Document: WT/DS382/R Page C-1 BCI deleted, as indicated [[XX]] ANNEX C ORAL STATEMENTS OR EXECUTIVE SUMMARIES THEREOF OF THE PARTIES AT THE FIRST SUBSTANTIVE MEETING OF THE PANEL
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 C

ORAL STATEMENTS OR EXECUTIVE SUMMARIES THEREOF OF
THE PARTIES AT THE FIRST SUBSTANTIVE
MEETING OF THE PANEL

Contents Page
Annex C-1 Executive Summary of the Opening Statement of Brazil at the First
Meeting of the Panel C-2
Annex C-2 Executive Summary of the Open ing Statement of the United States
at the First Meeting of the Panel C-7
Annex C-3 Closing Statement of Brazil at the First Meeting of the Panel C-15
Annex C-4 Closing Statement of the United States at the First Meeting of the
Panel C-17

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ANNEX C-1

EXECUTIVE SUMMARY OF THE OPENING STATEMENT
OF BRAZIL AT THE FIRST MEETING OF THE PANEL

I. INTRODUCTION

1. Brazil responds, in turn, to the legal and fact ual arguments in the US First Written Submission
("FWS"). At the outset, Brazil notes that in this di spute, the US consistently encourages the Panel to
depart from established precedent in Zeroing disputes. Brazil regrets such arguments, noting that
"WTO Members attach significance to reasoning pr ovided in previous pane l and Appellate Body
reports".1 Contrary to the US suggestions, Article 11 of the DSU does not imply that relevant
previous rulings by the Appellate Body should not be followed. On the contrary, respecting previous
and repeated rulings – which have been adopted by the WTO Membership in the DSB – is part and
parcel of, and even facilitates, a panel's objective assessment under Article 11 of the DSU.2

II. THE ANTI-DUMPING AGREEMENT AND THE GATT 1994 DEFINE "DUMPING"
IN RELATION TO THE "PRODUCT" AS A WHOLE

2. The US rightly notes that "this dispute is about the definitions of 'dumping' and 'margin of
dumping'".
3 Brazil argues that these concepts are defined by reference to the product as a whole.
Conversely, the US argues that these concepts are su fficiently "flexible" that they may be defined by
individual Members in relation (1) to the "product" as a whole; (2) to each individual transaction
relating to the "product"; or even (3) to both conceptions.

3. As a basis for its plea for unilateral discre tion, the U.S. relies on Article 17.6(ii) of the Anti-
Dumping Agreement, but misreads it. Article 17.6(ii) comprises two sentences. The first enjoins a
panel to interpret the Anti-Dumping Agreement using the customary rules of treaty interpretation. The
second provides that, when these rules yield multiple permissible interpretations, a measure is WTO-
consistent if it rests on one permissible interpretation. As the Appellate Body said in US – Continued
Zeroing, "Article 17.6(ii) contemplat es a sequential analysis", w ith a panel first applying the
customary rules of interpretation in a "conscientious" manner. "Only after engaging in this exercise
will a panel be able to determine whether the second sentence of Article 17.6(ii) applies".
4

4. The Appellate Body has applied the rules of treaty interpretation to the definitions of
"dumping" and "margin of dumping" in the past, and found that they lead to a product-wide meaning,
and that therefore there is no room for reso rting to the second sentence of Article 17.6(ii).
5 I t h a s
added that the notion of multiple permissible in terpretations cannot be stretched to include rival
interpretations.6

1 Appellate Body Report, US – Stainless Steel, para. 160.
2 See Appellate Body Report, US – Stainless Steel, paras. 157 – 162.
3 US FWS, para. 60.
4 Appellate Body Report, US – Continued Zeroing, para. 271. Original emphasis. See also, Appellate
Body Report, US – Hot-Rolled Steel, para. 60.
5 Appellate Body Report, US – Zeroing (Japan), para. 189.
6 Appellate Body Report, US – Continued Zeroing, para. 273 and Concurring Opinion, para. 312.

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5. Brazil has set forth its interpretation of these term s, explaining that they refer to the product as
a whole, in its FWS. 7 Brazil recalls that Article 2.1 of the Anti-Dumping Agreement , by defining
"dumping" "[f]or the purpose of this Agreement", makes plain that "dumping" has the same meaning
"in all provisions of the Agreement and for all types of anti-dumping proceedings".
8 The requirement
to give the concept of "dumping" a consistent meaning throughout the Anti-Dumping Agreement is
crucial because: "Nothing could be more important than the definition of the concept of "dumping".
It is foundational and applies throughout the Agr eement, as the clear wording of Article 2.1 makes
plain. It cannot have variable or contradictory meanings, for that would infect the entire Agreement."9

6. The US argues that Brazil is wrong to interpret "dumping" and "margin of dumping"
uniformly throughout the Anti-Dumping Agreement and Article VI:1 and VI:2 as referring to the
product as a whole, and finds support in the use of the singular words "product" and "price" in
Article VI:1 of the GATT 1994 and Article 2.1 of the Anti-Dumping Agreement. However, the cited
provisions use "price" in the singular also when referring to "normal value", which is not defined in
relation to a single transaction. Normal value is the "comparable price , in the ordinary course of
trade, for the like product ". "The ordinary course of trade" cannot be ascertained on the basis of one
transaction; and the adjective "normal" indicates that the price is the "regular", "usual", "standard" or
"common" price for "the like product". Such a "price" cannot be ascertained on the basis of one
transaction, but must be based on all relevant tran sactions contributing to the "normal" price. The
French and Spanish language versions of Article 2.1 confirm this view.

7. Numerous contextual provisions of the Anti-Dumping Agreement confirm that "dumping" and
"margin of dumping" are defined in relation to the product as a whole. For example, first, Article 5.8
of the Anti-Dumping Agreement requires the termination of an investigation into an exporter if "the
margin of dumping" is de minimis . The US position would mean that an authority's termination
decision would be made for each individual export transaction. This is absurd.
10 Second, Article 6.10
requires that an authority determine "an individual margin of dumping for each known exporter or
producer concerned of the product under investigation".11 Similar language appears in Articles 6.10.2
and 9.5. Third, under Article 3, an authority must assess th e injurious effects of "dumped imports", a
term that covers all imports from an exporter engaged in "dumping". 12 For purposes of Article 3, and
consistent with Article 6.10, a single dumping determination, based on all export transactions, is made
for an exporter, and that single determination infl uences the treatment of all imports from that party. 13
Fourth, under Articles 8 and 9 of the Anti-Dumping Agreement and the GATT 1994, the extent of
permissible remedial action to counter injurious "dum ping" is fixed by reference to a single margin of
dumping, and that remedy applies to all future imports of the "product".14

8. In sum, there is both consistency and logic to the text of the Anti-Dumping Agreement. By
defining "dumping" in relation to the product as a whole, the Anti-Dumping Agreement ensures
parallelism between the scope of a dumping determination and the sc ope of the legal consequences
this determination entails. This parallelism is important because, under Article II:2(b) of the
GATT 1994, anti-dumping duties frequently exceed the le vel of a Member's bound rates. To justify

7 See Brazil's FWS, paras. 49 – 61.
8 Appellate Body Report, US – Zeroing (Japan), para. 109.
9 Appellate Body Report, US – Continued Zeroing , Concurring Opinion, para. 307. See also, e.g.,
Appellate Body Report, US – Stainless Steel , para. 107, and Appellate Body Report, US – Continued Zeroing ,
para. 285.
10 See Appellate Body Report, US – Continued Zeroing, para. 283.
11 See Appellate Body Report, US – Softwood Lumber V , footnote 158, citing Appellate Body Report,
12 Appellate Body Report, EC – Bed Linen (21.5) , para. 115. See also Panel Report, Argentina –
13 See, e.g., Appellate Body Report, US – Stainless Steel, para. 108.
14 See Articles 8.1, 9.1 and 9.3, and Appellate Body Report, US – Softwood Lumber V (21.5), para. 108.

