Agreement and the GATT 1994. Thus, the continued use of zeroing is a measure of
a type that may be subject to WTO dispute settlement.

D. B
RAZIL' CONTINUED USE MEASURE FALLS WITHIN THE PANEL'S TERMS OF REFERENCE

23. Brazil begins by noting that the content of the measure identified in its panel request is
defined in very similar terms to the measure that the Appellate Body stated had been challenged by
the European Communities in US – Continued Zeroing . The two sets of measures were defined as
follows:

[T]he continued use by the United States of "zeroing procedures" in successive anti-
dumping proceedings, in relation to the anti- dumping duty order issued in respect of
imports of certain orange juice from Brazil (case No A-351-840), including the
original investigation and any subsequent administrative reviews, by which duties
are applied and maintained over a period of time.
34

29 Compliance with the requirements of Article 6.2, including the requirement to identify the specific
measures at issue, must be examined based "on the face" of the panel request, "read 'as a whole'". Appellate
Body Report, US – Continued Zeroing , para. 161, quoting Appellate Body Report, US – Carbon Steel ,
30 Appellate Body Report, US – Continued Zeroing, para. 168.
31 Appellate Body Report, US – Continued Zeroing, para. 166, 169.
32 Appellate Body Report, US – Continued Zeroing, para. 169.
33 Appellate Body Report, US – Continued Zeroing , para. 169. Also, Appellate Body Report, US –
Corrosion-Resistant Steel Sunset Review, para. 101.
34 Request for the Establishment of a Panel by Brazil, 20 August 2009, p. 3, heading (d).

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[T]he use of the zeroing methodology in su ccessive proceedings, in each of the 18
[anti-dumping] cases, by which the anti-dumping duties are maintained.35

24. Thus, Brazil identified the Continued Use measure at issue in similar terms to the formulation
that the Appellate Body used to describe a sim ilar measure. These similarities are not accidental.
Brazil intended to bring claims concerning the same ongoing conduct challenged by the European
Communities in US – Continued Zeroing , that is, the continued use of zeroing in successive anti-
dumping proceedings under a particular anti-dumping order. The only material difference is that
Brazil's claims address continued conduct under a different anti-dumping order from the orders
implicated in US – Continued Zeroing.

25. Given the Appellate Body's own formul ation of the "continued use" measure in US –
Continued Zeroing, the formulation of Brazil's panel request is more than sufficient for the Panel, the
United States, and the third parties to "identify[] with sufficient precision … what is referred to
adjudication".
36 The United States has not argued that th e panel request lacks clarity; it merely
repeats the arguments made in US – Continued Zeroing to the effect that the measure at issue is of a
type that cannot be challenged in WTO dispute settle ment, and that the measure does not exist. For
the same reasons as were given by the Appellate Body in US – Continued Zeroing, these arguments of
the United States should be rejected.37

26. Brazil also notes that, in US – Continued Zeroing , the Appellate Body rejected the
US argument that the continued use of zeroi ng in successive anti-dumping proceedings under specific
anti-dumping orders is no different to a challenge to past individual determinations, an argument that
the United States now repeats.
38 The Appellate Body observed that a challenge to a continued use
measure of the type at issue is "narrower than a challenge to the zeroing methodology" as such, and
"broader than specific instances in which the zeroing methodology was applied".39

27. With respect to the continued use measure, the Appellate Body found that the complaint was
directed at:

… the zeroing methodology as used in the final order and programmed to continue
to be used until such time as the United Stat es eliminates zeroing from the particular
anti-dumping duty under consideration.
40

28. The Appellate Body explained that a compla inant "is entitled to frame the subject of its
challenge in such a way as to bring the ongoing conduct [] under the scrutiny of WTO dispute
settlement".
41

29. As in US – Continued Zeroing , the conduct at issue in this case is the continued use of the
zeroing methodology in making determinations under a particular anti-dumping order , and the
remedy requires the United States to cease using this methodology to make determinations under the
particular order . In this regard, Brazil is entitled, as the European Communities was in US –
Continued Zeroing , to bring claims regarding this measure in order to resolve a disagreement
regarding the use of zeroing under the orange juice order.

35 Appellate Body Report, US – Continued Zeroing, para. 166.
36 Appellate Body Report, US – Continued Zeroing, para. 168.
37 Appellate Body Report, US – Continued Zeroing, paras. 169, 171.
38 US FWS, para. 50.
39 Appellate Body Report, US – Continued Zeroing, paras. 179 – 181.
40 Appellate Body Report, US – Continued Zeroing, para. 180.
41 Appellate Body Report, US – Continued Zeroing, para. 181, footnotes omitted.

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30. The United States also argues that Brazil is "challenging an indeterminate number of potential
future measures", which, it says, is contrary to the DSU. 42 This argument was also dismissed by the
Appellate Body in US – Continued Zeroing, which stated:

The prospective nature of the remedy sought by the European Communities is
congruent with the fact that the measures at issue are alleged to be ongoing, with
prospective application and a life potentially stretching into the future.43

31. Accordingly, Brazil is not precluded from challenging the Continued Use measure simply
because it may be applied when future anti-dumping determinations are made under the orange juice
order. To the contrary, this is the very reason why Brazil has brought this dispute over the continued
use of zeroing under the orange juice order – it wi shes to resolve a dispute regarding conduct that will
likely "stretch[] into the future".
44 WTO dispute settlement is designed precisely to allow Members to
settle such disputes promptly, by permitting Member s to challenge the root of the problem. By
challenging the root of the problem, Brazil avoids the situation where the United States has adopted
new individual determinations us ing zeroing before the Panel proceedings have been completed,
which would turn the US measures into "a 'moving target'".45

E. C
ONCLUSION

32. Thus, Brazil requests that the Panel re ject the United States' requests for the
Second Administrative Review and the Continued U se measure to be excluded from its terms of
reference, and to find that these measures form part of its terms of reference.