Document: WT/DS322/RW Page E-1 ANNEX E ORAL STATEMENTS OF THE PARTIES AND THIRD PARTIES OR EXECUTIVE SUMMARIES THEREOF AT THE SUBSTANTIVE MEETING OF THE PANEL
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 E

ORAL STATEMENTS OF THE PARTIES AND THIRD PARTIES
OR EXECUTIVE SUMMARIES THEREOF AT THE
SUBSTANTIVE MEETING OF THE PANEL

Contents Page
Annex E-1 Executive Summary of the Opening Statement of Japan E-2
Annex E-2 Executive Summary of the Openi ng Statement of the United States E-14
Annex E-3 Closing Statement of the United States E-20
Annex E-4 Third Party Oral Statement of China E-23
Annex E-5 Executive Summary of the Third Party Oral Statement of the
European Communities
E-25
Annex E-6 Third Party Oral Statement of Hong Kong, China E-30
Annex E-7 Third Party Oral Statement of the Republic of Korea E-32
Annex E-8 Third Party Oral Statement of Mexico E-35
Annex E-9 Third Party Oral Statement of Norway E-39
Annex E-10 Third Party Oral Statement of the Separate Customs Territory of
Taiwan, Penghu, Kinmen and Matsu
E-41
Annex E-11 Third Party Oral Statement of Thailand E-44

ANNEX E-1

EXECUTIVE SUMMARY OF THE OPENING STATEMENT OF JAPAN

I. THE PANEL HAS JURISDICTION OVER THE FOUR SUBSEQUENT PERIODIC
REVIEWS CHALLENGED IN THESE PROCEEDINGS

1. Japan has demonstrated that four subseque nt periodic reviews – reviews 4, 5, 6 and 9 1 –
constitute "measures taken to comply", under Article 21.5 of the DSU.

A. THE FOUR SUBSEQUENT PERIODIC REVIEWS ARE DECLARED MEASURES
TAKEN TO COMPLY

2. The United States argues that the periodic review s at issue in the original proceedings were
"withdrawn",
2 "superceded", 3 "eliminated", 4 "replaced" 5 and "removed" 6 by the subsequent periodic
reviews challenged by Japan in these compliance proceedings. Significantly, the United States asserts
that, with the adoption of th e subsequent reviews, it "has taken measures to comply with [the DSB's]
recommendations and rulings ".7 It adds that, with the subsequent reviews, "compliance was
accomplished".8

3. The DSU allows the United St ates to assert the subsequent periodic reviews as vehicles for,
and evidence of, its implementation of the DSB's recommendations and rulings. But the DSU also
requires this Panel to verify the US assertions, by assessing whether those same reviews actually
accomplish compliance in a WTO-consistent fashion.

B. THE UNITED STATES' INTENT TO COMPLY IS NOT DECISIVE UNDER
ARTICLE 21.5 OF THE DSU

1. Subsequent periodic reviews pre-dating adoption of the DSB's recommendations and
rulings can be measures "taken to comply"

4. The United States declares that the four sub sequent periodic reviews are "measures taken to
comply". Specifically, it asserts that the subsequent reviews secure withdrawal of the original, WTO-
inconsistent reviews, accomplish compliance with the DSB's recommendations and rulings.

1 These reviews are the 03/04, 04/05, 05/06 and 06/07 periodic reviews for ball bearings. Japan relies
on the numbering of the periodic reviews in Japan's Firs t Written Submission, para. 53. Review 9 is the 06/07
review for ball bearings.
2 United States' Second Written S ubmission, para. 28; United Stat es' First Written Submission,
paras. 39, 52, 54, 58, 65, 66, 67.
3 United States' First Written Submission, paras. 3, 44.
4 United States' Second Written Submission, para. 8; United States' First Written Submission, paras. 44,
54.
5 United States' Second Written S ubmission, para. 18; United Stat es' First Written Submission,
para. 44.
6 United States' Second Written Submission, paras. 18, 26.
7 United States' First Written Submission, para. 51.
8 United States' Second Written S ubmission, para. 18; United Stat es' First Written Submission,
paras. 52, 67.

5. Nonetheless, the United States argues that since the subsequent periodic reviews only
accomplished compliance accidentally, rather than purposefully, they cannot be considered "measures
taken to comply".

6. Although the United States argues that the timing of a measure constitutes an "objective"
factor under Article 21.5, the words it uses show that timing is relied on to demonstrate an absence of
"intent" to comply, which then excludes the measures from review by this Panel.
9 The date on which
the recommendations and rulings were adopted may be an "objective" marker. However, the United
States offers that marker to argue that compliance could not have been the intended objective of
measures taken before that date.

7. The distinction drawn by the United States between incidental and purposeful compliance is
without foundation in the DSU. The Appellate Body and compliance panels have insisted that, for a
measure to be "taken to comply", it need not be taken for the purpose or objective of complying with
the DSB's recommendations and rulings.

8. First, the Appellate Body has stated that a measure need not "move in the direction of . . .
compliance" to be considered a measure "taken to comply".
10

9. Second, the Appellate Body has stated that compliance panels are not limited to reviewing
measures that "have the objective of achieving [] compliance".
11 Nor are compliance panels limited to
review of measures that were "initiated in order to comply with the recommendations and rulings of
the DSB".12 Echoing this view, the compliance panel in US – Gambling (21.5) emphasized that it did
not "exclude any potential 'measures taken to comply' due to the purpose for which they may have
been taken".13

10. Accordingly, a measure that complies by accident – that is, a measure taken neither "for the
purpose of" achieving compliance, 14 nor "in view" 15 or "consideration" 16 of the DSB's
recommendations and rulings – can fall within the sc ope of Article 21.5. Equally, because intent is
not decisive, the fact that the measure was taken before the DSB's recommendations and rulings is
also not decisive.

