Document: Executive Summary
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 B

THIRD PARTIES' WRITTEN SUBMISSIONS OR
EXECUTIVE SUMMARIES THEREOF

Contents Page
Annex B-1 Third Party Written Submission of Argentina B-2
Annex B-2 Executive Summary of the Third Party Written Submission of the
European Union B-6
Annex B-3 Executive Summary of the Third Party Written Submission of
Japan B-10
Annex B-4 Executive Summary of the Third Party Written Submission of
Korea B-16
Annex B-5 Executive Summary of the Third Party Written Submission of
Mexico B-20

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I. INTRODUCTION

1. Argentina thanks the Panel for this oppor tunity to present its arguments concerning the
correct interpretation of the Anti-Dumping Agreem ent (hereinafter ADA), to ensure that the
Agreement is not interpreted in such a way as to diminish or impair the rights of Members.

2. Argentina will not discuss zeroing as applied in the specific case brought by Brazil. Rather, it
will focus on a more systemic aspect, i.e. the inconsistency of zeroing as such.

3. As it has emerged from other cases submitte d to the DSB, the practice and methodology
applied by the United States Department of Co mmerce (USDOC), commonly known as "zeroing", is
inconsistent with the ADA, since Article 1 of the ADA stipulates that "[a]n anti-dumping measure
shall be applied only under circumstances provided for in Article VI of GATT 1994 and pursuant to
investigations initiated and conducted in accordance with the provisions of this Agreement".

4. On the contrary, the zeroing methodology for calculating the margin of dumping during the
investigation phase, by eliminating certain relevant transactions from the calculation, can lead to
two situations: (a) artificial inflation of a ma rgin of dumping; or, in the worst-case scenario,
(b) creation of a margin of dumping where there is none.

5. Argentina will now present its arguments concer ning the interpretation of the main provisions
of the ADA raised in this dispute that may be affected as a result of applying the zeroing methodology
to calculate margins of dumping.

6. Firstly, bearing in mind that Brazil referred to the zeroing methodology in original
investigations ("model zeroing"), and more specifical ly to the inconsistency of the methodology with
Article 2.4.2 of the ADA
1, we shall examine the consistency of that methodology with the said
provision of the ADA.

7. Finally, in the light of Brazil's analysis of the inconsistency of the use of the zeroing
methodology in administrative reviews with Article VI.2 of the GATT 1994 and Article 9.3 of the
ADA, we shall address that issue.

II. INCONSISTENCY WITH ARTICLE 2.4.2 OF THE ANTI-DUMPING AGREEMENT

8. Both Panels and the Appellate Body have in several instances found the practice of zeroing to
be inconsistent with Article 2.4.2 of the ADA.
2

9. Article 2.4.2 refers to the various methods av ailable to investigating authorities for calculating
the margin of dumping. This provision specifies that "[ s]ubject to the provisions governing fair
comparison in paragraph 4, the existence of margin s of dumping during the investigation phase shall
normally be established on the basis of a comparison of a weighted average normal value with a
weighted average of prices of all
 comparable export transactions or by a comparison of normal value
and export prices on a transac tion to transaction basis [thus providing the possibility of a weighted
average/transaction under exceptional circumstances method]".

1 First Written Submission of Brazil, page 38, paragraph 114.
2 See the Reports of the Appellate Body in EC - Bed Linen, paragraph 66; US - Softwood Lumber V ,
paragraph 117; US - Zeroing (EC), paragraph 222. See also the reports of the Panels in US - Zeroing (Japan),
paragraphs 7.86 and 7.179; US - Stainless Steel (Mexico) , paragraph 7.63; and US - Continued Zeroing ,
paragraphs 7.109-111.

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10. The above provision explains how domestic authorities must proceed in establishing "the
existence of margins of dumping", that is, it explains how they must proceed in establishing that there
is dumping.

11. As can be inferred from this provision, co mparison for the purposes of calculating the
"margin of dumping" in an investigation, rega rdless of the method used, must be based on "all"
comparable transactions and not on the selection of some models or transactions.

12. Moreover, a methodology that fails to include all transactions in the calculation of the margin
of dumping is not "fair", thus contravening the prin ciple established in Article 2.4 of the ADA and the
first sentence of Article 2.4.2 of the ADA.

13. In this connection, in EC - Bed Linen (paragraph 55) the AB held that:

… the investigating authorities are required to compare the weighted average normal
value with the weighted average of prices of all comparable export transactions.
Here, we emphasize that Article 2.4.2 speaks of "all" comparable export transactions.
As explained above, when "zeroing", the European Communities counted as zero the
"dumping margins" for those models where the "dumping margin" was "negative".
As the Panel correctly noted, for those models, the European Communities counted
"the weighted average export price to be equal to the weighted average normal value
[…] despite the fact that it was, in reality , higher than the weighted average normal
value." By "zeroing" the "negative dump ing margins", the European Communities,
therefore, did not take fully into account the entirety of the prices of some export
transactions, namely, those export transactions involving models of cotton-type bed
linen where "negative dumping margin s" were found. [...] Thus, the
European Communities did not establish "the existence of margins of dumping" for
cotton-type bed linen on the basis of a comparison of the weighted average normal
value with the weighted average of prices of all comparable export transactions ...
14. Furthermore, Article 2.4.2 of the Anti-Dumpi ng Agreement also states 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 weighted average of prices of all comparable
export transactions".

15. As regards the term "comparable", in EC - Bed Linen (paragraph 56) the AB held that:

[T]he word "comparable" in Article 2.4.2 do es not affect, or diminish in any way, the
obligation of investigating authorities to establish the existence of margins of
dumping on the basis of "a comparison of the weighted average normal value with the
weighted average of prices of all comparable export transactions. (emphasis added)
16. By "zeroing" the difference between normal value and export price of certain transactions,
deliberately setting aside a proportion of the export pri ce, the United States appears to rely on at least
two presumptions, that is:

(a) A certain proportion of the price is irrele vant for calculating the margin of dumping,
whereas another part is not; and

(b) it prejudges the existence of a margin of dumping before even having made the
pertinent determination, since it decides a priori which margin to apply as a
parameter, at least for some transactions.

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17. As regards the first presumption, the AB ( EC - Bed Linen , paragraph 55) noted the
inconsistency of this reasoning, in finding that "a comparison between export price and normal value
that does not take fully into account the entirety of the prices of all comparable transactions" does not
fulfil the fair comparison requirement under Article 2.4 and Article 2.4.2.

18. It should be emphasized that the definition of the term "margin of dumping" is always the
same, regardless of the method used for its calculation, in accordance with Article 2.4.2 of the ADA.
In EC - Bed Linen (paragraph 53), the AB held that "[w]hatever the method used to calculate the
margins of dumping, […] these margins must be, and can only be, established for the product under
investigation as a whole".

