Document: WT/DS343/R Page C-1 ANNEX C EXECUTIVE SUMMARIES OF THE FIRST WRITTEN SUBMISSION OF THE THIRD PARTIES CONTENTS PAGE Annex C - 1 Executive Summary of the First Written Submission of Brazil C-2 Annex C - 2 Executive Summary of the First Written Submission of Chile C-7 Annex C - 3 Executive Summary of the First Written Submission of the
Document codes: WT/DS343/R
Complainant: Thailand
Respondent: U.S.
Third parties: Brazil, Chile, China, EU, India, South Korea, Japan, Mexico, Vietnam
Dispute stage: Appellate Body
Agreements cited: Art. 2.4.2, 2.1, 2.4, 9.3, 18.1, 7, 9.1, 9.2, 9.3, 7.4  Anti-dumpingArt. VI:2  GATT 1994Art. 7.2  Anti-dumpingArt. XI:1, I:1, II:1, X:3(a), XX  GATT 1994

ANNEX C

EXECUTIVE SUMMARIES OF THE FIRST WRITTEN SUBMISSION
OF THE THIRD PARTIES

CONTENTS PAGE
Annex C - 1 Executive Summary of the First Written Submission of Brazil C-2
Annex C - 2 Executive Summary of the First Written Submission of Chile C-7
Annex C - 3 Executive Summary of the First Written Submission of the
European Communities
C-10
Annex C - 4 Executive Summary of the First Written Submission of India C-15
Annex C - 5 Executive Summary of the First Written Submission of Japan C-21
Annex C - 6 Executive Summary of the First Written Submission of Korea C-24
Annex C - 7 Executive Summary of the First Written Submission of Mexico C-27

ANNEX C - 1

EXECUTIVE SUMMARY OF THE FIRST WRITTEN SUBMISSION OF
BRAZIL

(18 May 2007)
1. Introduction
1. In this submission, Brazil sets out its views on the reasons why the special bonding
requirement applied by the United States against im ports of certain frozen warm-water shrimp subject
to anti-dumping duties, originating in Brazil, China, Ecuador, India, Thailand and Vietnam
("Enhanced Bond Requirement" or "EBR") 1 violates Articles 18.1 and 1 of the Agreement on
Implementation of Article VI of the GATT 1994 (the "AD Agreement") and Articles VI:2 and II:1(b)
of the GATT 1994, or in the alternative Articles 9 and 1 of the AD Agreement. Further, the EBR is
not "reasonable security" under Note 1 Ad Article VI:2-3 and cannot be justified pursuant to
Article XX(d) of the GATT 1994.
2. The Measures At Issue
2. Responding to a report by US Customs and Border Protection ("CBP") 2 on fiscal year 2003
uncollected anti-dumping and countervailing duties, on 9 July 2004 CBP amended its existing Bond
Directive governing Customs bonding requirements, and set new formulas for calculating minimum
continuous bond amounts for importers of agriculture/aquaculture products subject to anti-dumping or
countervailing duty (CVD) orders.
3 This EBR requires a bond for 10 percent of duties, taxes and fees
paid by the importer in the prior 12 months (i.e ., the normal continuous bond amount), plus 100 per
cent of the cash deposit rate established in the anti-dumping order (or most recent administrative
review), multiplied by the value of the importer's entries of that product over the previous 12 months.4
Pursuant to a clarification issued by CBP on 10 August 2005, the EBR applies to "shrimp covered by
anti-dumping or countervailing duty cases", the only designated "Covered Cases" within the only
designated "Special Category", agriculture/aquaculture merchandise.
3. In October 2006, an in-depth examination of the EBR by the US Government Accountability
Office ("GAO") concluded that this bonding requi rement "represented a significant change from
CBP's traditional method of setting bond amounts," and was "inconsistently implemented" as between
shrimp importers, due to a lack of "clear and transparent guidance". 5 Days before the US Court of
International Trade ("USCIT") issued a stinging ju dgment against CBP in domestic litigation on the
EBR, 6 CBP issued a 24 October 2006 Federal Register notice further modifying the EBR by
identifying the factors it would consider in dete rmining, prospectively for individual importers,
whether to reduce a bond amount.7

1 Frozen warmwater shrimp from Brazil, Thailand, India and these other countries subject to
anti-dumping duties is referred to herein as "subject shrimp."
2 Continued Dumping and Subsidy Offset Act (CDSOA) annual report for fiscal year 2003,
Exhibit THA-11 (WT/DS343).
3 Exhibit THA-2.
4 Exhibit THA-5. The EBR is specific to subject shrimp, but if any other goods were subject to the
EBR but not to AD/CV duties, they would have no cash deposit rate, and the bond amount would be the same as
under a normal continuous bond.
5 Exhibit THA-10 (WT/DS343) at 7.
6 Exhibit THA-9.
7 Exhibit THA-5.

3. The Enhanced Bond Requirement Is Inconsistent "As Such" With Articles 18.1 and 1 of
the Anti-Dumping Agreement
4. The EBR should be analyzed as a separate measure, and as constituting "specific action"
imposed "against" dumping inconsistent with Articles 18.1 and 1 of the AD Agreement.
(b) The Enhanced Bond Requirement Is "Specific Action" and Is Imposed "Against Dumping"
5. As the Appellate Body stated in US – Offset Act (Byrd Amendment) , if a measure "may be
taken only when the constituent elements of dumping . . . are present", it is a "specific action" within
the meaning of Article 18.1. 8 The CBP notices imposing or clarifying the EBR state that it applies
only to goods subject to a US anti-dumping or CVD orde r. Since US law only permits such orders to
be imposed where the US authorities have determin ed that the constituent elements of dumping or
subsidization are present, the EBR is a "specific action against dumping."
6. The EBR corresponds to the fines on importers provided by Article 93V of Mexico's Foreign
Trade Act, which the panel in Mexico – Anti-Dumping Measures on Rice condemned under
Article 18.1. That panel also found that by threatening to impose fines on importers of a product
subject to an anti-dumping or CVD investigation, Article 93V provided a "specific action" not
permitted by the AD or SCM Agreements.9
7. The United States asserts that the E BR responds to "noncollection risk. 10 Yet Customs is not
acting against all importers whose circumstances indicate high noncollection risk-it is only acting
against those who import subject shrimp.
8. The EBR is specific action "against" dumping b ecause, in effect, it punishes importers for
importing subject shrimp. The EBR indisputably meet s the test explained by the Appellate Body in
US – Offset Act (Byrd Amendment) . 11 It imposes a much larger bond requirement, and thus a
significantly greater financial burden 12 , on certain importers simply because they import shrimp
subject to anti-dumping measures. Furthermore, the 10 August 2005 notice makes it clear that the
bond requirement may be altered if the importer can show that it has ceased importing subject shrimp,
as also acknowledged by the USCIT.13
(c) The Enhanced Bond Requirement Is Not a Permissible Response to Dumping
9. The EBR is also not taken "in accordance w ith the provisions of GATT 1994, as interpreted
by [the AD] Agreement". The only permissible responses to dumping are definitive anti-dumping
duties, provisional measures and price undertakings—and the EBR is none of these. It is therefore
inconsistent with Article 18.1 of the AD Agreement.

8 Appellate Body Report, US – Offset Act (Byrd Amendment), para. 239.
9 Panel Report, Mexico – Anti-Dumping Measures on Rice, paras. 7.276, 7.278.
10 United States' first written submission, para. 35.
11 Appellate Body Report, US – Offset Act (Byrd Amendment), para. 250.
12 The United States contends that the prohibitive cost of an enhanced bond, including the requirement
of collateral, is a matter between the surety and the importer and not the responsibility of the United States.
However, because surety companies must have sureties for customs bonds authorized and certified by the US
Government in order to be permitted to write such bonds, and CBP may collect duties from the surety if the
principal defaults, the United States has a direct interest in the amount of security required by sureties.
13 Thailand's first written submission, para. 183.

10. The EBR on subject shrimp is inconsistent with Article 18.1 of the AD Agreement "as such".
It is a "rule or norm" attributable to a WTO Member, which mandates enhanced bonding requirements
on subject shrimp and which has general and prospective application on imports of subject shrimp.14
4. The Enhanced Bond Requirement Does No t Constitute "Reasonable Security"
Permitted by Note 1 Ad Article VI:2-3
11. The United States places the weight of its defenc e in this dispute on the assertion that the
EBR is a "reasonable" surety system permitted under Note 1 Ad paragraphs 2 and 3 of GATT
Article VI. However, the EBR falls outside the scope of the Ad Note. The text of the Note refers to
security for payment of anti-dumping or countervai ling duties "pending final determination of the
facts in any case of suspected dumping or subsidi zation", i.e. the Note only applies during an anti-
dumping investigation, and does not apply beyond th e date of the final anti-dumping determination
and order. The US argument that the "final determ ination of the facts" does not arrive until the final
duty assessment 15 is misplaced. The Note refers to secu rity in cases of "suspected dumping," but
dumping is only "suspected dumping" before the anti-dumping investigation has concluded. The US
imposed the EBR on importers of subject shrimp only after final anti-dumping measures were
imposed on 1 February 2005, and over two years later the EBR continues in effect.
12. Even assuming that the EBR falls within th e scope of the Ad Note, the EBR does not
constitute "reasonable security" under that provision. The use of "or" in "bond or cash deposit" in the
Ad Note gives the importing Member a choice between either bond or cash deposit as a "reasonable
security" – not both at once. Furthermore, the reas onableness of any "security for the payment of anti-
dumping or countervailing duties" must relate to a risk-based standard for the need for security
against non-payment. The decision to apply the EBR to shrimp was not based on any evidence of
actual default; moreover, to date, CBP continues not to apply the EBR to imports with proven high
default rates without providing any explanation, cont inues to apply the EBR to importers without any
default history and refuses to reduce the amounts of enhanced bonds already provided. Remarkably,
the USCIT itself has issued a preliminary injunc tion (although only for eight importers) on the basis
that the EBR is likely to be found "arbitrary and capricious" – confirming that the EBR is
unreasonable.16
5. The Enhanced Bonding Requirement is Also In consistent with Articles VI:2 and II:1(b)
of the GATT and Article 1 of the Anti-Dumping Agreement
13. The fees and interest costs associated with th e duplicative requirements to pay a cash deposit
and provide an enhanced bond also have the result that the total duty burden on the importer will
exceed the amount of the dumping margin in violation of Article VI:2 of the GATT. Panels have
recognized that the fees and interest costs associated with a bonding requirement are a real cost to
importers.17 Because the EBR is applied other than unde r the circumstances provided for in Article
VI, it constitutes a breach by the United States of its obligations under Article 1 of the AD Agreement
and Article VI of the GATT. As a consequen ce, the EBR and the anti-dumping measures on subject
shrimp are not an "anti-dumping or countervailing duty applied consistently with the provisions of
Article VI," within the meaning of GATT Article II:2(b), and these measures therefore impose an
"other duty or charge" in breach of US obligations under GATT Article II:1(b).