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imposing anti-dumping duties on a product-wide basi s, a dumping determination must be made on an
equivalent product-wide basis.15

9. The U.S. also argues that "dumping" may have a transaction-specific meaning because the
word "product" in Article VII:3 of the GATT 1994, on customs valuation, refers to individual
transactions. The US confuses proximity (of Article V II:3 with Articles VI:1 and VI:2) with context.
The purpose and consequences of a customs valua tion decision and of anti-dumping proceedings are
altogether different.
16

10. The Note Ad Article VI:1, on which the US also relies, does not alter the requirement to
determine dumping for the product as a whole, but simply provides for the situation where sales to an
importer may not be relied upon directly because the exporter and the importer are related. The US
argument that a product-wide definition of "dum ping" and a prohibition on zeroing under Article 9.3
prevent anti-dumping duties from being effective is al so flawed, because "it is the exporter, not the
importer, that engages in" dumping.
17 Other US arguments have been comprehensively dealt with
and rejected by the Appellate Body, and in some cases by panels, too.18

III. ZEROING AS A MATTER OF FACT IN THE MEASURES AT ISSUE

A. USDOC PROGRAM LOGS

11. For the First Review, Brazil inadvertently s ubmitted as Exhibit BRA-30 a log generated by its
expert, Mr. Ferrier, when rerunning the USDOC software earlier this year. In US – Continued
Zeroing, the Appellate Body has questioned the significance of the fact that logs were replicated using
the USDOC programs, rather than being directly generated by the USDOC. 19 In any event, in
Exhibit BRA-45, Brazil now submits the log that Fischer received from the USDOC with its final
results in the First Review. The US also c ontests the provenance of the log for Fischer's

15 Brazil also rejects the argument, in footnotes 8 and 144 of the US FWS, that cash deposits are not
subject to the disciplines in Article 9.3 of the Anti-Dumping Agreement. In several disputes, the DSB has ruled
that cash deposits rates calculated with zeroing are inco nsistent with this provision (Appellate Body Reports,
US – Stainless Steel, paras. 133 – 134 and 156(a); US – Continued Zeroing, paras. 315 – 316 and 395(d); US –
Zeroing (EC) (21.5), para. 294; and Panel Report, US – Zeroing (Japan) (21.5), paras. 7.166 – 7.168 and 8.1(b).
See also Appellate Body Report, US – Zeroing (Japan), para. 156). In compliance proceedings in US – Zeroing
(Japan), the US itself argued in vain that its implementation obligations under Article 9.3 applied solely to cash
deposit rates, and not assessment rates ( see Panel Report, US – Zeroing (EC) (21.5) , para. 8.155(b); Appellate
Body Report, US – Zeroing (EC) (21.5), para. 6; Panel Report, US – Zeroing (Japan) (21.5) , para. 3.3; and
Appellate Body Report, US – Zeroing (Japan) (21.5) , para. 12). Thus, the applicability of Article 9.3 to cash
deposit rates is well-established, and has been accepted by the US.
16 Under Article 1.1 of the Customs Valuation Agreement, the customs value is the price actually paid
or payable in a specific import transaction. The authority does not value goods following an investigation into a
large number of transactions relating to a "product" that the authority itself has defined. Nor does the act of
customs valuation for an individual entry necessarily entail, for example, the imposition of duties in excess of
bound rates on all entries of the product.
17 Appellate Body Report, US – Zeroing (Japan), para. 156.
18 See, respectively: (i) on Article 2.2, Appellate Body Report, US – Softwood Lumber V (21.5) ,
paras. 82, 97 and 104; (ii) on prospective normal value systems and the US confusion between duty collection
under prospective normal value systems and the determination of the margin of dumping, Appellate Body
Report, US – Zeroing (Japan) , paras. 160, 162 – 163 and 166; and Appellate Body Report, US – Continued
Zeroing, para. 294; Panel Report, US – Stainless Steel, para. 7.131; and Appellate Body Report, US – Stainless
Steel, para. 120; (iii) and on "mathematical equivalence", Appellate Body Report, US – Zeroing (Japan) ,
paras. 133 – 135; Appellate Body Report, US – Softwood Lumber V (21.5) , paras. 97 – 100; Appellate Body
Report, US – Stainless Steel, paras. 126 – 127; Appellate Body Report, US – Continued Zeroing, para. 297.
19 Appellate Body Report, US – Continued Zeroing, para. 340.

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Third Administrative Review (Exhibit BRA-25), although without explanation.20 Fischer received the
log in Exhibit BRA-25 directly from the USDOC , as evidenced by USDOC's email that Brazil
submits as Exhibit BRA-46.

B. C
UTRALE'S FIRST AND FISCHER'S SECOND ADMINISTRATIVE REVIEWS

12. The US argues that Brazil has not met its burden of proving that zeroing was applied to, or
had an impact on, the margin of dumping for Cutrale in the First Re view, because the USDOC
determined a margin of dumping lower than the US de minimis threshold. The US makes similar
arguments regarding Fischer in the Second Revi ew, because the cash deposit and importer-specific
assessment rates were zero. The US is wrong on a number of counts.

13. First, as a matter of law, the use of zeroing is, in itself, sufficient to establish a violation of the
Anti-Dumping Agreement and the GATT 1994.
21

14. In this dispute, the use of zeroing to calculate margins of dumping in administrative reviews
violates Articles 2.4 and 9.3 of the Anti-Dumping Agreement , and Article VI:2 of the GATT 1994.
Brazil has already presented arguments on Article 9.3 and Article VI:2 22, and now presents arguments
based on Article 2.4. 23 The Appellate Body has held that, as a " way of calculating " margins, the
zeroing methodology "cannot be described as impar tial, even-handed, or unbiased", because it
necessarily excludes any negative comparisons results. 24 The Appellate Body has, therefore, ruled
that the "maintenance" of zeroing procedures in administrative reviews is inconsistent with Article 2.4
of the Anti-Dumping Agreement .25 Consequently, by including zeroing in its methodology for
determining margins of dumping in the administrati ve reviews at issue, the US failed to conduct a
"fair comparison".

15. Brazil has established that the USDOC used zeroing for Cutrale's determination in the
First Review, and for Fischer's de termination in the Second Review
26, and the US does not contest
this. As a result, the US violated Articles 2.4 and 9.3 of the Anti-Dumping Agreement and
Article VI:2 of the GATT 1994 in its dumping determin ations for Cutrale in the First Review, and for
Fischer in the Second Review.