11. This view is reinforced by the Appellate Body 's emphasis of the need for "an examination of
the effects of a measure" alleged to be "taken to comply".
17 This focus on the effects of a measure, as
distinct from the implementing Member's intent, is confirmed by the text of Articles 3.7 and 19.1 of
the DSU. The United States recognizes that the timing of a measure is only one "element" in
determining whether it is "taken to comply". 18 Indeed, the United States holds out the Zeroing
Notice,19 which withdraws the zeroing procedures in W- to-W comparisons in investigations, is a
"measure taken to comply", even though it was taken before adoption of the DSB's recommendations
and rulings.

9 United States' Second Written Submission, para. 9.
10 Appellate Body Report, US – Softwood Lumber IV (21.5), para. 67.
11 Appellate Body Report, US – Softwood Lumber IV (21.5), para. 67.
12 Appellate Body Report, US – Softwood Lumber IV (21.5), para. 88 (emphasis added).
14 United States' Second Written Submission, para. 10 (emphasis added). See also Id., para. 16. See
also United States' First Written Submission, para. 33.
15 United States' Second Written Submission, para. 15.
16 United States' First Written Submission, para. 39.
17 Appellate Body Report, US – Softwood Lumber IV (21.5), para. 67 (emphasis added).
18 United States' Second Written Submission, para. 14.
19 Antidumping Proceedings: Calculation of the Weighted-Average Dumping Margin During an
Antidumping Investigation; Final Modification, 71 Fed. Reg. 77722, 77723 (Dep't of Comm.,
27 December 2006) (emphasis added) (Exhibit JPN-35).

2. Subsequent periodic reviews post-dating adoption of the DSB's recommendations and
rulings are measures "taken to comply" even if not proximate to the date of declared
measures taken to comply or the date of DSB adoption

12. The United States' principal arguments concerni ng timing apply only to reviews 4 and 5, since
reviews 6 and 9 were taken after adoption of the DSB's recommendations and rulings. Nonetheless,
the United States also argues that timing disqualifies reviews 6 and 9 from consideration as "measures
taken to comply", because they "did not occur around the same time as US withdrawal of" the original
reviews, and "did not closely correspond to the expiration of the RPT".
20

13. The former consideration is simply not relevant. On the second argument, nothing in
Article 21.5 requires that, to be considered as "tak en to comply", a measure must "closely correspond
to the expiration of the RPT". The United States has itself successfully argued, in recent compliance
proceedings in EC – Bananas III , that measures adopted nearly seven years after the end of the RPT
are "measures taken to comply". 21 Review 6 was adopted on 12 October 2007, 22 just two-and-a-half
months before the end of the RPT on 24 December 2007. The determination date for review 6 did
"closely correspond to" the end of the RPT.

C. THE FOUR SUBSEQUENT PERIODIC REVIEWS ENJOY CLOSE SUBSTANTIVE
CONNECTIONS TO THE RECOMMENDATIONS AND RULINGS OF THE DSB

14. Even if the Panel finds that the four s ubsequent periodic reviews are not effectively declared
measures taken to comply, Japan has demonstrated th at they are measures taken to comply by virtue
of the close substantive connections they share with the DSB's recommendations and rulings.
23

15. Specifically, Japan has noted that th e subsequent reviews resulted from the same type of
USDOC anti-dumping proceedings that were at issue in the orig inal proceedings. Moreover, they
were conducted pursuant to the same anti-dumping order concerning ball bearings. As such, they all
concern the same subject product , the same exporting country and, additionally, concern
determinations made with respect to exports by the same companies.
24

16. Moreover, the United States characterizes the subsequent periodic reviews as measures that
"withdraw", "supercede", "eliminate", "replace" and "remove" previous ball bearings reviews, in two
senses.
25 Each subsequent review establishes a cash de posit rate that replaces the cash deposit rate
from the previous review; and each subsequent revi ew determines the importer-specific assessment
rate for entries initially subjected to the cash deposit rate from previous reviews.26

20 United States' Second Written Submission, para . 23; United States' First Written Submission,
para. 39.
21 See WT/DS27/15 (RPT ended on 1 January 1999); Panel Report, EC – Bananas III (Article 21.5 –
US), para. 8.4 (Measure considered by the panel to be a measure "taken to comply" was adopted on
29 November 2005). See also Panel Report, US – FSC (21.5 II), paras. 1.1, 7.50 (Implementation period ended
on 1 November 2000, while the Jobs Act, considered by the panel and the Appellate Body to be a measure
"taken to comply", was adopted nearly four years later, on 22 October 2004).
22 Exhibit JPN-44.
23 Appellate Body Report, US – Softwood Lumber IV (21.5) , para. 77 (emphasis added) (following
discussion, at paras. 73-76, of the approach taken by the panels in Australia – Salmon (21.5) and Australia –
Leather (21.5)). See Japan's First Written Submission, paras. 66-76.
24 Japan's First Written Submission, paras. 90-93.
25 See footnotes 2-6, above.
26 Japan's First Written Submission, para. 91.

17. The subsequent periodic reviews are, therefore, part of a chain of closely-connected measures
that succeed each other year after year.27

II. THE UNITED STATES HAS FAILED TO BRING ITS WTO-INCONSISTENT
MEASURES INTO CONFORMITY WITH ITS WTO OBLIGATIONS

A. THE UNITED STATES HAS FAILED TO COMPLY FULLY WITH THE DSB'S
RECOMMENDATIONS AND RULINGS WITH RESPECT TO THE ZEROING
PROCEDURES

18. The Appellate Body concluded "that the ' zeroing procedures' under different comparison
methodologies, and in different stages of anti- dumping proceedings, do not correspond to separate
rules or norms, but simply reflect different manifestations of a single rule or norm".
28 To capture the
WTO-inconsistency of this "single rule or norm" in its various "manifestations", the DSB made four
separate rulings regarding the zeroing procedures, addressing the application of those procedures in
four different settings.29

19. The United States narrowed the scope of app lication of the zeroing procedures to exclude
weighted average-to-weighted average ("W-to-W") comparisons in original investigations. The
United States maintains the zeroing procedures in the three other "manifestations" or situations.

