Document: WT/DS322/RW Page D-1 ANNEX D SUPPLEMENTAL SUBMISSIONS OF THE PARTIES OR EXECUTIVE SUMMARIES THEREOF Contents Page Annex D-1 Executive Summary of the Supplemental Submission of Japan D-2
Document codes: WT/DS322/RW
Complainant: Japan
Respondent: U.S.
Third parties: Argentina, China, EU, Hong Kong, India, South Korea, Mexico, New Zealand, Norway, Taiwan, Thailand
Dispute stage: Implementation & Compliance
Agreements cited: Art. 2.1, 2.4, 2.4.2, 9.1, 9.2, 9.3, 5.8, 3, 9.5, 11.1, 11.2, 11.3, 1  Anti-dumpingArt. VI  GATT 1994Art. 18.4  Anti-dumpingArt. XVI:4  Agreement Establishing the World Trade Organization

ANNEX D

SUPPLEMENTAL SUBMISSIONS OF THE PARTIES
OR EXECUTIVE SUMMARIES THEREOF

Contents Page
Annex D-1 Executive Summary of the Supplemental Submission of Japan D-2
Annex D-2 Response of the United Stat es to the Supplemental Submission of
Japan
D-7
Annex D-3 Response of Japan to th e United States' Response to the
Supplemental Submission of Japan
D-14

ANNEX D-1

EXECUTIVE SUMMARY OF THE SUPPLEMENTAL
SUBMISSION OF JAPAN

(17 October 2008)

I. THE PANEL HAS JURISDICTION OVER THE 06/07 REVIEW

1. As demonstrated below, the Panel has juri sdiction to assess the consistency with the Anti-
Dumping Agreement and the GATT 1994 of the 06/07 review. Specifically, Japan's request for
establishment of this Panel includes the 06/07 review , which constitutes a "measure taken to comply",
within the meaning of Article 21.5 of the Understanding on Rules and Procedures Governing the
Settlement of Disputes ("DSU").

2. In this submission, Japan explains that the 06/ 07 review is a "measure taken to comply" under
Article 21.5 of the DSU due to its close connections with the other Ball Bearing reviews at issue, and
with the DSB's recommendations and rulings. Therea fter, Japan responds to two arguments made by
the United States that attempt to exclude this "m easure taken to comply" from the scope of these
proceedings. In particular, Japan shows that its panel request is sufficien tly specific to identify
the 06/07 review, and that measures adopted during panel proceedings may fall within a panel's terms
of reference.

3. The Appellate Body has recognized that "Artic le 21.5 proceedings involve, in principle, not
the original measure, but rather a new and different measure which was not before the original panel".
Where such new measures have " a particularly close relationship to the declared 'measures taken to
comply', and to the recommendations and rulings of the DSB", or where there are " sufficiently close
links" among them, the Appellate Body has concluded th at those new measures are subject to review
by an Article 21.5 panel.

4. The 06/07 review enjoys the same close substantive relationship to the reviews challenged in
the original proceedings as do reviews 4, 5 and 6. Specifically:

• the 06/07 review, like the original reviews a nd the reviews 4, 5 and 6, resulted from anti-
dumping proceedings conducted by the United St ates Department of Commerce ("USDOC")
and, in particular, the same type of proceeding, namely periodic reviews;

• the 06/07 review, like several of the original reviews and reviews 4, 5 and 6, was conducted
pursuant to an anti-dumping order concerning "B all Bearings and Parts Thereof From Japan",
which is to say that it concerns the same s ubject product and the same exporting country as
the original reviews and reviews 4, 5 and 6; and,

• the 06/07 review, like the original reviews and reviews 4, 5 and 6, concerns dumping
determinations made with respect to exports from the same companies.

5. Moreover, as with reviews 4, 5 and 6, the 06/07 review constitutes a replacement measure
that "supersedes" the previous periodic review invol ving ball bearings (review 6). That is, the 06/07
review establishes a cash deposit rate that replaces the cash deposit rate from the previous review, and
determines the importer-specific ass essment rate for entries initially subjected to the cash deposit rate
from previous reviews.

6. Finally, Japan notes that, as with the original reviews and reviews 4, 5 and 6, Japan contests
"a specific component" of the 06/07 review, namely, the use of the zeroing procedures in making the
dumping determinations. Japan challenges this spec ific component of the 06/07 review – and not
other aspects of that measure – in these proceedings.

7. Thus, the 06/07 review is part of a chai n of measures with extremely close substantive
connections that succeed each other year after year, with each successive measure in essence changing
only the rates determined in the previous measur e in the chain. In a report circulated on
1 October 2008, the panel in United States – Continued Existence and Application of Zeroing
Methodology ("US – Zeroing II (EC) ") also examined a chain of successive periodic reviews, and
reached a similar conclusion. It found that a seri es of periodic reviews identified in the European
Communities' panel request were w ithin its terms of reference, even if not identified in the
consultations request, because they referred to "the same subject matter, the same dispute".

8. The United States resists the inclusion of the 06/07 review as a "measure taken to comply",
for two reasons. First, the 06/07 review is not properly within the Panel's terms of reference, because
it was not identified in Japan's panel request with su fficient specificity, as required by Article 6.2 of
the DSU; and, second, the 06/07 review cannot be part of these proceedings because it did not exist at
the time of panel establishment. For the reasons provided below, the United States is in error.