16. Moreover, even though it was not required to do so, Brazil has also shown that the use of
zeroing had an impact on the USDOC's calculation.
27 The logs and outputs for Cutrale and Fischer
show that the vast majority of export transactions – in number, volume and value – generated negative
comparison results, but were excluded from the calculation of the margins of dumping. 28 These facts
provide an illustration of the "inherent bias in a zeroing methodology".29

20 US FWS, footnote 145.
21 See, e.g., Panel Report, US – Zeroing (Japan) (21.5), para. 7.162.
22 Brazil's FWS, paras. 62 – 76 and 97.
23 Brazil's panel request, p. 3, includes claims under Article 2.4.
24 Appellate Body Report, US – Zeroing (Japan) , para. 146, quoting Appellate Body Report, US –
Softwood Lumber V (21.5) , para. 142. See also Appellate Body Report, US – Softwood Lumber V (21.5) ,
para. 138; and Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review, para. 135.
25 Appellate Body Report, US – Zeroing (Japan), paras. 169 and 190(d).
26 As explained in detail in Exhibit BRA-31.
27 This is explained in detail at paras. 35 – 38 and 40 – 44 of the Ferrier Affidavit. Exhibit BRA-31.
28 For Cutrale, Exhibit BRA-29, p. 63 and Exhibit BRA-34, last page. For Fischer, Exhibit BRA-38,
p. 76 and Exhibit BRA-39, last page. See also Exhibit BRA-31, paras. 38 and 56.
29 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review, para. 135.

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17. The resulting overall weighted average margin of dumping for Cutrale in the First Review
was 0.45 per cent, and not zero. 30 Furthermore, also using zeroing, the USDOC determined an
importer-specific assessment rate for Cutrale's goods that above the US de minimis threshold, with
anti-dumping duties collected at that rate. 31 Thus, zeroing had an impact on the calculation, and also
led to the collection of duties where none would have otherwise been collected. For Fischer in the
Second Review, the tiny minority of sales with a positive comparison result generated a positive
margin, albeit a small one, of 0.002 per cent 32, whereas without zeroing the margin would not have
been positive.

C. E
XISTENCE OF THE CONTINUED USE MEASURE

18. The US argues that Brazil has not proven the existence of the Continued Use measure to the
standard set out in US – Continued Zeroing . In that case, the Appellate Body sought to complete the
analysis on the continued use measures, which th e panel had ruled to be outside the terms of
reference. The Appellate Body found that the existe nce of continued use of zeroing in a specific anti-
dumping case was established when it was proven that the zeroing methodology had been used,
without interruption, in different types of proceedings over an extended period of time 33, or in other
words, when there was a "density of factual findings" 34 showing that zeroing had been used in
successive proceedings in the same case.

19. In this dispute, Brazil has shown that zeroing has been used by the USDOC at every available
opportunity under the Order in proceedings extending over five years from the original investigation,
initiated in February 2005, through the First and Second Reviews, to the preliminary determination in
the Third Review in April 2010. Furthermore, in its Issues and Decision Memoranda under the Order,
the US affirmed its continued use of zeroing in administrative reviews, stating expressly that its
zeroing policy in reviews is unchanged despite WTO rulings.
35 These Memoranda show that the use
of zeroing continues to be part of the USDOC's calculation methodology. In sum, there is the
required "density" of facts.

20. The US also repeats its arguments on the impact of zeroing. However, the conduct at issue is
the continued use of zeroing over time, and not the continued impact of zeroing. It is well-established
that, irrespective of the impact of zeroing, it is contrary to WTO law to maintain zeroing procedures to
calculate margins, whether for their continue d use in proceedings under specific anti-dumping
orders
36 or for their continued use in anti-dumping proceedings generally. 37 The Appellate Body
reached this conclusion in reply to a similar US argument made in US – Continued Zeroing.38

21. The US arguments that the Second and Thir d Review are outside the panel's terms of
reference are, in this context, irrelevant, because with regard to the Continued Use measure, these
reviews serve as evidence of the continued use of zeroing.

30 Exhibit BRA-34, p. 93, "wt avg percent margin". See also Exhibit BRA-20.
31 Exhibit BRA-34, p. 92, "percent ad valorem assessment".
32 Exhibit BRA-39, p. 106, right-most column "Wt avg percent margin".
33 Appellate Body Report, US – Continued Zeroing, para. 195. The Appellate Body also explained that
the approach it was taking was "cauti ous", because the panel had failed to make findings on continued use, and
the Appellate Body has no mandate to find facts.
34 Appellate Body Report, US – Continued Zeroing, para. 191.
35 Exhibit BRA-28, pp. 5 – 6; and Exhibit BRA-43, pp. 4 – 6.
36 Appellate Body Report, US – Continued Zeroing, paras. 199 and 395(a)(v).
37 Appellate Body Report, US – Zeroing (Japan), paras. 166, 169 – 170, 190(c) and 190(d).
38 Appellate Body Report, US – Continued Zeroing, para. 192.

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ANNEX C-2

EXECUTIVE SUMMARY OF THE OPENING STATEMENT OF THE
UNITED STATES AT THE FIRST MEETING OF THE PANEL

1. The United States would like to focus on a fe w points concerning Brazil's arguments. First,
we will discuss how Brazil is improperly trying to in clude measures that fall outside of the scope of
the Panel's terms of reference. Second, we will refu te Brazil's claims that the United States has acted
inconsistently with obligations under the Agreement on Implementation of Article VI of the General
Agreement on Tariffs and Trade 1994 ("Antidumping Agreement") or the General Agreement on
Tariffs and Trade 1994 ("GATT 1994"). A plain reading of the text of those agreements makes clear
that there is no obligation to provide offsets outside of the context of average-to-average comparisons
in original investigations. Reading the text to impose such obligations would render certain
provisions of the Antidumping Agreement meaningless. In addition, with respect to the challenged
"continued use" of "zeroing", Brazil has failed to show any basis for concluding that such alleged
"ongoing conduct" exists, or any basis for a di spute settlement panel to make findings based on
speculation about what measure may or may not exist in the future.

2. We recognize that this is not the first time a dispute settlement panel has considered the issue
of "zeroing," that is, the alleged obligation to pr ovide offsets for non-dumped transactions. On the
one hand, the Appellate Body h as found in other disputes that "zeroing" in Article 9 assessment
proceedings is inconsistent with provisions of the Antidumping Agreement and the GATT 1994.
Reliance upon those findings is the basis of Brazil's cl aims. On the other hand – as panels have found
in those disputes, and as discussed fully in the US first written submission – th ere is no textual basis
for imposing the obligations that Brazil suggests. Co nsistent with the standard of review provided for
in Article 17.6 of the Antidumping Agreement, and the responsibilities of panels provided for in the
Understanding on Rules and Procedures Governing the Settlement of Disputes ("DSU"), we ask this
Panel to remain faithful to the text of the nego tiated agreements and refrain from making the findings
that Brazil suggests.