III. INCONSISTENCY WITH ARTICLE 9.3 OF THE ANTI-DUMPING AGREEMENT
AND ARTICLE VI:2 OF THE GATT 1994

19. Article 9.3 of the ADA, read in conjuncti on with Article VI:2 of the GATT 1994, provides
that anti-dumping duties levied in order to offset the effects of dumping may not exceed the margin of
dumping in respect of such product.

20. Article 9.3 stipulates that " [t]he amount of the anti-dumping duty shall be established in
accordance with the provisions of Article 2".

21. The zeroing methodology, by not producing a resu lt that takes into account all the variables to
be taken into consideration in a margin-of-dumping determination, ultimately implies the levying of
anti-dumping duties in excess of the margin of dumpi ng, and is consequently inconsistent with
Articles 9.3 of the ADA and VI:2 of the GATT 1994.

22. Nonetheless, Argentina wishes to make clear that the imposition and collection of duties
cannot be confused with the calculation of the ma rgin of dumping, which the implementing authority
is required to make prior to the imposition phase.

IV. CONCLUSION

23. In view of the foregoing, Argentina considers that the zeroing methodology for calculating
margins of dumping during the investigation phase is inconsistent with Article 2.4.2 of the ADA.

24. Furthermore, the imposition of an anti-dumping duty in excess of the amount of the margin of
dumping is inconsistent with Article VI:2 of th e GATT 1994 and Article 9.3 of the ADA, except as
provided for in paragraph 24.

25. Accordingly, Argentina respectfully requests the Panel to ask the United States to bring its
measures into conformity with WTO law.

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ANNEX B-2

EXECUTIVE SUMMARY OF THE THIRD PARTY WRITTEN
SUBMISSION OF THE EUROPEAN UNION

I. PRELIMINARY ISSUES RAISED BY THE US

1. The EU considers that the Panel should reject the US request for preliminary rulings. First,
the EU considers that Brazil adequately identified th e measure at issue in its Consultations and Panel
Requests. Second, as regards the existence of the measures at issue and the requirements under
Article 6.2 of the DSU, in US – Continued Zeroing , the Appellate Body rejected a similar argument
raised by the US. Since the ongoing conduct at issue includes the original determination and any
subsequent administrative review with respect to the same anti-dumping order, Brazil has identified
with sufficient precision the measures at issue in the present case in accordance with Article 6.2 of the
DSU. Since the second administrative review is part of the same measure, the fact that the definitive
results were published only after consultations were held is irrelevant. All these measures thus fall
within the Panel's terms of reference.

II. BURDEN OF PROOF

2. The EU understands that the programme used to determine the specific dumping margins is
provided to each company in a disk so that the r esults can be verified. In that sense, running the
programme later on is a simple operation which does not alter the results contained in the programme
log. To the extent that the US disagrees with the documents provided by Brazil, in the EU's view, it is
for the US to provide the relevant evidence. In addition, the US argues that Brazil cannot meet its
burden of proof merely by alleging that "zeroing" may or will occur in the future. According to the
US, there may in fact be no "zeroing" at all wher e there are no negative comparison results. In this
respect, the EU considers that, even where all tran sactions are below or above the line, zeroing is
embedded in the measure at issue. The fact that the zeroing procedures do not alter the dumping
margin calculations is something which may be relevant when determining the level of nullification or
impairment caused at a later stage (e.g., in Artic le 22.6 DSU proceedings). However, it does not
eliminate the WTO inconsistent methodology which is part of the measure and that, depending on
future transactions, may lead to negative comparison results. In essence, what the US seems to argue
is that legislation which is not applied cannot be challenged since it does not lead to any results.
However, the relevant case law has clarified that le gislation can be challenged "as such" even if it has
never been enforced. Consequently, the US contention should be dismissed.

III. STANDARD OF REVIEW: THE ROLE OF THE PRECEDENT IN THIS DISPUTE

3. In US – Stainless Steel from Mexico the Appellate Body clarified the role of its
previous reports and indicated how panels should act in cases where the same legal issues arise
(paras 157-162). The EU fully agrees with these statements without reservation. WTO panels are
obliged to correctly apply the law; in the context of this dispute this also means that the Panel should
follow the rulings of the Appellate Body where th e Appellate Body has previously interpreted the
same legal questions. Otherwise, the security and predictability enshrined in Article 3.2 of the DSU
would be put in serious danger.

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IV. OVERVIEW OF THE CORE PROBLEM

4. The term "zeroing" – which does not appear in the ADA, may be considered something of a
misnomer, because it describes only part of the problem: that is, the downward adjustment of the
relatively high export transactions; or, in other wo rds, the setting to zero of the negative amounts.
The heart of the matter, however, is the selection of the relatively low priced export transactions per
se, as a sub-category, as the only or preponderant basis for the dumping margin calculation. This has
nothing to do with "offsets" or "credits".

5. This is not a new problem. It is discussed at length in Jacob Viner's Memorandum, and was
specifically addressed in the Uruguay Round negotiations, during which the Members were fully
informed of the issue and knew exactly what they we re talking about. After more than three years of
public negotiations, the problem was nicely summarised by the WTO secretariat: it was generally
considered that the practice of comparing a wei ghted average normal value with individual export
transactions was obviously unfair to exporters – particularly from developing countries – and required
amendment of the Tokyo Round AD Code; the US explained that such a method was necessary to
reveal targeted dumping – that is, successive attacks on different parts of an importing market; the
consensus was that the Membership should try to find a solution to accommodate the legitimate
concerns of both sides. That compromise was the text of Article 2.4.2 of the ADA, as it stands today.

6. Looking at the overall design and architecture of Article 2.4.2, and reading its provisions
intelligently, in the light of the underlying economic realities that the legal rules are intended to
address and respond to – that is, the real world, it is clear that there are only three sub-categories of
clustered low priced export transactions that it is permissible to respond to: those clustered by
purchaser, region or time. These categories broadly correspond to typical market definition
parameters: they make economic sense.

7. Thus, it is not permissible, and it is not fa ir, to pick up low priced export transactions
clustered by model. The US has acknowledged as much . This is clear from the term "all" in the
first sentence of Article 2.4.2, and the defi nition of dumping in Article 2.1 of the ADA and
Article VI:1 of the GATT 1994 in terms of the product; read together with the absence in the targeted
dumping provisions of any reference to a sub-categor y by model. Thus, the relevant provisions, and
particularly the normal rule and the exception, are read harmoniously, so as to give meaning – both
legal and economic – to all the treaty terms.