9. Japan disagrees that the 06/07 review was not identified in Japan's panel request.
Section III:B of Japan's panel request identifies the pe riodic reviews at issue, namely: (i) five reviews
at issue in the original proceedings; (ii) three closely connected reviews that the United States argues
have "superseded", and secured "withdrawal" of, certain measures at issue in the original proceedings;
and, (iii) "any subsequent closely connected meas ures". The 06/07 review is such a "subsequent
closely connected measure", and for that reason, is part of these proceedings.

10. Although the United States now contends that Japan's panel request is not sufficiently
specific, in its First Written Submission, the Un ited States quoted Japan's reference in the panel
request to "any subsequent closely connected measures", and stated:

… the United States is concerned that Japan is trying to include in the Panel's terms
of reference any future administrative revi ews related to the eight identified in its
panel request … .

11. The United States, therefore, understood that the words of Japan's request identified future
periodic reviews related to the Ball Bearing reviews. This confirms that th e terms of Japan's panel
request are sufficiently specific to identify the 06/07 review.

12. With respect to the second objection raised – the timing of the 06/07 review – the
United States argues that this review is not proper ly within the Panel's terms of reference, because it
did not exist at the time of panel establishment. Again, the United States is in error.

13. Before turning to the specific arguments on the timing of the 06/07 review, Japan notes that
the timing of subsequent periodic reviews is a major feature of the US attempts to force all disputes
regarding such reviews into fresh WTO proceedings, thereby turning dispute settlement into a Ground
Hog Day. In particular, Japan notes that the United States contends that the timing of four Ball
Bearing reviews – 03/04 (review 4), 04/05 (review 5) , 05/06 (review 6) and 06/07 reviews – excludes
each from the scope of these proceedings. In short, the United States' view is that the reviews were
adopted too soon to be part of these proceedings (reviews 4 and 5), not close enough to the end of the
reasonable period of time ("RPT") for implementation (review 6), or too late (06/07 review). It seems
there is never a moment when the timing of a s ubsequent review would allow it to be part of
compliance proceedings.

14. With respect to the 06/07 review, the United St ates argues that future measures can never be
part of a panel's terms of reference. This interpre tation is contradicted by pr evious interpretations of
Articles 6.2 and 21.5 of the DSU. In US – Zeroing II (EC) , circulated just last week, the panel,
building on several earlier decisions, expressly recogni zed that, in appropriate circumstances, future
measures identified in a panel request can be included within a panel's terms of reference:

There may be exceptional cases where panels may consider to make findings on
measures not identified in the complaining party's panel request if circumstances
justify it. For that to happen, howeve r, the new measure or measures have to
constitute "a measure" within the meaning of Article 6.2 of the DSU and have to
come into existence during the panel proceedings.

15. The panel concluded that, although the Europ ean Communities' panel request had identified a
category of measure that might exist at some time in the future, the European Communities had failed
to demonstrate that any such measure existed at any time before or subsequent to panel establishment.
The panel therefore declined to make findings with respect to those measures.

16. In these proceedings, the 06/07 review satisfies th e circumstances identified by the panel. In
contrast to the alleged measures cha llenged by the European Communities in US – Zeroing II (EC) ,
there is no dispute that the 06/07 review exists or that it came into existence during these panel
proceedings. Furthermore, as stated above, the meas ure was adequately identified in Japan's panel
request.

17. The compliance panel in Australia – Salmon (21.5) also found that measures adopted during
panel proceedings may fall within a panel's terms of reference, particularly in the context of
compliance proceedings. In that dispute, the DS B's recommendations and rulings required Australia
to bring a federal ban on salmon imports into conformity with its WTO obligations. Although
Australia withdrew the federal ban, the state of Tasmania imposed a new import ban on salmon
subsequent to establishment of the compliance panel.

18. The panel undertook a two-step analysis to determine whether the Tasmanian ban was
properly subject to its review. In a first step, the panel assessed whether the Tasmanian ban was a
"measure taken to comply" under Article 21.5 of th e DSU, and concluded that it was. Japan recalls
that it has similarly established that the 06/07 review is a "measure taken to comply" on the basis of
the close substantive relationship between the 06/ 07 review, the reviews subject to the original
proceedings, and the DSB's recommendations and rulings regarding the original reviews.

19. In a second step, the panel in Australia – Salmon (21.5) considered whether the Tasmanian
ban was properly within its terms of reference under Article 6.2 of the DSU, even though the ban
"was only introduced subsequent to this Panel's establishment and therefore not expressis verbis
mentioned in Canada's Panel request".

20. In finding that the ban was part of its terms of reference, the panel not ed that Canada's panel
request identified measures taken to comply that Australia "'has taken or does take
'", which the panel
found to be a reference to "future measures". The panel also found that "[t]he ban falls within the
category of measures specified in the Panel request ". Australia was, therefore, on notice that future
measures belonging to an identified category of measures were at issue.

21. The United States appears to believe that the Tasmanian ban was part of the panel's terms of
reference in Australia – Salmon (21.5) because it "implemented" or was "similar" to a declared
compliance measure, namely the removal of the fede ral ban. Japan is unsure why the United States
takes the view that introducing a regional ban "imple ments" or is "similar" to the elimination of a
country-wide ban. The Tasmanian ban did not implem ent any aspect of the elimination of the federal
ban; nor is a new ban similar to the elimination of an old ban.

