Document: WT/DS268/R Page B-1 ANNEX B THIRD PARTIES' SUBMISSIONS Contents Page Annex B-1 Third Party Submission of the European Communities B-2 Annex B-2 Third Party Submission of Japan B-31
Document codes: WT/DS268/R
Complainant: Argentina
Respondent: U.S.
Third parties: China, EU, Japan, South Korea, Mexico, Taiwan
Dispute stage: Implementation & Compliance
Agreements cited: Art. 1, 2, 3, 6, 11, 12, 18, Annex II  Anti-dumpingArt. VI, X  GATT 1994Art. XVI:4  Agreement Establishing the World Trade Organization

ANNEX B

THIRD PARTIES' SUBMISSIONS

Contents Page
Annex B-1 Third Party Submission of the European Communities B-2
Annex B-2 Third Party Submission of Japan B-31
Annex B-3 Third Party Submission of Korea B-47
Annex B-4 Third Party Submission of the Separate Customs Territory of
 Taiwan, Penghu, Kinmen and Matsu
B-56

Table of cases referred to in this submission

Short Title Full Case Title and Citation of Case
Canada-Patent Term Panel Report, Canada-Term of Patent Protection, , final report
circulated 5 May 2000
Appellate Body Report, Canada-Term of Patent Protection, ,
adopted 12 October 2000
EC-Bed Linen Panel Report, European Communities – Anti-Dumping Duties on imports of Cotton-
Type Bed Linen from India, final report circulated 30 October 2000
Appellate Body Report, European Communities – Anti-Dumping Duties on Imports
of Cotton-Type Bed Linen from India, , adopted 12 March 2001
EC-Bed Linen
(Article 21.5)
Panel Report, European Communities – Anti-Dumping Duties on imports of Cotton-
Type Bed Linen from India – Recourse to Article 21.5 of the DSU by India,
, final report circulated, 29 November 2002
Appellate Body Report, European Communities – Anti-Dumping Duties on Imports
of Cotton-Type Bed Linen from India – Recourse to Article 21.5 of the DSU by India,
, adopted 24 April 2003
EC-Tube and Pipe Panel Report, European Communities – Anti-Dumping Duties on Malleable Cast Iron
Tube or Pipe Fittings from Brazil, , final report circulated 7 March
2003
Appellate Body Report, European Communities – Anti-Dumping Duties on
Malleable Cast Iron Tube or Pipe Fittings from Brazil, , adopted

Egypt-Steel Rebar Panel Report, Egypt – Definitive Anti-Dumping Measures on Steel Rebar from
Turkey, WT/DS/211/R, adopted 1 October 2002
Guatemala-Cement II Panel Report, Guatemala-Definitive Anti-Dumping Measures on Grey Portland
Cement from Mexico, WT/DS156/R, adopted 17 November 2000
Japan-Alcoholic
Beverages II
Panel Report, Japan – Taxes on Alcoholic Beverages, WT/DS8/AB/R,
WT/DS10/AB/R, WT/DS11/AB/R, final report circulated, 11 July 1996
Appellate Body Report, Japan – Taxes on Alcoholic Beverages, WT/DS8/AB/R,
WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996
US-Carbon Steel
from Germany
Panel Report, United States – Countervailing Duties on Certain Corrosion-Resistant
Carbon Steel Flat Products from Germany, WT/DS213/R, final report circulated
3 July 2002
Appellate Body Report, United States – Countervailing Duties on Certain Corrosion-
Resistant Carbon Steel Flat Products from Germany, WT/DS213/AB/R, adopted
28 November 2002
US-Carbon Steel
from Japan
Panel Report, United States – Sunset Review of Anti-Dumping Duties on Corrosion-
Resistant Carbon Steel Flat Products from Japan, WT/DS244/R, final report
circulated 14 August 2003, notice of appeal 15 September 2003
US-CVDs on EC
Products
Panel Report, United States – Countervailing Measures Concerning Certain
Products from the European Communities, WT/DS212/R, final report circulated
31 July 2002
Appellate Body, United States – Countervailing Measures Concerning Certain
Products from the European Communities, WT/DS212/AB/R, adopted 8 January
2003
US-DRAMs Panel Report, United States – Anti-Dumping Duty on Dynamic Random Access
Memory Semiconductors (DRAMs) of one Megabit or above from Korea,
WT/DS99/R, adopted 19 March 1999
US-Hot-Rolled Steel Panel Report, United States – Anti-Dumping Measures on Certain Hot-Rolled Steel
Products from Japan, WT/DS184/R, final report circulated 28 February 2001
Appellate Body Report, United States – Anti-Dumping Measures on Certain Hot-
Rolled Steel Products from Japan, WT/DS184/AB/R, adopted 23 August 2001

Short Title Full Case Title and Citation of Case
US-Lamb Panel Report, United States-Safeguard Measures on Imports of Fresh, Chilled or
Frozen Lamb Meat from New Zealand and Australia , WT/DS177/R and
WT/DS178/R, final report circulated 21 December 2000
Appellate Body Report, United States-Safeguard Measures on Imports of Fresh,
Chilled or Frozen Lamb Meat from New Zealand and Australia, WT/DS177/AB/R
and WT/DS178/AB/R, adopted 16 May 2001
US-Lead and
Bismuth II
Panel Report, United States Imposition of Countervailing Duties on Certain Hot-
Rolled Lead and Bismuth Carbon Steel Products Originating in the United Kingdom,
WT/DS138/R, final report circulated 23 December 1999
Appellate Body Report, United States Imposition of Countervailing Duties on
Certain Hot-Rolled Lead and Bismuth Carbon Steel Products Originating in the
United Kingdom, WT/DS138/AB/R, adopted 7 June 2000
US-Lumber Panel Report, United States-Final Countervailing Duty Determination with respect to
Certain Softwood Lumber from Canada ; WT/DS257/R, final report circulated
29 August 2003, notice of appeal 21 October 2003
US-Offset Act Panel Report, United States – Continued Dumping and Subsidy Offset Act of 2000 ,
WT/DS2117, 234/R, final report circulated 16 September 2002
Appellate Body Report, United States – Continued Dumping and Subsidy Offset Act
of 2000, WT/DS2117, 234/AB/R, adopted 27 January 2003
US-Section 301 Panel Report, United States-Sections 301-310 of the Trade Act of 1974 ,
WT/DS152/R, adopted 27 January 2000

1. INTRODUCTION

1. The European Communities makes this third pa rticipant submission because of its systemic
interest in the correct interpretation of the Agreem ent on Implementation of Article VI of the General
Agreement on Tariffs and Trade 1994 (the “AD Agreement”).

2. In this written submission the European Communities will concentr ate on the following
issues, other matters being dealt with, to the extent necessary, in an oral statement:

• the United States preliminary objection as to whether the Panel request meets the
requirements of Article 6.2 DSU, and in par ticular whether this can be established for
certain parts of the Panel request in isolation;
• the determination in this case by the investigating authority that the response from
Siderca was inadequate, on the basis that it accounted for less than 50 per cent of total
exports of the product from Argentina to the United States from 1995 to 1999,
Siderca itself having made no exports during that period, and the consequences of
that determination;
• the “likely” standard for sunset review investigations provided for in Article 11.3 AD
Agreement;
• as regards the historical occurrence of dumping, the reliance by the investigating
authority only on the dumping margin (1. 36 per cent) calculated in respect of the
original investigation (the 6 months from 1 January to 30 June 1994), for the purposes
of determining (effective from 7 November 2000) that the duty should be applied for
a further 5 years (that is, until 11 August 2005 – 11 years, 1 month and 11 days after
the end of the original investigation period);
• as regards prospective likely dumping, the fa ct that the investigating authority relied
on no additional fact or reas on, or relied only on statements insufficient to give
effective meaning to Article 11.3 AD Agreement;
• the consistency of the Sunset Policy Bulletin “as such” with the AD Agreement;
• the reliance by the investigating authorit y on a dumping determination, made under
the Tokyo Round Anti-Dumping Agreement, that involved simple zeroing
(comparison of weighted-average normal va lue with individual export transactions),
in a manner inconsistent with the present AD Agreement; and
• the investigating authority’s determination of likely injury.

2. PRELIMINARY OBJECTION

 In its first written submission, the United St ates has requested a nu mber of preliminary
rulings. In particular, the United States has argued that certain parts of Argentina's request for the
establishment of a Panel, and in particular page 4 thereof, do not comply with the requirements of
Article 6.2 DSU.
1

 In this respect, the European Communities w ould like to observe that whether a Panel request
is in compliance with the requirements of Article 6. 2 DSU, and in particular whether it identifies the
measure clearly and whether it provides a brief summary of the legal basis of the complaint, cannot be
established by merely considering parts of a Pane l request. This has been clearly stated by the
Appellate Body in US – Carbon Steel from Germany.2

1 First written submission of the United States, para. 84 and following.
2 Para. 127.

"Moreover, compliance with th e requirements of Article 6.2 must be determined on
the merits of each case, having considered the panel request as a whole , and in the
light of attendant circumstances." (emphasis added)
 In the view of the European Communities, the Panel should not follow the United States
suggestion to consider page 4 of Argentina's Panel request, i.e. the concluding section thereof, in
isolation from the rest of the request. Rather, in order to establish whether the conditions of
Article 6.2 DSU are met, the Panel should consider the Panel request as a whole.

3. THE INADEQUACY DETERMINATION

3. An internal DOC memorandum dated 22 August 2000 3 explains that because Siderca had no
exports to the United States during 1995 to 1999, and because there were imports of the product from
Argentina during that period, Siderca accounts for le ss than 50 per cent of United States imports of
the product from Argentina during the relevant period.4

4. The memorandum accordingly recommended that Siderca’s response be determined to be
inadequate and that DOC should conduct an expedited (120 day) sunset review. According to
section 351.218(e)(1)(ii)(C) of DOC’s regulations, in an expedited review, the review will be
conducted on the basis of facts available as defi ned in Section 351.308(f). Section 351.308(f) of
DOC’s regulation provides in relevant part:
5

"(f) Use of facts available in a sunset review. Where the Secretary determines to issue
final results of sunset review on the basis of facts available, the Secretary normally
will rely on:
(1) Calculated countervailing duty rates or dumping margins, as applicable, from
prior department determinations; and
(2) Information contained in parties’ substantive responses to th e Notice of Initiation
filed under 351.218(d)(3), consistent with section 752(b) or 752(c) of the Act, as
applicable."
5. Argentina argues
6, and the European Communities agrees, that this determination is
inconsistent with Article 11.3 AD Agreement. The finding in the present case produced a result that is
inconsistent with the AD Agreement. It should be recalled that Siderca had, according to DOC, filed a
complete substantive response. This response was found inadequate only on the basis that Siderca had
not exported to the United States, so that its share of imports into the United States was less than
50 per cent.

6. This circumstance is not a sufficient justifi cation given the far-reaching consequences of the
decision to expedite the review. On the basis of Section 351.308(f), this decision led to the exclusion
of relevant evidence from the contested sunset re view investigation and determination, in a manner
inconsistent with Article 6.1 and 6.2 AD Agreement. It had the additional effect of largely relieving
the investigating authority of the obligation to investigate imposed on it by Article 11.3 AD
Agreement. The European Communities therefore cons iders that the decision to expedite the review
was incompatible with Articles 11.3 and 6 AD Agreement.

3 Exhibit ARG-50, pages 1 and 2.
4 See the rules in Section 351.218(e)(1)(ii)(A) of DOCs regulations, exhibit ARG-3.
5 Exhibit US-3, page 13524.
6 First written submission of Argentina, paras. 166 to 171.

4. LIKELY CONTINUATION OF DUMPING

4.1 Required Standard of Determination: Likely

7. Article 11.3 AD Agreement provides:

"Notwithstanding the provisions of paragraphs 1 and 2, any definitive anti-dumping
duty shall be terminated on a date not late r than five years from its imposition (or
from the date of the most r ecent review under paragraph 2 if that review has covered
both dumping and injury, or under this pa ragraph), unless the authorities determine,
in a review initiated before that date on their own initiative or upon a duly
substantiated request made by or on behalf of the domestic industry within a
reasonable period of time prior to that date, that the expiry of the duty would be likely
to lead to continuation or recurrence of dumping and injury. The duty may remain in
force pending the outcome of such a review." (footnote 22 omitted)
8. Argentina argues that Article 11.3 AD Agre ement requires an anti-dumping duty to be
terminated five years after imposition, unless the inve stigating authority determines that expiry of the
duty would be likely to lead to continuation or recurrence of dumping and injury. According to the
Panel in US – DRAMs, likely means “probable”.
7 It does not mean “possible” or something less than
“probable”. Argentina further argues that in the cont ested sunset investigation and determination, the
investigating authority failed to determine that dump ing and injury were likely, if the duty expired.
For this reason, according to Argentina, the cont ested sunset investigation and determination are
inconsistent with the obligations of the Un ited States under Artic le 11.3 AD Agreement. 8 As set out
in the following sections, the European Communities agrees with Argentina that the DOC likelihood
determination is not in accordance with the standard of Article 11.3 AD Agreement.

4.2 The Use of the Dumping Determination from the Original Investigation as the Sole Basis
for the Determination of Historical Dumping

9. The only dumping determination used by the in vestigating authority in the contested sunset
review investigation and determination (effective 7 November 2000) was that made in respect of the
original investigation (the 6 months from 1 January 1994 to 30 June 1994).

10. The contested sunset review determination wa s based on the following statement in the issues
and decisions memorandum
9, that being a document expressly incorporated by reference into the
contested determination:

"… we find that dumping has continued over the life of the Argentine order and is
likely to continue if the order were revoked." (emphasis added)
11. Article 11.3 AD Agreement refers to likely “continuati on or recurrence”. If “continuation”
and “recurrence” would be interpreted as having the same meaning, one of the two words would be
redundant. If that is to be avoided, the words must have different meanings.

12. Both words indicate a determination with a temporal aspect, being one that is partially
historical and partially prospective. If dumping continues, it is present, uninterrupted, both before and
(it is expected) after a point of reference in time. If dumping recurs, it is also present both before and

7 Panel Report, para. 6.45.
8 First written submission of Argentina, paras. 89 to 93 and 211 to 233.
9 Exhibit ARG-51, page 5, para. 2, final sentence.

(it is expected) after a point of reference in time, but it is interrupted by a time when there was no
dumping.10 These are the common and ordinary meanings of the words “continue” and “recur”.

13. The European Communities does not therefore c onsider that the unqualified statement in the
United States Statement of Administrative Action: 11 “The determination called for in these types of
reviews is inherently predictive an d speculative.” is consistent with the AD Agreement. The facts and
analysis in the historical part of the determin ation are neither predictive nor speculative. The
prospective part must consist of pos itive evidence, that is, historical facts (that are neither predictive
or speculative) plus analysis or reasoning. Of the fo ur elements in the determination, it is only this
final element of prospective analysis or reasoning th at might be termed predictive or speculative. For
similar reasons, the European Communities would not agree with the United States submissions in the
present case, insofar as they suggest that a sunset review investigation and determination is concerned
uniquely with a prospective analysis.12

14. Since time is continuous and sales punctual, whether dumping is continuous or recurrent can
only be determined by reference to a defined period . Otherwise every dumped import would be a
recurrence; continuous dumping could not by definition exist; and the word continuation would be
redundant. Thus, an Article 11.3 AD Agreement review must be conducted by reference to a specific
time period. As a matter of logic and common sense, it is not possible to conduct the analysis
required by Article 11.3 AD Agreement without some temporal parameters.

15. For example, referring to the 5 year period provided for in Article 11.3 AD Agreement, a
sunset review initiated before the end of year 5, that relied on a dumping determination in respect the
period from the end of the original investigation up to the most recent available data would be an
example of a review that relied on a likely continuation determination. On the other hand, an
Article 11.3 AD Agreement review which sought to rely on a dumping determination limited to, for
example, year 1, in circumstances where there was no subsequent dumping, would be an example of a
review that relied on a likely recurrence determination.

16. Are there any requirements concerning the time parameters that an investigating authority
may select for a sunset review ? As regards the hist orical element of the determination, the relevant
time period may end with the end of the period in wh ich the most recent data is available. There must
also be a date on which the time period starts. It cannot stretch back indefinitely.

17. If the investigation period in an Article 11 .3 review investigation is defined by the
investigating authority as starting on the date of the original investigation period (in this case,
1 January 1994) and ending with the end of the period in which the most recent data is available, then
there is no distinction between the concept of conti nuation and the concept of recurrence. This is the
method that was used by the investigating authority in the present case. It is a method that renders the
word “recurrence” redundant. Every case becomes a case of continuation. That is why in the issues
and decisions memorandum
13 the investigating authority considered itself able to state:

"… we find that dumping has continued over the life of the Argentine order and is
likely to continue if the order were revoked." (emphasis added).

10 Panel Report, US – Carbon Steel from Japan , para. 7.179 : “We derive this from the reference to
“recurrence”, which we understand to refer to the recommencement of a phenomenon that has ceased.”
11 United States Statement of Administrative Action (SAA), accompanying the adoption of the
Uruguay Round Agreements Act (URAA), implementing the WTO Agreement for the United States, with
effect, for the purposes of the present case, from 1 January 1995. Exhibit ARG-5 at page 4208.
12 First written submission of United States, paras. 250 and 255.
13 Exhibit ARG-51, page 5, para. 2, final sentence.

18. The investigating authority made that finding of continuity notwithstanding the fact that there
was a gap of six years, four months and seven da ys between the end of the original investigation
period (30 June 1994), and the date of th e contested sunset determination (effective
7 November 2000).

19. The specific question before the Panel is: by relying in the cont ested sunset review
investigation and determination, for the purposes of the historical part of a likely continuation
determination, only on the dumping calculation in relation to the original investigation period (in this
case, the six months from 1 January 1994 to 30 June 1994), did the United States act in a manner
inconsistent with its WTO obligations ? The Panel does not need to decide whether or not a Member
could rely on dumping during any specific later period (such as, for example, years 1, 2 or 3).

20. The European Communities agrees with Argentina that on this point the United States acted
inconsistently with its WTO obligations.
14 On the basis of the method used by the United States, a
dumping measure could be perpetuated for 10 years, indeed indefinitely, on the basis of the
calculation made in relation to the original investig ation period, together with the prospective part of
the likely continuation determination. That w ould not be consistent with Article 11.1 or 11.3 AD
Agreement.

21. Article 11.1 AD Agreement states a general and overarching principle in the light of which
Article 11.3 must be interpreted.15

22. Article 11.1 AD Agreement is particularly concerned with the temporal scope of an anti-
dumping measure. This appears from the title of Article 11, which contains the word “duration”. It is
confirmed by the use of the word “remain” in Article 11.1. The provision is not concerned with
whether or not a measure should be imposed, but whether or not it should remain.

23. The words “only as long as” in Article 11.1 AD Agreement are significant. The text of the
provision does not read “An anti-dumping duty shall remain in force if necessary to counteract
dumping …”. Rather, the agreed words “only as long as” indicate a temporal requirement that is more
than the mere conditional “if”. They indicate that there must be a minimum temporal relationship
between the existence of dumping and the existence of the duty. Only as long as there is dumping can
there be an anti-dumping duty. In other words, a dumping determination in relation to the original
investigation period has a limited “shelf-life”. It is not forever. It cannot be the sole basis for imposing
anti-dumping duties for an unlimited period of time.

24. This analysis is further confirmed by the use of the words “ is causing” (the present tense) in
Article 11.1 AD Agreement. The dumping in question cannot be dumping that “caused” or “was
causing” or “had caused” – it must be dumping that “is causing”. The present is now. Whilst it may be
true that the requirement to use positive eviden ce may logically justify using historical data, in
relation to a period that is closed (for example, year 4), that does not permit the investigating authority
to evade entirely the Member’s obligation to determine that dumping is present. If a Member relies
again only on the results of the original investigation, that would contradict the use of the present
tense in Article 11.1 AD Agreement.

25. Further guidance may be derived from the word “immediately” in Article 11.2 AD
Agreement, emphasizing that the dumping duty must be terminated immediately when the authorities
determine that it is no longer warranted.
16

14 First written submission of Argentina, paras. 156 to 165 and 184.
15 Appellate Body Report, US – Carbon Steel from Germany , para. 70; Panel Report, EC – Tube and
Pipe, para. 7.113.
16 Appellate Body Report, US – Carbon Steel from Germany, para. 71.

26. The proposition that a Member can rely only on the prospective part of a likely continuation
determination (together with the results of the original investigation), if that prospective determination
does not involve a present dumping determination, is equally inconsistent with the text of the AD
Agreement. Even a prospective dete rmination must be based on positive evidence, that is, evidence
capable of assessment, evidence that exists, historical evidence. If such evidence includes a dumping
determination, then the preceding observations apply. If it does not include a dumping determination
(but involves, for example, imports during the relevant period), then there will, by definition, be no
sufficiently recent dumping determination. The language of Article 11.1, as analysed above, expressly
and specifically requires a present determination of dumping, not a present determination concerning
imports.

