UNITED STATES – ANTI-DUMPING MEASURE ON SHRIMP FROM ECUADOR
Document: Agreement on Procedures between Ecuador and the United States
Date: 25 October 2006
Document codes: WT/DS335/8
Complainant: Ecuador
Respondent: U.S.
Third parties: Brazil, Chile, China, EU, India, Japan, South Korea, Mexico, Thailand
Dispute stage: Panel
Agreements cited: Art. 2.4.2  Anti-dumping

UNITED STATES – ANTI-DUMPING MEASURE ON SHRIMP FROM ECUADOR

Agreement on Procedures between Ecuador and the United States

 The following communication, dated 20 Oct ober 2006, from the delegation of Ecuador and
the delegation of the United States to the Chairman of the Dispute Settlement Body, is circulated at
the request of those delegations.

 On 27 November 2005, the Government of Ecuador requested cons ultations with the
United States (hereinafter "the Parties") under Article 4 of the Understanding on Rules and
Procedures Governing the Settlement of Disputes ("DSU"), Article XXII of the General Agreement
on Tariffs and Trade 1994 ("GATT 1994"), and Article 17 of the Agreement on Implementation of
Article VI of the General Agreement on Tariffs and Trade 1994 ("Anti-Dumping Agreement"), with
respect to anti-dumping measures on shrimp fro m Ecuador. (21 November 2005).
Consultations were held on 31 Ja nuary 2006 and on several occasions thereafter. These consultations
have enabled the Parties to agree on the following procedures for purposes of this dispute:

1. Ecuador requested the establishment of a panel in this dispute by filing its request for the
establishment of a panel on 8 June 2006 (WT/DS335/ 6). A copy of Ecuador's panel request is
attached to this agreement. The DSB established a panel on 19 July 2006.

2. The Parties will cooperate to enable the pane l to circulate its report as quickly as possible in
light of the requirements of the DSU. To that end, the Parties will work expeditiously to reach
agreement on expedited working procedures that they will jointly ask the panel to adopt, and that will
allow for the adoption of the panel report by the DSB no later than 31 October 2006. That agreement
will include a request that the Parties file only one written submission each, and that the panel forego
meetings with the Parties or, at most, have only one such meeting. The Par ties also agree to share
with each other drafts of their respective written submissions prior to submitting them to the panel and
to take all reasonably available steps to expedite the proceeding.

3. The United States will not contest Ecuador's cl aim that the measures identified in the attached
request for the establishment of a panel are inconsis tent with Article 2.4.2, first sentence, on the
grounds stated in United States – Final Dumping Determination on Softwood Lumber from Canada ,
WT/DS264/AB/R, Report of the Appellate Body adopted 31 August 2004.

4. Ecuador will not request that the panel sugg est, pursuant to Article 19.1, second sentence, of
the DSU, ways in which the United States could implement the panel's recommendations.

5. Provided that the panel's finding is limited to a finding that one or more of the challenged
measures is inconsistent with Article 2.4.2, fi rst sentence, of the Anti-Dumping Agreement, the
Parties agree that, pursuant to Article 21.3(b) of th e DSU, the reasonable period of time for bringing

each such measure into conformity with the Anti-Dumping Agreemen t will be six months, beginning
on the date on which the DSB adopts the panel report.

6. Subject to the consultation requirements of section 129(b) of the Uruguay Round Agreements
Act (“URAA”), 19 U.S.C. § 3538(b), the United States will use section 129(b) to recalculate margins
of dumping (subject to the exclusion of Exportadora de Alimentos S.A. in paragraph 8, below) and to
issue a new determination in order to render th e anti-dumping measures on shrimp from Ecuador not
inconsistent with the findings of the panel. If any such recalculation that is performed under
section 129(b) results in a change in a cash deposit rate for the anti-dumping measures on shrimp from
Ecuador, the new cash deposit rate will have prospective effect only, taking effect no sooner than the
date on which the United States Trade Representa tive directs the United States Secretary of
Commerce to implement its recalculation of the margins and new determination, as set forth in section
129(c)(1) of the URAA, 19 U.S.C. § 3538(c)(1).

7. The Parties also mutually understand that th e scope of Ecuador's request for the establishment
of a panel does not include any claim regarding th e margin of dumping calculated for Exportadora de
Alimentos S.A. The Parties agree that they w ill inform the panel in their written submissions,
whether made jointly or separately, that they are seeking findings consistent with this understanding.
Accordingly, implementation would not involve a recalculation of the margin of dumping for
Exportadora de Alimentos S.A., to the extent that the findings of the panel are consistent with the
Parties' understanding.

 For Ecuador For the United States

 (signed) (signed)
 Eva Garcia Fabre Peter F. Allgeier
 Ambassador Ambassador

ANNEX

9 June 2006

 (06-2790)
 Original: English

Request for the Establishment of a Panel by Ecuador

 The following communication, dated 8 June 2006, from the delegation of Ecuador to the
Chairman of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.

 Upon the instruction of my authorities, I here by convey the request of the Government of
Ecuador for the establishment of a panel under Article XXIII of the General Agreement on Tariffs and
Trade 1994 ("GATT 1994"), Articles 4 and 6 of the Understanding on Rules and Procedures
Governing the Settlement of Disputes ("DSU"), a nd Article 17 of the Agreement on Implementation
of Article VI of the General Agreement on Ta riffs and Trade 1994 ("Anti-Dumping Agreement")
regarding certain measures imposed by the United States, as further described below.

