Document: WT/DS383/R Page C-1 ANNEX C QUESTIONS AND ANSWERS Contents Page Annex C-1 Thailand's response to the Panel's Question C-2
Document codes: WT/DS383/R
Complainant: Thailand
Respondent: U.S.
Third parties: Argentina, EU, Japan, South Korea, Taiwan
Dispute stage: Panel
Agreements cited: Art. 2.4.2  Anti-dumping

ANNEX C

QUESTIONS AND ANSWERS

Contents Page
Annex C-1 Thailand's response to the Panel's Question C-2

ANNEX C-1

THAILAND'S RESPONSE TO
THE PANEL'S QUESTION

1. Thailand hereby submits its response to the question provided by the Panel to Thailand on
10 November 2009.

Question to Thailand

 At para. 10 of its written submission, Thailand asserts that the USDOC calculated the
anti-dumping margins for the relevant Thai exporters using the following steps:

 (i) the USDOC identified different "models," i.e., types, of products based on the
most relevant product characteristics;
 (ii) the USDOC calculated weighted average prices in the United States and
weighted average normal values in the comparison market on a model-specific
basis, for the entire period of investigation;
 (iii) the USDOC compared the weighted average normal value of each model to the
weighted average United States price for that same model;
 (iv) the USDOC calculated the dumping margin for an exporter by summing up the
amount of dumping for each model and then dividing it by the aggregated
United States price for all models; and
 (v) the USDOC set to zero all negative margins on individual models before
summing the total amount of dumping for all models.

 At para. 15 of its written submission, Thailand refers to specific lines of the computer
programme used by the United States to calcul ate dumping margins in the Final Determination
as evidence of "the use of 'zeroing' in the ca lculation of the dumping margins for the Thai
exporters". The Panel understands that Thailand refers to this evidence exclusively in support
of its assertion that the USDOC undertook step (v) above (i.e., the USDOC "set to zero all
negative margins on individual models before su mming the total amount of dumping for all
models"). Please explain what evidence Thailand relies on to support its assertion that the
USDOC also undertook each of steps (i) through (iv) outlined above.

2. In this dispute, Thailand does not challenge the United States' use of steps (i)-(iv) described in
paragraph 10 of Thailand's submission. Inst ead, Thailand challenges only the practice known as
zeroing described in step (v) of that paragraph. By this step, the USDOC "did not permit the results
of averaging groups for which the weighted-average export price or constructed export price exceeds
the weighted-average normal value to offset the r esults of averaging groups for which the weighted-
average export price or constructed export price is less than the weighted-average normal value".
1 In
other words, the USDOC "zeroed" any intermed iate model-by-model comparisons described in
steps (i)-(iii) that had a negative result.

3. That said, the comparison methodology discu ssed in steps (i)-(iv) is described in the
USDOC's notice of preliminary determination of sales at less than fair value in its investigation of
imports of polyethylene retail carrier bags ("PRCBs"), in which the USDOC stated that:
To determine whether sales of PRCBs to the United States by Thai Plastic Bags
and Universal in this investigation were ma de at less than fair value, we compare

1 See Antidumping Proceedings: Calculation of the Weighted-Average Dumping Margin During an
Antidumping Investigation; Final Modification, 71 Fed. Reg. 77722 (27 December 2006), Exhibit THA-7.

EP [export price] or construc ted export price (CEP) to normal value, as described
in the 'US Price' and 'Normal Value' sec tions of this notice. In accordance with
section 777A(d)(1)(A)(i) of the Act, we calculated weighted-average EPs and
CEPs.

In making the product comparisons, we matc hed foreign like products based on the
physical characteristics reported by the respondents in the following order of
importance ...
2

4. The USDOC further explained that:

We compared U.S. sales with sales of th e foreign like product in the home market
on the basis of the physical characteristics described under Fair Value Comparisons
above. Wherever we were unable to matc h a U.S. model to identical merchandise
sold in the home market, we selected the most similar model of subject
merchandise in the home market as the foreign like product.
3

5. Finally, the USDOC explained that the wei ghted-average dumping margin was "equal to the
weighted-average amount by which the normal value exceeds the EP or CEP".
4

6. Thus, the USDOC explained that it (i) identified different models based on physical
characteristics; (ii) calculated weighted-avera ge prices by model; and (iii) based its margin
calculations on the weighted-average amount by wh ich the normal value exceeded the export price in
the intermediate comparisons.
5

7. In addition, Thailand notes that the USDOC 's notice of 27 December 2006, in which the
USDOC provided notice of its intent to discontinue the use of zeroing with weighted-average to
weighted-average comparisons in anti-dumping inv estigations, describes this methodology in some
detail as well.
6 It is Thailand's understanding that it is not contested that the US DOC also used this
methodology in the measures at issue in this dispute.

2 See Notice of Preliminary Determination of Sales at Less than Fair Value and Postponement of Final
Determination: Polyethylene Retail Carrier Bags from Thailand , 69 Fed. Reg. 3552, 3554 (26 January 2004),
Exhibit THA-9.
3 Ibid., at 3555.
4 Ibid., at 3557.
5 These steps can also be seen in the computer programme used to determine the dumping margins
provided by Thailand in Exhibit THA-4. For example, part 5 of the programme (lines 1976-2005) determines
weighted-average US prices by model; part 8 of the programme (lines 985-1037) determines weighted-average
normal values by model; part 6 of the programme (lines 2007-2179) matches home market and US sales by
model; while part 9 of the programme (lines 2417-2555) shows the model-by-model calculations, including, in
lines 2541-2543, the subtraction of US price from normal value. The USDOC also provided output showing
summaries of and the highest 10 and lowest 5 margins by model ("CONNUMU" or "CONNUMH") for various
types of comparisons (identical or similar models, normal value based on home market price or constructed
value, same level of trade or not, etc.) in pages 32-44 of the output provided by the USDOC with the programme
included in Exhibit THA-4.
6 See Antidumping Proceedings: Calculation of the Weighted-Average Dumping Margin During an
Antidumping Investigation; Final Modification , 71 Fed. Reg. 77722 (27 Decem ber 2006), Exhibit THA-7.
("When the Department applies the average-to-average methodology during an investigation, the Department
usually divides the export transactions into groups by model and level of trade ('averaging groups') 19 CFR
351.414(d)(2). The Department then compares an average of the export prices or constructed export price of the
transactions within one averaging group to the weighted-average of normal values of such sales. 19 CFR
351.414(d)(1). Prior to this modification, when aggregating the results of the averaging groups in order to
determine the weighted-average dumping margin, the Department did not permit the results of averaging groups
for which the weighted-average export price or constructed export price is less than the weighted-average
normal value").

8. Thailand hopes that the above clarifies the Panel's understanding of the comparison
methodology used by the USDOC in the measure at i ssue. Thailand remains available to provide any
further information that the Panel may require to assist it in resolving this dispute.