20. In assessing the evidence, Japan recalls the Appellate Body's admonition that "Article 21.5
proceedings do not occur in isolation from the origin al proceedings, but that both proceedings form
part of a continuum of events."
30 In light of this "continuum of events", the Appellate Body observed
that "doubts could arise about the objective nature of an Article 21.5 panel's assessment if, on a
specific issue, that panel were to deviate from the reasoning in the original panel report in the absence
of any change in the underlying evidence."31

21. There is no relevant change to the underlying evidence to justify a conclusion that the United
States has eliminated the zeroing procedures in the three remaining "manifestations" subject to the
DSB's recommendations and rulings.

22. Finally, even if the Panel were to conclude that the original zeroing procedures have been
withdrawn through a narrowing of their scope of a pplication, the evidence shows that they were
simultaneously replaced by new zeroing procedures, with exactly the same precise content, applying
in all situations addressed by the DSB's recommendations and rulings, except W-to-W comparisons in
original investigations.

27 The panel in US – Zeroing II (EC) agreed that periodic reviews in such a chain were part of "the
same subject matter" and "the same dispute".(Panel Report, US-Zeroing II(EC), para. 7.28.)
28 Appellate Body Report, US – Zeroing (Japan), para. 88.
29 Japan's Second Written Submission, para. 66.
30 Appellate Body Report, Chile – Price Band system (21.5) , para. 136, citing Appellate body Report,
Mexico Corn Syrup (21.5), para. 121.
31 Appellate Body Report, US – Softwood Lumber VI (21.5), para. 103.

B. THE UNITED STATES HAS FAILED TO COMPLY FULLY WITH THE DSB'S
RECOMMENDATIONS AND RULINGS WITH RESPECT TO THE FIVE ORIGINAL
PERIODIC REVIEWS

1. The United States Must "Bring" the Importer-Specific Assessment Rates "Into
Conformity" with its WTO Obligations

23. With respect to the five original periodi c reviews, the disagreement between the Parties
concerns the US failure to bring the importer-speci fic assessment rates into conformity with its WTO
obligations. The United States argues that it need not bring these rates into conformity, because such
action would impose a "retrospective" remedy given th at the rates were established in the past, and
relate to past entries.
32 Japan, in contrast, contends that modifying the rates involves "prospective"
implementation, because it affects future US actions taken pursuant to the original reviews.

24. Neither the DSU nor the Anti-Dumping Agreement uses these words to describe a Member's
implementation requirements. Instead, the Panel mu st interpret and apply the treaty words to which
the Members agreed. Consistent with Articles 19.1, 22.1, 22.2 and 22.8 of the DSU, the DSB
recommended that the United States " bring [the five periodic reviews] into conformity" with its WTO
obligations. The DSB's recommendations and rulings apply to the importer-specific assessment rates
because the Appellate Body expressly found that these rates were WTO-inconsistent.
33

25. The ordinary meaning of the verb "bring" is "to cause to come from, into, out of, to, etc. a
certain state or condition" and "to cause to become". 34 This verb, therefore, connotes transformative
action by the implementing Member that changes the "s tate" of a measure. The immediate context of
the verb in the DSU shows that the action must tr ansform the measure into a state of "conformity"
with WTO law. This meaning is confirmed by th e Appellate Body's statement that an implementing
Member must take transformative action "by modify ing or replacing [the WTO-inconsistent measure]
with a revised measure".35

2. The United States' Arguments that Implementation Would Be Retrospective Are
Misplaced

26. The United States rejects Japan's view that implementation is "prospective" on the grounds
that Japan's argument would require Commerce to " recalculate the final liability" in the five original
reviews.36 The United States' objections to the " re"-vision of WTO-inconsis tent measures would,
again, eviscerate WTO dispute settlement. Simply by tagging the " re-"vision of a measure as
"retrospective" implementation, Members could: maintain and enforce WTO-inconsistent measures
after the end of the RPT; continue to nullify and im pair benefits; and perpetua te an imbalance in the
Members' rights and obligations.

3. Implementation Action Is Required When Me asures Continue to Produce Legal Effects

27. In cases where the WTO-inconsistent measure continues to produce WTO-inconsistent legal
effects, panels require that the measure be brought into conformity.

32 See, e.g., United States' First Written Submission, paras. 53 and 58.
33 Appellate Body Report, US – Zeroing (Japan), para. 175.
34 Definition of "to bring", The Oxford English Dictionary , J.A. Simpson and E.S.C. Weiner (eds.)
(Clarendon Press, 1989, 2 nd ed.), Volume II, page 555 (1 st column, numbered 8) (original italics). Exhibit
JPN-69.
35 Appellate Body Report, US – OCTG from Argentina (21.5) , para. 173 (footnote 367) (emphasis
added).
36 United States' Second Written Submission, para. 47.

28. Japan has already referred to EC – Commercial Vessels , in which the panel insisted that the
EC was obliged to take action to implement the DSB's recommendations and rulings with respect to
WTO-inconsistent measures "to the extent that [they] continue to be operational ".37 A s i m i l a r
conclusion was reached in India – Autos. 38

29. The panel indicated that the duty to bring a WTO-inconsistent measures into conformity does
not arise if past measures "have ceased to have an effect ".39 It noted, though, that the past "as
applied" measures at issue "remain[ed] binding and enforceable ",40 and concluded that the measures
should be brought into conformity with the relevant agreement.41

30. There are very close parallels between the five periodic reviews at issue in these proceedings
and the measures in India – Autos . In both disputes, the legal conclusion is the same. In India –
Autos, India had to bring the "as applied" measures into conformity with its WTO obligations to
ensure that the future enforc ement of the measures was WTO-consistent. In these proceedings,
because the WTO-inconsistent importer-specific assessme nt rates continue to be binding, enforceable
and produce legal effects, the respondent must bring them into conformity.

4. The United States Continues to Nullify or Impair Benefits Through the Collection of
Excessive Anti-Dumping Duties After the End of the RPT

31. In these proceedings, the five original periodi c reviews were found to be inconsistent with
Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994.