Standard of Review

3. Article 11 of the DSU generally defines a pane l's task in reviewing the consistency with the
covered agreements of measures taken by a WTO Member. In a dispute involving the Antidumping
Agreement, a panel must also take into account the standard of review set forth in Article 17.6(ii) with
respect to various permissible interpretations of a provision of the Antidumping Agreement.

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

5. Under Article 11 of the DSU, this Panel is charged with making an objective assessment of
the matter before it, including an objective assess ment of the facts and the conformity of the
challenged measures with the relevant covered agreements, applying the customary rules of
interpretation. The Panel cannot make findings or recommendations that add to or diminish the rights
and obligations provided in the covered agreements.

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6. The United States is aware that the Appellate Body has rejected the view that the covered
agreements do not impose an obligation to provide o ffsets in assessment reviews. However, the fact
that for the Appellate Body there is an interpre tation under which there would be an obligation to
provide offsets is not a basis for concluding that no other interpretation is permissible. The very
inclusion of Article 17.6(ii) confirms that the te xt of the Antidumping Agreement may be susceptible
to more than one interpretation. To find that it is not possible to find that there are conflicting
interpretations of the text would mean depriving the second sentence of Article 17.6(ii) of meaning.
If the permissible interpretations are all "harmonious ", then it is difficult to see how a measure could
be in conformity with only one of the interpreta tions. And it is not surprising that the Antidumping
Agreement could be subject to more than one perm issible interpretation. For example, in many
instances, the text was drafted to cover varying and complex antidumping systems around the world.
A number of previous panels that considered the issu e have found that the interpretation that there is
no obligation to provide offsets beyond the context of the average-to-average comparison
methodology in investigations rests on a permissible interpretation of the Antidumping Agreement. It
is difficult to understand how, if these various panels found that this interpretation is permissible, then
it is not permissible.

Scope of this Dispute

7. The United States has requested a preliminary ruling that two of the measures identified in
Brazil's panel request are outside the Panel's terms of reference.

8. Brazil suggests that the scope of a dispute includes any measure, adopted at any time (from
before consultations through implementation), as long as the measures share the same "essence" or
"close substantive connections" and together "man ifest a common 'problem' that the complaining
Member's claims are seeking to 'fix'". Such a sweeping approach is not based in the text of the DSU.

9. The Appellate Body has explained that the iden tification in a panel request may be considered
to include subsequent measures in more limited circumstances, namely where those measures do not
change the essence of the measure properly identified in the panel request. However, this is not the
case here. Each administrative review is separate and distinct from the reviews that proceed or follow
it. The second administrative review is not a measure with the same "essence" as the
first administrative review. It is a distinct measu re dealing with different entries during a different
period of time with different results. The final re sults of one administrative review do not apply to
entries of merchandise for any other review. The fact that the second administrative review is a
distinct measure is confirmed by Article 17 of the Antidumping Agreement which requires that there
have been "final action" to "levy antidumping duties". The "final action" under the
second administrative review is distinct from the "final action" under the first administrative review.

10. In addition, with respect to Brazil's claims concerning the "continued use of the US 'zeroing
procedures'", this is not a "measure" that even exis ts. Brazil purports to include in this "measure" an
indefinite number of future proceedings, none of them in existence. Any findings with respect to any
such hypothetical future measure would be based onl y on speculation. It is not possible to have
consulted on a measure not in existence or to "ide ntify" a "specific" non-existent measure, and any
findings based only on speculation could not comport with an "objective assessment" of the matter.

11. Moreover, the "essence" of a non-existent measure is nothing but speculation. In that vein, it
should be noted that, apart from the US – Zeroing II dispute, the cases cited by Brazil in support of its
broad approach to a panel's jurisdiction address situ ations in which the challenged "future" measures
were in fact in existence, such th at there was a measure that the panel could evaluate. This is not the
case here with respect to the "continued use of th e US 'zeroing procedures'". Rather, Brazil requests
the Panel to speculate as to whet her any such measure will come into existence, what that measure
will consist of, and find inconsiste nt an indefinite number of measure s that do not exist. It is not

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known whether any of these hypothetical future measures will even reflect "use of the US 'zeroing
procedures'". For example, there may be no negativ e value comparisons that could be "zeroed", such
that neither the margin of dumping nor the du ties assessed will reflect "zeroing". (Indeed, as
discussed in our first written submission, the facts Br azil itself presents bear this out.) The Panel of
course is unable to analyze any such future measure since there are no details or specifics to analyze.

12. Brazil's assertion that such an indeterminat e measure could be within a panel's terms of
reference is based on the reasoning of the Appellate Body in the US – Zeroing II (EC) dispute. As
just explained, however, we fail to see how a refe rence to the "continued use of the US 'zeroing
procedures' in successive anti-dumping proceedings " can in any way meet the requirement of
Article 6.2 of the DSU to identify the specific measu res at issue. Whether something is a "measure"
goes to the very question of what a Member may challenge under the DSU, and therefore what may
fall within a panel's terms of reference. If somethi ng is not a "measure", then it is not, and cannot be,
a measure "specifically" identified within the meaning of Article 6.2. Brazil may wish to be free of
needing to provide evidence as to the existence, cont ent, and relationship of any future measure to the
WTO agreements, but that is not consistent with the WTO dispute settlement system.

13. Furthermore, Article 17.4 of the Antidumping Agreement provides that, if consultations have
failed, and if "final action" has been taken by the administering authorities of the importing Member
to levy definitive antidumping duties or to accep t price undertakings, a Member may refer "the
matter" to dispute settlement. At the time of Brazil's consultations request, neither the second
administrative review nor the alleged "continued u se of the US 'zeroing procedures'" involved a final
action to levy definitive antidumping duties or accept price undertakings. (While provisional
measures may also be challenged in certain circum stances, Brazil has made no allegations in this
regard.) Including the second administrative review and "continued use" within the terms of reference
would ignore the fact that, for any given importation, the imposition of antidumping duties is
grounded in a specific final action.

14. The United States first requests a preliminary ruling that the "Second Administrative
Review", which appeared in Brazil's panel request but was not the subject of consultations, is outside
the Panel's terms of reference. Under Article 7.1 of the DSU, the measures within a panel's terms of
reference are determined by the complaining part y's request for the establishment of a panel.
Article 6.2 in turn provides that a panel request mu st "identify the specific measures at issue" in a
dispute. Under Article 4.7, however, a Member may not request the establishment of a panel with
respect to any measure, but only with respect to a measure that was subject to consultations.
Article 4.4 requires that the request for consultatio ns state the reasons for the request, "including
identification of the measures at issue and an indica tion of the legal basis for the complaint". As the
United States explained in its first written submis sion, the Antidumping Agreement contains parallel
requirements in Articles 17.3 through 17.5.

15. The covered agreements therefore establish a clear progression between the measures that are
discussed in consultations conducted pursuant to Ar ticle 4.4 of the DSU and the measures identified
in a request to establish a panel, which, in turn, form the basis of the panel's terms of reference. This
is not a question of form over substance. U nder the relevant provisions in the DSU and the
Antidumping Agreement just discussed, a panel's te rms of reference cannot include measures that
were not the subject of a request for consultations.

