UNITED STATES – ANTI-DUMPING ADMINISTRATIVE REVIEWS AND OTHER MEASURES RELATED TO IMPORTS OF CERTAIN ORANGE JUICE FROM BRAZIL
Document: Report of the Panel BCI DELETED, AS INDICATED [[XX]]
Date: 25 March 2011
Document codes: WT/DS382/R
Complainant: Brazil
Respondent: U.S.
Third parties: Argentina, EU, Japan, South Korea, Mexico, Taiwan, Thailand
Dispute stage: Mutually Agreed Solution
Agreements cited: Art. 2.1, 2.4.2, 2.4, 2  Anti-dumpingArt. VI:1, VI:2, II:1  GATT 1994Art. XVI:4  Agreement Establishing the World Trade OrganizationArt. 9.3  Anti-dumping

UNITED STATES – ANTI-DUMPING ADMINISTRATIVE
REVIEWS AND OTHER MEASURES RELATED TO
IMPORTS OF CERTAIN ORANGE JUICE
FROM BRAZIL

Report of the Panel

BCI DELETED, AS INDICATED
[[XX]]

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I. INTRODUCTION
1.1 On 27 November 2008, the Government of Brazil ("Brazil") requested consultations with the
Government of the United States of America (the "United States") under Articles 4 of the
Understanding on Rules and Procedures Governi ng the Settlement of Disputes (the "DSU"),
Article XXII:1 of the General Agreement on Ta riffs and Trade of 1994 (the "GATT 1994") and
Articles 17.2 and 17.3 of the Agreement on Implemen tation of Article VI of the General Agreement
on Tariffs and Trade of 1994 (the "AD Agreement"), with regard to certain laws, regulations,
administrative procedures, practices and methodologies for calculating dumping margins in
administrative reviews, involving the alleged use of so-called "zeroing", and their application in anti-
dumping duty administrative review s regarding imports of certain orange juice from Brazil (case
No A-351-840).
1 On 22 May 2009, Brazil requested further consultations with the United States with
regard to the alleged use of "zeroing" in the anti-dumping duty investigation and in the second
administrative review related to case No A- 351-840 as well as to the continued use of the
United States "zeroing procedures" in successive anti-dumping proceedings regarding imports of
certain orange juice from Brazil. 2 The consultations were held on 16 January and 18 June 2009,
respectively. The consultations failed to resolve the dispute.
1.2 On 20 August 2009, Brazil requested, pursu ant to Articles 4.7 and 6 of the DSU,
Article XXIII of the GATT 1994, and Article 17.4 of the AD Agreement, that the Dispute Settlement
Body ("DSB") establish a Panel with regard to the following measures:
(a) The anti-dumping duty investigation on certain orange juice from Brazil (the
"Original Investigation").
(b) The 2005-2007 anti-dumping duty administrative review on certain orange juice from
Brazil (the "First Administrative Review").
(c) The 2007-2008 anti-dumping duty administrative review on certain orange juice from
Brazil (the "Second Administrative Review").
(d) The continued use of the US "zeroing procedures" in successive anti-dumping
proceedings, in relation to the anti-dumping dut y order issued in respect of imports of
certain orange juice from Brazil.3
1.3 At its meeting on 25 September 2009, the DSB established a panel pursuant to the request of
Brazil in document WT/DS382/4, in accordance with Article 6 of the DSU.
1.4 The Panel's terms of reference are the following:
"To examine, in the light of the relevant provisions of the covered agreements cited
by the parties to the dispute, the matter referred to the DSB by Brazil in document
WT/DS382/4 and to make such findings as will assist the DSB in making the
recommendations or in giving the rulings provided for in those agreements."
1.5 On 29 April 2010, Brazil requested the Director-G eneral to determine the composition of the
Panel, pursuant to paragraph 7 of Article 8 of the DSU. This paragraph provides:

1 WT/DS382/1.
2 WT/DS382/1/Add.1.
3 WT/DS382/4.

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"If there is no agreement on the panelists within 20 days after the date of the
establishment of a panel, at the request of either party, the Director-General, in
consultation with the Chairman of the DSB and the Chairman of the relevant Council
or Committee, shall determine the com position of the panel by appointing the
panelists whom the Director-General consid ers most appropriate in accordance with
any relevant special or additional rules or procedures of the covered agreement or
covered agreements which are at issue in th e dispute, after consulting with the parties
to the dispute. The Chairman of th e DSB shall inform the Members of the
composition of the panel thus formed no later than 10 days after the date the
Chairman receives such a request."
1.6 On 10 May 2010, the Director-General accordingly composed the Panel as follows:
 Chairman: Mr. Miguel Rodriguez Mendoza

 Members: Mr. Pierre S. Pettigrew
 Mr. Reuben Pessah

1.7 Argentina; the European Union; Japan; Korea; Mexico; the Separate Customs Territory of
Taiwan, Penghu, Kinmen and Matsu ("Chinese Taip ei"); and Thailand reserved their rights to
participate in the Panel proceedings as third parties.
1.8 The Panel met with the parties on 15-16 July and 12 October 2010. It met with the third
parties on 16 July 2010. The Panel issued its inte rim report to the parties on 20 December 2010. The
Panel issued its final report to the parties on 21 February 2011.
II. FACTUAL ASPECTS
2.1 Brazil's complaint is focused on the alleged use by the United States Department of
Commerce ("USDOC") of a particular methodology, known as "zeroing", when calculating the
margin of dumping of investigated exporters in the anti-dumping proceedings conducted against
certain orange juice products from Brazil (case No. A-351.840). In particular, Brazil challenges the
alleged use of "simple zeroing" for the purpose of calculating the margins of dumping, cash deposit
rates and relevant importer-specifi c assessment rates for two respondents, Sucocítrico Cutrale S.A.
("Cutrale") and Fischer S.A. Comércio, Indústria e Agricultura ("Fischer") in the First and Second
Administrative Reviews.
4 In addition, Brazil challenges th e USDOC's alleged "continued use of
zeroing" as "ongoing conduct" in successive anti- dumping proceedings, including in the original
investigation resulting in the imposition of the an ti-dumping duty order on certain orange juice
products from Brazil5, and each of the first three administrative reviews related to that order.6
2.2 Brazil alleges two types of "zeroing" in this dispute, which it describes as constituting
different aspects of the same methodology: "mode l zeroing" and "simple zeroing". According to
Brazil, "model zeroing" involves a number of steps: First, the product under consideration is sub-
divided into a series of "averaging groups" or "m odels", and an annual we ighted-average normal
value and export price is calculated for the tran sactions falling within each group or model. A

4 Final Results of the First Administrative Review, 11 August 2008, 73 Fed. Reg. 46584.
Exhibit BRA-21 ("First Administrative Review"); and Final Results of the Second Administrative Review,
11 August 2009, 74 Fed. Reg. 40167. Exhibit BRA-22 ("Second Administrative Review").
5 Anti-Dumping Duty Order: Certain Orange Juice from Brazil, 9 March 2006, 71 Fed. Reg. 12183
("Anti-Dumping Duty Order"). Exhibit BRA-3.
6 First Administrative Review; Second Administrative Review; and Final Results of the Third
Administrative Review, 18 August 2010, 75 Fed. Reg. 50999. Exhibit BRA-49.

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comparison is then made between the annual weighted-average price of all export transactions and the
annual weighted-average price of all domestic market transactions in the same group or model. Next,
the multiple comparison results are aggregated and divided by the total value of all comparable export
transactions for all groups or models to arrive at a weighted-average margin of dumping. In summing
the comparison results by group or model, positive diffe rences (i.e., where the weighted average price
of export transactions is less than the weighted-a verage normal value of the model or group) are
added to determine the total amount of dumping, but all comparison results showing negative results
are disregarded or given a value of zero in the aggr egation exercise. This practice of disregarding or
counting as zero the negative results of weighted-a verage normal value to weighted-average export
price comparisons ("W-W") is what Brazil describes as "model zeroing". Brazil notes that the
USDOC ceased to apply "model zeroing" in February 2007 7, after the results of the original
investigation into exports of orange juice products from Brazil were issued.
2.3 Brazil describes "simple zeroing" as very similar to "model zeroing", with the key difference
stemming from the fact that the latter takes pl ace when using the W-W comparison methodology,
whereas the former arises when comparing the weig hted-average normal value by model or group to
the price of individual export transactions ("W-T" ). As with W-W comparisons, results of W-T
comparisons are aggregated and divided by the tota l value of all comparable export transactions to
arrive at a weighted average margin of dumping. Again, in making this calculation, only the positive
comparison results are aggregated, with all negative r esults (i.e., where the export price is higher than
weighted average normal value) disregarded or given a value of zero. This practice of disregarding or
counting as zero the negative comparison results when using the W-T comparison methodology is
what Brazil describes as "simple zeroing".
III. PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS
A. BRAZIL
3.1 Brazil requests that the Panel find:
(i) the United States' two administrative reviews concerning imports of certain
orange juice from Brazil inconsistent with Articles 2.4 and 9.3 of the
AD Agreement and Article VI:2 of the GATT 1994 due to the above-
mentioned alleged use of "zeroing"; and
(ii) the continued use by the United States of "zeroing" in successive anti-
dumping proceedings, in relation to the anti-dumping duty order issued in
respect of imports of certain orange juice from Brazil, including the
original investigation and subsequent administrative reviews, by which duties
are applied and maintained over a pe riod of time, inconsistent with
Articles 2.4, 2.4.2 and 9.3 of the AD Agreement and Article VI:2 of the
GATT 1994.
3.2 Pursuant to Article 19.1 of the DSU, Braz il requests that the Panel recommend that the
United States bring its measures, found to be inconsistent with the AD Agreement and the
GATT 1994, into conformity with its obligations under the covered agreements.

7 In particular, Brazil explains that on "Decemb er 27, 2006, the USDOC published a notice in the
Federal Register announcing that it would no longer make W-to-W comparisons in investigations without
providing offsets for non-dumped comparisons (71 Fed. Reg. 77722). The effective date of entry into force of
this modification was February 22, 2007 (72 Fed. Re g. 3783)". Brazil, First Written Submission ("FWS"),
footnote 31, citing Exhibits BRA-10 and BRA-11.

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B. THE UNITED STATES
3.3 The United States asks the Panel to reject the en tirety of Brazil's claims concerning the First
and Second Administrative Reviews as well as Brazil's claim regarding the alleged "continued use" of
"zeroing". The United States also asks the Panel to make two preliminary rulings concerning Brazil's
claims with respect to the Second Administrative Review and the alleged "continued use" of "zeroing"
in the orange juice anti-dumping proceedings.8
IV. ARGUMENTS OF THE PARTIES
4.1 The arguments of the parties are set out in their written submissions, oral statements to the
Panel and their answers to questions. Executive summaries of the parties' written submissions, and
where provided oral statements9, are attached to this Report as annex es (see List of Annexes, pages iv
and v).10
V. ARGUMENTS OF THE THIRD PARTIES
5.1 Argentina; the European Union; Japan; Ko rea; Mexico; Chinese Taipei; and Thailand
reserved their rights to participate in the Panel pr oceedings as third parties. Thailand and Chinese
Taipei did not submit third party written submissions; and Argentina, Mexico, Chinese Taipei and
Thailand did not submit third party oral statements. The arguments of Argentina and Mexico are set
out in their written submissions and answers to ques tions, and the arguments of the European Union,
Japan and Korea are set out in their written subm issions, oral statements and their answers to
questions. Third parties' written submissions and oral statements, or executive summaries thereof, are
attached to this Report as annexes (see List of Annexes, pages iv and v).
VI. INTERIM REVIEW
6.1 On 20 December 2010, we submitted our Interim Report to the parties. On 12 January 2011,
Brazil and the United States submitted written requests for review of precise aspects of the Interim
Report. On 7 February 2011, Brazil and the United States submitted written comments on each other's
requests for interim review. Neither party requested an additional meeting with the Panel.
6.2 Due to changes as a result of the interim revi ew, the numbering of paragraphs and footnotes
in the Final Report has changed from the Interim Repor t. The text below refers to the paragraph and
footnote numbers in the Interim Report. Where we have made changes, a reference to the
corresponding paragraph or footnote number in the Fi nal Report is included in parentheses for ease of
reference. In addition to the modifications me ntioned below, we have corrected a number of
typographical and other non-substantive errors throughout the report.
A. R
EVIEW REQUESTED BY BRAZIL
6.3 Brazil requests review of paragr aphs 7.25, 7.51-7.54, 7.65, 7.69, 7.72, 7.73, 7.77-7.81, 7.86,
7.115, 7.119, 7.125-7.127, 7.135, 7.136, 7.174, 7.180-7.182, 7.185 and 8.1, and footnotes 119-121,
124, 125, 135, 229, 271, 275-278. In addition, Brazil asks for th e insertion a new paragraph after
paragraph 7.86.

8 United States, First Written Submission ("FWS"), paras. 37-52.
9 The parties' closing oral statements from the firs t substantive meeting with the Panel are attached in
full.
10 In accordance with the Working Procedures, executive summaries of the parties' answers to the
Panel's questions were not provided. The arguments made in the parties' answers are therefore not reflected in
the annexes to this Report.

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6.4 In the absence of any objections from the Un ited States, we have decided to accept the
changes requested to paragraphs 7.25, 7.53 (par agraph 7.59 in the Final Report), 7.54 (7.60), 7.65
(7.71), 7.69 (7.75), 7.72 (7.78), 7.73 (7.79), 7.78 (7.84), 7.79 (7.85), 7.80 (7.86), 7.81 (7.87), 7.86
(7.92), 7.115 (7.122), 7.119 (7.126), 7.125 (7.132), 7.127 (7.134), 7.135 (7.142), 7.136 (7.143), 7.174
(7.181), 7.180 (7.187), 7.181 (7.188), 7.182 (7.189), 7.185 (7.192), 8.1 and footnotes 119-121 (127-
129), 124 (132), 125 (133), 219 (229), 229 (241), 271 (284), 277 (290) and 278 (291), albeit not
always on the exact terms proposed by Brazil. For th e reasons explained below, we have also agreed
to inserting a new paragraph after paragraph 7.86 (7.92), and to modify the language used in
paragraphs 7.126, 7.127 and 8.1. However, we have declined Brazil's requests to amend
paragraphs 7.51, 7.52 and 7.77.
Paragraphs 7.51 and 7.52

6.5 Brazil considers that paragraphs 7.51 and 7. 52 of the Interim Report failed to accurately
convey its arguments concerning the impact of "zeroing" in response to what it characterizes as the
United States submission that, in certain of the instances challenged by Brazil, the USDOC's recourse
to "zeroing" had no impact, and therefore did not violate Article 9.3 of the AD Agreement and
Article VI:2 of the GATT 1994. Brazil recalls th at it had argued that the United States' use of
"zeroing" under the orange juice anti-dumping duty order had three impacts: First, it resulted in the
exclusion of a large number of negative comparis on results from the determination of the margin;
second, it resulted in the determination of positive ma rgins of dumping higher than would have been
the case without the use of "zeroing"; and third, it resulted in the determination of cash deposit rates
("CDRs") and importer-specific assessme nt rates ("ISARs") that were above de minimis levels.
Brazil argues that paragraphs 7.51 and 7.52 faile d to convey the first two arguments and did not
convey accurately the gist of Brazil's third argument. Thus, Brazil requests that these paragraphs be
modified to ensure that they set out a more comp lete and accurate description of Brazil's arguments.
The United States did not comment on Brazil's request.
6.6 We note that the section of the Interim Report Br azil refers to sets out Brazil's arguments in
support of its claim that "simple zeroing" in the First and Second Administrative Reviews was
inconsistent with Article 9.3 of the AD Agre ement and Article VI:1 of the GATT 1994. Brazil
presented essentially two lines of argument in support of this claim: First, that the use of "simple
zerong" irrespective of its impact on the amount of anti-dumping duty collected is inconsistent with
these provisions; and second, that even if "simple zeroing" were required to impact the amount of
anti-dumping duty collected in order to violate th ese provisions (which is what is argued by the
United States), the facts of the First and Second Ad ministraive Reviews confirm that there was such
an impact for both respondents. Paragraphs 7.51 and 7.52 sought to describe this latter argument, that
is, what Brazil considered to be the impact of "simple zeroing" on the amount of anti-dumping duty
collected that caused the United States to be in br each of its obligations under Article 9.3 of the AD
Agreement and Article VI:2 of the GATT 1994.
6.7 While it is true that Brazil identified the three impacts of "simple zeroing" described above, it
did not claim that all three impacts resulted in a violation of Article 9.3 of the AD Agreement and
Article VI:2 of the GATT 1994, which is the focus of paragraphs 7.51 and 7.52. Therefore, we see no
need to include Brazil's additiona l arguments in the relevant para graphs, and consequently decline
Brazil's request.
 Paragraph 7.77

6.8 Brazil notes that the description of United States Administrative Reviews found in
paragraph 7.77 of the Interim Report characterized a cash deposit as "an estimate of an importer's
final amount of anti-dumping duty". Brazil recalls , however, that the parties disagree on the legal
characterization of cash deposits as a matter of WTO law, and that the Panel has not ruled on the

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matter. Thus, Brazil suggests that the Panel reform ulate its characterization by noting that a CDR is
determined by reference to each exporter's margin of dumping, and that the description of a cash
deposit as an estimate of future liability, reflects th e position of the United States. The United States
disagrees with Brazil's proposed revision, arguing th at the Interim Report text reflects more clearly
and accurately the way in which the United States sets cash deposits.
6.9 Brazil's requested modification suggests that it is of the view that by describing a cash deposit
as "an estimate of an importer's final amount of an ti-dumping duty liability", the Panel has effectively
prejudged one of the matters in dispute, namely , the question whether cash deposits amount to anti-
dumping duties or whether they are securities. Howe ver, in our view, the mere description of cash
deposits as "an estimate of an importer's final amount of anti-dumping duty liability" does not express
any view or conclusion on whether that "estimate" amounts to a duty or a security. Indeed, the very
sentence Brazil focuses upon in paragraph 7.77 makes cl ear that it is the United States that considers
cash deposits to represent a "security", not the Panel. Thus, we consider the proposed modification to
be unnecessary and therefore decline Brazil's request.
 Paragraph 7.86

6.10 Brazil considers that paragraph 7.86 does not fu lly reflect the contextual arguments it made
regarding the correct interpretation of the concept of "dumping". In order to do so, Brazil proposes
specific text for an additional paragraph it suggest s could be inserted after paragraph 7.86. The
United States does not agree with Brazil's proposed insertion as written, stating that it does not make
clear that the suggested language reflects only Brazi l's view of the interpretation of "dumping". The
United States therefore asks the Panel to revise Braz il's proposed text to make clear that the proposed
statements are Brazil's assertions. We have decided to accept Brazil's requested modification to
paragraph 7.86 (7.92), but slightly edited it to address the United States' concern.
 Paragraphs 7.126, 7.127 and 8.1

6.11 Brazil finds certain views expressed by the Panel in paragraphs 7.126, 7.127 and 8.1 of the
Interim Report on the impact of "zeroing" disputes on the WTO dispute settlement system
unnacceptable. According to Brazil, these views: " call into question the wisdom" of Brazil and other
Members in bringing "zeroing" disputes; exte nd beyond the Panel's mandate ; and do not serve to
advance the interests of the dispute settlement sy stem. Thus, Brazil requests the Panel to delete
certain portions of these paragraphs and suggests revisions to this effect.
6.12 The United States considers that there is no basis to accept Brazil's request. The United States
recalls that Article 11.7 of the DSU provides that "the report of the panel shall set out ... the basic
rationale behind any findings and recommendations that it makes", and notes that the passages at issue
explain why the Panel concludes as a legal matter that "dumping" cannot have a transaction-specific
meaning. The United States argues that Brazil's di sagreement with some elements of the Panel's
reasoning provides no basis for its deletion. To the contrary, according to the United States, the
language challenged by Brazil is pa rt of the Panel's discussion of the systemic issues related to the
Panel's conclusions, and therefore should not be deleted.
6.13 We note that the passages of text that Brazil obj ects to were not intended, as Brazil puts it, to
"question the wisdom" of Members in bringing "zeroing" disputes. We fully recognize that Members
are entitled to bring challenges where they believe that their rights under the WTO Agreement have
been nullified or impaired. The relevant passages were simply intended to draw attention to the
continuing difficulties of interpretation arising in resp ect of this issue, which we believe reflect the
lack of clarity in how the AD Agreement defin es "dumping". The views expressed in the Interim
Report that Brazil takes issue with were intended to highlight this interpretative problem, its effects
and potential consequences. In the light of the pa rties' comments, we have decided to revise the

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relevant passages of paragraphs 7.126 (7.133) , 7.127 (7.134) and 8.1 in order to avoid any
misunderstanding.
B. REVIEW REQUESTED BY THE UNITED STATES
6.14 The United States requests review of paragraphs 2.1, 7.3, 7.12-7.14, 7.22, 7.25, 7.26, 7.28,
7.38, 7.58, 7.63, 7.66, 7.74, 7.80, 7.86, 7.87, 7.102, 7.106, 7.184, 7.185 and footnotes 126 and 147.
6.15 In the absence of any objections from Brazil, we have decided to accept the United States'
requests to make changes to paragraphs 2.1, 7.3, 7.12-7.14, 7.22, 7.25, 7.58 (7.64), 7.63 (7.69), 7.66
(7.72), 7.74 (7.80), 7.86 (7.92), 7.87 (7.94), 7.102 (7.109), and footnote 147 (155), albeit not always
on the exact terms proposed by the United States. In addition, for the reasons expressed below, we
have decided to accept the modifications the Unite d States requests to paragraphs 7.26, 7.28, 7.81
(7.87) and 7.106 (7.113) and, in part, the change re quested to paragraph 7.80 (7.86). However, we
have declined the United States request concerni ng paragraphs 7.184 (7.191) and 7.185 (7.192), but
have decided to modify the language used in these paragraphs in order to avoid confusion and to
clarify our conclusions.
 Paragraphs 7.26 and 7.28

6.16 The United States argues that the Panel's findings in the Interim Report concerning its request
for a preliminary ruling in respect of Brazil's ch allenge to the "continued zeroing" measure addressed
only two of the three arguments it made in support of its request. In particular, the United States notes
that the Panel's ruling did not take into account its argument that "continued zeroing" should not fall
within the Panel's terms of reference because of Article 17.4 of the AD Agreement. The United States
asks the Panel to reflect this argument in the Fina l Report and, in addition, calls upon the Panel to
evaluate its merits as a separate jurisdictional basis for finding the alleged "continued zeroing"
measure outside of its terms of reference.
6.17 Brazil suggests two edits to the changes sought by the United States to paragraphs 7.26 and
7.28 in order to reflect the fact that the particul ar argument the United States now asks the Panel to
refer to was made for the first time in its Opening St atement at the Panel's First Substantive Meeting.
In addition, in the light of the United States' re quest, Brazil asks the Panel to insert one additional
paragraph into the Final Report in order to captu re an argument it advanced in response to the
United States. Brazil objects to the United States' re quest to have the Panel evaluate the merits of the
argument it made concerning Article 17.4 of the AD Agreement, recalling that Panels are not
specifically required to address all of the arguments advanced by parties. In any case, Brazil
considers that the United States' argument should be rejected on its substance.
6.18 We have decided to decline Brazil's suggested modifications to paragraphs 7.26 and 7.28, but
have accepted its request to refer to the additional argument it made in response to the United States'
request for a preliminary ruling. Paragraph 7.30 has been modified accordingly. We have also
accepted the United States' request to describe the ar gument it advanced in respect of Article 17.4 of
the AD Agreement in paragraphs 7.26 and 7.28, a nd have evaluated its mer its in our findings at
paragraphs 7.43-7.49 of the Final Report.
 Paragraph 7.80

6.19 The United States submits that paragraph 7.80 inaccurately describes its position with regard
to the margin of dumping for Fischer in the S econd Administrative Review. The United States does
not agree that the bracketed number referred to in this paragraph is a weighted-average margin
("WAM") for Fischer, and explains that the US DOC publishes exporters' WAMs in the Federal
Register. The United States argues that the com puter programme output from which the bracketed

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number is drawn is not the same as the official final WAM published in the Federal Register. The
United States asks the Panel to modify the langa uge in the penultimate sentence and delete the
entirety of the last sentence of paragraph 7.80 in orde r to clarify this distinction. Brazil objects to the
United States' request to delete the last sentence, arguing that it cannot be justified.
6.20 We note that the last sentence of paragraph 7. 80 was not intended to be understood to suggest
that the United States believes that Fischer's official WAM, published in the Federal Register, was the
same as the output from the computer programme ru n by the USDOC. Rather, the last sentence was
intended to convey the fact that the United Stat es does not contest that the WAM published in the
Federal Register for Fischer was 0%, precisely because a WAM of [[XX]] was determined for Fischer
through the computer programme. Thus, we do not consider the changes the United States has
requested to this paragraph to be necessary. Neve rtheless, we have redrafted the last sentence of
paragraph 7.80 (7.86) in order to avoid any misunderstanding.
 Paragraph 7.81

6.21 The United States suggests that footnote 126, whic h appears in paragraph 7.81, be revised to
reflect the fact that all transactions, including transactions where export price was not below normal
value, were taken into account in the denominator of the calculation of Fischer's ISAR in the Second
Administrative Review. To this end, the United States proposes that certain specific textual changes
be made to the footnote. Brazil objects to the Unite d States' proposed modification, arguing that it is
premised on a definition of "dumping" that is disputed between the parties and rejected by the Panel.
Brazil advances its own textual modifications to footnote 126, which it considers would address the
United States' concern while avoiding any confusion about the correct interpretation of the notion of
"dumping".
6.22 Footnote 126 explains and refers to evidence of the United States' use of "simple zeroing" in
the calculation of Fischer's ISAR in the Second Ad ministrative Review. The description of how the
United States determined this ISAR is consiste nt with how the "simple zeroing" methodology is
described elsewhere in the Report (e.g. paragraph 7. 79). In our view, it does not prejudge our views
on the correct interpretation of the definition of "dumping". Thus, we fail to see the problem that
Brazil raises with the language proposed by the Un ited States and therefore accept the United States
requested modifications to this footnote.
 Paragraph 7.106

6.23 The United States considers that paragraph 7.106 contains an incomplete summary of its
position regarding what it asserts is Brazil's use of "zeroing" under its prospective normal value
system. In particular, whereas the Interim Report in dicated that the United States had pointed to only
"one particular instance" of Brazil's alleged rec ourse to "zeroing" when collecting duties on the basis
of a prospective normal value, the United States recalls that it had in fact identified the collection of
duties by Brazil in this manner with respect to products from "at least seven countries". The
United States asks that this submission be fully re flected in the Final Report. Brazil objects to the
United States' request, stating that the United States' allegations are factually wrong. According to
Brazil, and contrary to the United States' assertions, the Brazilian investigating authority did not treat
the amount of duties imposed in relation to a singl e entry as a margin of dumping in the instances
identified by the United States. Rather, Brazil argues that the relevant exhibits show that the amount
of duties was capped at the level of a margin of dumping previously established.
6.24 We note that the relevant passage at issue in paragraph 7.106 does not represent a factual
finding on our part, but merely a description of an assertion made by the United States concerning
how Brazil has allegedly collected anti-dumping duties in a number of cases. To this extent, we have
decided to grant the United States' request and ha ve consequently modified the language of this

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paragraph in order to fully reflect the United St ates' factual assertions. Although Brazil did not
immediately respond to the United States' assertio ns when they were made during the Second
Substantive Meeting of the Panel with the parties, we have decided to reflect the position it has now
communicated with respect to the United States' alle gations in the Final Report. We have modified
footnote 177 (187) for this purpose.
 Paragraph 7.184 and 7.185

6.25 The United States considers that the inferences drawn in paragraphs 7.184 and 7.185 from the
Issues and Decision Memoranda Brazil submitted to substantiate its claim in respect of "continued
zeroing" are inherently speculative. According to the United States, it is "incorrect" to read these
Decision Memoranda as stating what approach the USDOC would take in a future proceeding because
they pertain to the particular determinations at issue. In this regard, the Unit ed States also notes that
in US – Continued Zeroing, the Appellate Body did not take a position as to what the USDOC would
do in the future, relying only on what had been done to date. Thus, the United States requests the
deletion of the relevant statements from paragraphs 7.184 and 7.185.
6.26 Brazil objects to the United States' request on tw o grounds. First, Brazil considers that the
United States is, in essence, stating that the Panel's factual findings concerning the Issues and
Decision Memoranda are "incorrect" on the ground th at it disagrees with the Panel's assessment.
Brazil recalls, however, that it is a Panel's task to examine and weigh evidence as the trier of facts in
WTO dispute settlement. Thus, the fact that the United States disagrees with the Panel's assessment
does not render it "incorrect". Secondly, Brazil cons iders that the Panel correctly concluded that the
Issues and Decision Memoranda support Brazil's claims concerning "continued zeroing", submitting
that in the absence of any change to the United States' "zeroing" policy, the Memoranda show that the
use of "zeroing" is part of the USDOC's calculation methodology.
6.27 We note that the statements in paragraphs 7.184 and 7.185 that are the focus of the United
States' request do not conclude that the USDOC will continue to use the "zerong procedures" in future
administrative reviews under the orange juice anti-dumping duty order. Rather, the statements
indicate only that the Issues and Decision Memoranda "strongly suggest" or "leave little doubt" that
this would be the case. Moreover, we do not agre e with the United States view that the Appellate
Body in US – Continued Zeroing did not take a position on whethe r the USDOC would continue to
use the "zeroing procedures" in the administrative revi ews at issue in that dispute. On the contrary,
the Appellate Body expressly conc luded in that dispute that the evidence before it provided a
sufficient basis to find that "the zeroing methodology would likely continue
 to be applied in
successive proceedings". 11 Thus, we see no reason to delete the relevant statements made in
paragraphs 7.184 and 7.185, and therefore decline th e United States' request. Nevertheless, we have
decided to amend the language in these paragraphs in order to clarify that the Panel's evaluation of the
contents of the Issues and Decision Memoranda refl ects an assessment of the intention held by the
USDOC at the time those documents were published. A modification to this end has been made in the
Final Report at paragraphs 7.191 and 7.192.