27. Once it is accepted that the results of a dumping calculation made in relation to an original
investigation period cannot alone forever be the basis for imposing duties, the only question that
remains is what is the maximum “sell-by date” ? Is it 11 years, 7 months and 11 days, and, based on
current United States methods and practice, almost certainly longer – indeed indefinite ? In the
opinion of the European Communities it results incontestably from Article 11.3 AD Agreement that
the maximum period is five years. The minimum meaning of Article 11.3 AD Agreement is that, to
continue the measure beyond five years, an histor ical dumping determination more recent than
that made in the original investigation is necessary.

4.3 Prospective Continuation of Dumping

4.3.1 Prospective determination

28. Article 11.3 AD Agreement requires a determination that is in part prospective. Article 11.3
AD Agreement does not merely require a finding that dumping occurred or recurred or continued
(past tense). It requires a finding that dumping is likely to continue or recur (future tense). Thus,
having made the required historical determination of dumping, an investigating authority must go on,
in addition, to make the required prospective dete rmination, based on pos itive evidence existing at
least at the time of the determination.
17

4.3.2 Additional factual requirement

29. The question that arises is whether the prosp ective determination can consist only of analysis,
no new facts being added to those used for the histor ical determination, or whether new facts must be
added, before the prospective analysis is made. In the opinion of the Eu ropean Communities, this
may depend on how recent the historical dumping determination is.

30. If the historical dumping determination relates, for example, to years 1 to 4 (during which the
order is in force) and margins are constant or increasing over time, then the same facts might possibly
carry weight both for the historical determina tion and the prospective determination. For the
prospective determination what would be particularly necessary would be to add some reasoning. If
dumping has recently occurred even with an order in place, then it might be relevant for the
determination, especially if the trend in the margin is upwards.

17 Panel Report, US – Carbon Steel from Japan , para. 7.45 : “… the authorities are required to
establish, on the basis of positive evidence, that there is likelihood of continuation or recurrence of dumping or
injury …”, and paras. 7.177 and 7.279 (“Future “facts” do not exist.”); Panel Report, US-DRAMS, para. 6.42 :
“… such continued imposition must, in our view, be essentially dependent on, and therefore assignable to, a
foundation of positive evidence that circumstances demand it. In other words, the need for the continued
imposition of the duty must be demonstrable on the basis of the evidence adduced.”; Appellate Body Report, US
– Carbon Steel from Germany , para. 88 : “… a fresh determination, based on credible evidence, will be
necessary to establish that the continuation of the countervailing duty is warranted …”; Appellate Body Report,
US – Lamb, para. 136.

31. One point, however, is clear. If the histor ical dumping determination relates only to the
original investigation period (as in the present ca se), in the opinion of the European Communities,
some new facts must at least be added for the pur poses of the prospective dumping determination.
Otherwise the continuation of the measure would be based only on out-of-date data and
speculation about the future . In that way, Article 11.3 AD Agreement would be rendered effectively
meaningless, which would not be an acceptable interpretation of the AD Agreement, in conformity
with customary rules of international law.

32. What kind of additional factual information is required ? If the requirements would be high
(many detailed facts on a range of matters directly li nked to the issue of likely future dumping), the
balance would lie towards the first part of the first sentence of Article 11.3 AD Agreement : “… any
definitive anti-dumping duty shall be terminated on a date not later than five years from its imposition
…”. If the requirements would be low (few general facts on limited matters not directly linked to the
issue of likely future dumping), the balance would li e towards the second part of the first sentence of
Article 11.3 AD Agreement : “… unless the authorities determine … that the expiry of the duty would
be likely to lead to continuation or recurrence of dumping and injury.”

33. In the opinion of the European Communities, the threshold for additional factual information
must be sufficiently high to give effective meaning to the rule in Article 11.3 AD Agreement.
18

34. Accordingly, since Article 11.3 AD Agreemen t contains the presump tion that duties will be
terminated after 5 years, there must be positive fact ual findings capable of supporting a determination
of likely continuation of dumping. Even if th ere is evidence as to dumping in the original
investigation period, that does not mean that the prospective requirement is satisfied.

4.3.3 Additional factual assertions in this case

35. In the issues and decisions memorandum
19 the investigating authority first rejects the no-
likelihood argument advanced by Siderca. This rejection is based on a contrario reasoning derived
from the truncated quotation from the SAA at the beginning of para. II.4 of the Sunset Policy
Bulletin20, that being an example of a situation, it is said, in which dumping may be “less likely” to
continue.

36. In the same paragraph of the issues and decisions memorandum, the final sentence is
concerned with the affirmation of the likelihood determ ination (the reference to 1.27 per cent instead
of 1.36 per cent appears to be a typographical error). It reads:

"Because 1.27 per cent is above the 0.5 per cent de minimis standard applied in
sunset reviews, we find that dumping ha s continued over the life of the Argentine
order and is likely to continue if the order were revoked."
37. This is a reference to point II.3(a) of the Sunset Policy Bulletin, which states in relevant part:

"… the Department normally will determine that revocation of an anti-dumping order
… is likely to lead to continuation or recurrence of dumping where – (a) dumping
continued at any level above de minimis after the issuance of the order …"

18 Appellate Body Report, US – Carbon Steel from Germany, para. 71 : “As we explained in our Report
US – Lead and Bismuth II, the determination made in a review under Article 21.2 [of the SCM Agreement] must
be a meaningful one.” – otherwise “… the review mechanism under Article 21.2 [of the SCM Agreement]
would have no purpose.” (Appellate Body Report, US – Lead and Bismuth II, para. 61). (emphasis added)
19 Exhibit ARG-51, page 5, para. 2, first 3 sentences.
20 Exhibit ARG-35.

38. The only factual statement in the first phrase above, from the memorandum, relates to the
dumping margin calculated in the original investigat ion. We therefore conclude that for the purposes
of the prospective part of the likely continuation de termination, the conteste d determination contains
no additional statement of fact , other than the dumping margin calc ulated in relation to the original
investigation period (1 January to 30 June 19 94). For this reason, the European Communities
considers the contested sunset review investigat ion and determination to be inconsistent with
Article 11.3 AD Agreement.

39. It is correct that, in rejecting Siderc a’s comments on no-likelihood, DOC made an incidental
factual assertion : “In the Argentine case, there has been no decline in dumping margins coupled with
an increase in imports.”

40. Whether or not such an incidental factual statement could be sufficient for the purposes of
Article 11.3 AD Agreement, the European Communities has the following comments. We first
consider the statement : “there has been no declin e in dumping margins”. In order to determine that
something has declined it would be necessary to make at leas t 2 discrete measurements, at different
times. The investigating authority did not do that. Instead, it stretched the period under consideration,
extending it from the original investigation period (the 6 months from 1 January 1994 to
30 June 1994) to the time at which the assessment was made, and concluded that during this period
there had been no decline, because there had been no change. If no additional measurement is made,
that result is a foregone conclusion, following inevitably and automatically from the method used by
the United States.
21 The conclusion must be that this part of the statement adds no new factual
element to the historical dumping determination, for the purposes of the prospective part of the
determination.

41. Thus, the single additional factual element relied on by the investigating authority is the
statement:

"… there has been no … increase in imports … ."
42. The specific question before the Panel is: wa s this factual assertion alone, leaving aside for
the time being the question of whether or not it is accurate, relevant to and sufficient for the purposes
of the prospective part of the likely continuation of dumping determination ? Is it a feast of fact, or a
meagre crumb? In the respectful opinion of the European Communities, the Panel should conclude
that it is insufficient for the purposes of the AD Agreement.

43. That conclusion is confirmed when one considers the possible additional factual
determinations that are omitted. The Panel need not enter into a general discussion of what they might
or must be, it being sufficient for the purposes of the present case to refer to (without endorsing)
United States legislation. The SAA provides:22

"… Commerce also will consider other info rmation regarding price, cost, market or
economic factors it deems relevant. Such factors might include the market share of
foreign producers subject to the anti-dumping proceeding; changes in exchange rates,
inventory levels, production capacity, and ca pacity utilization; any history of sales

21 Appellate Body Report, EC – Bed Linen (21.5) , para. 132 : “The approach taken by the European
Communities in determining the volume of dumped imports was not based on an “objective examination”. The
examination was not “objective” because its result is predetermined by the methodology itself.”; Appellate Body
Report, US – Hot-Rolled Steel, para. 196.
22 Exhibit ARG-5 at page 4214.

below cost of production; changes in manufacturing technology of the industry; and
prevailing prices in relevant markets. …"
23
44. In commercial terms, five years is a long time. There are very many reasons why imports
from one Member to another might have been at a particular level prior to the order, and not increased
after the order, other than the existence of the order itself. A sufficient and fa ir consideration of those
possible reasons cannot be made if the factual basis for the prospective part of the determination is as
narrow as that used by the investigating authority in the present case.

45. That conclusion is also confirmed when one considers the ambiguity and lack of precision in
the factual statement – the absence of precise detail means one cannot conclude that an objective
determination was made.

46. That conclusion is further confirmed when it is recalled what facts DOC did not use :
throughout the period Siderca neither imported nor dumped the product in the United States.

4.3.4 Additional reasoning

47. Similar comments apply with regard to the need for additional reasoning. Given the
requirement that the determination be based on pos itive evidence, and given that identifying facts
relevant to a prospective determination may be problematic, the reasoning justifying the determination
assumes a particular importance. A su fficiently detailed and persuasive set of reasons, such as to give
effective meaning to Article 11.3 AD Agreement, is therefore necessary. In the present case, as
indicated above, there was no additional reasoning , DOC relying only the dumping margin
calculated in respect of the original investigation pe riod (1 January to 30 June 1994). For this reason,
the European Communities considers the contested sunset review inve stigation and determination to
be inconsistent with Article 11.3 AD Agreement.

48. It is correct that, in rejecting Siderca’s no-likelihood comment, DOC incidentally mentioned
the following:

"… declining or no dumping margins accompanied by steady or increasing imports
may indicate that a company does not have to dump in order to maintain market
share."
49. As the issues and decisions memorandum indicates, that statement is also to be found in the
SAA
24 and also appears as a truncated quotation from the SAA in the Sunset Policy Bulletin.25

50. Whether or not such an incidental statement of reason could be sufficient for the purposes of
Article 11.3 AD Agreement, the European Communities has the following comments. We note first
that the phrase does not appear in the issues memorandum in exactly the same context as in the SAA.
In the SAA, the preceding sentence contains an example of circumstances in which the measure
subject to the sunset review investigation would not be terminated. It states:

"For example, declining import volumes accompanied by the continued existence of
dumping margins after the issuance of an order may provide a strong indication that,
absent an order, dumping would be likely to continue, because the evidence would
indicate that the exporter needs to dump to sell at pre-order volumes." (emphasis
added)

23 See also : 19 USC. 1675 (Exhibit ARG-1), at page 1157 : “If good cause is shown, the administering
authority shall also consider such other price, cost, market or economic factors as it deems relevant.”.
24 Exhibit ARG-5, page 4213.
25 Exhibit ARG-35, page 18872.

51. DOC does not rely on this statement. Instead, DOC relied on an example of circumstances in
which the measure might be terminated, drawing from this example, using a contrario reasoning, a
different statement.

52. As already indicated above, the European Communities considers that there may be many
reasons why import volumes decline, apart from an anti-dumping order, none of which were
considered in the contested sunset review investigation and determination.

53. Again, it is appropriate to consider whethe r or not such a statement can be considered
relevant, sufficient, persuasive, credible, even-handed. Is it a fair and persuasive justification for the
contested determination, not to mention the 217 othe r determinations presented by Argentina, or is
it a brush-off? In the respectful opinion of the European Communities, the Panel should conclude that
it is insufficient for the purposes of the AD Agreement.

54. It results from the preceding observations that the European Communities agrees with
Argentina26 that the United States acted inconsistently with Article 11.3 AD Agreement, insofar as the
additional statement of fact, if any, and the additio nal statement of reason, if any, relied on by the
investigating authority for the purposes of the pros pective part of its likely continuation of dumping
determination were insufficient to give effective meaning to Article 11.3 AD Agreement.

4.4 Conclusion on Likely Continuation of Dumping

55. For each of the above reasons consider ed independently (reliance on the dumping
determination from the original investigation, and no or insufficient statement of fact and reason for
the purposes of the prospective determination) the European Communities co nsiders that the United
States did not act in accordance with its obligatio ns under the AD Agreement. In any event, the
European Communities invites the Panel to reach that conclusion when both arguments are considered
together : continuation of the duty was based on out- of-date data and, essentially, speculation about
the future, thus depriving Article 11.3 AD Agreement of effective meaning.

56. Articles VI (1) and (2) GATT 1994 are drafted in the present tense, as is most of the AD
Agreement. There must therefore be a minimum te mporal relationship between the dumping, and the
duty. The object and purpose of Article 11.3 AD Agreement is to define, as a general rule or principle,
what that minimum temporal relationship should be, subject to an exception. For Article 11.3 AD
Agreement to have effective meaning, the exception cannot be interpreted in such a way as to make it
the rule. A meaningful balance must be struck . There was no such meaningful balance struck in the
present case. And the statistics submitted by Argen tina in respect of United States sunset review
investigations reveal that no such meaningful bala nce is being struck by the United States over time,
nor will be struck in the future, unless the Pa nel reaches an appropriate conclusion and makes
appropriate recommendations.

57. According to the SAA
27 which provides authoritative interp retation of United States law :
“The [Anti-Dumping] Agreement does require a numb er of changes in US law, such as … new five-
year “sunset” review provisions. These changes do not diminish in any meaningful way the level of
protection afforded US industries from dumped imports.” (emphasis added).

58. It is clear from the SAA 28 that administrative burden is an issue in the United States : “…
there will likely be more than 400 of these transition orders …”; “… thereby creating an extraordinary
burden on the agencies’ resources …”; “To promote administrative efficiency …”. Certainly these
pressures exist and are intense, not least because th e United States did not previously have a sunset

26 First written submission of Argentina, paras. 181 and 184.
27 At page 137.
28 Exhibit ARG-5 at page 4208.

review investigation provision, and it is perfectly un derstandable that a Member should wish to take
them into account. As a matter of WTO law, however, such resource allocation issues could never
justify such a paucity of fact, reason and procedure as is reflected in the contested sunset review
investigation and determination, such as to deprive Article 11.3 AD Agreement of effective meaning.

59. If the United States could conclude in the present case that dumping is likely up to a date
more than 11 years after the single determination in the original investigation, surely this Panel can
conclude on the basis of the 217 determinations submitted and anal ysed by Argentina, that no
meaningful Article 11.3 AD Agreement balance is being struck or is likely to be struck by the United
States, and act accordingly? To do otherwise would be to empty Article 11.3 AD Agreement of
meaning, and thus to “upset the delicate balance of rights and obligations attained by the parties to the
negotiations.”
29

60. As the Appellate Body has observed:

"… we wish to underline the thrust of Article 21.3 of the SCM Agreement. An
automatic time-bound termination of countervailing duties that have been in place for
five years from the original investigation or a subsequent comprehensive review is at
the heart of this provision . Termination of a countervailing duty is the rule and its
continuation is the exception. The continuation of a countervailing duty must
therefore be based on a prope rly conducted review and a positive determination that
the revocation of the countervailing duty w ould “be likely to lead to continuation or
recurrence of subsidization and injury”. Where the level of subsidization at the time
of the review is very low, there must be persuasive evidence that revocation of the
duty would nevertheless lead to injury to the domestic industry. Mere reliance by
the authorities on the injury determinat ion made in the original investigation
will not be sufficient . Rather, a fresh determination, based on credible evidence ,
will be necessary to establish that the c ontinuation of the countervailing duty is
warranted to remove the injury to the domestic industry."30 (emphasis added)
5. THE SUNSET POLICY BULLETIN AND UNITED STATES METHODOLOGY “AS
 SUCH”

61. Argentina argues that the Sunset Policy Bulletin and United States methodology “as such” are
inconsistent with Article 11.3 AD Agreement because they establish and evidence that there is an
irrefutable presumption that dumping is likely to co ntinue or recur if dumping margins continue or
imports cease or decline
31. The United States argues that no such irrefutable presumption exists, and
that, in any event, neither the Sunset Policy Bulletin nor United States methodology, not being
mandatory, can be found “as such” inconsistent with the AD Agreement.32

62. The European Communities considers that the Sunset Policy Bulletin , or at least the specific
provision of the Sunset Policy Bulletin in question, is a measure that may properly be referred to a
Panel for the purposes of determining whether or not it is consistent with the AD Agreement.

5.1 The So-Called Mandatory/Discretionary Doctrine

63. The European Communities considers that the distinction between mandatory and
discretionary measures is not based on any provision in the WTO Agreements. Moreover, that

29 Appellate Body Report, US – Carbon Steel from Germany, para. 91.
30 Appellate Body Report, US – Carbon Steel from Germany, para. 88.
31 First written submission of Argentina, paras. 124 to 137.
32 First written submission of the United States, paras. 171 to 208.

approach does not reflect a general approach by WTO Panels, and has never been confirmed by the
Appellate Body.

64. Some Panels have applied a mandatory/discre tionary doctrine. Other Panels, and notably the
Panel in US – Section 301, have taken a contrary, or at least mo re qualified view. The Appellate Body
for its part has so far abstained from pronouncing itself clearly on the issue, although it may be called
upon to do so soon in a case presently pending before it. 33 The European Communities considers that,
even if relevant, the distinction could not be determinative, nor the end of the analysis.34

65. The European Communities further agrees with the Panel in US – Section 301 that whether or
not so-called “discretionary” legislation may be subject to challenge may depend on the specific
obligations imposed by each provision of the WTO Agreement. It therefore considers that it is
necessary to examine the specific provisions of the AD Agreement in order to establish whether the
Sunset Policy Bulletin as such may constitute a violation of the disciplines of this agreement.

5.2 The Sunset Policy Bulletin Is an Administrative Procedure

66. In the view of the European Communities, th e decisive provision for determining whether the
Sunset Policy Bulletin may give rise to a violation of the AD Agreement is Article 18.4 of the AD
Agreement.

67. The European Communities considers that th ere are two aspects in the wording of this
provision which are noteworthy in the present co ntext. First of all, Article 18.4 AD Agreement
requires that WTO Members take "all necessary measur es, of a general or of a particular character".
Laws and regulations being by definition of a general character, this indicates that the obligations of
WTO Members are not exhausted by merely en acting laws and regulations which are not
incompatible with the AD Agreement, but must ensu re that the AD Agreement is respected also in
particular cases.

68. Second, Article 18.4 AD Agreement refers, as well as to "laws" and "regulations", also to
"administrative procedures". In the view of the European Communities, this separate notion must
have a distinct meaning compared to "laws and regulations". However, by examining whether the
Sunset Policy Bulletin is "binding under US law", the United St ates is essentially asking the question
whether the Sunset Policy Bulletin is a law or a regulation. It th ereby fails to correctly interpret
Article 18.4 AD Agreement.

69. The European Communities considers that the term "administrative pr ocedures" cannot be
limited to "rules" or "procedures" the compliance with which is “mandated” by municipal law. If this
were the interpretation, the term would be deprived of all independent meaning. Rather, the European
Communities considers that the term applies to all rules and procedures which guide proceedings
falling under the AD Agreement, including those which have lesser legal force or effects in municipal
law than laws and regulations.

70. The European Communities considers that this interpretation is also necessary in order to
protect the efficiency of the multilateral system of dispute resolution. Anti-Dumping is characterized
by a large number of proceedings affecting individu al producers, which follow identical procedures
and in which certain issues are bou nd to recur. It would be regrettable from the point of view of the
efficiency of the DSU if a WTO Member could establish certain procedures which effectively result
in WTO-incompatible behaviour in a large numb er of cases, without such procedures being
challengeable as such.

33 US – Carbon Steel from Japan (DS 244/AB-2003-5).

71. Additional guidance may be drawn from a number of further provisions of the AD
Agreement, all of which indicate that administra tive actions and procedures are subject to the
disciplines of the Agreement: Article 18.1 (“action” ); Article 18.3 and 18.3.2 (“measures”); Article
18.5 (“changes … in the administration of such la ws and regulations.”); Article 1 (“actions”); and
Article 13 (“administrative actions”).

72. For these reasons, the European Communities considers that the Sunset Policy Bulletin must
be considered an administrative procedure within the meaning of Article 18.4 AD Agreement, and
therefore challengeable as such.

5.3 The Sunset Policy Bulletin Is Mandatory in Character

73. Furthermore, and on a subsidiary note, even if the distinction between mandatory and
discretionary measures were held to be relevant in the present case, the European Communities
considers that the Sunset Policy Bulletin should be considered as being a mandatory measure.

74. In this context, the question should not be whether the Sunset Policy Bulletin is "binding
under US law" on DOC. Rather, the question is whether the Sunset Policy Bulletin has binding effect
by determining the actions of those who conduct sunset reviews. In this respect, the EC would submit
that the Sunset Policy Bulletin is a formal instruction issued by DOC, and is as such binding on the
staff of DOC.