16. Brazil seeks to include the second administrative review in this dispute. However, the final
determination in the second administrative review was issued after Brazil's request for consultations,
and even after those consultations were held. It was not, and could not have been, the subject of
consultations and is therefore outside this Panel's terms of reference. Brazil's argument to the contrary
is based on its assertion that the second administ rative review "has the same essence as" the
first administrative review. However, as explaine d earlier, the second administrative review is not

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essentially the same measure as the first administrative review, and is not within the scope of this
dispute.

17. The United States also asks that the Panel find that Brazil's reference in its panel request to
the "continued use of the US 'zeroing procedur es' in successive anti-dumping proceedings" does not
meet the specificity requirement of DSU Article 6.2. As noted above, by including this purported
"measure" in its panel request, Brazil is merely sp eculating as to what might happen in the future, and
speculation as to what might happen is not identification of a specific measure.

18. In addition, Article 3.3 of the DSU contemplat es the "prompt settlement of situations where a
Member considers that any benefits accruing to it di rectly or indirectly under the covered agreements
are being impaired " by another Member's measures. While it appears that Brazil is challenging an
indeterminate number of future measures by identif ying "the continued use" in its panel request, a
non-existent measure cannot be impairing any such benefits and cannot fall within the scope of a
dispute.

19. Finally, we note that Brazil makes repeated references to what it suggests is the desired
remedy in this dispute as justifying the expansion of the scope of this proceeding. First, there have
been no recommendations and rulings yet in this di spute. Moreover, a Member's desired remedy
(whatever that may be) does not dictate a panel' s jurisdiction and does not provide a basis for
departing from the requirements of the DSU. In de termining its terms of re ference, a panel does not
start from what the complaining Member describes as the appropriate relief and work backwards.
Rather, the Panel should be guided by the require ments of the DSU, including the requirement to
identify the specific measures at issue.

The Claimed Obligation to Provide Offsets

20. We now turn to comments related to Br azil's argument that the Antidumping Agreement
contains an obligation to provide offsets for in stances of non-dumping in the context of assessment
proceedings. Brazil argues that the Antidumping Agreement imposes on Members an obligation to
provide an offset to dumping in all types of antidumping proceedings, including assessment
proceedings. The key issue here is whether the te xt of the Antidumping Agreement actually contains
such an obligation that applies in assessment proceedi ngs. The starting point must be what the text of
the Agreement actually says. It is fundamental th at a treaty interpreter must not impute into an
agreement words and obligations that are not contained in the text. But, in this dispute, Brazil asks
this Panel to read an obligation into the Antidum ping Agreement, notwithstanding the fact that there
is no textual basis for the obligation that Brazil proposes.

21. In particular, Brazil seeks to infer an ob ligation to reduce antidumping duties to account for
instances of non-dumping. This treats non-dumped imports as though they were a remedy for
dumped imports. Brazil does so despite the fact that there is no textual basis for such an obligation
and that there is a permissible interpretation of the Antidumping Agreement that does not require such
offsets.

22. In the disputes that have addressed this issue, the only textual basis panels have identified for
an obligation to provide offsets has been the "all comparable export transactions" language in the text
of Article 2.4.2 of the Antidumping Agreement. This is entirely consistent with the approach
articulated by the Appellate Body in US – Softwood Lumber Dumping . The phrase "all comparable
export transactions" in Article 2.4.2 applies onl y to antidumping investigations and only when
authorities use average-to-average comparisons pursuan t to Article 2.4.2. Pa nels have consistently
characterized as persuasive the argument that th e obligation to provide offsets applies only as a
consequence of the text-based obligation to include all comparable export transactions when making
weighted-average to weighted-average comparisons in an investigation. With respect to the argument

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that there is an obligation to provide offsets outsi de this context, the pane ls addressing this question
have consistently reasoned that ther e is no textual basis for such an obligation. The analysis offered
by the prior panels is persuasive and correct.

23. Article 2.4.2 provides for three different t ypes of comparisons: two symmetrical comparison
types, average-to-average and transaction-to-tran saction; and a third asymmetrical comparison type,
average-to-transaction, which may be used under certa in conditions. With respect to the average-to-
average comparisons, the phrase "all comparable expor t transactions", as interpreted by the Appellate
Body in US – Softwood Lumber Dumping, addresses whether the relevant comparison may be made at
the level of averaging groups (or "models"). Unde r this reading, the word "all" in "all comparable
export transactions" refers to all transactions acros s all models of the product under investigation.
This is the textual basis for the conclusion that margins of dumping based on average-to-average
comparisons must relate to the "product as a w hole", rather than individual averaging group
comparisons. This phrase, "all comparable export transactions", however, applies only to the use of
average-to-average comparisons in an investigation. It does not apply to the use of transaction-to-
transaction or average-to-transaction comparisons . Such comparisons will necessarily result in
multiple comparisons where there are numerous transactions because each export transaction will
result in its own separate comparison. The text of Article 2.4.2 does not address whether or how a
Member should aggregate the results of such multip le comparisons into a single overall margin of
dumping.

24. A general prohibition of zeroi ng that applies in all proceedings and with respect to all
comparison types would negate and contradict the interpretation of the phrase "all comparable export
transactions" that was the basis of the obligation to provide offsets in the context of average-to-
average comparisons, and for the conclusion that the margin of dumping must be calculated for "the
product as a whole".

25. Brazil argues that margins of dumping calculate d in assessment proceedings must relate to the
"product as a whole", and cannot be calculated for individual transactions. However, "product as a
whole" is not a term found in the Antidumping Agre ement, nor does it have any defined meaning.
Furthermore, to the extent the concept of "produc t as a whole" has any relevance to the Antidumping
Agreement, it is only as a shorthand for the operation of the phrase "all comparable export
transactions" in the context of average-to-average comparisons in investigations. Brazil's argument
relies entirely on the concept of "product as a whole" being applied in a manner detached from that
underlying textual basis.

26. Brazil offers no textual analysis to support its claim that offsets are required by Article 2.1 of
the Antidumping Agreement and Article VI of th e GATT 1994. This is because the text of these
provisions defines and describes dumping as occurring in the course of individual commercial
transactions. Prices are generally set in individua l transactions, and products are "introduced into the
commerce" of the importing country in individual transactions. In other words, dumping – as defined
under these provisions – may occur in a single transac tion. This is entirely consistent with the
exporter-specific understanding of dumping because individual transactions are also exporter-specific.
There is nothing in either the GATT 1994 or the Antidumping Agreement that suggests that dumping
that occurs with respect to one transaction is mitig ated by the occurrence of another transaction made
at a non-dumped price. To the extent that some transactions introduce merchandise into the market of
an importing country at a price a bove normal value, this benefits the seller, but does not undo the
effects on the domestic industry of other (dumped) transactions made at less than normal value.