11 Appellate Body Report, US – Continued Zeroing, para. 191 (emphasis added).

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VII. FINDINGS
A. UNITED STATES' REQUESTS FOR PRELIMINARY RULINGS
1. Second Administrative Review
(a) Arguments of the United States
7.1 The United States asserts that Brazil's request for the establishment of a panel ("panel
request"), which it submits defines this Panel's te rms of reference, identified the "2007-2008 anti-
dumping duty administrative review on certain oran ge juice from Brazil (the 'Second Administrative
Review')" as one of the measures at issue. However, the United States points out that the final results
in Second Administrative Review were issued on 11 August 2009, well after the date of Brazil's
request for consultations, dated 27 May 2009. Thus, according to the United States, the measure that
Brazil challenges in its panel request did not exis t at the time of its consultations request, and
therefore could not have been subject to consultations.12
7.2 The United States recognizes that the prelimin ary results of the Second Administrative
Review had been issued by the time of Brazil's reque st for consultations. However, the United States
explains that preliminary results are not final, and their publication simply affords interested parties an
opportunity to provide comments, which the Un ited States Department of Commerce ("USDOC")
considers before making a final determination. The United States submits that prior to the issuance of
the final results of the Second Administrative Review, it was entirely possible that no definitive duties
would have been levied at all. The United States a sserts that this is exactly what happened for one of
the two respondents (Fischer) in the Second Administrative Review.13
7.3 The United States recalls that a panel's terms of reference are determined by the complaining
party's panel request, and that pursuant to Article 4.7 of the DSU, a complaining party may request
establishment of a panel only if "consultations fail to settle a dispute". 14 The United States argues that
Articles 17.3 through 17.5 of the AD Agreement cont ain requirements that parallel those of the DSU,
and the AD Agreement clarifies further the relati onship between consultatio ns and panel requests
under that Agreement. The United States notes that Article 17.4 provides that a Member may only
refer "the matter" to the DSB following a failure of consultations to achieve a mutually agreed
solution, and final action by the administering authorities to levy definitive antidumping duties or
accept price undertakings. The United States submits further that, in Guatemala – Cement , the
Appellate Body found that the term "matter" has the same meaning in Article 17.3, relating to the
request for consultations, and in Articles 17.4 and 17 .5, relating to the referral of a matter to the DSB
and the request for the establishment of a panel. Thus, the United States submits that a Member may
only file a panel request with respect to a measu re upon which the consulta tions process has run its
course; and the United States considers that no such consultations were held in respect of the "2007-
2008 anti-dumping duty administrative review on certain orange juice from Brazil (the 'Second
Administrative Review')". In this light, the Unite d States asks the Panel to make a preliminary ruling
that Brazil's claims against this measure are outside of its terms of reference.
(b) Arguments of Brazil
7.4 Brazil notes that although Article 6.2 of the DSU requires that consultations be held between
parties in dispute, it does not require that the meas ures identified in the panel request be identical to
the measures identified in the consultations request . Brazil recalls that the Appellate Body has on

12 United States, FWS, paras. 37, 46 and 48.
13 US, FWS, para. 47.
14 US, FWS, para. 39.

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several occasions explained that "Articles 4 and 6 of the DSU [do not] ... require a precise and exact
identity between the specific measures that were the subject of consultations and the specific
measures identified in the request for the establishment of a panel". 15 Rather, Brazil argues that
panels and the Appellate Body have consistently held that a panel' s terms of reference may include a
measure properly identified in the panel request, even if that measure was not included in the
consultations request, provided that doing so does not change the "essence" of the dispute.16
7.5 Brazil submits that its consultations and panel requests both identified the Second
Administrative Review, which was ongoing when the consultations request was filed. 17 According to
Brazil, the consultations request also included a reference to "any on-going or future antidumping
administrative reviews ... related to the imports of certain orange juice from Brazil (case no. A-351-
840)", as well as the "continued use of zeroing pro cedures" by the United States in successive anti-
dumping proceedings under the orange juice anti-du mping duty order. Thus, Brazil argues that the
relevant measures were identified with sufficient cl arity for the United States to comprehend that the
Second Administrative Review was part of the dispute.
7.6 Brazil also submits that the Second Administ rative Review has very close substantive
connections to, and the same essence as, the First Administrative Review. Brazil explains that the
Second Administrative Review followed the First Administrative Review adopted under the same
anti-dumping duty order. The Second Administrativ e Review also involved the same type of
determinations as the First Administrative Review, made by the same United States administering
authority, concerning the same products, the same exporters, and the same exporting country. Brazil
also highlights that the First and Second Admini strative Reviews provide succeeding bases for the
continued imposition of anti-dumping duties under the orange juice anti-dumping duty order. Brazil
submits that these connections are confirmed by the fact that, under the USDOC's Regulations, all
administrative (and other) reviews occurring under a single order are mere "segments" of a single
"proceeding" that continues until revocation.
18
7.7 Finally, Brazil argues that, if the Second Administrative Review were excluded from the
panel's terms of reference, it woul d be difficult, if not impossible, to pursue WTO dispute settlement
with respect to United States' administrative reviews. Because the United States conducts

15 Brazil, Comments on US Prelimin ary Rulings Request ("Brazil, Pr eliminary Rulings"), para. 7,
referring to Appellate Body Report, Brazil – Export Financing Programme for Aircraft ("Brazil – Aircraft "),
WT/DS46/AB/R, adopted 20 August 1999, DSR 1999:III, 1161, para. 132. See also, e.g. , Panel Report,
United States – Continued Existence and Application of Zeroing Methodology (" US – Continued Zeroing "),
WT/DS350/R, adopted 19 February 2009, as modified by Appellate Body Report WT/DS350/AB/R, para. 7.23;
Appellate Body Report, United States – Continued Existence and Application of Zeroing Methodology ("US –
Continued Zeroing "), WT/DS350/AB/R, adopted 19 February 2009, para. 222; and Appellate Body Report,
United States – Subsidies on Upland Cotton ("US – Upland Cotton"), WT/DS267/AB/R, adopted 21 March 2005,
DSR 2005:I, 3, para. 285.
16 Brazil, Preliminary Rulings , paras. 9-22, referring inter alia to Panel Report, Canada – Measures
Affecting the Export of Civilian Aircraft ("Canada – Aircraft"), WT/DS70/R, adopted 20 August 1999, as upheld
by Appellate Body Report WT/DS70/AB/R, DSR 1999:IV, 1443, para. 9.14; Appellate Body Report, Brazil –
Aircraft, para. 132; Appellate Body Report, Chile – Price Band System and Safeguard Measures Relating to
Certain Agricultural Products ("Chile – Price Band System "), WT/DS207/AB/R, adopted 23 October 2002,
DSR 2002:VIII, 3045 (Corr.1, DSR 2006:XII, 5473), para. 139; Panel Report, Dominican Republic – Measures
Affecting the Importation and Internal Sale of Cigarettes (" Dominican Republic – Import and Sale of
Cigarettes"), WT/DS302/R, adopted 19 May 2005, as modified by Appellate Body Report WT/DS302/AB/R,
DSR 2005:XV, 7425, para. 7.21; Appellate Body Report, European Communities – Customs Classification of
Frozen Boneless Chicken Cuts ("EC – Chicken Cuts "), WT/DS269/AB/R, WT/DS286/AB/R, adopted
27 September 2005, and Corr.1, DSR 2005:XIX, 9157, para. 157; Appellate Body Report, US – Continued
Zeroing, in particular paras. 222 and 228.
17 Brazil, Preliminary Rulings, paras. 3-4 and 23.
18 Brazil, Preliminary Rulings, para. 25, referring to 19 C.F.R. § 351.102. Exhibit BRA-44.

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administrative reviews on an annual basis, Brazil argu es that if a complainant were required to file a
new consultations request for every administrativ e review, WTO dispute settlement would become a
"moving target", and the recommendations and ruli ngs of the DSB could not address the latest
measure. According to Brazil, this would needlessly prevent the prompt settlement of disputes.19
7.8 Thus, Brazil asks the Panel to reject the United States' request for the exclusion of the Second
Administrative Review from its terms of reference, and instead find that it properly falls within the
scope of this dispute.
(c) Arguments of the Third Parties
(i) European Union
7.9 The European Union considers that Brazil's consultations and pane l requests adequately
identified the Second Administrative Review as one of the challenged measures. 20 Moreover, the
European Union argues that since the Second Admi nistrative Review is part of the "continued
zeroing" measure, which the European Union consider s is within the panel's terms of reference, the
fact that the final results were published only after consultations were held is irrelevant. 21 Thus, the
European Union urges the Panel to reject the United States' request for preliminary ruling.
(ii) Japan
7.10 Japan recalls that the Appellate Body has found that Articles 4 and 6 of the DSU "set forth a
process by which a complaining party must request consultations, and consul tations must be held,
before a matter may be referred to the DSB for the establishment of a panel". 22 Moreover, Japan also
notes that the Appellate Body has held that "consulta tions provide the parties an opportunity to define
and delimit the scope of the dispute between them" 23; and that Articles 4 and 6 do not "require a
precise and exact identity between the specific measures that were the subject of consultations and the
specific measures identified in the request for the establishment of a panel". 24 Rather, "[a]s long as
the complaining party does not expand the scope of the dispute", the Appellate Body has said it would
"hesitate to impose too rigid a standard for the 'precise and exact identity' between the scope of
consultations and the request for the establishment of a panel, as this would substitute the request for
consultations for the panel request".25
7.11 Japan notes that the Second Administrative Revi ew was subject to consultations and is
included in the Panel's terms of reference. Jap an recognizes that the final results of the Second
Administrative Review had not been issued at the time of Brazil's request for consultations. However,
it asserts that the Review had been initiated and a final result was expected to be issued within a
certain period. Japan observes that Brazil's panel re quest mentioned the date and contents of the final
result of the Second Administrative Review. Thus, Jap an argues that, in the light of the description in
the request for consultations, Brazil's consultations provided the parties with an opportunity to define
and delimit the scope of the dispute between them. After reviewing Brazil's consultations request and

19 Brazil, Preliminary Rulings, para. 27.
20 EU, Third Party Written Submission ("TPWS"), para. 5.
21 EU, TPWS, para. 8.
22 Appellate Body Report, Brazil – Aircraft, para. 131.
23 Appellate Body Report, Mexico – Anti-Dumping Investigation of High Fructose Corn Syrup (HFCS)
from the United States – Recourse to Article 21.5 of the DSU by the United States ("Mexico – Corn Syrup
(Article 21.5 – US)"), WT/DS132/AB/RW, adopted 21 November 2001, DSR 2001:XIII, 6675, para. 54.
24 Appellate Body, Brazil – Aircraft, para. 132 (Emphasis original).
25 Appellate Body Report, US – Upland Cotton, para. 293.

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panel request, Japan concludes that it is sure that Brazil's panel request has not broadened the scope of
the dispute. Thus, Japan submits that the Panel should dismiss the United States' request.26
(iii) Korea
7.12 Korea submits that there is no basis to suppor t the United States' request for a preliminary
ruling because a combined reading of Articles 17. 3 and 17.4 of the AD Agreement indicate that
consultations may be requested before "final action" is taken by the administering authorities, while
the establishment of a panel may not be requested un til after that "final action" has occurred. In
particular, Korea notes that Article 17.3 of the AD Agreement, which authorizes WTO Members to
request consultations, does not contain any language that might be read to suggest that a Member
must wait to request consultations until a final determ ination has been issued. By contrast, the first
sentence of Article 17.4, which authorizes WTO Members to refer matters to the DSB for
establishment of a panel, does specifically require complaining Members to wait until (1)
consultations under Article 17.3 "have failed to achieve a mutually agreed solution", and (2) "final
action has been taken by the administering author ities of the importing Member to levy anti-dumping
duties ….". Korea argues that if the administrativ e authorities have not yet taken "final action", the
matter may not be referred to the DSB for establishmen t of a panel (except to the extent permitted by
the second sentence of Article 17.4, concerning panel review of "provisional measures").
7.13 According to Korea, the clear implication of th is combined reading of the two provisions is
that consultations may be requested before "fin al action has been taken by the administering
authorities". Korea submits that if this were not the case, there would be no need to include a
requirement of "final action" in the first sentence of Article 17.4. If consu ltations could be requested
only after "final action" by the administering author ities, Korea argues that the provisions of the first
sentence of Article 17.4 requiring that consulta tions be held (and "have failed") would embody a
requirement of "final action" as well. Under such an interpretation, Korea considers that the language
requiring "final action" in the first sentence of Article 17.4 would be redundant.
7.14 Thus, Korea argues that, consistent with the pr inciple of effective treaty interpretation,
Article 17.3 of the AD Agreement must be read to allow for the possibility of holding consultations
on measures before "final action" has been taken. Accordingly, Korea asks the Panel to reject the
United States' request for a preliminary ruling.
27
(iv) Mexico
7.15 Mexico considers that the United States' argum ents for seeking the exclusion from the Panel's
terms of reference of Brazil claims against the Second Administrative Review are factually incorrect
and misstate the role of consultations in defining the Panel's terms of reference. Mexico asserts that,
as a factual matter, Brazil did specifically seek consultations, and in fact did consult with the
United States, in respect of the Second Administrativ e Review. Moreover, Mexico argues that Brazil
was not required to request consultations precisely with respect to the Second Administrative Review
in order to properly include it in its panel request , recalling that neither Articles 4 and 6 of the DSU
"require a precise and exact identity between the specific measures that were the subject of
consultations and the specific measures identified in the request for the establishment of a panel".
28
Thus, according to Mexico, as long as Brazil made cl ear that it was challenging the application of
zeroing in recent and ongoing administrative re views, sufficient notice was provided to the
United States, and the Second Administrative Revi ew could properly be challenged in the panel

26 Japan, Third Party Written Submission ("TPWS"), paras. 13-17.
27 Korea, Third Party Written Submission ("TPWS"), paras. 8-10.
28 Mexico, Third Party Written Submission ("TPWS"), para. 15, quoting from Appellate Body Report,

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request as a measure subject to the Panel's terms of re ference. In this regard, Mexico recalls that the
panel was confronted with, and dismissed, a similar request for a preliminary ruling in US –
Continued Zeroing. Mexico invites the Panel to do the same in the present dispute.29
(d) Evaluation by the Panel
7.16 In general, a panel's terms of re ference are found in the panel request 30, where pursuant to
Article 6.2 of the DSU, a complaining Member must "indicate whether consultations were held,
identify the specific measures at issue and provide a brief summary of the legal basis of the complaint
sufficient to present the problem clearly". The United States' request for a preliminary ruling
concerning Brazil's complaint against the Second Ad ministrative Review does not take issue with
whether the measure being challenged, or the claims being made, are properly described in the Panel's
terms of reference. Rather, the United States asks that we rule that Brazil's claims are outside of the
terms of reference of this dispute because it alleges that the final results of the "2007-2008 anti-
dumping duty administrative review on certain oran ge juice from Brazil (the 'Second Administrative
Review')" did not exist at the time of Brazil's cons ultations request, and therefore they could not have
been the subject of consultations.
7.17 It is well established that in order to bring a matter before a WTO dispute settlement panel, a
Member must first make a request for consultations and consultations must take place in respect of
that matter. In Brazil – Aircraft, the Appellate Body observed that:
"Articles 4 and 6 of the DSU ... set forth a process by which a complaining party must
request consultations, and consultations must be held, before a matter may be referred
to the DSB for the establishment of a panel".31
Article 4.4 of the DSU prescribes that a consultati ons request must "be submitted in writing and shall
give the reasons for the request, including identifica tion of the measures at issue and an indication of
the legal basis for the complaint". Moreover, fo r the purpose of dispute settlement, the scope of
consultations are defined by what is expressed in th e consultations request (and not by any record of
what was actually discussed). 32 A Member cannot, therefore, challenge a measure in panel
proceedings unless it has been identified in its request for consultations. However, it is not necessary
for there to be "a precise and exact identity between the specific measures that were the subject of
consultations and the specific measures identified in the request for the establishment of a panel" in
order for the latter to properly fall within a panel's terms of reference. 33 In this regard, the Appellate
Body in US – Upland Cotton explained that:

"As long as the complaining party does not expand the scope of the dispute, we
hesitate to impose too rigid a standard for the 'precise and exact identity' between the
scope of consultations and the request for the establishment of a panel, as this would
substitute the request for consultations for the panel request. According to Article 7
of the DSU, it is the request for the estab lishment of a panel that governs its terms of
reference, unless the parties agree otherwise."34

29 Mexico, TPWS, paras. 11-20.
30 Article 7.1 DSU.
31 Appellate Body Report, Brazil – Aircraft , para. 131. A parallel process is envisaged under
Articles 17.3 to 17.5 of the AD Agreement. See Appellate Body Report, Guatemala – Cement I, paras. 57-80.
32 Appellate Body Report, US – Upland Cotton, paras. 286-287.
33 Appellate Body Report, Brazil – Aircraft, para. 132.
34 Appellate Body Report, US – Upland Cotton, para. 293 (footnotes omitted).

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7.18 Thus, in evaluating the merits of the United States' request for a preliminary ruling, we see the
main question to be resolved to be whether Brazil's reference to the final results of Second
Administrative Review in its panel request has e xpanded the scope of the dispute beyond the contours
of what the United States could have reasonably understood from Brazil's request for consultations.
We start by reviewing Brazil's request for consultations.
7.19 Brazil's request for consultations is constituted by two documents: an original request for
consultations and an addendum. Brazil's original request is dated 27 November 2008 (circulated on
1 December 2008). This request identified the Firs t Administrative Review under the orange juice
anti-dumping duty order and "any on-going or future antidumping administrative reviews, and the
final results thereof, related to the imports of certain orange juice from Brazil (case no. A-351-840)"
as the USDOC "determinations" raising concern. 35 As regards the First Administrative Review, the
original consultations request reveals that Brazil t ook issue with the USDOC's alleged application of
"zeroing".
7.20 The addendum to Brazil's original request for consultations is dated 22 May 2009 (circulated
on 27 May 2009). This document states that Brazil and the United States held consultations on
16 January 2009 covering the First and Second Admi nistrative Reviews "pursuant to the original
request for consultations, which included among othe rs: the First Administrative Review ... and, any
on-going or future antidumping administrative revi ews" under the orange juice anti-dumping duty
order.36 In other words, although not expressly mentioned in Brazil's original request for
consultations, the Second Administrative Revi ew appears to have been discussed during the
16 January 2009 consultations between the two parties. In this regard, we note that the Second
Administrative Review was in progress at the time of the January 2009 consultations, with
preliminary results being issued on 6 April 2009. 37 Reflecting this state of affairs, the addendum to
Brazil's original consultations request explicitly identified the Second Administrative Review as one
of the measures Brazil wished to consult about with the United States.38
7.21 Brazil's request for establishment of a pane l is dated 20 August 2009 (circulated
21 August 2009). This document recalls that by vi rtue of the addendum to its original request for
consultations, Brazil had requested further consultations with the United States concerning "the use of
'zeroing' in the anti-dumping duty investigation an d in the second administrative review related to
case No A-351-840 ...".39 The same document explains that a second round of consultations was held
on 18 June 2009. It also identifies the final results of the Second Administrative Review, which had
been issued on 11 August 200940, as one of the measures at issue in the following terms:
"(c) The 2007-2008 anti-dumping duty admini strative review on certain orange juice
from Brazil (the 'Second Administrative Review')
This anti-dumping proceeding concerns the administrative review of anti-
dumping duties on certain orange juice from Brazil (case No A-351-840) for the
period 1 March 2007 through 29 February 2008. The final results of this

35 Request for Consultations by Brazil, 1 December 2008, WT/DS382/1, p. 1
36 Request for Consultations by Brazil (Addendum), 27 May 2009, WT/DS382/1/Add.1, p. 1
37 Second Administrative Review, Final Results, Exhibit BRA-22.
38 Request for Consultations by Brazil (Addendum), 27 May 2009, WT/DS382/1/Add.1, p. 2 ("The
Antidumping Duty Administrative Review from 1 March 2007 to 29 February 2008 (the 'Second Administrative
Review'), related to the imports of certain orange juice from Brazil (case n° A-351-840)").
39 Request for the Establishment of a Panel by Brazil, 21 August 2009, p. 1.
40 Second Administrative Review, Final Results, Exhibit BRA-22.

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Second Administrative Review were published in 74 Fed. Reg. 40167 on
11 August 2009. ..."41
7.22 In our view, Brazil's reference to the final resu lts of the Second Administrative Review in its
panel request does not expand the scope of the compla int presented in its request for consultations.
Not only do Brazil's original consultations request and addendum respectively identify a concern with
"any on-going or future antidumping administrative revi ews, and the final results thereof, related to
the imports of certain orange juice from Brazil (case no. A-351-840)" and the "Second Administrative
Review", but it appears that the USDOC's conduc t during the Second Administrative Review was
discussed in both consultations that were actually held. While it is true that the final results of the
Second Administrative Review were not yet issued at the time of those consultations, we do not
consider this to mean that Brazil's focus on these r esults in its panel request expanded the scope of its
complaint beyond what the United States could have reasonably understood the dispute to be about.
On the contrary, we see the explicit reference to the final results of the Second Administrative Review
as merely confirming the content of the complaint Brazil appears to have always been making.
7.23 In support of its objection to Brazil's inclusion of the final results of the Second
Administrative Review in the panel re quest, the United States refers to US – Certain EC Products
dispute. In that controversy, the European Co mmunities sought to challenge two measures taken by
the United States in retaliation to the EC's alle ged failure to implement the recommendations and
rulings of the DSB in the EC – Bananas dispute. The first measure, taken by the US Customs
Service, imposed increased bonding requirements on im ports of certain EC products, which subject to
the decision of the arbitrator in the EC – Bananas dispute, could potentially result in the payment of
additional duties of 100%. This measure was effective as of 3 March 1999, and was identified in both
the consultations and panel requests. The second measure was adopted by the USTR and imposed
100% duties on some, but not all, of the designated products that were previously subject to the
increased bonding requirements, in the light of the arbitrator's ruling in EC – Bananas . This second
measure was adopted on 19 April 1999 and was identifi ed only in the panel request. Thus, at the time
of the consultations request, dated 4 March 1999, the second measure did not exist.
7.24 The panel and Appellate Body found that the 19 April 1999 measure was outside of the
panel's terms of reference, not only because it did not exist at the time of consultations (and therefore
could not have been subject to consultations), but also because they found it to be "legally distinct"
from the 3 March 1999 measure. Among the factors c onsidered by the Appellate Body to indicate
that the two measures were "legally distinct" include d the fact that the substance of the two measures
was not entirely the same; that different legal b ases and different United States government agencies
were responsible for each measure; and the fact that the first measure was not in any way a
prerequisite for the second measure.42
7.25 In our view, the circumstances surrounding the United States' request for a preliminary ruling
in the present dispute are clearly different to the particular facts of US – Certain EC Products . For
instance, as we have already noted, although the final results of the Second Administrative Review
were not mentioned in Brazil's original consultations request and addendum, the Second
Administrative Review and its preliminary results were in fact identified. The final results of the
same Second Administrative Review are part of th e same proceeding undertak en by the same United
States' agency in relation to the same product. Th e final results of the Second Administrative Review
represent the USDOC's final determination of the issues at stake in the Second Administrative Review
under the orange juice anti-dumping duty order; i ssues which included those Brazil had identified in

41 Request for the Establishment of a Panel by Brazil, 21 August 2009, p. 1.
42 Appellate Body Report, United States – Import Measures on Certain Products from
the European Communities ("US – Certain EC Products "), WT/DS165/AB/R, adopted 10 January 2001,
DSR 2001:I, 373, paras. 74-77.

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its original consultations request and addendum. It is also important to note that Brazil's claims in
respect of the final results of the Second Administra tive Review are identical to those raised in its
original consultations request and addendum concerning the Second Administrative Review and its
preliminary results. Thus, we cannot see how Brazil's focus on the final results of the Second
Administrative Review in its panel request expand s the scope of its complaint beyond what the
United States could have reasonably understood thro ugh Brazil's consultations request. Indeed, as we
have already observed, the explicit reference to th e final results of the Second Administrative Review
merely confirms the content of the complaint Br azil appears to have always been making. We
therefore reject the United States request for a prelim inary ruling and find that the final results of the
Second Administrative Review fall within our terms of reference.
2. "Continued Zeroing"
(a) Arguments of the United States
7.26 The United States requests the Panel to make a pr eliminary ruling that Brazil's claims against
the "continued use" of "zeroing" do not fall within its terms of reference because: (i) Brazil's panel
request lacks specificity as regards the alleged meas ure; (ii) Brazil's challenge purports to include
future measures that were not in existence at the ti me of the establishment of this Panel; and (iii) the
alleged measure did not involve a final action to levy definitive anti-dumping duties or accept price
undertakings as required by Article 17.4 of the AD Agreement.
7.27 The United States argues that Brazil's focus on "continued zeroing" is nothing more than a
challenge to "an indeterminate number of potential m easures". The United States recalls that in order
to satisfy the requirements of Article 6.2, a pane l request must identify the "specific" measures at
issue. According to the United States, in challenging "continued zeroing" Brazil is speculating as to
what may happen in the future, and such speculation is not an identification of a "specific" measure.43
7.28 Referring to previous terms of refere nce rulings by the panels in the US – Upland Cotton and
Indonesia – Autos disputes, the United States also submits that future measures that are not yet in
existence at the time of panel establishment are not w ithin a panel's term of reference under the DSU.
The United States asserts that the alleged "contin ued zeroing" measure is focused on "indeterminate
future measures that did not exist at the time of Brazil's panel request (and may never exist)". The
United States submits that such measures cannot be "impairing any benefits accruing to Brazil",
within the meaning of Article 3.3 of the DSU, and therefore they cannot be within the Panel's terms of
reference.44 Furthermore, the United States argues th at including "continued zeroing" within the
Panel's terms of reference would be contrary to Article 17.4 of the AD Agreement because it would
ignore the fact that, for any given importation, the imposition of anti-dumping duties is grounded in a
specific final action, and no such final action has been taken in the case of "continued zeroing".
(b) Arguments of Brazil
7.29 Brazil recalls that the Appellate Body has observed that the specificity requirement in
Article 6.2 of the DSU means that "the measures at issue must be identified with sufficient precision
so that what is referred to adjudication by a panel may be discerned from the panel request".45 Brazil
notes that in US – Continued Zeroing , the Appellate Body found that the European Communities had
satisfied this standard when it identified a "speci fic measure" that the Appellate Body described as
"the use of the zeroing methodology in successive proceedings, in each of the 18 [anti-dumping]

43 US, FWS, para. 51.
44 US, FWS, para. 52.
45 Brazil, Preliminary Rulings, para. 33, quoting Appellate Body Report, US – Continued Zeroing ,
para. 168.

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cases, by which the anti-dumping duties are maintained". 46 Brazil submits that the measure it has
described in its panel request uses very simila r language, noting that the only material difference
between Brazil's description and the measure at issue in US – Continued Zeroing is that in Brazil's
case, the measure addresses continued conduct un der a different anti-dumping duty order from the
orders implicated by the European Communities. 47 Indeed, given the Appellate Body's own
formulation of the "continued use" measure in US – Continued Zeroing , Brazil argues that the
formulation used in the panel request is more than sufficient for the Panel, the United States, and the
third parties to "identify[] with sufficient precision … what is referred to adjudication". In particular,
according to Brazil, the panel request specifies that: (1) the measure involves the use of "zeroing" in
successive anti-dumping proceedings; (2) the relevant proceedings in which "zeroing" is used are
those conducted pursuant to a named anti-dumping duty order; (3) the particular types of anti-
dumping proceedings in which "zeroing" is used in clude original investigations and administrative
reviews; and (4) the determinations made in th ese proceedings using "zeroing" provide the basis for
the application and maintenance of anti-dumping duties under the order over a period of time.48
7.30 Brazil rejects the United States allegations to the effect that the measure at issue is of a type
that cannot be challenged in WTO dispute settlement and that it does not exist, recalling that faced
with similar arguments in US – Continued Zeroing , the Appellate Body explained that "... the
identification of the specific measures at issue, pursuant to Article 6.2, is different from a
demonstration of the existence of such measures"; and that "an examination regarding the specificity
of a panel request does not entail substantive c onsideration as to what types of measures are
susceptible to challenge in WTO dispute settlement". 49 In addition, Brazil considers that the United
States' characterization of its complaint as a challe nge to potential future measures misses the point.
According to Brazil, the United States' position fails to appreciate the difference between a "continued
use" measure and challenges to individual determin ations. Brazil argues that the "continued use"
measure involves ongoing conduct in the form of us e of the "zeroing" methodology under a particular
anti-dumping order. In its view, this is not a "potential future measure[]",50 but an actual measure that
exists today.51
7.31 Thus, Brazil asks the Panel to reject the Unite d States' request for the exclusion of the
"continued use" measure from its terms of reference, and find instead that it falls within the scope of
this dispute.52
(c) Arguments of the Third Parties
(i) European Union
7.32 The European Union recalls that the Appellate Body in US – Continued Zeroing was faced
with essentially the same issue that is before the Panel in the pr esent dispute, namely, whether the
European Union's complaint against the United States' alleged "continued zeroing" as "ongoing
conduct" was within the panel's terms of refere nce. The European Un ion recalls that in US –
Continued Zeroing, the Appellate Body ruled that "the identification of the specific measures at issue,
pursuant to Article 6.2, is different from a demonstr ation of the existence of such measures", rejecting
"the proposition that an examination of the specifici ty requirement under Article 6.2 of the DSU must

46 Brazil, Preliminary Rulings, para. 34, quoting Appellate Body Report, US – Continued Zeroing ,
para. 166.
47 Brazil, Preliminary Rulings, para. 39.
48 Brazil, Preliminary Rulings, paras. 40-41.
49 Brazil, Preliminary Rulings, paras. 43-45, quoting from Appellate Body Report, para. 169.
50 US, FWS, para. 52.
51 Brazil, Preliminary Rulings, para. 54.
52 Brazil, Preliminary Rulings, paras. 29-56.