22. Instead, the crucial feature of Australia – Salmon (21.5) is that a subsequent "measure taken
to comply" was part of the panel's terms of reference because it belonged to a category of measures
identified in the panel request . Similar to Australia – Salmon (21.5) , the 06/07 review is a "measure
taken to comply" that falls within a category of measures explicitly identified in the panel request,
namely "any subsequent closely connected measures".

23. The panel in Australia – Salmon (21.5) also held that the particular characteristics of
compliance proceedings compelled the inclusion of the Tasmanian ban within its terms of reference:

What is referred to this Article 21.5 Pa nel is basically a disagreement as to
implementation. One measure was explicitly identified [in Canada's panel request],
with the knowledge, however, that further measures might be taken. To exclude
such further measures from our mandate once we have found that they are
"measures taken to comply", would go against the objective of "prompt compliance"
set out in Articles 3.3 and 21.1 of the DSU. To rule that such measures fall within
our mandate would not, in our view, deprive Australia of its right to adequate notice
under Article 6.2. On the basis of the Panel request Australia should have
reasonably expected that any further measures it would take to comply, could be
scrutinized by the Panel. We are faced here not with an Australian measure that was
unexpectedly included by Canada in its cl aims, but with a measure taken during our
proceedings by Australia, . . . and as part of Australia's implementation process to
which Canada subsequently referred. Argua bly, the surprise or lack of notice may,
indeed, be more real for Canada than for Australia.

24. Thus, like Canada's panel request in Australia – Salmon (21.5) , Japan's panel request
identified certain original and subsequent reviews "with the knowledge" of both Parties that future
"closely connected", and identified, subsequent revi ews might be taken. Indeed, the United States
was very much aware that the 06/07 review might be adopted during these proceedings given that it
initiated the review on 29 June 2007, during the RPT.

25. As the panel Australia – Salmon (21.5) said,

… compliance is often an ongoing or continuous process and once it has been
identified as such in the panel request, as it was in this case, any "measures taken to
comply" can be presumed to fall within the panel's mandate, unless a genuine lack of
notice can be pointed to.

26. In these proceedings – as with Australia – Salmon (21.5) – the respondent has received ample
"notice". The terms of Japan's request were suffici ently specific to alert the United States that the
panel request addressed, in the United States' own words, "any future administrative reviews related to
the eight identified in its panel request … ". Ther e was, therefore, nothing whatsoever "unexpected[]"
in Japan's claims regarding the 06/07 review in these proceedings.

27. As the panel in Australia – Salmon (21.5) said, this interpretation of Article 6.2 promotes the
prompt settlement of disputes under Articles 3.3 and 21.1 of the DSU. With successive periodic
reviews withdrawing, replacing, and succeeding each other year after year, compliance in these
proceedings is an "ongoing or continuous" process, just as it was in Australia – Salmon (21.5) . The
settlement of any disputes regarding this "ongoi ng" process must be addressed in Article 21.5
proceedings.

28. For all these reasons, the 06/07 review is a "me asure taken to comply" that is properly within
the Panel's terms of reference.

II. THE 06/07 REVIEW IS INCONSISTENT WITH THE ANTI-DUMPING
AGREEMENT AND THE GATT 1994

29. In the 06/07 review, the USDOC calculated: (1) a margin of dumping for each examined
exporter that became the cash deposit rate
 for all entries of the product, from that exporter, occurring
after 11 September 2008; and (2) an importer-specific assessment rate based on the total amount of
dumping attributable to each importer, which dete rmined that importer's final liability for anti-
dumping duties in connection with the entries that occurred during the review period.

30. In the review proceedings, several interest ed parties argued that the USDOC should not use
the zeroing procedures to calculate either the cas h deposit or importer-specific assessment rates,
because these procedures are WTO-inconsistent. However, rejecting these arguments, the USDOC
decided to maintain its use of zeroing:

While the Department has modified its calculation of weighted-average dumping
margins when using average-to-average co mparisons in antidumping investigations,
the Department has not adopted any ot her modifications concerning any other
methodology or type of proceedings, such as administrative reviews.

In concluding, the USDOC stated that it "has con tinued to deny offsets to dumping based on export
transactions that exceed normal value in these reviews".

31. Japan notes that the 06/07 review constitut es yet another example of the United States'
maintenance of the zeroing procedures, following the expiry of the RPT on 24 December 2007, in
situations other than weighted average-to-weighted average comparisons in original investigations. In
addition, the 06/07 review was completed with four other reviews issued under separate anti-dumping
orders concerning the importation of ball bear ings from France, Germany, Italy and the
United Kingdom. The United States also used zeroing in these four other reviews. To reflect these
five additional examples of the use of zeroing following the end of the RPT, Japan submits
Exhibit JPN-68, which is an updated version of Exhibit JPN-46 that includes these five reviews.

32. In addition to relying on the 06/07 review as evidence of the mainte nance of the zeroing
procedures, Japan also makes claims regarding that review. The sole element of the 06/07 review that
Japan contests is the USDOC's use of the zeroing pro cedures. The Appellate Body has ruled in three
separate disputes, including in the original proceedi ngs in this dispute, that the United States acts
inconsistently with the Anti-Dumping Agreement and the GATT 1994 by relying on zeroing to
calculate margins of dumping in periodic reviews. Equally, in a report circulated on 1 October 2008,
the panel in US – Zeroing II (EC) reached the same conclusion.