32. As the Appellate Body put it, these provisions "ensure that the total amount of anti-dumping
duties collected
 on the entries of a product from a given exporter" does not exceed the exporter's
margin of dumping. 42 It also said that this margin of dumping "operates as a ceiling for the total
amount of anti-dumping duties that can be levied on the entries of the subject product". 43 T h e
Appellate Body's interpretation is c onfirmed by the title of Article 9, " Imposition and Collection of
Anti-Dumping Duties".

33. The United States expressly states that it agrees with this interpretation:

37 Panel Report, EC – Commercial Vessels, para. 8.4 (emphasis added).
38 Panel Report, India – Autos , paras. 8.4 and 8.5.( In that dispute, India subjected the importation of
automotive products to the fulfilment of certain WTO-inconsistent conditions. Among others, importation was
conditioned on an agreement by importers to export a minimum amount of production. India withdrew the
original measures such that new imports were no longer subject to the WTO-inconsistent restrictions. India
argued that there was, therefore, no duty to implement, because the measures had been withdrawn, and new
entries were not subject to restrictions.)
41 Panel Report, India – Autos , para. 8.58("The essential issue here is that the [restrictive condition]
foreseen in [the past measures], which was found to be inconsistent, continues to be binding and to produce
effects …. This issue does not relate to whether any past execution of [the past measures] might be required to
be "undone" or otherwise called into question, but merely to establishing whether the measure previously found
to be in violation of two of the GATT provisions continues to have an existence today , so that the Panel would
be justified in making a recommendation that this meas ure be brought into conformity with the relevant
agreement as of today.") (underlining added).
42 Appellate Body Report, US – Zeroing (EC) , para. 130, and Appellate Body Report, US – Zeroing
(Japan), para. 155.
43 Appellate Body Report, US – Zeroing (EC) , para. 130, and Appellate Body Report, US – Zeroing
(Japan), para. 155 (underlining added).

 The United States does not dispute that Article 9.3 of the AD Agreement obliges
Members to ensure that the amount of antidumping duty collected
 not exceed the
margin of dumping established under Article 2 of the AD Agreement.44

34. Pursuant to this interpretation, irrespectiv e of the date a periodic review is completed,
Article 9.3 and Article VI:2 discipline a Member's actions in collecting duties. Moreover, the benefits
that accrue to Japan under this provision concern the amount of the anti-dumping duties actually
collected.

35. In these proceedings, the importer-specific as sessment rates continue to be binding and
enforceable, and continue to produce legal effects, after the end of the RPT. After that date, the
United States will take enforcement actions to coll ect anti-dumping duties in excess of the margin of
dumping. By collecting excessive duties, the United States violates Article 9.3 and Article VI:2, and
nullifies or impairs benefits.

36. Furthermore, the US enforcement actions are distinct measures that also nullify or impair
benefits under Article II of the GATT because, through these measures, the United States imposes
duties at rates in excess of its tariff bindings.

5. Actions by US Courts Do Not Excuse the United States From the Requirement to Bring
the Five Original Periodic Reviews into Conformity

37. The United States argues that the importer-sp ecific assessment rates in the five original
periodic reviews need not be "brought into confor mity", even though they continue to produce legal
effects, because enforcement was delayed until after the end of the RPT due to injunctions issued in
domestic litigation.
45

38. Japan disagrees. In fact, all Members must provide judicial review of anti-dumping
determinations under Article 13 of the Anti-Dumping Agreement . Moreover, the Agreement
specifically envisions the possibility that judici al proceedings required by Article 13 may delay
enforcement of a periodic review.
46

39. The status of a measure under domestic law – including the "existence of domestic litigation"
affecting that measure – is a fact.47

40. Brazil – Tyres provides an illustration.
48

41. The court injunctions do not involve acts by private enterprises. Instead, they are acts of the
United States' own courts, attributable to the United States under WTO law. As noted by the
Appellate Body in US – Shrimp, the United States "bears responsibilit y for acts of all its departments
of government, including its judiciary".49

44 United States' Second Written Submission, para. 64.
45 United States' Second Written Submission, paras. 51-56.
46 See Anti-Dumping Agreement, footnote 20, which refers to the possibility of delays, as a result of
domestic judicial proceedings, with respect to all the deadlines in Article 9.3.
47 United States' Second Written Submission, para. 51.
48 In that dispute, the enforcement of the measure at issue was partially suspended pursuant to court
injunctions obtained by private parties in domestic courts. The panel and the Appellate Body held that Brazil's
measure could not benefit from an exception under Article XX of the GATT 1994 because of the court
injunctions.(Appellate Body Report, Brazil-Tyres, para.252.) The fact that Brazil's partial suspension of the
measure "arise[s] from court rulings does not exoner ate Brazil from its obligation to comply with the
requirements of Article XX".(Panel Report, Brazil-Tyres, para.7.305.)
49 Appellate Body Report, US – Shrimp, para. 173 (emphasis added). See also Panel Report, Brazil –
Tyres, para. 7.305, citing Article 4(1) of the ILC Articles (Exhibit JPN-65).

42. There is nothing frivolous about such litigation 50, nor about delaying the collection of duties
pending the outcome of that litigation. Interested parties incurred considerable expense in pursuing
these judicial proceedings.

6. The ILC Articles on State Responsibility Confirm Japan's Position

43. Japan uses the ILC Articles to inform its interpretation of Article 19.1 of the DSU, which
requires the United States to "bring the measure[s] into conformity" with its WTO obligations by the
end of the RPT.
51

44. The ILC Articles confirm that implementation action to "bring the measure[s] into
conformity", with prospective effect from the end of the RPT, was essential to prevent post-RPT
conduct, under the original measures, from giving rise to WTO-inconsistencies that occurred newly or
continued after the end of the RPT . As a result, the Articles confirm that, absent prospective
implementation action, the original reviews have ongoing legal effects after the end of the RPT,
resulting in violations of WTO law at that time , with continued nullification or impairment of
benefits.