A. Consultations

 On 17 November 2005, the Government of Ecuador requested cons ultations with the
Government of the United States under Article 4 of the DSU, Article XXII of the GATT 1994, and
Article 17 of the Anti-Dumping Agreement concerning anti-dumping measures involving Certain
Frozen Warmwater Shrimp from Ecuador, Inv. no. A- 331-802. See Notice of Final Determination of
Sales at Less Than Fair Value: Certain Fr ozen and Canned Warmwater Shrimp from Ecuador,
69 Fed. Reg. 76913, 23 December 2004, and Notice of Amended Final Determination of Sales at Less
Than Fair Value and Antidumping Duty Order: Certain Frozen Warmwater Shrimp from Ecuador,
70 Fed. Reg. 5156, 1 February 2005.

 Consultations were held on 31 January 2006 and on several occasions thereafter. These
consultations provided helpful clarifications, but have not completely resolved the dispute.

B. Summary of the Facts

 The United States initiated its anti-dumping inv estigation against certain frozen warmwater
shrimp from Ecuador on 27 January 2004. See 69 Fed. Reg. 3876. The DOC conducted its
investigation of the extent of dumping under the st atutory authority provided by the Tariff Act of
1930, as amended, 19 U.S.C. § 1673, et seq., and under the regulatory authority provided in 19 C.F.R.
Part 351. As noted above, the DOC published its fi nal margin determination on 23 December 2004.
Following a final affirmative determination of ma terial injury by the US International Trade
Commission (70 Fed. Reg. 3943, 27 January 20 05), the DOC published its amended final margin
determination and anti-dumping duty order on 1 February 2005. The DOC's final margin

determination and amended final margin determination, as well as its anti-dumping duty order,
reflected and contained anti-dumping margins that were calculated by using "zeroing."

 The DOC's "zeroing" of negative anti-dumping ma rgins in anti-dumping investigations more
specifically means the following: (1) different "model s," i.e., types, of products are identified using
"control numbers" that specify the most relevant pr oduct characteristics; (2) weighted average prices
in the U.S. and weighted average normal values in the comparison market are calculated on a model-
specific basis for the entire period of investigati on; (3) the weighted average normal value of each
model is compared to the weighted average U.S. price for that same model; (4) to calculate the
dumping margin for an exporter, the amount of dump ing for each model is summed and then divided
by the aggregated U.S. price for all models; (5) before summing the total amount of dumping for all
models, all negative margins on individual models ar e set to zero. Through this method, the DOC
calculates margins of dumping and collects anti-du mping duties in amounts that exceed the actual
extent of dumping by the investigated companies.

 The DOC used zeroing in determining the fi nal anti-dumping margins for the two Ecuadorian
exporters for which anti-dumping margins above the 2 per cent de minimis level were calculated in
both the final and the amended final affirmative determination of sales at less than fair value in the
investigation of Certain Frozen Warmwater Shri mp from Ecuador cited above, as well as for "all
other" Ecuadorian exporters that were not separately investigated. The DOC's unpublished Issues and
Decision Memorandum, dated 23 December 2004, as well as other documents contained in the
administrative record of the investigation, includi ng computer programs, describe in more detail the
DOC's use of zeroing in the Ecuadorian shrimp investigation.

 The DOC's use of zeroing in the Ecuadorian sh rimp investigation appears to be similar
or identical to the investigation method that w as held to be inconsistent with the Anti-Dumping
Agreement in United States – Final Dumping Determination on Softwood Lumber from Canada
(Panel Report, WT/DS264/R, and Appellate B ody Report, WT/DS264/AB/R, adopted 31 August
2004), and in United States – Laws, Regulations and Methodology for Calculating Dumping Margins
("Zeroing") (Panel Report, WT/DS294/R, and Appella te Body Report, WT/DS294/AB/R, adopted
9 May 2006).

C. Measures and Claims

 The DOC's Final Determination, the DOC's Amended Final Determin ation, and the DOC's
anti-dumping duty order applied zeroing in its inv estigation of Certain Frozen Warmwater Shrimp
from Ecuador (referred to collectively below as the "m easures"). The use of zeroing in each of these
measures to calculate the margins of dumpi ng for the two exporters with margins above de minimis
and "all other" exporters is in consistent with the obligations of the United States under the
Anti-Dumping Agreement. Specifically, Ecuador considers that the measures are inconsistent with
the first sentence of Article 2.4.2 of the Anti-Dumping Agreement.

 The foregoing paragraph is provided without pr ejudice to any arguments that the Government
of Ecuador may develop and present to the panel regarding the WTO-inconsistency of the measures at
issue.

D. Request

 Ecuador requests, pursuant to Article 6 of the DSU and Article 17.4 of the Anti-Dumping
Agreement, that the Dispute Settle ment Body establish a panel to examine this matter, with the
standard terms of reference set out in Article 7.1 of the DSU. Ecuador asks that its request be placed
on the agenda for the next meeting of the Dispute Settlement Body to be held on 19 June 2006.