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involve a substantive inquiry as to the existence and precise content of the measure".53 As regards the
proper identification of the alleged measure in its panel request, the European Union notes that the
Appellate Body saw "no reason to exclude ongoing c onduct that consists of the use of the zeroing
methodology from challenge in WTO dispute settlement". 54 The European Union asks the Panel to
come to the same result in respect of Brazil's challenge to the United States' "continued zeroing" in the
orange juice anti-dumping proceedings.55
(ii) Japan
7.33 Japan finds no substantial difference betw een the "continued zeroing" measure Brazil
challenges in this dispute and the "c ontinued zeroing" measures at issue in US – Continued Zeroing .
In response to the United States argument that th e alleged measure includes an indeterminate number
of potential future measures and is not properly with in the Panel's terms of reference, Japan argues
that the United States overlooks Brazil's description of the alleged measure that "[i]n particular, the
use of zeroing continues in the 'most recent admini strative review' … by which duties are 'currently'
applied and maintained".56 In this light, Japan urges the panel to reject the United States' request for a
preliminary ruling and find that the "continued use" of the zeroing methodology in successive anti-
dumping proceedings, in relation to the anti-dumpi ng duty order issued in respect of imports of
certain orange juice from Brazil, constitutes a "me asure" that falls within the Panel's terms of
reference under Article 6.2 of the DSU.
(iii) Korea
7.34 Korea recalls that the specificity requirement under Article 6.2 of the DSU is designed to
ensure that a panel request "present[s] the problem clearly" and that "the identification of a measure
within the meaning of Article 6.2 need be framed only with sufficient particularity so as to indicate
the nature of the measure and the gist of what is at issue". 57 According to Korea, it is clear from
item (d) of Brazil's panel request that its complain t relates to "a string of connected and sequential
determinations" in which the United States u ses the zeroing methodology by which duties are
maintained over a period of time under the anti-dump ing duty order. Thus, Korea argues that Brazil
has satisfied the standard under Article 6.2 of the DS U. Moreover, Korea agrees with Brazil that the
"continued zeroing" measure it is challenging in th is dispute is virtually the same "ongoing conduct"
that was at issue in US – Continued Zeroing. However, Korea notes that it would be inappropriate to
address the existence of the measure for the purpose of responding to the United States' request for a
preliminary ruling, recalling that the Appellate Body in US – Continued Zeroing stated that "the
identification of the specific measures at issue, pursuant to Article 6.2, is different from a
demonstration of the existence of such measures".58
(iv) Mexico
7.35 Mexico argues that the United States' request fo r a preliminary ruling confuses the specificity
requirement under Article 6.2 of the DSU with the susceptibility of ongoing conduct to WTO dispute
settlement. Mexico recalls that the Appellate Bo dy has observed that "the identification of the
specific measures at issue, pursuant to Article 6.2, is different from a demonstration of the existence
of such measures"; and that "the specificity requi rement under Article 6.2 is intended to ensure the

53 EU, TPWS, para. 6, quoting from Appellate Body Report, US – Continued Zeroing, para. 169.
54 EU, TPWS, para. 7, quoting from Appellate Body Report, US – Continued Zeroing, para. 181.
55 EU, TPWS, para. 8.
56 Request for the Establishment of a Panel by Brazil, WT/DS382/4, p. 3.
57 Korea, TPWS, para. 12, quoting Appellate Body Report, US – Continued Zeroing , paras. 168
and 169.
58 Korea, TPWS, paras. 14-16.

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sufficiency of a panel request in presenting the problem clearly". 59 According to Mexico, the problem
at issue in this dispute – the United States' c ontinued application of zeroing in successive anti-
dumping proceedings – is clear and easy to discern. Accordingly, Mexico contends that Brazil's panel
request satisfies the specificity requirement of Article 6.2 of the DSU.
7.36 In addition, Mexico argues that the United States' reliance on US – Upland Cotton in support
of its view that future measures not yet in existen ce at the time of panel establishment are not within a
panel's term of reference is misplaced. According to Mexico, the facts in US – Upland Cotton can be
distinguished from the facts at issue in the present dispute. In particular, Mexico notes that in US –
Upland Cotton , the panel found that payments under the Agricultural Assistance Act of 2003 (the
"Act") were not within its terms of re ference because the Act was not enacted until after the panel
request. As a result, consultations were not sought or held on the payments under the Act. In making
its finding, Mexico recalls that the panel specifica lly "noted[d] that the cottonseed payments for each
year were ad hoc appropriations, each with a separ ate legal basis, which did not follow a single
model". Moreover, Mexico recalls that the panel found that the relevant section "did not amend or
modify any existing or previous programme". Mexi co also notes that the panel concluded that the
evidence before it disclosed "the existence of se parate and legally distinct cottonseed payment
programmes for crops in different years rather than a single cottonseed payment programme".60
7.37 Mexico observes that, in contrast, in the present dispute Brazil challenges the continued
application of zeroing in periodic reviews conducte d as stages of a continuous proceeding involving
the imposition, assessment, and collection of duties under the same anti-dumping duty order. With
respect to the proceeding on certain orange jui ce from Brazil, Mexico argues that the USDOC has
applied zeroing at every stage of the proceeding a nd has given no indication that it will change its
approach in the future. Mexico submits that it is this recurring and ongoing conduct under the single
anti-dumping duty order that Brazil challenges. After recalling that the Appellate Body in US –
Continued Zeroing found a series of similar "ongoing conduct" measures to be susceptible to WTO
dispute settlement proceedings, Mexico asks the Pa nel to deny the United States' request for a
preliminary ruling to exclude Brazil's claims from its terms of reference.
61
(d) Evaluation by the Panel
7.38 The United States' request for a preliminary ruling in respect of Brazil's "continued zeroing"
claim is based on three lines of argument. First, th e United States submits that in seeking to describe
the alleged "continued zeroing" measure, Brazil's pane l request provides only a "general reference to
an indeterminate number of potential measures" base d on "speculation" as to what may happen in the
future. According to the United States, such "sp eculation" cannot satisfy the Article 6.2 requirement
that a panel request "identify the specific measures at issue".62 Secondly, the United States argues that
by challenging "continued zeroing", Brazil appears to challenge "an indeterminate number of potential
future measures", which were not in existence at the time of panel establishment and may never exist,
and therefore cannot fall within the Panel's terms of reference. 63 Thirdly, the United States argues that
the inclusion of "continued zeroing" in the Panel's te rms of reference is incons istent with Article 17.4
of the AD Agreement, because no "final action" within the meaning of that provision has been taken
in the case of "continued zeroing".

59 Mexico, TPWS, para. 23, quoting from Appellate Body Report, US – Continued Zeroing, paras. 168
and 169.
60 Mexico, TPWS, para 25, quoting from Panel Report, US – Upland Cotton , paras. 7.162, 7.165
and 167.
61 Mexico, TPWS, paras. 26-28.
62 US, FWS, paras. 49-51 (United States' emphasis).
63 US, FWS, para. 52.

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7.39 Before turning to examine Brazil's panel request , we note that the first two of the arguments
described above served as the basis for a similar request for a preliminary ruling made by the
United States in US – Continued Zeroing . Although the panel in that dispute agreed with the
United States64, the Appellate Body reversed the panel's fi ndings. In particular, the Appellate Body
held that the United States could reasonably have been expected to understand, from reading the panel
request as a whole, that the European Communities was challenging the use of "zeroing" in successive
proceedings, as "ongoing conduct", in each of 18 sepa rate anti-dumping cases. The Appellate Body
saw confirmation of this in the fact that th e European Communities wa s seeking a prospective
remedy.65 The Appellate Body also rejected the pane l's view that "in order to successfully raise
claims against a measure, the complaining Member must in the first place demonstrate the existence
and the precise content of such measure, consisten tly with the requirements of Article 6.2 of the
DSU".66 In this regard, the Appellate Body made the following observation:
"... the identification of the specific measure s at issue, pursuant to Article 6.2, is
different from a demonstration of the existe nce of such measures. For the latter, a
complainant would be expected to present relevant arguments and evidence during
the panel proceedings showing the existence of the measures, for example, in the case
of challenges brought against unwritten norms. {} Moreover, although a measure
cannot be identified without some indication of its contents, the identification of a
measure within the meaning of Article 6.2 need be framed only with sufficient
particularity so as to indicate the nature of the measure and the gist of what is at issue.
Thus, an examination regarding the specifi city of a panel request does not entail
substantive consideration as to what types of measures are susceptible to challenge in
WTO dispute settlement. Such consideration may have to be explored by a panel and
the parties during the panel proceedings, but is not prerequisite for the establishment
of a panel. To impose such prerequisite w ould be inconsistent with the function of a
panel request in commencing panel pro ceedings and setting the jurisdictional
boundaries of such proceedings. Therefor e, we reject the proposition that an
examination of the specificity requirement under Article 6.2 of the DSU must involve
a substantive inquiry as to the existence and precise content of the measure."
67
7.40 In the present dispute, Brazil's panel request describes the alleged measure at issue in the
following terms:
 "Measures and claims

 The measures at issue are the following:

(d) The continued use of the U.S. 'zeroing procedures' in successive anti-
dumping proceedings, in relation to the anti-dumping duty order
issued in respect of imports of certain orange juice from Brazil
 This measure concerns the continue d use by the United States of "zeroing
procedures" in successive anti-dumping proceedings, in relation to the anti-dumping
duty order issued in respect of imports of certain orange juice from Brazil (case
No A-351-840), including the original investigation and any subsequent

64 Panel Report, US – Continued Zeroing, para. 7.61.
65 Appellate Body Report, US – Continued Zeroing, para. 171.
66 Panel Report, US – Continued Zeroing, para. 7.50.
67 Appellate Body Report, para. 169.

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administrative reviews, by which duties are applied and maintained over a period of
time. In particular, the use of zeroing continues in the most recent administrative
review, identified under item (c) above, by which duties are currently applied and
maintained."
7.41 The language in Brazil's panel request explic itly identifies the measure at issue as "the
continued use by the United States of 'zeroing pr ocedures' in successive anti-dumping proceedings"
under the orange juice anti-dumping duty order, "i ncluding the original investigation and any
subsequent administrative reviews, by which duties are applied and maintained over a period of time".
We note that this language reveals that Brazil's c oncern is focused on the "continued use" of "zeroing
procedures" in "successive " proceedings "including the original investigation and any subsequent
reviews". In other words, Brazil objects to the United States' alleged "continued use" of "zeroing
procedures" over time, starting from the original i nvestigation that resulted in the imposition of the
orange juice anti-dumping duty order to any subsequent proceeding un der the same order. In our
view, it is reasonably clear from this description, wh en read in the light of the panel request as a
whole68, that the alleged measure Brazil challenges is the United States' "continued use" of "zeroing
procedures" as "ongoing conduct".
7.42 We see no need, for the purpose of responding to the United States request for a preliminary
ruling, to pronounce on whether such "ongoing conduc t" is susceptible to challenge in WTO dispute
settlement. As the Appellate Body ob served in the above-quoted passage from US – Continued
Zeroing, "an examination regarding the specificity of a panel request does not entail substantive
consideration as to what types of measures are su sceptible to challenge in WTO dispute settlement". 69
Likewise, we do not see that it is our task, when considering the United States' preliminary ruling
request, to decide whether the "ongoing conduct" measure Brazil objects to actually exists, even
assuming that it can be challenged in WTO disput e settlement. Again, as the Appellate Body
explained in US – Continued Zeroing, "the identification of the specific measures at issue, pursuant to
Article 6.2, is different from a demonstration of the existence of such measures".70
7.43 The third argument the United States advances to support its request for a preliminary ruling
is related to Article 17.4 of the AD Agreement. This provision reads:
"If the Member that requested consultations considers that the consultations pursuant
to paragraph 3 have failed to achieve a mutually agreed solution, and if final action
has been taken by the administering authorities of the importing Member to levy
definitive anti-dumping duties or to accept price undertakings, it may refer the matter
to the Dispute Settlement Body ("DSB"). When a provisional measure has a
significant impact and the Member that requested consultations considers that the
measure was taken contrary to the provisi ons of paragraph 1 of Article 7, that
Member may also refer such matter to the DSB."
7.44 The United States notes that Article 17.4 provides that a member may only refer a matter to
the DSB following a failure of consultations to achie ve a mutually agreed solution, and "final action"
has been taken by the administering authorities to levy definitive anti-dumping duties or accept price
undertakings. According to the United States, "continued zeroing" does not amount to "final action"
within the meaning of Article 17.4 of the AD Agreement and, therefore, it cannot fall within our terms
of reference. Although the Appellate Body in US – Continued Zeroing did not directly address this

68 For instance, we note that in addition to making claims against the "continued use" of "zeroing
procedures" in "successive anti-dumping proceedings", Brazil's panel request challenges the original
investigation and First and Second Administrative Reviews individually, as three separate measures.
69 Appellate Body Report, US – Continued Zeroing, para. 169.
70 Appellate Body Report, US – Continued Zeroing, para. 169.

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argument, it did appear to take this provision ( as well as Article 17.3 of the AD Agreement) into
account in the process of overturning the panel's fi ndings on the merit of the European Communties'
"continued zeroing" claims. In particular, in exam ining the question whether "continued zeroing" is a
measure susceptible to WTO dispute settlement, a nd after recalling its observation from a previous
case where it stated that "in principle, any act or omission attributable to a WTO Member can be a
measure of that Member for purposes of dispute settlement proceedings" 71, the Appellate Body noted
that:
"Articles 17.3 and 17.4 of the Anti-Dumping Agreement are also relevant to the
question of the types of measures that can be submitted to dispute settlement under
the Anti-Dumping Agreement . Closely resembling Article 3.3 of the DSU,
Article 17.3 provides that, '[i]f any Member considers that any benefit accruing to it,
directly or indirectly, under [the Anti-Dumping Agreement ] is being nullified or
impaired ... by another Member or Member s, it may, with a view to reaching a
mutually satisfactory resolution of the matter, request in writing consultations with
the Member or Members in question.'
{} Article 17.4 of the Anti-Dumping Agreement
further specifies that a Member may refer a ma tter to the DSB if it considers that the
consultations have failed to achieve a mutual ly agreed solution 'and if final action has
been taken by the administering authorities of the importing Member to', inter alia,
'levy definitive anti-dumping duties'.72"
7.45 In the very next paragraph, the Appellate Body agreed with the panel that "measures
examined by WTO panels and the Appellate Body in clude 'not only measures consisting of acts that
apply to particular situations, but also those cons isting of acts setting forth rules or norms that have
general and prospective application'." The Appellate Body then went on to observe that "[i]n order to
be susceptible to challenge, a measure need not fit squarely within [the "as such" or "as applied"]
categories, that is, either as a rule or norm of gene ral and prospective application, or as an individual
instance of the application of a rule or norm". Finally, the Appellate Body described the "continued
zeroing" measure challenged by the European Commun ities using terms that are very similar to those
used by Brazil in the present dispute, and conc luded that it saw "no reason to exclude ongoing
conduct that consists of the use of the zeroi ng methodology from challenge in WTO dispute
settlement"73.
7.46 In our view, the clear implication to draw fro m the Appellate Body's reasoning and findings
in US – Continued Zeroing is that Article 17.4 of the AD Agreement does not limit Brazil's right in
the present dispute to challenge "continued zeroing" under the AD Agreement. This conclusion finds
support in the Appellate Body's observations in US – 1916 Act , where in allowing the European
Communities and Japan to challenge certain United States' anti-dumping legislation, the Appellate
Body explained inter alia that:
"Important considerations underlie the restri ction contained in Article 17.4. In the
context of dispute settlement proceedings regarding an anti-dumping investigation,
there is tension between, on the one hand, a complaining Member's right to seek
redress when illegal action affects its economic operators and, on the other hand, the
risk that a responding Member may be harass ed or its resources squandered if dispute
settlement proceedings could be initiated ag ainst it in respect of each step, however
small, taken in the course of an anti-dumpi ng investigation, even before any concrete
measure had been adopted. {} In our view, by limiting the availability of dispute
settlement proceedings related to an an ti-dumping investigation to cases in which a

71 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review, para. 81.
72 Appellate Body Report, US – Continued Zeroing, para. 177.
73 Appellate Body Report, US – Continued Zeroing, paras. 180-181.

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Member's request for establishment of a panel identifies a definitive anti-dumping
duty, a price undertaking or a provisional measure {}, Article 17.4 strikes a balance
between these competing considerations.
Therefore, Article 17.4 sets out certain cond itions that must exist before a Member
can challenge action taken by a national inv estigating authority in the context of an
anti-dumping investigation. However, Article 17.4 does not address or affect a
Member's right to bring a claim of inconsistency with the Anti-Dumping Agreement
against anti-dumping legislation as such.
Moreover, as we have seen above, the GA TT and WTO case law firmly establishes
that dispute settlement proceedings may be brought based on the alleged
inconsistency of a Member's legislation as su ch with that Member's obligations. We
find nothing, and the United States has iden tified nothing, inherent in the nature of
anti-dumping legislation that would rationall y distinguish such legislation from other
types of legislation for purposes of disput e settlement, or that would remove anti-
dumping legislation from the ambit of the generally-accepted practice that a panel
may examine legislation as such.74"
7.47 Thus, in the US – 1916 Act dispute, the Appellate Body found that the European Communities
and Japan were entitled to bring a complaint against legislation they considered to be inconsistent
with the AD Agreement before a panel, even though th at legislation did not amount to a "final action"
or a provisional measure within the meaning of Ar ticle 17.4 of the AD Agreement. In doing so, the
Appellate Body described the relevance of Article 17 .4 as being limited to complaints related to the
conduct of investigating authorities in an anti-dum ping investigation. However, in the present
dispute, Brazil's challenge to the United States' al leged "continued use" of "zeroing" does not pertain
to the conduct of the USDOC in one particular an ti-dumping investigation. Rather, as we more fully
explain below75, Brazil's complaint is focused on the USDO C's alleged "use of zeroing" in multiple
proceedings, under the orange juice anti-dumping duty order, as a single " ongoing conduct" measure.
In our view, an "ongoing conduct" measure is br oader than the type of conduct envisaged under
Article 17.4 of the AD Agreement, and as such, falls outside of its scope of operation.
7.48 In any case, we note that the ev idence Brazil has advanced in support of the existence of the
alleged "continued zeroing" measure includes inst ances where the United States authorities have, in
fact, levied definitive anti-dumping duties. 76 Thus, Brazil does not challenge the alleged "continued
zeroing" measure in the absence of any connection betw een this alleged measure and "final action".
On the contrary, the evidence of United States' "final action" lies at the heart of Brazil's complaint.
7.49 In conclusion, we find that Brazil's panel request is sufficiently precise to satisfy the standards
of Article 6.2 of the DSU in that it reasonably iden tifies "the nature of the measure and the gist of
what is at issue". Furthermore, we also find th at the inclusion of Brazil's claim against the alleged
"continued zeroing" measure in our terms of refere nce is not inconsistent with the requirements of
Article 17.4 of the AD Agreement. We therefore di smiss the United States' request for a preliminary
ruling.

74 Appellate Body Report, United States – Anti-Dumping Act of 1916 ("US – 1916 Act "),
WT/DS136/AB/R, WT/DS162/AB/R, adopted 26 September 2000, DSR 2000:X, 4793, at paras. 73-75 (footnote
omitted).
75 See below, paras. 7.171-7.176.
76 The evidence Brazil has advanced to establish the existence of the alleged "continued zeroing"
measure is set out and evaluated below, at paras. 7.177-7.192.

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B. BRAZIL'S CLAIMS CONCERNING THE ALLEGED USE OF "SIMPLE ZEROING" IN
ADMINISTRATIVE REVIEWS
1. Arguments of Brazil
7.50 Brazil claims that by allegedly calculati ng the margins of dumping, relied upon for the
purpose of establishing the cash-deposit rates ("CDRs"), and the importer-specific assessment rates
("ISARs") for Cutrale and Fischer in the First a nd Second Administrative Reviews through the use of
"simple zeroing", the USDOC acted inconsistently w ith its obligations under Articles 2.4 and 9.3 of
the AD Agreement and Article VI:2 of the GATT 1994.77
(a) Article 9.3 of the AD Agreement and Article VI:2 of the GATT 1994
7.51 Brazil argues that Article 9.3 of the AD Ag reement and Article VI:2 of the GATT 1994
establish an obligation on Members not to impose an anti-dumping duty on any dumped product in an
amount that is greater than the "margin of dumping" determined in respect of that product. Relying
upon the findings of the Appellate Body in a series of disputes involving the USDOC's application of
"simple zeroing" in administrative reviews
78, Brazil submits that a "margin of dumping" can only be
calculated with respect to the product under cons ideration "as a whole", encompassing all export
transactions of the product under consideration; a nd that it cannot be found to exist only for a type,
model or category of that product. Brazil recalls that the Appellate Body has repeatedly found that
Article 2.1 of the AD Agreement and Article VI:1 of the GATT 1994 define "dumping" as a concept
related to the product "as a whole". In addition, Brazil notes that the Appellate Body has previously
indicated that "dumping" and "margin of dumping" relate to the pricing practices of individual
exporters or foreign producers; and that this interp retation is supported by several other provisions of
the AD Agreement, including Articles 2.2, 2.3, 5.8, 6. 10, 8.1, 9.4 and 9.5. Furthermore, Brazil recalls
that the Appellate Body has found that the AD Agreement and the GATT 1994 are not concerned with
dumping per se, but with dumping that causes or threatens to cause material injury to the domestic
industry, a condition that by the terms of Article 3. 1 of the AD Agreement cannot be found to exist in
relation to individual transactions, but only for the product as a whole.79
7.52 Brazil argues that the fact that Article 9.4(ii) of the AD Agreement recognizes that variable
anti-dumping duties may be collected on a transaction- specific basis does not mean that Article 2 of
the AD Agreement authorizes a determination of dumping on the same basis. Brazil emphasizes that
Article 9 of the AD Agreement governs the imposition and collection of duties, noting that these rules
are "distinct and separate" from th e rules governing the determinati on of dumping under Article 2.
Thus, while Article 9 permits collection of vari able anti-dumping duties on a transaction-specific

77 Brazil, FWS, paras. 97 and 1 18; Brazil, Second Written Submission ("SWS"), para. 47; Brazil,
Answers to Panel Questions 2 and 3.
78 In particular, Brazil refers to the following Appellate Body Reports: Appellate Body Report,
United States – Laws, Regulations and Methodology for Calculating Dumping Margins ("Zeroing") (" US –
Zeroing (EC)"), WT/DS294/AB/R, adopted 9 May 2006, and Corr.1, DSR 2006:II, 417; Appellate Body Report,
United States – Measures Relating to Zeroing and Sunset Reviews ("US – Zeroing (Japan)"), WT/DS322/AB/R,
adopted 23 January 2007, DSR 2007:I, 3; Appellate Body Report, United States – Measures Relating to Zeroing
and Sunset Reviews – Recourse to Article 21.5 of the DSU by Japan ("US – Zeroing (Japan) (Article 21.5 –
Japan)"), WT/DS322/AB/RW, adopted 31 August 2009; Appellate Body Report, United States – Final Anti-
Dumping Measures on Stai nless Steel from Mexico (" US – Stainless Steel (Mexico) "), WT/DS344/AB/R,
adopted 20 May 2008; and US – Continued Zeroing.
79 Brazil, FWS, paras. 6, 49-76; Brazil, Firs t Confidential Opening Oral Statement ("FCOOS"),
paras. 12-37.

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basis, Brazil argues that "dumping" must be dete rmined for the "product as a whole" in accordance
with Article 2.80
7.53 In addition, Brazil submits that the possibility that a general prohibition on "zeroing" may
result in "mathematical equivalence" between th e result obtained when calculating a margin of
dumping, for the purpose of Article 2.4.2, through the use of the W-W and W-T methodologies, does
not undermine its legal argument, because "mathe matical equivalence" may arise only "under a
specific set of assumptions" that do not always apply. Furthermore, Brazil argues that the
interpretation of the exceptional comparison methodology in Article 2.4.2 (i.e., "W-T") – and whether
it permits "zeroing" – cannot govern the interpretation of the general rule regarding the definition of
"dumping". In any case, Brazil recalls that the Appellate Body has noted that some Members have
argued that the second sentence of Article 2.4.2 does not permit "zeroing".
81
7.54 Brazil observes that the Appellate Body has repeatedly confirmed that the interpretation of the
concepts of "dumping" and "margin of dumping" that it is advancing in the present dispute is the only
"permissible" interpretation under the terms of Artic le 17.6(ii) of the AD Agreement, noting that the
application of customary rules of treaty interpretation cannot result in a rival transaction-specific
definition of these concepts.82
7.55 Thus, on the basis of essentially the same line of reasoning expounded by the Appellate Body
in previous disputes involving "simple zeroing", Braz il argues that if a Member determines a margin
of dumping for a particular exporter in an admini strative review that exceeds the overall margin of
dumping for that exporter's "product as a whole" because of the systematic exclusion of certain export
transactions, that determination must be inconsis tent with Article 9.3 of the AD Agreement and
Article VI:2 of the GATT 1994. Brazil urges the Pane l to come to the same conclusion, emphasizing
the importance of resolving the same legal questions in the same way in subsequent disputes for the
"security and predictability" and "consistency and stability" of the WTO dispute settlement system.
83
7.56 Brazil argues that the facts show that the USDOC calculated the margins of dumping for
Cutrale and Fischer in the First and Second Administrative Reviews through the use of "simple
zeroing", and that in the absence of "simple zeroing", both respondents would have had no margins of
dumping at all. 84 According to Brazil, the mere use of "simple zeroing" by the USDOC to calculate
these margins, irrespective of any impact they may have had on the amount of anti-dumping duties
actually collected, is inconsistent with Article 9.3 of the AD Agreement and Article VI:2 of the
GATT 1994. In particular, Brazil argues that pursuant to these provisions, a Member must establish a
margin of dumping for the "product as a whole" in accordance with Article 2 of the AD Agreement.
Referring to a statement made by the panel in US – Zeroing (Japan)(Article 21.5 – Japan) , Brazil
submits that a failure to comply with this require ment vitiates a determination made under Article 9.3
of the AD Agreement and Article VI:2 of the GATT 1994, irrespective of the amount of duties that is
ultimately collected.
85
7.57 In any case, Brazil notes that the margins of dumping determined for Cutrale and Fischer did
have an impact on the amount of anti-dumping duti es collected. Brazil notes that the margins of
dumping were in fact relied upon by the USDOC to set the CDR for Cutrale in the Second

80 Brazil, FCOOS, paras. 47-51; Brazil, SWS, para. 5.
81 Brazil, FCOOS, paras. 52-58; Brazil, SWS, para. 5.
82 Brazil, FCOOS, paras. 2-4, 8-11.
84 Brazil, FWS, para. 5; Brazil, FCOOS, paras. 66-75; Brazil, SWS, paras. 19, 35; Brazil, Answer to
Panel Question 2.
85 Brazil, Answer to Panel Question 2; Brazil, SWS, paras. 11-13, citing Panel Report, US – Zeroing
(Japan)(Article 21.5 – Japan), para. 7.162.