14 Appellate Body Report, US – Zeroing (EC), para. 198. See also Appellate Body Report, US –
Zeroing (EC), para. 188, and Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review, para. 82.
15 United States' first written submission, para. 22. Br azil also notes the striking difference between the
texts of Ad Note 1 ( final determination of facts ) and Article 9.3.1 of the AD Agreement, cited by the United
States in support of its argument (determination of the final liability for payment of anti-dumping duties).
16 Exhibit THA-9, p. 46-47, 53, 57-61.
17 See, e.g., EEC – Minimum Import Prices, para. 4.6 (accepting that in terest charges and costs in
connection with the lodging of a security associated with an import certificate were in excess of bound duties).

6. In the Alternative, the Enhanced Bond Re quirement is Inconsistent as such with
Articles 9 and 1 of the Anti-Dumping Agreement
14. In the alternative, even if the EBR is to be analyzed together with the anti-dumping measures
it enforces, it is inconsistent with Article 9 of the AD Agreement, because the United States is
collecting duties in excess of the amounts permitted thereunder. The EBR is inconsistent with
Article 9.1, because the charges imposed by the US are not the "full margin of dumping or less"; with
Article 9.2, because the anti-dumping duty collected by the United States is not collected in the
"appropriate amounts"; and Article 9.3, because the amount of the anti-dumping duty exceeds the
margin of dumping.
15. In consequence, the US anti-dumping measures on subject shrimp are imposed inconsistently
with the United States' obligations under Article 1 of the AD Agreement. As a further consequence,
the EBR and the anti-dumping measures on subject shrimp fall outside GATT Article II:2(b) and are
in breach of GATT Article II:1(b) for the reasons set forth in the preceding paragraph.
16. While the United States may have a right to co llect cash deposits, it has no right to require
both a cash deposit equivalent to the full amount of the dumping margin and a bonding requirement as
an anti-dumping enforcement measure.
7. The Enhanced Bond Requirement Cannot be Justified under Article XX(d) of the
GATT 1994
17. The United States has invoked Article XX(d) of the GATT 1994 as an affirmative defence. 18
The United States bears the burden of proof to demo nstrate that all conditions of Article XX(d) are
fulfilled. Brazil offers the following comments on Article XX(d) without prejudice to its right to
submit further arguments at the oral hearing.19
(b) The Enhanced Bond Requirement Is Not "Nece ssary to Secure Compliance" Within the
Meaning of Article XX(d) of the GATT 1994
18. The United States has not demonstrated that the EBR satisfies the requirements of
Article XX(d).20 The United States has done no more than make unsubstantiated assertions that
agriculture/aquaculture products in gene ral, or shrimp in particular, create per se a critical risk of
default in AD/CV duty collection. General, abstra ct allegations such as these are insufficient to
satisfy the burden of proof under Article XX.
19. Moreover, the GAO's finding that when the CBP examined AD and CVD cases to evaluate
the risk of uncollected duties, 67 per cent of the time, duty rates decreased or stayed the same
between the time of entry and final liquidation 21, contradicts the United States' general assertion that
there is a need to impose untargeted surety requirements to guarantee increased future duty payments.

18 United States' first written submission, paras. 61-77.
19 It is not entirely clear whether the references ma de by the United States to Article XX encompass
claims advanced by the complainants under Article 18.1 of the AD Agreement. The United States simply argues
that Article XX reinforces its allegations th at the EBR is not inconsistent with “US WTO obligations”
(emphasis added). Brazil proceeds, however, under the as sumption that the US defense relates exclusively to
claims under the GATT provisions.
20 United States' first written submission, paras. 61-77.
21 Exhibit THA-10, at 16. Where no administrative review of an order is requested on the anniversary
of the order or no administrative review is conducted, liquidation is set at the rates set by the final determination
and order. It is only when an administrative review is conducted that a rate may change.

20. The United States suggests that its decision to designate the shrimp anti-dumping orders as
"Covered Cases" is "due in part to low capitalizat ion and high turnover rates in the industry as a
whole" 22 , and a belief "that importers of agricultu re/aquaculture merchandise tended to be
undercapitalized.23 Yet importers of agriculture and aquaculture products do not necessarily have low
capitalization. Conversely, any consumer goods indu stry where the importer is a middleman rather
than a user of the product imported is likely to be characterized as thinly capitalized and subject to
high turnover rates. Thus, the US concerns do not apply to all agriculture and aquaculture importers,
and can apply to importers in many other sectors.
21. Even assuming that the United States can demonstr ate that particular features of aquaculture
and agriculture imports warrant particular surety me asures, the United States had at its disposal less
trade restrictive measures that it could reasonably employ (e.g . more frequent investigations, raising
the cash deposit rate immediately upon making a preliminary finding in an anti-dumping
administrative review, etc.).24
22. Finally, Brazil recalls that as the GAO Report states, adoption of the EBR – by transferring
the burden of higher bonds to foreign-based supplie rs – is already giving rise to results that defeat,
rather than make a contribution to, the purpose allegedly pursued by the US Customs authorities.25
(c) The Enhanced Bond Requirement Does Not Se cure Compliance with Measures That Are
"Not Inconsistent" With the WTO Agreement
23. Furthermore, the adoption of the EBR was directly related to enforcement of the Byrd
Amendment26 in defiance of the adopted Panel and Appe llate Body reports condemning that illegal
measure and in disagreement with the US's stated intentions to comply with the DSB's rulings and
recommendations.27 The explicit nexus traced by the US authorities between the EBR and the Byrd
Amendment constitutes undeniable evidence of a bi as that no legitimate reading of Article XX can
support.
8. Conclusions
24. Brazil respectfully requests that the Panel find that the EBR is inconsistent as such with
Articles 18.1 and 1 of the AD Agreement, and Articl es VI:2 and II:1(b) of the GATT 1994, or in the
alternative with Articles 9 and 1 of the AD Agreement. Brazil further requests that the Panel find that
the EBR does not constitute "reasonable security" unde r Note 1 Ad Article VI:2-3 of the GATT 1994,
and that the EBR cannot be justified under Artic le XX(d) of the GATT 1994. Brazil supports the
request of Thailand that the Panel, pursuant to its authority under Article 19.1 of the DSU, suggest
that the United States bring its measure into conformity with its WTO obligations, by immediately
releasing any bonds held by the CBP for imports of an y subject shrimp pursuant to the EBR, so that
those imports would be secured by the normal basi c bond requirements applying to all other US
imports.

22 United States' first written submission, para. 27.
23 United States' first written submission, para. 14.
24 Thailand's first written submission, paras. 84-89.
25 Exhibit THA-10, at p. 6. See also Thailand's first written submission at p. 35, 43-44.
26 Thailand's first written submission, paras. 94-97.
27 Dispute Settlement Body, Minutes of the Meeting of 27 January 2003 (WT/DSB/M/142,
6 March 2003), para. 60. At the time the "9 July 2004 Amendment" was adopted by the US Customs authorities,
almost 18 months had passed from the date on which the United States announced its intention to implement the
DSB’s rulings and recommendations in the Byrd Amendment dispute.

ANNEX C - 2

EXECUTIVE SUMMARY OF THE FIRST WRITTEN SUBMISSION OF
CHILE

(10 May 2007)

1. Introduction
1. This submission containing the grounds and le gal argument in support of Chile's position is
made under Articles 10.2 and 10.3 of the Dispute Settlement Understanding ("the DSU"). Chile
makes this submission in light of its systemic inte rest in the correct application of the Agreement on
Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (the "Anti-
Dumping Agreement).
2. Thailand asserts that the United States used th e "zeroing" methodology in the determination
of margins of dumping and applied significantly enhanced bonding requirements with respect to
imports of certain frozen warmwater shrimp from Thailand.
3. Chile submits, in accordance with the factua l evidence provided by Thailand, that the
measures concerned are inconsistent with the Unite d States obligations under Articles 2.4.2. and 18.1
of the Anti-Dumping Agreement and Articles XI:1, I, II:2 (b), first and second sentences, and X:3 of
the General Agreement on Tariffs and Trade 1994 (the "GATT 1994").
(b) The USDOC's Use of Zeroing
4. Repeated reports by panels and the Appellate Body have declared that the use of "zeroing"
methodology during the investigations to determine ma rgins of dumping is inconsistent with Article
2.4.2 of the Anti-Dumping Agreement. As it is described by the panel in US – Zeroing (Japan):
Where an authority establishes the existence of margins of dumping during the
investigation phase by making multiple, model-by-model comparisons between
average export prices and average normal va lues and by aggregating the results of
those comparisons into an overall margin of dumping, Article 2.4.2. of the AD
Agreement requires that the results of tho se comparisons be fully taken into account
in the numerator of the overall margin of dumping.
5. There is a consistent line of reasoning in the Appellate Body reports, from EC – Bed Linen to
US Zeroing (EC) , that holds that "zeroing" in the cont ext of the weighted-average-to-weighted-
average methodology in original investigations is in consistent with Article 2.4.2 of the Anti-Dumping
Agreement.
6. As Chile has submitted in past disputes, involving "zeroing" methodology, it is urgent that the
United States and in particular the United Stat es Department of Commerce (USDOC) relinquishes for
good the application of this methodology in original investigations and subsequent reviews in full
implementation with the abovementioned reports.
(c) The Enhanced Bond Requirement
7. Article 18.1 of the Anti-Dumping Agreement is clear in stating that no specific action against
dumping of exports from another member can be ta ken except in accordance with the provisions of
GATT 1994, as interpreted by the Agreement.