33. For the reasons given in these rulings, Japan submits that the 06/07 periodic review is
inconsistent with Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994 due
to the application of the zeroing procedures. Moreover, for the reasons given in the original
proceedings in this dispute, the review is also in consistent with the "fair comparison" obligation of
Article 2.4.

34. Finally, Japan recalls its claim that the Un ited States has violated Article II of the GATT 1994
by issuing instructions and notices for the liquidation of entries at WTO-inconsistent importer-specific
assessment rates determined in the periodic reviews numbered (1), (2), (7) and (8) in paragraph 53 of
Japan's First Written Submission. Japan wishes to clarify that it does not pursue claims under
Article II of the GATT 1994 in relatio n to liquidations instructions a nd notices issued pursuant to the
06/07 review, because no such instructions have yet been issued.

Table of Reports

Short Form

Full Citation
Argentina – Poultry (Panel) Panel Report, Argentina – Definitive Anti-
Dumping Duties on Poultry from Brazil ,
WT/DS241/R, adopted 19 May 2003
Australia – Salmon (Art. 21.5) (Panel)

Panel Report, Australia – Measures Affecting
Importation of Salmon – Recourse to Article 21.5
of the DSU by Canada , WT/DS18/RW, adopted
20 March 2000
Japan – Film (Panel) Panel Report, Japan – Measures Affecting
Consumer Photographic Film and Paper ,
WT/DS44/R, adopted 22 April 1998
US – Softwood Lumber Dumping (AB)

Appellate Body Report, United States - Final
Dumping Determination on Softwood Lumber
from Canada , WT/DS264/AB/R, adopted
31 August 2004
US – Softwood Lumber IV (Art. 21.5) (AB)

Appellate Body Report, United States – Final
Countervailing Duty Determination with Respect
to Certain Softwood Lumber from Canada –
Recourse to Article 21.5 of the DSU by Canada ,
WT/DS257/AB/RW, adopted 20 December 2005
US – Upland Cotton (Panel) Panel Report, United States – Subsidies on
Upland Cotton , WT/DS267/R, adopted
21 March 2005, as modified by the Appellate
Body Report, WT/DS267/AB/R
US – Zeroing (Japan) (AB)

Appellate Body Report, United States – Measures
Relating to Zeroing and Sunset Reviews ,
WT/DS322/AB/R, adopted 23 January 2007
US – Zeroing II (EC) (Panel) Panel Report, United States – Continued
Existence and Application of Zeroing
Methodology, WT/DS350/R, circulated
1 October 2008, not yet adopted

I. INTRODUCTION

1. The United States would like to thank the Panel for this opportunity to respond to Japan's
supplemental submission of 10 October 2008. Japan asserts that the 2006-07 administrative review of
Ball Bearings from Japan falls within the scope of this proceeding. 1 However, this administrative
review is not a measure taken to comply within the meaning of Article 21.5 of the Understanding on
Rules and Procedures Governing the Settlement of Disputes ("DSU") and is therefore outside the
Panel's terms of reference. Moreover, Japan impr operly uses its submission as an opportunity to re-
argue whether alleged "subsequent closely connected measures" may fall within the scope of this
proceeding.2 The Panel should therefore exclude Japan' s additional arguments from consideration.
Even aside from the fact that the Panel should not take into account Japan's arguments on this issue,
the United States has demonstrated throughout th is compliance proceeding and further discusses
below, that under the DSU, the Pa nel may not consider future measu res that were not identified in
Japan's panel request and that were not in existence at the time of panel establishment.

II. THIS PANEL DOES NOT HAVE JURISDICTION OVER THE 2006-07
ADMINISTRATIVE REVIEW OF BALL BEARINGS FROM JAPAN

A. T
HE 06/07 REVIEW IS NOT A MEASURE TAKEN TO COMPLY

2. Japan erroneously claims that the 06/07 review is a measure taken to comply with the DSB's
recommendation and rulings. 3 Japan's argument depends on the same flawed logic that Japan used
when attempting to demonstrate why the three subsequent reviews of Ball Bearings were allegedly
within the Panel's terms of reference. 4 As the United States will show, the 06/07 review – just as the
other three subsequent reviews – is not a measure taken to comply, and therefore does not fall within
the scope of this proceeding under Article 21.5 of the DSU.

3. Japan relies extensively on the alleged "particul arly close relationship" or "sufficiently close
links" between the 06/07 review, the administrative reviews challenged in the original proceeding,
and Review Nos. 4, 5, 6.
5 Japan highlights similarities, such as the fact that the reviews all involve
the "same subject product", "the same exporting countries", and "the same companies". 6 Further,
Japan notes that the cash deposit rate from one revi ew replaces the rate from another, overlooking the
fact that this is an incidental consequence of the US anti-dumping system. 7 Based on Japan's
reasoning, every subsequent review would be swept into the scope of an Article 21.5 proceeding.