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Administrative Review and Fischer in the First Administrative Review. 86 According to Brazil, CDRs
amount to anti-dumping duties and are subject to the disciplines of Article 9.3, as is well established
in WTO case-law.87 Therefore, if the impact of the use of "zeroing" is relevant to establish a violation
of Article 9.3 of the AD Agreement and Article VI:2 of the GATT 1994, the USDOC's reliance upon
margins of dumping calculated using "simple zero ing" for the purpose of the CDRs collected on
imports of the respondents' products in the periods subsequent to the relevant administrative reviews
must be inconsistent with those provisions.88
7.58 Brazil also notes that the facts show that the ISARs determined for Cutrale in the First and
Second Administrative Reviews, and for Fischer in the First Administrative Review, were calculated
through the use of "simple zeroing". 89 Thus, again, if the impact of the use of "zeroing" is relevant to
establish a violation of Article 9.3 of the AD Ag reement and Article VI:2 of the GATT 1994, the
USDOC's use of "simple zeroing" when establishing th e relevant ISARs must be inconsistent with
those provisions.90
7.59 Brazil rejects the United States' view that CDRs do not amount to anti-dumping duties falling
within the scope of Article 9.3 of the AD Agre ement. In its view, CDRs have the essential
characteristics of anti-dumping duties imposed unde r Article 9 of the AD Agreement, and not
reasonable securities within the meaning of the Ad Note to Article VI:2 and VI:3 of the GATT 1994.
Relying on various observations of the Appellate Body in the US – Shrimp/Bond dispute91, Brazil
concludes that a reasonable security is "a respon se to a determination of a risk of non-payment of
future anti-dumping duties that is commensurate with that risk" 92 and that a CDR neither reflects nor
is commensurate with the likely magnitude of the ri sk of non-payment by an importer. Indeed, Brazil
submits that the characteristics of a CDR match those of an anti-dumping duty because: it is imposed
on all imports from exporters found to be engaged in injurious dumping; it is imposed as a specific
response to a dumping determination made in connection with a particular exporter; and it is fixed at
the level of the individual margin of dumping determ ined by the USDOC for the exporter in question,
and cannot exceed that margin. As such, Brazil argues a CDR is an anti-dumping duty.
7.60 That CDRs are anti-dumping duties subject to Article 9 of the AD Agreement is, Brazil
argues, confirmed by the case-law concerning United States' administrative reviews. First, Brazil
recalls that in US – Shrimp/Bond , the Appellate Body, despite holding that it did not have to rule on
the issue, disagreed with the "reasoning" that led th e panel in that case to find CDRs to be securities
within the meaning of the Ad Note, and not an ti-dumping duties subject to Article 9 of the AD
Agreement. Moreover, Brazil submits that the Appe llate Body in the same dispute emphasized that
even under United States' law, the role of cash depos its differs from a security, and that they are fixed
at the level of an exporter's margin of dumping. Second, Brazil argues that the Appellate Body has
found several times that CDRs calculated through "zer oing" are inconsistent with Article 9.3 of the
AD Agreement and Article VI:2 of the GATT 1994.
93

86 Brazil, FWS, paras. 77-96; Brazil, Answer to Panel Question 2.
87 Brazil, FCOOS, para. 35; Brazil, Answer to Panel Question 3.
88 Brazil, Answer to Panel Question 2.
89 Brazil, FWS, paras. 77-96; Brazil, Answer to Panel Question 2.
90 Brazil, FCOOS, para. 72; Brazil, SWS, paras. 20-21; Brazil, Answer to Panel Question 2.
91 In particular, Appellate Body Report, United States – Measures Relating to Shrimp from
Thailand / United States – Customs Bo nd Directive for Merchandise Subject to Anti-Dumping/Countervailing
Duties (" US – Shrimp (Thailand) / US – Customs Bond Directive "), WT/DS343/AB/R, WT/DS345/AB/R,
adopted 1 August 2008, paras. 221, 256, 258-263.
92 Brazil, Answer to Panel Question 3.
93 Brazil, Answer to Panel Question 3, referring to Appellate Body Report, United States – Final Anti-
Dumping Measures on Stai nless Steel from Mexico (" US – Stainless Steel (Mexico) "), WT/DS344/AB/R,
adopted 20 May 2008, paras. 133-134 and 156(a), Appellate Body Report, US – Continued Zeroing, paras. 315-

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7.61 Thus, Brazil argues that the applicability of Article 9.3 of the AD Agreement and Article VI:2
of the GATT 1994 to CDRs is well established and th at security and predictability in the multilateral
trading system dictate that the conclusion reached in disputes involving several other Members should
also apply to Brazil's claims.94
(b) Article 2.4 of the AD Agreement
7.62 Brazil argues that the use of "simple zeroing" to calculate an exporter's margin of dumping in
any stage of an anti-dumping proceeding infringes th e requirement that a "fair comparison shall be
made between export price and norma l value" under Article 2.4 of th e AD Agreement. According to
Brazil, the obligation under Article 2.4 to make a "fair comparison" applies independently of the
amount of anti-dumping duties that are collected by an importing Member. Brazil recalls that the
Appellate Body has on numerous occasions observed that there is "an inherent bias in a zeroing
methodology" and that as a "way of calculating" margins, the "zeroing" methodology "cannot be
described as impartial, even-handed, or unbiased". 95 Moreover, Brazil notes that one panel and the
Appellate Body have previously found that the maintenance and application of "zeroing" in the
context of administrative reviews is inconsis tent with Article 2.4 of the AD Agreement. 96 Brazil asks
the Panel to come to the same conclusion, and in the light of the evidence it asserts shows the USDOC
used "simple zeroing" to calculate the margins of dumping of Cutrale and Fischer in the First and
Second Administrative Reviews, find that the United States acted inconsistently with Article 2.4 of
the AD Agreement.
97
2. Arguments of the United States
7.63 The United States rejects Brazil's claims, argui ng that they are grounded on an interpretation
of Articles 2.4 and 9.3 of the AD Agreement and Ar ticle VI:2 of the GATT 1994 that finds no textual
basis in the language of these provisions. Moreover, even accepting Brazil's legal arguments, the
United States submits that Brazil's claims are at least in part factually flawed.
(a) Article 9.3 of the AD Agreement and Article VI:2 of the GATT 1994
7.64 The United States submits that, in US – Softwood Lumber V , the Appellate Body concluded
that "zeroing" is prohibited in the context of wei ghted-average to weighted -average comparisons in
investigations by interpreting the terms "mar gins of dumping" and "all comparable export

316 and 395(d), Appellate Body Report, United States – Laws, Regulations and Methodology for Calculating
Dumping Margins ("Zeroing") – Recourse to Article 21.5 of the DSU by the European Communities ("US –
Zeroing (EC) (Article 21.5 – EC) "), WT/DS294/AB/RW and Corr.1, adopted 11 June 2009, para. 304, and
Appellate Body Report, United States – Measures Relating to Zeroing and Sunset Reviews – Recourse to
Article 21.5 of the DSU by Japan (" US – Zeroing (Japan) (Article 21.5 – Japan) "), WT/DS322/AB/RW,
adopted 31 August 2009, para. 156.
94 Brazil, Answer to Panel Question 3.
95 Brazil, FCOOS, para. 68 and Brazil, SWS, paras. 16-17, quoting Appellate Body Report,
United States – Sunset Review of Anti-Dumping Duties on Corrosion-Resistant Carbon Steel Flat Products from
Japan (" US – Corrosion-Resistant Steel Sunset Review "), WT/DS244/AB/R, adopted 9 January 2004,
DSR 2004:I, 3, para. 135, and Appellate Body Report, US – Zeroing (Japan), para. 146, quoting Appellate Body
Report, United States – Final Dumping Determination on Softwood Lumber from Canada – Recourse to
Article 21.5 of the DSU by Canada ("US – Softwood Lumber V
 (Article 21.5 – Canada) "), WT/DS264/AB/RW,
96 Brazil, SWS, para. 17, referring to Panel Report, United States – Measures Relating to Zeroing and
Sunset Reviews – Recourse to Article 21.5 of the DSU by Japan ("US – Zeroing (Japan) (Article 21.5 –
Japan)"), WT/DS322/RW, adopted 31 August 2009, as upheld by Appellate Body Report WT/DS3227AB/RW,
paras. 7.168 and 8.1(b); Appellate Body Report, US – Zeroing (Japan)(Article 21.5 – Japan) , para. 195, 197
and 213(c); and Appellate Body Report, US – Zeroing (Japan), paras. 169, 176, 190(d) and 190(e).

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transactions" as they are used in Article 2.4.2 in an integrated manner. The United States argues that
a general prohibition on "zeroing" can not be reconciled with this interp retation.. In this regard, the
United States recalls that the language of Article 2.4.2 of the AD Agreement explicitly requires that
"all comparable export transactions" be taken into account when establishing the margin of dumping
through W-W comparisons. The United States notes that this language canno t be found elsewhere in
the AD Agreement. Were there a general prohibiti on on "zeroing" applying in all proceedings and all
comparison methodologies, the United States submits that the "all comparable export transactions"
language in Article 2.4.2 would be redundant. Thus, according to the United States, the fact that no
such language is found elsewhere in the AD Agreemen t suggests that there is no general prohibition
on "zeroing" beyond W-W comparisons in original investigations.
98
7.65 The United States argues that there is no textual basis in Articles 2.1 and 9.3 of the
AD Agreement or Article VI:2 of the GATT 1994 to conclude that the definition of the terms
"dumping" and "margin of dumping" must be excl usively understood to mean that dumping and
margins of dumping can only exist for the product "as a whole" through the aggregation of
comparison results of all transactions. The Unite d States submits that the "product is always
'introduced into the commerce of another country' through individual transactions, and thus 'dumping',
as defined in Article 2.1 of the AD Agreement, is most certainly transaction-specific". The
United States observes that this "definition descr ibes the real-world commercial conduct by which a
product is imported into a country, i.e., transaction by transaction".
99
7.66 The United States draws support for its interpretation of the concept of "dumping" from the
1960 Report of the Group of Experts, which it asserts indicated that the "ideal method" for applying
anti-dumping duties "was to make a determination of both dumping and material injury in respect of
each single importation of the product concerned". The United States considers that the view
expressed by the Group of Experts reflects the rules as they stood under Article VI of the GATT 1947,
which was incorporated into the GATT 1994 without an y change or revision. The United States finds
this transposition significant arguing that the " normal inference one draws from the absence of a
change in language is that the drafters inte nded no change in meaning". Furthermore, the
United States submits that if the negotiators inte nded to make "such a fundamental change" to the
meaning of "margin of dumping", they would have done so clearly, and "it would not have come as a
surprise to the major users of anti-dumping remedies, such as the EU and the United States, after the
fact through dispute settlement".
100
7.67 The United States rejects the view that the definition of dumping in Article 2.1 of the
AD Agreement can only be read to mean that dum ping can exist exclusively with respect to the
"product as a whole". The United States notes that the expression "product as a whole" does not
appear anywhere in the AD Agreement, and that th e Appellate Body has not cited any actual text that
would support a finding that a margin of dumping must occur at the level of multiple transactions, nor
any text that would preclude the calculation of dum ping from occurring at a transaction-specific level.
Moreover, for the United States, the notion of "produ ct as a whole" denies that the ordinary meaning
of the word "product" used in Article 2.1 adm its of a meaning that is transaction-specific.
101
According to the United States, the words "pr oduct" and "products" in Article 2.1 of the
AD Agreement and Article VI of the GATT 1994 cannot be interpreted in such an exclusive manner

98 US, FWS, paras. 53-59; US, First Confidential Opening Oral Statement ("FCOOS"), paras. 23-25.
99 US, FWS, paras. 61-68; US, FCOOS, para . 29; US, Second Written Submission ("SWS"),
paras. 23-27.
100 US, FWS, paras. 69-72, citing Second Report of the Group of Experts, L/1141, adopted on
27 May 1960, BISD 9S/194, para. 7.
101 US, FWS, paras. 73-81.

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so as to deprive them of one of their ordinary meanings. The United States comes to a similar
conclusion with respect to the term "margin of dumping".102
7.68 The United States submits that a general prohib ition on the use of "zeroing" outside of the
limited circumstances of W-W comparison methodology in original investigations under Article 2.4.2
would render the third methodology (W-T) redundant because of "mathematical equivalence". The
United States rejects the Appellate Body's explana tion of how "mathematical equivalence" might be
avoided, arguing that by suggesting that the comparison take place in respect of a subset of export
transactions, the Appellate Body proposes a methodol ogy that would itself be inconsistent with its
view that the margin of dumping can only be establis hed for the "product as a whole". In this regard,
the United States recalls that a treaty "interpreter is not free to adopt a reading that would result in
reducing whole clauses or paragraphs of a treaty to redundancy or inutility".103
7.69 The United States recalls that prospective normal value systems, which are explicitly
provided for in Article 9.4(ii) of the AD Agreement, assess anti-dumping duties through a comparison
of the import price of a given transaction with the prospective normal value, without considering the
prices paid for other import transactions. Accord ing to the United States, if the liability for the
payment of anti-dumping duties can be determined on a transaction-specific basis in prospective
normal value systems, there is no reason why the same cannot be the case in retrospective duty
assessment systems. Moreover, the United States submits that requiring, as the Appellate Body has
ruled, that any margin of dumping determined for the purpose of Article 9.3 assessment be calculated
on the basis of aggregating all comparison results of all transactions would turn prospective normal
value systems of duty assessment into retrospectiv e systems. The United States also notes that
Articles 9.3, 9.3.1, and 9.3.2 are silent as to the period of review for any such assessment proceeding,
and submits that the negotiators of the Antidum ping Agreement would not have provided explicitly
for a prospective normal value system and at th e same time require th at such systems conduct
retrospective assessment proceedings that aggr egate all the transactions occurring over some
unspecified period of time.
104
7.70 Thus, the United States urges the Panel to make its own objective assessment of the matter, as
it is required to do under Article 11 of the DSU, a nd refrain from adopting the interpretations of the
AD Agreement advanced by Brazil and developed by the Appellate Body in previous disputes
involving "simple zeroing". Instead, the United Stat es asks the Panel to find, consistent with the
objective assessment made by previous panels, that the United States' approach rests on a permissible
interpretation of the AD Agreement within the meani ng of Article 17.6(ii) of the AD Agreement. In
this regard, the United States argues, inter alia , that the very inclusion of the special standard of
review contained in Article 17.6(ii) confirms that th e text of the AD Agreement may be susceptible to
more than one interpretation. To find that it is not possible to arrive at c onflicting interpretations of
the text would, according to the United States, me an depriving the second sentence of Article 17.6(ii)
of meaning.105
7.71 In any event, the United States emphasizes th at the obligation in Article 9.3 of the
AD Agreement is about ensuring that the " amount of the anti-dumping duty shall not exceed the
margin of dumping as established under Article 2". According to the United States, this means that
even if "simple zeroing" were used in an administ rative review, it cannot result in any violation of the

102 US, FWS, paras. 82-84; US, FCOOS, paras. 26-28.
103 US, FWS, paras. 93-98, citing Appellate Body Report, United States – Standards for Reformulated
and Conventional Gasoline ("US – Gasoline"), WT/DS2/AB/R, adopted 20 May 1996, DSR 1996:I, 3, para. 23;
US, FCOOS, para. 34; US, SWS, paras. 74-79.
104 US, FWS, paras. 109-115; US, FCOOS, para. 31; US, Answer to Panel Question 12; US, SWS,
paras. 58-69; US, SCOOS, paras. 21-23.
105 US, FWS, paras. 5, 23-33; US, FCOOS, paras. 3-7; US, Answer to Panel Questions 8 and 9.

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obligation contained in this provision if no anti-dumping duties were in fact collected. 106 The
United States notes that this is precisely the situ ation with respect to Fischer in the Second
Administrative Review, whose ISAR was [[XX]]. Thus, the United States argues that Brazil has
failed to substantiate its claims with respect of Fischer in the Second Administrative Review.
7.72 Similarly, the United States observes that a lthough Cutrale was assessed as having dumped at
a rate of 0.45% in the First Administrative Re view, no CDR was applied because under United States
law, a rate of less than 0.5% is de minimis. Thus, the United States argues that regardless of whether
"simple zeroing" was applied to determine the CDR for Cutrale in the First Administrative Review, a
de minimis margin of dumping cannot exceed any "ceiling" provided for in the covered agreements.
To this extent, the United States submits that the treatment of Cutrale in the First Administrative
Review was not inconsistent with Article 9.3 and Article VI of the GATT 1994, even by Brazil's own
interpretation of the obligations contained in those provisions.
107
7.73 The United States also argues that Brazil errs in characterising CDRs as anti-dumping duties
that are subject to the disciplines of Article 9. 3 of the AD Agreement and Article VI:2 of the
GATT 1994. In its view, CDRs are a security for the payment of anti-dumping duties and are
governed by the AD Note to paragraphs 2 and 3 of the GATT 1994. 108 The United States recalls that
the Ad Note allows a Member to "require a reasonable security (bond or cash deposit) for the payment
of anti-dumping or countervailing duty pending final determinati on of the facts in any case of
suspected dumping or subsidization". According to the United States, the "determination of the facts"
identified in the Ad Note refers to the "determination of final liability for payment of anti-dumping
duties" described in Article 9.3.1 of the AD Agreem ent. Moreover, the United States explains that a
CDR is only an estimate of future anti-dumping duties, based on past dumping, that serves as a
security pending determination of final liability to pay anti-dumping duties. The United States
disagrees with Brazil's characterization of the Appellate Body findings in US – Stainless Steel
(Mexico) and US – Continued Zeroing, submitting that they did not reflect a conclusion that CDRs are
anti-dumping duties, but rather a conclusion that the application of "zeroing" in administrative
reviews was inconsistent with Article 9.3 of the AD Agreement because it "results in the levy of an
amount of anti-dumping duty that exceeds an exporter's margin of dumping". 109 Similarly, the
United States argues that the other Reports mentioned by Brazil do not stand for the proposition that
CDRs amount to anti-dumping duties.
110
(b) Article 2.4 of the AD Agreement
7.74 The United States submits that Brazil's interpre tation of the obligation in Article 2.4 to
conduct a "fair comparison" has no textual basis in the language of this provision and is
misconceived. In its view, the text of Article 2.4 makes clear that it only addresses the adjustments
that must be made to export price and normal value in order to account for "differences which affect
price comparability" and render a "fair comparison". Thus, the United States argues that Article 2.4
does not create an obligation with respect to how the results of such comparisons are treated.
According to the United States, its interpretation of Article 2.4 is supported by previous panel and
Appellate Body Reports as well as the negotiating history of the AD Agreement. Moreover, given the
highly subjective nature of the term "fair", the Unite d States argues that its meaning in the context of
Article 2.4 must have a principled basis, and not the open-ended and subjective meaning advanced by
Brazil. Thus, the United States urges the Panel to reject Brazil's expansive interpretation of

106 US, SWS, para. 80.
108 US, FWS, footnote 8; US, Answer to Panel Question 5.
109 US, Answer to Panel Question 5, referring to Appellate Body Report, US – Stainless Steel (Mexico),
110 US, Answer to Panel Question 5.

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Article 2.4, which, in its view, would lead to a flood of anti-dumping disputes that are virtually
impossible to resolve in any credible manner.111
3. Arguments of the Third Parties
(a) Argentina
7.75 Argentina does not address the merits of Brazil's specific claims, but rather the consistency of
"zeroing", in general, under the AD Agreement. Recalling the Appellate Body's findings in EC – Bed
Linen, Argentina argues that zeroing is inconsistent w ith Article 2.4.2, regardless of the methodology
used.112 In addition, according to Argentina, the " zeroing" methodology, by not producing a result
that takes into account all the variables to be take n into consideration when determining a margin of
dumping, ultimately results in the levying of anti- dumping duties in excess of the margin of dumping,
and is consequently inconsistent with Articles 9.3 of the AD Agreement and VI:2 of the GATT 1994.
However, Argentina emphasizes that the imposition a nd collection of duties cannot be confused with
the calculation of the margin of dumping, which the implementing authority is required to make prior
to the imposition phase.113
(b) European Union
7.76 The European Union submits that the United States' view that the prohibition on zeroing
found in Article 2.4.2 of the AD Agreement is limite d to W-W comparisons in the context of original
investigations should be rejected in its entirety. According to the European Union, when the language
of this provision is correctly interpreted, fo llowing the rules of interpretation of the Vienna
Convention, there can be no result other than a finding that Article 2.4.2 prohibits "zeroing" in all
forms except targeted dumping
114, and in all types of anti-dumping proceedings.115
7.77 Drawing on essentially the same line of reasoni ng developed in prev ious Appellate Body
reports, the European Union argues that the "margi n of dumping" referred to in Article 9.3 of the
AD Agreement must be interprete d and understood in the context of the definition of "dumping"
contained in Article 2.1 of the AD Agreement and Article VI:1 of the GATT 1994 – i.e., that dumping
can only be found in relation to the "product as a whol e", as defined by the investigating authority.
According to the European Union, "dumping" cannot be found to exist for only a type, model or
category of a product, including a "category" in one or more low priced export transactions. Thus, the
European Union submits that whatever method is u sed to calculate the margin of dumping, that
margin must be and can only be established for th e "product as a whole", subject to targeted dumping
provisions.116
7.78 The European Union asserts that it is uncontest ed that the USDOC's use of "zeroing" in
administrative reviews "systematically and inevitabl y inflates the dumping margin and the amount of
duty, compared with a computation without zeroing". Thus, it submits that the use of "zeroing" in the
administrative reviews at issue constitute a "direct violation of Article 9.3".
117 The European Union
argues that the possibility for Members to use pr ospective normal value systems of duty collection
offers no support to the United States' interpretation of the obligations in Article 9.3. In particular, the
European Union is of the view that such prosp ective systems of duty assessment will always remain
subject to Article 9.3.2, which calls for duty ref unds to be made on request. In other words, the

111 US, SWS, paras. 4-22; US, Second Confidential Opening Oral Statement ("SCOOS"), paras. 26-28.
112 Argentina, Third Party Written Submission ("TPWS"), paras. 8-18.
113 Argentina, TPWS, paras. 21-22.
114 EU, TPWS, paras. 23-24, 163, 165 and 175.
115 EU, TPWS, paras. 22-159.
116 EU, TPWS, paras. 160-163.
117 EU, TPWS, para. 169.

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margin of dumping that should be used to assess th e final duty liability must be determined on the
basis of all export transactions, even those w ith a value above the prospective normal value. 118
Similarly, the European Union rejects the Unite d States' reliance on "mathematical equivalence",
arguing that there are ways of using the targeted dumping methodology without "zeroing"; and that in
any case, permitting "zeroing" in circumstances where the third methodology applies might be
acceptable, given that it is an exception to the rule.119
(c) Japan
7.79 Japan submits that the legal principles govern ing the WTO-inconsistency of the "zeroing"
procedures at issue in this dispute have been thoroughly canvassed by the Appellate Body in past
WTO disputes, and are now well established. Japan recalls that the Appellate Body has, on numerous
occasions, determined that Article 2.1 of the AD Agreement and Article VI:1 of the GATT 1994,
when properly interpreted according to the Vienna Convention, define " dumping" on an exporter-
specific basis for the "product as a whole". Japan notes that this definition applies throughout the
AD Agreement, and is therefore relevant to all anti-dumping proceedings involving the determination
of a margin of dumping, including duty assessment under Article 9.3 of the AD Agreement. Japan
argues that the consequences of the USDOC's use of "zeroing" in the administrative reviews at issue
in the present dispute are the same as those addressed in previous controversies. Japan asserts that by
excluding all negative comparison results, the US DOC makes a "dumping" determination that
disregards an entire category of the export tran sactions making up the "pro duct" – namely, those
transactions that generate the negative comparison results. Thus, Japan submits that the USDOC does
not determine "dumping" for the "product" as defined by the investigating authority, but for a sub-part
of that product. In conclusion, Japan argues that by applying "zeroing" in the measures at issue, the
USDOC failed to comply with the definition of " dumping". Japan therefore urges the Panel to find
that the United States acted inconsistently with Ar ticle 9.3 of the AD Agreement and Article VI:2 of
the GATT 1994.120
(d) Korea
7.80 Korea recalls that in repeatedly ruling th at the USDOC's practice of "zeroing" in
administrative reviews is inconsistent with Artic le 9.3 of the AD Agreement and GATT Article VI:2,
the Appellate Body has explicitly rejected the Un ited States' arguments that "dumping" and "margin
of dumping" can be found to exist at the level of individual transactions. Korea notes that the
Appellate Body has found contextual support for this view in other provisions of the AD Agreement,
such as Articles 5.8, 6.10 and 9.5 as well as the c oncept of injurious dumping. Korea submits that,
like the Appellate Body, it too is unable to find "a textual or contextual basis in the GATT 1994 or the
Anti-Dumping Agreement for treating transactions that occur above normal value as 'dumped', for
purposes of determining the existence and magnitude of dumping in the original investigation, and as
'non-dumped', for purposes of assessing the final liability for payment of anti-dumping duties in a
period review".
121
7.81 Thus, Korea urges the Panel to follow the Appe llate Body's reasoning in previous cases, and
find that Brazil has established that the United Stat es has acted inconsistently with its obligations
under the AD Agreement and the GATT 1994.122

118 EU, TPWS, paras. 171-174.
119 EU, TPWS, paras. 175-176.
120 Japan, TPWS, paras. 4-12, 24-53, 57-69 and 72.
121 Korea, TPWS, paras. 21-23, referring to and quoting Appellate Body Report, US – Continued
Zeroing (EC), paras. 285 and 287.
122 Korea, TPWS, paras. 23-24.

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(e) Mexico
7.82 Mexico asserts that Brazil's claims against the United States' "zeroing" methodology are
substantially the same as those brought against the United States in previous disputes. Mexico notes
that the WTO-inconsistency of this methodology ha s now been firmly established with the Appellate
Body rulings in US – Zeroing (EC) , US – Zeroing (Japan) , US – Stainless Steel and US – Continued
Zeroing. According to Mexico, in responding to Brazi l's claims, the United States has raised no new
substantive arguments in defence of "zeroing" that have not already been fully addressed in these
cases. Mexico urges the Panel follow the Appellate Body on this matter and find that Brazil has fully
made out its claims. Mexico considers that the Pa nel should do this not only because the prior rulings
are correct, but also because there are strong system ic reasons to adhere to the Appellate Body's
consistent body of case-law. In this regard, Mexico recalls the point made by the Appellate Body in
US – Oil Country Tubular Goods Sunset Reviews, where it stated that "following the Appellate Body's
conclusions in earlier disputes is not only appropria te, but is what would be expected from panels,
especially where the issues are the same". 123 Thus, as the United States is, in Mexico's view, unable
to identify any new substantive arguments not alrea dy rejected in previous WTO disputes, and as the
substance of all of Brazil's legal claims have been considered and a ffirmed in a long line of consistent
prior Appellate Body reports, Mexico asks the Pa nel to adopt the reasoning from those prior rulings
and find "(yet again)" that the United States' "zeroing" methodology is inconsistent with the
AD Agreement and the GATT 1994.124
4. Evaluation by the Panel
(a) Relevant Facts
(i) Administrative Reviews under United States' Law
7.83 The United States operates a retrospective system of duty assessment whereby liability for the
payment of anti-dumping duties attaches at the time of entry, yet the final amount of such liability is
not actually determined at that moment. Instead, at the time of entry, the United States collects what
it characterizes as a "security" in the form of a c ash deposit, which represents an estimate of an
importer's final amount of anti-dumping duty liability. Once a year (during the anniversary month of
the anti-dumping duty orders) interested parties may request an administrative review to determine the
final amount of duties that is actually owed on each entry made during the period of review.
125 Thus,
an administrative review serves two purposes. First, it establishes an overall dumping margin for each
exporter, which becomes the new cash deposit rate (" CDR") for entries made after the publication of
the review determination, and c ontinues to apply until the completion of the next administrative
review. Second, it establishes the final amount of anti-dumping duty that must be paid by each
respective importer on imports that occurred during the relevant period of review – the importer-
specific assessment rate ("ISAR"). If the ISAR results in an amount of duties that is less than the total
amount of cash deposits that were paid by the im porter on importation, the difference is refunded,
with interest. Conversely, if the ISAR results in an amount of duties that is greater than the total
amount of the cash deposits, the importer is requested to pay the difference, plus interest. If the ISAR
results in an amount of duties that is equal to the cash deposits, the importer is notified of assessment

123 Appellate Body Report, United States – Sunset Reviews of Anti-Dumping Measures on Oil Country
Tubular Goods from Argentina ("US – Oil Country Tubular Goods Sunset Reviews"), WT/DS268/AB/R, adopted
17 December 2004, DSR 2004:VII, 3257, para. 188.
124 Mexico, TPWS, paras. 1-10.
125 The period of review covered by United States duty assessment proceedings is normally twelve
months. However, in the case of the first assessmen t proceeding following the orig inal investigation imposing
the anti-dumping duty order, the period of time may extend to a period of up to 18 months in order to cover all
entries that may have been subject to provisional measures.

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at that rate. If no review is requested, the duty is assessed at the estimated rate, and the cash deposits
made on the entries during the previous year are retained to pay the final duties.
(ii) Measures at Issue
7.84 The measures at issue under this part of Brazil's complaint relate to the anti-dumping duty
order issued by the United States on 9 March 2006 covering exports of certain orange juice from
Brazil.126 In particular, Brazil challenges the final resu lts for two respondents, Cutrale and Fischer, in
the First and Second Administrative Reviews, which we re respectively published in the United States
Federal Register on 11 August 2008 and 11 Augus t 2009. The weighted average dumping margins
("WAM"), the cash-deposit rates ("CDR") and the importer-specific assessment rates ("ISAR")
determined for Cutrale and Fischer in the two administrative reviews are shown in the following table:
 WAM127 CDR127 ISAR128
First Administrative Review
Cutrale 0.45% 0% [[XX]]
Fischer 4.81% 4.81% [[XX and XX]]
Second Administrative Review
Cutrale 2.17% 2.17% [[XX]]
Fischer 0% 0% [[XX]]

7.85 In each of the challenged administrative reviews, the USDOC used a computer programme to
process the export price and normal value data of each exporter in order to calculate individual
WAMs. In essence, this calculation followed three steps: First, the price of each individual export
transaction was compared to a weighted-average normal value for a contemporaneous month; second,
the results of these comparisons were aggregated; and third, the aggregated comparison results were
divided by the total value of all export transactions , and the resulting fraction expressed in percentage
terms. When undertaking the second step (aggreg ation), the programme included language that
instructed the computer to disregard or count as zer o any comparison results that were negative (i.e.,
where weighted-average normal value was lower than the relevant individual export price). In other
words, the computer programme called for negative comparison results to be disregarded or given a
zero value in the process of their aggregation fo r the purpose of establishing the numerator of the
fraction representing the margin of dumping. It is this treatment of negative weighted-average normal
value and individual export price comparison results that Brazil describes as "simple zeroing".
7.86 In addition to the support found in certain p assages of the Issues and Decision Memoranda
from the First and Second Administrative Reviews
129, the computer programme log and output

126 Anti-Dumping Duty Order: Certain Orange Juice from Brazil, 9 March 2006, 71 Fed. Reg. 12183
("Anti-Dumping Duty Order"). Exhibit BRA-3.
127 As published in the Final Results of the First Administrative Review, Exhibit BRA-21, and the Final
Results of the Second Administrative Review, Exhibit BRA-22.
128 Figures drawn from Exhibits BRA-34 (BCI) and BRA-37 (Cutrale's computer programme outputs),
penultimate page; and BRA-35 (BCI) and BRA-39 (Fischer's computer programme outputs), penultimate page.
129 We note that the United States asserts that the Issues and Decision Memorandum from the First
Administrative Review submitted by Brazil does not demonstrate that the USDOC applied "simple zeroing" in
that administrative review. In particular, the United States does not accept that it demonstrates that "Fischer's or
Cutrale's sales presented [USDOC] with instances of non- dumped sales such that any denial of an offset for a
non-dumped sale actually occurred" (US Answer to Panel Question 10). However, in our view, various
statements made in this Issues and Decision Memorandum strongly suggest that the "simple zeroing" instruction
was in fact used. For instance, "In the preliminary results, we followed our standard methodology of not using

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evidence advanced by Brazil demonstrates that the "simple zeroing" instruction was in fact executed
in the WAM calculations performed for each of the two respondents. 130 Moreover, we note that the
WAMs for Fischer in the First Administrativ e Review (4.81%) and Cutrale in the Second
Administrative Review (2.17%) were relied upon to se t equivalent CDRs. In the First Administrative
Review, the WAM for Cutrale of 0.45% was deemed to be de minimis under United States law, and
therefore a 0% CDR was applied. 131 Although the WAM (and consequently the CDR) published in
the Final Results of the Second Administrative Review for Fischer were 0% 132, the computer
programme evidence submitted by Brazil shows that the calculation run by the USDOC resulted in a
WAM of [[XX]]. 133 Thus, it appears that a WAM of 0%, a nd an equivalent CDR, were imposed on
Fischer in the Second Administrative Review because of the WAM of [[XX]] determined through the
application of the USDOC's computer programme. We note that the United States does not argue that
a WAM and CDR of 0% were imposed on Fischer for any other reason.
7.87 To determine the ISARs applicable to entr ies of the respective exporter's products, the
computer programme applied by the USDOC fo llowed the same methodology described in
paragraph 7.85 but, for a given importer, it incl uded only those transactions imported by that
importer in the calculation. In other words, the computer programme sorted and
aggregated transactions where the export price w as below normal value on an importer-specific basis,
thereby applying "simple zeroing". 134 Accordingly, ISARs of [[XX]] and [[XX]] were calculated for
Cutrale in, respectively, the First and Second Admi nistrative Reviews; and for Fischer, ISARs of
[[XX]] and [[XX]] were determined in the First Administrative Review. 135 Although a [[XX]] ISAR
was applied to Fischer's imports in the Second Administrative Review, the evidence demonstrates that

non-dumped comparisons to offset or reduce the dumping found on other comparisons (commonly known as
'zeroing'). ... We have not changed our calculation of the weighted-average margin of dumping margin as
suggested by the respondents in these final results". Exhibit BRA-28, pp. 3 and 5. Similar language can be
found in the Issues and Decision Memorandum from the Second Administrative Review, Exhibit BRA-43, pp. 3
and 6.
130 Regarding Cutrale in the First Administrative Review, see Exhibits BRA-29 (BCI) (Computer
programme log); BRA-28 (Issues and Decision Memorandum), pp. 3-6; BRA-34 (BCI) (Computer programme
output); and BRA-31 (BCI) (Ferrier Affidavit). Regarding Fischer in the First Administrative Review, see
Exhibits BRA-45 (BCI) (Computer programme log); BRA-28 (Issues and Decision Memorandum), pp. 3-6;
BRA-35 (BCI) (Computer programme output); and BRA-31 (BCI) (Ferrier Affidavit). Regarding Cutrale in
the Second Administrative Review, see Exhibits BRA-36 (BCI) (Computer programme log); BRA-43 (Issues
and Decision Memorandum), pp. 3-6; BRA-37 (BCI) (Computer programme output); and BRA-31 (BCI)
(Ferrier Affidavit). Regarding Fischer in the Second Administrative Review, see Exhibits BRA-38 (BCI)
(Computer programme log); BRA-43 (Issues and Decision Memorandum), pp. 3-6; BRA-39 (BCI) (Computer
programme output); and BRA-31 (BCI) (Ferrier Affidavit). Although the United States initially challenged the
authenticity of one piece of evidence Brazil relied upon for the purpose of demons trating that the WAM of
Fischer in the First Administrative Review was calculated through the use of "simple zeroing" (Exhibit BRA-30
(BCI) (Computer programme log)), Br azil subsequently introduced a repl acement exhibit, th e authenticity of
which the United States has not challenged. See, US, FWS, para. 122; US, FCOOS, para. 36. Exhibit BRA-45
(BCI). See also the summary of information on the use of "zeroing", submitted as Exhibit BRA-48.
131 Exhibit BRA-21.
132 Exhibit BRA-22.
133 Exhibit BRA-39 (BCI), last page, right-hand column, "Wt avg percent margin".
134 Regarding Cutrale in the First Administrative Review, see Exhibits BRA-29 (BCI) (Computer
programme log); and BRA-31 (BCI) (Ferrier Affidavit). Regarding Fischer in the First Administrative Review,
see Exhibits BRA-45 (BCI) (Computer programme log); and BRA-31 (BCI) (Ferrier Affidavit). Regarding
Cutrale in the Second Administrative Review, see Exhibits BRA-36 (BCI) (Computer programme log);
and BRA-31 (BCI) (Ferrier Affidavit). Regarding Fischer in the Second Administrative Review, see
Exhibits BRA-38 (BCI) (Computer programme log); and BRA-31 (BCI) (Ferrier Affidavit). See also the
summary of infromation on the use of "zeroing", submitted as Exhibit BRA-48.
135 See above, footnote 127.