8. United States in paragraph 31 of its First Submission states that the Additional Bond
Directive does not constitute a specific action against dumping because it does not meet any of the
criteria singled out in the same paragraph: (1) th e action is taken only when the constituent elements
of dumping are present (i.e. it is specific to dumping) ; (2) the action is taken "against dumping"; and
(3) it is inconsistent with the provisions of GA TT 1994. United States explained that the additional
bond directive serves to secure an otherwise unsecured debt owed to the US government in the form
of assessed antidumping duties that exceed cash deposits.
9. However, we consider that the elements provide d by the parties indicate that we are in the
presence of a measure within the terms of Article 18. 1 of the Anti-Dumping Agreement. The panel in
US – Offset Act , states that all types of specific actions against anti-dumping, which are not those
permissible under GATT 1994 as interpreted by the Anti-Dumping Agreement (i.e. definitive anti-
dumping duties, provisional measures and price undert akings) are not permitted. In addition, the
Appellate Body in US – Offset Act , clarifies that the constituent elements of dumping are present
when the measure is inextricable linked to, or have a strong correlation with, the constituent elements
of dumping.1
10. In accordance with the Amendment to Bond Directive 99- 3510-004 for Certain Merchandise
Subject to Antidumping/Countervailing Duty Cases 2 and the Clarification to July 9, 2004 Amended
Monetary Guidelines for Setting Bond Amounts fo r Special Categories of Merchandise Subject to
Antidumping and/or Countervailing Duty Cases 3 , it appears clearly that the application of the
Enhanced Bond Requirement is limited to goods upon which USDOC has issued an anti-dumping
order. With that, the inextricability relationship between the Enhanced Bond Requirement and the
constituent elements of dumping is established, meeting the specificity dimension of the measure.
11. Regarding the requirement that the measure constitutes an specific action against dumping,
the Appellate Body in US – Offset Act, held that the measure:
has an adverse bearing on, or, more specifically, has the effect of dissuading the
practice of dumping or the practice of subsidization, or creates an incentive to
terminate such practices.4
12. The evidence submitted by Thailand demonstrat es that the Enhanced Bond Requirement is
within the meaning stated by the Appellate Body. It has an adverse bearing and serves to dissuade the
practice of dumping by increasing the costs to importe rs, exporters, or foreign producers of importing
the merchandise in question to the United States.
13. Furthermore the Enhanced Bond Requirement is inconsistent with GATT 1994. Specifically,
Article XI:1 prohibits restrictions on importation that do not take the form of duties, taxes or other
charges. We agree with the view of Thaila nd that the Enhance Bond Requirement imposes a
restriction within the meaning of Article XI:1and it does not constitute a duty, tax or other charge.
The United States concedes that the bond provided takes the form of a security that does not involve a
transfer of funds to the United States treasury.5
14. In accordance with the elements mentioned abov e, Chile considers that the Enhanced Bond
Requirement constitutes a specific action against dump ing, and therefore inconsistent with Article
18.1 of the Anti-Dumping Agreement.

1 Appellate Body Report, US – Offset Act, para. 239.
2 Exhibit THA – 2.
3 Exhibit THA – 4.
4 Appellate Body Report, US – Offset Act, para. 254.
5 United States' first written submission, para. 10.

2. Conclusion
15. Chile respectfully requests that the Panel does not divert from previous and conclusive rulings
and recommendations of the DSB and confirms that "zeroing" is a methodology inconsistent with
Article 2.4.2 of the Anti-Dumping Agreement and that the Enhanced Bond Requirement is
inconsistent with Article 18.1 of the Anti-Dumping Agreement and Article XI:1 of GATT 1994.

ANNEX C - 3

EXECUTIVE SUMMARY OF THE FIRST WRITTEN SUBMISSION OF
THE EUROPEAN COMMUNITIES

(16 May 2007)

1. Enhanced Bond Requirement
(a) Principal factual features of the EBR which affect the EC legal analysis
1. As explained by Thailand (and not disputed by the US) the Enhanced Bond Requirement
("EBR")1 applies in addition to the cash deposit rate. 2 Hence, the EBR is not supposed to ensure the
collection of dumping duties assessed at the rate initially determined by the US investigating
authorities (as the collection of these duties is ensure d by the cash deposit rate). The EBR is designed
to ensure collection of final anti-dumping duties that would be due in case dumping would increase
dramatically from one year to another. 3 The EBR is therefore a measure designed to address a
hypothetical problem in the collection of a hypothetical dumping duty reflecting a hypothetical
dramatic increase in dumping (up to 100 per cent ) from the level of dumping that has been initially
determined by the investigating authorities.
(b) Measure designed to ensure collection of an anti-dumping duty cannot be more onerous that
the anti-dumping duty itself
2. In the European Communities' view, one of the main reasons behind the existence of
Article VI GATT and the Anti-Dumping Agreement was a desire to create a set of anti-dumping
disciplines acceptable to all Members and capable of curbing the possibilities of a misuse – deliberate
or not – of anti-dumping policies by Members. Yet, what would be the purpose of creating these
rather detailed and carefully balanced rules, su ch as those on the calculation of dumping margin and
the amount of anti-dumping duty, if the effect on trade of the duties determined pursuant those rules
could be in practice much less important that the impact of measures ensuring the collection of those
duties?
3. By definition, measures designed to ensure th e collection of anti-dumping duties are merely
ancillary to the duties themselves. If no dumping is determined which would give a rise to an
anti-dumping duty, there cannot be an ancillary measur e that is supposed to ensure the collection of
such duty. Moreover, even if a margin of dump ing is determined and a corresponding anti-dumping
duty is assessed, the mechanism for securing the collection of that anti-dumping duty cannot impose a
burden which would be greater than the duty itsel f – otherwise the Anti-Dumping Agreement would
contain detailed rules only on the determinatio n of a collection mechanism and not on the
determination of dumping.

 1In its first written submission, Thailand refers to a number of US measures challenged in the present
dispute as "Enhanced Bond Requirement". The US us es, in its first written submission, another set of
abbreviations to refer to these measures, or some of those measures (as the reference does not seem to be always
consistent). For ease of reference and to prevent co nfusion, the European Communities will refer in this
submission to these measures, identified by Thailand, as the "Enhanced Bond Requirement" or "EBR".
2 Thailand's first written submission, para 5, fo r instance, and Exhibit THA-2. US first written
submission, paras 11-13.
3 This also is confirmed by the statements made by the US authorities. See Thailand's first written

4. The temporary nature of EBR (the fact that once the margin of dumping for the period
covered by EBR is definitely de termined and the anti-dumping duties finally collected, the remaining
funds previously "frozen" in the enhanced bonds can be used for other purposes) does not affect this
assessment. To the contrary, it actually underlines it. What sort of a temporary measure of an
ancillary nature can be given such an effect whic h actually removes the very reason for the existence
of and imposition the anti-dumping duties – namely the exports by dumping companies – by
eliminating in practice these companies themselves (or their ability to export to the US)? 4
(c) EBR is inconsistent with the provisions of Article 9 Anti-Dumping Agreement
5. The European Communities recalls the far-reaching nature of the EBR: the EBR is not merely
a "collection-ensuring mechanism", it is a measure against potential future dumping which is put in
place without any evidence and actual determination of dumping. This contradicts a number of
distinct provisions of Article 9 Anti-Dumping Agreement. Article 9, as indicated in its title, sets forth
– for the purposes of the Anti-Dumping Agreement – rules governing the imposition and collection of
anti-dumping duties. The first three paragraphs of Article 9 set out rules governing this issue.
6. First, following on the precedi ng provisions of the Anti-Dumping Agreement, Article 9.1
makes clear that the determination of a margin of dumping is an inherent pre-condition for the
imposition of any anti-dumping duty. At any stage, an anti-dumping duty has to be calculated and
imposed on the basis of and in correspondence to positive evidence of dumping. The latter element –
the existence of a corresponding relationship between the evidenced margin of dumping and the
amount of duty – is also reflected in the sec ond sentence of Article 9.1 of the Anti-Dumping
Agreement: Members are encouraged to impose a l esser duty than the margin of dumping if such
lesser duty would be adequate to remove the in jury to domestic industry. However, Members
certainly cannot, under this provision, impose a duty which would be more than the margin of
dumping.
7. Article 9.2 of the Anti-Dumping Agreement confirms the above understanding. The
reference to "appropriate amounts" in Article 9.2 follows on the principle set out in Article 9.1: an
anti anti-dumping duty imposed (in accordance with Article 9.1) shall also be collected in appropriate
amounts.
8. In other words, the rule resulting from Articles 9.1 and 9.2 is that the "appropriate amounts"
have to correspond to the imposed duty and the duty itself has to correspond to the margin of
dumping (or less than the margin of dumping, if deemed sufficient to remove injury). This principle
is further elaborated in Article 9.3 of the Anti-Du mping Agreement. This provision states, in its
chapeau, the fundamental principle that "[t]he amount of the anti-dumping duty shall not exceed the
margin of dumping established under Article 2." To ensure that this princi ple is respected, Articles
9.3.1 and 9.3.2 of the Anti-Dumping Agreement set forth refund rules for both the retrospective and
prospective systems. The existence of these rul es makes it clear that the collected anti-dumping
duties may temporarily exceed the actual contemporaneous margin of dumping (as opposed to the
margin of dumping calculated during the original in vestigation) – for example if dumping decreases.
This is a natural implication of the technical m echanics of the dumping determination, nothing more.
An attempt to read into these refund rules a new rule, namely one allowing a temporary increase of
collected anti-dumping duty bearing no relation to the margin of dumping actually ascertained would
not be based on the text of these provisions.
5 Both the text and context make clear that the purpose of
Article 9.3.1 and 9.3.2 is to set forth refund rul es and not to provide a ground for a departure from the
principles established in Articles 9.1 and 9.2 of the Anti-Dumping Agreement.