45. The Appellate Body, panels and arb itrators have frequently relied on the ILC Articles to
support the interpretation of the covere d agreements. In these decisions, the ILC Articles have been
cited as "rules of general international law",
52 and as reflective of "customary international law". 53
Arbitrators have also described the ILC's work on State responsibility as "based on relevant State
practice as well as on judicial decisions and doctrin al writings, which constitute recognized sources of
international law".54

46. Articles 13, 14 and 15 of the ILC Articles are, "rules of international law" under
Article 31(3)(c) of the Vienna Convention that are "relevant" in interpreting Article 19.1 of the DSU.
Articles 13, 14 and 15 of the ILC Articles could also be used to inform the "ordinary meaning" of
Article 19.1 under Article 31(1) of the Convention, and may even be more pertinent than
dictionaries.
55

7. Japan's Interpretation Places All Duty Collection Systems on an Equal Footing

47. Whenever a WTO-inconsistent measure continu es to produce legal effects after the end of the
RPT, it must be brought into conformity with WT O law. This same obligation applies to all
Members, irrespective of the duty collection system they operate.

50 US Court of Appeals for the Federal Circuit, Zenith Radio Corp. v. United States , 710 F. 2d 806
(Fed. Cir. 1983), at 809 (Exhibit JPN-70). See also Nies J., concurring, at 812.
51 Japan's Second Written Submission, paras. 148-170.
52 Appellate Body Report, US – Cotton Yarn , para. 120, and Panel Report, Australia – Salmon (21.5) ,
para. 7.12, footnote 146
53 Appellate Body Report, US – Line Pipe , para. 259 ("Although Article 51 is part of the International
Law Commission's Draft Articles, which do not constitute a binding legal instrument as such, this provision sets
out a recognized principle of customary international law .") ; Panel Report, US – Gambling , para. 6.128; and
Panel Report, Canada – Dairy , para. 7.77, footnote 427. See also Panel Report, Korea – Government
Procurement, para. 7.96. ("Customary international law….applie s to the extent that the WTO treaty agreements
do not 'contract out' from it. …to the extent there is no conflict or inconsistency, or an expression in a covered
WTO agreement that implies differently, we are of the vi ew that the customary rules of international law apply
to the WTO treaties and to the process of treaty formation under the WTO.")
54 Award of the Arbitrator, US – FSC (22.6), para. 5.59, footnote 68; Award of the Arbitrator, Brazil –
Aircraft (22.6), para. 3.44.
55 See Appellate Body Report, US – Shrimp, paras. 130-131, where international law norms were used
in a general way to inform ordinary meaning, with reference to the Vienna Convention.

8. The United States' Arguments Reduce Article 9.3 of the Anti-Dumping Agreement to
Inutility

48. The United States contends that effective impl ementation under Article 9.3 is ensured because
the cash deposit rate established in the original reviews has been withdrawn by the cash deposit rate
established in subsequent periodic reviews.
56 This argument is flawed for two reasons.

49. First, the subsequent reviews – by which the United States says "compliance was
accomplished"
57 – are WTO-inconsistent for exactly the same reasons as the original reviews.

50. Second, and much more importantly, the United States argues that the importer-specific
assessment rates need never be revised because they do not apply to new entries.

51. In any event, implementation action w ith respect to initial cash deposit rates can never secure
compliance with the obligations in Article 9.3 regarding the amount of duties finally collected (unless
no periodic review occurs). Even if a WTO-consiste nt cash deposit rate were to apply at the time of
importation, much higher duties coul d be subsequently collected on the basis of a WTO-inconsistent
importer-specific assessment rate.

C. FOUR SUBSEQUENT PERIODIC REVIEWS COMPLETED BY THE UNITED STATES
ARE INCONSISTENT WITH THE ANTI-DUMPING AGREEMENT AND THE GATT 1994

52. In relation to the substance of Japan's clai ms that four subsequent periodic reviews are
inconsistent with the Anti-Dumping Agreement and the GATT 1994, we note only that the
United States' defence rests entirely on its jurisdictional arguments.
58 That is, the United States
asserts that the Panel cannot examine these reviews. However, it does not argue that any of the
reviews are consistent with its WTO-obligations; nor does it dispute that the USDOC used the zeroing
procedures in any of these reviews.

D. LIQUIDATION NOTICES AND INSTRUCTIONS ARE INCONSISTENT WITH
ARTICLE II OF THE GATT 1994

53. Japan claims that United States' liquidation no tices and instructions, issued pursuant to four
original periodic reviews (numbers 1, 2, 7, and 8) , are inconsistent with Article II:1(a) of the GATT
1994. The United States argues that these claims sh ould not be addressed because Japan "failed to
request findings" from the Panel under Article II, and because these claims are "entirely derivative".
59

54. However, first, there is no requirement in the DSU for a Member to "request findings" in its
submissions to the Panel. In any event, if such a request is necessary, Japan hereby requests a finding
under Article II of the GATT 1994.

55. Second, like " any act or omission" attributable to a Member,
60 the United States' liquidation
instructions and notices are "measures".

56. Notably, whereas the four original periodic re views were all adopted before the original panel
proceedings began, the liquidation measures were all adopted after the end of the RPT. This shows
that the measures involve separate acts of the United States.

56 See, e.g., United States' Second Written Submission, paras. 45 and 63.
57 United States' Second Written Submission, para. 18.
58 United States' Second Written Submission, para. 79.
59 United States' Second Written Submission, para. 75.
60 Appellate Body Report, US – Zeroing (EC), para. 188.

57. Japan disagrees with the US argument that th e liquidation measures do not violate Article II
because liability for the duties arose at the time of importation when a cash deposit was paid. 61 Even
if provisional liability for duties arose at the time of importation, the cash deposit rates did not
establish the "treatment" 62 to which Japanese imports were ultima tely subjected in connection with
importation. Further, even if the periodic revi ews establish the "treatment" to which imports are
subsequently liable, the duties themselves are not collected or levied in the final results of a periodic
review. Instead, the final " treatment" is made concrete only through the liquidation measures, which
formally effect collection or levy of the import duties.