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the computer programme used by the USDOC to calculate Fischer's ISAR applied "simple
zeroing".136
(b) Introduction
7.88 As the parties recognize 137, Brazil's complaint against the United States' alleged use of
"simple zeroing" in the relevant administrative revi ews is, first and foremost, premised on the view
that "dumping" is defined, as a general matter, in the AD Agreement and the GATT 1994 in relation
to the "product as a whole". Thus, the fundamental qu estion that lies at the heart of Brazil's claims is
the following: how does the AD Agreement define the notion of "dumping"? Is Brazil correct in
submitting that "dumping" is a concept that relate s to an exporter's overall pricing behaviour that
Members are only entitled to measure with respec t to the "product as a whole"? Or does the
AD Agreement, as the United States argues, permit bo th this and a transaction-specific conception of
"dumping"?
(c) The definition of "dumping"
7.89 We start our assessment of the parties' arguments by reviewing Article VI:1 of the
GATT 1994 and Article 2.1 of the AD Agreement, which respectively read:
Article VI:1 of the GATT 1994
"The contracting parties recognize that dumping, by which products of one
country are introduced into the commerce of another country at less than the
normal value of the products, is to be conde mned if it causes or threatens material
injury to an established industry in the terr itory of a contracting party or materially
retards the establishment of a domestic indus try. For the purposes of this Article, a
product is to be considered as being intr oduced into the commerce of an importing
country at less than its normal value, if the price of the product exported from one
country to another
(a) is less than the comparable price, in the ordinary course of trade, for
the like product when destined for consumption in the exporting
country, or,
 ( b) in the absence of such domestic price, is less than either
(i) the highest comparable price for the like product for export to
any third country in the ordinary course of trade, or
(ii) the cost of production of the product in the country of origin
plus a reasonable addition for selling cost and profit.
Due allowance shall be made in each case for differences in conditions and terms of
sale, for differences in taxation, and for other differences affecting price
comparability.*"

136 In particular, the computer pr ogramme evidence reveals that the numerator in the calculation of
Fischer's ISAR in the Second Administrative Review in cluded only the total amount by which export price of
individual transactions was below normal value. These accounted for [[XX]] out of a total of [[XX]]
transactions. See Exhibits BRA-38 (BCI), p.76; and BRA-31 (BCI) (Ferrier Affidavit), paras. 53-56. We note
that the ISAR determined on this basis ([[XX]]) was cons idered to be [[XX]]. Exhibit BRA-39 (BCI), p. 105.
See also the summary of information on the use of "zeroing", submitted as Exhibit BRA-48.
137 Brazil, FCOOS, para. 6; US, FWS, paras. 60-61.

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Article 2.1 of the AD Agreement
"For the purpose of this Agreement, a produc t is to be considered as being dumped,
i.e. introduced into the commerce of anothe r country 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 ordinary course of trade, for the like product when destined
for consumption in the exporting country."
7.90 Both Article VI:1 of the GATT 1994 and Ar ticle 2.1 of the AD Agreement describe
"dumping" in the same terms, namely, as occurri ng whenever a product is "introduced into the
commerce of another country at less than its norma l value" or, more specifically, when the export
"price of the product exported from one country to anot her is less than the comparable price, in the
ordinary course of trade, for the like product wh en destined for consumption in the exporting
country". There is no disagreement between the parties that this description, as it appears in
Article 2.1, defines "dumping" for the purpose of the entire AD Agreement. Moreover, although both
parties consider the ordinary meaning of the text of these provisions to support their own
interpretations of the notion of "dumping", they do not argue that the text alone resolves the question
whether "dumping" may be measured on the basis of individual transactions or whether it must
necessarily always be determined through aggregatio n of all transactions relating to the "product as a
whole".
138 Previous panels and the Appellate Body have generally come to the same conclusion, and
have looked beyond the language of Article 2.1 in order to decipher the meaning of "dumping".
When it comes to the issue of "zeroing", the inco nclusive nature of the definition of "dumping"
contained in Article 2.1 was perhaps most clearly articulated in US – Continued Zeroing , where the
Appellate Body declared that:
"Mere scrutiny of the particular terms – such as product and export price – in
Article 2.1 does not resolve the issue of wh ether the concept of dumping is concerned
with individual transactions or whethe r it is necessarily an aggregative concept
attributable to an exporter".139
Similarly, the Concurring Opinion in the same Appellate Body report observed:

"... Nothing could be more important than the definition of the concept of 'dumping'.
It is foundational and applies throughout the Agreement, as the clear wording of
Article 2.1 makes plain. It cannot have va riable or contradictory meanings, for that
would infect the entire Agreement. Yet the definition is cast at a high level of
generality. The definition makes no attribution of agency; it does not say who
introduces a product into the commerce of another country. Article 2.1 might so
easily have included the words 'by an exporter', but it does not. So too, the definition
might have referred to the product as a whole, and not simply a product. The
definition is inchoate, and thus it must be interpreted."
140
7.91 In our view, the language of Article 2.1 of the AD Agreement and Article VI:1 of the
GATT 1994 is drafted in such general terms that render both provisions potentially capable of
capturing either of the two conceptions of "dumpi ng" advanced by the parties. We are mindful,
however, that this conclusion is only the starting poi nt of our analysis, as pursuant to the customary
rules of interpretation of public international law reflected in the Vienna Convention, we must test and

138 See, for instance, Brazil, FWS, paras. 49-60; and US, FWS, paras. 63-68.
139 Appellate Body Report, US – Continued Zeroing , para. 282. See further, e.g., Panel Report, US –
Zeroing (Japan), paras. 7.103-7.112; Panel Report, US – Stainless Steel (Mexico), para. 7.119.
140 Appellate Body Report, US – Continued Zeroing, para. 300.

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explore our understanding of the relevant text in the light of its context and the object and purpose of
the AD Agreement.
(i) Articles 3, 5.8, 6.10, 8.1, 9.1, 9.3 and 9.5 of the AD Agreement
7.92 Drawing from various findings of the Appellate Body in prior disputes 141, Brazil argues that
Articles 3, 5.8, 6.10, 8.1, 9.1, 9.3 and 9.5 of the AD Agreement all support the position that
"dumping" must be understood in terms of the pric ing behaviour of individua l exporters or foreign
producers determined through the calculation of a single margin of dumping with respect to the
"product as a whole". 142 In particular, Brazil highlights, inter alia, that pursuant to Article 5.8, there
shall be "immediate termination" of an anti-dum ping investigation against an exporter where the
margin of dumping determined for that exporter is de minimis, recalling that the Appellate Body has
said that the term "margin of dumping" in this provision "refers to a single margin established for each
exporter by aggregation of its export transactions". 143 Similarly, Brazil points to: (i) Article 6.10,
which it emphasizes requires that investigating authorities "shall, as a rule, determine an individual
margin of dumping for each known exporter or producer concerned of the product under
investigation"144: (ii) Articles 6.10.2 and 9.5, which acco rding to Brazil, contain similar language 145;
(iii) Article 8.1, which Brazil submits provides th at price undertakings must not be greater than
necessary "to eliminate the margin of dumping"146; and (iv) Articles 9.1 and 9.3, which Brazil notes
stipulate that duties imposed and collected must be no greater than "the margin of dumping".147 Brazil
also asserts that the injurious effects of "dumped imports" are assessed under Article 3, not on a
transaction-by-transaction basis, but rather by exam ining the effects of all imports of the exporter
engaged in dumping. Brazil argues that a uniform interpretation of the term "dumping" ensures that
transactions treated as "dumped" for purposes of a dumping determination are also treated as
"dumped" for the purpose of injury, and vice versa.
148
7.93 Brazil adds that there is both a consistency an d logic to the text of the AD Agreement.
According to Brazil, Article 6.10 expressly requires that a single margin of dumping be determined
for each exporter of the product. In Brazil's view, the singularity of that determination has a series of
important legal consequences that affect the produc t as a whole: under Article 5.8, the decision to
terminate an investigation is based on a single dumping determination made for all transactions
relating to the "product"; under Article 3, on the ba sis of a product-wide dumping determination, all
entries of the "product" are treated as dumped fo r the purposes of an injury determination; under
Articles 8 and 9, the extent of permissible remedial action to counter injurious "dumping" is fixed by

141 Including, 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 ("EC – Bed Linen (Article 21.5 –
India )"), WT/DS141/AB/RW, adopted 24 April 2003, DSR 2003:III, 965, para. 115; Appellate Body Report,
US – Softwood Lumber V , footnote 158; Appellate Body Report, United States – Final Dumping Determination
on Softwood Lumber from Canada – Recourse to Article 21.5 of the DSU by Canada ("US – Softwood Lumber V
(Article 21.5 – Canada) "), WT/DS264/AB/RW, adopted 1 September 2006, DSR 2006:XII, 5087, para. 108;
Appellate Body Report, US – Zeroing (Japan) , para. 126; Appellate Body Report, US – Stainless Steel
(Mexico), paras. 86-87, 99, 108; and Appellate Body Report, US – Continued Zeroing, paras. 268, 283.
142 Brazil, FWS, paras. 54-56; Brazil, FCOOS, paras. 20-28.
143 Brazil, FWS, para. 55; Brazil, FCOOS, para. 20, referring to Appellate Body Report, US –
Continued Zeroing, para. 283.
145 Brazil, FCOOS, para. 21.

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reference to a single margin of dumping, and that remedy applies to all future imports of the
"product".149
7.94 The United States considers that Brazil's contextu al arguments in support of its legal case are
misplaced. Although agreeing with Brazil that the ma rgin of dumping referred to in Article 5.8 of the
AD Agreement may refer to an aggregation of multip le transactions, the United States considers that
its relevance is limited to original investigati ons conducted under Article 5 of the AD Agreement,
where an investigating authority must determ ine whether dumping exists above a 2 per cent de
minimis threshold, and whether such dumping causes in jury to the domestic industry. The United
States argues that, in contrast, duty assessment under Article 9.3 of the AD Agreement is about the
collection of duty, not the determination of the ex istence of dumping and injury. Thus, according to
the United States, the differences between an Ar ticle 5 original inves tigation and duty assessment
under Article 9.3 undermine Brazil's reliance on Article 5.8.150
7.95 The United States submits that the term "individual" appearing in Article 6.10 does not, as
Brazil argues, refer to a "single" margin of du mping calculated on the basis of the "product as a
whole". Rather, the United States argues that this term must be read as meaning that any calculated
margin must correspond to the individual exporter. The United States finds support for this view in
the Spanish text, which it notes provides that the investigating authority determine a margin of
dumping "que corresponda a cada exportador", i. e., "that corresponds to each exporter". The
United States explains that a margin may co rrespond to an exporter while being based on one
transaction – as long as that transaction is the exporter' s. According to the United States, Article 6.10
has nothing to do with how many transactions form th e basis for any such margin, a fact it argues has
been recognized by previous panels.151
7.96 The United States also argues that Brazil's interpretation of Articles 6.10, 8.1, 9.1, 9.3 and 9.5,
overstates the importance of the term "margin of dumping" in the singular. 152 According to the
United States, Brazil has itself admitted that "the use of the singular is not decisive".153 Thus, drawing
on previous panel and Appellate Body findings, the United States submits that a term that is used in
the AD Agreement in the singular form may have "both singular and plural meanings". 154 In addition,
the United States counters Brazil's reliance on how in jury is determined under Article 3 by recalling
that no injury determination is required in Artic le 9.3 assessment proceedings. The United States
explains that Article 9 focuses on the amount of duty to be assessed on particular entries, an exercise
that is separate and apart from the calculation of an overall dumping margin and determination of
injury or threat of material injury during the original anti-dumping investigation.155
7.97 We agree with the parties that Article 5.8 makes it necessary to determine a "single" overall
margin of dumping for an investigated producer or exporter in order to ensure compliance with the de
minimis dumping rule it prescribes. However, it is equally apparent to us that Article 5.8 says nothing
about how any such single margin of dumping must be calculated – i.e., whether it should involve an

149 Brazil, FCOOS, para. 26.
150 US, SWS, paras. 30-37.
151 US, SWS, paras. 38-42, referring to inter alia Panel Report, US – Zeroing (Japan) , para. 7.111;
Panel Report, US – Stainless Steel (Mexico) , para. 7.127; and Panel Report, US - Continued Zeroing ,
para. 7.163.
152 US, SWS, para. 43.
154 US, SWS, para. 43, referring to Panel Report, United States – Anti Dumping Measures on Oil
Country Tubular Good s (OCTG) from Mexico , WT/DS282/R, adopted 28 November 2005, as modified by
Appellate Body Report WT/DS282/AB/R, para. 7.149; and Appellate Body Report, United States –Anti
Dumping Measures on Oil Country Tubular Goods (OCTG) from Mexico, WT/DS282/AB/R, adopted
28 November 2005, para. 147.
155 US, FWS, paras. 87-92.

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aggregation of the results of all normal value and export price comparisons or only those where
normal value exceeds export price. We note that the question that must be answered when examining
the WTO-consistency of "zeroing" is not simply whether there must be aggregation of multiple
normal value and export price comparison results, but also whether any such aggregation must always
necessarily take account of all those comparison results. 156 In our view, the fact that Article 5.8
envisages the calculation of a "single" overall margin of dumping clarifies little about how that margin
of dumping is supposed to be calculated.157
7.98 Similarly, the fact that all imports are treated as "dumped" for the purpose of determining
injury in an original investigation under Article 3 might also be understood to provide support for the
view that "dumping" concerns the "product as a whole". 158 In this regard, Brazil recalls that the
Appellate Body has highli ghted "the contradiction that arises wh en the same type of transactions are
treated as 'dumped' for purposes of injury determ ination in the original investigation and as 'non-
dumped' in periodic reviews for duty assessment". 159 Brazil argues that such contradictions have no
place in a "harmonious and coherent" interpretation of the AD Agreement. 160 However, as we see it,
contradiction and incoherence aris es only if the qualitative differences in the rules governing original
investigations (where authorities must perform an injury analysis) and duty assessment proceedings
(where the focus is purely on duty collection) are not considered sufficient to justify the possibility of
two conceptions of the notion of "dumping" co-e xisting in the AD Agreement. Obviously, the
Appellate Body believes the differences are not so great.161
7.99 We find the language that Brazil has pointed to in the remainder of the above-mentioned
provisions relatively weak and consider that it provides no particularly useful guidance for the
purpose of determining which of the two con ceptions of "dumping" is favoured under the
AD Agreement. Again, it is difficult to see what ob ligations which refer to "the" margin of dumping
or "an individual" margin of dumping can tell us about the definition of "dumping" when they do not
speak at all to how "the" margin of dumping or any "individual" margin of dumping must be
calculated – should it be through an aggregation of the results of all normal value and export price
comparisons or only those where normal value exceeds export price?
162
(ii) "Dumping" is an exporter-specific, not importer-specific, concept
7.100 Brazil recalls that the Appellate Body has found th at "dumping" is determined with respect to
an individual exporter, and not on an importer-specific basis. Relying upon the position articulated by
the Appellate Body in US – Stainless Steel (Mexico), Brazil submits that the elements of the definition
of "dumping" – namely, that "dumping" occurs when a product is " introduced into the commerce of
another country" at an "export price" that is less than the "comparable price for the like product in the
exporting country " – indicate that Article VI:1 of the GATT 1994 and Article 2.1 of the

156 See above, para. 7.90.
157 A similar view was expressed in the Concurring Opinion of one Appellate Body Member in
Appellate Body Report, US – Continued Zeroing, paras. 309-310.
158 We note that there is no disagreement between the parties that a margin of dumping determined
through the use of the first methodology described in Article 2.4.2 of the AD Agreement must be established on
the basis of a comparison of weighted average normal value with a weighted average of prices of all comparable
export transactions. See, e.g., Brazil, FWS, para. 114; US, FWS, para. 54.
159 Appellate Body Report, US – Stainless Steel (Mexico), para. 108.
160 Brazil, FCOOS, para. 23.
161 See, e.g, Appellate Body Report, US – Continued Zeroing, paras. 284-285.
162 A similar view was expressed with respect to Ar ticles 6.10 and 9.5 of the AD Agreement in the
Concurring Opinion of one Appellate Body Member in Appellate Body Report, US – Continued Zeroing ,
paras. 309-310.

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AD Agreement address the pricing practices of an exporter. 163 Brazil also refers to Articles 2.2, 2.3,
5.8, 6.10, 8.1, 9.4 and 9.5 of the AD Agreement, drawing support for its position from the language in
these provisions which identifies or focuses upon the " export price", the " exporter", the " volume of
exports", the " exporting country ", "any known exporter ", " any exporter ", " exporters or foreign
producers" and the " selected exporters or producers ".164 In addition, Brazil cites another series of
Appellate Body statements where it is observed that:
"[d]umping arises from the pricing practices of exporters as both normal value and
export prices reflect their pricing strategies in home and foreign markets".165
"Indeed, it is the exporter, not the importer that engages in practices that result in
situations of dumping".166
"The fact that 'dumping' and 'margin of dumping' are exporter-specific concepts under
the Anti-Dumping Agreement is not altered by the fact that the export price may be
the result of negotiation between the importer and the exporter. Nor is it altered by
the fact that it is the importer that incurs the liability to pay anti-dumping duties".
167
7.101 The United States submits that "dumping" may be both exporter-specific and transaction-
specific at the same time. Accord ing to the United States, an exporter orientation does not, of itself,
require that transactions be aggregated under Ar ticle 9.3 of the AD Agreement because a dumping
margin determination on the basis of an exporter's actions with respect to an individual transaction is
no less exporter-specific than one on the basis of mu ltiple transactions by that exporter. Moreover,
the United States argues that a transaction-specific meaning is equally exporter-specific and importer-
specific since each transaction has both an exporter and an importer.168
7.102 We agree with Brazil and the Appellate Body that "dumping" is a concept that relates to an
individual exporter's pricing behaviour. Howeve r, in our view, this tells us little about how to make a
determination of "dumping", and in particular, whether the focus of such a determination should be an
individual exporter's overall pricing behaviour in resp ect of the "product as a whole", or an exporter's
pricing behaviour considered on a transaction-specific basis. As the United States has submitted, the
question at issue in this dispute is not whether "d umping" is an exporter-specific or importer-specific
concept, but rather to what extent individual transact ions of a particular exporter must be aggregated
when making a determination of "dumping". 169 Brazil's arguments concerning the exporter-specific
nature of "dumping" elucidate very little in this regard.
(iii) Article VII:3 and the Ad Note to Article VI:1 of the GATT 1994, and Articles 2.2 and 2.3 of
the AD Agreement
7.103 The United States submits that the term "product" used throughout the AD Agreement and the
GATT 1994 carries with it a variable meaning, implying that it cannot be presumed that the same
term has the exclusive meaning Brazil argues in th e context of Article 2.1 of the AD Agreement and
Article VI:1 of the GATT. For instance, the United States points to Article 2.6 of the AD Agreement,

163 Brazil, FWS, para. 53, referring to Appellate Body Report, US – Stainless Steel (Mexico) , para. 86
(emphasis original).
164 B r a z i l , F W S , p a r a s . 5 4 - 5 6 , r eferring to Appellate Body Report, US – Stainless Steel (Mexico) ,
paras. 86-87 (emphasis original).
165 Brazil, FWS, para. 57, c iting Appellate Body Report, US – Stainless Steel (Mexico) , para. 95 and
Appellate Body Report, US – Zeroing (Japan), para. 156.
166 Brazil, FWS, para. 57, citing Appellate Body Report, US – Zeroing (EC), para. 129.
167 Brazil, FWS, para. 57, citing Appellate Body Report, US – Stainless Steel (Mexico), para. 95.
168 US, FWS, paras. 85-86.
169 US, FWS, para. 85.

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which defines the term "like product" in relation to "the product under consideration". According to
the United States, this provision plainly uses the term "product" in the collective sense. The
United States notes that, by contrast, Article VII: 3 of the GATT 1994 – which refers to "[t]he value
for customs purposes of any imported product" – plai nly uses the term "product" in the individual
sense of the object of a particular transaction ( i.e., a sale involving a specific quantity of merchandise
that matches the criteria for the "product" at a particular price).170
7.104 In addition, the United States argues that the term "margin of dumping" found in the Ad Note
to Article VI:1 of the GATT 1994 and Article 2.2 of the AD Agreement does not refer exclusively to
the aggregated results of comparisons for the "pr oduct as a whole". As used in the Ad Note to
Article VI:1, the United States submits that the term "margin of dumping" cannot relate to aggregated
results of all comparisons for the "product as a w hole" because an exporter or foreign producer may
make export transactions using multiple importers. Similarly, according to the United States, were
Brazil correct, the term "margin of dumping" as it ap pears in Article 2.2 of the AD Agreement, would
require the use of constructed normal value for the "product as a whole", even if the condition
precedent for using constructed normal value under Article 2.2 relates only to a portion of the
comparisons. In this regard, the United States recalls that the panel in US – Softwood Lumber V
(Article 21.5 – Canada) observed that this "would run counter to the principle that constructed normal
value is an alternative to be used only in the limited circumstances provided for in Article 2.2. ... We
are not convinced that the Appella te Body could have intended its US – Softwood Lumber V findings
to be applied in this manner".
171
7.105 Brazil argues that the United States' reliance on Article VII:3 of the GATT 1994
misunderstands the role of context in treaty interpreta tion. According to Brazil, the fact that the same
word appears in two (or more) proximate treaty provisions does not mean that the word carries the
same meaning in each provision. Thus, Brazil subm its that a single word used in two provisions may
have different meanings in each provision, depending on the context. In its particular context, the
word "product" appearing in Article VII:3 has a mean ing that is relevant to what is regulated under
that provision – customs valuation, which is nece ssarily undertaken on a transaction-specific basis.
This is an entirely different context to Article VI:1 , which is about dumping. Therefore, Brazil is of
the view that the United States is wrong to assume th at the same word, "product", must be given the
same meaning in Article VI:1 and Article VII:3 of the GATT 1994.172
7.106 Brazil also disputes the United States' interpretation of the Ad Note to Article VI:1, arguing
that it does not provide a definition of either "dumping" or "margins of dumping", nor does it state
implicitly or otherwise that "margins" may be tran saction-specific. Brazil argues that like Article 2.3
of the AD Agreement, the Ad Note to Article VI:1 simply permits an authority to use an importer's
resale price to an independent buyer as the star ting-point for determining the export price in
circumstances where the importer is related to the expor ter. In its view, neither Article 2.3 nor the Ad
Note to Article VI:1 alters the requirement that an individual marg in of dumping be determined for
each exporter on the basis of all relevant export transactions.173
7.107 Finally, Brazil rejects the United States' re liance on Article 2.2 of the AD Agreement,
recalling that the Appellate Body has pr eviously rejected the same argument. 174 In particular, Brazil
notes that the Appellate Body has held that an authority may sub-divide the product in conducting

170 US, FWS, para. 79.
171 US, FWS, para. 83, referring to Panel Report, US – Softwood Lumber V (Article 21.5 – Canada) ,
para. 5.62.
172 Brazil, FCOOS, paras. 39-43.
173 Brazil, FCOOS, paras. 44-45.
174 Brazil, FCOOS, para. 46, referring to Appellate Body Report, US – Softwood Lumber V
(Article 21.5 – Canada), para. 104.

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intermediate comparisons on a model-specific basis, and on this basis assess whether the conditions in
Article 2.2 for construction of normal value are me t. Brazil emphasizes that the results of all
intermediate comparisons must be aggregated to determine "dumping" on a product-wide basis to
meet the definition in Article 2.1.
7.108 We agree with the United States that the transa ction-specific meaning of the word "product"
when used in Article VII:3 of the GATT 1994 tends to support the view that it cannot be presumed
that the same word, when it appears in Article 2. 1 of the AD Agreement and Article VI:1 of the
GATT 1994, must necessarily refer to the "product as a whole", with all the consequences that follow
for the definition of "dumping". However, we not e that Brazil's arguments are based on more than
just the ordinary meaning of the word "product", but also the particular context in which it is found in
both the AD Agreement and the GATT 1994. In other words, Brazil does not presume that the word
"product" in abstract has the meaning it argues. Ra ther, Brazil submits that this meaning is confirmed
from how the notion of "dumping" is described in other provisions it considers form part of the
relevant context of Article 2.1 of the AD Agreem ent and Article VI:1 of the GATT 1994. Thus, in
our view, the fact that the word "product" in Artic le VII:3 has a transaction-specific meaning does not
detract from Brazil's complaint. It does, however , suggest that the drafters of the GATT understood
that the meaning of the word "product" could have a transaction-specific meaning in the particular
context of customs valuation, which in turn also suggests that it cannot be categorically excluded that
the negotiators may have held the same view a bout the meaning of "product" when it appears in
Article 2.1 of the AD Agreement and Article VI:1 of the GATT 1994. As we have said before, the
ordinary meaning of the word "product" as it app ears in Article 2.1 of the AD Agreement does not
resolve which of the two definitions of "dumping" must prevail.
7.109 The United States argues that the Ad Note to Article VI:1 of the GATT 1994 expressly
defines a particular form of dumping – "hidden dum ping" – in relation to individual transactions and
that the text of that provision contemplates that a "margin of dumping" may be calculated for a
specific sale by an importer, implying that "dumping" cannot be exclusively defined with respect to
the "product as a whole". It is not entirely clear to us that this is the correct reading of the Ad Note.
In our view, the plain language of the Ad Note mi ght equally be interpreted as merely identifying one
particular situation ("Hidden dumping by associated houses") in which investigating authorities are
entitled to construct export price on the basis of an importer's resale price. In any case, because the
Ad Note is silent about how any comparison results involving normal value and one or more
constructed export prices must be aggregated, it doe s not provide any useful guidance on the question
whether "dumping" relates exclus ively to the "product as a whole" or whether it can also be
transaction-specific. The same can be said about Ar ticle 2.2 of the AD Agreement. As Brazil notes,
it is possible to sub-divide a product when multiple averaging, and explore whether the conditions in
Article 2.2 for constructed normal value are satisfi ed for each averaging group. However, again,
because Article 2.2 (like Article 2.3) says nothing about how comparisons involving constructed
normal value must be aggregated, this provision is, in our view, inconclusive about how to interpret
the notion of "dumping".
(iv) Duty collection on the basis of a prospective normal value
7.110 The United States argues that the existence of prospective normal value systems of duty
collection demonstrates that the notion of "dumping" cannot be exclusively understood to relate to the
"product as a whole".
175 Drawing on descriptions found in previous panel reports 176, as well as

175 US, FWS, paras. 109-115; US, SWS, paras. 59-69.
176 For example, Panel Report, US – Zeroing (Japan) , para. 7.201; and US – Softwood Lumber V
(Article 21.5 – Canada), para. 5.53.