75. Moreover, the European Communities notes that DOC may depart from the Sunset Policy
Bulletin only so long as it explains the reasons for doing it.
35 This duty to provide reasons for any
departure from the Sunset Policy Bulletin means that it is by no means without legal effect for DOC.
This legal effect is reinforced by the fact that the Sunset Policy Bulletin is officially published, which
means that any departure from it might be challe nged by the participants in an anti-dumping
proceeding. Thus, even if theoretically DOC might have the power to depart from its Sunset Policy
Bulletin if it so decided, it is in practice highly unlikely that it would do so in the context of a concrete
review investigation. This is co nfirmed by the fact that in hundreds of review investigations
conducted so far, DOC has in fact never departed from the Sunset Policy Bulletin.

76. The European Communities observes that the Sunset Policy Bulletin is a formal policy
statement signed by the Assistant Secretary for Import Administration, on behalf of and on the
authority of the administration itself. It was pub lished in the Federal Register. There was a formal
consultation procedure (recorded in the Sunset Policy Bulletin itself) for its adoption. It is listed on the
relevant web site 36, in the same list, shortly after “laws an d regulations”, that is, dealt with and
presented to the public in the same way and given the same ranking. There are currently 23 such
policy bulletins (not just in relation to anti-dumping) on the relevant web site, dating from 1991. They
are thus relatively few in number, and durable. A “polic y” that lasts for 13 years, for example, can, in
the opinion of the European Communities, correc tly be described as something of which the WTO
should be notified pursuant to Article 18.5 AD Agreement, and in respect of which dispute settlement
ought to be possible.

77. The European Communities would also invite the Panel to consider the preamble to DOCs
final anti-dumping regulation. That repeatedly uses the word “policy” to describe the content of the
regulations, confirming that in substantive terms the two documents contain the same type of
material. It further refers several times to polic y bulletins, stating, for example, that DOC “… will

35 Panel Report, US – Carbon Steel from Japan, para. 7.121 (quoting a response of the United States to
a question from the Panel).
36 http://ia.ita.doc.gov

describe” a certain methodology in a policy bulletin 37, confirming that the Sunset Policy Bulletin can
be described as “action taken under … regulations” within the meaning of Article 1 AD Agreement.

78. Finally, the European Communities notes that the Appellate Body has already held that trade
defence methodologies can violate the WTO Agreement. 38 Although that case concerned the SCM
Agreement, there is no reason to suppose that the same does not hold for the AD Agreement.

6. ZEROING

6.1 Preliminary Observations

79. The European Communities notes that Argentin a has raised an argument about zeroing, to
which the United States has responded by referring to the Tokyo Round anti-dumping agreement. The
European Communities considers the zeroing issue of systemic importance, and has requested
consultations with the United States in relation to it.
39 In view of the fact that the European
Communities, as third participant in these proceedi ngs, will not be able to respond to the arguments
presented by the parties later in this procedure, the European Communities considers that it may be of
assistance to the Panel to set out its views in some detail now.

80. The original applications having been made prior to 1 January 1995, it appears that the AD
Agreement would not apply to the original final de termination and order in this case. The question
that arises, however, is whether the results of the original dumping determination could be used in the
contested sunset review investigation and determina tion, given that they involve zeroing inconsistent
with Article 2.4 of the AD Agreement40. The European Communities agrees with Argentina 41 that on
this point the United States acted inconsistently with the AD Agreement.

6.2 Model Zeroing and Simple Zeroing

81. The European Communities recalls two methods of zeroing. What we may call “model
zeroing” was the subject of the EC-Bed Linen case, and arises when the individual margins calculated
for each model are combined. What we may call “sim ple zeroing” arises at an earlier stage in the
calculation, when a weighted-average normal value is compared with individual export transactions.

82. Exhibit ARG-52 contains the detail of the original dumping calculation. On page 2, if the total
of the column “TOTPUDD” (125478.93) is divided by the total of the column “TOTVAL”
(9240392.64), the result is the 1.36 per cent in th e original final determination and order. The column
“CONNUMU” refers to the models sold in the United States; and the column “CONNUMT” refers to
the models sold in the third country. The zeroing appears from the dots in columns “MRGOBS” to
“WTAVPERC” and rows 25 to 58. These are the results for which the final column “USPR” exceeds
the penultimate column “FUPDDL”, and for which the dumping margin was therefore negative, but
set at zero. It thus appears from this table that the zeroing method used was at least equivalent to that
used in EC-Bed Linen (model zeroing). It further appears from the columns TOTOBS and MRGOBS,
and the differences between them, that each individua l export transaction was in fact compared with a
weighted-average normal value (simple zeroing).

83. Whilst it is true that the two methods are different, in the opinion of the European
Communities it is possible to say that unjustified simple zeroing is worse than model zeroing. Model
zeroing allows for the possibility of some set- off between negative and positive dumping margins.

37 62 FR 27355, 27371, 27374, 27376.
38 Appellate Body Report, US – CVDs on EC Products, para. 151.
39 DS294.
40 First written submission of Argentina, para. 190, final sentence.
41 First written submission of Argentina, paras. 181 and 189 to 192.

Simple zeroing does not allow for any set-off at all. The conclusion would be that, in ruling as it did
in the EC Bed Linen case that model zeroing is inconsistent with the AD Agreement, the Appellate
Body effectively ruled that unjustified simple ze roing is also (even more) inconsistent with the AD
Agreement, for the same reasons.

84. The European Communities refers the Panel to the text of Articles 2.1, 2.4 and 2.4.2 of the
AD Agreement, and to EC – Bed Linen, para. 6.115 of the Panel Report and para. 55 of the Appellate
Body Report.

85. The United States has not modified its methodology to take account of EC – Bed-Linen . For
example, the “Notice of Final Determination of Sa les at Less Than Fair Value; Certain Hot-Rolled
Carbon Steel Flat Products From The Netherlands” published in FR 66 50408, amended in FR 66
55637, incorporates an issues and decisions memora ndum, which states in relevant part (in response
to comments from interested parties criticising the zeroing methodology):

"These statutory requirements [which, a ccording to DOC, mandate zeroing] take
precedence over any potentially conflicting obligations under the Uruguay Round
Agreements. The Uruguay Round Agreements Act makes clear that if there is a
conflict between US law and any provision of the WTO Uruguay Round Agreements,
US law prevails. See section 102(a)(1) of the URAA ("no provision of the Uruguay
Round Agreements, nor the application of any such provision to any person or
circumstances, that is inconsistent with any law of the United States shall have
effect.") Moreover, the SAA specifically provides that "[r]eports issued by Panels or
the Appellate Body under the DSU (i.e., the WTO Dispute Settlement Understanding)
have no binding effect under the law of the United States." SAA at 1032, reprinted in
1994 USC.C.A.N. 4040, 4318. Finally, the Bed Linens Panel and Appellate Body
decisions concerned a dispute between the European Union and India. We have no
WTO obligation to act based on these decisions."
86. It results from the EC – Bed Linen case that if a Member elects to use models, it must still
respect the requirement to make a fair comparison, and to compare weighted-average normal value
with a weighted-average export price, absent ju stification pursuant to the final sentence of
Article 2.4.2 AD Agreement. The rule is essentia lly sequential: by requiring averaging first, the
possibility of zeroing is mathematically eliminated.

87. In the opinion of the European Communities it necessarily follows from the conclusion that
model zeroing is inconsistent with the AD Agreement, that simple zeroing is also inconsistent with
the AD Agreement, other than in the circumstances described in the final sentence of Article 2.4.2 AD
Agreement.

6.3 Zeroing in Context of a Sunset Review Investigation

88. The European Communities anticipates that the United States might eventually seek to argue
that the provisions of Article 2 AD Agreement, or at least some of them, notably Article 2.4.2, which
contains the phrase “during the investigation phase”, are irrelevant in the context of a review (as that
term is used by the United States) because they relate only to investigations (as that term is used by
the United States).

89. The European Communities would not agree with the proposition that Article 2.4.2 is not
relevant in the context of a review. First, simple zeroing in a sunset review investigation is in any
event inconsistent with the obligation in Article 2.4 AD Agreement to conduct a fair comparison
42,
and Article 2.4 does not refer to an “investigation” (as opposed to a “review”). Second, when no

42 Appellate Body Report, EC – Bed-Linen, paras. 59 and 60.

justification is given, simple zero ing is also inconsistent with Ar ticle 2.4.2 AD Agreement, second
sentence, which also makes no reference either to “investigation” or to “review”. Third, in any event,
the reference to “investigation” in Article 2.4.2 AD Agreement, first sentence does not have the
limited and qualified meaning attributed to it by the United States. Of these three points, the European
Communities focuses in this submission on the third. It reserves the possibility to submit further
arguments, and to develop the first and second points, in its oral statement or in response to questions
from the Panel.

90. According to the United States, it would appear (1) that a distinction must be made between
the concept of “investigation” and the concept of “review”; (2) that it is correct to compare or
juxtapose these two terms, as if, conceptually, like were being compared with like; and (3) that these
concepts are mutually exclusive. The European Communities does not consider these propositions to
be correct.

6.3.1 The scheme of the AD Agreement and Article 2.1

91. The European Communities observes that a ll of the provisions with which the present
submission is concerned are in th e same part – Part I – of the AD Agreement, which indicates a
special degree of connexity between them. The Eur opean Communities also considers that there is a
certain logical sequence to th e articles in Part I of th e AD Agreement, which is an integral part of the
text. Thus, after the statement of principles (Article 1), Articles 2 (determination of dumping),
3 (determination of injury) and 4 (definition of do mestic injury) set out what are clearly the basic
building blocks. Articles 5 (initiation and subseque nt investigation) and 6 (evidence) are more
procedural. Articles 7, 8, 9 and 10 concern the va rious measures that may be taken. Article 11
concerns reviews. Articles 12 to 15 may fairly be described as miscellaneous.

92. The European Communities inv ites the Panel to consider Articl es 2, 3 and 4, which assume
particular significance, given the re lative brevity of Article 1. They are definitions. Article 2.1 begins
with the text “For the purposes of this Agreement, a product is to be considered as being dumped
…”.
43 Article 3 begins with the words : “A determina tion of injury for the purposes of Article VI of
GATT 1994 shall be …”, and footnote 9 defines the term “injury”. Article 4 is entitled “ definition of
domestic industry” and begins with the words : “For the purposes of this Agreement, the term
“domestic industry” shall be interpreted as …”. Bo th principles and definitions are abstract text
destined to be used when interpreting or applying other text.

93. The European Communities invites the Panel to consider the number of times these concepts
are used in the text of the AD Agreement. By way of illustration only, a simple automatic computer
search of the text of the AD Agreement yields the following re sults : dumping (110), dumped (37),

43 Appellate Body Report, EC – Bed Linen , para. 51 : “Article 2.4.2 of the Anti-Dumping Agreement
explains how domestic investigating 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. Toward this end,
Article 2.1 states : …”; Panel Report, US – Hot-Rolled Steel , para. 7.115; Panel Report, EC – Bed Linen ,
para. 6.114. The introductory phrase of Article 2.1 is identical to the phrase used in Article 1 of the SCM
Agreement : “For the purposes of this Agreement, a subsidy shall be deemed to exist …”. See Appellate Body
Report, US – Carbon Steel from Germany , para. 80 : “… Article 1 of the SCM Agreement sets out a definition
of “subsidy” that applies to the whole of that Agreement …”. See also Panel Report EC – Bed Linen (21.5) ,
para. 6.124 and Appellate Body Report EC – Bed Linen (21.5) paras. 65 and 141 (the United States submits that
Article 2.1 AD Agreement “ defines” dumping …). According to the SAA, (page 138) which provides
authoritative interpretation of United States law : “Article 2 [ADA] … adopts the standard definition of
dumping …”. Accordingly, the SAA sets out at page 150 the legislative steps necessary with respect to
“Definition of dumping”. See also first written submission of the United States, paras. 253 and 256 : “ …
Article 2.1 provides the general definition that a product is considered to be “dumped” where the export price
of that product is less than the comparable price in the comparison market.” and this applies “… throughout the
AD Agreement …”.

injury (50), domestic industry (27), total (224). Clearly, these basic concepts permeate the entire
agreement.

94. The European Communities does not consider that an express cross-reference from Article 11
to some other provision is necessary, before that other provision must be considered for the purposes
of interpreting Article 11. It is instructive, however, to trace the web of express cross-references :
Article 11 refers to Articles 9 (twice), 6 and 8; Artic le 9 to Articles 2 (twice) and 6 (thrice); Article 6
to Article 5; Article 5 to Article 3 (and vice versa). Article 1 refers to Article 5; Article 4 to Articles 8
and 3; Article 7 to Articles 5 and 9; Article 10 Articles 7 and 9. This list incorporates, more than once,
all the Articles from 1 to 11, and they are all connected to each other by these cross-references. The
text of all these articles is thus meshed together as part of a single web or matrix. What was agreed to
by all the Members of the WTO was the whole text, not Article 11 in isolation.

95. The European Communities would draw the Pa nel’s very particular attention to the words
“unless otherwise specified” in footnote 9 of the AD Agreement. These words indicate that, as regards
the definition of injury, there may be derogations or special rules elsewhere in the AD Agreement. No
such words are used in Article 2.1 AD Agreement as regards the definition of dumping. Thus, unlike
in the case of injury, the AD Agreement does not foresee any poss ibility at all for departing from the
definition of dumping set out in Article 2.1 AD Agreement.

96. Accordingly, the European Communities would in vite the Panel not to follow, in any event,
the reasoning of the Panel in US – Carbon Steel from Japan, paras. 7.99 to 7.101, which relies entirely
on the words “unless otherwise specified” – words not present in this case. In fact, the Panel’s
reasoning in para. 7.99 of its report was that the presence of a definition “… would seem to support
the view that the provisions of Article 3 concerning injury may be generally applicable throughout the
Anti-Dumping Agreement …” and that “Article 11 do es not seem to explicitly specify otherwise in
the case of sunset review s.” Transposing that reasoning to the definition of dumping, absent the
words “unless otherwise specified” , would confirm that Article 2 AD Agreement applies in the
context of a sunset review investigation. As has been observed a number of times in the jurisprudence:
“the fact that a particular treaty provision is silent on a specific issue must have some meaning.”
44

6.3.2 Anti-Dumping Proceeding

97. Neither of the words “investig ation” or “review” is to be found in Article VI GATT 1994,
which the AD Agreement implements.

98. In the opinion of the European Communities, as a matter of WTO law (which is what is
determinative for the purposes of the present discussion) the unqualified word “investigation” does
not describe the whole anti-dumping procedure. Convenience and the need for a common vocabulary
in order to conduct meaningful discussions makes a label appropriate. The precise term is of little
importance, but might reasonably be the “ proceeding
”. That word is used as an abstract noun at least
4 times in the AD Agreement.45 Furthermore, it corresponds to the common and ordinary meaning of
the text : both court and administrative or quasi-j udicial proceedings are commonly said to begin with
the filing of the first document with the relevant authority, and the term is customary in WTO anti-
dumping law.46

44 Appellate Body Report, US – Carbon Steel from Germany, para. 65; Appellate Body Report, Japan –
Alcoholic Beverages II, para. 111; Appellate Body Report, Canada – Patent Term, para. 78.
45 AD Agreement, Article 5.9, Article 8.1, Article 9.5 and footnote 19.
46 For example : Panel Report, US – Carbon Steel from Japan , para. 7.32 : “This clause in Article 12.1
appears to us to serve a timing purpose : it explains when during an anti-dumping proceeding the public notice
of initiation should be given.”; Panel Report, EC – Bed Linen , footnote 45 (twice) and paras. 6.185 and 6.238;
Panel Report, EC – Tube and Pipe , para. 7.208; Panel Report, Egypt-Steel Rebar, para. 7.139; Panel Report,
Guatemala-Cement II , paras. 8.247, 8.249 and 8.250 (twice); Panel Report, US – Lead and Bismuth II ,

6.3.3 Review

99. The word “review” is us ed 6 times in Article 9.5 AD Agreement (newcomer review), 3 times
in Article 11.2 AD Agreement (changed circum stances review), 4 times in Article 11.3 AD
Agreement (sunset review) and 5 other times in Article 11 and footnote 21 AD Agreement (changed
circumstances and sunset reviews). It is also used once in Article 12.3 AD Agreement (changed
circumstances and sunset reviews) and twice in Article 18.3 AD Agreement (all reviews).

100. The word “review” is also used four times in Article 13 AD Agreement. The first two times it
refers to judicial review of administrative action (as in footnote 20 of the AD Agreement). The third
and fourth times the word is used, apparently, in the sense indicated in the preceding paragraph.

101. The word “review” is also used twice in Article 18.6 AD Agreement, which refers to the
review of the implementation and operation of the AD Agreement.

102. The conclusion must therefore be that the word or concept “review” is referred to in the AD
Agreement with at least 5 different meanings : newcomer review, changed circumstances review,
sunset review, judicial review, operational review. Sometimes it is used in two senses at the same time
(for example, Article 11.4 AD Agreement). Sometimes it is used in three senses at the same time (for
example, Article 18.3 AD Agreement). Which is the correct meaning in any given instance must
necessarily be determined by looking beyond the text of the word itself, interpreting it in its context
and having regard to the object and purpose of the provision in question.

6.3.4 Investigation

103. Similar remarks apply with respect to the word “investigation”.

104. That word appears 15 times in Article 5 AD Agreement (initiation and subsequent
investigation). Each time it is expressly associated with the qualifying word “initiate” or “initiation”.
The sense of the word in Article 5 may therefore be described as an Article 5 investigation or an
“initial investigation
” or an “original investigation” – also customary in WTO anti-dumping law. 47

para. 6.8; Panel Report, US – Hot Rolled Steel from Japan, para. 7.128; Appellate Body Report, US – Offset Act,
para. 7.144. As regards the SCM Agreement, see : Panel Report, US – Lead and Bismuth II , paras. 6.8 (twice)
and 6.40 (twice); Panel Report, US – Lumber , para. 7.116. In the present case , the notice of initiation of the
contested sunset review determination (ARG-44) states : “Please consult the Department’s regulations at 19
CFR Part 351 (2000) for definitions of terms and for other general information concerning anti-dumping duty
order proceedings at the Department.”. The explanatory memorandum to those regulations (62 FR 27296) states
that DOC “… hereby revises its regulations on anti-dumping and countervailing duty proceedings …”. Section
351.101 of those regulations states : “This part contains procedures and rules applicable to anti-dumping and
countervailing duty proceedings …”. The Sunset Policy Bulletin (ARG-35) also refers to “Sunset reviews in
Anti-Dumping Proceedings”, at page 18872 and again at page 18874 in relation to countervailing duties. The
issues memorandum in this case (ARG-51) also states 4 times that DOC has not conducted any duty-absorption
investigations “in this proceeding.” See also first written submission of United States, for example at paras. 35,
39 and 40. (emphasis added)
47 For example : Panel Report, US – Carbon Steel from Japan , para. 7.37, in which the Panel, in
analysing the use of the word “investigation” in Article 5 AD Agreement, also recorded 9 times the use of the
word “initiate” or one of its derivatives. The Panel then went on, in para. 7.38, to refer 3 times to the term
“original investigations”. It also used the term original investigation in para. 7.8 (3 times), footnote 64,
para. 7.162 and para. 7.186 of the Report. The term is also used in Appellate Body Report, US – Carbon Stee1
quotes from the SAA, which uses the term “ initial” investigation. See also Panel Report, US-DRAMS, section
II.A. (titled “The original anti-dumping duty investigation”); Appellate Body Report US – CVDs on EC
Products (15 times) and Panel Report (13 times); Panel Report, EC – Bed Linen (21.5) (12 times); Panel
Report, US – Lumber (5 times); etc. In the present case , the adequacy determination (ARG-50) itself used the

Similarly, the word is used in the same sense 4 times in Article 7 AD Agreement (provisional
measures), being there also associated with Article 5 AD Agreement or with the word “initiation”. It
is also used twice in Article 10 AD Agreement, again each time associ ated with the word “initiating”
or “initiation”. In both cases this is perfectly logical, since both provisional measures and retroactivity
are relevant in the context of initial or original inve stigations, but not, by definition, in the context of
reviews.