8. In exactly the same way, it is not possible to pick up low priced export transactions per se as a
sub-category. There is no reference to any such sub-category in the provisions on targeted dumping.
To accept such a proposition would be to render th e targeted dumping provisions useless; and to
negate the compromise, negotiated and agreed by all the WTO Members (in return for other
concessions), to which we have just referred. The pr oof of this is that for some 15 years the US has
simply ignored the targeted dumpi ng requirements, content to continue doing exactly what it was
doing before, based on its own unilatera l interpretation of Article 2.4.2. The further proof of this is
that, by its own assertion, the US sought the inser tion of the phrase "the existence of margins of
dumping during the investigation phase" (the "Phrase" ) precisely with the intention of side-stepping
the compromise and the obligations that we have just outlined. This is a highly significant point that
bears repetition: the entire US position is premised on the implied admission that the overall design
and architecture of Article 2.4.2 is to be interpre ted in the manner advocated by the EU in previous
cases.

9. We turn, therefore, to the Phrase "the existence of margins of dumping during the
investigation phase", added – behind closed doors – after some three and a half years of public
negotiations. According to the US, this means that the obligations in Article 2.4.2 do not apply to the
re-calculation of dumping margins in assessment pro ceedings. Rather, the US is completely free to

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choose the methodology to be used for calculating a contemporaneous dumping margin and finally
collecting duties. Since the results of the first retrospective assessment proceeding are applied with
effect from the date on which duties were first impo sed, this would negate entirely the compromise
enshrined in Article 2.4.2.

10. In the view of the EU, assuming Members ne gotiate in full knowledge of the 1969 Vienna
Convention on the Law of the Treaties (the "Vienna Convention"), it may reasonably be assumed that
they negotiate in good faith, just as they agree that the terms of th e ADA are to be interpreted in good
faith. In such negotiations, the EU would neither e xpect nor accept that what is clearly given, after
lengthy debate, with one hand (t hat is, agreement not to use asymmetry absent targeted dumping)
would be surreptitiously entirely taken away with the other hand. The US position reflects what
might be termed the "last minute" "spanner in the wo rks" theory of international negotiation – a tactic
that, in the view of the EU, is hardly suited to a multilateral organisation with 153 Members,
including many developing countries.

11. However, assuming for the sake of argument, that such negotiation tactics are permissible,
the EU would like to draw the Panel's very close attention to what a Member forfeits when it adopts
such an approach. First, most obviously, the Member chooses to leave no trace of its intended
unilateral interpretation in the preparatory work. Second, and in similar vein, the Member chooses
not to offer any explanation to its negotiating partne rs – many of whom are developing countries - as
to what the object and purpose of such a provision might be. This is particularly problematic when
the subsequent unilateral interpre tation flies in the face of the overall design and architecture of
the ADA. Especially when there is no object and pur pose capable of explaining why, on the basis of
identical data, the mere act of collection shoul d inflate the dumping margin many times over – a
proposition that is "manifestly absurd or unreasonabl e" within the meaning of the Vienna Convention
– both in legal terms and in economic terms. Th ird, and in similar vein, the Member chooses to
forego any attempt to reconcile conflicting context with its intended unilatera l interpretation. The
Panel may thus note that of the various elements of the interpretive rule in the Vienna Convention, by
the US' own choice, there is only one that stands between the US and failure: the supposed ordinary
meaning of the Phrase.

12. We believe we have previous ly amply demonstrated – and we do so again below - that the
ordinary meaning of the Phrase is not that advocated by the US. We believe that, for the US, the term
"investigation" was key in its intended unilateral interpretation. In fact, we have an express admission
of this in the US Statement of Administrative Action (SAA), which accompanied the adoption of the
US Uruguay Round Agreements Act, and which contains the words ("not reviews"). Obviously, the
drafter of the SAA well appreciated that these word s are not contained in Article 2.4.2 of the ADA,
and do not result from a proper interpretation of that provision, which is precisely why they were
inserted in the SAA in an attempt at ex post rationa lisation – an attempt doomed to fail, as subsequent
WTO litigation has demonstrated.

13. The discussion could stop here. But there are a multitude of other interpretative points
against the US. First, the grammatical structure of the Phrase, in which the term "during … phase" is
grammatically linked to a period of time in which margins exist (an investigation period) as opposed
to one in which they are established (as the US would have it). This both confirms the EU
interpretation and precludes the US interpretation. Second, the defined term "margin of dumping" has
the same meaning throughout the ADA, and must in form the meaning of the Phrase – there being no
support in the text for the view that the definition should change at the moment of final collection.
Third, the overall design and architecture of Article 2.4.2, as outlined above. It is particularly
significant in this respect that the EU position r eads the normal rule referring to the investigation
period in counterpoint to the exceptional rule perm itting a response to time based targeted dumping.
Thus, once again, the EU advances a harmonious read ing of all the treaty terms, which makes legal
and economic sense of all of them. Fourth, the nume rous references in Article 2 to "investigations",

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which are considered, even in US municipal law, to refer to all types of investigations, including
assessment proceedings. Fifth, the rule in Ar ticle 9.3 that the amount assessed cannot exceed the
dumping margin – with an express cross-reference to all of Article 2. Sixth, the absence of any object
and purpose argument capable of supporting the US position. Seventh, the preparatory work, as
outlined above … And the list goes on.

14. Finally, the US turns to some other general ar guments, equally without merit. First, the so-
called "mathematical equivalence" argument, whic h is obviously vitiated by a simple intellectual
error: something can perfectly well be fair as a response to targeted dumping, but unfair absent
targeted dumping. Second, the argument derived fr om Article 9(4)(ii) and the so-called "variable
duty" or prospective normal value. This provision concerns sampling, and insofar as it implies the
possibility that one of the measures that could be imposed pursuant to Article 9.2 ADA could be a
variable duty, it equally implies that any such duty is ultimately subject to final assessment or refund
under Article 9.3, with dumping margins re-calcula ted in accordance with all of the provisions of
Article 2. This is completely logical. It plugs th e gap that would otherwise arise in the refund system
under Article 9.3.2, in which final liability canno t, by definition, increase. The only option for
Members operating such systems who are fearful of targeted dumping is a variable duty, with refund
in the event that the feared targeted dumping does not materialise. The proposition that
Article 9(4)(ii) in any way contradicts any of the in terpretative points that we have already outlined is
thus without merit. Third, the proposition that because, in the US, assessment proceedings are
importer driven, this should change the analysis. This practical assertion is without merit. The ADA
responds to international price discrimination by exporters; and it is a matter of elementary accounting
to calculate final liabilities for importers, whils t respecting the ceiling fixed by the amount of
dumping practiced by an exporter.

15. If all of the interpretative elements in th e Vienna Convention support the position of the EU
and Brazil, and disprove the position of the US , the US interpretation cannot be said to be
"permissible" within the meaning of Article 17.6 of the ADA.

V. CONCLUSION

16. The EU submits that the US new attempt to re visit the issue of zeroing should be rejected and
trusts that the Panel will comply with its functions under Article 11 of the DSU.

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ANNEX B-3

EXECUTIVE SUMMARY OF THE THIRD PARTY WRITTEN
SUBMISSION OF JAPAN

1. In this dispute, Brazil presents a series of claims against the United States' continued use of
the so-called "zeroing" procedures in calculating margins of dumping in a large number of anti-
dumping proceedings.