4 See, for instance, Thailand's first written submission, paras 121 et seq.
5 It seems that the US might actually be taking this position (cf. United States first submission, para 23).

9. To summarize: the EBR attempts to ensure the collection of an anti-dumping duty for which a
margin of dumping has not at all been established. In that respect, the measure directly violates
Articles 9.1, 9.2, 9.3 and 9.3.1 of the Anti-Dumping Agreement.
10. The European Communities also notes that Thailand argues that the EBR is not an
anti dumping "duty".6 Irrespective of whether EBR is seen as a "part" of a provisional duty collected
or as something else, the legally significant aspect is that the EBR distorts, in a very rampant way, the
balance reached in the provisions of Article 9. The European Communities also does not take the
view that the drafters chose to leave out the ques tion of the adequateness of security for the collection
of anti-dumping duty outside the scope of the Anti-Dumping Agreement. The applicable rules are
embodied in the provisions of Article 9 discussed above.
(d) Ad Note to paragraphs 2 and 3 of Article VI GATT confirms that EBR violates Article VI:2
GATT and the Anti-Dumping Agreement
11. The European Communities is of the view that EBR is prohibited by Article VI:2 GATT for
the same reasons as discussed above : the EBR requires a surety with respect to anti-dumping duties
based on dumping which had not yet been determined a nd, in fact, had not occurred. The Ad Note to
paragraphs 2 and 3 of Article VI GATT confirms this conclusion as it allows a Member to "require
reasonable security (bond or cash deposit) for th e payment of anti-dumping or countervailing duty
pending final determination of the facts in any case of suspected dumping or subsidization. "7 In many
respects, this provision addresses the very matte r at issue. The EBR is not a "security … pending
final determination of the facts". As the European Communities mentioned at the outset, the EBR is
targeted at a potential future dramatic increase (up to 100 per cent ) in dumping beyond the level of
the dumping incurred in the past assessment period. Hence, in contrast to a cash deposit applied by
the US, the EBR is not a security required pending the final determination of the facts in a case of
suspected dumping. A "final determination" implie s that there already has been a preliminary or
initial determination of dumping which is then veri fied – and, if necessary, adapted – and becomes
final. Yet, when EBR is applied, there is no prel iminary or initial determination of the facts of
dumping with respect to the dramatically increased dumping that is addressed by EBR.
(e) Article 7.2 Anti-Dumping Agreement confirms that security cannot exceed the margin of
dumping
12. In the preceding section, the European Communiti es explained that EBR violates Article 9 as
it attempts to ensure the collection of duties d esigned to offset dumping which has not yet occurred
and has not been established. This view is further confirmed by Article 7.2 Anti-Dumping Agreement.
While this provision relates to provisional measures, the principle holds equally well with respect to
the issue at hand: if there is a margin of dum ping determined, and if there is a duty assessed on the
grounds of that margin, then a security can be requested that, however, has to correspond to the
amount of that duty . In other words, the security cannot be determined in the absence of a margin of
dumping and duty determination. If this rule were not applicable beyond the stage of preliminary
measures, then one would end up with a rather absu rd result: one would have to accept that the Anti-
Dumping Agreement for some reason only protects th e preliminary phase against a misuse and that
the main and principle part of the anti-dumping regime, which can and does last for years, is fully
open to all kinds of measures which can bypass the anti-dumping duty and be, as far as their effect is
concerned, much more onerous.

6 Thailand's first written submission, paras 203 – 210.
7 Emphasis added.

(f) EBR violates Article 18.1 Anti-Dumping Agreement
13. Like Thailand, the European Communities is also of the view that EBR is a "specific action
against dumping" which is not permitted by Article 18.1 of the Anti-Dumping Agreement. Instead of
repeating the arguments made by Thailand, however , the European Communities would limit itself to
pointing out a few factual and legal aspects of the EBR which it considers particularly relevant. First,
in the European Communities' view, there can be no doubt that the EBR is a "specific" action against
dumping. As the European Communities mentioned above, the EBR is a measure ancillary to the
anti dumping duties, not the other way round. Without an anti-dumping proceeding and an initial
finding of dumping, the EBR would/could not be im posed and, in fact, would be without purpose.
Second, there is no doubt that the EBR is a specific action "against" dumping. The European
Communities recalls that under the Appellate Body case law, the legal test in this respect should focus
on dumping (or subsidization) as "practices"
8 and, particularly, on the assessment of "whether the
design and structure of a measure is such that th e measure … has an adverse bearing on … or, more
specifically, has the effect of dissuading the pr actice of dumping … or creates an incentive to
terminate such practices". 9 The effect of the measure in question on the competitive position of the
domestic industry vis-à-vis their foreign competitors subject to anti-dumping duties is at least one of
the elements in the above test. 10 The harmful effects of EBR on the competitors of the US domestic
industry have been well documented in the submission of Thailand.11
(g) Other claims raised by Thailand and alterna tive measure ensuring collection of anti-dumping
duties
14. The European Communities does not address other cl aims raised by Thailand in detail as it
believes that a Panel finding made under the legal pr ovisions discussed in the preceding sections of
this submission (i.e., provisions which pertain sp ecifically to dumping) would correspond to and
address more pertinently the problem at issue. For the sake of comple teness, the European
Communities notes, however, that it disagrees with the US view that the EBR can be justified under
Article XX(d) GATT. 12 In particular, contrary to what the US argues, the EBR is not "necessary to
secure compliance" with US anti-dumping duty laws. Alternative measures, su ch as variable duties,
are reasonably available 13 and, if adopted, would lead to a c onsiderably less onerous and restrictive
impact upon trade.
2. The Anti-Dumping Measure
15. The European Communities notes that the US acknowledged that US DOC used in the case
referred to by Thailand the same zeroing methodology as was used in the US – Zeroing (Ecuador)
case and that it did not put forward any arguments jus tifying the use of this methodology. There is no
question that the Panel should consider itself bound by what is now a well established case law on the
issue and find that the US violated its obligations under Article 2.4.2 of the Anti-Dumping Agreement.
3. Conclusion
16. The European Communities is of the view th at the EBR, as challenged by Thailand, is
inconsistent with Articles 9.1, 9.2, 9.3, 9.3.1 and 18.1 of the Anti-Dumping Agreement and with
Article VI:2 GATT including the Ad Note to Paragr aphs 2 and 3 of Article VI GATT. The European

8 US – Offset Act (Byrd Amendment), Appellate Body Report, para 253.
9 US – Offset Act (Byrd Amendment), Appellate Body Report, para 254.
10 US – Offset Act (Byrd Amendment), Appellate Body Report, para 256.
11 See, for instance, Thailand's first written submission, paras 121 et seq.
12 United States' first written submission, paras 61 et seq.
13 United States' first written submission, para 70.

Communities is also of the view that the Anti-Dumpi ng Measure is inconsistent with Article 2.4.2 of
the Anti-Dumping Agreement.

ANNEX C - 4

EXECUTIVE SUMMARY OF THE FIRST WRITTEN SUBMISSION OF
INDIA

(20 May 2007)
1. Zeroing.
(a) "Zeroing” is inconsistent with Article 2.4.2 of the Anti-Dumping Agreement
1. India has consistently opposed the use of zeroing methodology in calculating dumping
margins beginning with the dispute that it in itiated against the European Communities in EC - Bed
Linen. The findings of the Appellate Body in that dispute have been confirmed and extended in
subsequent panel and Appellate Body reports.
2. In its first written submission, Thailand no tes that the zeroing methodology used by the
United States in calculating dumping margins of Thai exporters of subject shrimp 1 is identical to that
found to be inconsistent with Article 2.4.2 of the Anti-Dumping Agreement in US – Softwood
Lumber V. Thailand relies on the repeated findings in pa nel and Appellate Body reports that zeroing
is inconsistent with Article 2.4.2 of the Anti-Du mping Agreement. Thailand also relies on a recent
report in US – Shrimp (Ecuador) where the Panel found that the zeroing methodology used by United
States to calculate dumping margins is inconsis tent with Article 2.4.2 of the Anti-Dumping
Agreement. In its first submission, the United Stat es has conceded that the same type of zeroing as in
US – Shrimp (Ecuador) has occurred in the investigation of subject shrimp from Thailand and that "…
a measure using a similar calculation was the subject of the Softwood Lumber report and the DSB
ruled that the measure was inconsistent with Article 2.4.2, first sentence, because of that calculation".
India considers, therefore, that Thailand has discharged its burden of making a prima facie case
establishing the inconsistency of the zeroing me thodology used by the United States with its
obligations under Article 2.4.2 of the Anti-Dumping Agreement.
2. The Enhanced Bond Requirement.
(a) The Enhanced Bond Requirement is inconsiste nt with Article 18.1 of the Anti-Dumping
Agreement.
3. The Enhanced Bond Requirement constitutes an impermissible "specific action" against
dumping that is inconsistent with the obligations of the United States under Article 18.1 of the Anti-
Dumping Agreement. According to the Appellate Body ruling in US – Offset Act , a three-step
analysis is necessary to determine whether a measure constitutes impermissible specific action against
dumping. The two basic conditions precedent are that the measure must be (a) "specific" to dumping,
and (b) "against" dumping. If these two conditions ar e met, it is necessary to determine whether the
measure has been taken in accordance with the provisions of Article VI of the GATT 1994 as
interpreted by the provisions of the Anti-Dumping Agreement.
4. The Enhanced Bond Requirement is "specific" to dumping because it applies only to
importers of designated merchandise that is s ubject to anti-dumping duties, i.e., when all the
conditions for imposition of anti-dumping duties have been fulfilled. As the United States itself has
admitted in US- Offset Act , a measure such as the Enhanced Bond Requirement that "… imposes …
liability on importers/producers/ exporters when dumping … is found …" will constitute "specific
action" with respect to dumping. In addition, one important element of the formula for calculating the

1 Terms used but not defined in this Executive Summary of the third party submission of India have the
meanings assigned to them in the first written submission of Thailand in this dispute.