105. The contrast with Article 6 AD Agreement is very striking.

106. Article 11.4 AD Agreement provides that the provisions of Article 6 regarding evidence and
procedure shall apply to any review carried out under Article 11 AD Agreement. The word
“investigation” is used 21 times in Article 6 AD Agreement. Thus, the relevant provisions of Article 6
must be applied in the context of an Article 11.3 review, and when they so apply, they must apply in
respect of “an investigation”, as that word is used in Article 6. For example, Article 6.6 AD
Agreement requires authorities during the course of “ an investigation” to satisfy themselves as to the
accuracy of the information supplied by interested parties upon which their findings are based. This
rule also applies to sunset review investigations. Thus, the type of investigation with which Article 6
read in conjunction with Article 11.4 AD Agreement is concerned must be described as a “ review
investigation” – again, customary in WTO anti-dumping law.48 The United States does not argue that
the provisions concerning “investigations” in Article 6 do not apply to sunset reviews, only that they
were complied with in this case.49

107. It is not possible to apply the relevant provis ions of Article 6 and to assert that there is no
investigation, when those provisions expressly refer repeatedly to an investigation. Unlike certain
other AD Agreement cross-references, Article 11.4 AD Agreement does not use the term “mutatis
mutandis”, indicating that the drafters intended th at all of the provisions of Article 6 AD Agreement
(excluding those not relating to evidence and procedure) would apply in an identical manner to sunset
review investigations, as they apply to initial or original investigations.
50 As we have already

phrase “… in the original investigation …”; as does the ITC initiation (ARG-45 at page 41088); the final sunset
determination (ARG-46), at page 66702; the issues memorandum (ARG-51) 5 times at pages 6, 7 and 8; and the
ITC final determination (ARG-54) at least 15 times at page s 3, 4, 5, 8, 11, 13, 15 and 17 [the limit of the
European Communities’ verification on this point for the time being]. The Sunset Policy Bulletin (ARG-35) also
uses the term “original investigation” twice (page 18873). See also first written submission from United States,
for example, paras. 40, 51, 54, 55, etc. (emphasis added)
48 For example : in the context of Article 11.2 AD, Panel Report, US – DRAMS, para. 2.3 : “The DOC
initiated the first annual review of DRAMs from Korea on 15 June 1994 and investigated whether the Korean
companies made sales of DRAMs less than normal value, (i.e. dumped) during the period of review.”. The same
statement is made in para. 2.4 of the same Panel Report; Panel Report, EC-Bed Linen (21.5) (3 times); Panel
Report, US – CVDs on EC Products , footnote 295 and para. 7.114 : “We consider that in a sunset review
investigation the importing Member is obliged …”. In the present case, the ITC notice of initiation (ARG-45)
bears the title : “[ Investigations Nos. 701-TA-364 (Review) and 731-TA-711 and 713-716 (Review)]”. This is
highly significant. The description “investigation” is used in the general title, thus applying to all that follows;
the word “investigation” is used for the purposes of assigning a case number; both the word “investigation” and
the word “review” are used in the same description, thus to describe the same thing, showing that they are not
mutually exclusive; and the word “investigation”, if anything, clearly takes precedence over the word “review”.
The same page also includes a reference to the “Office of Investigations”. The reference to the investigation
numbers are also included, twice, in the final ITC determination (ARG-54) on the title page and following page,
and on page 6 the ITC refers expressly to “ review investigations
”. See also first written submission of United
States, para. 154, in which dictionary definitions of “review” and “determine” are said to include “… conclude
from reasoning or investigation, deduce …”. (emphasis added)
49 First written submission of United States, para. 163 and following.
50 Panel Report, US – Carbon Steel from Japan , para. 7.33 : “… the use of term “mutatis mutandis”
demonstrates that the drafters foresaw that certain provisions of Article 12 could not be applied, at all, or at the
very least not in an identical manner, in the case of sunset reviews.”

recalled, the fact that a particular treaty provisi on is silent on a specific issue must have some
meaning.

108. Naturally, Article 6 AD Agreement also applies to initial or original investigations, as well as
review investigations. This resu lts particularly clearly from the fact that, unlike Article 5 AD
Agreement, which refers always to initial investigatio ns, Article 6 refers to an investigation in neutral
terms. Thus, the word “investigation” in Article 6 AD Agreement has a more general meaning, that
encompasses both initial or original investigations an d review investigations. Once again, the fact that
a particular treaty provision is silent on a specific issue must have some meaning.

109. The reason why an express cross-reference in Article 11.4 AD Agreement is necessary is not
because the concept of “investigation” and the concept of “review” are mutually exclusive, as the
United States would have it. It is simply be cause not every review necessarily involves an
investigation, in exactly the same way as not every proceeding necessarily involves an investigation.
Thus, Article 11.4 AD Agreement has a purpose : it ensures that the relevant Article 6 AD Agreement
rules apply in all reviews, not just those reviews that involve an investigation.

110. This reading of the AD Agreement corresponds to the comm on and ordinary meaning of the
word “investigation”, which is what the Panel is bound to use.

111. Further guidance is provided by the term “investigating authorities”, which is used several
times in the AD Agreement. Given the common and ordinary meaning of this term, what an
investigating authority does is to investigate, or in other words, to conduct an investigation. In the
present case, having regard to the relevant provisions of Article 6 AD Agreement, which applied in
this case, both DOC and the ITC can only be correctly described in terms of the AD Agreement as
“investigating authorities”.
51 Thus, in the present case they were engaged in the conduct of an
investigation – a sunset review investigation.

6.3.5 “During the Investigation Phase”

112. In the light of the preceding observations, the European Communities does not agree with the
interpretation advanced by the United States of the words “during the investigation phase” in
Article 2.4.2 AD Agreement. It is incorrect to assert that the words “investigation” and “review” in
the AD Agreement each have a single, mutually exclusive, meaning. They have different meanings,
depending on the context and the object and pur pose of the relevant provision. Under the AD
Agreement, there may be both initial or original investigations, and review investigations. The text of
Article 2.4.2 AD Agreement does not read : “during the initial investigation phase” or “during the
original investigation phase” or “during the Article 5 investigation phase”, as would be to be expected
if the United States were correct. If that would be th e intended or agreed meaning, it would have been
a simple matter for the negotiating Members to insert one of those formulations in the text. But they
chose not to do that . Instead, the more general term “investigation” is used , just as in Article 6
AD Agreement, encompassing both initial or origin al investigations as well as sunset review
investigations conducted pursuant to Article 11.3 and Article 6 AD Agreement. To read into the text
of Article 2.4.2 AD Agreement words that are not there, and that fly in the face of the context, object
and purpose of the provisions, would be to diminish the rights accruing to the Members of the WTO
under the AD Agreement, in a manner inconsistent with Articles 3(2) and 19(2) DSU.

51 Panel Report, US – Carbon Steel from Japan , para. 7.166; Panel Report, US – DRAMs , para. 6.58;
Panel Report, EC – Pipe and Tube, para. 7.112. See also first written submission from United States, paras. 131,
132, 141, 239, 280 : “In a sunset review, the investigating authority …”, etc.

6.3.6 Other phases : Pre-Investigation Phase

113. The European Communities considers that, follo wing this reasoning, there is no particular
difficulty in identifying the object and purpose of the words “during the investigation phase” in
Article 2.4.2 AD Agreement. An anti-dumping proceeding may contains other phases, such as, for
example, the pre-investigation phase (there may also be others).

114. Thus, the first step in an anti-dumping pr oceeding is not the initiation of an Article 5
investigation. The first step is normally the written application by the domestic industry, pursuant to
Article 5.1 AD Agreement. There are several provisions of the AD Agreement regulating the period
prior to the initiation of an Article 5 investigation. These provisions impose obligations on Members.
For example, Article 5.2 sets out the minimum content of an application. If an application does not
meet these requirements, a Member cannot initi ate an Article 5 investigation without acting
inconsistently with the AD Agreement. According to Article 5.3 AD Agreement, the authorities must
examine the accuracy and adequacy of the evidence provided in the application to determine whether
there is sufficient evidence to justify the in itiation of an investigation. Article 5.4 AD Agreement
requires the authorities to determine that the applicati on is supported by a sufficient proportion of the
domestic industry – otherwise “An investigation shall not be initiated …”. Article 5.5 AD Agreement
prohibits the authorities from publicising the appli cation prior to initiation of an investigation, and
requires pre-notification to the government of the exporting Member. Article 5.7 AD Agreement
contains rules regarding the consideration of dumpin g and injury, both in the pre-investigation phase,
and “thereafter”. Article 5.8 AD Agreement sets out circumstances in which an application must be
rejected, and de minimis rules. Even if an Article 5 investiga tion is initiated pursuant to Article 5.6,
there must necessarily first be a period during which the authorities gather the necessary evidence,
and during which they will be bound by the rules set out in Article 5 AD Agreement. Finally, the
European Communities notes that the transitional rule in Article 18.3 AD Agreement is formulated by
reference to the date of application.

115. There is therefore, incontestably, a period of time before an Article 5 investigation is initiated
during which (1) facts material to a possible final determination arise or are placed on the record (2)
procedural steps are taken both by “interested parties” (the domestic industry) and by the authorities
and (3) AD Agreement rules apply and impose obligations on Members. For the sake of convenience,
this period of time or phase prior to the initiation of an Article 5 investigation, which incontestably
exists, may be given a label. The precise term chos en is of little importance , but might reasonably be
“pre-investigation phase
”.

116. Thus, the rule in Article 2.4.2 AD Agreement would not apply, for example, during the pre-
investigation phase. That is common sense and consistent with the other provisions of the AD
Agreement. Article 5.2 AD Agreement requires the applicant to provide “such information as is
reasonably available to the applicant”. Article 5.2 (iii) AD Agreement refers to “information on
prices” in the domestic market and “information on export prices”. That might, for example, include
published price lists. In the opinion of the Europe an Communities, the threshold established by
Article 5.2(iii) can be met by information that falls short, very far short, of the information necessary
to make a full anti-dumping determination. In fact, this will normally be the case. That is because the
very detailed and complete information concerning like product, model types, costs of production,
domestic export transactions and export transactio ns, and all information necessary to make a fair
comparison pursuant to Article 2.4 AD Agreement, will simply not be available, or reasonably
available, to the applicant. Complaints are not required to contain precise and accurate dumping
margin calculations. So it would make no sense to apply rules about zeroing. So the AD Agreement
expressly provides that the zeroing rules do not apply in the pre-investigation phase.

6.3.7 Object and Purpose of Article 11.3 AD Agreement

117. In the opinion of the European Communities, the object and purpose of Article 11.3 AD
Agreement is simple and very clear. We must have a rule other than : duties ar e forever. That is what
Article 11.3 achieves. It takes the period of ti me from now stretching forward into the future, and
divides it up into 5 year segments. In respect of ea ch 5 year segment, Members are required to ensure
that any anti-dumping duties they impose are consistent with the AD Agreement. If a duty depends on
dumping, and dumping on a comparison, why should it be the case that, with the passage of time, the
necessary comparison should move from being “fair” to “unfair” ? If anything, surely the contrary
observation would be more consistent with th e WTO Agreement. Thus, to permit an unfair
comparison in sunset review investigations would not be consistent with the object and purpose of
Article 11.3, the AD Agreement as a whole, or Article VI GATT 1994.

6.4 Dumping Margin Calculated Under Previous Agreement

118. The European Communities agrees with the United States that the purpose of the present
proceedings is not to consider whether or not, in adopting the original determination, the United States
acted in a manner consistent with the Tokyo Round anti-dumping agreement or the present AD
Agreement. However, the point is that for the purpos es of the present sunset review investigation and
determination, the use by the United States of th e original dumping determination was inconsistent
with the present AD Agreement.

119. The European Communities considers that the Panel should conclude that, given that the
original determination involved an unjustified si mple zeroing method inconsistent with Article 2.4
and 2.4.2 AD Agreement, it could not be relied on for the purposes of the contested sunset review
determination, and the fact that it was made under the Tokyo Round anti-dumping agreement is not a
valid defence for the United States.
52

120. In this respect, the European Communitie s recalls that according to Article 18.3.2 AD
Agreement the present AD Agreement applies also to reviews of measures existing at the date of entry
into force of the WTO Agreement. This implies the continuation of such measure is made subject to
the disciplines of the AD Agreement, including to the principle contained in Article 11.1 that anti-
dumping duties should be maintained only as long as necessary to counteract dumping which is
causing injury. This objective of Article 18.3.2 would be undermined if a party were allowed to
continue a pre-WTO measure solely on the basis of findings which are not in accordance with the
provisions of the AD Agreement.

121. Furthermore, the European Communities no tes that the investigating authority made a
determination of continued dumping, not by making a fresh assessment of fresh information, but by
the fiction of stretching the sunset review investig ation period back to the beginning of the original
investigation period (1 January 1994). It was not possible for the investigating authority to rely on the
concept of continued dumping during the period 1 January 1994 to the date of the sunset
determination (effective 7 November 2000), given that during that period, on 1 January 1995, the
basic definition of dumping, indeed the entire agreement, changed. The conclusion that there is
dumping is a legal determination resulting from appl ying certain legal rules to certain facts. Even if
the facts have remained the same, if the legal rules have changed, to conclude that dumping continues

also during the period after the rules have changed it must at the very least be necessary to apply the
new legal rules to the facts. Especially when, as in the present case, doing so would result in no
dumping margin at all. In failing to do that in the present case, the inve stigating authority acted
inconsistently with the AD Agreement. One simply cannot speak of a continuous legal determination,
when during the period the applicable legal rules changed.

52 First written submission of United States, para. 260.

122. These observations apply with equal or greater force insofar as Article 11.3 AD Agreement
requires a prospective determination of likely continuation of dumping in the future. That future
dumping could only be dumping according to the terms of the present AD Agreement.

7. INJURY

123. The European Communities agrees with Arge ntina that the provisions of Article 3 AD
Agreement apply mutatis mutandis in the context of a sunset review investigation.
53 As for dumping,
there must a determination either of likely continuati on, or likely recurrence. In both cases there is an
historical element and a prospective element.

124. Article 3.1 of the AD Agreement confirms this by referring to "a determination of injury for
purposes of Article VI of GATT 1994". This introductory wording of Article 3.1 suggests that the
disciplines of Article 3 are in principle relevant for the entire AD Agreement, which concerns the
implementation of Article VI GATT. This was also the view of the Panel in US – Carbon Steel from
Japan.
54

125. There are other textual indications that the Article 3 injury obligations apply throughout the
Agreement. For example, the use of the language "for purposes of Article VI of GATT 1994" 55 in
Article 3.1 also suggests that, in general, the oblig ations in Article 3 pertaining to injury may apply
throughout the Anti-Dumping Agreement, i.e. they are not limited to initial or original investigations.

126. Given the introductory wording of Article 3. 1 AD Agreement, the absence of an explicit
cross-reference in Article 11.3 to Article 3, to which the United States has referred,
56 is irrelevant.
Moreover, the view of the United St ates that Article 3 is not applicable in the context of a sunset
review would lead to a completely unfettered disc retion of the authorities as to how they determine
likelihood of continuation or recurrence of injury in a sunset review.

127. The United States has argued that even though Article 3 does not apply in a sunset review,
some of its provisions "may provide guidance as to th e type of information that may be relevant to the
examination in a sunset review". 57 This line of reasoning is unconvincing. The provisions of the AD
Agreement, including Article 3 thereof, contain binding legal commitments which must be respected
throughout the application of the Agreement. The purpose of the provisions is not to provide mere
"guidance" to the Members.

128. Furthermore, The European Communities agrees with Argentina that the required standard is
“likely”, not “possible” or “a concept that falls in between ‘probable’ and ‘possible’ on a continuum
of relative certainty”.
58 The contested sunset review investigation and determination did not correctly
apply the “likely” standard, but a lesser standard, an d is therefore inconsistent with the obligations of
the United States under Article 11.3 AD Agreement.

129. Finally, The European Communities agrees with Argentina 59 that both the historical and
prospective part of the injury determination must be based on positive evidence and involve an

53 First written submission of Argentina, paras. 234 to 241.
54 Para. 7.100.
55 We note that in accordance with the provisions of Article 1 of the Anti-Dumping Agreement, the
reference to Article VI of GATT 1994 in Article 3 is also a general reference to the Anti-Dumping Agreement
itself.
56 First written submission of United States, para. 296.
57 First written submission of United States, para. 302.
58 First written submission of Argentina, para. 211.
59 First written submission of Argentina, para. 243 et seq.

objective examination, as required by Article 3.1 AD Agreement. Mere speculation about facts that
might or might not arise in the future is insufficient.

8. CONCLUSION

130. In the light of the preceding observations, the European Communities has the following
conclusions:

• Whether the Panel request satisfies the re quirements of Article 6.2 DSU should be
established on the basis of the request as a whole, and not with respect to certain
isolated parts of the request. The United States acted inconsistently with the AD
Agreement insofar as it determined that the response from Siderca was inadequate, on
the basis that it accounted for less than 50 per cent of total exports of the product
from Argentina to the United States from 1995 to 1999, Siderca itself having made no
exports during that period.
• The United States acted inconsistently with the AD Agreement in not correctly
applying the “likely” standard for sunset review investigations provided for in
Article 11.3 AD Agreement.
• The United States acted inconsistently with Article 11.3 AD Agre ement, insofar as it
relied only on the dumping determination made in respect of the original period of
investigation. The minimum meaning of Article 11 .3 AD Agreement is that, to
continue the measure beyond five years, an historical dumping determination more
recent than that made in the original investigation is necessary.
• The United States acted inconsistently with Article 11.3 AD Agreement, insofar as
the additional statement of fact, if any, and the additional statement of reason, if any,
relied on by the investigating authority for the purposes of the prospective part of its
likely continuation of dumping determina tion were insufficient to give effective
meaning to Article 11.3 AD Agreement.
• In any event, considering the two preceding arguments together, the United States
acted inconsistently with Article 11.3 AD Agreement insofar as the contested
determination was based on out-of-date data and essentially speculation about the
future, thus emptying Article 11.3 AD Agreement of effective meaning.
• The Sunset Policy Bulletin is, as such, inconsistent with Article 11.3 AD Agreement.
• Model zeroing is inconsistent with the AD Agreement, Article 2, 2.4 and 2.4.2;
simple zeroing is inconsistent with the AD Agreement, Article 2, 2.4 and 2.4.2,
except as provided for in Article 2.4.2, second sentence (which exceptions are not
relevant in the present case); and the i nvestigating authority acted in a manner
inconsistent with the AD Agreement insofa r as it relied, for the purposes of the
contested sunset review investigation and determination, on a dumping margin
involving such zeroing, particularly insofar as it found continued dumping during a
period in which the applicable legal ru les changed. That conclusion is not
contradicted by the phrase “during the i nvestigation phase” in Article 2.4.2, first
sentence AD Agreement, since it is a conclusion that results from the unqualified
definition of dumping in Article 2.1, from the Article 2.4 obligation to make a “fair
comparison” and from the Article 2.4.2, seco nd sentence obligation to justify any use
of simple zeroing. Furthermore, the word “investigation” in Article 2.4.2 is not
qualified with the word “initial” (or original) or one of its derivatives, as in Article 5,
but is used in the same more general sense as in Article 6, which applies to sunset
review investigations by virtue of the unqu alified cross-reference in Article 11.4 AD
Agreement.
• Article 3 of the AD Agreement is applicable in the context of a sunset review.

 The European Communities remain available should the Panel wish to pose any written or
oral questions on the matters dealt with in this submission.

I. INTRODUCTION
1. Japan welcomes this opportunity to present its view in the dispute brought by Argentina over
the consistency with Article VI of the General Agreement on Tariffs and Trade 1994(“GATT”), the
Agreement on Implementation of Article VI of the GATT (“AD Agreement”), and the Marrakech
Agreement establishing the World Trade Organization (“WTO Agreement”) of the decisions by the
United States not to terminate the imposition of the anti-dumping duty on oil country tubular goods
(“OCTG”) from Argentina and US statutory, regulato ry, and administrative measures with regard to
sunset reviews.

2. Japan has systemic interests in the interpretation and application of the AD Agreement,
GATT and WTO Agreement with regard to sunset re views. As a third party, Japan would like to
address the following issues raised by Argentina:

- Applicability of provisions of Articles 2, 3, 6, and 12 to Article 11.3;
- Inconsistency of margins of dumping based on the zeroing methodology for
determining “dumping” with Articles 2.1 and 2.4; and inconsistency of
determinations of likelihood of continuation or recurrence of both “dumping”
by the US Department of Commerce (“DOC”) and “injury” by the US
International Trade Commission (“ITC”) based on such dumping margins in
the sunset review of OCTG from Argentina with Article 11.3;
- Inconsistency of the determination by the ITC of likelihood of continuation
or recurrence of injury with Articles 3.1, 3.4, 3.5 and 11.3;
- Inconsistency of the waiver provisions in the US statute and regulations and
the three scenarios in the Sunset Policy Bulletin
1 a s s u ch w i t h A r t i c l e s 6 . 2 ,
11.3 and 18.4 of the AD Agreem ent and Article XVI:4 of the WTO
Agreement.
II. ARGUMENTS
A. ARTICLES 2, 3, 6 AND 12 APPLY TO SUNSET REVIEWS UNDER ARTICLE 11.3
3. Japan shares the view of Argentina that Artic les 2, 3, 6 and 12 apply to sunset reviews under
Article 11.3. Provisions of these Articles are explic itly cross-referenced either to or from Article 11,
as discussed below. These cross-references show dr afters’ unequivocal intent that provisions of these
Articles apply to sunset reviews under Article 11.3. The Appellate Body in US – Carbon Steel 2
confirmed this interpretation. The Appellate Body in that case has reviewed phrases “for the purpose
of this Agreement” and “under this Agreement,”3 and stated “these cross-references suggest to us that,
when the negotiators of the SCM Agreement intended that the disciplines se t forth in one provision
be applied in another context, they did so expressly.”4

1 Policies Regarding the Conduct of Five-year (“Sunset”) Reviews of Anti-Dumping and
Countervailing Duty Orders; Policy Bulletin , 63 Fed. Reg. 18871 (16 April 1998) ( “ Sunset Policy Bulletin ”)
(Exhibit ARG-35).
2 Appellate Body Report, United States – Countervailing Duties on Certain Corrosion-Resistant
Carbon Steel Flat Products from Germany ("US – Carbon Steel "), WT/DS213/AB/R and Corr.1.
(28 November 2002).
3 See ibid., footnote 59 (indicating phrases “For the purpose of this Agreement” regarding definition of
“subsidy” in Article 1; “For the purpose of Part V” regarding calculation of the amount of a subsidy under
Article 14; and “Under this Agreement” in the definition of "injury" under Article 15 and in footnote 45.).
4 Ibid., para. 69 (emphasis added).