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information concerning how Canada administers its own prospective normal value system 177, the
United States explains that under such systems, the amount of liability for payment of anti-dumping
duties is determined at the time of importation on th e basis of a comparison between the price of the
individual export transaction and the prospective normal value. Thus , according to the United States,
duties will be payable only when the price of an imported product is belo w the prospective normal
value, with the prices of all other transactions playing no part in this determination. The United States
recalls that the transaction-specific nature of pr ospective normal value systems has led previous
panels to find that a transaction-specific conception of "dumping" must also be permissible under the
AD Agreement. For instance, the United States points to the following observation of the panel in
US – Zeroing (Japan):
"the fact that express provision is made in the AD Agreement for this sort of system
confirms that the concept of dumping can apply on a transaction-specific basis to
prices of individual export transactions below the normal value and that the
AD Agreement does not require that in calculating margins of dumping the same
significance be accorded to export prices a bove the normal value as to export prices
below the normal value".
178
7.111 Brazil responds to the United States' submissi ons by recalling that the Appellate Body has
considered and rejected the same arguments in previous "zeroing" disputes. 179 In particular, Brazil
notes that the Appellate Body has explained "that the duty collected at the time of importation under a
prospective normal value system does not represent th e margin of dumping", and that the rules in the
AD Agreement regarding duty "imposition and collec tion" are "distinct and separate" from those
governing a determination of "dumping".
180 Moreover, Brazil observes that the Appellate Body has
also explained that the amount of duties collected in a prospective normal value system is subject to
review under Article 9.3.2 of the AD Agreement to ensure that the total amount of duties does not
exceed the margin of dumping for the "product as a whole".181
7.112 Previous panels have generally disagreed with the view that duty collection in a prospective
normal value system is subject to refund proceed ings involving the calculation of a margin of
dumping for the "product as a whole" under Article 9. 3.2 of the AD Agreement, on the ground that it
would be inconsistent with the fundamental natu re of how such systems are intended to function. 182
The United States submits that accepting the Appella te Body's position would effectively transform
the prospective normal value system into a retrospective system of duty collection. 183 We recognize
that the functioning of prospective normal value systems of duty collection, as described by the
United States and previous panels, would be fundame ntally altered if subjected to the possibility of
duty refunds involving the calculation of a margin of dumping on the basis of the "product as a
whole". An approach that would permit transacti on-specific determinations of a margin of dumping
for the purpose of collecting anti-dumping duties, yet require "product as a whole" determinations
when deciding whether there was over-collection, in our view, seems to be incongruent and not in
keeping with how prospective normal value systems ha ve traditionally operated. In this regard, we

177 US, Answer to Panel Question 13; and US, SWS, paras. 63-65, referring to Report on the Special
Import Measures Act, House of Commons Canada, December 1996, submitted by the United States as
Exhibit US-2; and Canada's WTO Trade Policy Review, WT/TPR/S/112, para. 68 and Table III.5.
178 Panel Report, US – Zeroing (Japan) , para. 7.205. The United State refers to a similar statement
made by the panel in Panel Report, US – Zeroing (EC), para. 7.206.
179 Brazil, SCOOS, paras. 14-16.
180 Brazil, FCOOS, paras. 47-48, referring to Appellate Body Report, US – Zeroing (Japan), para. 160;
Appellate Body Report, US – Continued Zeroing, para. 294; and Brazil, SWS, para. 5.
181 Brazil, FCOOS, para. 49; and Brazil, Answer to Panel Question 12.
182 See for instance, Panel Report, US – Zeroing (Japan) , para. 7.204; Panel Report, US – Stainless
Steel (Mexico), para. 7.133.

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note that the United States asserts that Canada, a WTO Member that applies a prospective normal
value system, grants refund ("re-determination") requests that are "usually transaction-specific". 184
Moreover, although the Canadian system envisag es that, under certain conditions, importers may
request a refund with respect to multiple transactions ("blanket request procedure") 185, this possibility
is limited to transactions concerning "shipments of goods to the same importer".186
7.113 Brazil and a number of third parties that typically collect anti-dumping duties on a
prospective basis, but with varying levels of experience in their collection on the basis of a
prospective normal value, have stated that they would provide refunds of excessive duties collected
through application of a prospective normal value on the basis of a margin of dumping determined for
the "product as a whole". 187 However, neither Brazil nor any of the relevant third parties have
explained how any such refunds w ould be determined. Thus, we do not know, for instance, what
would be the length of the period of review cove red by any such "product as a whole" assessment or
whether any refund would be based on a calculation i nvolving exports to all importers or only those
requesting a refund. Indeed, neither Brazil nor any of the relevant third parties have identified any
instance in which refunds for duties collected on the basis of a prospective normal value have actually
been requested and/or granted. In this regard, we note that the United States has questioned whether
Brazil's system in fact operates as Brazil asserts , pointing to instances involving the collection of
duties on the basis of a prospective normal value on products from seven WTO Members, where the
United States asserts Brazil's Official Gazette stated that the anti-dumping duty would be calculated
on a transaction-specific basis.
188
7.114 In considering the United States' arguments in respect of prospective normal value systems,
we cannot, however, overlook the absence from the AD Agreement of any complete description of
how prospective normal value systems are intended to operate. Apart from Article 9.4(ii) of the
AD Agreement – a provision explaining how anti-du mping duties may be collected from exporters or
producers not included in a limited examination pe rformed under Article 6.10 – the AD Agreement is
silent about how such systems must be implemente d. In the absence of any more detailed provisions
explaining how prospective normal value systems are generally supposed to function, it is difficult to
come to any firm conclusion about which of the two views should prevail.

184 US, Answer to Panel Question 13, footnote 11 citing Exhibit US-6, Canada Border Services
Agency; Procedures for making a request for a Re-Determination or an Appeal under the Special Import
Measures Act: Memorandum D14-1-3 (1 October 2008) (the "SIMA Memorandum"), paras. 19, 34-44.
185 The SIMA Memorandum stipulates that "A blanket request is a procedure through which an
importer may request re-determinations on more than one transaction under specific conditions provided that
both the public and the CBSA receive administrative benefits". A "blanket request" may be refused where inter
alia it "may result in administrative difficulties or processing delays". Exhibit US-6, paras. 50 and 53(b).
186 SIMA Memorandum, para. 53(d). Exhibit US-6.
187 Brazil, Answer to Panel Question 13. See also EU, Answer to Panel Question 2 to the Third Parties;
and Mexico, Answer to Panel Question 2 to the Third Parties.
188 US, SCOOS, paras. 13-19 and Ministry of Development, Industry and Foreign Trade, Office of the
Secretary of Foreign Trade, Circular No. 12 of 7 March 2008 , (imports of polyvinylchloride from the
United States and Mexico) Exhibit US-9, para. 3 ("The anti-dumping duty is calculated on the basis of the
absolute difference between the refere nce price and the price at which the transaction by which the product is
imported from the USA or Mexico is executed, as the case may be. The anti-dumping duty will be charged only
in a case in which the price of the imported product is lower than the proposed reference price.") See also
Exhibits US-10 to US-12, containing other determinations with substantially similar language. Brazil submits
that the United States' assertions are f actually wrong. In its vi ew, the measures at issue laid down a cap on the
amount of duties that could be levied on each import entry, providing that this amount could not exceed the
relevant margins of dumping previously established by the Brazilian investigating authority. Thus, according to
Brazil, its investigating authority did not treat the amount of duties imposed in relation to a single entry as a
margin of dumping, and instead, capped the amount of duties at the level of a margin of dumping previously
estalished. Brazil, Comments on US Requests for Interim Review, paras. 19-22.

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(v) Article 2.4.2 and "mathematical equivalence"
7.115 The United States submits that the prohibiti on on "model zeroing" found by the Appellate
Body to exist in US – Softwood Lumber V under Article 2.4.2 of the AD Agreement was based on the
textual references to "margins of dumping" and "a ll comparable export transactions" appearing in the
first sentence of this provision, which the Appellate Body stated ha d to be read in an "integrated
manner". According to the United States, it was th ese textual references, and not any independent
obligation found elsewhere in the AD Agreement, th at led the Appellate Body to conclude that
"product" must mean "product as a whole" and th at "margins of dumping" may not be based on
individual averaging group comparisons. The Un ited States notes that no similar language appears
elsewhere in the AD Agreement, in its view s uggesting that the "product as a whole" notion of
"dumping" cannot extend, as a general matter, beyond the particular context of W-W comparisons in
original investigations. Indeed, the United Stat es submits that if, as Brazil argues, there were a
general prohibition on "zeroing" applying to a ll anti-dumping proceedings and all comparison
methodologies, the meaning ascribed to "all comparab le export transactions" by the Appellate Body
in US – Softwood Lumber V, would be redundant.189
7.116 The United States also argues that any in terpretation of the AD Agreement and the
GATT 1994 that gives rise to a general prohibition of "zeroing" – i.e., that establishes that "dumping"
can only be defined with respect to the "produc t as a whole" – would render the second sentence of
Article 2.4.2 redundant. In particular, the Unite d States submits that the exceptional comparison
methodology provided for in this sentence (the W- T methodology) would yield precisely the same
result as a W-W comparison if, in both cases, "dum ping" was determined for the "product as a
whole". According to the United States, such an outcome would contradict a key rule of treaty
interpretation, namely, that an "interpretation must give meaning and effect to all the terms of a
treaty".190 The United States recalls that previous panels have found th is argument persuasive191, and
urges the Panel in this dispute to do likewise.192
7.117 Brazil does not appear to have directly responded to the United States' arguments concerning
the implications of a general prohibition on "zeroing" in the light of the Appellate Body's findings in
US – Softwood Lumber V and Article 2.4.2 of the AD Agreement. However, it has repeatedly
emphasized that the Appellate Body has consistently found that Artic le 2.1 of the AD Agreement and
Article VI:1 of the GATT 1994, when considered in the context of various other provisions and in the
light of the object and purpose of the AD Agreement, establish a definition of "dumping" applicable
to the entire AD Agreement that is focused on the "product as a whole". As regards the United States'
"mathematical equivalence" argument, Brazil recalls that the Appellate Body has found there to be
"considerable uncertainty as to how precisely the third methodology should be applied", noting that
different approaches to its application could gene rate results that would not be mathematically
equivalent. In addition, Brazil argues that the exceptional authority conferred under the second
sentence of Article 2.4.2 cannot dictate how the general (non-exceptional) rules for calculating
margins of dumping are to be interpreted.
193
7.118 The United States is correct in recalling that an "integrated" reading of the terms "margins of
dumping" and "all comparable export transactions" was central to the Appellate Body's "model

189 US, FWS, paras. 54-59; US, FCOOS, paras. 23-25.
190 US, FWS, para. 94, referring to Appellate Body Report, US – Reformulated Gasoline, p. 23.
191 The United States refers to: Panel Report, US – Zeroing (EC) , para. 7.266; Panel Report, US –
Softwood Lumber V (Article 21.5 – Canada), para. 5.52; Panel Report, US – Zeroing (Japan), para. 7.127; and
Panel Report, US – Stainless Steel (Mexico), para. 7.134.
192 US, FWS, paras. 93-98; US, FCOOS, para. 34; US, Answer to Panel Question 14.
193 Brazil, FCOOS, paras. 52-58; Brazil, Answer to Panel Question 14; Brazil, SWS, para. 5; Brazil,
SCOOS, paras. 32-36.

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zeroing" findings in US – Softwood Lumber V . However, there was no disagreement between the
parties in that dispute about how the term "all comp arable export transactions" should be interpreted.
That is, all participants agreed that "all comparab le export transactions" had to be taken into account
in establishing margins of dumping. The parties' dispute was with respect to how the results of
multiple comparisons should be interpreted and ag gregated. The Appellate Body described this
disagreement as flowing from the respective views on the meaning of "dumping" and "margins of
dumping".194 To resolve this difference of opinion, the Appellate Body turned to the definition of
"dumping" found in Article 2.1 of the AD Agre ement and Article VI:1 of the GATT 1994. The
Appellate Body then explained:
"It is clear from the texts of these provisions that dumping is defined in relation to a
product as a whole as defined by the investigating authority. Moreover, we note that
the opening phrase of Article 2.1—'[f]or the purpose of this Agreement'—indicates
that the definition of 'dumping' as contained in Article 2.1 applies to the entire
Agreement, which includes, of course, Artic le 2.4.2. 'Dumping', within the meaning
of the Anti-Dumping Agreement, can therefore be found to exist only for the product
under investigation as a whole, and cannot be found to exist only for a type, model, or
category of that product."
195
Thus, it appears to us that the same notion of "dumping" that Brazil advances in the present
controversy was also at the heart of the Appe llate Body's finding concerning "model zeroing" in US –
Softwood Lumber V.

7.119 In its answer to Panel Question 14, the United St ates explained in detail how it considered the
third (W-T) methodology described in Article 2.4.2 operates, demonstrating how "mathematical
equivalence" would result if "zeroing" was genera lly prohibited. Brazil, on the other hand, has
pointed to various descriptions found in previous panel and Appellate B ody reports of how other
Members give effect to, or potentially give effect to, the W-T methodology set out in Article 2.4.2
without yielding "mathematical equivalence". It is apparent that Members have different views on
how the W-T methodology in Article 2.4.2 should be implemented, and whether it will result in
"mathematical equivalence". This is not surp rising as when it comes to understanding the modalities
for how it should be applied, the text of Article 2.4.2 provides little guidance for those seeking a
detailed explanation of what may or may not be pe rmissible. Were the approach advocated by the
United States correct, a general prohibition on "zeroing" (i.e., a definition of "dumping" in relation to
the "product as a whole") applicab le to the entire AD Agreement w ould render the text describing the
W-T methodology in Article 2.4.2 redundant. Obviously, such a result would be inconsistent with the
principle of effective treaty interpretation. This would imply that no such general prohibition could
exist, unless, as Brazil, two of the third parties
196 and the Appellate Body contend, the W-T
methodology can be characterized as an "exception" to the otherwise generally applicable definition
of "dumping". However, it could be argued that this point of view also has its weaknesses. First, the
word "exception" does not appear in Article 2.4.2. Arguably, the fact that the first sentence of
Article 2.4.2 directs Members to "normally" establis h margins of dumping through the use of the W-
W and T-T methodologies does not render the W-T methodology described in the following sentence
an "exceptional" methodology, but rather one whose application is not expected to be the "norm". 197
Second, the fact that the definition of dumping c ontained in Article 2.1 of the AD Agreement is

194 Appellate Body Report, US – Softwood Lumber V, para. 90.
195 Appellate Body Report, US – Softwood Lumber V, para. 93.
196 EU, TPWS, para. 175; and Japan, Answer to Panel Question 3 to the Third Parties.
197 In our view, there may well be situations where a particular product or market is affected by
"targeted" dumping to such an extent that an investig ating authority will resort to the W-T methodology more
often than the W-W or T-T methodologies. In such circumstances, the W-T methodology could effectively
become the "norm" with respect to that particular product or market.

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intended to apply "[f]or the purpose of this Agreem ent" could be viewed as suggesting that it is not
subject to any "exception". Thus, on the issue of "mathematical equivalence", we find neither of the
positions advanced by the parties' to be conclusive.
(vi) Historical background
7.120 The United States considers that the Second Report of the Group of Expert Report on anti-
dumping and countervailing duties, adopted in May 1960, supports the view that the notion of
"dumping" may be defined on a transaction-specific b asis. The United States explains that the Group
of Experts considered that the "ideal method" for applying anti-dumping duties "was to make a
determination of both dumping and material injury in respect of each single importation of the product
concerned".
198 The United States recalls that previous panels have found this evidence persuasive,
with the panel in US – Zeroing (Japan) observing that it "shows that historically the concept of
dumping has been understood to be applicable at the level of individual export transactions" 199; and
the panel in US – Softwood Lumber V (Article 21.5 – Canada) concluding that it demonstrates that
"the Group of Experts did not consider that there was anything in the definition of dumping set forth
in Article VI of the GATT that would preclud e the calculation of such transaction-specific
margins".200
7.121 In addition, the United States notes that two GATT 1947 panels asked to determine whether
"zeroing" was prohibited under the provision of the Tokyo Round Anti-Dumping Code concluded that
it was not, further reinforcing the validity of the Gr oup of Experts' understandi ng of Article VI of the
GATT 1947.201 In this light, the United States finds it significant that Article VI of the GATT 1947
was incorporated into the GATT 1994 without revisions, notwithstanding the fact that the Uruguay
Round negotiators had actively discussed whether the use of "zeroing" should be restricted.
According to the United States, if the Uruguay Round negotiators had intended to make such a
fundamental change to the notion of "dumping" they would have been clearer about it, and it would
not have come to a surprise to the major user s of dumping remedies, such as the EU and the
United States, after the fact through dispute settlement. 202 In this regard, the United States advances
evidence which it considers demonstrates that ap art from the United States and the EU, at least
two other major users of the anti-dumping remedy continued to calculate margins of dumping through
the use of "zeroing" after the entry into force of the Uruguay Round Agreements.203

198 US, FWS, para. 69, citing Anti-Dumping and Countervailing Duties, Second Report of the Group of
Experts, L/114, adopted on 27 May 1960, BISD 9S/194, para. 7.
199 Panel Report, US – Zeroing (Japan), para. 7.107.
200 Panel Report, US – Softwood Lumber V (Article 21.5 – Canada), para. 5.64.
202 US, FWS, paras. 69-72.
203 US, Answer to Panel Question 17, referring to Argentina and South Africa, who together with the
European Communities and the United States, accounted for the largest number of initiations of anti-dumping
investigations in 1995. As regards Argentina, the United States points out that in the Argentina – Poultry Anti-
Dumping Duties dispute, the panel concluded inter alia that "if zeroing is inconsistent with Article 2.4.2, then
Argentina's practice of totally disregarding certain export transactions [i.e., transactions with a price that was
higher than or equal to normal value] would also be inconsistent with Article 2.4.2 because it does not compare
the weighted average normal value with the weighted average of prices of all comparable transactions". In
addition, the United States notes that Argentina stated that its methodology was also used by other WTO
Members. Panel Report, Argentina – Definitive Anti-Dumping Duties on Poultry from Brazil (" Argentina –
Poultry Anti-Dumping Duties "), WT/DS241/R, adopted 19 May 2003, DSR 2003:V, 1727, para. 7.78 and
Annex B-4 (Replies of Argentina to Questions of the Panel – First Meeting, reply to question 11(b), at B-94). In
respect of South Africa, the Unite d States points to the Board of Tariffs and Trade Report, in the Investigation
into the Alleged Dumping of Meat of Fowls of the Species Gallus Domesticus, Originating in or Imported from
the United States of America , where the following statement was made: "In determining the dumping margin,

BCI deleted, as indicated [[XX]]

7.122 Brazil considers the United Stat es' references to the methodologies allegedly used by other
WTO Members to be irrelevant for the purpose of assessing whether the United States' own conduct
in the orange juice proceedings was WTO-consiste nt. In any case, Brazil notes that the European
Union has abandoned "zeroing" in order to comply with its WTO obligations; that the panel's
findings in Argentina – Poultry Anti-Dumping Duties, relied upon by the United States, related in fact
to the investigating authority's decision to initiate an investigation, and not to the determination of the
margin of dumping in the investigation itself; and that Argentina's position as a third party in the
present dispute is that it considers "zeroing" to be inconsistent with the AD Agreement.204
7.123 Brazil has not responded to the United States ' arguments concerning the Group of Experts
Report and the prior GATT panels. However, they have been addressed previously by the Appellate
Body in a number of disputes, where it has denied the relevance of the Report and the previous GATT
panel reports for various reasons, including becau se: (i) the Group of Experts' Report itself
characterized the "ideal" transaction-specific method of determining injurious dumping as "clearly
impracticable"; (ii) today, Article VI of the GATT 1994 has to be interpreted in the light of the
relevant AD Agreement framework in cluding provisions such as Articles 2.1, 2.4, 2.4.2 and 9.3; (iii)
the AD Agreement entered into force "long after" the 1960 Group of Experts Report; and (iv) the
panel reports at issue examined "zeroing" unde r the Tokyo Round Anti-Dumping Code, which as a
plurilateral agreement was legally separate from the GATT 1947, has been terminated, and in any
case, contained provisions much less detailed than those found in the current AD Agreement.
205
7.124 We have sympathy for the view that a tr ansaction-specific notion of "dumping" was
traditionally recognized by the Contracting Parties to the GATT 1947 as being at least permissible
under Article VI, particularly given that the ma jor users of the anti-dumping remedy were all
Signatories to the Tokyo Round Anti-Dumping Code and therefore members of the Committee on
Anti-Dumping Practices, which on 30 October 1995 adopted the EEC – Cotton Yarn panel report.
206
Indeed, Brazil, which was the complainant in that case, did not argue against the use of "zeroing" per
se. Rather, "Brazil argued that in this case the la rge variations in dumping margins found by the EC
were due to severe distortions in the Brazilian financial environment. In the circumstances of a volatile
financial environment, so-called 'zeroing' produced a distortion which should have been the subject of a
due allowance".207 It is true, however, that the panel in the EEC – Cotton Yarn dispute examined
Brazil's claims under Article 2.6 of the Tokyo R ound Code, a provision which was modified in the
WTO AD Agreement. Moreover, there was no equivalent of Article 2.4.2 of the WTO
AD Agreement in the Tokyo Round Anti-Dumping Code.
7.125 As regards the Group of Experts Report, we note that the Experts consid ered that the "ideal
method of fulfilling [the principles of Article VI] was to make a determination of both dumping and
material injury in respect of each single importation of the product concerned". 208 However, they

the Board applied the 'zeroing' methodology ... This methodology is applied by a number of jurisdictions
including the European Union and the United States". Exhibit US-13.
204 Brazil, Comments on US Answer to Panel Question 17.
205 See e.g., Appellate Body Report, US – Stainless Steel (Mexico) , paras. 131-132; Appellate Body
Report, US – Continued Zeroing, paras. 299-303.
206 Minutes of the Meeting of the Committee on Anti-Dumping Practices, 21 February 1996,
ADP/M/50. As regards the EC – Audiocassettes dispute, we note that although having expressed dissatisfaction
with the ruling concerning "zeroing", Japan (the complainant) "welcomed the Report and strongly recommended
the Committee to adopt it at this first opportunity". It was the EC that opposed the adoption of this report. See,
e.g., Minutes of the Meeting of the Committee on Anti-Dumping Practices, 26 September 1995, ADP/M/49;
and Minutes of the Meeting of the Committee on Anti-Dumping Practices, 8 April 1997, ADP/M/54.
207 GATT Panel Report, European Economic Community – Imposition of Anti-Dumping Duties on
Imports of Cotton Yarn from Brazil, ADP/137, adopted 30 October 1995, BISD 42S/17, para. 486.
208 Emphasis added.

BCI deleted, as indicated [[XX]]

found that this "was clearly impracticable, particularly as regards injury ".209 In other words, the
Group of Experts appear to have tied their acceptan ce of transaction-specific dumping determinations
to transaction-specific injury determinations, which is not exactly what the United States is arguing in
the present dispute.
(vii) Permissible Interpretations under Article 17.6(ii) of the AD Agreement
7.126 Brazil has characterized the notion of "dumping" as a "foundational concept" that must be
defined uniformly for all Members.210 Although this language does not appear in the AD Agreement,
it goes without saying that the notion of "dumping" is indeed fundamental and of critical importance
to the operation of the AD Agreement. However, as our analysis of the parties' arguments and
relevant jurisprudence reveals, the express term s of the AD Agreement provide no precise definition
of this important concept. Indeed, that the text used in the definition of "dumping" set forth in
Article 2.1 of the AD Agreement and Article VI:1 of the GATT 1994 is, alone, inconclusive has
already been recognized by previous panels and the Appellate Body.
211 Furthermore, in our view,
even when interpreted in its relevant context and in the light of the object and purpose of the
AD Agreement, the definition of "dumping" containe d in these provisions does not result in one clear
definition that is free from valid criticism, or that does not generate its own set of practical and legal
problems. In this regard, we cannot help but agree with the Concurring Opinion in US – Continued
Zeroing that the arguments the parties have advanced in respect of the definition of "dumping" create,
for different reasons, their own interpretative dilemmas. 212 We view this objective lack of clarity in
the definition of a concept that is as fundament al to the functioning of the AD Agreement as
"dumping" to strongly suggest that Members held, if not accepted, differing views about what
"dumping" meant at the time of the closure of the Uruguay Round.
7.127 The Appellate Body has expressed the opinion th at the proper application of the rules of
treaty interpretation set out in the Vienna Conventio n cannot result in conflicting interpretations. In
particular, the Appellate Body has explained that:
"... the rules and principles of the Vienna Convention cannot contemplate
interpretations with mutually contradict ory results. Instead, the enterprise of
interpretation is intended to ascertain the prope r meaning of a provision; one that fits
harmoniously with the terms, context, and object and purpose of the treaty. {} T h e
purpose of such an exercise is therefore to narrow the range of interpretations, not to
generate conflicting, competing interpretations. Interpretative tools cannot be applied
selectively or in isolation from one anothe r. It would be a subversion of the
interpretative disciplines of the Vienna Convention if application of those disciplines
yielded contradiction instead of coheren ce and harmony among, and effect to, all
relevant treaty provisions."
213
7.128 Brazil agrees with the Appellate Body. 214 On the other hand, the United States argues that
such a view would render Article 17.6(ii) meaningless. According to the United States,
Article 17.6(ii) reflects the Uruguay Round negotiators ' recognition that they had left a number of
issues unresolved and that customary rules of interpretation would not always yield only one
permissible interpretation of a given provision. Thus , the United States submits that to conclude that

209 Emphasis added.
210 See, e.g., Brazil, FCOOS, para. 31.
211 See above discussion concerning Article 2.1 of the AD Agreement and Article VI:1 of the
GATT 1994, at paras. 7.89-7.91.
212 Appellate Body Report, US – Continued Zeroing, para. 305.
213 Appellate Body Report, US – Continued Zeroing, para. 273 (footnote omitted).
214 See, e.g,. Brazil, FCOOS, paras. 6-11.

BCI deleted, as indicated [[XX]]

"it is not possible to find that there are conflicting interpretations of the text would mean depriving the
second sentence of Article 17.6(ii) of meaning. If th e permissible interpretations are all 'harmonious'
then it is difficult to see how a measure coul d be in conformity with only one of the
interpretations".215
7.129 It is well established that the purpose of treat y interpretation through the use of the Vienna
Convention is the identification of the common intention of the parties. 216 It follows that where the
common intention of the parties to a treaty explic itly provides for two conflicting interpretations of
the same term or treaty provision, the Vienna Convention rules on treaty interpretation must
necessarily recognize both positions. In other word s, where the very words of a treaty expressly
provide for the legality of two rival interpre tations, the Vienna Convention will respect both
interpretations. The same result must also hold wher e the examination of a term's ordinary meaning,
in the light of its context and the object and purpose of the treaty to which it pertains, establishes a
common intention of the parties to accept two conflicting in terpretations. To the extent that both
circumstances give effect to the common intention of the parties, they are not only consistent with the
rules of interpretation contained in the Vienna Convention, but also entirely coherent and
representative of the particular order negotiated by the parties. Thus, we see the critical question
before us in the present dispute to be the followi ng: does application of the customary rules of
interpretation of public international law refl ected in the Vienna Convention rules of treaty
interpretation lead us to understand the common in tention of the Members at the end of the Uruguay
Round as allowing for one exclusive ("product as a whole") interpretation of the concept of
"dumping"; or does it accept the possibility that "dumping" may also have an additional
("transaction-specific") meaning?
(viii) Conclusion concerning the definition of "dumping"
7.130 The present controversy is the fifth dispute wher e a panel has been tasked with examining the
notion of "dumping" in the context of a complaint ag ainst the United States' alleged use of "zeroing"
administrative reviews.
217 In all but one of these disputes, panels have taken the view that the
AD Agreement does not exclusively define "dumping" in relation to the "product as a whole". These
panels have found that it is permissible to measure "dumping" in the context of duty assessment
proceedings in the United States on a transaction-specific basis. 218 On the other hand, the Appellate
Body has consistently found that the only permissible interpretation of the notion of "dumping" is that
it relates to the "product as a whole". Not surprisingly, the parties' arguments in the present dispute
have closely followed the two currents of thought th at have evolved in previous cases, with Brazil
advocating the position taken by the Appellate Body and the United States the views of most of the
previous panels.
7.131 For the reasons we have tried to explain in the above analysis, we find it difficult to accept, on
the basis of the arguments and jurisprudence we ha ve reviewed, that the AD Agreement entertains
only one exclusive definition of "dumping". Howeve r, there is no doubt in our minds that on the
question of "zeroing", and more particularly, the definition of "dumping", the string of Appellate
Body reports concerning mainly the United States' us e of "zeroing" in anti-dumping proceedings read
loud and clear.

215 US, FCOOS, para. 7; US, FWS, paras. 25-28.
216 See, e.g, Appellate Body Report, European Communities – Customs Classification of Certain
Computer Equipment ("EC – Computer Equipment "), WT/DS62/AB/R, WT/DS67/AB/R, WT/DS68/AB/R,
adopted 22 June 1998, DSR 1998:V, 1851, para. 84; and Appellate Body Report, EC – Chicken Cuts, para. 239.
217 See Panel and Appellate Body Reports, US – Zeroing (EC); US – Zeroing (Japan); US – Stainless
Steel (Mexico); and US – Continued Zeroing.
218 Although the panel in US – Continued Zeroing "generally found the reason ing of earlier panels ...
persuasive", it concluded that "the multiple goals of the DSU" would be best served by following the Appellate
Body's adopted findings. Panel Report, US – Continued Zeroing, paras. 7.162-7.183.

BCI deleted, as indicated [[XX]]

7.132 Although adopted panel and A ppellate Body reports do not bind WTO Members beyond
parties to a particular dispute 219, the Appellate Body has expressed the view that ensuring "'security
and predictability' in the dispute settlement system, as contemplated in Article 3.2 of the DSU, implies
that, absent cogent reasons, an adjudicatory body will resolve the same legal question in the same way
in a subsequent case". 220 Indeed, the Appellate Body has held that "following the Appellate Body's
conclusions in earlier disputes is not only appropria te, but is what would be expected from panels,
especially where the issues are the same". 221 The Appellate Body's role in the WTO dispute
settlement system is defined in terms of hearing appeals from panel cases and "limited to issues of law
covered in the panel report and legal interpretations developed by the panel".222 Members are entitled
to express their views on an Appellate Body report. However, unless the DSB decides not to adopt it,
an Appellate Body report "shall be adopted by th e DSB and unconditionally accepted by the parties to
the dispute".223 Institutionally, the fact that all Appella te Body reports overturning panel findings on
the question of "zeroing" have been adopted by the DSB implies acceptance by all WTO Members of
their contents, and bestows upon them systemic legitimacy.
7.133 WTO Members created the WTO dispute settlement system as "a central element in providing
security and predictability to the multilateral trading system" 224, emphasizing that "the prompt
settlement" of disputes is "essential to the effective functioning of the WTO". 225 Moreover, the "aim
of the dispute settlement mechanism is to secure a positive solution to a dispute". 226 We recall that
this is the fifth dispute where the United States' u se of "simple zeroing" in administrative reviews has
been challenged. It is also the tenth dispute that has involved the definition of "dumping" in the
context of "zeroing".
227 Furthermore, two additional panels have recently been established to examine
complaints that include claims not unlike those presented by Brazil in the present dispute. 228
Inevitably, irrespective of the position taken by th ose (and any future) panels on the definition of
"dumping", the Appellate Body will decide the matt er by following its previous rulings. Following
this pattern, the "zeroing" question has tested th e limits of the WTO dispute settlement system for
almost 10 years now. It has occupied the work of Members, panels and the Appellate Body like no
other controversy. We have no doubt that this experience has not served to advance the system's
efficiency; and we note that Members have not only sought to resolve the issue of "zeroing" through
WTO dispute settlement, but they are also trying to address it through negotiations in the Negotiating
Group on Rules in the context of the Doha Development Agenda.
229.