2. To determine the overall amount of "dumping", the USDOC aggregated the multiple
comparison results. Under the zeroing procedures, the USDOC disregarded – or treated as "zero"
value – the negative comparison results for export tr ansactions which the USDOC itself deemed to be
comparable. By excluding all negative comp arison results, the USDOC makes a "dumping"
determination that disregards an entire category of the export transactions making up the "product" –
namely, those transactions that generate the negative comparison results. "Dumping" is, therefore, not
determined for the "product" as defined by the investigating authority, but for a sub-part of it.

3. The Appellate Body repeatedly ruled that a par tial determination of this type is inconsistent
with the definition of "dumping" in Article 2.1 of the Anti-Dumping Agreement, and Article VI of the
GATT 1994, because it is not made for the " 'product' as a whole " but for a sub-part of the product.
1
The Appellate Body also ruled that this definition of "dumping" "applies to the entire [Anti-Dumping]
Agreement", including all the provisions governing reviews. 2 The United States' zeroing procedures,
and anti-dumping measures adopted us ing these procedures, have been found to be incompatible with
Articles 2.4 and 2.4.2, 9.3, 9.5 and 11.3 of the Anti-Dumping Agreement in a series of previous
disputes.3

4. In the current dispute, the United States' defe nse consists entirely of a repetition of arguments
that have been made in previous disputes. Th e purpose of WTO dispute settlement is to allow the
Dispute Settlement Body – acting th rough panels and, ultimately, the Appellate Body – to resolve
disputes by clarifying the meaning of the text on a multilateral basis. Japan does not consider that
these ends would be served if the Panel were to re ject the Appellate Body's previous rulings on
zeroing, which are based on the text of the covered agreements, and have been consistently rendered.

I. THE UNITED STATES' REQUEST FOR PRELIMINARY RULINGS SHOULD BE
REJECTED

5. The United States argues that the Second Admini strative Review is not properly within the
Panel's terms of reference, because the final results of it had not been issued at the time of Brazil's
request for consultations. However, in the pr esent case, the Second Administrative Review was
subject to consultations and included in the Panel's terms of reference. Even though the final result of
the review had not been issued at the time of the request for consultations, the review had been

1 Appellate Body Report, EC – Bed Linen, para. 53; Appellate Body Report, US – Softwood Lumber V,
para. 99; Appellate Body Report, US – Zeroing (EC) , para. 126; Appellate Body Report, US – Softwood
Lumber V (Article 21.5 – Canada), paras. 87 and 89; Appellate Body Report, US – Zeroing (Japan), para. 115.
2 Appellate Body Report, US – Zeroing (Japan) , para. 109; Appellate Body Report, US – Softwood
Lumber V, para. 93; and Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , paras. 109
and 126.
3 Appellate Body Report, US – Zeroing (Japan), para. 190; Appellate Body Report, US – Zeroing (EC),

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initiated and a final result had been expected to be is sued in a certain period. Japan thinks that, from
the description of the request for consultations, Brazil's consultations provided the parties an
opportunity to define and delimit the scope of the dispute between them.

6. The United States argues that the "continued u se of zeroing" is not a measure with in the
Panel's terms of reference under Article 6.2 of the DSU. To see Brazil's panel request, Japan finds no
substantial difference between the measure at issu e in the present case and the measures at issue in
US – Continued Zeroing (EC).
4 Japan thinks that the panel should reject the United States' request for
preliminary rulings and find that the continue d use of the zeroing methodology in successive anti-
dumping proceedings, in relation to the anti-dumpi ng duty order issued in respect of imports of
certain orange juice from Brazil, constitute a "measure " that falls within the Panel's terms of reference
under Article 6.2.

II. THE ZEROING PROCEDURES USED BY THE USDOC IN THE MEASURES
CHALLENGED BY BRAZIL ARE INCO NSISTENT WITH THE OBLIGATIONS
ESTABLISHED BY THE ANTI-DUMPING AGREEMENT AND THE GATT 1994

7. As the United States accepts, the analysis of the zeroing issue begins with the concepts of
"dumping" and "margins of dumping", as defined in Article VI:1 of the GATT 1994 and Article 2.1 of
the Anti-Dumping Agreement. Article 2.1 has particular importance among the "agreed disciplines"
set out in Article 2 for determini ng "dumping" and "margins of dumping"
5, because it provides a
definition of "dumping". This provision reiterates th e definition of "dumping" in Article VI:1 of the
GATT 1994. The text of both of these pr ovisions refers to the dumping of "a product". In addition,
they state that dumping of " a product" occurs when " the [export] price of the product" is less than
"the comparable price … for the like product" (Emphasis added). The text, therefore, defines
"dumping" in terms of the difference between two prices, each one of which is an aggregate price for
"the product". The "dumping" dete rmination is, therefore, made by reference to an overall price
difference for the product.6

8. Whether or not the investigating authority d ecides initially to make multiple comparisons at
the sub-product level, the wording of Article 2.1 and Article VI emphasizes that "dumping is defined
in relation to a product".
7 Thus, the Appellate Body further found, "it is only on the basis of
aggregating all these 'intermediate values' that an investigating authority can establish margins of
dumping for the product under investigation as a whole".8

9. For each individually examined producer or exporter, the text of the Anti-Dumping Agreement
expressly contemplates the determination of only a single margin of dumping for a product. As stated
by Article 2.1, this language underscores that a single, overall dumping determ ination is made for a
product as a whole on the basis of aggregate pri ce comparisons, even if multiple intermediate
comparisons are undertaken at a sub-product level. Finally, as noted above, Article 2.1 sets forth a
definition of "dumping" that applies "[f]or the pur pose of this Agreement". Therefore, a uniform
definition of "dumping" relating to a product as a whole applies throughout the Anti-Dumping
Agreement, and to different types of anti-dumping pro ceedings that are conducted pursuant to the
Agreement.
9

4 Appellate Body Report, US – Continued Zeroing (EC), para. 181
5 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review, para. 127.
6 Appellate Body Report, US – Zeroing (Japan), para. 109.
7 Appellate Body Report, US – Softwood Lumber V, para. 93.
8 Appellate Body Report, US – Zeroing (Japan), para. 122.
9 Appellate Body Report, US – Zeroing (Japan), para. 109.

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10. Then, Japan addresses more specific arguments raised by the United States to support its
argument that "dumping" in Article 2.1 and Article VI :1 need not be defined in relation to a "product"
as a whole. First, the United States argues that the mean ing of the treaty terms "dumping" and
"margins of dumping" must be based on "real-wor ld commercial conduct" in the marketplace, where
prices are often determined for individual transactions. The text of the Anti-Dumping Agreement
requires that a comparison be made of aggregate prices for a "product" to arrive at a single margin of
dumping for each foreign producer or exporter. Th e fact that prices may be determined in the
marketplace for individual transactions is not the sole consideration that motivated WTO Members.