1. The provisions of Article 2 apply to the dete rmination of likelihood of continuation or
recurrence of “dumping” under Article 11.3
4. As Argentina argues, the provis ions of Articles 2.1 and its subs equent paragraphs in Article 2
define the term “dumping” throughout the AD Agreement, including Article 11.3. The title of
Article 2 states “Determination of Dumping.” Article 2.1 then states that:

For the purpose of this Agreement , a product is to be considered as being dumped,
i.e. introduced into the commerce of another co untry at less than its normal value, if
the export price of the product exported from one country to another is less than the
comparable price, in the ordi nary course of trade, for the like product when destined
for consumption in the exporting country.5
5. The first phrase “[f]or the purpose of this Agreement” demonstrates drafters’ clear intent to
apply the obligations of Article 2 throughout the AD Agreement, wherever the word “dumping”
appears. The basic concept of “dumping” under Article 2 thus applies to all “dumping”
determinations throughout the AD Agreement, including sunset reviews under Article 11.3. To find
otherwise would render the opening phrase of Article 2.1 devoid of any meaning.

6. Article 2.1 is further defined by the other provisions of Article 2, including Article 2.4.
Article 2.4 provides “a fair comparison shall be made between the export price and the normal value.”
As the Appellate Body in EC – Bed Linen has stated, 6 this general obligation inform Article 2.1 of
how the margin of dumping, i.e., the difference between the export price and the normal value, must
be established.

7. The phrase “likely to lead to continuation or recurrence” in Article 11 .3 does not change the
core concept of “dumping,” nor does it affect the applicability of Article 2 to Article 11.3. To find
“continuation of dumping,” the authorities must find the existence of dumping at the time of the
sunset review before ascertaining whether it will “c ontinue”. To find “recurrence of dumping,” the
authorities must first find that dumping has ceased by the time of the sunset review before
determining whether it will “recur.” The threshold question, therefore, is how the authorities must
find the existence of currently occurring dumping. Sunset reviews therefore focus on both the current
existence of dumping and the continued existence, or occurrence in the future, of dumping. The
underlying concept of “dumping” is the same in eith er case; the only differenc e is the period of time
for which this assessment is being made.

8. A determination of whether future dumping is likely to continue or re cur under Article 11.3,
therefore, must reflect the definition and obligatio ns enumerated in Articles 2.1, 2.4 and the other
provisions of Article 2.

2. Provisions of Article 3 apply to Article 11.3
9. Argentina also correctly stated that provisions of Article 3 apply to Article 11.3. The title of
this Article states “Determination of Injury.” Footnote 9 then defines the term “injury” that:

Under this Agreement the term “injury” shall, unless otherwise specified, be taken
to mean material injury to a domestic industry, threat of material injury to a domestic
industry or material retardation of the establishment of such an industry and shall be
interpreted in accordance with the provisions of this Article. (emphasis added.)

5 Article 2.1 of the AD Agreement (emphasis added).
6 Appellate Body Report, European Communities – Anti-Dumping Duties on Imports of Cotton-Type
Bed Linen from India (“EC – Bed Linen ”), WT/DS141/AB/R (1 March 2001), para. 59 (a fair comparison in
Article 2.4 “is a general obligation that, in our view, informs all of Article 2.”)

 The phrase “[u]nder this Agreement” in Footnote 9 ensures that, whenever the AD Agreement
uses the term “injury,” the provisions of Article 3 define the term. To find “injury,” therefore, the
provisions in Article 3 setting forth requirements for finding “injury” must be satisfied.

10. The texts of the individual provisions of Artic les 3 further clarify that the requirements in
these provisions apply to a determination of “injury.” Article 3.1 sets forth general requirements for a
determination of “injury.” The phrase “a determination of injury for purposes of Article VI of GATT
1994” clarifies its cross-reference that the provision s of Article 3 apply to an “injury” determination
throughout the AD Agreement to determine circum stances in which anti-dumping measure can be
applied.
7 The Appellate Body has confirmed “Article 3.1 is an overarching provision that sets forth a
Member’s fundamental, substantive obligation in this respect. Article 3.1 in forms the more detailed
obligations in succeeding paragraphs.”8

11. Article 3.1 requires the authorities to base th eir injury determination on positive evidence and
objective examination of “the volume of the dumped imports” and “the effect of the dumped imports
on prices.” Article 3.2 then sets forth further rules on how the authorities shall consider these two
elements. In this way, Article 3.2 informs Article 3.1 and all other provisions of the AD Agreement
of the analytical methods that the authorities must follow for making an injury determination.

12. Article 3.1 also provides that the authorities mu st base their injury determinations on positive
evidence and objective examination of “the consequent impact of these imports on domestic
producers of such products.” Article 3.4 then sets forth how “the impact of dumped imports on the
domestic industry” must be examined. Article 3. 4 thus provides the detailed requirements for the
examination of the impact of dumped imports under Article 3.1, and therefore, for a determination of
injury. As such, the authorities must satisfy the re quirements in Article 3.4 to determine “injury” in
any proceedings under AD Agreement.

13. Article 3.5 provides that injury “within the meaning of this Agreement” must be caused by
dumped imports through the effects of dumping as set forth in paragraphs 2 and 4. The phrase “injury
within the meaning of this Agreement” ensures that the provisions of Article 3.5 further define the
term “injury” whenever the term “injury” appe ars in this Agreement. The causation and non-
attribution requirements under Article 3.5, therefore, must be satisfied to make a determination of
“injury.”

14. The phrase “likely to lead to continuation or recurrence” in Article 11 .3 does not change the
core concept of “injury,” as is the case of “dum ping” discussed above. The terms “continuation or
recurrence” demonstrate the drafters’ intent that th e authorities must first find the current state of
injury to the domestic industry, and then how the current state is likely to change. The modifying
phrase therefore does not affect the applicability of Article 3 to Article 11.3.

15. The provisions of Article 3, therefore, apply to “injury” determinations in sunset reviews
under Article 11.3.

3. Article 6 applies to determinations under Article 11.3
16. Provisions of Article 6 also apply to Artic le 11.3. Article 11.4 provides the clear cross-
reference that “the provisions of Article 6 regarding evidence and procedures shall apply to any
review carried out under this Article.”

7 See Article 1 of the AD Agreement, which defines that “[a]n anti-dumping measure shall be applied
under the circumstances provided for in Article VI of GATT 1994.”
8 Appellate Report, Thailand – Anti-Dumping Duties on Angles, Shape and Extensions of Iron or Non-
Alloy Steel and H-Beams (“Thailand – H-Beams”), WT/DS122/AB/R (12 March 2001), para. 106.

17. The language “regarding evidence and procedures” in Article 11.4 does not limit the
applicability of provisions of Article 6 to Article 11.3. As the Appellate Body in Thailand – H-Beams
stated, Article 6 “establishes a framework of procedural and due process obligations.”9 The Appellate
Body in EC – Bed Linen (Article 21.5 – India) has further stated:

Article 6 is entitled “Evidence”, and there is no indication in Article 6 – or elsewhere
in the Anti-Dumping Agreement – that Article 6 does not apply generally to matters
relating to "evidence" throughout that Agreement. Therefore, it seems to us that the
subparagraphs of Article 6 set out evidentiary rules that apply throughout the course
of an anti-dumping investigation, and provide also for due process rights that are
enjoyed by "interested parties" throughout such an investigation.10
18. As the Appellate Body clarified, provisions of Article 6 set forth evidentiary and procedural
rules. All provisions of Article 6, therefore, apply to Article 11.3 through Article 11.4.

4. Article 12 applies to Article 11.3
19. All provisions of Article 12 also apply to s unset reviews under Article 11.3. Article 12.3
specifically states “[t]he provisi ons of this Article shall apply mutatis mutandis to the initiation and
completion of reviews pursuant to Article 11.”

20. The plain and ordinary meaning of “ mutatis mutandis” is “all necessary changes have been
made.”
11 In other words, one must replace those terms in the original Article, which do not fit the
situations in the other Article, with the appropriat e terms. Because Article 12.3 expressly indicates
that the requirements of Article 12 apply to Ar ticle 11, which deals with “reviews,” the most
reasonable approach is to replace the term “investigation” in Article 12 with the word “review.” No
other words need to be changed, and all remaining words would apply equally.

21. As such, all provisions of Article 12 apply to sunset reviews under Article 11.3 through
Article 12.3.

B. T
HE UNITED STATES WOULD HAVE ACTED INCONSISTENTLY WITH ARTICLES 2 AND 11.3, IF
ITS DETERMINATION WERE BASED ON DUMPING MARGIN WITH ZEROING METHODOLOGY
1. Dumping margins using zeroing methodology cannot be a proper evidentiary basis for
determining “dumping” in sunset reviews
22. Japan agrees with Argentina that the ma rgin of dumping calculated using the zeroing
methodology cannot provide a WTO-c onsistent basis for determining likelihood of continuation of
dumping in a sunset review. The practice of “zeroing” selectively calculates margins only for those
sales of a product with positive margins, setting nega tive margins produced from sales of the product
to zero. This methodology thus creates an artificial dumping margin. As discussed below, a
“dumping” determination based on margins with the zeroing practice is inconsistent with Articles 2.1
and 2.4. Articles 2.1 and 2.4 apply to the determination of likelihood of continuation or recurrence of
dumping under Article 11.3, as demonstrated above. Therefore, a determination of likelihood of
continuation or recurrence of dumping based on the margins with the zeroing methodology is
inconsistent with Article 11.3.

9 Appellate Body Report, Thailand – H-Beams, para. 109; see also Appellate Body Report, EC – Anti-
Dumping Duties on Malleable Cast Iron Tube or Pipe Fittings form Brazil (“ EC – Pipe Fittings ”),
10 Para. 136 (emphasis added).
11 See Black’s Law Dictionary, 1039 (7th ed. West Group 1999).

23. The term “a product” under Article 2.1 clarifies that the margin of dumping, i.e., the basis of
the determination of “dumping,” must incorporate all types of the product that are subject to a
particular anti-dumping proceeding. The Appellate Body in EC - Bed Linen has stated, “from the
wording of this provision, it is clear to us that the Anti-Dumping Agreement concerns the dumping of
a product.”
12 The Appellate Body in EC-Bed Linen further clarified this point:

all references to the estab lishment of "the existence of margins of dumping" are
references to the product that is subject of the investigation. … Whatever the
method used to calculate the margins of dumping, in our view, these margins must be,
and can only be, established for the product under investigation as a whole.13
 The Appellate Body in EC – Bed Linen (Article 21.5 – India) also confirmed “dumping is a
determination made with reference to a product from a particular producer [or] exporter, and not with
reference to individual transactions.” (emphasis added)14 Article 2.1 thus provides that dumping must
be determined on the basis of all types of a product under consideration as a whole , not some types of
the product.

24. The Appellate Body in EC - Bed Linen proceeded to clarify that the “fair comparison” and
"price comparability" requirements mean that the establishment of dumping margins under Article 2.4
must be made by evaluating the product under consideration as a whole, not just a portion of the
product. The Appellate Body stated “[a]ll types or models falling within the scope of a “like” product
must necessarily be ‘comparable’.”
15 It then further stated that:

The European Communities argues on the basis of the "due allowance" required by
Article 2.4 for "differences in physical char acteristics" that distinctions can be made
among different types or models of cotton-type bed linen when determining
"comparability". But here again we fail to see how the European Communities can
be permitted to see the physical characteri stics of cotton-type bed linen in one way
for one purpose and in another way for another.16
25. The practice of zeroing in establishing dumping margins of a product under consideration,
therefore, is inconsistent with Articles 2. 1 and 2.4 of the AD Agreement. Any “dumping”
determination based on the margin calculated by the zeroing methodology therefore lacks the proper
evidentiary basis, and thus also inconsistent with these Articles.

2. DOC’s evidentiary basis for determining likelihood of continuation of dumping, if based
on zeroing, would render the determination inconsistent with Articles 2 and 11.3
26. It appeared to us that the dumping margin calculated in the original determination was the
basis for DOC to make its affirmat ive determination in the sunset re view of OCTG from Argentina.
In its Decision Memorandum,17 DOC has stated:

12 Appellate Body Report, EC – Bed Linen, para. 51.
13 Appellate Body Report, EC – Bed Linen, para. 53 (emphasis added).
14 Appellate Body Report, European Communities – Anti-Dumping Duties on Imports of Cotton-Type
Bed Linen from India , Recourse to Article 21.5 of the DSU India (“ EC – Bed Linen (Article 21.5 – India) ”),
WT/DS141/AB/RW (8 April 2003), para. 143, quoting the original panel report, European Communities – Anti-
Dumping Duties on Imports of Cotton-Type Bed Linen from India , WT/DS141/R (30 October 2000),
para. 6.136.
15 Appellate Body Report, EC – Bed Linen, para. 58.
16 Ibid. para. 60.
17 Issues and Decision Memorandum for the Expedited Sunset Reviews of the Anti-Dumping Duty
Orders on Seamless Pipe from Argentina, Brazil, Germany, and Italy; Final Results (“Decision Memorandum”)
(7 November 2000) (Exhibit ARG-51).

In this case, there has been no decline in dumping margins nor an increase in imports.
Rather, absent an administrative review, the dumping margin from the original
investigation is the only indicator availabl e to the Department with respect to the
level of dumping. Because 1.27 per cent is above the 0.5 per cent de minimis
standard applied in sunset reviews, we fi nd that dumping has continued over the life
of the order and is likely to continue if the order were revoked.18
27. In the original investigation, DOC calculated the dumping margin of 1.36 per cent for Siderca
only, and applied this margin to all others rate. 19 Argentina presented an exhibit showing how DOC
calculated the margin of dumping for Siderca in the original investigation. 20 While Japan does not
take any position with respect to the factual aspect of this dispute, it appears to us that Siderca’s
dumping margin might have been negative if th e zeroing had not been applied in the original
investigation. If it were the case, then DOC would lose its proper evidentiary basis for its affirmative
determination in the OCTG sunset review under Articles 2.1 and 2.4.21

28. Japan therefore respectfully requests that the Panel carefully review the evidence to confirm if
DOC used the zeroing methodology to find the 1.36 per cent margin of dumping, and if the margin
would have been negative without the zeroing method ology. If the Panel finds that DOC applied the
zeroing methodology to find the positive margin, then Japan respectfully requ ests that the Panel find
that the DOC’s determination in the sunset review in question was inconsistent with Articles 2.1 and
2.4, and thus, inconsistent with Articles 11.3.

3. ITC’s evidentiary basis would not be proper for determining likelihood of continuation
of injury, and would render its injury determination inconsistent with Article 11.3
29. If the margin of dumping in the original investigation were calculated using the zeroing
methodology, then it also would render the “injur y” determination in the sunset review of OCTG
inconsistent with Article 11.3.

30. In the sunset review of OCTG from Argentina, DOC reported to the ITC the dumping margin
calculated in the original investigation as the dumping margin that is likely to prevail if the order were
revoked.
22 As discussed above, the provisions of Articles 3.1, 3.4 and 3.5 apply to the determination
of likelihood of continuation or r ecurrence of injury under Article 11.3. The ITC therefore must have
based its determination of “dumped” imports under Article 3.1 and consideration of “the magnitude of
margin of dumping” under Article 3.4, and the effects of dumping on the domestic industry under
Article 3.5 on the reported margin to reach Article 11.3 injury determination.

31. As discussed above, if the reported margins were calculated using the zeroing methodology,
these margins were inconsistent with Articles 2.1 and 2.4 for determining “dumping.” In other words,
the reported margin would not be a proper evidentiary basis to measure “dumping.” The reported
margin, therefore, could not be a proper evidentiary basis to determine dumped imports or to consider
the magnitude of margin of dumping and the effects of dumping, and thus to determine “injury” under
Article 11.3.

18 Ibid., p. 5.
19 Ibid., p. 8.
20 See Exhibit ARG-52.
21 Japan notes that any determination must be based on proper evidence as required under
Article 17.6(i) of the AD Agreement. See US – Hot-Rolled Steel , para. 56 (“Article 17.6(i) sets forth the
appropriate standard to be applied by panels in examining the WTO-consistency of the investigating
authorities' establishment and evaluation of the facts under other provisions of the Anti-Dumping Agreement.”)
22 See Decision Memorandum (Exhibit ARG-51).

32. In sum, as the ITC based these determination and consideration on the reported rates, the
ITC’s injury determination would also be inconsis tent with Article 11.3 if the DOC’s reported rate
were calculated using the zeroing methodology.

C. ITC’
S INJURY DETERMINATION IS INCONSISTENT WITH ARTICLES 3.4, 3.5 AND 11.3
33. Japan supports Argentina’s claims that the IT C’s injury determination was inconsistent with
Articles 3.4 and 3.5 of the AD Agreement. As discussed above, Articles 3.4 and 3.5 apply to sunset
reviews under Article 11.3. The ITC’s failure to comply with the provisions of these Articles,
therefore, renders its injury determination in the su nset review of OCTG from Argentina inconsistent
with these Articles and Article 11.3.

1. ITC acted inconsistently with Articles 3.4 and 11.3
34. Argentina submitted convincing evidence
23 that the ITC did not evaluate certain factors
mandated by Article 3.4 for determining injury. As Argentina pointed out, Article 3.4 requires that
the authorities evaluate all relevant economic factors indices as set forth in the Article. The Appellate
Body in Thailand – H-Beams confirmed the obligation of the authorities, stating, “Article 3.4 requires
a mandatory evaluation of all of the factors listed in that provision.”24

35. For example, the ITC stated in its report 25 the rates of likely margins of dumping reported
from DOC. The ITC, however, did not provide any words stating its evaluation of these rates. Mere
statement of facts is insufficient for the purpose of Article 3.4. As the Appellate Body confirmed, the
ITC must evaluate each factor.

36. By failing to evaluate certain factors in Artic le 3.4, therefore, the ITC acted inconsistently
with Article 3.4 and accordingly with Article 11.3 in the sunset review of OCTG from Argentina.

2. ITC would have acted inconsistently with Articles 3.5 and 11.3
37. Japan also requests the Panel to carefully review the facts in this dispute to decide whether the
ITC acted inconsistently with Article 3.5 and therefore Article 11.3.

38. The first sentence of Article 3.5 expressly states that the authorities must demonstrate that the
effects of “dumping” actually caused the injury. As discussed above, the term “dumping” is defined
in Article 2.1 and detailed in subsequent provisions.26 In these connections, the Appellate Body in US
– Carbon Steel has stated:

Where the level of subsidization at the time of the review is very low, there must be
persuasive evidence that revocation of the duty would nevertheless lead to injury to
the domestic industry. Mere reliance by the authorities on the injury determination
made in the original investigation will not be sufficient.
27

39. In this case, DOC found that the magnitude of dumping that would be likely to prevail with
respect to OCTG from Argentina was 1.36 per cent, th e rate found in the original investigation. This

23 See first submission of Argentina, para. 259 and related exhibits.
24 Appellate Body Report, Thailand – H-Beams, para. 128 (emphasis added).
25 See Commission’s Sunset Determination, p. V-1. (Exhibit ARG-54)
26 See Appellate Body Report, EC – Bed Linen (Article 21.5 – India), para. 142. See also United States
– Continued Dumping and Subsidy Offset Act of 2000 , WT/DS217, 234/AB/R (13 January 2003), para. 240
(“We recall that, in US – 1916 Act , we said the constituent elements of dumping are found in the definition of
dumping in Article VI:1 of the GATT 1994, as elaborated in Article 2 of the Anti-Dumping Agreement.”).
27 Appellate Body Report, US – Carbon Steel, para. 88.

margin of dumping is below de minimis under the AD Agreement, and even could be negative without
zeroing, if the original investigation were subject to the AD Agreement. In order for the injury
determination to be consistent w ith Article 3.5 and 11.3, therefore, the ITC must have persuasive
evidence demonstrating that the in jury would be nonetheless likely to continue or recur if the duty
were terminated.