58. Accordingly, by adopting th e liquidation measures, the Unite d States acted inconsistently
with its obligations under Article II:1(a) of the GAT T 1994. Japan asks the Panel to make findings in
that regard, independently of any findings it makes under the Anti-Dumping Agreement regarding the
periodic reviews.

E. THE UNITED STATES HAS FAILED TO COMPLY WITH THE DSB'S
RECOMMENDATIONS AND RULINGS REGARDING ONE SUNSET REVIEW

1. The Panel cannot reconsider the Appellate bo dy's finding that the USDOC's likelihood-
of-dumping determination is WTO-inconsistent

59. Japan claims that the United States has fa iled to implement the DSB's recommendations and
rulings regarding the sunset review of 4 November 1999 concerning Anti-Friction Bearings (or
"AFBs").
63 Although the United States accepts that findings of inconsistency "must be treated by the
parties to [the] particular dispute as a final resolution to that dispute", 64 it argues that there is no
resolution on the issue it raises, namely "whether the original likelihood of dumping determination
can exist on alternative grounds".65

60. Japan disagrees. The Appellate Body's conc lusion that the USDOC's likelihood-of-dumping
is WTO-inconsistent represents a "final resolution" of the matter that is binding on the Parties, and
that conclusion cannot be reassessed by this Panel.66

61. Japan notes that a similar finding was made in US – OCTG from Argentina (21.5)
67

2. The United States has not demonstrated a WTO-consistent basis for the USDOC's
likelihood-of-dumping determination

62. The Panel need go no further than to c onclude that the United States has taken no
implementation action to bring the 1999 AFB sunset review into conformity with Article 11.3 of the
Anti-Dumping Agreement . Nonetheless, Japan wishes to comme nt on the US assertions that the
USDOC's 1999 likelihood determination is WTO-consis tent, despite the Appellate Body's ruling to
the contrary.

61 United States' Second Written Submission, para. 76.
62 Article II:1(a) of the GATT 1994.
63 See Japan's First Written Submission, paras. 155 to 158.
64 Appellate Body Report, US – Shrimp (21.5), para. 97. See also Panel Report, US – Gambling (21.5),
para. 6.56.
65 United States' Second Written Submission, para. 84.
66 United States' Second Written Submission, para. 84.
67 Appellate Body Report, US – OCTG from Argentina (21.5) , para. 143.( "The original panel
concluded that "the USDOC's likelihood determination in the instant sunset review was inconsistent with
Article 11.3 of the Anti-Dumping Agreement." It is evident from this language that the original panel's finding
of WTO-inconsistency is addressed to the USDOC's likelihood-of-dumping determination. Therefore, to
comply with the original panel's finding, as adopted by the DSB, the United States had to bring its determination
of likelihood of dumping into conformity with Article 11.3 of the Anti-Dumping Agreement.")

63. The United States contends that "the majority of the dumping margins relied on in that
determination are not WTO-inconsistent".
68 However, the supporting evidence it provides concerns
just 10 of the 21 margins calculated in the 1996 peri odic review, which is just one of nine periodic
reviews covered by the 1999 sunset determination.69 This is very far from a "majority" of the margins
relied on by the USDOC.

64. The United States' assertion that the USDOC's 1999 likelihood determination is justified by
just 10 margins determined in the 1996 review using adverse facts, suffers from other serious flaws. 70

65. The picture painted today by the United St ates does not conform to the terms of the 1999
likelihood determination.
71 In fact, Japan considers that the United States is engaging in the worst
form of ex post rationalization in an attempt to justify its inaction.

66. Although the United States now presen ts the 10 adverse facts margins as the centerpiece of
the USDOC's 1999 likelihood determination, that determination curiously makes no reference
whatsoever to these particular margins.

67. Even if the USDOC had expressly addressed the 10 adverse facts margins in its 1999
likelihood determination, these margins would not provide "positive eviden ce" for a determination
regarding the likelihood of a continuation or recurrence of dumping in 1999.

68. Further, an authority cannot cherry-pick the evidence on which it chooses to rely, for
example, taking account of 10 adverse facts margins to the exclusion of all other relevant evidence.
Instead, it must conduct a "rigorous examination" of all relevant evidence.

69. In fact, instead of explaining how the 10 ma rgins were weighed with "positive evidence", the
1999 determination inaccurately depicts the facts, because the USDOC impermissibly relied on many
margins calculated using zeroing.
72

70. The 10 adverse facts margins do not provide a WTO-consistent basis for a likelihood
determination, because they were not calculated in a WTO-consistent fashion.

71. If an investigating authorit y relies on margins calculated in earlier proceedings, those margins
must be consistent with the requirements of the Anti-Dumping Agreement.
73

72. In selecting secondary information, Annex II(7) of the Anti-Dumping Agreement requires an
authority to use " special circumspection ", choosing the "most appropriate" information available,
74
and verifying it against information from "independent sources".

73. In the 1996 review, the USDOC relied on the highest alleged margin in the 1988 petition.
The choice of the most unfavourable alleged margin does not appear to meet the requirement to use
"special circumspection", given that there were many more "appropriate" sources of information that
could have been used in place of the petitioners out-dated allegations.

68 United States' First Written Submission, paras. 3 and 75.
69 United States' Second Written Submission, para. 85.
71 The 1999 sunset review is contained in Exhibit JPN-22.

3. Conclusion on the 1999 likelihood-of-dumping determination

74. In conclusion, the Panel cannot re-open the conclusion that the USDOC's 1999 likelihood-of-
dumping determination is inconsistent with the Anti-Dumping Agreement. And, even if it could, the
United States fails in its attempts to justify the 1999 determination because its ex post rationalization
bears no relation to, and is not supported by, the terms of that determination. The US ex post
rationalization does not show that the 1999 determ ination was based on a "rigorous examination"
leading to a "reasoned and adequate explanation" supported by sufficient "positive evidence".

75. Finally, the arguments surrounding the US ex post rationalization demonstrate that the DSB's
recommendations and rulings are too complex to be resolved by an ex post rationalization. Instead,
the United States was required to revisit its 1999 determ ination in light of all pertinent evidence that
was available at the time, but chose not to do so.