219 See, e.g., Appellate Body Report, Japan – Taxes on Alcoholic Beverages ("Japan – Alcoholic
Beverages II "), WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, DSR 1996:I, 97 at
106-108; and Appellate Body Report, US – Stainless Steel (Mexico), para. 158.
220 Appellate Body Report, US – Stainless Steel (Mexico), para. 160.
221 Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews, para. 188.
222 Article 17.6, DSU.
223 Article 17.14, DSU.
224 Article 3.2, DSU.
225 Article 3.3, DSU.
226 Article 3.7, DSU.
227 See Panel and Appellate Body Reports in EC – Bed Linen; EC – Pipe Fittings; US – Zeroing (EC);
US – Zeroing (Japan); US – Stainless Steel; US – Continued Zeroing; US – Softwood Lumber V; US – Shrimp
(Ecuador); US – Shrimp (Thailand) / US – Customs Bond Directive; and US – Anti-Dumping Measures on PET
Bags.
228 United States – Use of Zeroing in Anti-Dumping Measures on Products from Korea , panel
constituted on 16 July 2010, WT/DS402/4; United States – Anti-Dumping Measures on Shrimp from Viet Nam ,
panel constituted on 16 July 2010, WT/DS404/6.
229 See, e.g, Draft Consolidated Chair Texts of the AD and SCM Agreements, 30 November 2007,
TN/RL/W/213; and New Draft Consolidated Chair Texts of the AD And SCM Agreements, 19 December 2008,
TN/RL/W/236.

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7.134 Given the objective lack of clarity in the current definition of "dumping" that is set forth in
the AD Agreement (a conclusion which we beli eve is inescapable after almost a decade of
unprecedented, and often conflicting, panel and Appe llate Body opinions on the matter), we firmly
believe that all Members have a strong systemic in terest in seeing that a lasting resolution to the
"zeroing" controversy is found sooner rather than later230.
7.135 With all these considerations in mind, and d espite sometimes diverse positions existing even
amongst ourselves as to different aspects of this de bate, we believe that, on balance, our function
under Article 11 of the DSU, and the integrity an d effectiveness of the WTO dispute settlement
system, are best served in the present instance by fo llowing the Appellate Body. Thus, we find that
the only permissible interpretation of the definiti on of "dumping" contained in Article 2.1 of the
AD Agreement, with relevance for the entire AD Agreem ent, is one that is based on an understanding
that "dumping" can only be determined for the "product as a whole", and not individual transactions.
7.136 Having concluded that "dumping" cannot have a transaction-specific meaning, we now move
on to examine the merits of Brazil's claims under Articles 2.4 and 9.3 of the AD Agreement and
Article VI:2 of the GATT 1994. Because "zeroing" takes place in the process of calculating margins
of dumping, we consider it appropriate to comme nce our evaluation by focusing on Brazil's claim
under Article 2.4 of the AD Agreement, the one lega l basis for Brazil's complaint that, as the title to
Article 2 indicates, is explicitly about the "determination of dumping".
(d) Brazil's claims under Article 2.4 of the AD Agreement
7.137 Brazil claims that the USDOC 's use of "simple zeroing" in the First and Second
Administrative Reviews to determine the WAMs, relied upon for the purpose of establishing the
CDRs, and the ISARs of Cutrale and Fischer was inc onsistent with Article 2.4 of the AD Agreement,
irrespective of its impact on the amount of duties actually collected by the United States.
231 T h e
United States rejects Brazil's claims, arguing inter alia that the obligations set forth in Article 2.4 do
not prescribe how the results of multiple comparisons between export price and normal value must be
aggregated.
7.138 Brazil submits that the first sentence of Artic le 2.4 contains an obligation that applies
whenever an investigating authority calcula tes a margin of dumping in any anti-dumping
proceeding.232 According to Brazil, Article 2.4 is not only about "price comparability" but also "the
nature of the comparison between export price and nor mal value", and therefore the "fairness of that
comparison".233 Relying on previous findings of the Appe llate Body, and one panel in an Article 21.5
implementation dispute234, Brazil argues that the calculation of a margin of dumping through the use

230 We note that Article 3.9 of the DSU states that its provisions are "without prejudice to the right of
Members to seek authoritative interpretation of provis ions of a covered agreemen t through decision-making
under the WTO Agreement".
231 Brazil, FCOOS, paras. 67-72 and 74-79, referring to inter alia , the explanation provided in the
Ferrier Affidavit, Exhibit US-31 (BCI), paras. 35-38 (F irst Administrative Review - ISARs) and 40-44 (First
Administrative Reviews - CDRs) and 48-65 (Second Administrative Review – ISARs and CDRs); Brazil,
Answer to Panel Question 2.
232 Brazil, Answer to Panel Question 2.
233 Brazil, SCOOS, para. 82, citing from Panel Report, Egypt – Definitive Anti-Dumping Measures on
Steel Rebar from Turkey ("Egypt – Steel Rebar"), WT/DS211/R, adopted 1 October 2002, DSR 2002:VII, 2667,
paras. 7.333-7.335, and referring to Panel Report, Argentina – Definitive Anti-Dumping Duties on Poultry from
Brazil ("Argentina – Poultry Anti-Dumping Duties"), WT/DS241/R, adopted 19 May 2003, DSR 2003:V, 1727,
234 Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , paras. 101, 138;
Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review, para. 135; Appellate Body Report, US –
Zeroing (Japan), paras. 146, 169 and 190(d).

BCI deleted, as indicated [[XX]]

of "simple zeroing" results in an unfair comp arison between export price and normal value and
therefore infringes Article 2.4. 235 On the other hand, the United St ates argues that the obligation to
make a fair comparison under Article 2.4 is lim ited to adjustments needed to ensure price
comparability. The United States finds support for this position not only in the statements made by
panels and the Appellate Body in other disputes, but also the alleged negotiating history of the
AD Agreement and Member practice. Moreover, the United States counters Brazil's reliance on the
alleged panel and A ppellate Body findings in previous "zer oing" disputes, arguing that there were
either no such findings made in the relevant disputes, or that they related to claims that are factually
and legally distinct from those Brazil is making in the present dispute.
236
7.139 Article 2.4 of the AD Agreement reads:
"A fair comparison shall be made betw een the export price and the normal value.
This comparison shall be made at the same level of trade, normally at the ex-factory
level, and in respect of sales made at as nearly as possible the same time. Due
allowance shall be made in each case, on its merits, for differences which affect price
comparability, including differences in conditi ons and terms of sale, taxation, levels
of trade, quantities, physical characteristi cs, and any other differences which are also
demonstrated to affect price comparability.
{} In the cases referred to in paragraph 3,
allowances for costs, including duties a nd taxes, incurred be tween importation and
resale, and for profits accruing, should also be made. If in these cases price
comparability has been affect ed, the authorities shall establish the normal value at a
level of trade equivalent to the level of tr ade of the constructed export price, or shall
make due allowance as warranted under this paragraph. The authorities shall indicate
to the parties in question what information is necessary to ensure a fair comparison
and shall not impose an unreasonable burden of proof on those parties."
237
7.140 Brazil's claim raises two main questions. The first is whether the obligation in the first
(underlined) sentence of Article 2.4 to ensure a "fair comparison" between export price and normal
value applies outside of the context of what is d escribed in the remainder of this provision, namely,
beyond the selection of transactions and use of adjust ments to account for differences between export
price and normal value which affect their comparability. Assuming it does, and that it applies to
calculations of the margin of dumping in the way Brazil argues, including during duty assessment
proceedings, the second question we would have to reso lve is whether the use of "simple zeroing" to
calculate a margin of dumping is unfair.
7.141 In previous "zeroing" disputes where claims unde r Article 2.4 have been made in the context
of United States' administrative reviews, panels and the Appellate Body appear to have accepted that
the first (underlined) sentence in Article 2.4 is appli cable beyond the particular context of adjustments
or the selection of transactions for purposes of price comparability. For instance, in US – Zeroing
(Japan), the panel explained its views on the scope of Article 2.4, first sentence, in the following
terms:

235 Brazil, FCOOS, para. 68; Brazil, Answer to Panel Question 2.
236 US, SWS, paras. 4-22, quoting Panel Report, Egypt – Rebar, para 7.335; Panel Report, Argentina –
Poultry Anti-Dumping Duties , para. 7.265; Panel Report, US – Softwood Lumber V , para. 7.356; Appellate
Body Report, United States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan ("US –
Hot-Rolled Steel"), WT/DS184/AB/R, adopted 23 August 2001, DSR 2001:X, 4697, para. 179, to support its
position that Article 2.4 governs only adjustments needed to ensure price comparability; and quoting Panel
Report, US – Zeroing (Japan), para. 7.155; US – Softwood Lumber V (Article 21.5 – Canada) , para. 5.74; and
Panel Report, US – Zeroing (EC) , para. 7.260, in support of the view that the notion of "fairness" must be
interpreted in a principled fashion, in the context of the activity at issue, and not in the abstract, as it alleges
Brazil argues. US, SCOOS, paras. 26-28.
237 Underline added, footnote omitted.

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"We consider that the requirement of a fair comparison set out in the first sentence of
Article 2.4 is an independent legal obligati on that is not defined exhaustively by the
specific requirements set out in the remainder of Article 2.4 and is not limited in
scope to the issue of adjustments to ensure price comparability. In this regard, we
agree with the analysis of the panel in US – Zeroing (EC) regarding the scope of the
"fair comparison" obligation. First, as stated by that panel, not to give independent
meaning to the "fair comparison" requirem ent would render this provision inutile.
Second, the structure of Article 2.4 suggests that the chapeau of Article 2.4 and its
sub-paragraphs must be interpreted as a whole. Third, the "comparison" referred to in
Articles 2.4.1 and 2.4.2 of the AD Agreement is the "comparison" in Article 2.4.
Fourth, the "fair comparison" requirement explicitly applies also to the subject matter
of Article 2.4.2 by virtue of the phra se "subject to the provisions governing fair
comparison in paragraph 4" in Article 2.4.2.
 {}"238
7.142 We note that the plain language of the first sentenc e of Article 2.4 implies that it is concerned
with the "comparison" made between export price a nd normal value for the purpose of determining a
margin of dumping; with the "fairness" re quirement applying precisely to discipline that
"comparison". While this requirement can (and s hould) be understood to inform the rules concerning
price comparability issues addressed in the remainder of Article 2.4, we agree with previous panels
and the Appellate Body that this do es not exhaust its relevance. First, it is significant that the "fair
comparison" requirement is stated in a separate se ntence at the beginning of the provision. In this
light, to read it as simply repeating the requirement s that follow would render the first sentence of
Article 2.4 redundant. 239 Secondly, unlike Article 2.4.2, which is explicitly limited to the
"investigation phase", the application of Article 2.4 is not constrained to any particular anti-dumping
proceeding. It follows that the entirety of Article 2.4, including its first sentence, must apply to
discipline the "comparison" between export price and normal value whenever undertaken during an
anti-dumping proceeding, including during duty assessment.240
7.143 One panelist wishes to emphasize that, in his view, the correct interpretation of the "fair
comparison" requirement set out in the first sentence of Article 2.4 is not as clear as previous panels
and the Appellate Body appear to have suggested. In particular, this panelist considers that the scope
of the "fair comparison" requirement must be info rmed by its immediate context, which includes the
last sentence of Article 2.4. This sentence esta blishes an obligation on investigating authorities to
"indicate to the parties what information is necessary to ensure a fair comparison". In the view of this
panelist, the "fair comparison" referred to in this last sentence of Article 2.4 is the same that is
described in the first sentence. Moreover, the "information ... necessary to ensure a fair comparison"
is not information pertaining to any aspect of the comparison between export price and normal value.
Rather, it is information needed to make appropr iate adjustments or transaction selection for the
purpose of accounting for differences affecting price comparability. When this view of the operation
of Article 2.4 is coupled with the arguments advanced by the United States in support of its view that
the "fair comparison" requirement should have limite d application, this panelist finds there to be
strong grounds to doubt the broad interpretation of the scope of the "fair comparison" requirement
made by previous panels and th e Appellate Body. Nevertheless, this panelist considers that, on
balance, and in the light of the systemic considera tions previously mentioned in this report, the view
of the Appellate Body should be followed on this issue.

238 Panel Report, US – Zeroing (Japan), para. 7.157 (footnote omitted).
239 Panel Report, US – Zeroing (EC), para. 7.253. On appeal, the Appellate Body agreed with the panel
that "the legal rule set out in the first sentence of Article 2.4 is expressed in terms of a general and abstract
standard. One implication of this is that this requir ement is also applicable to proceedings governed by
Article 9.3". Appellate Body Report, US – Zeroing (EC), para. 146 (footnote omitted).
240 By this conclusion, we do not mean to say that a "comparison" between export price and normal
value is required in all anti-dumping proceedings.

BCI deleted, as indicated [[XX]]

7.144 We recall that "simple zeroing" takes place when aggregating multiple results of comparisons
between individual export prices and weighted-avera ge normal values. In our view, the process of
aggregation is an integral part of the "comparison" that is undertaken between export prices and
weighted-average normal values. It therefore falls sq uarely within the "comparison" that is envisaged
and regulated under the first sentence of Article 2.4. Thus, in order to comply with what is prescribed
in that sentence, "simple zeroing" must be "fair".
7.145 In terms of whether Article 2.4 prohibits margins of dumping calculated on the basis of
"simple zeroing", it is not surprising to find that, in essence, the jurisprudence mirrors the findings of
past panels and the Appellate Body with resp ect to the definition of "dumping". Thus, in US –
Zeroing (Japan) , the panel rejected Japan's claim that the USDOC's use of "simple zeroing" in
11 administrative reviews was inconsistent with Article 2.4 of the AD Agreement because it
considered that a general prohibition on zeroing in any context would: (i) render the W-T
methodology described under Article 2.4.2 inutile; and (ii) undermine the effectiveness of Article 9,
which in the panel's view, permitted duty collection on a transaction basis. 241 In US – Stainless Steel
(Mexico), the panel dismissed Mexico's claim that the United States had acted inconsistently with
Article 2.4 of the AD Agreement by using "simple zero ing" in five administrative reviews because, in
its view, it was permissible under Article 9.3 for the United States to have used "simple zeroing". In
other words, what was permissible under one provi sion of the AD Agreement could not be found to
be "unfair" and impermissible under another provision.
7.146 In US – Zeroing (Japan) , the Appellate Body reversed the panel's findings under Article 2.4
and found instead that the United States use of "s imple zeroing" was, "as such" and "as applied",
inconsistent with this provision. 242 The Appellate Body explained its reasoning in the following
terms:
"We turn next to examine whether zeroing in periodic reviews and new shipper
reviews is, as such, inconsistent with the "fair comparison" requirement in Article 2.4
of the Anti-Dumping Agreement.
If anti-dumping duties are assessed on the basis of a methodology involving
comparisons between the export price and the normal value in a manner which results
in anti-dumping duties being collected from importers in excess of the amount of the
margin of dumping of the exporter or fore ign producer, then this methodology cannot
be viewed as involving a 'fair comparison' w ithin the meaning of the first sentence of
Article 2.4.
{} This is so because such an ass essment would result in duty collection
from importers in excess of the margin of dumping established in accordance with
Article 2, as we have explained previously.{}"243
7.147 Although clearly rejecting the view expressed by the panel concerning the inconsistency of
"simple zeroing" with Article 2.4, we note that the underlined text in the Appellate Body's reasoning
appears to signal that the basis of its findings lay in the effect "simple zeroing" had on the amount of
duties collected. Similarly, the Appellate Body appeared to express the same view in US – Zeroing
(Article 21.5 – Japan), where it upheld the panel's findings that the United States had failed to comply
with the recommendations and rulings from the origin al proceeding when it acted inconsistently with
Article 2.4 of the AD Agreement by using "simple ze roing" in a series of subsequent administrative

241 Panel Report, US – Zeroing (Japan), para. 7.159.
242 In US – Stainless Steel (Mexico) , the Appellate Body reversed the panel's findings, but it refrained
from making any findings of its own on the merits of Mexico's claim under Article 2.4 on the basis that it
considered it unnecessary for the purpose of resolving the dispute. Appellate Body Report, US – Stainless Steel
(Mexico), paras. 143-144.
243 Appellate Body Report, US – Zeroing (Japan), paras. 167-168 (footnotes omitted, underline added).

BCI deleted, as indicated [[XX]]

reviews. In coming to its conclusion, the Appella te Body explained that ""[i]n this case, compliance
with the DSB's recommendations and rulings require d the cessation of zeroing in the application of
anti-dumping duties by the end of the reasonable period of time".244
7.148 However, in general, the Appellate Body h as on multiple occasions also described its views
on "zeroing" in terms that strongly suggest that it is unfair because of its effect on the magnitude of
the margin of dumping, whenever determined. For instance, in US – Corrosion-Resistant Steel Sunset
Review, the Appellate Body stated:
"When investigating authorities use a zeroing methodology such as that examined in
EC – Bed Linen to calculate a dumping margin, whet her in an original investigation
or otherwise, that methodology will tend to inflate the margins calculated. Apart
from inflating the margins, such a methodol ogy could, in some instances, turn a
negative margin of dumping into a positive margin of dumping. As the Panel itself
recognized in the present dispute, "zeroing ... may lead to an affirmative
determination that dumping exists where no dumping would have been established in
the absence of zeroing."

{} Thus, the inherent bias in a zeroing methodology of this
kind may distort not only the magnitude of a dumping margin, but also a finding of
the very existence of dumping."245
7.149 We are somewhat attracted by the logic underlying the panel's observation in US – Zeroing
(Japan) that a general prohibition on "zeroing" operati ng through Article 2.4 of the AD Agreement,
would render the W-T methodology described in the second sentence of Article 2.4.2 redundant .
However, we see a parallel between this line of reasoning and the conundrum posed by "mathematical
equivalence". In the latter context, we noted in our previous discussion that no redundancy would
exist if the United States' views about how the W-T methodology actually operates were incorrect.
Yet we observed that there appears to be cons iderable uncertainty as to precisely how the W-T
methodology should be given effect. We also conc luded that another way to avoid redundancy would
be if the W-T methodology, as described by the United States, could be characterized as an
"exception" to the otherwise generally applicab le definition of "dumping", which operates to
otherwise prohibit "zeroing". We did not, how ever, find this explanation to be convincing.
246 In our
view, the same interpretative dilemmas can be found in the particular problem posed by the approach
taken by the panel in US – Zeroing (Japan) to Article 2.4.
7.150 The United States argues further that if a genera l prohibition on "zeroing" existed by virtue of
the operation of Article 2.4, there would be no need to articulate the same requirement through the use
of the "all comparable export transactions" and "margins of dumping" language in Article 2.4.2 of the
AD Agreement.247 However, we note that Article 2.4 operates as the chapeau to Article 2.4.2, and
therefore logically, it must inform whatever is governed under that provision. Indeed, Article 2.4.2
explicitly provides that it must be read "subject to the provisions governing fair comparison in
paragraph 4".
7.151 The United States also submits that Brazil's interpretation of the "fair comparison"
requirement is overly broad, unprincipled and, as we understand the United States' argument, would
result in the establishment of an ob ligation to ensure that "any and all anti-dumping calculations are
'impartial, even-handed, or unbiased'". 248 In this regard, the United States refers to the panel in US –

244 Appellate Body Report, US – Zeroing (Japan)(Article 21.5 – Japan), para. 193 (underline added).
245 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review, para. 135.
246 See discussion above, para. 7.119.
247 US, SCOOS, para. 26.
248 US, SWS, paras. 16-22; US, SCOOS, para. 28.

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Softwood Lumber V (Article 21.5 – Canada) , which it argues "cautioned against the overly liberal use
of the 'fair comparison' language of Article 2.4" in the following terms:
"[W]e believe that a claim based on a highl y general and subjective test such as 'fair
comparison' should be approached with cau tion by treaty interpreters. For this
reason, any conception of 'fairness' should be solidly rooted in the context provided
by the AD Agreement, and perhaps the WTO Agreement more generally. As such,
there must be a discernable standard within the AD Agreement, and perhaps the WTO
Agreement, by which to assess whether or not a comp arison has been 'fair' or 'unfair'.
Thus, the fact that comparison methodology A produces a higher margin of dumping
than comparison methodology B would only make comparison methodology A unfair
if comparison methodology B were the applicable standard.
{} If, however, the
AD Agreement were to permit either comparison methodology A or B, this would not
be the case."249
7.152 We agree with the United States and the panel in US – Softwood Lumber V (Article 21.5 –
Canada) that the meaning of the notion of "fairness" as it is articulated in Article 2.4 will depend
upon the particular context in which it is intended to operate. In our view, the search for this context
must, first and foremost, start with understanding preci sely what it is that must be "fair". This, of
course, is the "comparison" between export pri ce and normal value. Thus, contrary to the
United States' argument, accepting that the scope of the "fair comparison" requirement extends
beyond the subject matter of Article 2.4, does not establish a rule governing "any and all anti-dumping
calculations".
250 The very language of the first sentence of Article 2.4 explicitly limits its relevance to
situations involving the "comparis on" between export price and normal value. For instance, the "fair
comparison" requirement does not extend to govern how an investigating authority establishes normal
value. It is clear that this is comprehensivel y disciplined under Article 2.2 of the AD Agreement.
Neither does the "fair comparison" requirement re gulate how to establish constructed export price,
which is addressed in Article 2.3 of the AD Agreemen t. However, pursuant to the first sentence of
Article 2.4, the "comparison" between any ex port price and normal value, both individually
established in accordance with the specific rules set out in Article 2, must be "fair".
7.153 An investigating authority will compare expor t price with normal value for the purpose of
determining the existence of dumping or the magnitude of a margin of dumping. This implies that the
comparison between export price and normal value mu st be informed by the definition of "dumping"
that is contained in Article 2.1 of the AD Agreem ent. Above we have found that, on balance, and
taking into account important systemic concerns, it is impermissible to compare export price with
normal value in such a way that does not result in a determination of "dumping" for the "product as a
whole". In this light, a comparison methodology (such as "simple zeroing") that ignores transactions,
which if properly taken into account, would result in a lower margin of dumping, must be considered
"unfair" and therefore inconsistent with Article 2.4.
7.154 Thus, for all of the above reasons , we conclude that "simple zero ing" is inconsistent with the
"fair comparison" requirement that is prescribed in Article 2.4 of the AD Agreement.
(i) "Simple zeroing" in the First Administrative Review
7.155 We recall that we have found that the WAMs and ISARs determined for both Cutrale and
Fischer in the First Administrative Review were calculated through the use of "simple zeroing". 251 In
the case of Fischer, the WAM determined by the USDOC was relied upon for the purpose of

249 Panel Report, US – Softwood Lumber V, para. 5.74.
250 US, SWS, para. 22.
251 See above, paras. 7.84-7.87.

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establishing Fischer's CDR. Likewise, because the WAM determined for Cutrale was considered to
be de minimis under United State law, a CDR of 0% was applied to entries of Cutrale's products in the
subsequent period.
7.156 The United States argues that even under the Appellate Body's own rationale, the
determination of Cutrale's de minimis margin of dumping, which was converted into a CDR of 0%
through the operation of United States law, cannot be considered to infringe Article 2.4 because a de
minimis margin cannot be said to be "artificially inflated" or "inherently unfair". 252 We disagree. In
our view, the obligation under Article 2.4 is focu sed on the "comparison" between export price and
normal value, not its impact. In other words, it is the nature of the "comparison" itself, and not the
results of that comparison, that is disciplined unde r Article 2.4. Thus, a "comparison" between export
price and normal value that involves "simple zeroing" will be "unfair" for the purpose of Article 2.4,
irrespective of whether the final margin of dumping actually applied is considered to be de minimis.
Moreover, in the present instance, although Cutrale's WAM was de minimis , the fact remains that
absent "simple zeroing" it would have been non-existent.253
7.157 Thus, we find that by using "simple zeroi ng" to calculate the WAMs (relied upon for the
purpose of setting CDRs) and the ISARs for both Cutrale and Fischer in the First Administrative
Review, the United States failed to perform a "f air comparison" between export price and normal
value, and thereby acted inconsistently with Article 2.4 of the AD Agreement.
(ii) "Simple zeroing" in the Second Administrative Review
7.158 We recall that we have found that the WAM and ISAR determined for Cutrale in the Second
Administrative Review were calculated through the use of "simple zeroing". 254 We also made the
same finding with respect to Fischer. In pa rticular, we noted that although the WAM and
corresponding CDR for Fischer were both declared to be 0% in the published Final Results, the WAM
calculation actually run by the USDOC by means of its computer programme that involved "simple
zeroing" determined a WAM of [[XX]].
255 Likewise, we concluded that "simple zeroing" was used in
the computer programme applied by the United St ates for the purpose of calculating Fischer's ISAR,
even though the ISAR actually imposed on imports of Fischer's products was [[XX]].256
7.159 The United States argues that, even according to the Appellate Body's rationale relied upon by
Brazil, the determination of a 0% margin of dump ing for Fischer cannot be considered to infringe
Article 2.4 because a 0% margin cannot be said to be "artificially inflated" or "inherently unfair". 257
Similarly, the United States argues that even accepting the Appellate Body's line of reasoning with
respect to Article 2.4, in order for there to be an infringement of the "fair comparison" requirement in

252 US, SWS, para. 18, citing from Appellate Body Report, US – Softwood Lumber V (Article 21.5 –
Canada), paras. 143-144.
253 The computer programme log for Cutrale indicates that [[XX]] out of [[XX]] export transactions
generated negative comparison results, and were theref ore excluded from the US DOC's calculation. These
transactions represented [[XX]] of Cutrale's transactions. Exhibits BRA-29 (BCI), p. 63; and BRA-31 (BCI)
(Ferrier Affidavit), para. 38. Moreover, Cutral e's computer programme output reveals that the de minimis
margin of 0.45% was determined by taking into accou nt export transactions accounting for [[XX]] of the total
volume of transactions, and [[XX]] of their total value. Exhibit BRA-34 (BCI), last page.
254 See above, paras. 7.84-7.87.
255 See above, para. 7.86.
256 See above, para. 7.86.
257 US, SWS, para. 18, citing from Appellate Body Report, US – Softwood Lumber V (Article 21.5 –
Canada), paras. 143-144.

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the context of administrative reviews, any use of "simple zeroing" must result in excessive collection
of duties.258
7.160 We are unable to agree with the United States' submissions. As we have already explained 259,
the obligation under Article 2.4 is focused on th e "comparison" between export price and normal
value, not its impact. In other words, it is the natu re of the "comparison" itself, and not the results of
that comparison, that is disciplined under Artic le 2.4. Thus, in our view, it follows that a
"comparison" between export price and normal value that involves "s imple zeroing" will be "unfair"
for the purpose of Article 2.4, irrespective of whether the final WAM or final ISAR actually imposed
is 0%. Article 2.4 regulates the "comparison" that is made by an investigating authority; and it is this
"comparison" (not its outcome) that falls within the scope of Article 2.4 of the AD Agreement.
7.161 Thus, we find that by using "simple zeroi ng" to calculate the WAMs (relied upon for the
purpose of setting CDRs) and the ISARs for both Cutrale and Fischer in the Second Administrative
Review, the United States failed to perform a "f air comparison" between export price and normal
value, and thereby acted inconsistently with Article 2.4 of the AD Agreement.
(e) Brazil's claims under Article 9.3 of the AD Agreement and Article VI:2 of the GATT 1994
7.162 Having found that the measures challenged by Braz il are inconsistent with Article 2.4 of the
AD Agreement, we consider it is not necessary, for the purpose of satisfactorily resolving this dispute,
to make additional findings with respect to Br azil's claims that the same measures are also
inconsistent with Article 9.3 of the AD Agreement and Article VI:2 of the GATT 1994. On this basis,
we decide to exercise judicial economy and decline to make any findings in respect of these claims.
C. B
RAZIL'S CLAIMS CONCERNING "CONTINUED ZEROING"
1. Arguments of Brazil
7.163 Brazil challenges the alleged "continued use by the United States of zeroing procedures in
successive anti-dumping proceedings under the Or ange Juice Order, including the original
investigation and any subsequent administrative re views by which duties are applied and maintained
over a period of time".260
7.164 Brazil characterizes the USDOC's alleged "conti nued use" of "zeroing" as "ongoing conduct"
of virtually the same kind found to be inconsis tent with Article 9.3 of the AD Agreement and
Article VI:2 of the GATT 1994 by the Appellate Body in US – Continued Zeroing . Relying entirely
upon the Appellate Body's reasoning in that disp ute, and various pieces of evidence allegedly
demonstrating the USDOC's use of "zeroing procedur es" in the original investigation and First,
Second and Third Administrative Reviews, Brazil asks the Panel to find that the USDOC's "continued
use" of "zeroing" in successive proceedings under of the orange juice anti-dumping duty order, by
which duties are applied to imports of orange jui ce from Brazil, amounts to "ongoing conduct" that is
inconsistent with Articles 2.4, 2.4.2 and 9.3 of the AD Agreement and Article VI:2 of the
GATT 1994.261

258 US, SWS, para. 17, citing from Appellate Body Report, US – Zeroing (Japan), para. 168.
259 See above, para. 7.156.
260 Brazil, FWS, para. 48.
261 Brazil, FWS, paras. 98-117; Brazil, FCOOS, paras. 80-96; Brazil, SWS, paras. 27-46; Brazil,
SCOOS, paras. 86-93.