40. Further, the “non-attribution” requirement 28 in the second and third sentences of Article 3.5
requires that the authorities explicitly separate and distinguish the injurious effects of other injury
factors from the injurious effects of the dumping. In this case, the ITC acknowledged that the market
share of the domestic industry has fallen from 90.0 pe r cent in 1995 to 74.9 per cent in 2000, “due
largely to an increase in non-subject imports.”29 The ITC also noted that “[o]il and natural gas prices,
the ultimate drivers of OCTG demand”30 and “a slowdown in the US and/or world economy”31 would
be factors contributing to likely injury to the dome stic industry. It, howeve r, appears that the ITC
made no attempt to separate an d distinguish effects of these known factors from the effects of
dumping to the domestic industry. If the ITC had failed to separate and distinguish these known
factors, then the ITC acted inconsistently with the non-attribution requirement under Article 3.5.

41. Japan, therefore, respectfully requests th at the Panel carefully review whether the ITC
demonstrated that the likely injury to the domestic industry would be caused by the effects of
dumping, although the magnitude of its margin of dumping was very low. Japan also respectfully
requests that the Panel carefully review whether th e ITC separated and distinguished effects of all
known factors to the likely injury to the domestic industry from the effects of dumping. If the ITC
failed to do so, then the Panel should find that the IT C has acted inconsistently with Articles 3.4, 3.5,
and 11.3.

28 See Appellate Body Report, US – Hot-Rolled Steel. In that report, the Appellate Body interpreted the
second and third sentences of Article 3.5 as follows:
222. This provision [Article 3.5] requires investigating authorities, as part of their
causation analysis, first, to examine all “known factors”, “other than dumped imports”, which
are causing injury to the domestic industry “at the same time” as dumped imports. Second,
investigating authorities must ensure that injuries which are caused to the domestic industry
by known factors, other than dumped imports, are not “attributed to the dumped imports.”
223. . . . In order that investigating authorities, applying Article 3.5, are able to ensure that
the injurious effects of the other known factors are not “attributed” to dumped imports, they
must appropriately assess the injurious effects of those other factors. Logically, such an
assessment must involve separating and distinguishing the injurious effects of the other factors
from the injuriou s effects of the dumped imports . If the injurious effects of the dumped
imports are not appropriately separated and distinguished from the injurious effects of the
other factors, the authorities will be unable to conclude that the injury they ascribe to dumped
imports is actually caused by those imports, rather than by the other factors. Thus, in the
absence of such separation and distinction of the different injurious effects, the investigating
authorities would have no rational basis to conclude that the dumped imports are indeed
causing the injury which, under the Anti-Dumping Agreement, justifies the imposition of anti-
dumping duties.
US – Hot-Rolled Steel, paras. 222-23 (emphasis added).
29 Commission’s Sunset Determination at 22 (Exhibit ARG-54).
30 Ibid., p. II-13.
31 Ibid.

D. W
AIVER PROVISIONS IN US STATUTE AND THREE SCENARIOS IN SUNSET POLICY BULLETIN
ARE INCONSISTENT WITH ARTICLES 6, 11.3 AND 18.4 OF THE AD AGREEMENT AND ARTICLE
XVI:4 OF THE WTO AGREEMENT AS SUCH
42. Japan agrees with Argentina that the waiver provisions in the US statute and regulations and
the three scenarios32 in the Sunset Policy Bulletin are inconsistent with Articles 6, 11.3 and 18.4 of the
AD Agreement and Article XVI:4 of the WTO Agreement. Articles 18.4 and XVI:4 require that each
Member must “ensure” the “conformity of its laws , regulations and administrative procedures” with
the AD Agreement. By establishing and applying the waiver provisions and the three scenarios,
which are inconsistent with Articles 6 and 11.3, the United States acted inconsistently with
Articles 18.4 and XVI:4.

1. Both the Waiver Provisions and the three scen arios are actionable under Article 18.4 of
the AD Agreement and Article XVI:4 of the WTO Agreement as such
(a) Inconsistency of a Measure As Such Must Be Examined in Accordance with Article 18.4 of
the AD Agreement and Article XVI:4 of the WTO Agreement
43. A Member’s laws, regulations, and administrative procedures are inconsistent with
Article 18.4 of the AD Agreement and Article XVI:4 of the WTO Agreement as such, where a
complaining Member established that a responding Member failed to “ensure” the “conformity” of
them with the AD Agreement. Article 18.4 provides:

Each Member shall take all necessary steps, of a general or particular character, to
ensure, not later than the date of entry into force of the WTO Agreement for it, the
conformity of its laws, regulations and admi nistrative procedures with the provisions
of this Agreement as they may apply for the Member in question.
44. The phrase “administrative procedures” confirms that the rules subject to Article 18.4 and
Article XVI:4 go well beyond just “laws” and “regula tions.” The use of the word “administrative”
confirms that the scope includes the conduct of authorities in administering their anti-dumping laws.
Adding the word “procedures” provides a broader sweep. One of the basic meanings of “procedure”
is “a particular mode or course of action.”
33 The term “administrative procedures” thus underscores
the broad reach of Article 18.4 and Article XVI:4 that encompass from a legislative rule to a
particular method of action adopted by the authorities. In addition, by requiring Members to take “all
necessary steps, of a general or particular character,” Article 18.4 of the AD Agreement contemplates
broad and comprehensive action to ensure compliance with WTO obligations.

45. By requiring Members to “ensure … confor mity,” Article 18.4 and Article XVI:4 further
confirm this broad sweep. The plain or ordina ry meaning of “ensure” is to “make certain the
occurrence of (an event, situation, outcome, etc.).” 34 In the context of these Articles, “ensure” acts to
create an affirmative obligation on the part of a Member. The Appellate Body has commented on the
meaning of “conform to” in EC-Hormones, stating that “conform to” has a stricter meaning than the
term “based on.” The Appellate Body explained “conform to,” means “‘comply with,’ ‘yield or show
compliance’” with something, or “‘correspondence in form or manner,’” or “‘following in form or
nature.’”
35 From this definition it is apparent that “conformity” goes beyond mere narrow formalities;
“conformity” requires compliance, in manner and nature, as well as in form.

32 See the first submission of Argentina, para. 145; see also section II.A.3 of the Sunset Policy Bulletin
(Exhibit ARG-35).
33 New Shorter Oxford English Dictionary, Vol. II at 2363.
34 New Shorter Oxford English Dictionary, Vol. I at 827.
35 Appellate Body Report, EC Measures Concerning Meat and Meat Products (“EC – Hormones”),
WT/DS26/AB/R, WT/DS48/AB/R (16 January 1998), para. 163.

46. The term “administrative procedures” must be understood in this context. Coming after
“laws” and “regulations,” Articles 18.4 and Articl e XVI:4 provide the broader term “administrative
procedures” to catch administrative rules that may appear discretionary, but that in fact operate as
substantively and effectively mandatory rules. Mo reover, the term “administrative procedures” must
also be understood in the context of a Member needing to take “all” the steps necessary to “ensure” ...
“conformity” with WTO obligations. Thus, this lan guage calls for affirmative steps to comply with
WTO obligations. To act consistently with Article 18.4, therefore, Members must adopt
administrative procedures that are fully consistent with WTO obligations, not those that specifically
ignore these WTO obligations.

47. WTO jurisprudence clarifies that the mere language of a measure might not be sufficient to
determine whether the measure is inconsistent with Article 18.4 and Article XVI:4 as such. Rather,
the nature of a measure -- and whether that measure meets the requirements to “ensure … conformity
of its … administrative procedures with”
36 the provisions of the AD Agreement -- must be decided on
a case-by-case basis. The Appellate Body in US – 1916 Act noted the need to address the “nature”
and “breadth” of the discretion at issue.37 The panel in US – Countervailing Measures stated “we are
of the view that the existence of some form of exec utive discretion alone is not enough for a law to be
prima facie WTO-consistent; what is important is whethe r the government has an effective discretion
to interpret and apply its legislation in a WTO-consistent manner.” 38 The panel in US – Section 301
Trade Act echoed the same view when it stated that “[i] t simply does not follow from this test, as
sometimes has been argued, that legislation with discretion could never violate the WTO.”39

48. WTO jurisprudence further explains that the Member’s failure to ensure the conformity of a
law, regulation, or administrativ e procedure with the relevant WTO agreement can be shown by
evidence of the case-by-case application of these measures. In this connection, the Appellate Body
explained in US – Carbon Steel:

The party asserting that another party's muni cipal law, as such, is inconsistent with
relevant treaty obligations bears the burden of introducing evidence as to the scope
and meaning of such law to substantiate that assertion. Such evidence will typically
be produced in the form of the text of the relevant legislation or legal instruments,
which may be supported, as appropriate, by ev idence of the consistent application of
such laws, the pronouncements of domestic courts on the meaning of such laws, the
opinions of legal experts a nd the writings of recognized scholars. The nature and
extent of the evidence required to satisfy the burden of proof will vary from case to
case.40

36 Article 18.4 of the AD Agreement, and Article XVI.4 of the WTO Agreement.
37 Appellate Body Report, US – 1916 Act, para. 91.
38 See Panel Report, United States – Countervailing Measures Concerning Certain Products from the
European Communities ("US – Countervailing Measures”), WT/DS212/R (31 July 2002), para. 7.123 (emphasis
added). The Appellate Body appears not to reverse this part of Panel decision, stating “We are not, by
implication, precluding the possibility that a Member could violate its WTO obligations by enacting legislation
granting discretion to its authorities to act in violation of its WTO obligation. We make no finding in this
respect.” Appellate Body Report, US – Countervailing Measures , WT/DS212/AB/R (9 December 2002), n.
334.
39 Panel Report, United States – Sections 301-310 of the Trade Act of 1974 ("US- Section 301 Trade
40 Appellate Body Report, US – Carbon Steel, para. 157 (footnote omitted).

(b) Both the Waiver Provisions and the Three Scenarios Are Actionable under Article 18.4 of the
AD Agreement and Article XVI:4 of the WTO Agreement As Such
49. Applying the above jurisprudence to the instan t case, both the waiver provisions and the three
scenarios in the Sunset Policy Bulletin are actionable under Article 18.4 and XVI:4 as such. For the
waiver provisions, the US statute provides:

In a review in which an interested party waives its participation pursuant to this
paragraph, the administering authorities shall
 conclude that revocation of the order or
termination of the investigation would be lik ely to lead to continuation or recurrence
of dumping or a countervailable subsidy (as the case may be) with respect to that
interested party.
41
The US regulations then provide:

The Secretary will consider the failure by a respondent interested party to file a
complete substantive response to a notice of initiation … as a waiver of participation
in a sunset review before the Department.42
50. These two provisions explicitly use the mandatory languages “shall” and “will.” No
modifying languages, which may give certain discretion to the authorities, are provided. These
provisions therefore mandate that DOC make an affi rmative determination automatically in the sunset
review where no responding parties submitted substa ntive responses to DOC. No exceptions are
provided in such case. These mandatory provisions are sufficient evidence to make them actionable
under Article 18.4 and XVI:4.

51. The three scenarios in the Sunset Policy Bulletin are also actionable under Article 18.4 and
XVI:4. Argentina established that DOC has consiste ntly applied, and has never deviated from, these
three scenarios to all sunset reviews in which domestic interested parties have participated. 43 Such
consistent application of the three scenarios is su fficient evidence to prove the mandatory nature of
the three scenarios and, thus, to make the three scenarios actionable under Articles 18.4 and XVI:4.

2. The Waiver Provisions are inconsistent with Articles 6.2 and 11.3
52. As Argentina claims, the waiver provisions of the US statute and regu lations are inconsistent
with Articles 6.2 and 11.3. As discussed above, the waiver provisions in the US statute and
regulations mandate DOC to make affirmative dete rmination automatically where responding parties
did not submit substantive responses to DOC. This determination method is inconsistent with
Articles 6.2 and 11.3 as discussed below.

(a) Requirements for Sunset Review “Dumping” Determinations in Article 11.3
53. A determination in a sunset review under Article 11.3 requires that dumping be examined on
a prospective
 basis and that the administering authorit y must base its determination on probable , not
possible, outcomes, and on positive evidence . The term “likely” in Article 11.3 requires that the

41 19 USC. § 1675(c)(4)(B) (Exhibit ARG-1).
42 19 C.F.R. §351.218(d)(1)(iii) Exhibit ARG-3).
43 See first submission of Argentina, para. 133 and Exhibit ARG-63.

authorities make an affirmative determination on a prospective basis 44 that there is a probability, not a
mere possibility, that the dumping will continue or recur in the future.45

54. For the positive evidence requirement, the Panel in US – DRAMs has stated:

[S]uch continued imposition must, in our view, be essentially dependent on, and
therefore assignable to, a foundation of positive evidence that circumstances demand
it. In other words, the need for the continued imposition of the duty must be
demonstrable on the basis of the evidence adduced.”46
55. The Appellate Body in US – Carbon Steel has also stated, “a fresh determination, based on
credible evidence , will be necessary to establish that the continuation of the countervailing duty is
warranted…” 47 The Appellate Body further explained, “[m]ere reliance by the authorities on the
injury determination made in the original investigation will not be sufficient.”48

56. This WTO jurisprudence must also be understood in conjunction with the “necessity”
requirement under Article 11.1. Article 11.1 is an umbrella provision that informs the interpretation
of all other provisions of Article 11, including the basic principle that imposition of anti-dumping
duties “shall remain in force only as long as and to the extent necessary.”
49 When read in context with
the concept of “necessary,” the obligation to “determine” under Article 11.3 reflects a serious burden.
The panel in US – DRAMs explained:

We recognize that the certainty inherent to such a prospective analysis could be
conceivably somewhat less than that attached to purely retrospective analysis,
reflecting the simple fact that analysis in volving prediction can scarcely aspire to a
standard of inevitability. This is, in our view, a discernable distinction in the degree
of certainty, but not one which would be sufficient to preclude that the standard of
necessity could be met. In our view, this reflects the fact that the necessity involved
in Article 11.2 is not to be construed in some absolute and abstract sense, but as that
appropriate to circumstances of practical reasoning intrinsic to a review process.
Mathematical certainty is not required, but the conclusions should be demonstrable
on the basis of the evidence adduced.”
50

44 See Panel Report, US – Carbon Steel , para. 8.96 (“This is, obviously, an inherently prospective
analysis”).
45 See Panel Report, US – DRAMs , para. 6.45 (“a failure to find that an event is not likely is not
equivalent to a finding that the event is likely.”).
46 Panel Report, United States – Anti-Dumping Duty on Dynamic Random Access Memory
Semiconductors (DRAMS) of One Megabit or Above from Korea (“ US – DRAMs ”) WT/DS99/R
(19 March 1999), para. 6.42. This panel report considers the standard under Article 11.2, but is relevant to
sunset reviews because the prospective analysis considered in an Article 11.2 context is the same as in an
Article 11.3 context.
47 The Appellate Body Report, United States – Countervailing Duties on Certain Corrosion-Resistant
Carbon Steel Flat Products from Germany (" US – Carbon Steel "), WT/DS213/AB/R and Corr.1
(28 November 2002), para. 88.
48 Id.
49 See US – DRAMs, para. 6.41. (“We agree with the parties that, by virtue of Article 11.1 of the AD
Agreement, an anti-dumping duty may only continue to be imposed if it remains ‘necessary’ to offset injurious
dumping. We are of the view that Article 11.1 contains a general necessity requirement, whereby anti-dumping
duties ‘shall remain in force only as long as and to the extent necessary’ to counteract injurious dumping. That
anti-dumping duties ‘shall remain in force only as long as and to the extent necessary’ to counteract injurious
dumping is therefore an unambiguous requirement of Article 11.1.”)
50 Id., para. 6.43. (emphasis added.)

(b) Inconsistency of the Waiver Provisions with Article 11.3
57. The US statute and regulations completely ignored the heavy burden placed on the
authorities, and the need for the authorities to make their determination of the necessity of continued
imposition of dumping duties, based on a “fresh” analysis of “credible evidence,” and to reach the
conclusion as “demonstrable [from] the evidence adduced”. Instead, the waiver provisions require
the authorities to make an affirmative determina tion without reviewing any positive evidence. The
mandatory affirmative finding, with no evidence subs tantiating its affirmative finding, falls short of
the requirements under Article 11.3.

(c) Inconsistency of the Waiver Provisions with Article 6.2
58. Furthermore, the waiver provisions are inconsis tent with Article 6.2 because these provisions
mandate the authorities to make an affirmative de termination without any further procedures. The
waiver provisions fail to provide any opportunity with responding parties for defending their interests,
and thus, deny responding party’s due process right under Article 6.2.

59. The due process right under Article 6.2 must be understood in conjunction with Article 6.9
because Articles 6.2 and 6.9 operate together to en sure (along with other provisions) that authorities
provide interested parties a full and fair opportunity to defend their inte rests. Article 6.2 sets out the
general procedural and due process obligations. Arti cle 6.9 then requires an authority to inform the
parties of the “essential facts under considerati on which form the basis for the decision.” The
provision further requires that the disclosure take pl ace “in sufficient time” for the parties to defend
their interests. A “full opportunity” under Article 6.2 thus exists only where the authority discloses
all of the relevant facts in sufficient time for their defence.

60. The waiver provisions mandate DOC to make an affirmative determination without further
procedures, including the disclosure of essential facts to responding parties. These provisions give
responding parties no opportunity to present their views on the essential facts. The waiver provisions
thus fail to give any regard to the responding pa rties’ due process right u nder Article 6.2. These
provisions, therefore, are inconsistent with Article 6.2.

3. The three scenarios are inconsistent with Article 11.3
61. Japan agrees with Argentina that the th ree scenarios, which DOC sets forth in the Sunset
Policy Bulletin to instruct or “guide” individual sunset review determinations, are inconsistent with
11.3. None of these scenarios meets requirements for sunset review determinations under
Article 11.3.

62. As discussed above, the au thorities must make prospective analysis based on positive
evidence to determine the probability, not a mere possibility, of continuation or recurrence of
dumping. None of these scenarios, however, re quires the authorities to make any prospective
analysis. Nor do any of these three scenarios require any positive evidence to establish that
continuation or recurrence of dumping is probable. They simply require the authorities to check the
current import volume to compare the volume during the period of original investigation, and the
current state of dumping. These three scenarios then instruct that DOC make an affirmative
determination either where dumping exits at the rate of 0.5 per cent or above, where imports were
ceased, or where the import volume at the time of the sunset review was significantly lower than the
volume during the period of original investigations. These three scenarios are far short of satisfying
the requirements under Article 11.3, and therefore are inconsistent with Article 11.3.

63. Moreover, these scenarios predetermine the results in an uneven-handed, unfair, biased, and
un-objective manner in favour of continuation of imposition of anti-dumping duties. Such

predetermined method is beyond the permissive exercise of the authorities’ discretion under
Article 11.3 in conjunction with Article 17.6 and the Vienna Convention Article 26. 51

64. Japan recognizes that Article 11.3 provides th e authorities with certain discretion to consider
relevant evidence. This discretion, however, is not unlimited. The AD Agreement does not confer
unfettered discretion on the authorities to pick a nd choose whatever methodology they see fit for
determining the likelihood of continuation or re currence of dumping. Article 26 of the Vienna
Convention dictates that any discretion under treaty provisions must be exercised in good faith. In US
– Shrimp,52 the Appellate Body explained that this general principle “prohibits the abusive exercise of
a state's rights,”53 and that the exercise of a state’s right should be “ fair and equitable as between the
parties and not one which is calculated to procure for one of them an unfair advantage in the light of
the obligation assumed.” 54 As clarified by the Appellate Bo dy, the basic principle of good faith
requires the authorities to act in an even-handed manner that respects fundamental fairness.55

65. The explanation by the Appellate Body in US – Hot-Rolled Steel with respect to DOC’s
treatment of a respondent’s affiliated parties in connection with normal value is also instructive. The
Appellate Body stated:

Although we believe that the Anti-Dumping Agreement affords WTO Members
discretion to determine how to ensure that normal value is not distorted through the
inclusion of sales that are not “in the ordinary course of trade,” that discretion is not
without limits. In particular, the discretion must be exercised in an even-handed way
that is fair to all parties affected by an anti-dumping investigation.
56
66. Recently, the Appellate Body in EC – Bed Linen (Article 21.5 – India) also stated in a slightly
different context:

the examination was not “objective” because its result is predetermined by the
methodology itself. … This approach makes it “more likely [that investigating
authorities] will determine that the domestic in dustry is injured” and, therefore, it
cannot be “objective.”
57
67. In Japan’s view, the three scenarios, set forth in the Sunset Policy Bulletin and applied in all
sunset reviews in which domestic interested parties have participated, did not abide by this important
principle, and thus were inconsistent with the obligations set forth in the AD Agreement. One of three
scenarios instructs that DOC find dumping is likely to continue where DOC finds that the dumping
exists at the time of a sunset review. In order to find that dumping is likely to “continue,” however,
the dumping must exist as the prerequisite. Accordin g to this scenario, theref ore, all cases, in which
DOC must consider whether dumping is likely to “continue,” result in its affirmative findings. In this
way, this scenario predetermines th e result. Indeed, no actual “determination” is involved to find the
dumping is likely to “continue.”