11. Second, the United States relies on certain historical arguments in support of its argument that
zeroing is permissible. Although the United States believes that the negotiating history produced an
outcome permitting zeroing, nothing in the text sh ows that the Members agreed to this view. Third,
the United States argues that the term "product" does not refer exclusively to "product as a whole".
The analysis of the zeroing issue begins with the c oncepts of "dumping" and "margins of dumping" in
Article VI:1 of the GATT 1994 and Article 2.1 of the Anti-Dumping Agreement . For each
individually examined producer or exporter, the text of the Anti-Dumping Agreement expressly
contemplates the determination of single margin of dumping for a product.

12. Fourth, the United States argues that Ad Article VI:1 "provides for importer-specific
comparisons" and, as a result, "the term 'margin of du mping' cannot relate to aggregated results of all
comparisons for the 'product as a whole'". The Ad Article does not purport to alter the requirement in
Article 2.1 and Article VI:1 that dumping and marg ins of dumping are determined for a "product".
Instead, consistent with these provisions, the term "margin of dumping" in the Ad Article can, and
must, be read to refer to a margin for a "product". Fifth, the United States relies on Article 2.2 of the
Anti-Dumping Agreement, arguing that a product-wide definiti on of dumping "would require the use
of constructed [normal] value for the 'product as a whole'". Whether or not normal value is
constructed for some or all models under Article 2.2, the results of intermediate comparisons must all
be aggregated to determine "dumping" on a product-wide basis to meet the definition in Article 2.1.

13. The United States contends that a "general prohibition of zeroing" w ould be "inconsistent"
with the second sentence of Article 2.4.2 of the Anti-Dumping Agreement , and specifically would
"reduce to inutility" the comparison methodology au thorized by that sentence. The United States
made this argument, without success, in US – Zeroing (EC), US – Softwood Lumber V (Article 21.5 –
Canada), US – Zeroing (Japan), US – Stainless Steel (Mexico) and US – Continued Zeroing (EC).

14. In US – Softwood Lumber V (Article 21.5 – Canada) , the Appellate Body rejected the
United States' argument that the prohibition of zeroing would render the second sentence of
Article 2.4.2 inutile. First, it noted that the United States has never applied the methodology
authorized by the second sentence and that the argu ment as to "mathematical equivalence" between
W-to-W and W-to-T comparisons "rests on an untested hypothesis". 10 Second, the Appellate Body
noted that the methodology authorized in the second sen tence of Article 2.4.2 is an "exception" to the
methodologies authorized in the first sentence, and as such, the second sentence "alone cannot
determine the interpretation of the two methodologies provided in the first sentence …". 11 Third, the
Appellate Body noted that "there is consid erable uncertainty regarding how precisely the
third methodology [i.e. the methodology in the sec ond sentence] should be applied", because it has
never been invoked and that the United States could not provide details regarding how this never-used
methodology would work.

15. The United States indicated to the Appellate Body that its use of W-to-T comparison method
would be limited to the export transactions maki ng up the "pricing pattern", and that W-to-W

10 Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada), para. 97.
11 Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada), para. 97.

BCI deleted, as indicated [[XX]]

comparisons would be conducted fo r the remaining export transactions. However, "the United States
failed to explain how precisely the results of the two comparison methodologies would be combined".
Finally, applying the proper test for inutility, the Appe llate Body found that "[i]t has not been proven
that in all cases, or at least in most of them, the two methodologies would produce the same results".12
The Appellate Body, therefore, found that the con cerns regarding "mathematical equivalence" were
unwarranted.13

16. The Appellate Body added that the sec ond sentence of Article 2.4.2 does not provide
contextual support for a finding that zeroing is pe rmissible because, "[i]n order to unmask targeted
dumping, an investigating authority may limit the application of the W-T comparison methodology
[under the second sentence] to the prices of export transactions falling within the relevant pattern".
14
On this interpretation, absent zeroing, a comparis on based on this sub-set of transactions would not
produce the same outcome as a W-to-W comparison under the first sentence. There is, therefore, no
need to permit zeroing under the second sentence of Artic le 2.4.2 in order to avoid the inutility of the
sentence.

A. Zeroing as Used by the USDOC in Orig inal Investigations Is Inconsistent with
Article 2.4.2 of the Anti-Dumping Agreement

17. After noting that "model zeroing" had already b een found to be inconsistent with Article 2.4.2
in US – Zeroing (EC) when used in W-to-W comparisons, the Appellate Body in US – Zeroing
(Japan) went on to explain that (simple) zeroing in T-to-T comparisons is likewise inconsistent.15

B. Zeroing as Used by the USDOC in Periodic Reviews Is Inconsistent with Article 9.3 of
the Anti-Dumping Agreement

18. The requirement set forth in the chapeau of Article 9.3 parallels th e language of Article VI:2
of the GATT 1994. It also reflects the rule in Article 9.1 that the amount of duty can be no more than
the margin of dumping. As a discipline on the "magnitude" of the duty imposed
16, the rule that the
maximum amount of anti-dumping duty cannot exceed the "margin of dumping" reflects the
"overarching principle " in Article VI of the GATT 1994 and Article 11.1 of the Anti-Dumping
Agreement that duties may be imposed solely " to the extent necessary to counteract dumping" during
the time period covered by the review.
17

19. On the basis of this treaty text, the Appella te Body held that "the margin of dumping
established for an exporter or foreign producer operates as a ceiling for the total amount of anti-
dumping duties that can be levied on the entries of the subject product (from that exporter) covered by
the duty assessment proceeding".
18 The express reference to Article 2 in the chapeau of Article 9.3
includes, among others, Article 2.1, which, as noted above, sets forth a definition of "dumping" that
applies "[f]or the purpose of this Agreement". In US – Zeroing (EC) , relying on these textual cross-
references, the Appellate Body made an explic it interpretive connection between a "product as a

12 Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada), para. 99.
13 Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada), para. 100.
14 Appellate Body Report, US – Zeroing (Japan), para. 135.
15 Appellate Body Report, US – Zeroing (Japan), para. 123.
16 Appellate Body Report, US – Carbon Steel, para. 70.
17 Appellate Body Report, US – OCTG Sunset Reviews (Mexico), para. 115.
18 Appellate Body Report, US – Zeroing (EC), para. 130. Original emphasis. See also Appellate Body

BCI deleted, as indicated [[XX]]

whole" requirement of Article 2.1 and dumpi ng determinations in periodic reviews under
Article 9.3.19

20. Accordingly, if, in a periodic review, th e investigating authority chooses to undertake
multiple comparisons at an intermediate stage, it is not permitted to take into account the results of
only some of the multiple comparisons, while di sregarding others. Thus, for purposes of these
reviews, the investigating authority must aggregat e all multiple comparisons to establish a margin of
dumping for the "product" under investigation as a whole. It is required to compare the anti-dumping
duties collected on all entries of the subject merc handise from a given exporter or foreign producer
with that exporter's or foreign producer's margin of dumping for the product as a whole, to ensure that
the total amount of the former does not exceed the latter.
20