4. Japan's approach is so broad as to rende r the requirements of Article 21.5 of the DSU
meaningless. As the Appellate Body stated in US – Softwood Lumber IV (Art. 21.5) , "not . . . every
assessment review will necessarily fall within the jurisdiction of an Article 21.5 panel".8 According to

1 Japan refers to this administrative review throughout its supplemental submission as the
"06/07 review". See, e.g. , Japan Supplemental Submission, para. 1. For ease of reference, and to avoid
confusion, the United States adopts the same terminology.
2 Japan Panel Request, para. 12; Japan Second Written Submission, paras. 59-65.
3 Japan Supplemental Submission, para. 3.
4 These three administrative reviews of Ball Bearings and Parts Thereof from Japan are identified as
Review Nos. 4, 5, and 6 in Japan's first written submission. See Japan First Written Submission, paras. 52-53.
More specifically, the reviews are: Review No. 4 – Ball Bearings and Parts Thereof From Japan (1 May 2003
through 30 April 2004) (JTEKT, NSK, NPB and NTN); Review No. 5 – Ball Bearings and Parts Thereof From
Japan (1 May 2004 through April 30 2005) (JTEK, NS, NPB, and NTN); Review No. 6 – Ball Bearings and
Parts Thereof From Japan (1 May 2005 through 30 April 2006) (Asahi Seiko, JTEKT, NSK, NPB and NTN).
5 Japan Supplemental Submission, paras. 4-5.
6 Japan Supplemental Submission, para. 5.
7 Japan Supplemental Submission, para. 6.
8 US – Softwood Lumber IV (Art. 21.5) (AB), para. 93 (footnote omitted).

the Appellate Body, "such an approach would be too sweeping."
9 This Panel should reject Japan's
attempt to include the 06/07 review just because of the superficial similarities between that review,
the original reviews, and the three subsequent reviews. If the overlap between product, exporting
country, and exporting company, or the incidental operation of the anti-dumping system, was
sufficient to establish the type of "particularly close relationship" found in US – Softwood Lumber IV
(Art. 21.5) , then every administrative review would fall within the jurisdiction of an Article 21.5
panel. In line with the Appellate Body's statements in US – Softwood Lumber IV (Art. 21.5), the DSU
does not permit such an approach.

5. The timing of the 06/07 review is important, despite Japan's attempt to downplay and dismiss
this factor as somehow irrelevant.
10 The 06/07 review was initiated at the request of interested parties,
on a schedule independent of dispute settlement and pursuant to domestic law implementing the rights
and obligations in the Agreement on Implementation of Article VI of the General Agreement on Tariffs
and Trade 1994 ("AD Agreement"). The results of the re view were not issued around the same time
as the withdrawal of the measure that brought the United States into compliance, 11 and not around the
time of the expiry of the reasonable period of time ("RPT"). 12 By contrast, in US – Softwood
Lumber IV (Art. 21.5) , the determination in the first administ rative review (allege d measure taken to
comply) was issued a few days after the Sectio n 129 determination (declared measure taken to
comply) and both closely corresponded to the expiry of the RPT. 13 The Appellate Body accorded
these facts considerable weight in finding that the subsequent review was a measure taken to comply.

6. Japan further relies on the recent panel report in US – Zeroing II (EC) to demonstrate that the
06/07 review is part of a "chain of measures" which falls within the scope of an Article 21.5
proceeding.14 This report has been circulated to Members but has not been adopted by the DSB and is
subject to appeal by either party. In any ev ent, Japan misunderstands the panel's findings. In US –
Zeroing II (EC), the panel was not addressing the issue of whether a subsequent review was a measure
taken to comply within the meaning of Article 21.5. In fact, that dispute was not a compliance dispute
at all; rather, the panel was addressing the EC's "a s applied" zeroing claims. Moreover, Japan relies
on language from the panel's preliminary ruling that measures included in the panel request but not
included in the consultations request fell within the scope of the panel proceeding. 15 The panel's
treatment of that issue is irrelevant to the issue cu rrently before this Panel, which is not considering
whether measures specified in a panel request, but not a consultation request, are properly before it.

7. Perhaps of even greater significance from a sy stemic point of view is that Japan's "closely
related" approach would mean that the terms of re ference of an Article 21.5 panel could spread ever
outward like ripples in a pond. This is because a measure (referred to as "measure B" for
convenience) that is "closely related" to a measure taken to comply (referred to as "measure A") is
itself then deemed to be a measure taken to comply by virtue of that close relationship. In that case,
any measure (e.g., "measure C") that is "closely rela ted" to measure B then itself becomes a "measure
taken to comply." In turn then, any measure cl osely related to measure C could become a measure
taken to comply, with each succeeding iteration perh aps bearing a more and more remote relationship
to the original measure, measure A. Members nowhere agreed to such an approach in the DSU.

9 US – Softwood Lumber IV (Art. 21.5) (AB), para. 87 (footnote omitted).
10 Japan Supplemental Submission, para. 14.
11 The cash deposit rate for the most recent administrative review of Ball Bearings that was subject to
the DSB's recommendations and rulings (i.e., the 2002-03 review) was replaced by the cash deposit from the
2003-04 review in September 2005, about three years before the final results of the 06/07 review were
announced.
12 The RPT expired on December 24, 2007.
13 US – Softwood Lumber IV (Art. 21.5) (AB), para. 84.
14 Japan Supplemental Submission, para. 8.
15 US – Zeroing II (EC) (Panel), paras. 7.11-7.28.