bond liability amount is the amount of anti-dumping duties owed based on the dumping margin.
Moreover, one of the stated purposes of the Enha nced Bond Requirement is to ensure that anti-
dumping duties are collected for payment to domestic industry under the Byrd Amendment, which the
Appellate Body has found to be a "specific action" against dumping. Regulations or administrative
procedures by CBP to implement the Byrd Amendment such as the Enhanced Bond Requirement also,
therefore, constitute specific action against dumping or subsidization. Therefore, there is clearly an
inextricable link between the Enhanced Bond Requirement and the constituent elements of dumping.
5. Further, the Enhanced Bond Requirement also clearly acts "against" dumping. It has a serious,
adverse impact on importers and, therefore, on dumping. The demand of 100 per cent collateral by
sureties acceptable to CBP to issue enhanced bonds and high bond premiums and other charges
impose a heavy burden on importers . The bonds initially posted inevitably get saturated before the
first administrative review and liquidation are comple ted. As a result, importers are forced to post
additional enhanced bonds, which results in further charges and further depletion of their capital and
credit. Thus, as found by the USCIT, importers suffer serious losses in profits and business
opportunities. This has a serious deterrent effe ct on exports subject to the Enhanced Bond
Requirement as is evident from the sharp drop be tween 2005 and 2006 in the quantity and value of
subject shrimp exported from India as well as in the total number of exporters from India.
6. The last step in the analysis is to determ ine whether the Enhanced Bond Requirement accords
with the requirements of Article VI of the GATT 1994 as interpreted by the provisions of the
Anti-Dumping Agreement. In US –1916 Act , the Appellate Body found that the Anti-Dumping
Agreement limits the permissible responses to dumping to (a) definitive anti-dumping duties,
(b) provisional measures and (c) price undertakings. By definition, the Enhanced Bond Requirement
does not involve the collection of a definitive anti- dumping duty or a price undertaking by exporters.
It is also not a provisional measure to the extent that it is applied (a) in addition to, and on top of, the
provisional measures contemplated by Article 7 of the Anti-Dumping Agreement, and (b) even after
the provisional measures contemplated by these prov isions have run their c ourse and the decision to
impose definitive duties has been taken. Acco rdingly, the Enhanced Bond Requirement is
inconsistent with the obligations of the Un ited States under Article 18.1 of the Anti-Dumping
Agreement.
7. Further, the United States cannot rely on footnote 24 to the Anti-Dumping Agreement to
justify the Enhanced Bond Requirement under other provisions of the GATT 1994. Footnote 24
qualifies Article 18.1 of the Anti-Dumping Agreement by stating that it is not "…intended to preclude
action under other relevant provisions of GATT 1994, as appropriate." In US – Offset Act , the
Appellate Body clarified that these provisions only "… confirm what is implicit in Article 18.1 of the
Anti-Dumping Agreement …, namely, that an action that is not ‘specific’ within the meaning of
Article 18.1 of the Anti-Dumping Agreement …, but is nevertheless related to dumping …, is not
prohibited by Article 18.1 of the Anti-Dumping Agreement ". Therefore, a measure that constitutes
specific action against dumping cannot be justified under footnote 24. The Enhanced Bond
Requirement clearly constitutes specific action against dumping. Accordingly, the United States
cannot justify it under any other provision of the GATT 1994.
(b) The Enhanced Bond Requirement is inconsistent with Articles 9.1, 9.2, 9.3 and 9.3.1 of the
Anti-Dumping Agreement.
8. Under Article 9.1 of the Anti-Dumping Agreement, the decision to impose definitive duties
follows upon an affirmative finding of dumping and of consequent injury. Under Article 9.2 of the
Anti-Dumping Agreement, the only measure that ma y be taken as a result of the decision to impose
definitive duties under Article 9.1 is that duties sh all be collected in the "appropriate amounts".
Further, under Article 9.3, the amount of the duty shall not exceed the "margin of dumping".

Therefore, it is clearly impermissible to demand an enhanced bond in addition to the duties collected
in an amount equal to the dumping margin.
9. The United States cannot justify the Enhanced B ond Requirement on the basis that it follows
the retrospective system of assessment referred to in Article 9.3.1 of the Anti-Dumping Agreement.
Article 9.3.1 clarifies that the "final liability" for anti-dumping duties will be fixed at the stage of
administrative review and that any refund must be made normally within a period of 90 days from the
determination of the final liability. The terms "f inal liability" and "refund" in Article 9.3.1 of the
Anti-Dumping Agreement have the following implications. First, there must be a prior liability that is
not "final", which can only refer to the liability fixed at the time of the imposition decision in
Article 9.1. Second, it is permi ssible under Article 9.3.1 for the Unite d States to collect higher anti-
dumping duties after the administrative review under Article 9.3.1 than were collected under Article
9.2 consequent upon the imposition decision taken under Article 9.1. Third, Article 9.3.1 could not
have contemplated a refund unless some amounts have already been collected prior to the
determination of the final liability. However, th e duties may be collected only "in the appropriate
amounts" consequent upon the imposition decision in Article 9.1. Lastly, the absence of any
reference to a discharge of bonds in Article 9. 3.1 (unlike in Articles 10.4 and 10.5 of the Anti-
Dumping Agreement) confirms that no measure ot her than the collection of definitive anti-dumping
duties in "appropriate amounts" is contemplated af ter the imposition decision in Article 9.1 and prior
to the determination of final liability in Article 9. 3.1. Even by implication, however, Article 9.3.1
does not confer any special right on Members that choose to follow the retrospective assessment
system to take any measure after the imposition d ecision in Article 9.1 othe r than to collect anti-
dumping duties.
10. The ordering of the paragraphs of Article 9 of the Anti-Dumping Agreement makes it clear
that Articles 9.1 and 9.2 also govern the retrospective assessment system. That Article 9.3 and Article
9.3.1 follow after Article 9.2 does not mean that so me additional right to take security exists in the
case of retrospective assessment systems. In f act, the first sentence of Article 9.3 prohibiting
collection of duties in excess of the dumping marg in qualifies the "appropriate amounts" in which
anti-dumping duties may be collected under Article 9.2.
11. Moreover, it is important to keep in mind the policy consequences of conceding any right to
take enhanced bonds that is not governed by the strict disciplines contained in the Anti-Dumping
Agreement. Members may well demand a continuous bond amounting to 200 per cent or 300 per cent
of anti-dumping duties payable on imports for the immediately preceding one-year period. Therefore,
the Enhanced Bond Requirement is inconsistent with the provisions of Articles 9.1, 9.2, 9.3 and 9.3.1
of the Anti-Dumping Agreement.
(c) The Enhanced Bond Requirement is inconsis tent with Article 7 of the Anti-Dumping
Agreement.
12. The Enhanced Bond Requirement cannot be ju stified under Article 7 of the Anti-Dumping
Agreement. Under Article 7.1(iii), it is necessary that "the authorities concerned judge such measures
necessary to prevent injury being caused during the investigation". The stated reasons for introducing
the Enhanced Bond Requirement do not mention injury being caused during the investigation and
focus on ensuring that payments are made to domes tic industry pursuant to the Byrd Amendment.
Therefore, if the Enhanced Bond Requirement is a provisional measure, it is inconsistent with
Article 7.1(iii) of the Anti-Dumping Agreement.
13. The Enhanced Bond Requirement is also incons istent with Article 7.2 of the Anti-Dumping
Agreement. A provisional measure may not be for an amount in excess of the "provisionally
estimated margin of dumping". However, under the Enhanced Bond Requirement, importers are
required to provide an enhanced bond for an am ount equal to the anti-dumping duties payable on

imports for the previous year rather than a single-entry bond for the amount of anti-dumping duty
owed on each shipment.
14. Moreover, Article 7.4 of the Anti-Dumping Agreement provides for limiting a provisional
measure to a maximum period of six months. To th e extent that the Enhanced Bond Requirement on
importers is introduced or remains in place on a ny date after six months from the date on which
provisional measures are first imposed, the Enha nced Bond Requirement constitutes a clear
inconsistency with the provisions of Article 7.4.
(d) The Enhanced Bond Requirement is inconsistent with Note 1 to Paragraphs 2 and 3, Ad
Article VI.
15. India considers that the United States cannot rely upon the Note 1 to Paragraphs 2 and 3, Ad
Article VI to justify the Enhanced Bond Requirement independently of Article 7 of the Anti-Dumping
Agreement. In fact, it is clear that the "reasonable security (bond or cash deposit)" referred to in Note
1 to Paragraphs 2 and 3, Ad Article VI is the same as the provisional measures referred to in Article 7
and that this provision merely elaborates upon Note 1 to Paragraphs 2 and 3, Ad Article VI and
imposes further disciplines in this regard. The final determination of the facts referred to in Note 1 to
Paragraphs 2 and 3, Ad Article VI can only be at the stage of the decision to impose definitive anti-
dumping duties under Article 9.1. Thus, Note 1 to Paragraphs 2 and 3, Ad Article VI does not
constitute a "general exception" in Article VI of the GATT 1994 that operate s independently of the
disciplines in Articles 7 and 9.
16. Further, the requirement in Note 1 to Paragra phs 2 and 3, Ad Article VI that any security
taken must be "reasonable" is clearly not satisfi ed in the case of the Enhanced Bond Requirement
because the enhanced, continuous bond must be furnis hed in addition to maki ng cash deposits at the
duty rates specified in the Order. Therefore, th e Enhanced Bond Requirement imposed by the United
States is per se unreasonable. In addition, the Enhanced Bond Requirement is clearly not reasonable
because it was motivated by political considerations. Further, the designation of products by CBP is
also arbitrary and capricious. CBP does not cite a single reason as to why there is a likelihood of a
higher rate of default in collection of anti-dumping duties on imports of subject shrimp as opposed to
imports of other agricultural or aquacultural mercha ndise. As imports of subject shrimp were not
liquidated, there was no evidence of default by impor ters of subject shrimp at the relevant time.
Further, CBP at no time has offered any explanatio n of why importers of crawfish or garlic from
China were not subject to the Enhanced Bond Requirement. It is clear also that CBP does not engage
in any analysis of the likelihood of an increas e in dumping margins which is the ostensible
justification for applying the Enhanced Bond Requi rement to merchandise subject to anti-dumping or
countervailing duties.
17. Moreover, the extent of the security dema nded under the Enhanced Bond Requirement is
clearly excessive. As the USCIT found, the effect s of imposition of the Enhanced Bond Requirement
include (a) a serious depletion of the credit of im porters, (b) dropping or scaling back on product lines
imported into the United States, (c) preventing the addition of new product lines, (d) causing the loss
of spot sales, (e) preventing participation in bids from major supermarket chains, (g) forcing imports
of subject shrimp on a delivered, duty-paid basis, t hus reducing profit margins, (h) adversely affecting
customer and supplier relationships, and (i) inability to fulfil contractual orders. The extent of the
harm suffered as a result of the Enhanced Bond Requirement is evidence of its unreasonableness.
18. In fact, until the publication of the 24 Octobe r 2006 Notice in the Federal Register, CBP did
not take account of the financial soundness of indi vidual importers at all, which presumably should
have been its primary concern in imposing the Enhanced Bond Requirement. This is an obvious
indicator of the extreme unreasonableness both in c onception and in administration of the Enhanced
Bond Requirement. Although CBP now claims that it will take into account the financial soundness