21. The Appellate Body also rejected the Unite d States' argument that, in a periodic review,
"dumping" and "margins of dumping" can be determined on an importer- or import-specific basis. In
doing so, the Appellate Body relied in part on Artic le 6.10 as context, which precludes the calculation
of a margin of dumping for each individual import transaction, and it also requires that margins be
calculated for exporters and fo reign producers, not importers.
21 The United States objects to the
Appellate Body's interpretation that margins of dumping are determined for foreign producers or
exporters. However, as the Appellate Body previous ly explained, the United States' misgivings are
misplaced. Although margins of dumping are established for foreign producers or exporters for a
product as a whole, Members can assess anti-dumping duties on "a transaction- or importer-specific
basis", "provided that the total amount of anti- dumping duties that are levied does not exceed the
exporters' or foreign producers' margins of dumping".22

22. The United States argues that Members using a prospective normal va lue system are entitled
to assess duties on the basis of a transaction-specific margin of dumping. And, it says, the same
entitlement to make transaction-sp ecific assessments should be afforded to users of retrospective
systems. However, Articles 9.1 and 9.2, and Article VI:2 allow duties to be collected in appropriate
amounts not exceeding the margin of dumping, determined either during the investigation or a
subsequent review. The manner in which a Me mber chooses to impose and collect duties under
Article 9 – retrospectively or prospectively – does not alter the uniform definition of "dumping" in
Article 2.1 and Article VI:1.

C. Other Issues on Brazil's Claims

23. The United States argues that with respect to two administrative reviews Brazil has failed to
satisfy its burden of proving that zeroing was applie d to, or had an impact on, the challenged margins
of dumping. Japan would like to note that in US – Continued Zeroing (EC) , the Appellate Body
stated, "[w]e therefore consider that the Panel di sregarded the significance of the submitted evidence
when it failed to give consideration to that evidence in its totality
, including evidence that, in the
Panel's view, did not by itself show that simple zeroing was applied in a particular periodic review".23

24. The United States appears to be based on the premise that Brazil would claim that continued
use of zeroing is inconsistent solely with Article 2.4.2 of the Anti-Dumping Agreement. It is not true,
and Japan notes that Brazil claims that the c ontinued use by the United States of its zeroing

19 Appellate Body Report, US – Zeroing (EC) , para. 127, quoting Appellate Body Report, US –
Softwood Lumber V, para. 99.
20 Appellate Body Report, US – Zeroing (EC), para. 132.
21 Appellate Body Report, US – Zeroing (EC) , para. 128. See also Appellate Body Report, US –
Zeroing (Japan), para. 112.
22 Appellate Body Report, US – Zeroing (EC), para. 131.
23 Appellate Body Report, US – Continued Zeroing (EC), para. 337. Underlining Added.

BCI deleted, as indicated [[XX]]

procedures violates Article 2.4.2 in relation to the original investigations; and Article VI:2 of the
GATT 1994 and Article 9.3 in relation to the imposition and collection of anti-dumping duties.

III. CONCLUSION

25. Japan submits the following:

 (1) two administrative reviews concerning imports of certain orange juice from Brazil are
inconsistent with Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the
GATT 1994 due to the use of zeroing;

 (2) the continued use by the United St ates of zeroing procedures in successive anti-
dumping proceedings, in relation to the anti-dumpi ng duty order issued in respect of imports
of certain orange juice from Brazil, including the original investigation and subsequent
administrative reviews, by which duties are app lied and maintained over a period of time, is
inconsistent with Articles 2.4.2 and 9.3 of the Anti-Dumping Agreement, and Article VI:2 of
the GATT 1994.

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ANNEX B-4

EXECUTIVE SUMMARY OF THE THIRD PARTY WRITTEN
SUBMISSION OF KOREA

1. Korea addresses in its submission (1) certain issues presented in the request by the
United States for a preliminary ruling; and (2) some additional substantive issues raised by the parties
in their submissions.

I. THE UNITED STATES' REQUEST FOR PRELIMINARY RULINGS SHOULD BE
REJECTED

2. In its first written submission, the United St ates requests preliminary rulings with regard to
two issues. First, the United States argues that the USDOC's final determination in the second
administrative review of the antidumping order on Certain Orange Juice from Brazil is not within the
Panel's terms of reference because that determination was not the subject of consultations between the
parties. Second, the United States asks the Panel to find that the "continued use of the US 'zeroing
procedures' in successive anti-dumping proceedings" l acks the required specificity and is not within
the Panel's terms of reference.

3. The United States has contended that the USDOC's determination in the second
administrative review was not adequately described in Brazil's request for consultations. Korea notes,
however, that Brazil's Addendum to its initial request for consultations dated 22 May 2009
specifically indicated that "[t]he consultati ons, held on 16 January 2009, covered the … the
Antidumping Duty Administrative Review from 1 March 2007 to 29 February 2008 (the "Second
Administrative Review")".

4. As a separate matter, it should be noted that it is beyond dispute that Brazil's 20 August 2009
request for establishment of a panel in this dis pute did specifically identify the second administrative
review as one of "the measures at issue". In d escribing that measure, Brazils' panel request also
specifically referred to the USDOC's 11 August 2009 final determination in that review.

5. The preliminary ruling request by the United States does not address the significance of this
statement in Brazil's panel request. This silence suggests that the United States believes that the
USDOC's second administrative review can only fall within the Panel's terms of reference if the final
determination in that review was specifically referenced in the consultation request, as well as in the
panel request itself. However, that interpretation is not consistent with the provisions of the relevant
agreements.

6. Article 17.3 of the Anti-Dumping Agreement , which authorizes WTO Members to request
consultations, does not contain any language that might be read to suggest that a Member must wait to
request consultations until a fina l determination has been issued. By contrast, the first sentence
Article 17.4 of the Anti-Dumping Agreement, which authorizes WTO Members to refer matters to the
DSB for establishment of a panel, does specifically require complaining Members to wait until (1)
consultations under Article 17.3 "have failed to achieve a mutually agreed solution", and (2) "final
action has been taken by the administering author ities of the importing Member to levy anti-dumping
duties…". If the administrative authorities have not yet taken "final action," the matter may not be
referred to the DSB for establishment of a panel (except to the extent permitted by the second
sentence of Article 17.4, concerning panel review of "provisional measures").

BCI deleted, as indicated [[XX]]

7. The clear implication is that consultations may be requested before "final action has been
taken by the administering authorities". After all, if consultations could not be requested before such
"final action," there would be no need to include a requirement of "final action" in the first sentence
Article 17.4. Instead, if consultations could be requested only after "final action" by the administering
authorities, then the provisions of the first sentence of Article 17.4 requiring that consultations be held
(and "have failed") would embody a requirement of "final action" as well. Under such an
interpretation, the language requiring "final action" in the first sentence of Article 17.4 would be
redundant.