27. Nevertheless, Brazil asserts th at dumping and margins of dumping "are defined in relation to
a product under investigation as a whole, encompassi ng all of the export transactions of the product
pertaining to an investigated exporter, and they ca nnot be found to exist only for a type, model, or
category of that product". The Appellate Body re ports relied upon by Brazil for this proposition are

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unpersuasive because they cannot alter the simple fact that the relevant text of these provisions, the
relevant context for interpreting the meaning of these terms, and the well-established prior
understanding of these concepts all confirm that dumping and margins of dumping do have a meaning
in relation to individual transactions. Our written submission sets forth the textual, contextual, and
other evidence that the concepts of dumping and ma rgins of dumping, as defined in the Antidumping
Agreement and GATT 1994, are applicable to indivi dual transactions. That evidence establishes that
the terms dumping and margins of dumping as used in Article 2.1 of the Antidumping Agreement and
Article VI of the GATT 1994 do not support the exis tence of an obligation to provide offsets for
instances of non-dumping in assessment proceedings.

28. Brazil has not demonstrated any inconsis tency with Article 9.3 of the Antidumping
Agreement or Article VI:2 of the GATT. Article 9.3 requires that the amount of the antidumping duty
assessed shall not exceed the margin of dumping. The term "margin of dumping" may be applied to
individual transactions. Individual transactions ar e both the means by which less than fair value
prices are determined and by which the product is introduced into commerce. Antidumping duties are
similarly assessed on individual entries resulting from those individual transactions. The obligation in
Article 9.3 to assess no more in antidumping duties th an the margin of dumping, just like the term
"margin of dumping" itself, may be applied at the level of individual transactions.

29. In this same vein, Brazil atte mpts to tie an obligation to provide offsets to a determination of
injury, arguing that "injury cannot be found to exist in relation to an individual transaction, but only
for the product as a whole ". However, Brazil's argument actuall y reinforces the interpretation that
any such obligation would be limited to the cont ext of investigations because, in contrast to
investigations, there is no obligation to address the existence of injury in Article 9.3 duty assessment
proceedings.

30. In addition, Brazil's interpre tation of Article 9.3, requiring that antidumping duty liability be
determined for the product "as a whole", cannot be reconciled with the specific provision in Article 9
that recognizes the existence of prospective nor mal value systems of assessment. Under such
systems, the amount of liability for payment of antidumping duties is determined at the time of
importation on the basis of a comparison between the price of the individual export transaction and
the prospective normal value. If the margin of dum ping must relate exclusively to the "product as a
whole", as Brazil argues, the administration of such an assessment system is an impossibility. This is
because, among other reasons, future transactions that would need to be taken into account in such a
margin of dumping would not yet have occurred. An obligation to account for other imports in
assessing antidumping duties on a particular entry is c ontrary to the very concept of a prospective
normal value system and, if accepted, would eff ectively render prospective normal value systems
WTO-inconsistent unless they were converted to a retrospective system by adopting periodic
retrospective assessment reviews.

31. Antidumping duties are applied at the level of individual entries for which importers incur the
liability. An importer's cost of acquiring the entered merchandise is the sum of the dumped price and
the antidumping duty. Accordingly, the importer has an incentive to raise resale prices to cover the
full normal value of the merchandise, thereby providing an effective remedy for the dumping. The
antidumping duty will be insufficient to have this effect if, instead, the amount of the duty must be
reduced to account for the amount by which some ot her transaction was sold at above normal value,
possibly involving an entirely different importer. The importer would remain in a position to
profitably resell the exporter's dumped product at a pri ce that continues to be less than normal value.
If Brazil's reading of "margin of dumping" is ac cepted as the sole permissible interpretation of
Article 9.3, the remedy provided under the Antidumping Agreement and the GATT 1994 will be
prevented from fully addressing dumping.

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31. In addition, as the panel in US – Softwood Lumber Dumping (21.5) observed, and as
described in detail in our written submission, providing offsets creates perverse incentives and
"absurd results" that undermine the remedial effect of antidumping duties.

32. Any interpretation that gives rise to a gene ral prohibition of zeroing also renders the second
sentence of Article 2.4.2 inutile. This is b ecause the exceptional methodology provided for in
Article 2.4.2 mathematically must yield the same result as an average-to-average comparison if, in
both cases, non-dumped comparisons are required to offset dumped comparisons.

Brazil has not satisfied its Burden of Proving th at "Zeroing" was applied to, or had an Impact on,
the challenged Margins of Dumping

34. As detailed in our first submissi on, Brazil has also failed to make a prima facie case as to the
facts for certain of its claims. Brazil has challe nged the calculation of dumping margins determined
for two respondents, Fischer and Cutrale, in two administrative reviews. However, aside from the fact
that the second administrative review is outside the Panel's terms of reference, in each of the reviews,
the margin was zero or de minimis for one of these two respondents. Consequently, Brazil cannot
establish that the margin should have been any lower to be consistent with the covered agreements.

35. Also, with respect to the assessment for Fischer in the first administrative review, the exhibits
Brazil submitted in support of its claim with its first written submission are not the actual computer
program logs created by Commerce.

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

36. Brazil's claim with respect to the "continued use of the US 'zeroing procedures'" should also
be rejected. Aside from the fact that this alleged "measure" is outside the Panel's terms of reference,
as explained in our first written submission, even we re there an obligation to provide offsets outside
the context of average-to-average comparisons in in vestigations, there is no basis for concluding that
such "continued use" constitutes "ongoing conduct" that violates Article VI:2 of the GATT 1994 or
Articles 2.4.2 and 9.3 of the Antidumping Agreement.

37. First, Brazil's own evidence refutes its claim that "zeroing" had any impact on the dumping
margins in the original investigati on. As such, even applying Brazil' s interpretations of the relevant
provisions of the covered agreem ents, there is no basis for findi ng the margins in the original
investigation were inconsistent with any provision of the covered agreements.

38. The evidence with respect to each of th e first and second administrative reviews also
undermines Brazil's claims regarding the alleged "continued use" of "zeroing." One of the
two companies reviewed had a de minimis margin in the first administrative review, which Commerce
essentially treats as zero. One of the two companies reviewed had a zero margin in the second
administrative review.

39. Thus, each of the proceedings concluded to date in the orange juice case – the investigation,
the first administrative review, and the second admini strative review – include margins that were not
impacted (or "inflated") by "zeroing". As explained in our submission, this does not reflect a
sequential string of determinations applying "zeroing", contrary to Brazil's assertion. It does not
provide a basis for in turn projecting that the Unite d States will act inconsistently in the future with
respect to measures that may never come into existence.

40. As noted in our first written submission, our experience in the US – Zeroing II (EC) dispute
demonstrates further that there is no basis to assume that "zeroing" will be used in any antidumping
proceeding. In that dispute, the Dispute Settleme nt Body adopted recommendations and rulings with

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respect to the use of "zeroing" in four origin al investigations. Commerce then issued new
determinations with respect to those four inves tigations. In doing so, however, Commerce discovered
that in three of the four investigations there were no offsets to provide (that is, there was no "zeroing")
because all of the comparisons demonstrated dumpi ng, or the rates determined in the original
determinations were base d upon facts available rates that did not involve "zeroing". As such, the
dumping margins did not change in Commerce's new determinations. Accordingly, among the many
problems under Brazil's approach would be the fact that any recommendation with respect to a future
measure would need to be conditioned on the use of zeroing, but there would be no mechanism to
determine if that condition were fu lfilled – that is, if zeroing were in fact used in any individual
proceeding.