of individual importers in fixing the amount of the e nhanced bond, they have also clarified that they
will not apply this analysis pending liquidation to im porters of subject shrimp to reduce the value of
enhanced, continuous bonds already furnished. A ccordingly, India considers that the Enhanced Bond
Requirement is inconsistent with the provisions of Note 1 to Paragraphs 2 and 3, Ad Article VI.
(e) The Enhanced Bond Requirement is inconsistent with Article X:3(a) of the GATT 1994.
19. India submits that the Enhanced Bond Requireme nt is inconsistent with Article X:3(a) as
applied to subject shrimp because it has not been ad ministered in a uniform, impartial and reasonable
manner as discussed above. It has been applied onl y to importers of subject shrimp from the six
countries subject to anti-dumping duties and not to other importers. Therefore, the Enhanced Bond
Requirement is clearly inconsistent with the requi rements of Article X:3(a) as applied to subject
shrimp.
(f) The Enhanced Bond Requirement is inconsistent with Articles I and II:1(a) and II:1(b) of the
GATT 1994.
20. To the extent that the Enhanced Bond Require ment can be characterized legally as involving
duties, taxes or other charges, India submits that it is inconsistent with the obligations of the United
States under Articles I:1 and II:1(a) and II:1(b) of the GATT 1994. The Enhanced Bond Requirement
certainly involves charges by US surety companies, is "a method of levying … duties", and represents
a "rule" and "formality" in connection with importation. " Therefore, it is clearly subject to the most-
favoured nation obligation in Article I:1 of the GA TT 1994. To the extent that the Enhanced Bond
Requirement is applied in a discriminatory manner, th erefore, to only those Members that are subject
to anti-dumping duties in respect of certain designate d merchandise, it is clearly inconsistent with the
obligations of the United States under Article I:1 of the GATT 1994.
21. Again, to the extent that the Enhanced B ond Requirement necessarily involves payment of
(high) charges to US surety companies, it cons titutes an inconsistency with the second sentence of
Article II:1(b), which provides that the "… products [d escribed in Part I of the Schedule] relating to
any [Member] shall also be exempt from all other … charges of any kind imposed on or in connection
with the importation in excess of those imposed on th e date of this Agreement or those directly and
mandatorily required to be imposed thereafter by legisl ation in force in the importing territory on that
date."
22. The duties associated with the Enhanced B ond Requirement are not anti-dumping duties
authorized under the provisions of Article VI of the GATT 1994 or the Anti-Dumping Agreement. To
the extent that the Enhanced Bond Requirement resu lts in an increase in "contingent tariff liability"
above bound levels for Members subject to anti- dumping or countervailing duties, therefore, the
Enhanced Bond Requirement is inconsistent with the obligations of the United States under
Article II:1(a) and the first sentence of Article II: 1(b) of the GATT 1994. Moreover, the increase in
contingent tariff liability is only in respect of cer tain Members whose merchandise is subject to the
Enhanced Bond Requirement. Therefore, it is also inconsistent with the "most-favoured nation"
treatment obligation of the United States under Article I:1 of the GATT 1994. It is important to note
that the bound rate for shrimp falling under tariff headings 0306.13.00 and 1605.20.10 in the Schedule
of Concessions of the United States is "0.0%". Therefore, the Enhanced Bond Requirement is
inconsistent with Articles I, II:1(a) and II:1(b) as applied to subject shrimp.
(g) In the alternative, the Enhanced Bond Requireme nt is inconsistent with Article XI of the
GATT 1994.
23. Alternatively, to the extent that the Enhanced Bond Requirement may be legally characterized
as an import restriction and not as a "duty, tax or other charge," it is clearly inconsistent with

Article XI:1 of the GATT 1994 and is not saved by any of the exceptions contained therein. The
Enhanced Bond Requirement operates in a manner th at severely restricts imports into the United
States of merchandise subject to anti-dumping or count ervailing duties. Accordingly, to this extent,
the Enhanced Bond Requirement is inconsistent with Article XI:1 of the GATT 1994.
3. Conclusion
24. For the reasons stated above, India requests that the Panel find that (a) the zeroing
methodology followed by the United States is inconsiste nt with its obligations under Article 2.4.2 of
the Anti-Dumping Agreement; and (b) the Enhanced Bond Requirement is in consistent with the
provisions of Articles 7.1, 7.2, 7.4, 9.1, 9.2, 9.3, 9.3.1 and 18.1 of the Anti-Dumping Agreement, of
Article X:3(a) of the GATT 1994 and of (i) Articles I:1 and II:1(a) and II:1(b) or (ii) alternatively, of
XI:1 of the GATT 1994.

ANNEX C - 5

EXECUTIVE SUMMARY OF THE FIRST WRITTEN SUBMISSION OF
JAPAN

(18 May 2007)
1. Introduction
1. This dispute brought by Thailand is about the Enhanced Bond Requirement (the "EBR") on
certain products subject to antidumping or countervailing duties introduced by the United States.
Thailand questions the WTO consistency of this measure on imports of certain frozen warmwater
shrimp from Thailand in light of various provisions under the AD Agreement and the GATT 1994. In
this submission, Japan, as a third party, would like to focus on the following two issues based on its
systemic interest in the interpretation of these agr eements ensuring fair and objective application of
them:
– whether the EBR constitutes specific action ag ainst dumping that is inconsistent with
Article 18.1 of the AD Agreement; and
– whether the EBR is inconsistent with the Ad Note 1 to paragraphs 2 and 3 of Article VI
of the GATT 1994.
2. Arguments
(a) Consistency of the EBR with Article 18.1 of the AD Agreement prohibiting specific actions
against dumping other than those permitted under the AD Agreement
2. Thailand submits that the EBR constitutes an impermissible specific action against dumping
under Article 18.1 of the AD Agreement.
3. The Appellate Body stated that a Member's measure constitutes a specific action against
dumping, where: (1) the measure is "specific" to dumping; (2) the action is taken "against" dumping,
i.e., to counteract dumping; and (3) it is in consistent with the provisions of GATT 1994, as interpreted
by the AD Agreement. 1 An action is "specific" where it is "inextricably linked to, or have a strong
correlation with, the constituent elements of dumping." 2 An action is taken "against" dumping if the
action "has the effect of dissuading the practice of dumping."3
4. Regarding the "specific" requirement, Japan considers that the Panel should examine under
what situations the EBR is imposed to see whethe r and how the measure is linked to the "constituent
elements" of dumping. In Japan's view, to meet this requirement, it would be necessary that the EBR
is imposed only where dumping is found to exist. In this connection, it appears that the bond
requirement in question is required only where th e United States found the existence of dumping, i.e .,
constituent elements of dumping. Any additional re quirements, such as the risk of non-collection for
individual importers, would not change such basic characteristics of the EBR.
5. Regarding the "against" requirement, the Panel should examine at least the purpose as well as
the design and structure of the EBR, and its eff ect, that is, how the bond requirement would reduce
shipments from subject countries. In particular, th e United States admits that the EBR is to secure

1 See Appellate Body Report, US –Offset Act (Byrd Amendment), WT/DS217/AB/R, WT/DS234/AB/R,
adopted 27 January 2003, para. 236.
2 Ibid., para.239.
3 Ibid., para.254.

future duty collection in case that "the anti dumping duty rate actually assessed increase from that
determined during the investigation." 4 By definition, the antidumping duty is a measure "against"
dumping. As the bond requirement in question is a measure to complement the imposition of
antidumping duty, it must be a measure "against" dumping.
6. The United States argues that the EBR is not an action "against" dumping, but "is designed to
secure antidumping liability" only because "the vast majority of unsecured liability that has resulted in
noncollection happens to be antidumping duty liability."
5 The United States also argues that it is just
a third party beneficiary and "is not itself a party to the contract" with a surety. 6 There is no dispute,
however, that the EBR is an action taken by the United States to collect antidumping duty only with
respect to imports for which dumping was found. As discussed above, the bond requirement at issue
must be a "specific action against dumping".
7. In such case, the Appellate Body clarifies that the permissible action under Article 18.1 of the
AD Agreement is limited to the imposition of (i) definitive anti-dumping duties, (ii) provisional
measures, or (iii) price undertakings. 7 The EBR is not either one of these three measures, and
therefore impermissible under Article 18.1 of the AD Agreement.
8. The United States argues that the EBR is merely "related to" dumping or subsidies 8, and
therefore permissible. The United States then re lied on the statement of the Appellate Body that
footnote 24 of the AD Agreement and footnote 54 of the SCM Agreement is to confirm that "an
action that is not ‘specific' within the meaning of Article 18.1 of the Anti-Dumping Agreement and of
Article 32.1 of the SCM Agreement, but is neverthe less related to dumping or subsidization, is not
prohibited" by those Articles. 9 As the bond requirement in question is "specific" action against
dumping or a subsidy as discussed above, the requi rement would not be justified by any other
provisions of GATT 1994.
(b) Permissibility of the Enhanced Bond Requirement under the Ad Note
9. The United States argues that the Ad Note 1 to paragraphs 2 and 3 of Article VI of the
GATT 1994 justifies the EBR, 10 arguing that the EBR is "security against the prospect of a future
liability."11 Thailand considers that the measure which the Ad Note contemplates is the provisional
measure provided in Article 7 of the AD Agreement .12 The United States rebuts that the bond
requirement at issue is imposed pending determination of the final liability for payment of duties .
According to the United States, in the context of its retrospective duty assessment system, the
language "final determination of the facts" in the Ad Note means "determination of the final liability
for payment of anti-dumping duties." 13 Based on the following consider ation, Japan is of the view
that the "reasonable security" permitted under the Ad Note purports the provisional measures, which
are articulated in Article 7 of the AD Agreement or Article 17 of the SCM Agreement.
10. First, the language "pending final determination of the facts" in the Ad Note must be read in
the context of the subsequent language "in any case of suspected dumping or subsidization" (emphasis