8. In accordance with the principle that "a treaty interpreter must give meaning and effect to all
terms used in a treaty provision and must avoid interpretations which render treaty terms redundant"
in WTO jurisprudence, the provisions of Articles 17.3 and 17.4 of the Anti-Dumping Agreement must
be understood to indicate that consultations ma y be requested before "final action" by the
administering authorities, while the establishment of a panel may not be requested until after that
"final action" has occurred. Consequently, there is no basis for the argument by the United States that
Brazil's request for consultations with respect to the second administrative review before the USDOC
issued its final determination in that review was somehow improper or invalid.

9. The United States also requests that the Pa nel make a preliminary ruling that Brazil's
reference to the "continued use of the US ' zeroing procedures'" does not properly describe a
"measure" that can fall within the Panel's terms of reference. In particular, the United States argues
that the description of the measure in Brazil's panel request lacks specificity because the alleged
measure did not exist at the time of the panel request.

10. Korea notes that a measure may be identified either by the name or number of promulgation,
law, regulations, etc. or by a narrative description of the nature of the measure, so that the measure
may be discerned by the panel examining the panel request. As the Appellate Body has explained, the
specificity requirement under Article 6.2 of the DS U is designed to ensure that a panel request
"present[s] the problem clearly". The Appellate Body has also found that "the identification of a
measure within the meaning of Article 6.2 need be framed only with sufficient particularity so as to
indicate the nature of the measure and the gist of what is at issue".

11. In item (d) of its panel request, under the heading "Measures and claims", Brazil has
identified the anti-dumping duty order, case No A-350-840 and the original investigation and
subsequent administrative reviews under such order. It appears to be sufficiently clear in this dispute
that the measure referred to is "a string of co nnected and sequential dete rminations" in which the
United States uses the zeroing methodology by which duties are maintained over a period of time
under the anti-dumping duty order.

12. It should also be noted that the Appellate Body in US – Continued Zeroing concluded that a
Member's "ongoing conduct" constitutes a measure and is challengeable by another Member.
According to the Appellate Body, such a measure w ould not fall squarely with in the "as such" or "as
applied" distinction, but that fact would not pr eclude a Member from bringing a challenge in WTO
dispute settlement. As Brazil notes in its first wr itten submission, the ongoi ng conduct that was at
issue in the US – Continued Zeroing is virtually identical to the ongoing conduct at issue in this
dispute. The zeroing practice by the USDOC maintained and applied in successive phases of the anti-
dumping proceeding under the anti-dumping duty orde r on certain orange juice from Brazil is an
ongoing conduct that is inconsistent with the Anti-Dumping Agreement.

13. In addition, it should be recalled that the identification of a measure is distinct from the
demonstration of the existence of a measure. Acco rding to the Appellate Body, the demonstration of
the existence of a measure can, if necessary, be made at subsequent stages of the dispute. It would be

BCI deleted, as indicated [[XX]]

inappropriate, therefore, to dismiss Brazil's claims in whole or in part without allowing it a full
opportunity to present its case.

II. THE PRACTICE OF "ZEROING" IN ORIGINAL INVESTIGATIONS IS
INCONSISTENT WITH ARTICLE 2.4.2 OF THE ANTI-DUMPING AGREEMENT

14. In its first written submission, the United St ates concedes that its zeroing practice utilized in
original investigations is incons istent with Article 2.4.2 of the Anti-Dumping Agreement. There no
longer appears to be any dispute with respect to this issue.

15. In light of the decisions holding zeroing in inves tigations to be inconsistent with Article 2.4.2,
the USDOC has stated that, effective 22 February 2007 it will no longer utilize the practice of zeroing
in new and pending investigations. However, this change in practice was not applied to the anti-
dumping investigation that is the subject of this dispute, because the final results and the amended
final results of the original investigation of an ti-dumping duties on certain orange juice from Brazil
were published on 13 January 2006 and 21 February 2006 - more than a year before the effective date
of the USDOC's 22 February 2007 change in practice.

16. Because the USDOC has only implemented its ch ange in practice for original investigations
that were either pending on or commenced after 22 February 2007, the final results of the original
investigation that is the subject of this dispute were calculated using the zeroing methodology that the
United States has admitted is inconsistent with Article 2.4.2 of the Anti-Dumping Agreement .
Therefore, the Panel should find the practice of zeroing in the original investigation of anti-dumping
duties on certain orange juice from Brazil inconsistent with Article 2.4.2 of the Anti-Dumping
Agreement.

III. THE PRACTICE OF "ZEROING" IN PERIODIC REVIEWS IS INCONSISTENT
WITH ARTICLE 9.3 OF THE ANTI-DUM PING AGREEMENT AND ARTICLE VI:2
OF THE GATT 1994

17. The Appellate Body has repeatedly ruled th at the USDOC's practice of zeroing in periodic
administrative reviews is inconsistent with the Anti-Dumping Agreement - and it has held that panels
considering this issue should follow the Appellate Body's reasoning on this issue. However, the
United States contends that, notwithstanding the rulings by the Appellate Body, the practice of
zeroing in periodic "administrative reviews" s hould be found to be consistent with the Anti-Dumping
Agreement. Korea considers the United States' argumen ts unconvincing and subm its that the Panel
should once again find that the United States' pr actice of zeroing in administrative reviews is
inconsistent with the Anti-Dumping Agreement.

18. In ruling that the USDOC's practice of zer oing in periodic "administrative reviews" is
inconsistent with Article 9.3 of the Anti-Dumping Agreement and GATT Article VI:2, the Appellate
Body has explicitly rejected the United States' ar guments that "dumping" and "margin of dumping"
can be found to exist at the level of individual transactions.

19. The Appellate Body, in analyzing the con cept of "dumping" and "margin of dumping," has
examined the context in other provisions of the Anti-Dumping Agreement, such as Articles 5.8, 6.10,
9.5, as well as the concept of injurious dumping, and concluded that the Anti-Dumping Agreement
does not refer to "dumping" and "margin of dumpi ng" as existing at the level of individual
transactions. Korea believes that the Appellate Body 's analyses are readily available to the Panel and
does not see the need to repeat all of the Appellate Body's reasoning. Like the Appellate Body, Korea
is unable to find "a textual or contextual basis in the GATT 1994 or the Anti-Dumping Agreement for
treating transactions that occur above normal va lue as "dumped", for purposes of determining the
existence and magnitude of dumping in the original investigation, and as "non-dumped", for purposes

BCI deleted, as indicated [[XX]]

of assessing the final liability for payment of anti-dump ing duties in a period review". It is time that
the United States bring its practice in periodic ad ministrative reviews into conformity with
requirements of the Anti-Dumping Agreement - as it already has with original investigations.