41. As noted in our first written submission, we have serious concerns about the approach taken
by the Appellate Body in the US – Zeroing II (EC) dispute. However, because Brazil relies heavily
upon the Appellate Body's reasoning in that dispute, it bears repeating that, as a factual matter, there is
no basis for such an approach in this case. The facts of this case ar e not "virtually identical" to the
cases in that dispute found to be WTO-inconsistent. They are instead more similar to the cases where
the evidence was considered insufficient to support such a finding.

42. In summary, even were the alleged "continued use of the US 'zeroing procedures'" within the
Panel's terms of reference, Brazil has failed to establish that any such "ongoing conduct" exists or is
likely to continue into the future . Brazil has not and cannot demons trate a basis for concluding that
any measures that may come to be with respect to imports of orange juice will involve the application
of "zeroing" and be inconsistent with the covered agreements.

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ANNEX C-3

CLOSING STATEMENT OF BRAZIL AT THE
FIRST MEETING OF THE PANEL

1. Mr. Chairman, Members of the Panel, Brazil th anks you for the opportunity to appear before
you and answer your questions.

2. During the hearing yesterday, we heard oppos ing interpretations of the foundational terms
"dumping" and "margin of dumping" in the Anti-Dumping Agreement and Article VI of the
GATT 1994. According to Brazil, these concepts are defined by reference to the product as a whole.
According to the United States, they are sufficiently "f lexible" that they may be defined in relation to:
the "product" as a whole; individual transacti on; or, even a combination of these different
conceptions.

3. Brazil takes the view that the meaning given to these terms must be based on the text, context,
object and purpose of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the GATT 1994.
The treaty interpreter must strive for an interpre tation that "is harmonious and coherent and fits
comfortably in the treaty as a whole".
1 Brazil also notes that the terms at issue have been interpreted
numerous times in previous disputes concerning zeroi ng. The Appellate Body has now clarified the
interpretation of these terms beyond any reasonable doubt . An important part of ensuring "security
and predictability"2 through the dispute settlement system is that panels must, in making an objective
assessment under Article 11 of the DSU, follow the Appellate Body's rulings when the same legal
questions are presented. Brazil, therefore, urges the Panel to adopt the interpretation of "dumping"
and "margin of dumping" that the Appellate Body has given.

4. Yesterday, we also had a discussion on the relevance of the impact of zeroing to Brazil's
claims. Brazil argues that the use of zeroing is prohibited, irrespective of its particular impact. In
previous disputes, the use and maintenance of zer oing has been found to be WTO-inconsistent in
original investigations and administrative reviews, irrespective of the impact of zeroing.
3

5. The Panel has also enquired about the impact , "in the real world", of zeroing in the present
case. Brazil therefore briefly summarizes the impact of zeroing under the Orange Juice Order.

6. First, the use of zeroing under this Order has resulted in the determination of positive margins
in the administrative reviews completed so far under the Orange Juice Order, where there would have
been negative margins had zeroing not been used.

7. Second, the use of zeroing under the Orange Juice Order has resulted in the imposition of
duties, where no duties would have otherwise been im posed. Cutrale and Fischer have so far incurred
final anti-dumping duty liabilities of [[XX]] million US dollars, whereas they would have owed zero
duties had the United States not used zeroing. Th us, "in the real world", zeroing has enabled the
imposition of significant amounts of duties on Brazil's exports.

1 Appellate Body Report, US – Continued Zeroing, para. 268.
2 Article 3.2 of the DSU.
3 See, e.g., Panel Report, US – Zeroing (Japan) (21.5), para. 7.162 and 8.1(b); Appellate Body Report,
US – Zeroing (Japan), paras. 190(b) and (c) ; Appellate Body Report, US – Continued Zeroing, para. 395(a)(v),
second indent.

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8. Third, under US law, the USDOC routinely terminates an anti-dumping order for any exporter
that has zero margins in three consecutive administrative reviews. 4 Under the Orange Juice order,
Cutrale and Fischer would both have had consecutiv e zero margins in the first two administrative
reviews, with the final results of the third due in August 2010. Had the United States not used
zeroing, the Brazilian exporters could now expect termination of the Order. Thus, "in the real world",
zeroing perpetuates the duration of the order.

9. To answer the Panel's enquiry, the use of zeroing has a significant "real world" impact on the
Brazilian exporters covered by the Order.

10. As regards Brazil's continued use claim, the United States goes not much further than to say
that this "ongoing conduct" is based on "speculation" . Brazil need only remind the Panel of the latest
Issues and Decision Memorandum relative to the Or ange Juice Order at issue, where the USDOC
restates its position of maintaining the zeroing methodology.
5 That is indeed a new meaning to the
word "speculation", especially in li ght of the facts in this dispute, where the "density" of facts is
beyond doubt, not fragmented, and where zeroing is a bout to be re-used in the Third Administrative
Review.

11. Finally, the continued used claim, already accepted by the Appellate Body
6, allows Members
to avoid being victims of the "moving target" and "h it and run" scenarios typical of measures that are
sequential over time.

12. Mr. Chairman, Members of the Panel, staff of the Secretariat, Brazil once again thanks you
for this opportunity and for your hard work in this dispute.

4 19 C.F.R. § 351.222(b), available at http://frwebgate2.access.gpo.gov/cgi-
bin/PDFgate.cgi?WAISdocID=68qIUf/103/2/0&WAISaction=retrieve.
5 Exhibit BRA-43, pp. 4 – 6, "Department's Position".
6 See Appellate Body Report, US – Continued Zeroing, para. 185.

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ANNEX C-4

CLOSING STATEMENT OF THE UNITED STATES AT THE
FIRST MEETING OF THE PANEL

Mr. Chairman, members of the Panel:

1. On behalf of the United States delegation, I would once again like to thank you and the
members of the Secretariat for your work on this dispute. We appreciated the opportunity to provide
you with preliminary thoughts on your questions a nd look forward to providing you with our written
responses and our rebuttal submission.

2. As an initial matter, Brazil asserts its claims are not dependent upon whether zeroing had an
effect on the calculations. We disagree. It is not sufficient to simply point to the presence of a
zeroing line in a computer code. The zeroing line of programming language is itself conditional. It
only operates when the requisite condition is satisfied . With respect to the investigation, Brazil has
conceded that no comparison results were "zeroe d". Thus, these dumping margins were calculated
without using zeroing. While Brazil stated yesterday that it is only relying on the investigation as
evidence as the "continued use" of zeroing, the in vestigation provides no such evidence. Because
zeroing was not used in the calculation of these ma rgins, Brazil's claim that there is any such
"continued use" is not supported by the evidence.

3. With respect to the second administrative re view determination, Brazil's position is equally
incoherent. Brazil fails to explain how no anti dumping duty for Fischer in the second administrative
review determination is excessive under Article 9. 3, or otherwise inconsistent with any other
provision of the covered agreements. Like wise, Brazil did not explain how Commerce's
determination to assess no duties on Fischer's entr ies during the period and to estimate that no
antidumping duty would be due on Fischer's en tries after the second administrative review
determination could be inconsistent.