4 United States' first written submission, para.13.
5 Ibid., para. 34.
6 Ibid., para. 7.
7 See Appellate Body Report, United States – Anti-Dumping Act of 1916 , WT/DS136/AB/R,
WT/DS162/AB/R, adopted 26 September 2000, para.137.
8 United States' first written submission, para.33.
9 US – CDSOA (AB), para.262. (emphasis in original)
10 United States' first written submission, paras.20-29.
11 Ibid., para. 25.
12 Thailand first written submission, paras.194-198
13 United States' first written submission, para.22 (emphasis added)

added). The word "suspected" suggests that the fa cts concerning "dumping" or "subsidization" are
still at an unproven stage. Therefore, Japan unders tands that Ad Note contemplates a situation before
the final determination of dumping or subsidization in the original investigation. The language of the
Ad Note "determination of facts in any case of suspected dumping or subsidization" does not support
the United States contention that this "determination" concerns with the final liability for payment of
duties in a review. The review, however, does not concern with the determination of the fact, or the
existence, of dumping or a subsidy. It merely reassesses the amount of dumping or subsidization.
The determination in a review, thus, is not related to the "final dete rmination of the facts of dumping
or subsidization" as set forth in the Ad Note.
11. Japan considers that the "final determination" in the Ad Note means that of dumping or
subsidization as a prerequisite of deciding to impose antidumping or countervailing duties. Therefore,
the measure permitted under the Ad Note should be th e provisional measures to be taken before the
final determination of dumping or subsidization, as provided in Article 7 of the AD Agreement or
Article 17 of the SCM Agreement.
12. Even in the retroactive system of duty assess ment in the antidumping regime, the United
States issues the antidumping order, which embodies the administrative decision to impose
antidumping duties on certain products upon affirmative final determination on the facts of dumping.
The determination of the assessment of the final duty liability may take place after the review process,
if a request for a review is made. The measure purpo rted in the Ad Note, howe ver, is only related to
the provisional measure to be taken before the issu ance of this order, not after the affirmative final
determination on dumping in the or iginal investigation, and not even before the completion of the
final liability assessment in a subse quent review. This interpretation equally applies to the imposition
of countervailing duties.
13. The United States also quotes the reference to "many other cases in customs administration"
to contend that the Ad Note permits the security requirement for the payment of antidumping or
countervailing duties apart from provisional measures. 14 However, the mere reference to customs
administration does not give support for an interp retation that the Ad Note would broadly permit
security requirement, including those imposed even after the final determination of dumping or
subsidization.
14. For the above reasons, Japan submits that it cons iders that the Ad Note gives no legal basis
for the imposition of the EBR.
3. Conclusion
15. Japan respectfully requests the Panel to examine carefully the facts presented by the parties to
this dispute in light of Japan's arguments above to ensure fair and objective application of the
AD Agreement and the GATT 1994.

14 United States' first written submission, para.25.

ANNEX C - 6

EXECUTIVE SUMMARY OF THE FIRST WRITTEN SUBMISSION OF
KOREA

(10 May 2007)
1. Introduction
1. This third party submission is presented by the Government of the Republic of Korea
("Korea") with respect to certa in aspects of the first written submissions by Thailand dated
20 March 2007 and the United States dated 1 May 2007, respectively, in United States – Measures
Relating to Shrimp from Thailand (WT/DS343).
2. Korea has systemic interests in the interpretation and application of provisions of Article 2.4.2
of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and
Trade 1994 ("AD Agreement") , which lay out legal guidelines for investigating authorities of the
Members in calculating dumping margins in an anti-dumping investigation. Therefore, Korea
reserved its third party rights pursuant to Article 10.2 of the Understanding on Rules and Procedures
Governing the Settlement of Dispute ("DSU") . Korea appreciates this opportunity to present its view
to the Panel.
3. In February 2005, the United States Department of Commerce ("USDOC") imposed
definitive anti-dumping duties on imports of certa in frozen warmwater shrimp from Thailand. 1 In the
course of the investigation, th e USDOC utilized the practice known as "zeroing" in calculating the
dumping margins for Thai exporters of subject product. 2 Korea believes that the anti-dumping
investigation conducted by the USDOC against shri mp from Thailand constitutes a serious violation
of Article 2.4.2 of the AD Agreement. In Korea's view, this dispute presents a vivid example of the
distortive nature of the zeroing practice maintained by the United States for a long time: but for
zeroing, the USDOC would have been unable to find a margin of dumping in the underlying
investigation.3
4. Korea therefore generally supports the argument s raised by Thailand in its first written
submission. Rather than covering all the argument s, however, Korea will address in this submission
certain critical issues in Korea's view.
2. Legal Arguments
(a) The USDOC's continued utilization of "zeroing" in an original investigation on an average-to-
average basis constitutes violation of Article 2.4.2 of the AD Agreement
5. First of all, Korea notes that in U.S.-Zeroing (Japan), the most recent decision relating to
zeroing, in which the Appellate Body exercised a comprehensive review of all aspects of zeroing
practice under the AD Agreement, the Appellate Body unequivocally held that zeroing in all respects
violates relevant provisions of the AD Agreement. 4 Furthermore, there is an ample body of
precedents, where panels and the Appellate Body fou nd that the zeroing practice used in average-to-

1 See Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty
Order: Certain Frozen Warmwater Shrimp from Thailand, 70 Fed. Reg. 5145 (1 February 2005). Not only
Thailand but five other countries were also subject to the concurrent investigations.
2 See USDOC, Decision Memorandum, Exhibit THA-16, p. 8.
3 See Thailand's first written submeission in U S—Measures Relating to Shrimp from Thailand (WT/
DS343) (20 May 2007), at para. 4.
4 See United States – Measures Relating to Zeroing and Sunset Reviews, WT/DS322/AB/R (adopted 23
January 2007) ("U.S.-Zeroing (Japan)"), at paras. 137-138, 147, 166, 167-169, 177, 186-187.

average comparison in an original investigation (tha t is, the first methodology in the first sentence of
Article 2.4.2 of the AD Agreement) viol ates Article 2.4.2 of the AD Agreement. 5 In the underlying
investigation of this dispute, the USDOC continued to utilize the zeroing prac tice in exactly the same
manner which has been repeatedly found by the pane ls and Appellate Body to be in violation of
Article 2.4.2 of the AD Agreement: it applied the zeroing practice in average-to-average comparison
in an original investigation. In Korea's view, therefore, the Panel could easily reach its determination
on this issue in this dispute.
6. This dispute provides a showcase example why and how zeroing distorts an anti-dumping
investigation. It has allowed the investigating authority to find a dumping margin where there should
have been none in the first place. Once an anti- dumping margin was erroneously found as a result of
zeroing and duty imposed, another agency of the US government, the Customs and Border Protection
("CBP"), then imposed a further administrative penalty on Thai exporters in the name of an
"Enhanced Bond Requirement."6
7. If there had not been a zeroing practice, there would not have been an anti-dumping order,
hence, probably, no Enhanced Bond Requirement either . In other words, this whole dispute simply
stemmed from the zeroing practice. As such, Kor ea requests the Panel to find that the zeroing
practice of the USDOC in an original investigation in an average-to-average comparison methodology
is prohibited by Article 2.4.2 of the AD Agreement.
8. Korea is aware that the United States has announ ced its intention to discontinue the use of
zeroing when calculating dumping margins on the basis of average-to-average comparisons in original
investigations. 7 Korea hopes that the new calculati on methodology of the USDOC faithfully
implements the holdings of the panels and the Appell ate Body in future anti-dumping investigations.
However, (i) given the length of zeroing disputes over the years involving multiple cases, (ii) the
history of continued resistance of the United States in implementing the panels' and Appellate Body's
zeroing decisions, and (iii) the still seemingly existe nt leeway of the investigating authority in
calculating the dumping margin under the new met hodology, Korea believes it worthwhile for the
Panel in this dispute to pursue this issue thoroug hly and pronounce its confirmation in an unequivocal
manner that the zeroing in an original investigati on on a weighted-average-to-weighted-average basis
violates Article 2.4.2 of the AD Agreement.
(b) Not only in average-to-average comparison in orig inal investigations, but also in any context
of dumping investigations and reviews zeroi ng produces inaccurate dumping margins and
thus violates various provisions of the AD Agreement
9. In addition, Korea also requests the Panel, in th e course of addressing this issue in the present
dispute, to confirm the gist of the Appellate Body decision in U.S.-Zeroing (Japan) : the Appellate
Body's decision was clearly to the effect that zeroing constitutes a violation not only in the context of
an average-to-average comparison in an original i nvestigation as with the case here, but also in all
aspects of an anti-dumping administration procedure, including administrative reviews, new shipper
reviews, and sunset reviews, regardless of comparison methodologies utilized by investigating