B. THE PANEL MAY NOT CONSIDER AN ADMINISTRATIVE REVIEW NOT SPECIFIED
IN JAPAN'S PANEL REQUEST

1. The Panel Should Reject Japan's Additional Arguments

8. As an initial matter, Japan has used its s upplemental submission as an opportunity to attempt
to rebut once again the US arguments regardi ng the specificity of Japan's panel request.
16 T h e
United States recalls that it objected to Japan's a ttempt to include "any subsequent closely connected
measures" that were not anywhere identified in Japan's panel request. 17 The United States asked for a
preliminary ruling under Article 6.2 of the DSU to exclude such future measures. Japan had an
opportunity to rebut the US arguments in its second written submission and attempted to do so. 18
Japan also raised this issue in its 15 September 2008 request to file a supplemental submission on an
alleged additional measure taken to comply, and attempted to ju stify why it had the right to file a
submission on future measures. 19 The United States, as part of its second written submission,
responded to Japan's rebuttal submission and Japan 's separate request to file a supplemental
submission.20 The Panel, without ruling on the issue of sp ecificity, then permitted Japan to file its
supplemental submission regarding why the 06/07 review was an alleged measure taken to comply.

9. Japan is now using its supplemental submissi on to address yet again an issue that has been
fully argued by both parties and for which it did not request permission to file a supplemental
submission. The Panel should disregard Japan's furt her arguments as to why "any subsequent closely
connected measures"– in this instan ce, the 06/07 review – are within the scope of this proceeding.
Nevertheless, the United States will respond to Japan 's argument, without prejudice to its objection
that Japan has improperly inserted additional argumentation into its supplemental submission.

2. Japan's Panel Request Does Not Meet the Specificity Requirement of DSU Article 6.2

10. Japan's panel request did not properly address th e specific measures at issue – in this instance,
the 06/07 review. Under Article 6.2 of the DSU, a panel request must identify the specific measures
at issue, and under Article 7.1, the Panel's terms of reference are limited to those specific measures.
Here, each anti-dumping determination that sets a ma rgin of dumping for a defined period of time is
separate and distinct, and under Article 6.2, Japan had to identify each such measure in its panel
request.

11. As the United States explaine d in its second written submission,
21 future administrative
reviews, like the 06/07 review, also fall outside th e scope of this proceeding because under the DSU,
measures not yet in existence at the time of pa nel establishment cannot be subject to dispute
settlement.22 The results of the 06/07 review were i ssued in September 2008, months after Japan
made its request for establishment. The simple f act that Japan had to seek to make a "supplemental
submission" well after Japan was to have provided all of its written submissions only highlights that
the measure was not in existence at the time of th e Panel's establishment a nd could not have been
specified by Japan in its panel request. Therefore, this subsequent administ rative review cannot fall
within the Panel's terms of reference.

16 Japan Supplemental Submission, paras. 9-28.
18 Japan Second Written Submission, paras. 59-65.
19 Japan's Letter to the Panel, 15 Sept. 2008 (citing Australia – Salmon (Art. 21.5) (Panel)).
20 US Second Written Submission, paras. 29-34.
22 US – Upland Cotton (Panel) , paras. 7.158-7.160 (rejecting inclusion of the Agricultural Adjustment
Act of 2003 in the panel's terms of reference because that law did not co me into existence until after panel
establishment) ("In this case, the Agricultural Assistance Act of 2003 could not possibly have been impairing
any benefits at the date of Brazil's referral of its complaint to the DSB because it did not yet exist.").

12. Japan argues that the United St ates "received ample 'notice'" of Japan's intention to challenge
future reviews;
23 this argument, however, is beside the point. Article 6.2 of the DSU imposes no
burden on a party to show that it failed to receive adequate notice as to certain measures not identified
in the panel request, or that it was somehow prejudiced by the lack of specificity in a panel request.
And no such requirement is found in any other provisi on of the DSU, or anywhere else in the covered
agreements.24 The requirements of Article 6.2 of the DSU are clear – the panel request must " identify
the specific measures at issue." 25 Measures not so identified do not fall within the panel's terms of
reference. Japan could not have identified a measure not yet in existence. This is all that the
United States is required to show in order to prev ail on its preliminary objection under Article 6.2 of
the DSU.

13. Japan cites to the recent, unadopted panel report in US – Zeroing II (EC) to support its
erroneous argument that future administrative revi ews may fall within a panel's terms of reference. 26
Again, this report has not been adopted by the DSB and may be appealed by either party. In any
event, in that report, the panel actually rejected the EC's attempt to obtain "a remedy which would
affect anti-dumping proceedings that the USDOC may conduct in the future" following panel
establishment.27 As the panel found, "in our view, Article 6.2 of the DSU, in principle, does not allow
a panel to make findings regarding measures that do not exist as of the date of the panel's
establishment."28 The panel noted that there may be "exceptional circumstances" where future
measures could fall within the panel's terms of reference. 29 But the panel found that this was not the
case where a complaining Member was attempting to reach future anti-dumping determinations that
were not in existence at the time of panel establishment.

14. Japan relies once again on the panel report in Australia – Salmon (Art. 21.5) and accuses the
United States of misreading the panel's findings.
30 As the United States has demonstrated, 31 it is
Japan that distorts the reasoning from that dispute to argue that future reviews are properly before the
Panel.