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2. Arguments of the United States
7.165 The United States argues that "continued zeroing" as "ongoing conduct" does not exist as a
"measure" susceptible to challenge in WTO disput e settlement proceedings. In particular, the
United States asserts that the alleged measure is focused on "indeterminate future measures that did
not exist at the time of Brazil's panel request (and ma y never exist)". Accord ing to the United States,
"measures that do not and may never exist are no t within a dispute settlement panel's terms of
reference", and for this reason, they cannot be challenged in WTO dispute settlement. Thus, the
United States asks the Panel to find that "contin ued zeroing" as "ongoing conduct" is not a measure
that can be challenged in this dispute.262
7.166 In any case, the United States submits that Br azil has failed to establish that the USDOC
actually "zeroed", as a matter of fact, in "successive proceedings". The United States asserts that the
computer programme evidence submitted by Braz il in Exhibits BRA-32 (BCI) and BRA-33 (BCI)
does not demonstrate that the USDOC used "zeroing" in the original investigation. According to the
United States, the various lines of the computer programme that Brazil focuses upon show that the
"necessary condition for activating the 'zeroing' operation" was not satisfied, meaning that no
comparison of export price and normal value resulte d in a negative value. In other words, the
United States asserts that Brazil's evidence shows th at all comparison results were positive (i.e., all
comparison results showed dumping).263 The United States also argues that the computer programme
evidence submitted by Brazil in Exhibit BRA-33 (BC I) was generated by Brazil's consultant, not the
USDOC, and only after the USDOC made the relevant final determinations. 264 Moreover, the
United States emphasizes that no CDR was applied to imports of Cutrale's products following the
First Administrative Review, and no CDRs or ISARs were applied to Fischer's products as a result of
the Second Administrative Review. Thus, the Unit ed States submits that whatever "zeroing" may
have taken place in the calculation of Cutrale's or Fischer's margins of dumping, it did not result in a
breach of the United States' obligation under Article 9.3 of the AD Agreement to ensure that any anti-
dumping duty applied is not in excess of the margin of dumping established under Article 2.265
7.167 The United States submits that, at most, the evidence advanced by Brazil shows that "zeroing"
was applied in order to determine the margin of dumping of one company in one proceeding covering
a one year period. The United States contrasts this with the facts the Appellate Body found in US –
Continued Zeroing to demonstrate the existence of "continued zeroing" as "ongoing conduct",
namely: the use of "zeroing" in the original inv estigation; the use of "zeroing" in four successive
administrative reviews; and reliance in a sunset review upon rates determ ined using "zeroing".
According to the United States, the facts Br azil relies upon do not c onstitute "a string of
determinations, made sequentially ... over an ex tended period of time". Thus, the United States
argues that there is no basis for the Panel to find that the "zeroing" methodology was used without
interruption, that it was used in different proceedi ngs, and that it was used over an extended period of
time. The United States therefore asks the Panel to reject Brazil's claim that it has established the
USDOC's "continued zeroing" as "ongoing conduct".266
7.168 Finally, the United States notes that Brazil challenges "continued zeroing" under Article 2.4.2
of the AD Agreement, in addition to Article 9.3 and Article VI:2 of the GATT 1994. The
United States argues that Brazil's reliance on this legal basis is misplaced because Article 2.4.2 is
explicitly limited to the "investiga tion phase", and has therefore no a pplication to duty collection or

262 US, FWS, paras. 52, 124 and 130-131; US, SWS, paras. 83-84.
Question 24.
264 US, Answer to Panel Question 24.
266 US, FWS, paras. 132-133; US, SWS, para. 87; US, SCOOS, paras. 39-40.

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other anti-dumping proceedings. In this regard, th e United States asks the Panel to follow the finding
of the panel in US – Zeroing (EC) , and decline to extend the oblig ations of Article 2.4.2 to
"successive proceedings" beyond the original investigation.267
3. Arguments of the Third Parties
(a) Japan
7.169 Japan argues that there is no substantial diffe rence between the "continued zeroing" measure
that Brazil challenges in the present dispute and the "continued zeroing" measure challenged by the
European Communities in US – Continued Zeroing . Japan recalls that previous panels and the
Appellate Body have found that "zeroing" is inco nsistent with Article 2. 4.2 (when performed in
original investigations) and Article 9.3 of th e AD Agreement and Article VI:2 of the GATT 1994
(when performed for the purpose of duty assessment pr oceedings). Thus, Japan calls on the Panel to
follow these findings and rule that the USDOC's "continued zeroing" in the orange juice anti-dumping
proceedings is inconsistent with Article 9.3 of the AD Agreement and Article VI:2 of the
GATT 1994.268
4. Evaluation by the Panel
(a) Introduction
7.170 Brazil's complaint against the USDOC's alleged "continued use" of "zeroing" in the orange
juice anti-dumping proceedings raises essentially three main questions: (i) whether it is possible to
challenge a Member's "ongoing conduct" as a "measu re" in WTO dispute settlement; (ii) if it is
possible to challenge such a "measure", whether Brazil has demonstrated that it exists as a matter of
fact; and (iii) if it does exist, whether the "measure" is inconsistent with Articles 2.4, 2.4.2 and 9.3 of
the AD Agreement and Article VI:2 of the GATT 1994. Below we address each of these questions in
turn.
(b) Whether the "continued use" of "zeroing" as "ongoing conduct" is a "measure" susceptible to
WTO dispute settlement
7.171 It is well established that "in principle, any act or omission attributable to a WTO Member
can be a measure of that Member for purposes of dispute settlement". 269 Measures that have been
examined by panels and the Appella te Body in the past include "not only measures consisting of acts
that apply to particular situations, but also tho se consisting of acts setting forth rules or norms that
have general and pros pective application".270 Moreover, in US – Zeroing (EC) , the Appellate Body
found that the European Communiti es was entitled to challenge an unwritten zeroing "norm" because
it found no basis in the DSU and the AD Agreement to "conclude that 'rules or norms' can be
challenged, as such, only if they are expressed in written form".271
7.172 In US – Continued Zeroing, the Appellate Body concluded that the USDOC's "continued use"
of "zeroing" to calculate the margins of dumping in 18 different anti-dumping proceedings could be
challenged as a "measure" it described as "ongoi ng conduct". The Appellate Body's reasoning
included the following observations:

267 US, FWS, paras. 134-135.
268 Japan, TPWS, paras. 18-22 and 72.
269 Appellate Body Report, US – Corrosion Resistant Steel Sunset Review, para. 81.
270 Panel Report, US – Continued Zeroing , para. 7.45, cited with approval in Appellate Body Report,
US – Continued Zeroing, para. 177.
271 Appellate Body Report, US – Zeroing (EC), para. 193. The panel in the same case come to the same
conclusion on the basis of similar reasoning.

BCI deleted, as indicated [[XX]]

"Thus, the measures at issue consist of ne ither the zeroing methodology as a rule or
norm of general and prospective application, nor discrete applications of the zeroing
methodology in particular determinations; rather, they are the use of the zeroing
methodology in successive proceedings, in each of the 18 cases, by which duties are
maintained over a period of time. We see no reason to exclude ongoing conduct that
consists of the use of the zeroing methodology from challenge in WTO dispute
settlement. The successive determinations by which duties are maintained are
connected stages in each of the 18 cases involving imposition, assessment, and
collection of duties under the same anti-dumping duty order. {} The use of the zeroing
methodology in a string of these stages is the allegedly unchanged component of each
of the 18 measures at issue. {} It is with respect to this ongoing conduct that the
European Communities brought its challenge, seeking its cessation. At the oral
hearing, the European Communities confirmed that it is not seeking the revocation of
the 18 anti-dumping orders but, rather, the cessation of the use of the zeroing
methodology by which the duties are calc ulated and maintained in these 18 cases.

In our view, the European Communities, in seeking an effective resolution of its
dispute with the United States, is entitled to frame the subject of its challenge in such
a way as to bring the ongoing conduct, regarding the use of the zeroing methodology
in these 18 cases, under the scrutiny of WTO dispute settlement."
272
7.173 Conceptually, the alleged "measure" that Brazil ch allenges in this dispute appears to be very
similar, if not identical, to the measure that was the subject of the European Communities' complaint
in US – Continued Zeroing . Indeed, Brazil has repeatedly emphasized that it is challenging the same
type of "measure" that was at issue in US – Continued Zeroing , namely, a "measure" in the form of
"ongoing conduct". Moreover, Brazil has explaine d that by challenging the alleged "measure" it is
seeking to obtain a prospective remedy, namely, the "cessation of the use of the zeroing methodology"
in the orange juice anti-dumping proceedings.273
7.174 According to the United States, the allege d "ongoing conduct" "measure" that Brazil
challenges cannot be subject to WTO dispute settleme nt because it is based on "an indefinite number
of future individual measures that do not and may never exist". 274 Moreover, the United States
submits that if "continued use" were a "measure", it would "presumably ... cease to exist if at any
point 'zeroing' is not used in a particular indivi dual determination". Yet, the United States notes that
"Brazil's argument requires the Panel to assume that it will be used".275 Thus, the United States argues
that Brazil's focus on "continued zeroing" as "ongoing conduct" involves "speculating as to what may
happen in the future" 276, and for this reason the United States considers that such conduct cannot
amount to a "measure" that is susceptible to WTO dispute settlement.
7.175 As we understand it, implicit in the United States' argument is the view that there is a
prospective element to the alleged "ongoing conduc t" "measure" Brazil challenges which cannot be
established with any degree of certainty because it is inherently speculative. We note, however, that
although describing the "ongoing conduct" measure in US – Continued Zeroing in terms that
contemplate its prospective operation, the Appellate Body did not require absolute certainty as to the
future conduct it envisaged. In particular, the Appellate Body found that:
"The density of factual findings in these cases, regarding the continued use of the
zeroing methodology in a string of successive proceedings pertaining to the same

272 Appellate Body Report, US – Continued Zeroing, para. 181 (footnotes omitted).
273 Brazil, Answer to Panel Question 2.
274 US, FWS, paras. 51 and 131.
275 US, SWS, para. 84.
276 US, SWS, para. 84.

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anti-dumping duty order, provides a sufficient basis for us to conclude that the
zeroing methodology would likely continue to be applied in successive proceedings
whereby the duties in these four cases are maintained."277
7.176 Thus, ongoing conduct may be simply described as conduct that is currently taking place and
is likely to continue in the future. Given that any act or omission attributable to a Member may, in
principle, be challenged by a Member in WTO dispute settlement proceedings, we see no reason why
"ongoing conduct" cannot also be the subject of a complaint. The particular "ongoing conduct" that
Brazil objects to is the USDOC's alleged "continue d use" of "zeroing procedures" under the orange
juice anti-dumping duty order. Conceptually, we see no practical difference between this form of
"ongoing conduct" and the "ongoing conduct" challenged in the US – Continued Zeroing dispute.
Like the Appellate Body in that controversy, we consider that Brazil is entitled to bring a complaint
against such a "measure" to WTO dispute settlement. However, accepting that the "continued use" of
"zeroing" may be challenged in WTO dispute se ttlement as a "measure" in the form of "ongoing
conduct" does not amount to accepting that any such "m easure" actually exists. It is to this second
question that we now turn.
(c) Has Brazil established that the alleged "con tinued zeroing" as "ongoing conduct" measure
exists?
7.177 In US – Continued Zeroing , the Appellate Body explained the basis for its conclusion
concerning the existence of "continued zeroing" as "ongoing conduct" in the following terms:
"Thus, in each of the above four cases, the Panel's findings indicate that the zeroing
methodology was repeatedly used in a string of determinations, made sequentially in
periodic reviews and sunset review s over an extended period of time . The density of
factual findings in these cases, regarding the continued use of the zeroing
methodology in a string of successive pro ceedings pertaining to the same anti-
dumping duty order , provides a sufficient basis for us to conclude that the zeroing
methodology would likely continue to be applied in successive proceedings whereby
the duties in these four cases are maintained."278
7.178 Thus, the evidence the Appellate Body consid ered demonstrated the existence of the
"continued zeroing" measure covered the use of "zeroi ng" in the original investigation; the use of
"zeroing" in four successive administrative reviews; and reliance in a sunset review upon rates
determined using "zeroing". On the other hand, the Appellate Body fo und that the "continued
zeroing" measure could not be established on the basis of evidence showing the use or reliance upon
"zeroing" in only: (i) one anti-dumping proceeding – i.e., either one origin al investigation, one
administrative review or one sunset review; (ii) two (three) administrative reviews in the same
proceeding, where there was a lack of evidence showing that the use of "zeroing" in a third (fourth)
administrative review related to the same anti- dumping duty order; and (iii) two administrative
reviews and one sunset review related to the same anti-dumping duty order, where there was no
evidence regarding any other proceedings submitted during the panel process.
279
7.179 Brazil argues that the evidence it has introduced shows that the USDOC used "zeroing" to
calculate the margins of dumping in the original investigation and the First, Second and Third
Administrative Reviews. Moreover, according to Br azil, the facts it has presented also demonstrate
that the USDOC will continue to apply the same methodology in all future proceedings under the
orange juice anti-dumping duty order. On the othe r hand, the United States submits that Brazil has

277 Appellate Body Report, US – Continued Zeroing, para. 191 (emphasis added).
278 Appellate Body Report, US – Continued Zeroing, para. 191 (emphasis added).
279 Appellate Body Report, US – Continued Zeroing, para. 194.

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failed to satisfy the standard a pplied by the Appellate Body in US – Continued Zeroing, noting that in
a number of instances, the USDOC did not use "zeroing" at all, or that even when it did, it had no
bearing on the WAMs, CDRs or ISARs actually imposed. According to the United States, the facts
Brazil relies upon have more in common with the facts the Appellate Body considered did not
establish the existence of a "continued zeroing" measure, than those the Appellate Body found to
demonstrate its existence.
7.180 We have previously concluded that Brazil has shown that the USDOC determined the WAMs
(relied upon for the purpose of setting the CDRs) and th e ISARs of Cutrale and Fischer in the First
and Second Administrative Reviews through the use of "simple zeroing".
280 Below we examine the
extent to which the evidence Brazil has submitted esta blishes the same with r espect to the original
investigation and the Third Administrative Review.
(i) Original Investigation
7.181 Brazil asserts that the computer programme the USDOC applied in the original
investigation281 to calculate the respondents' margins of dumping "provided for the exclusion ... of
negative comparison results where the weighted-ave rage export price of any model exceeded normal
value".282 To substantiate this assertion, Brazil subm its a copy of the relevant programme logs
together with an explanation which identifies the "language to zero negative margins" appearing in
each log.283
7.182 The United States asserts that the computer programme evidence submitted by Brazil
demonstrates that no "zeroing" actually took place in the original investiga tion. According to the
United States, there were no negative comparison results to "zero" in that investigation because all of
the respondents transactions were dumped. Thus, th e United States does not argue that the "zeroing"
instruction was not present in the computer programme used in the Original Investigation. Rather, the
United States points out that the instruction wa s not executed during the course of the calculation
because of the absence of non-dumped transactions.
7.183 Brazil does not contest the United States' assertion about the absence of transactions sold at an
export price above normal value. Indeed, the expl anation provided in Exhibit BRA-31 (BCI) appears
to confirm this point. However, Brazil does not accep t that the "zeroing" instruction did not function
in the original investigation. According to Brazil, the "zeroing" line ("WHERE EMARGIN GT 0")
always functions to ensure that the total am ount of dumping is based exclusively on positive
comparison results. For this line not to function, Brazil submits that it must be removed from the
computer programme.284 Moreover, Brazil argues that in the light of the nature of its claim, the fact
that the "zeroing procedures" did not exclude any transactions sold at an export price above normal
value is irrelevant. Brazil explains the nature of its claim in the following terms:

280 See above, paras. 7.84-7.87, 7.155 and 7.158.
281 Final Results of the Original Investigation, 71 Fed. Reg. 2183 (13 January 2006), Exhibit BRA-18;
and Amended Final Results of the Original Investigation, 71 Fed. Reg. 8841 (21 February 2006), Exhibit BRA-
19.
282 Brazil, FWS, para. 102.
283 Exhibits BRA-32 (BCI) (Programme log for Cutrale); BRA-33 (BCI) (Programme log for Fischer);
and BRA-31 (BCI) (Ferrier Affidavit). The United States argues that Exhibit BRA-33 (BCI) was "generated by
Brazil's consultant, not by the USDOC, and only after the USDOC made the relevant final determinations" (US,
Answer to Panel Question 24). Howeve r, Brazil has presented evidence whic h we are satisfied confirms that
Exhibit BRA-33 (BCI) was provided to Fischer's Counsel by the USDOC (See Exhibit BRA-58, and Brazil,
Comment on US Answer to Panel Question 24). See also the summary of infromation on the use of "zeroing",
submitted as Exhibit BRA-48.
284 Brazil, Comment on US Answer to Panel Question 24.

BCI deleted, as indicated [[XX]]

"In Brazil's view, a challenge to the continued use of zeroing under a single anti-
dumping order does not fit squarely into either the 'as applied' or the 'as such'
category. Indeed, the claim shares elements of both 'as such' and 'as applied' claims.
With respect to similarities to an 'as such ' claim, the claim contests the continued use
of zeroing in a series of determinations under a specific anti-dumping order that
applies prospectively to all subject imports; the claim is, therefore, not confined to
'specific instances in which the zeroing me thodology was applied, such as a periodic
review or sunset review determination'.
{} The evidence, as a whole, shows that, under
the Orange Juice Order, the United States systematically uses the zeroing as part of its
methodology for determining dumping and marg ins of dumping. Also similar to an
'as such' claim, the aim of the 'continued use' claim is to obtain 'the cessation of the
use of the zeroing methodology by which the duties are calculated and maintained'.

Thus, the 'continued use' claim contests zer oing on a relatively generalized basis,
aiming to terminate its use on that basis.
However, the claim is nonetheless different from an 'as such' claim with respect to the
degree of generality of the claim. An 'as such' claim against the zeroing procedures
as a rule or norm of general and pros pective application would address the
maintenance of zeroing for use in administrative (or other) reviews, under all anti-
dumping orders. In contrast, Brazil’s 'con tinued use' claim addresses the use of the
zeroing in determinations under one single anti-dumping order, namely the Orange
Juice Order. The claim is, therefore, 'narrower' than an 'as such' claim.{}"285
"With respect to the 'conti nued use' measure, the conduct comprising this measure is
the use of zeroing in determinations made under the Orange Juice Order, including in
administrative reviews. As with an 'as such' claim against zeroing under all anti-
dumping orders, the consistency of this me asure, under Article 9.3 and Article VI:2,
in the context of the Orange Juice Order, does not turn on the outcome of any specific
determination resulting from the use of zeroing."286
Thus, Brazil argues that its challenge relates to the "continued use" of the USDOC's "zeroing"
methodology, not its impact. For this reason, Brazil argues that the fact that the "zeroing" instruction
did not function to "zero" any export transactions so ld at a price above normal value in the original
investigation does not detract from its complaint.

7.184 We agree with Brazil. In our view, the nature of its complaint against "continued zeroing" is
akin to a claim that could be made against a measu re "as such", in the sense that Brazil challenges the
"continued use" of the "zeroing methodology" under the orange juice anti-dumping duty order,
independent of its application . However, whereas a measure subject to a typical "as such" claim in
WTO dispute settlement would be generally appl icable to all anti-dumping proceedings conducted
under all United States anti-dumping duty orders, th e "measure" Brazil objects to exists only in the
limited context of the orange juice proceedings.
7.185 By bringing a complaint against such a "measure", Brazil is seeking to redress what it
considers to be the root of the problem it has wi th the United States' conduct of the orange juice
proceedings, namely, the USDOC's "continued use" of the "zeroing methodology". Brazil's challenge
seeks to achieve a prospective remedy; a solution that would prevent the United States from using the
"zeroing methodology" in future proceedings under th e orange juice anti-dumping duty order. In this
light, the fact that the particular circumstances of the original investiga tion were such that the

285 Brazil, Answer to Panel Question 1 (footnotes omitted).
286 Brazil, Answer to Panel Question 2.

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"zeroing" instruction did not function to rem ove any negative export price to normal value
comparisons does not invalidate Brazil's claim, beca use it is the very existence of the "zeroing"
instruction in the computer programmes used to calculate the relevant margins of dumping,
independent of its application, that is the subject of Brazil's complaint.
7.186 Thus, we conclude that the evidence Brazil h as submitted demonstrates that the USDOC used
the "zeroing methodology" in the original investiga tion, even though this conduct had no impact on
the relevant margins of dumping determined for the respondents because of the particular set of facts
that arose in that investigation.
(ii) Third Administrative Review
7.187 Brazil asserts 287 that the USDOC used "simple zeroing" in the Final Results of the Third
Administrative Review to determine the following WAMs, CDRs and ISARs:
 WAM288 CDR288 ISAR289
Third Administrative Review
Cutrale 8.13% 8.13% [[XX]]
Fischer 5.26% 5.26% [[XX]]

7.188 To substantiate its assertion, Brazil submits the same type of evidence it used to demonstrate
the use of "simple zeroing" in the First and Se cond Administrative Reviews, namely, the relevant
computer programme logs and output for each respondent, the Issues and Decision Memorandum, and
a second Ferrier Affidavit. 290 We have carefully reviewed this evidence and find that it confirms
Brazil's assertions.
7.189 The United States does not contest that the USDOC used "simple zeroing" when determining
the above WAMs, CDRs and ISARs 291, but it argues that the Third Administrative Review is not
within the Panel's terms of reference.292 However, apart from referring to a discussion contained in its
first written submission where it explains why the Second Administrative Review is outside of the
Panel's terms of reference, the United States pres ents no separate argumentation concerning the Third
Administrative Review.
7.190 In our view, the United States' position with resp ect to Brazil's reliance on the results of the
Third Administrative Review is misplaced. Brazil does not challenge the results of the Third
Administrative Review, but instead uses them as evidence of the "continued zeroing" measure. A
panel's terms of reference need onl y contain a sufficiently clear explanation of the legal basis of a
complainant's claims and a description of the challenged measures 293; they are not required to also

287 Brazil, SWS, paras. 36-41.
288 Final Results, Third Administrative Review, Exhibit BRA-49.
289 BRA-54 (BCI) (Programme output for Cutrale) , penultimate page; BRA-55 (BCI) (Programme
output for Fischer), penultimate page.
290 Exhibits BRA-50 (Issues and Decision Memorandum), pp. 2-6; BRA-51 (BCI) (Ferrier Affidavit re
3rd Administrative Review); BRA-52 (BCI) (Programme log for Cutrale); BRA-54 (BCI) (Programme output
for Cutrale); BRA-56 (BCI) (Programme log for Fischer); BRA-55 (BCI) (Programme output for Fischer). See
also the summary of information on the use of "zeroing", submitted as Exhibit BRA-48.
291 US, Answer to Panel Question 24.
292 US, FWS, para. 126; US, Answer to Panel Question 24.
293 See, e.g., Appellate Body Report, Guatemala – Anti-Dumping Investigation Regarding Portland
Cement from Mexico ("Guatemala – Cement I "), WT/DS60/AB/R, adopted 25 November 1998,
DSR 1998:IX, 3767, para. 72.

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identify the evidence. We therefore see no basis for the United States' objection to Brazil's reliance on
the results of the Third Administrative Review.
(iii) Conclusion regarding the existence of the "continued zeroing" measure
7.191 Overall, the evidence submitted by Brazil re veals that the USDOC applied a computer
programme that included an instruction to "zero" in the original investigation and in the First, Second
and Third Administrative Reviews, for the purpose of calculating the WAMs and the ISARs of the
relevant respondents. The evidence also shows that this instruction was actually executed in the first
three administrative reviews under the orange jui ce anti-dumping duty order. Moreover, the Issues
and Decision Memoranda from the three administrative reviews strongly suggest that, at the time they
were issued, the USDOC intended to continue to ta ke the same approach to calculating margins of
dumping in the future. In this regard, we find the following USDOC statement, which appears in
exactly the same language in all three Issues and Decision Memoranda, to be particularly revealing:
"Section 771(35)(A) of the Act defines 'dumping margin' as the 'amount by which the
normal value exceeds the export price or constructed export price of the subject
merchandise'. Outside the context of an tidumping investigations involving average-
to-average comparisons, the Department inte rprets this statutory definition to mean
that a dumping margin exists only when NV is greater than EP or CEP. As no
dumping margins exist with respect to sales where NV is equal to or less than EP or
CEP, the Department will not permit these non-dumped sales to offset the amount of
dumping found with respect to other sales. The CAFC has held that this is a
reasonable interpretation of the statute."294
7.192 We recall that in US – Continued Zeroing , the evidence the Appellate Body considered was
sufficient to establish the existence of the "conti nued zeroing" measure challenged in that dispute
demonstrated that the USDOC: used "zeroing" in the original investigation; used "zeroing" in four
successive administrative reviews; and relied in a sunset review upon margins of dumping
determined through the use of "zeroing". Although the pattern of use of "zeroing" in the present
dispute is not exactly the same, there is neverthel ess, in our view, sufficient evidence to establish the
existence of the "continued use" measure that Brazil challenges. Apart from the evidence showing the
use of "zeroing procedures" in each of the successive proceedings, of particular significance are the
statements contained in the Issues and Decisi on Memoranda, which in our view, leave little doubt
about how the USDOC intended to interpret the notio n of "dumping" in future proceedings under the
orange juice anti-dumping duty order at the time the Memoranda were issued. Thus, we conclude that
Brazil has established the existence of the USDOC' s "continued use" of "zeroing procedures" as a
"measure" in the form of "ongoing conduct" under the orange juice anti-dumping duty order.
(d) Whether the "measure" is inconsistent with Ar ticles 2.4, 2.4.2 and 9.3 of the AD Agreement
and Article VI:2 of the GATT 1994
7.193 We recall that we have already found that the USDOC's use of "simple zeroing" is
inconsistent with Article 2.4 of the AD Agreement. In our view, it necessarily follows that the
"continued use" of the "zeroing procedures" must also be inconsistent with the same provision. Thus,
we find that the United States' "continued use" of "zeroing" under the orange juice anti-dumping duty
order is inconsistent with Article 2.4 of the AD Agreement.
7.194 Brazil claims that the USDOC's "continued use" of "zeroing" is also inconsistent with
Articles 2.4.2 and 9.3 of the AD Agreement and Article VI:2 of the GATT 1994. The United States
submits that Brazil's reliance on Article 2.4.2 is misplaced because, in its view, the prohibition on

294 Exhibits BRA-28, p 5; BRA-43, pp 4-5; and BRA-50, p 4.

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"zeroing" in this provision is explicitly limited to the "investigation phase" , which by definition does
not include duty assessment proceedings or any ot her proceedings. Having found that the "continued
zeroing" measure challenged by Brazil is inconsiste nt with Article 2.4 of the AD Agreement, we
consider it is not necessary, for the purpose of satisfact orily resolving this dispute, to make additional
findings with respect to the same measure under Articles 2.4.2 and 9.3 of the AD Agreement and
Article VI:2 of the GATT 1994. On this basis, we decide to exercise judicial economy and decline to
make any findings in respect of Brazil's claims under Articles 2.4.2 and 9.3 of the AD Agreement and
Article VI:2 of the GATT 1994.
VIII. CONCLUSIONS AND RECOMMENDATIONS
A. CONCLUSIONS
8.1 As previously observed, the question at the cen tre of Brazil's complaint in this dispute has
been well litigated in WTO dispute settlement. Th is core question concerns how the AD Agreement
(and Article VI of the GATT 1994) defines the notion of "dumping": is it a concept that relates to an
exporter's overall pricing behaviour that can onl y be measured with respect to the "product as a
whole"; or can it also be conceived of and m easured on a transaction-specific basis? Although
fundamental and of critical importance to the opera tion of the AD Agreement, our evaluation of the
parties' arguments and relevant jurisprudence has led us to conclude that there exists no single answer
to this question. The objective lack of clarity on th is issue, to some extent also recognized by the
Appellate Body 295, lends legitimacy to both parties' pos itions. However, the Appellate Body has
consistently only found room for there to be one permissible interpretation of "dumping"; and for the
important systemic reasons described above 296, we have decided to follow this interpretation and
come to the final conclusions expressed in this report. Nevertheless, we wish to once again
emphasize that all Members have a strong systemic interest in seeing that a lasting resolution to the
"zeroing" controversy is found sooner rather than later. In this regard, we note that Members have not
only sought to resolve the issue of "zeroing" thr ough WTO dispute settlement, but they are also trying
to address it through negotiations in the Negotiati ng Group on Rules in the context of the Doha
Development Agenda
297.
8.2 In the light of the findings set out in the fore going sections of this Repor t, we conclude that
Brazil has established that:
(a) the United States acted inconsistently with Article 2.4 of the AD Agreement when it
used "simple zeroing" to determine the we ighted-average margins of dumping (used
to set the cash-deposit rates) and the importer-specific assessment rates of Cutrale and
Fischer in the First and Second Administ rative Reviews under the orange juice anti-
dumping duty order; and
(b) the United States' "continued use" of "zeroi ng" in proceedings under the orange juice
anti-dumping duty order is inconsistent with Article 2.4 of the AD Agreement.
8.3 Finally, in the light of the findings we have set out in paragraphs 8.2, we make no findings,
based on judicial economy, in respect of Brazil's claims:

295 See, in particular, the Concurring Opinion of one Appellate Body Member in Appellate Body
Report, US – Continued Zeroing, paras. 304-313.
296 See above, paras. 7.132-7.135.
297 See, e.g, Draft Consolidated Chair Texts of the AD and SCM Agreements, 30 November 2007,
TN/RL/W/213; and New Draft Consolidated Chair Texts of the AD And SCM Agreements, 19 December 2008,
TN/RL/W/236. We also note that Article 3.9 of the DSU states that its provisions are "without prejudice to the
right of Members to seek authoritative interpretation of provisions of a covered agreement through decision-
making under the WTO Agreement".

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(a) under Article 9.3 of the AD Agreement and Article VI:2 of the GATT 1994,
concerning the United States' alleged use of "simple zeroing" in the First and Second
Administrative Reviews under the orange juice anti-dumping duty order; and
(b) under Articles 2.4.2 and 9.3 of the AD Agreement and Article VI:2 of the
GATT 1994, concerning the United States' "continued use" of "zeroing" in
proceedings under the orange juice anti-dumping duty order.
B. RECOMMENDATION
8.4 Pursuant to Article 3.8 of the DSU, in cases wh ere there is infringement of the obligations
assumed under a covered agreement, the action is considered prima facie to constitute a case of
nullification or impairment of bene fits under that agreement. Accord ingly, we conclude that to the
extent the United States has acted inconsistently with Article 2.4 of the AD Agreement, it has
nullified or impaired benefits accruing to Brazil.
8.5 We recommend that the Dispute Settlement Body request the United States to bring its
measures into conformity with its obligations under the AD Agreement.