5 See, e.g., Panel Report, US – Zeroing (Japan) , para. 7.86; Appellate Body Report, US – Softwood
Lumber V, para. 117; Panel Report, US – Softwood Lumber V , para. 7.224 and 8.1(a)(i); Panel Report, US. –
Zeroing (EC), paras. 7.31-32; Appellate Body Report, EC – Bed Linen, paras. 46-66.
6 Although Korea notes that the Enhanced Bond Requirement itself poses a significant violation of
Article 18.1 of the AD Agreement, in the interest of brevity, it decides not to discuss this issue in this submission.
Korea generally supports the argument presented by Thai in its first written submission regarding the "Enhanced
Bond Requirement" issue.
7 See USDOC, Antidumping Proceedings: Calculation of the Weighted-Averag e Dumping Margin
During an Antidumping Investigation; Final Modification, 71 Fed. Reg. 77722 (27 December 2006).

authorities. Korea views the decision of the Appella te Body in that decision as pronouncing a blanket
prohibition of zeroing in any context of anti-dumping investigations and reviews.
10. So, in reaching a decision in this particular di spute, Korea requests the Panel to discharge its
obligation taking into account this broad finding of the Appellate Body that zeroing per se is simply
prohibited in an AD Agreement. Korea is aware that only Article 2.4.2 is implicated in this dispute
because zeroing challenged here is only the one used in an original investigation on an average-to-
average basis. The broad finding of the Appellate Body in U.S.-Zeroing (Japan), however, is directly
relevant in this dispute as well, because it provid es the most recent, the most comprehensive and the
most reasoned analysis on zeroing, basically wrapping up all the related issues and controversies in
this particular area.
11. As the Appellate Body correctly noted in that dispute, the fundamental problem of zeroing is
that it produces inaccurate dumping margins and this obvious inaccuracy distorts all aspects of anti-
dumping investigations and reviews. Thus zeroing-pr oduced determinations in original investigations
and reviews (including periodic reviews, new ship per reviews and sunset reviews) regardless of
specific comparison methodologies utilized (whether it is average-to-average basis, transaction-to-
average basis or transaction-to-transaction basis) in evitably constitute violations of various provisions
of the AD Agreement, such as Articles 2, 9 and 11. In reaching a decision in this dispute, therefore,
Korea hopes that the Panel analyses the present case from this broad perspective.
12. Korea also notes that recent panels reviewing zeroing disputes have made efforts to provide
consistent and uniform jurisprudence on this volatil e issue, and respectfully requests that the current
Panel does the same.8 Korea believes that the Panel's decision in this case will be important in that it
will be able to prompt the United States to halt its continued use of zeroing in any context in future
anti-dumping investigations and reviews.
3. Conclusion
13. For the foregoing reasons, Korea respectfully su bmits that the Panel finds that the USDOC's
anti-dumping investigation against shrimp from Thailand constitutes a violation of Article 2.4.2 of the
AD Agreement, and recommends that the United Stat es bring the measure into conformity with its
obligation under the AD Agreement. Korea apprecia tes this opportunity to present its view to the
Panel.

8 See, for instance, Panel Report, US – Shrimp (Ecuador), paras. 7.39 et seq.

ANNEX C - 7

EXECUTIVE SUMMARY OF THE FIRST WRITTEN SUBMISSION OF
MEXICO1

(10 May 2007)

1. Introduction
1. The Government of Mexico is grateful for this opportunity to present its views as a third party
to these proceedings. Mexico is participating in th is dispute as a third party because its interests have
been seriously undermined by the systematic app lication by the United States of WTO-inconsistent
zeroing measures identical to those that are being ch allenged in this dispute. This practice expressly
violates the United States' obligations under the WTO Anti-Dumping Agreement. 2 The present case
offers an opportunity to reaffirm these obligati ons and to secure prompt compliance by the
United States.
2. Mexico is not taking position on the impositi on of more stringent bond conditions for US
imports of the subject merchandise in the Warm Water Shrimp anti-dumping proceedings.
3. Mexico would like to share with the Panel a number of observations which it considers
important to the Panel's decision.
(a) "consistent line" of Appellate Body Reports have found Zeroing in original investigations to
be inconsistent with Article 2.4.2, first sentence
4. The legal conclusion to be drawn concerning the zeroing measures that are before the Panel is
clear. As recognized by the United States3, the zeroing model at issue in Thailand's claim involves the
same type of zeroing procedures that were before the Panel in United States – Anti-Dumping Measure
on Shrimp from Ecuador .4 In that case, the United States did not contest the inconsistency of its
measure with the Anti-Dumping Agreement, an d the Panel found the zeroing measure to be
inconsistent with the first sentence of Article 2.4.2 of the Anti-Dumping Agreement.
5. In its first written submission, the United States recognizes that "a measure using a similar
calculation was the subject of the Softwood Lumber report, and the DSB ruled that the measure was
inconsistent with Article 2.4.2". 5 However, although this was not expressly acknowledged by the
United States, the same legal conclusions were r eaffirmed by the Appellate Body in a series of
decisions issued since the report in US – Softwood Lumber V , for example in US – Zeroing (EC) and
US – Zeroing (Japan). Both of these Appellate Body reports found the zeroing measure to be
inconsistent "as such" with the obligations of th e United States under Article 2.4.2 and Article 2.4 of
the Anti-Dumping Agreement because it fails to determine a margin of dumping for the product under
investigation taken as a whole. As recently explained by the Panel in US – Shrimp from Ecuador
(WT/DS335/R):
[...] Thus, in our view, there is now a cons istent line of Appellate Body Reports, from
EC – Bed Linen to US – Zeroing (EC) that holds that "zeroing" in the context of the

1 This text was originally submitted in Spanish by Mexico.
2 Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994.
3 United States' first written submission (DS343) (20 March 2007), paragraph 80.
4 WT/DS335/R (30 January 2007).
5 United States' first written submission, paragraph 80.

weighted average-to-weighted average methodology in original investigations (first
methodology in the first sentence of Article 2.4.2) is inconsistent with Article 2.4.2.
We have, as is our duty, carefully consid ered the Appellate Body's reasoning in US –
Softwood Lumber V and taken into consideration th e consistent line of Appellate
Body Reports as mentioned in the previous paragraph. We find the Appellate Body's
reasoning persuasive and adopt it as our own. Given that the issues raised by
Ecuador's claims are identical in all material respects to those addressed by the
Appellate Body in the Lumber V case, we are satisfied that Ecuador has made a prima
facie case that the use of zeroing by the US DOC in the calculation of the margins of
dumping for Exporklore and Promarisco, from which were calculated the "all others"
margins in the three measures identified in its request for the establishment of a panel,
is inconsistent with the United States ' obligations under Article 2.4.2 of the
Anti-Dumping Agreement because the USDOC did not calculate these dumping
margins on the basis of the "product as a whole" as it failed to take into account all
comparable export transactions in calculating the margins of dumping.
6
6. The above considerations and reasoning are obvi ously directly related to Thailand's claim
with respect to the zeroing measure at issue in these proceedings.
7. Mexico strongly endorses the legal reasoning applie d in the uninterrupted string of Appellate
Body decisions described above. In each case, the Appellate Body has rightly taken as a starting point
the definitions of "dumping" and "margin of dumpi ng" appearing in Articles VI:1 and VI:2 of the
GATT 1994 and Article 2.1 of the Anti-Dumping Agre ement. The Appellate Body has consistently
determined that the margins of dumping must be calculated for each exporter or producer at issue with
reference to that exporter or producer's sales of the product under investigation taken as a whole.
These obligations are fundamental, and apply to the calculation of margins of dumping in all
procedural contexts and in all possible comparison methodologies.7
(b) There are compelling systemic reasons for this Panel to follow the Appellate Body's ruling
8. Although the quality and persuasiveness of th e Appellate Body's reasoning in themselves
provide sufficient grounds for this Panel to abide by the Appellate Body's decisions, Mexico notes
that there are also other considerations of consid erable systemic importance that should prompt this
Panel to adopt the reasoning applied in those earlier decisions.
9. Article 3.2 of the Dispute Settlement Understa nding identifies the dispute settlement system
as a "central element" in providing security and predictability to the multilateral trading system.
10. A panel in a previous dispute rightly pointed out that "[a]lthough previous Appellate Body
decisions are not strictly speaking binding on panels , there clearly is an expectation that panels will
follow such decisions in subsequent cases raisi ng issues that the Appellate Body has expressly
addressed."8 The Appellate Body supported this principle, inter alia, in US – Oil Country Tubular
Goods Sunset Reviews , in which it stated that "following the Appellate Body's conclusions in earlier
disputes is not only appropriate but is what w ould be expected from panels, especially where the
issues are the same."9

6 Report of the Panel, US – Shrimp from Ecuador, paragraph 7.40 and 7.41.
7 See, for example, the report of the Appellate Body in US – Zeroing (Japan), paragraph 109.
8 Report of the Panel in US – Zeroing (EC), paragraph 7.30.
9 Report of the Appellate Body, US – Sunset Review of Anti-Dumping Measures on Oil Country
Tubular Goods, paragraph 188.

(c) The Panel should note that the United States has modified its WTO–inconsistent practice, but
not with respect to initial investigations concluded before 22 February 2007
11. Mexico acknowledges that the United States h as modified its WTO-inconsistent zeroing
practice in one respect (original investigation us ing the average-to-average comparison methodology)
by virtue of a notice published in the Federal Register in December 2006. 10 However, this change of
policy does not address the case at issue directly, si nce it applies only to investigations subject to
determinations made on or after 22 February 2007. The determina tion in this case was made on
23 December 2004, which means that, if at all, the United States will change the results in this case
only with respect to the domestic legal proce dures under Section 129 of the Tariff Act of 1930 as
amended.
12. It is regrettable that Thailand has found it necessary to resolve this matter through the WTO
dispute settlement procedures in spite of the multip le Appellate Body reports that have found this
practice to be WTO-inconsistent and in spite of the fact that the United States does not appear to
dispute Thailand's claims with regard to zeroing. Mexico respectfully requests that the Panel bear
these circumstances in mind when formulating its recommendations in the Report.
2. Conclusion
13. For the reasons stated above, Mexico asks the Panel to uphold Thailand's claim that by using
the zeroing methodology with respect to the Warmwater Shrimp anti-dumping measure, the United
States has acted inconsistently with Article 2.4.2 of the Anti-Dumping Agreement.

Investigations, 71 Fed. Reg. 77722 (Department of Commerce) (27 December 2006).