15. In Australia – Salmon (Art. 21.5) , Canada requested leave to file a supplemental submission
on a Tasmanian import ban that was adopted after the panel proceeding had begun. Australia objected
that the new measure was outside th e panel's terms of reference. Canada's panel request identified
measures that Australia "has taken or would take
" to comply "with the recommendations and rulings
of the DSB by implementing the policies fo r non-viable salmonids outlined in AQPM 1999/51 ."32
The compliance panel noted that future measur es that were taken "to implement AQPM 1999/51"
(namely, AQPM 1999/64, 66, 69, 70, 77, and 79) were within scope of proceeding, and that neither

23 Japan Supplemental Submission, para. 27.
24 In US – Zeroing II (EC) (Panel) , the panel found that "neither Article 6.2 of the DSU nor any other
provision of the WTO Agreement supports the argument that the defendant has to show prejudice in cases where
the complaining Member's panel request falls short of the requirements of Article 6.2." US – Zeroing II (EC)
(Panel), para. 7.63.
25 Emphasis added.
26 Japan Supplemental Submission, paras. 15-17.
27 US – Zeroing II (EC) (Panel), para. 7.59.
28 US – Zeroing II (EC) (Panel), para. 7.59.
29 The panel may have had in mind the panel report in Japan – Film , which it earlier dismissed as
irrelevant to the issue under consideration. See US – Zeroing II (EC) , para. 7.54. In Japan – Film , the panel
found that subsequent measures promulgated under a framework law that was identified in the panel request fell
within its terms of reference. It considered these measures "subsidiary" or "closely related" to the law of general
application specifically identified. See Japan – Film (Panel) , paras. 10.8-10.14. Unlike Japan – Film , this
dispute does not involve subsequent regulations issued under a law of general application.
30 Japan Supplemental Submission, paras. 18-29.
31 US Second Written Submission, paras. 32-33.
32 Australia – Salmon (Art. 21.5) (Panel), para. 7.10(25) (emphasis in original).

party contested this fact.33 The panel then reasoned that the Tasmanian measure, "for similar reasons"
was within scope of the Article 21.5 proceeding.34 In other words, the panel found that the Tasmanian
ban fell within a "category of measures" to comply that were specified in the panel request, or was
"closely related" to those measures.35 The panel also considered it important that Australia apparently
had agreed, with respect to other, future measures, that such measures were within the panel's terms of
reference.36

16. Japan ignores the key difference from Australia – Salmon (Art. 21.5) . Here, Japan is not
challenging future measures that implement or that are "closely related" to a framework regulation
that was adopted to comply with the recommendati ons and rulings of the DSB. Rather, Japan is
trying to challenge a subsequent administrative re view, which occurred upon request of interested
parties based upon provisions of the AD Agreement and on a schedule established without regard for
dispute settlement proceedings. The 06/07 re view, and any other s ubsequent reviews of Ball
Bearings, therefore are separate and distinct measures, independent of the present dispute, and
independent of other prior reviews. Japan's ch allenge is not analogous to challenging subsequent
measures which implement or are closely related to a framework law or regulation.

III. THE PANEL SHOULD NOT REACH THE MERITS OF JAPAN'S CLAIMS
CONCERNING THE 06/07 REVIEW

17. Japan claims that the 06/07 review violat es Articles 2.4 and 9.3 of the AD Agreement and
Article VI:2 of the GATT 1994 due to the application of zeroing procedures.
37 As the United States
has explained, this review is not a measure taken to comply and is not properly within the scope of
this proceeding.38 Therefore, this Panel should not reach the issue of the WTO consistency of this
alleged measure.

IV. CONCLUSION

18. For the reasons set forth above, along with t hose set forth in the US written submissions, the
United States requests that the Panel rej ect the 06-07 administrative review of Ball Bearings from
Japan as outside the scope of this proceeding.

34 Australia – Salmon (Art. 21.5) (Panel), para. 7.10(27) (emphasis added).
35 Australia – Salmon (Art. 21.5) (Panel) , para. 7.10(27). The panel's reasoning was based in part on
the panel report in Japan – Film, which similarly found that measures closely related to the implementation of a
framework law could be included in a panel's terms of reference, even if they came into existence after the panel
request. See Australia – Salmon (Art. 21.5) (Panel), para. 7.10(26) & n.144.
37 Japan Supplemental Submission, para. 34.
38 In making its argument on the merits, Japan relies on the recent, unadopted panel report in US –
Zeroing II (EC), as well as the Appellate Body reports in US – Zeroing (EC) and US – Stainless Steel (Mexico).
See Japan Supplemental Submission, paras. 33-34 & nn. 35-3 7. The United States notes that dispute settlement
reports are not binding except with respect to resolving the particular dispute between the parties to that dispute.
See US – Softwood Lumber Dumping (AB), para. 111 (citing Japan–Alcohol Taxes (AB) ); Argentina–Poultry
(Panel), para. 7.41. Although panels may take the persuasiveness of other reports into account, there is no stare
decisis in the WTO dispute settlement system, and prior reports from other disputes do not bind this Panel.

ANNEX D-3

RESPONSE OF JAPAN TO THE UNITED STATES' RESPONSE TO THE
SUPPLEMENTAL SUBMISSION OF JAPAN

(5 November 2008)

I. INTRODUCTION

1. Mr. Chairman, Japan appreciates the opportunity to make a short statement regarding the
United States' rebuttal to our supplemental submissi on on the 06/07 periodic review. Japan will not
respond to every US argument, because the United St ates repeats many of the arguments it has made
in connection with the other subsequent reviews.