BCI deleted, as indicated [[XX]]

ANNEX B-5

EXECUTIVE SUMMARY OF THE THIRD PARTY WRITTEN
SUBMISSION OF MEXICO

I. INTRODUCTION

1. As a WTO member likewise seeking compliance by the United States with its WTO
obligations in relation to the practice of "zeroi ng" in anti-dumping duty "administrative reviews"
conducted by the U.S. Department of Commerce, Me xico has a systemic interest in the proper
interpretation and application of the various provisions of the Antidumping Agreement, GATT 1994,
and the DSU. Also, Mexico, as well as other WTO Members, has been facing the application of
zeroing by the United States in antidumping duty "admin istrative reviews", and has been dealing with
the fact that the United States has not eliminated this practice despite several recommendations from
the DSB.

2. The substantive core of Brazil's challenge in this dispute is the WTO-consistency of the
United States' application of zeroing in anti-dumping administrative reviews. However, given that the
principal substantive issue in this proceeding has been decided the same way many times over,
Mexico will limit its response to three issues of systemic importance to Mexico and other WTO
Members.

3. First, Mexico will address the compelling need for this Panel to follow the consistent body of
Appellate Body jurisprudence in this area. Second, Mexico will discuss the United States' request for
a preliminary ruling with respect to the inclusi on within the Panel's term s of reference of an
antidumping administrative review that was not final as of the date Brazil first requested
consultations. Finally, Mexico will address the Un ited States' request for a preliminary ruling that
Brazil's challenge to "ongoing conduct" is not subject to the scrutiny of WTO dispute settlement.

II. THE PANEL SHOULD FOLLOW THE CONSISTENT LINE OF APPELLATE
BODY JURISPRUDENCE IN THIS AREA

4. The United States requests that this Panel rec onsider and reject the long line of consistent
Appellate Body rulings in this area and instead chart a course of its own. This Panel should reject that
suggestion and should adhere to the well-establishe d WTO jurisprudence – not only because the prior
Appellate Body decisions were correctly decided, but because there are strong systemic reasons to
adhere to this consistent body of law.

5. As recognized both by WTO panels and the Appellate Body, there are important systemic
reasons for following the reasoning of the Appellate B ody in previous disputes when issues already
decided are presented again to a new panel. As one panel succinctly summarized, "following the
Appellate Body's conclusions in earlier disputes is not only appropriate, but is what would be
expected from panels, especially where the issues are the same".
1

6. As the United States is unable to identify an y new substantive arguments not already rejected
in previous proceedings, and as the substance of all of Brazil's legal claims have been considered and
affirmed in a long line of consistent prior Appe llate Body decisions, this Panel should adopt the

1 Appellate Body Report, United States – Sunset Reviews of Anti-Dumping Measures on Oil Country
Tubular Goods from Argentina, WT/DS268/AB/R, adopted 17 December 2004, para. 188.

BCI deleted, as indicated [[XX]]

reasoning from those prior decisions and hold (yet again) the United States' zeroing methodology in
violation of the Antidumping Agreement and the GATT 1994.

III. THE SECOND ADMINISTRATIVE REVIEW IS WITHIN THE PANEL'S TERMS
OF REFERENCE

7. The United States seeks a preliminary ruling that the Panel's terms of reference do not include
the Second Administrative Review on the grounds that this measure was not subject to consultations
because the final results of that review were not published until after Brazil first requested
consultations. The United is factually incorrect a nd misstates the role of consultations request in
defining the Panel's terms of reference under the DSU.

8. Previous panels and the Appellate Body ha ve specifically highlighted that a WTO panel's
terms of reference are governed by the complain ing Member's panel request, as opposed to it its
consultations request. There is no dispute that th e final results of the Second Administrative Review
were published prior to Brazil's panel request. It is equally clear that Brazil's panel request identified
the Second Administrative Review, and specifically the final results published on 11 August 2009, as
a "measure at issue".

9. Moreover, the United States is incorrect in its suggestion that the consultations request sets
the matter in stone, thereby limiting what can properl y be included in the panel request. As long as
Brazil made clear that it was challenging the appl ication of zeroing in recent and ongoing periodic
administrative reviews, sufficient notice was provided to the United States, and the Second
Administrative Review could properly be challenged in the panel request as a measure subject to the
Panel's terms of reference.

10. But even if this was not the case, Brazil's challenge to the United States' application of
zeroing in the Second Administrative Review would still properly fall within the Panel's terms of
reference because, as a factual matter, Brazil did specifically seek consultations-and, in fact, consulted
with the United States-about this particular measure.

11. Accordingly, there is no question that Brazil properly included in its panel request its
challenge to the application of zeroing in the Second Administrative Review. Therefore, the
United States' request for a preliminary ruling in this respect should be denied.

IV. THE CONTINUED USE OF THE US ZEROING PROCEDURES ARE PROPERLY
CHALLENGED AND SUBJECT TO PANEL REVIEW IN THIS DISPUTE

12. The United States is equally misguided in its request for a preliminary ruling (i) that Brazil's
challenge to the continued use of US zeroing procedures fails to meet the requirement under
Article 6.2 of the DSU that panel requests identify specific measures at issue, and (ii) that Brazil
appears to be challenging an indeterminate number of potential future measures that are outside of the
scope of the Panel's terms of reference because the measures are not yet in existence.

13. First, as the Appellate Body has pointed out, th e specificity requirement is intended to ensure
the sufficiency of a panel request in presenting the problem clearly. The problem here-the
United States' continued application of zeroing in successive antidumping proceedings-is clear and
easy to discern. Accordingly, the requirement under Article 6.2 has been met.

14. Second, in this dispute Brazil challenges th e continued application of zeroing in periodic
reviews conducted as stages of a continuous pro ceeding involving the imposition, assessment, and
collection of duties under the same anti-dumping duty order. With respect to the proceeding on
certain orange juice from Brazil, the United States Department of Commerce has applied zeroing at

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every stage and has given no indication that it will change its approach in future stages. It is this
recurring conduct under the single antidumping duty order that Brazil challenges here.

15. It is the ongoing conduct of the United Stat es in continuing to use zeroing in successive
determinations by which anti-dumping duties are app lied and maintained that Brazil is challenging as
"ongoing conduct" here. Brazil is entitled to fra me its challenge in way that subjects this ongoing
conduct to the scrutiny of WTO dispute settlement. Accordingly, the United States' request for a
preliminary ruling in this respect should be denied.

V. CONCLUSION

16. For the foregoing reasons, Mexico respectfully requests that the Panel deny the United States'
requests for preliminary rulings. Mexico also submits that the Panel should follow the well-
established precedent holding the United States' application of zeroing in violation of the Antidumping
Agreement and the GATT 1994.

17. Mexico appreciates the opportu nity to participate in these proceedings, and to present its
views to the Panel.