51 Parties are obliged to perform their treaty obligations in good faith. See Vienna Convention on the
Law of Treaties , Article 26 (“Every treaty in force is binding upon the parties to it and must be performed by
them in good faith.”).
52 United States – Import Prohibition of Certain Shrimp and Shrimp Products , WT/DS58/AB/R
(12 October 1998) (“US – Shrimp”).
53 Appellate Body Report, US – Shrimp, para. 158.
54 Id. at n.156 quoting B. Cheng, General Principles of Law as Applied by International Courts and
Tribunals (Stevens and Sons, Ltd., 1953), Chapt. 4, page 125, (emphasis added by Appellate Body).
55 See Appellate Body Report, US – Hot-Rolled Steel , para. 148 and n.142. See also EC Measures
Concerning Meat and Meat Products (“ EC – Hormones ”), WT/DS26/AB/R, WT/DS48/AB/R
(16 January 1998), para. 133.
56 Appellate Body Report, US – Hot-Rolled Steel, para. 148 (emphasis in original).
57 Appellate Body Report, EC – Bed Linen (Article 21.5 – India), para. 132. (a footnote omitted).

68. Other two scenarios also rest on mechanical pr esumptions, not facts. Both scenarios reflect
the presumption that all responding parties will export their products at volumes not less than the pre-
order level, if the anti-dumping duty is lifted. These methods also stand on the further presumption
that all responding parties will cut their export pr ice to less than their normal value to sell their
product at the volume of the pre-order level. Th ese presumptions were in fact suggested in the
legislative history, including the SAA and the House Report.
58 The two scenarios do not require DOC
any information to substantiate th at these presumptions are applicable to an individual case “on the
basis of the evidence adduced.” 59 This use of presumptions rather than facts, thus, predetermines the
results to continue imposition of anti-dumping duties in favour of the domestic industry.

69. In sum, the three scenarios cannot satis fy the requirements under Article 11.3, and
predetermine the results in favour of the domestic industry beyond the permissive exercise of the
authorities’ discretion under Article 11.3. These three scenarios are, therefore, inconsistent with
Article 11.3.

4. Conclusions
70. As discussed above, both waiver provisions and the three scenarios are actionable under
Article 18.4 and XVI:4 as shown by their language or repeated applications to sunset reviews and are
inconsistent with Article 6.2 and 11.3. The United St ates thus failed to ensure the conformity of its
statute, regulations, and administrative procedures regarding the waiver provisions and the three
scenarios with Articles 6.2 and 11.3 of the AD Agreem ent. Japan thus respectfully requests that the
Panel find that waiver provisions in the US statute and regulations and the three scenarios in the
Sunset Policy Bulletin are inconsistent with Article 18.4 of the AD Agreement and Article XVI:4 of
the WTO Agreement as such.

III. CONCLUSION
71. For the foregoing reasons, Japan respectf ully requests the Panel to clarify that the
United States acted inconsistently with Articles 2.1, 2.4, 3.1, 3.4, 3.5, 6.2, 11.3, and 18.4 of the AD
Agreement and Article XVI:4 of the WTO Agreement.

58 Section II.A.3 of the Sunset Policy Bulletin specifically stated “the SAA at 890, and the House
Report, at 63-64, state that, [E]xistence of dumping margins after the order, or the cessation of imports after the
order, is highly probative of the likelihood of continuation or recurrence of dumping.” (Exhibit ARG-35).

I. INTRODUCTION
1. This third party submission is presented by the Government of Korea (“Korea”) with respect
to certain aspects of the first Panel submission by Argentina in United States – Sunset Reviews of
Anti-Dumping Measures on Oil Country Tubular Goods from Argentina , WT/DS268. The issues
raised by Argentina are detailed in its first submission, dated 15 October 2003.
1 Korea also responds
herein to certain points made by the Unite d States in its own first submission, dated
7 November 2003.2

2. Korea has systemic interests in the interpre tation and application of the provisions of
Article 11 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs
and Trade 1994 (“the AD Agreement”) governing fi ve-year or “sunset” reviews of anti-dumping
measures. Therefore, Korea reserved its third pa rty rights pursuant to Article 4.11 of Understanding
on Rules and Procedures Go verning the Settlement of Disputes (“DSU”). Korea appreciates this
opportunity to present its views to the Panel.

3. Korea is concerned with several aspects of the US law and practice governing how the US
Department of Commerce (the “DOC”) and the US International Trade Commission (“USITC”) make
their respective determinations regarding the like lihood of continuation or recurrence of dumping and
injury, as required by Article 11.3 of the AD Ag reement. In Korea’s view, US law and practice on
sunset reviews fails to respect fully the discipline s of the AD Agreement and to give effect to the
presumption inherent in the AD Agreement in fav our of termination of anti-dumping measures after
five years. Korea therefore generally supports the arguments raised by Argentina in its first
submission. Rather than repeating all of those arguments, however, Korea will address in this
submission only certain critical issues on which Korea has additional views.

II. EXECUTIVE SUMMARY
4. Korea addresses the followin g issues in this submission:

5. All relevant substantive and procedural provisions of the AD Agreement, especially
Articles 2, 3, 6 and 12, are applicable mutatis mutandis to Article 11.3, to the extent that they are
relevant to sunset reviews. Article 11.3 of the AD Agreement does not set ou t detailed substantive or
procedural rules. Accordingly, the standards gove rning sunset reviews must be found in the other
relevant provisions of the AD Agreement. Bear ing in mind the object and purpose of the AD
Agreement, which is to establish clear and unifo rm multilateral disciplines governing the imposition
and duration of anti-dumping measures, Article 11.3 cannot properly be interpreted as standing alone
independent of the other disciplines of the Agreement.

6. US law and practice assume that dumping is li kely to continue or recur where the respondents
are deemed to have waived their rights to participat e in the sunset review or where their responses are
deemed inadequate. The United States’ practice in th is regard fails to ensure that Members’ rights
under Articles 6 and 12 of the AD Agreement are re spected, in that parties are not afforded an
opportunity to present all the evidence necessar y to defend their interests. The Panel in US – Sunset
Review of Steel from Japan
3 stated that a determination of the likelihood of continuation or recurrence
of dumping and injury must be based on a “sufficient factual basis.” Under US practice in expedited
cases, however, the DOC may assume that dumpi ng is likely to continue or recur without any
meaningful factual evidence or analysis. This failu re to protect Members’ rights under Article 6 is

1 Hereinafter “Argentina’s first submission.”
2 Hereinafter “US first submission.”
3 Panel Report, United States – Sunset Review of Anti-Dumping Duties on Corrosion-Restraint Carbon
Steel Flat Products from Japan, WT/DS244/R (circulated 14 August 2003), para. 7.271.

particularly egregious where, as here, the respondent, Siderca, in fact responded to the DOC’s notices,
but its responses were deemed inadequate because the DOC alleged that it did not account for
50 per cent of exports of subject merchandise during the relevant period. It does not appear that
Siderca had any effective means to challenge this determination.

7. The DOC’s method of determining likely margins in the event of revocation of an order is
biased in favour of finding continued dumping and is based on such limited evidence that it is not
reasonably or objectively founded on “positive eviden ce.” The DOC uses a mechanical analysis of
previous dumping margins and import volumes to reach pre-ordained conclusions regarding the likely
margin of dumping in the event of revocation. Ar gentina has shown that this approach has led to
affirmative determinations in 100 per cent of the DOC’s sunset determinations. The United States’
practice is therefore inconsistent with the requirements of Articles 11.3 and 2, and undermines the
presumption of Article 11 in favour of the termination of dumping measures after five years.

8. The USITC’s interpretation of the term “likel y” in Article 11.3 as requiring only a finding
that injury may possibly continue or recur in the even t of termination is inconsistent with Article 11.3
of the AD Agreement, as interpreted in the applicable WTO jurisprudence. WTO panels – in the US –
DRAMs from Korea
4 and US – Sunset Review of Steel from Japan 5 cases – have found that “a ‘likely’
determination requires that the administering author ity must base its determination on ‘probable’, not
‘possible’, outcomes.”

III. LEGAL ARGUMENTS
A. SUNSET REVIEWS UNDER ARTICLE 11.3 MUST BE CONDUCTED IN ACCORDANCE WITH THE
SUBSTANTIVE AND PROCEDURAL RULES OF ARTICLES 2, 3, 6 AND 12 OF AD AGREEMENT
9. In Korea’s view, the purpose of the AD Agreem ent is to establish multilateral control of and
clear and consistent disciplines governing the imposition of anti-dumping measures. To achieve this
purpose, the disciplines laid out in the AD Agreement must be applied consistently to all aspects of
the imposition of an anti-dumping measure, includ ing any determination whether to continue or
terminate a measure. This purpose would be thwa rted, however, if inves tigating authorities were
permitted to use different substantive definitions and standards to determ ine whether initially to
impose a measure (in an anti-dumping investigation) and whether to terminate or continue that
measure (in a sunset review).

10. It is not disputed that an anti-dumping measure may only be imposed following findings of
dumping and injury, and a causal link between the tw o. Article 11.3 of the AD Agreement provides
that such a measure shall be terminated after five years unless the authorities determine that
termination of the measure would be likely to lead to continuation or recurrence of dumping and
injury. Thus, Article 11.3 refers to the same two prerequisites for continuation of a measure –
dumping and injury – as were required to impose th e measure in the first place. There is no rational
reason why the terms “dumping” and “injury” as used in Article 11.3 should be defined or interpreted
differently in deciding whether to terminate a me asure than in deciding whether to impose the
measure in the first place. To the contrary, to perm it different definitions of dumping and injury in
sunset reviews would undermine the disciplines and purpose of the AD Agreement.

11. Korea recalls that provisions of the AD Ag reement are to be interpreted according to
Article 31 of the Vienna Convention, which provides:

4 Panel Report, US – Anti-Dumping Duties on Dynamic Random Access Memory Semiconductors
(DRAMS) of One Megabit or Above from Korea, WT/DS99/R (adopted 19 March 1999), footnote 494.
5 Panel Report, US – Sunset Review of Anti-Dumping Duties on Corrosion-Resistant Carbon Steel Flat
Production from Japan, WT/DS244/R (circulated 14 August 2003), para. 7.178.

A treaty shall be interpreted in good faith in accordance with the ordinary meaning to
be given to the terms of the treaty in their context and in light of its object and
purpose.
12. Thus, the provisions of Article 11.3 of AD Agreement governing sunset reviews must be
interpreted according to their ordinary meaning, within the context of Article 11 and the overall object
and purpose of the AD Agreement as a whole. This means that the concepts of dumping and injury
referred to in Article 11.3 must be interpreted in the same manner as those terms are used in other
provisions of the AD Agreement, in cluding, in particular, Articles 2 a nd 3. Similarly, the procedural
protections of Article 6 and 12 of the AD Agreement must also apply to Article 11.3 reviews.

13. The United States argues that it is permissible to interpret Article 11.3 in isolation from the
other provisions of the AD Agreement because Article 11.3 contains no explicit reference to the other
provisions of the AD Agreement.
6 The absence of such cross -references cannot, however, be
understood to permit the interpretation of the terms dumping and injury differently than elsewhere in
the AD Agreement. To do so would be inconsistent with the principles of Article 31 of the Vienna
Convention, quoted above, which provides that all the provisions must be read in the context of their
object and purpose. This interpretive guide remove s the need for explicit cross references in every
case where terms such as dumping and injury recur.

14. Article 11.3 of the AD Agreement contains no detailed substantive definitions or procedural
rules for the conduct of sunset reviews. These definitions and rules must be found elsewhere in the
AD Agreement. Korea submits that all other provisi ons of the AD Agreement, especially Articles 2,
3, 6 and 12, are applicable mutatis mutandis to Article 11.3, to the extent that they are relevant to
sunset reviews. To hold otherwise would render the terms dumping and injury, as used in
Article 11.3, inutile and would mean that there were in e ffect no multilateral disciplines governing the
conduct of sunset reviews. Korea finds no basis or support for this position, either evidenced in the
intent of the drafters of the AD Agreement, in the general object and purpose of the AD Agreement,
or in WTO jurisprudence generally.

15. Korea believes that the introductory words of Article 2.1 of the AD Agreement (“for purposes
of the Agreement”) mean that the definition of dumping and the rules for the determination of
dumping contained in Article 2 apply mutatis mutandis to determinations under Article 11.3. Korea
also notes that the literal meaning of the text of Article 11.3 itself supports the view that the term
“dumping” in Article 11.3 should be interpreted as referring to dumping determined under the rules
laid down in Article 2. Article 11.3 refers to a determination of the like lihood of “continuation or
recurrence of dumping and injury.” The dictionary definition of “continua tion” is “the action of
continuing in something; continuity in space or of substance; the action or fact of remaining in a state;
continuous or prolonged existence of operation.”
7 Similarly, “recurrence” refers to “the fact or
instance of recurring” or “return or reversion to a state.”8 Both terms refer to a pre-determined or pre-
established state. The “state” referred to by Article 11.3 is, of course, dumping. Thus, “a
continuation or recurrence of dumping” means that the original state of dumping either remains in
effect or is returned to. The logical meaning of this is that the state of dumping referred to in
Article 11.3 is the same state of dumping established under the rules of Article 2 in the original
investigation. To hold otherwise would permit the possibility that an Article 11.3 review could lead
to an anti-dumping measure remaining in effect on th e basis of a different “state” than was originally
found.

16. The text of Article 11.1 provides additional contextual support for Korea’s reading.
Article 11.1 states that measures should remain in force only as long as necessary to “counteract”

6 See US first submission, paras. 140-142.
7 The New Shorter Oxford English Dictionary (Fourth Ed. 1993), pgs. 494-495.
8 Id., pg. 2510.

dumping. The use of the word “counteract” suggests that the measure is a response to the original
finding of dumping, and must retain a nexus to that original finding of dumping. That nexus is lost if
the determination of the likelihood of continuation of dumping is made using a different definition of
dumping than is used for the original finding.

17. Korea notes that it is not arguing that investigating authorities must make precisely the same
determination of dumping following a complete inve stigation in sunset reviews as is made in an
original investigation. Korea recognizes that a sunset review involves a prospective analysis of the
likelihood of dumping on sales that have yet to be made. As a practical matter, these future sales
cannot be the subject of the same price comparison as sales that have been previously made, as in an
investigation. Rather, Korea’s position is that in determining whether “dumping” will continue or
recur, the investigating authorities must be governed by the definitions established in Article 2 in
determining what kind of “dumping” is likely to recur.

18. In its first submission, the United States argues that Article 11.3 does not set forth any
methodology to be used in determining the likelihood of continued dumping.9 The United States goes
on to say that it is not required, and indeed could not, quantify the margin of dumping because of the
inherently prospective nature of the determinatio n. However, the United States fails to fully
recognize that the reference in Article 11.3 to “dumping” is to the same practice of “dumping” defined
in Article 2. There is no need for Article 11.3 to pr ovide an additional definition of that term when it
has already been defined in Article 2. Korea does not understand Argentina to argue that the United
States must achieve some impossible feat of prognostication. The point, simply, is that the United
States must ensure that any practice of dumping th at it determines would continue or recur in the
event of termination of the measure must be define d in accordance with the rules of Article 2. A
finding of some sort of dumping other than that de fined in Article 2 cannot justify continuation of a
measure.

19. For the same reasons, Korea believes that the term “injury” in Article 11.3 must be interpreted
as referring to injury as defined in Article 3 of the AD Agreement. Article 11.3 contains nothing to
suggest that the term “injury” should be interpre ted in any way other than fully consistent with
Article 3. Again, it would undermine the discip lines of the entire AD Agreement to permit anti-
dumping orders to be continued on the basis of a different standard than that required to impose the
measure.

20. Korea finds the United States’ attempts to av oid this interpretation to be unpersuasive. The
United States attempts to draw a distinction betw een the texts of Articles 3 and 11.3, saying that
Article 3 refers to a “determination of injury” wh ereas Article 11.3 refers to a determination of
“recurrence of injury.”
10 But that is not the point. Of course, there is a temporal difference between
present injury in an original investigation and recurr ence of injury in a sunset review. However, both
Articles 3 and 11.3 refer to the same concept of inju ry – whether one looks forward or back in time –
and the sole definition of the concept of injury is contained in Article 3.

21. Moreover, footnote 9 of the AD Agreement pr ovides specific textual support for Korea’s
view that Article 3 applies to Ar ticle 11.3. Footnote 9 of the AD Agreement explicitly states that
“under this Agreement the term ‘injury’ shall, unless otherwise specified, be taken to mean material
injury to a domestic industry, threat of material in jury or material retardation of the establishment of
such industry and shall be interpreted in accordance w ith the provisions of this Article [3]” (emphasis
added). Nothing in Article 11 specifies any other meaning for the term “injury.” Accordingly, the
reference to “injury” in Article 11.3 must be inte rpreted to mean the same “injury” referred to in
Article 3 and footnote 9.

9 US first submission, paras. 250 et seq.
10 US first submission, para. 289.

22. The United States attempts to avoid this conclusi on by saying that to define injury in the same
manner in sunset reviews as original inve stigations would lead to absurd results.
11 The United States
says that is impossible to base an Article 11.3 determination on a finding of threat of injury. Again,
this is not the point (although in many respects the prospective nature of the sunset review is very
analogous to a threat determination in an investigation). Instead, the point is that the injury that may
be found likely to continue in a sunset review must be the same character of injury that was originally
found to exist in the underlying investigation, using the definitions of Article 3.

23. Korea finds further textual support for this re ading of Article 11.3 in Article 3.1 of the AD
Agreement, which states the conditions upon which a determination of injury shall be made “for
purposes of Article VI of GATT 1994,” without exception or qualification for different injury
determinations that may be required over the life of a measure.

24. While Korea has not addressed here every aspect of the claims raised by Argentina, Korea
submits that for the reasons summarized above, it is critically important to the integrity of the AD
Agreement that a single definition of each of the fundamental concepts of dumping and injury be
applied consistently throughout the Agreement. Korea submits that this interpretation is fully
consistent with the text, as well as with the context and the object and purpose, of the AD Agreement.

B. T
HE UNITED STATES’ PRACTICE OF MAKING AN AUTOMATIC FINDING OF CONTINUED
DUMPING IN THE EVENT OF A FAILURE TO PARTICIPATE OR WAIVER IS INCONSISTENT WITH
ARTICLES 6, 11.3 AND 11.4 OF THE AD AGREEMENT
25. Article 6 of the AD Agreemen t applies to Article 11.3 by virtue of the cross-reference in
Article 11.4, which provides that “the provisions of Article 6 regarding evidence and procedure shall
apply to any review carried out under this Article.”

26. Article 6.1 stipulates that “[a]ll interested parties in an anti-dumping investigation shall be
given … ample opportunity to present in writing all evidence which they consider relevant in respect
of the investigation in question” (emphasis added). Further, Article 6.2 provides that “[t]hroughout
the anti-dumping investigation all interested partie s shall have a full opportunity for the defence of
their interests.”

27. Thus, all interested parties are guaranteed the opportunity to present all evidence, in order to
be afforded an opportunity to defend their interests. Under US law, however, in the event that a party
is deemed to waive its right to participate in a DOC sunset review,
12 or to have submitted an
inadequate response, 13 the DOC automatically reaches an e xpedited determination that dumping
would continue or recur in the event of termination of the measure. In Korea’s view, these expedited,
automatic determinations – whether on the basis of waiver or inadequacy – fail to protect the rights of
interested parties under Articles 6.1 and 6.2.

28. The Panel in US – Sunset Review of Steel from Japan held that Article 11.3 precludes an
investigating authority from simply assuming th at likelihood of continued or recurring dumping
exists. The Panel stated that “in order to contin ue imposing the measure, the investigating authority
has to determine, on the basis of positive evidence, th at its termination of duty is likely to lead to
continuation or recurrence of dumping and injury and it must have a sufficient factual basis to allow it

11 US first submission, para. 293.
12 19 USC. § 1675(c)(4)(B) (This section stipulates that “In a review in which an interested party
waives its participation pursuant to his paragraph, the administering authority shall conclude that revocation of
the order…would be likely to lead to continuation or recurrence of dumping…”).
13 19 USC. § 1675(c)(3)(B) (This section provides that “If interested parties provide inadequate
responses to a notice of initiation, the administering authority.… may issue, without further investigation, a final
determination on facts available...”).

to draw reasoned and adequate conclusions conc erning the likelihood of such continuation or
recurrence.”14

29. Thus, the investigating authorities must have a sufficient factual basis for their finding that
dumping is likely to continue or recur. By as suming that a waiver of participation means that
dumping is likely to continue or recur, however, the US authorities are making determinations without
having done any meaningful analysis or without any factual basis to suggest there is a likelihood of
continuation or recurrence of th e dumping and injury. This cannot be said to comply with the
requirements of Articles 11.4 and 6.