II. THE PANEL'S TERMS OF REFERENCE

2. We begin with observations on the United States' argument that the terms of Japan's panel
request do not cover the 06/07 review. This argument is contradicted by the fact that the
United States understood Japan's panel request to in clude "future administrative reviews related to the
eight identified in its panel request".
1 The United States' ability to identify the measures at issue
confirms that Japan's panel request meets the specificity and due process requirements of Article 6.2.2

3. The United States argues that a panel requ est cannot include measures that come into
existence during the panel proceedings. 3 In making this argument, the United States attempts to
distinguish the situation in these co mpliance proceedings from those in Australia – Salmon (21.5). In
so doing, it mis-states the findings of the panel in Australia – Salmon (21.5) . As in its previous
submissions,4 the United States argues that a measure imposing a regional ban was found to be within
the panel's terms of reference, because the regional ban was taken to implement , and was similar to,
federal measures withdrawing a federal ban that were specified in the panel request.5

4. Besides reasserting its earlier argument, the United States has not explained how the
introduction
 of a regional ban "implements" or is "similar" to the elimination of a federal ban. The
regional ban did not implement any aspect of the federal measures eliminating the federal ban;
imposing a new ban is not similar to eliminating an old ban.6 Japan does not, therefore, agree with the
US reading of Australia – Salmon (21.5).

1 United States' First Written Submission, para. 50.
2 Appellate Body Report, Thailand – H-Beams, para. 88.
4 United States' Second Written Submission, paras. 32, 33.
5 United States' Supplemental Submission, para. 15 (" The compliance panel noted that future measures
that were take to implement AQPM 1999/51 . . . were within scope of proceeding, and that neither party
contested this fact. The panel then r easoned that the Tasmanian measure, 'for similar reasons' was within scope
of the Article 21.5 proceeding".).

5. Instead, as the United States concedes, 7 the panel found that the regional ban was within its
terms of reference because it belonged to a category of measures identified in the panel request ,
namely any "measure taken to comply". Similar to Australia – Salmon (21.5) , the 06/07 review is
within this Panel's terms of reference because it falls within a category of measures explicitly
identified in the panel request, namely "any subsequent closely connected measures".

6. However, even if – as the United States asserts 8 – the panel's findings in Australia –
Salmon (21.5) were based on the "close relationship" between the regional ban and the federal
measures withdrawing the original federal ban, Australia – Salmon (21.5) still supports inclusion of
the 06/07 review in this Panel's terms of referenc e. For reasons enumerated in our Supplemental
Submission, the 06/07 review is, indeed, "similar" and "closely related" to other measures that the
United States does not contest are iden tified in Japan's panel request: five original reviews, and three
subsequent reviews.9

III. THE 06/07 REVIEW IS A "MEASURE TAKEN TO COMPLY"

7. We turn briefly to US arguments that the 06/07 review is not a "measure taken to comply". In
US – Zeroing II (EC) , the panel found that periodic revi ews under a single anti-dumping order,
involving the same calculation methodology, were part of "the same subject matter" and "the same
dispute", because of the close substantive links between the reviews.
10 The panel correctly held that
this close relationship may be important in defi ning a panel's terms of reference in original
proceedings.

8. The United States contends that the panel's statement in US – Zeroing II (EC) is "irrelevant"
to these proceedings, because the statement was not made in compliance proceedings.
11 Japan
disagrees. Original and compliance proceedings are, in fact, part of "the same dispute". As panels
and the Appellate Body have sai d, "Article 21.5 proceedings do not occur in isolation from the
original proceedings, but both proceedings form part of a continuum of events " that extends until
compliance is fully achieved.12

9. As a result, where the original proceedings con cern a chain of periodic reviews that are part of
"the same subject matter" and "the same dispute", new links in that chain involving the same disputed
calculation methodology are necessarily part of a "continuum of events" prolonging "the same
dispute".
13 In the context of such a dispute, there is no basis for artificially splitting the chain of
measures and events, either at the end of the original proceedings or after the end of the RPT.

10. The United States also suggests that the 06/07 re view bears a "more remote relationship to the
original measure[s]" than the other subsequent reviews.
14 Again, Japan disagrees. Japan has outlined
that the close substantive connections linking the 06/07 review, and the other subsequent reviews, to
the original measures. 15 That is, the same substantive feat ures of the original periodic reviews –
which define the contours of this dispute – are mirro red in each of the subsequent reviews. The later
measures are no less substantively connected to the dispute than the earlier measures.

7 United States' Supplemental Submission, para. 15 ("In other words, the panel found that the
Tasmanian ban fell within a "categor y of measures" to comply that we re specified in the panel request , or was
"closely related" to those measures") (underlining added).
8 United States' Supplemental Submission, paras. 15-16.
9 Japan's Supplemental Submission, paras. 5-7.
10 Panel Report, US – Zeroing II (EC), para. 7.28.
12 Appellate Body Report, Chile – Price Band System (21.5) , para. 136, citing Appellate Body Report,
Mexico – Corn Syrup (21.5), para. 121 (emphasis added).
13 Panel Report, US – Zeroing II (EC), para. 7.28.
15 See Japan's Supplemental Submission, paras 5-7.

11. In reality, given that the key substantive feat ures of the periodic reviews are unchanged, the
US "remoteness" argument is code for its argument on timing. In essence, the United States argues
that, where there is a chain of measures with a clo se substantive connection to the original measures,
the latest measure ceases to be part of the disput e if it is too distant in time from the original
proceedings. Japan has already expres sed its disagreement with this point.
16 Compliance is an
"ongoing or continuous process", 17 and panels must be able to scrutinize the latest measures that
undermine the DSB's recommendations and rulings . Otherwise, in a dispute regarding recurring
measures – such as periodic reviews or recurring subsidies – an implementing Member is rewarded
under Article 21.5 for its persistence in ignoring the DSB's recommendations and rulings.

12. Thank you, Mr. Chairman.