ANNEX E-2

EXECUTIVE SUMMARY OF THE OPENING STATEMENT OF THE
UNITED STATES

13 November 2008

1. On behalf of the US delegation, I would like to thank you for agreeing to serve on the Panel.
As an initial matter, the United States would like to thank the Panel for agreeing to open the Panel's
meeting to the public, including opening the third pa rty session for those third parties willing to make
their statements public. Opening this meeting to the public will have a positive impact on the
perception of the WTO dispute settlement system, particularly with respect to transparency.

I. SCOPE OF THIS DISPUTE

2. The United States has requested a preliminary ruling concerning Japan's attempt to include
three administrative reviews of Ball Bearings from Japan within the Panel's terms of reference. These
reviews, identified by Japan as Review Nos. 4, 5, and 6, are not measures taken to comply with the
DSB's recommendations and rulings, and the Panel shoul d reject them as outside the scope of this
proceeding under Article 21.5.

3. As an initial matter, it is important to recall that DSU Article 21.5 applies only when there is a
disagreement as to the existence or consistency w ith a covered agreement of a measure taken to
comply with the recommendations and rulings of the DSB. Therefore, the scope of an Article 21.5
compliance panel is inherently limited – it may only examine a claim that a measure taken to comply
does not exist, or that a measure taken to comply is inconsistent with a covered agreement. In either
case, the focus is on the DSB's recommendations and rulings.

4. Two of the administrative reviews of Ball Bearings challenged by Japan cannot be considered
measures taken to comply because the final results in those reviews were adopted prior to the DSB's
recommendations and rulings in th e original proceeding. Measures taken by a Member prior to
adoption of a dispute settlement report typically ar e not measures taken for the purpose of achieving
compliance, and would not be within the scope of a proceeding under Article 21.5.

5. Here, the determinations from the 2003-04 and 2004-05 administrative reviews of Ball
Bearings were issued in 2005 and 2006, respectively, which was well before the adoption of the
DSB's recommendations and rulings at the end of January 2007. These administrative reviews have
no connection with the DSB's recommendations and rulings and cannot logically be considered
measures taken to comply. They therefore fall outside the scope of this proceeding.

6. Japan has urged this Panel to take an expa nsive and unwarranted view of Article 21.5.
According to Japan's argument, any subsequent ad ministrative review could fall within a compliance
proceeding merely because it involved the same pr oduct exported from the same country by the same
companies. However, as the Appellate Body noted in US – Softwood Lumber IV (Art. 21.5) ("US –
SWL IV"), an approach where every subsequent administrative review was treated as a measure taken
to comply "would be too sweeping."

7. Japan relies frequently on the Appellate Body report in US – SWL IV in an attempt to show
the alleged "particularly close relationship" between the original Ball Bearings reviews and the three
subsequent reviews. Japan's reliance is misplaced. Here, unlike in the US – SWL IV dispute, two of
the three subsequent determinations were made well before the adoption of the DSB's
recommendations and rulings. These subsequent determ inations thus could no t logically have taken
into consideration the recommendations and rulings of the DSB in the original dispute.

8. As to the administrative review of Ball Bearings for 2005-06, Commerce issued the final
results in this review after the adoption of the DSB's recommendations and rulings. However, this
determination was made in 2007, long after the cash deposit rates from the administrative reviews
subject to the DSB's recommendations and rulings had been withdrawn. In addition, the final results
did not closely correspond to the expiration of the reasonable period of time ("RPT"). By contrast, in
US – SWL IV , the determination in the first administra tive review (the alleged measure taken to
comply) was issued a few days after the Section 12 9 determination (the declared measure taken to
comply), and both determinations closely corresponde d to the expiration of the RPT. Finally, unlike
the alleged measure taken to comply in SWL IV , the 2005-06 administrative review did not
incorporate elements from a Section 129 determina tion "in view of " the DSB's recommendations and
rulings.

9. None of these three subsequent measures is a measure taken to comply. Contrary to Japan's
assertion, the United States has not asked this Pane l to focus on the subjective intent of the United
States in adopting the final results in the three ad ministrative reviews. Rather, as we have just
demonstrated, the three subsequent measures cannot objectively be considered measures taken to
comply.

10. Japan also relies on the erroneous argument th at the United States has d eclared that the three
subsequent reviews of Ball Bearings are measures taken to comply. However, the United States has
explained that the measures subject to the DSB's r ecommendations and rulings were eliminated as an
incidental consequence of the US anti-dumping system when the cash deposit rate from one review
was replaced by the cash deposit rate from the next review. This fact does not transform the
subsequent reviews into "measures taken to comply" within the meaning of Article 21.5.

11. Japan worries that it will somehow be left wit hout a remedy if the three subsequent reviews
are excluded from this proceeding. However, the sc ope of a proceeding under Article 21.5 is limited
by the text that Members have agreed to. The provi sions of the DSU cannot be re-written just to take
into account one Member's view of the way things o ught to be. Article 21.5 is clear: measures that
are not measures taken to comply – like those at issue here – do not fall within the scope of a
compliance proceeding. Japan cannot distort the re quirements of Article 21.5 so as to challenge any
measure it deems related to the original Ball Bearings reviews.

12. The United States has also asked this Panel to reject any claims with respect to anti-dumping
measures that were not specified in Japan's panel request because those measures were subsequent to
that request. Japan would like to include any an d all subsequent administrative reviews that it
believes are "closely connected" to the DSB's recommendations and rulings, including the 2006-07
administrative review of Ball Bearings from Japan. However, under DSU Article 6.2, 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 de termination that sets a margin of dumping for a
defined period of time is separate and distinct. U nder Article 6.2, Japan had to identify each such
measure in its panel request. It did not and could not since the m easures were not even in existence
at the time of Japan's request fo r the establishment of this Panel. Accordingly, these subsequent
administrative reviews cannot be subject to this compliance proceeding.