4. Turning to the issues of interpretation, Brazil argues that the term "margin of dumping" must
always relate to the "product as a whole" regardless of the context in which the term is used. At the
same time, Brazil also asserts, "The fact that the same word appears in two (or more) proximate treaty
provisions does not mean that the word carries th e same meaning in each provision ... a single word
used in two provisions may have different meanings in each provision, depe nding upon the context".
The United States agrees that context matters. As we have explained, the precise meaning of the term
"margin of dumping" may be informed by the cont ext in which the term is used. The terms
"dumping" and "margin of dumping" are defined in relation to the term "product". The ordinary
meaning of "product" may refer to a single tran saction, or multiple transactions, or both. For
example, in Article II of the GATT 1994, the term "product" is used, including with respect to the
imposition of an antidumping duty on a "product" "at th e time of importation". Clearly, Article II is
using "product" in the sense of an individual transaction and not in the sense of "product as a whole".
No one has argued that tariffs on a product can excee d the bound rate for some transactions as long as
they are below the bound rate in enough other transac tions such that the av erage does not exceed the
bound rate.

5. In particular, contrary to Brazil's assertion at paragraph 20 of its opening statement, the
United States agrees that in the context of Artic le 5.8 the margin of dumping may refer to an
aggregation of multiple transactions. Article 6.10 concerns the question of what information should

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be relied upon in calculating margins of dumping for exporters or producers. It ensures that each
exporter or producer is assigned an antidumping duty based on its own pricing behavior, and not that
of other exporters or producers, unless it is imprac ticable. In this context, this provision does not
address whether the "margin of dumping" only has meaning in relation to the product as a whole (a
term nowhere found in the text of the Antidumping Agreement) or individual transactions. With
respect to Articles 6.10, 8.1, 9.1, 9.3, and 9.5, Brazil's interpretation relies solely on the use of the
term "margin of dumping" in the singular as the b asis for its interpretation. We, however, would
agree with Brazil's observation in paragraph 13 of its opening statement that "the use of the singular is
not decisive ...".

6. As detailed in our first written submission, Brazil's interpretation cannot be reconciled with
the ordinary meaning of the terms with whic h dumping and margins of dumping are defined.
Dumping is defined as occurring in the course of ordinary commercial transactions, where products
are "introduced into the commerce" of the importing country transaction by transaction, not "as a
whole". And, the prices of products are set in individual transactions, not "as a whole". Brazil's
interpretation also cannot be reconciled with the A ppellate Body's interpretation of the phrase "all
comparable export transactions" in US – Softwood Lumber Dumping . Nor can it be reconciled with
the exceptional provision in the second sentence of Article 2.4.2; or with the effective functioning of
antidumping duties as a remedy for dumping.

7. In addition, Brazil's proposed obligation is c ontrary to the very concept of a prospective
normal value system provided for in Article 9. As we explained yesterday, under such a system, the
amount of liability for payment of antidumping duties is determined at the time of importation on the
basis of a comparison between the price of the individual export transaction and the prospective
normal value. The administration of such an ass essment system cannot function as intended if the
margin of dumping must relate exclusively to an aggregation of all transactions constituting the
"product as a whole". As became apparent from Br azil's answers to the Panel's questions, Brazil's
proffered understanding of how the prospective nor mal value systems should function is radically
different from how Members operate these systems.

8. Under Brazil's interpretation, a prospective normal value assessment system necessarily
requires retrospective reviews on the basis of the aggregation of transactions because the margin of
dumping for the "product as a whole" can never be known at the time of importation. Nothing in the
text of Article 9, however, suggests that the re fund proceeding described therein necessarily must
relate to an aggregated examination of all transac tions. Nor does Brazil attempt to explain why, if
refund proceedings under Article 9. 3 require aggregation of transactions for the "product as a whole",
Article 9.3 fails to provide for any time frame over which the transactions would be aggregated.

9. In contrast, the United States has offered a ha rmonious and coherent in terpretation that gives
meaning to all provisions of the Antidumping Ag reement and the GATT 1994. This interpretation
has been endorsed by prior panels. Brazil would ha ve you believe that none of these panels adopted
an interpretation that is coherent, and that none of these panels had the interest of the dispute
settlement system or the trading system at heart. But this interpretation, in contrast to Brazil's
interpretation, is fully consistent with the text, context, and object and purpose of the covered
agreements.

10. In its opening statement, Brazil categorically asserts that "the same legal questions must be
resolved in the same way in subsequent disput es". On the contrary, the authority to adopt
interpretations of the covered agreements rests ex clusively with the Ministerial Conference and the
General Council.
1 Therefore, while the dispute settlement system serves to resolve a particular

1 Article IX:2 of the Marrakesh Agreement Establishing the World Trade Organization . See also,
United States' First Written Submission, n. 26.

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dispute, and to clarify agreement provisions in the context of doing so, neither panels nor the
Appellate Body can adopt authoritative interpreta tions that are binding with respect to another
dispute.

11. Brazil would have this Panel me rely follow Appellate Body reports without engaging in its
own analysis. We disagree. To be clear, the Un ited States is not asking the Panel blindly to follow
the numerous panel reports that ha ve found a general requirement to provide offsets does not exist in
the Antidumping Agreement. Nor have we aske d you to ignore Appellate Body reports finding
zeroing to be WTO-inconsistent in certain circumstances.

12. What we have asked you to do, and are conf ident you will do, is to fulfill your function to
make an objective assessment of the matter before you. As part of that, we have asked you to
consider whether previous panel reports on this issue are persuasive; we believe they are. We have
also asked you to consider whether previous Appella te Body reports on this issue are persuasive; we
have explained they are not. Of course, the Pa nel must undertake its own consideration of these
reports and determine their relevance to the issues he re and their persuasiveness, as previous panels
confronted with claims against "zeroing" have done.

13. Brazil would instead have the Panel abdi cate its responsibility of making an objective
assessment in the interest of "security and predicta bility". Security and predictability are provided by
a dispute settlement system that does not add to or diminish the rights and obligations to which the
Members agreed. This requires the proper applicati on of customary rules of interpretation of public
international law to the provisions of the covered ag reements. Any obligation to provide offsets must
be found in the text of the cove red agreements. There is no textua l basis for a general prohibition of
zeroing. The only textual basis for an obligation to provide offsets arises in the limited context of
average-to-average comparisons in investigations.

14. Brazil's proposed obligation to reduce anti dumping duty assessments for negative comparison
results treats non-dumped imports as a remedy for dumping that replace the application of
antidumping duties. However, the application of antidumping duties is the remedy provided for in the
covered agreements. The prior panels addressing this issue have consistently recognized the
deficiencies inherent in Brazil's proposed inte rpretation (and in the A ppellate Body reports upon
which Brazil relies). The panels have found that the relevant text, the relevant context, and the well-
established prior understanding of the terms "dumpi ng" and "margin of dumping" demonstrate that
these concepts are not devoid of meaning except in relation to the product as a whole.

15. Mr. Chairman, Members of the Panel, we a ppreciate this opportunity to present these closing
comments and look forward to continuing to work with you on these issues.