30. Korea is also concerned that the US law and regulations and the DOC’s practice do not
comply with the rules of Article 6.8 and Annex II gove rning the use of facts available. First, it is not
clear that the DOC’s practice complies with paragr aph 6 of Annex II regarding notification of and an
opportunity to correct “inadequacies” in a resp onse. Second, and perhaps more importantly, the
DOC’s practice of assuming a certain outcome where it deems responses to be “inadequate” fails to
fulfil the DOC’s obligation to make a determination, on the basis of the facts available, as to whether
dumping would continue or recur in the event of termination of the measure.

31. This case presents a particularly troubles ome example of how the United States’ practice
works to the detriment of foreign exporters (and Argentina has cited other examples in its first
submission). The Argentine respondent, Siderca, had indicated that it had not exported to the United
States during the five years the order was in existence and argued that the dumping margin from the
original investigation was not large enough to support a finding that dumping would recur in the event
of revocation. However, the DOC decided to conduct an expedited review on the grounds that
Siderca did not account for 50 per cent of Argentin e exports during the period of review. While the
United States claims that Siderca had an op portunity to comment on this determination,
15 Korea does
not understand the United States to claim that it sought additional information from Siderca regarding
its exports or those of other exporters, that it speci fically notified Siderca of the consequences of its
likely determination, or that it otherwise attempte d to ascertain which, if any, other Argentine
exporters may account for the balance of exports that would make up the DOC’s 50 per cent
threshold. (Korea notes that this threshold has no basis in the AD Agreement).

32. The consequences of these omissions were gr ave for Siderca. These omissions ensured that
the DOC expedited its review and, using the mechan ical process described in further detail below,
reached an automatic finding that dumping would be likely to continue or recur in the event of
termination of the measure. While the United States goes to great lengths to defend its actions in its
first submission, it fails to explain exactly what Siderca could have done to avoid having its response
deemed inadequate, and to avoid the inevitable conseq uences of an expedited review in this case.
Nothing in the United States’ first submission suggests that Siderca could reasonably have done
anything that would have resulted in the DOC conducting a “full” review and, in turn, perhaps
determining that dumping would not continue in the ev ent of revocation. In these circumstances, it is
difficult to see how the rights guaranteed by Articles 6 and 11 were protected.

33. The United States argues that the provisions of US law relating to waivers and inadequate
responses should be accepted as a practical means of achieving administrative efficiency in the
conduct of administrative reviews. Although Korea understands the United States’ concerns
regarding the efficient use of administrative resource s, these concerns cannot be allowed to supersede
the substantive and procedural requirements of the AD Agreement, especially with regard to such an
important issue as whether an anti-dumping measure should remain in effect.

14 Panel Report, United States – Sunset Review of Anti-Dumping Duties on Corrosion-Restraint Carbon
Steel Flat Products from Japan, WT/DS244/R (circulated 14 August 2003), para. 7.271 (emphasis added).
15 US first submission, paras. 51-55.

34. Moreover, by making assumptions that favour continuation rather than termination of anti-
dumping measures, the US laws and practice fail to give effect to the object and purpose of Articles
11.1 and 11.3. Article 11.1 expressly states th at “an anti-dumping duty shall remain in force as long
as and to the extent necessary to counteract dumping which is causing injury” (emphasis added).
Further, Article 11.3 stipulates that a “definitive anti-dumping duty shall be terminated on a date not
later than five years from its imposition,” unless it is determined that termination would lead to
continued or recurring dumping and injury. These provisions establish a presumption in favour of
termination of measures after five years, absent clear and explicit determinations that the termination
would lead to continued or recurring dumping and injury. In Korea’s view, the assumptions made
under US law and practice are wholly inconsistent with this presumption, and therefore with the
object and purpose of Article 11.

C. T
HE UNITED STATES’ METHOD OF DETERMINING LIKELY DUMPING MARGINS IN THE EVENT OF
REVOCATION OF AN ORDER IS IMPERMISSIBLY BIASED IN FAVOUR OF A FINDING OF
CONTINUED DUMPING
35. As discussed above, Korea submits that the determination of the likelihood of continued or
recurring dumping under Article 11.3 must be ba sed on the definition of dumping contained in
Article 2 of the AD Agreement. Korea has explaine d that the text of Article 2 makes clear that its
rules regarding determination of dumping are estab lished “for the purpose of AD Agreement,” which
includes Article 11.3. This reading is consistent with Article 31 of the Vienna Convention.

36. Thus, Article 11.3 imposes a positive obligation on the domestic authorities to determine that
dumping, as defined in Article 2, is likely to continue or recur. Ar ticle 11.3 requires a determination
based on a prospective analysis of “positive eviden ce” that there is a probability that dumping will
continue or recur in the future.

37. In its sunset determinations, however, the DOC determines whether dumping is likely to
continue in the future based only on two data po ints relating to past experience. These are the
historical dumping margins and the historical import volumes. By limiting its inquiry in this manner,
the DOC’s practice is flawed in two respects.

38. First, the DOC looks backwards rather than fo rward. The DOC makes no effort to extrapolate
likely future data from the historical data, other than to assume that as matte rs were in the past, so
shall they remain in the future. Thus, rather than making the kind of prospective determination
contemplated by Article 11.3, the DOC simply relies on its retrospective data.

39. Second, the DOC does not consider the impact of any other events or external forces – even
data regarding price changes, excha nge rate changes, etc. that might affect its conclusion. The very
limited nature of the DOC’s analysis cannot possibly provide a sufficient factual basis on which to
make a determination regarding likely future dumpin g. Argentina has documented how this approach
has led to an affirmative finding of likely contin ued dumping in 100 per cent of the DOC’s sunset
determinations, without exception. The United States does not appear to dispute these statistics. In
these circumstances, the DOC’s method of determining whether dumping is likely to continue – both
in this case and in every other instance in whic h it has applied the same mechanical rules – lacks
sufficient factual basis to satisfy the requirements of the AD Agreement.

D. T
HE USITC’S INTERPRETATION OF THE REQUIREMENT THAT INJURY BE “LIKELY” TO
CONTINUE OR RECUR IS INCONSISTENT WITH ARTICLE 11.3 OF THE AD AGREEMENT
40. Argentina argues that the use of the term “likely” in Article 11.3 means that investigating
authorities must find that continued or recurring dumping or injury would be “probable” and not
merely “possible” in the event of termination of the measure. Argentina argues that the USITC’s

interpretation of the term “likely” as requiring only a finding that recurring injury would be “possible”
is therefore inconsistent with Article 11.3. Korea agrees, for the following reasons.

41. Argentina correctly relies on dictionary defin itions to interpret the term “likely” to mean “
probable.”16 The ordinary meaning of the term “likely” is, in effect, that there is a greater chance than
not that the event will occur. WTO jurisprudence on this point supports Arge ntina’s interpretation.
The term “likely” as used in Article 11.3 (and Article 11.2) has been construed as meaning “probable”
by the panel in US – DRAMs from Korea , which stated that “likelihood or likely carries with it the
ordinary meaning of probable.”17 Similarly, the US – Sunset Review of Steel from Japan panel found
that “a ‘likely’ determination requires that the administering authority must ba se its determination on
‘probable’, not ‘possible’, outcomes.”18 This interpretation is also co nsistent with the presumption in
favour of termination of anti-dumping measures contained in the AD Agreement.

42. The United States ignores the proper interpreta tion of the term “likely.” Argentina cites to
USITC statements to the effect that the term “ likely” “captures a concept that falls in between
‘probable’ and ‘possible’ on a continuum of relative certainty.” 19 Neither the US statute nor the
Statement of Administrative Action regarding the implementation of the law requires the USITC to
adhere to a standard of probability.

43. Korea therefore submits that the USITC improperly interprets the term “likely” as meaning
“possible” for the purposes of its determinati on of the likelihood of continued injury under
Article 11.3. The US interpretation should be found to be inconsiste nt with the text of Article 11.3,
and rejected by the Panel.

IV. CONCLUSION
44. Korea respectfully submits that in reaching its decision on Argentina’s various claims, the
Panel should ensure that the provisions of Article s 2, 3, 6, and 12 are applied consistently and
rationally to sunset reviews under Article 11. This will add clarity, consistency and fairness to the
conduct of sunset reviews, and give effect both to the ordinary meaning of, and the context, object and
purpose of Article 11 and the AD Agreement as a whole.

45. Korea appreciates the opportunity to participat e in this proceeding and to present its views to
the Panel.

17 Panel Report, US – Anti-Dumping Duties on Dynamic Random Access Memory Semiconductors
(DRAMS) of One Megabit or Above from Korea, WT/DS99/R (adopted 19 March 1999), footnote 494.
18 Panel Report, US – Sunset Review of Anti-Dumping Duties on Corrosion-Resistant Carbon Steel Flat
Production from Japan, WT/DS244/R (circulated 14 August 2003), para. 7.178.
19 Argentina’s first submission, para. 217 (citations omitted).

1. As this dispute gives rise to certain important issues in respect of sunset review, which are of
high significance to Members, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu
has a systemic interest in the proper interpretation and operation of relevant provisions involving the
procedures and would like to submit its views on the following aspects:

(a) Expedited review and the “waiver” determination by the US Department of
Commerce;
(b) The issue of “irrefutable presumption” alleged by Argentina; and
(c) The question of applicability of Articles 2 and 3 of the AD Agreement to Sunset
Reviews.
A. EXPEDITED REVIEW AND THE “WAIVER” DETERMINATION BY THE US DEPARTMENT OF
COMMERCE
2. We are of the view that a Member may conduct an expedited sunset review if it deems
appropriate in so far as its conduct is consistent wi th the relevant provisions of the AD Agreement.
Article 11.4 of the AD Agreement explicitly provides that a review under Article 11 “shall be carried
out expeditiously and shall normally be concluded w ithin 12 months of the date of initiation of the
review.” However, the admission of an expedited review does not exempt a Member from its
obligations under the AD Agreement.

3. We consider that the mandatory wording imposed by 19 USC. §1675(c)(4)(B) to the effect
that “[i]n a review in which an interested party waiv es its participation pursuant to this paragraph, the
administering authority shall conclude that revocation of the order or termination of the investigation
would be likely to lead to continuation or recurre nce of dumping or countervailable subsidy (as the
case may be) with respect to that interested party” (emphasis added) 1, on the face of it, leaves the
Department of Commerce with no discretion as to the mandated result of its finding of “likelihood”
once the participation of a foreign interested party is deemed waived, irrespective of whether, based
on the “information available” or fresh evidence su bmitted during the sunset review, the continuation
or recurrence of dumping is likely or not.

4. Article 11.3 of the AD Agreement provides in part that the authorities must “ determine…that
the expiry of the duty would be likely to lead to continuation or recurrence of dumping and injury” in
order not to terminate the imposition of a definitive anti-dumping duty. (emphasis added). In our
view, a review with the finding of the Commerce Department pre-determined and mandated by statute
could hardly be considered as determination being “properly conducted”, which is a standard set for
sunset review by the Appellate Body in United States – Countervailing Duties on Certain Corrosion-
Resistant Carbon Steel Flat Products from Germany
2(“Steel from Germany”) that “[t]ermination of
countervailing duty is the rule and its continua tion is the exception. The continuation of a
countervailing duty must therefore be based on a properly conducted review and a positive
determination that the revocation of the countervailing duty would be likely to lead to a continuation
or recurrence of subsidization and injury” 3 (emphasis added). It follows, therefore, that this Panel

2 WT/DS213/AB/R cited in Argentina's first submission, para. 83.
3 WT/DS213/AB/R, para.88. Article 21.3 of the SCM Agreement has similar provision with
Article 11.3 of the AD Agreement in that Article 21.3 also requires the authorities to determine whether the
expiry of the duty would be likely to lead to continuation or recurrence of subsidization and injury. Thus the
Appellate Body report in United States – Countervailing Duties on Certain Corrosion-Resistant Carbon Steel
Flat Products from Germany in relation to the requirement of “determination” should be applicable to AD case
with regard to the determination of the continuation or recurrence of dumping and injury.

should find that the deemed “waiver” provision referre d to in the preceding paragraph is inconsistent
with Article 11.3 of the AD Agreement.

B. T
HE ISSUE OF “IRREFUTABLE PRESUMPTION” ALLEGED BY ARGENTINA
5. In relation to the Statement of Administrative Action (“SAA”) and the Sunset Policy Bulletin
(“Bulletin”), we note that these documents only co ntain guidelines for the Department of Commerce
to follow in a normal situation. We do not find any provision in these documents that mandates
compulsory compliance by the Department of Commerce. As such, we thus failed to see an irrefutable
presumption that is inconsistent with Article 11.3 of the AD Agreement. However, the indication of
SAA being an authoritative expression of US anti-du mping laws and the fact the Bulletin reflecting
the Department of Commerce’s own practice show that these documents could serve as strong
evidence to support that the Commerce Department did act in accordance with the SAA and the
Bulletin in the present case, in relation to its d ecision on the continuous imposition of anti-dumping
duties. This helps Argentina in discharging its onus of proving violation of the AD Agreement by the
Commerce Department’s measures. In this respect, the panel report of United States – Measures
Treating Export Restraints as Subsidies also recognized the authoritative status of the SAA. 4 It
follows, therefore, that when this Panel consider s whether there is evidence to show that the
Department has acted inconsistently against the AD Agreement, the existence of the SAA and the
Bulletin shall be taken into important account.

6. As regards the practice of the Department of Commerce, we do not consider that it is proper
to draw a conclusive inference from the analysis conducted by Argentina. 5 However, the fact that in
100 per cent of the cases in which domestic interest ed parties have participated, the Department has
found the likelihood of continuation or recurrence of dumping, still suggests that the Department of
Commerce has the apparent tendency of not pr operly conducting these reviews and making its
positive determination as required by the Agreem ent. This should serve as giving complementary
support to establishing Argentina’s prima facie evidence that is required of the Complainant in this
regard, to show that the Department of Commerce has not conducted these reviews properly and that
its determination is not based on positive evidence.

C. THE QUESTION OF APPLICABILITY OF ARTICLES 2 & 3 TO SUNSET REVIEWS
7. We do not share the view of the United States that Article 3 of the AD Agreement is
inapplicable in total to a sunset review. We consid er that the correct interpretation of the law on this
issue should be the view expressed by the panel in United States – Sunset Review of the Anti-Dumping
Duties on Corrosion-Resistant Carbon Steel Flat Products from Japan (“Sunset Review-Japan
Steel”)6 that, save Article 3.3, “the obligations in Article 3 pertaining to injury may apply throughout
the Anti-Dumping Agreement, i.e. they are not limited to investigations” 7, although we do have some
reservations on excepting the application of Article 3.3 on Sunset Review.8

8. We also share the view of the panel in the same matter that in clarifying the requirements of a
determination of dumping in an Article 11.3 review, “Article 2 also provides guidance as to the type
of information that may be relevant to a sunset review examination of the presence or absence of

4 WT/DS194/R, adopted 23 August 2001, paras. 8.97-8.98.
5 Argentina's first submission, paras. 129-134.
6 WT/DS244/R, circulated 14 August 2003.
7 Ibid., para. 7.98-100.
8 We consider that if de minimis dumping cannot be cumulatively assessed and thus is not subject to
any duty in the original investigation, it is only logical to conclude that it should not be cumulatively assessed
and subject to any duty in the sunset review either. In order for a coherent reading of the AD Agreement,
Article 3.3 should be interpreted as applicable to sunset review.

dumping since the imposition of the order.” 9 The Panel seems to rely on the first paragraph of
Article 2.1 “[f]or the purpose of this Agreement”, to come to its conclusion that this provision
“describes a concept which is generally relevant throughout the Anti-Dumping Agreement”.10

9. Our proposition in support of the Sunset Review – Japan Steel Panel mentioned in the
preceding paragraphs is based principally on the pl ain language of Article 11.3 of the AD Agreement,
which purports to set out the conditions for continuing with an anti-dumping order. These conditions,
which must be established simultaneously, may be summarized as follows: an authority must
(i) conduct a review and (ii) make a positive determination that the expiry of the order would likely
lead to continuation or recurrence of dumping and injury. We are of the view that it is the second
condition which renders the application of Articles 2 and 3 of the AD Agreement relevant.

10. We consider that in each Article 11.3 review, the question of dumping and injury must also be
examined when the question of likelihood of conti nuation or recurrence is determined. The provision
in Article 11.3 already suggests such interpretation. The statement made by the Panel in the Sunset
Review – Japan Steel
11, cited in paragraph 9 above, further supports our contention that in a sunset
review the question of whether dumping is present must be determined. We are of the view that the
determination of the likelihood of continuation or recurrence must first rest on some positive
determination that sales by exporters after lifting of the anti-dumping order do constitute dumping as
defined by Article 2.1, as apparently not all sales by exporters in that case (albeit by those exporters
that are subject to the original dumping order) are dumping per se . Equally, the incentive to sell
immediately into such market after the lifting of the order does not necessarily equate to such exporter
selling at a dumped price.

11. Although the standard of determination of dumping in an Article 11.3 review may not be the
same as that in relation to investigation, it does not necessarily mean that the determination of the
presence of dumping and that such dumping is causing injury, can be dispensed with. In a
determination of dumping , Article 2 will be relevant and should be followed in this regard. By the
same token, the question of injury must also be established, as dumping based on the margin
determined in the original investigation that was causing injury may not necessarily then be causing
injury at later stage. In this context Article 3 would also be relevant.

12. Article 11.1 of the AD Agreement, which is stated by the panel in EC – Anti-Dumping Duties
on Malleable Cast Iron Tube or Pipe Fittings from Brazil12 to be “a general and overarching principle,
the modalities of which are set forth in paragraphs 2 & 3” 13, provides a mandatory requirement that
anti-dumping duty shall remain in force only as lo ng as and to the extent necessary to counteract
dumping which is causing injury. The wording of Ar ticle 11.1, which informs the whole Article 11, is
unambiguous. The present tense used in this Article, i.e. “which is causing injury” demonstrates that
anti-dumping duty can only remain in force if there is dumping as defined by Article 2.1, and that
such dumping is causing injury. If there is no act of dumping or if such dumping is not causing injury,
the anti-dumping duty must be revoked.

13. If the above propositions are accepted, which we consider should be the case, any effective
interpretation of Article 11 .3 in the context of Article 11 and the AD Agreement, and in light of the
object and purpose of the AD Agreement i.e. to discipline and counteract injurious dumping, requires
a reading that both Article 2 for the purpose of determining the question of dumping, and Article 3 for
the purpose of determining the question of injury, should be made applicable in an Article 11.3
review.

10 Ibid., footnote 144.
11 Supra footnote 8.
12 WT/DS219/R, adopted 18 August 2003.
13 Ibid., para. 7.113.

D. C
ONCLUSION
14. Although Article 11.3 is silent as to the standard and methodologies which Members must
follow in their sunset review, we do not consider that it is the intention of WTO Members to leave this
question deliberately open and unchecked. We are of the view that a coherent reading of the AD
Agreement calls for the application of sunset review s to the provisions in Articles 2 and 3 of the AD
Agreement.

15. We like to mention that the above-mentione d views that US laws and practices are in
violation of AD Agreement are not exhaustive. For instance, we also agree with the view submitted
by Argentina, in that the Commerce Department’s “deemed waiver” of the right of a respondent party
to participate in a Sunset Review violates Article 6.1 of the AD Agreement, which requires “all
interested parties in an anti-dumping investigation shall be given . . . ample opportunity to present in
writing all evidence which they consider relevant in respect of the investig ation in question” and
Article 6.2, which provides that interested partie s shall be given a full opportunity for the defence of
their interests.

16. Furthermore, for instance, the “deemed waiver ” rule applying only to respondent interested
parties of the sunset review pr ocedures and US parties being not similarly exposed to the same
detrimental effect of a deemed waiver should be in violation of Article X:3(a) of the GATT 1994 with
respect to the requirements of transparency and procedural fairness, which was emphasized in the US
– Shrimp case dealing with an alleged violation of Article X relating to the failure of the United States
to respect the due process in developing and applying its law prescribing the shrimp import ban. The
Appellate Body observed that Article X:3 of the GATT 1994 establishes certain minimum standards
for transparency and procedural fairness in the administration of trade regulations. It further noted that
"insomuch as there are due process requirements generally for measures that are otherwise imposed in
compliance with WTO obligations, it is only reasonable that rigorous compliance with the
fundamental requirements of due process should be required in the application and administration of a
measure…"
14

17. The essence of the argument is that if US laws and practices with regard to the waiver and
determination of recurrence or continuation of dumping and injury are admitted under the WTO, the
result would be that all Members will be able to manoeuvre the continuation of imposing anti-
dumping duties without being subject to any time limit. This is not the purpose of the AD Agreement
in setting five years as the maximum period in principle.

14 United States – Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R.