13. The United States reiterates that the 2006-07 administrative review of Ball Bearings should
be rejected as outside the scope of this proceeding because it was not in existence at the time of panel

establishment. However, this administrative review is not within the Panel's terms of reference for
another reason as well – it is not a measure taken to comply for the reasons provided in our
3 November submission.

II. THE UNITED STATES HAS FU LLY COMPLIED WITH THE DSB'S
RECOMMENDATIONS AND RULINGS WITH RESPECT TO THE FIVE
ADMINISTRATIVE REVIEWS

14. In this dispute, the Appellate Body found five anti-dumping administrative reviews
inconsistent with the AD Agreement and the GAT T 1994. The United States fully implemented the
DSB's recommendations and rulings with respect to these administrative reviews by withdrawing the
anti-dumping orders covering two of the administ rative reviews and withdrawing the cash deposit
rates established in the remaining three administrative reviews.

15. Japan has raised one principal argument in res ponse. Japan asserts that implementation by the
United States was insufficient because it did not undo action taken with respect to imports that entered
the United States prior to the end of the RPT but that remained unliquidated after the end of the RPT –
that is, "prior unliquidated entries." We recall that "liquidation" refers to the ministerial process under
US law whereby the United Stat es collects anti-dumping duties from importers. It should not be
confused with the determination of final liability which occurs either through an administrative review
or, automatically, if no administrative review is requested.

16. With respect to the prior unliquidated entr ies, Japan argues that the United States must
recalculate the final anti-dumping liability establishe d in the five administrative reviews. Japan's
theory of implementation fails because: 1) the theory of implementation would create fundamental
inequalities between retrospective and prospectiv e anti-dumping systems; 2) this theory of
implementation is not prospective in nature; and, 3) this theory of implementation is premised on
misunderstandings of the AD Agreement.

17. The United States will first address the inequalit y created by Japan's theory of implementation
for anti-dumping administrative reviews. Under Japan's theory, one implementation obligation exists
for Members with prospective anti-dumping systems, but, two implementation obligations exist for
Members with retrospective systems. For prospec tive systems, a Member has the obligation to revise
the measure as applied to imports entering after the da te of implementation – that is, future entries.
For a retrospective system, a Member would simila rly have the obligation to revise the measure as
applied to future entries. However, in addition, the Member would have to recalculate final liability
for any prior unliquidated entries.

18. Japan has been unable to provide any basis under the WTO agreements for establishing such
radically different implementation obligations for Members with prospective and retrospective anti-
dumping systems because none exists. The correct interpretative approach is to provide equal
implementation obligations under either anti-dumping system.

19. The US understanding of implemen tation obligations creates just such equality. Under either
a prospective or retrospective system, a Member has one implementation obligation – to bring that
measure into conformity with the WTO agreements as applied to future entries. This is exactly what
the United States has done in this dispute. The dete rmination of the final liability in the five anti-
dumping administrative reviews was not applied to any future entries. In this regard, the
United States has withdrawn the five administrative reviews within the meaning of Article 3.7 of the
DSU. Because these measures have been withdrawn, the United States has fully complied with its
WTO obligations.

20. Japan's theory of implementation does not pr ovide for prospective relief, but instead would
require the United States to implement retroactivel y the DSB's recommendations and rulings in this

dispute. Japan incorrectly assumes that recalculating final liability for prior unliquidated entries is not
retrospective because these entries have not been li quidated. However, Japan's theory leads to an
"undoing of past acts" for these prio r unliquidated entries and is, thus, retrospective. Under Japan's
theory, the United States would have to revisit the determination of the final liability calculated for
these unliquidated entries. This would undo the resu lts of the anti-dumping administrative reviews as
applied to these prior entries.

21. The correct understanding of implementation, in contrast, is unquestionably prospective. A
Member need not undo any past acts, but, instead, must either withdraw the measure or revise the
measure as applied to future entries. This is exactly what the United States did with respect to the five
administrative reviews because it withdrew each of the challenged measures. In this way, the
United States prospectively implemented the DSB's recommendations and rulings.

22. Japan's theory of implementation must also be rejected because it is premised on incorrect
interpretations of Articles 18.3 and 9.3 of the AD Ag reement. First, Japan asserts that pursuant to
Article 18.3 of the AD Agreement, the AD Agreem ent applies to the five administrative reviews
because these reviews were based on applications ma de after 2 January 1995. As a result, Japan
incorrectly concludes that there is no manner in which applying the DSB's recommendations and
rulings in this dispute to prior unliquidated entries can be viewed as retroactive.

23. Japan misapprehends Article 18.3 of the AD Agreement because this article does not address
the implementation obligations of Members pur suant to the dispute settlement provisions.
Additionally, Japan's argument assumes what it want s to prove. That is, Japan's argument assumes
that a WTO dispute challenging a determination made after 2 January 1995, could lead to a revision
of entries prior to that date. However, this is precisely the question at issue – whether WTO disputes
affect prior unliquidated entries. Article 18.3 of the AD Agreement in no manner answers this
question.

24. Japan's interpretation of Article 18.3 also would introduce an implausible definition of
"retroactive" into WTO anti-dumping disputes. As long as a WTO dispute involves an administrative
review that was based on an application received on or after 2 January 1995, under Japan's theory the
dispute could result in an obligation to revise that administrative review in any manner irrespective of
how long ago the WTO Member took action pursuant to that administrative review and how final that
action was. The mere fact that Article 18.3 of th e AD Agreement makes the agreement applicable to
administrative reviews initiated pursuant to applica tions made on or after 2 January 1995, cannot
support such an implausible definition of "retroactive."

25. Japan also incorrectly argues that Article 9.3 of the AD Agreement requires implementation
obligations with respect to the five administrative reviews to reach prior un liquidated entries because
if the obligations do not exist, Article 9.3 woul d be rendered a nullity. The US obligations under
Article 9.3 are the same as those for Members operating prospective systems – if the results of a
review are found to be WTO inconsistent, those r esults must not be applied to future entries.
Article 9.3 does not require a WTO Member to undo results of a review as to prior unliquidated
entries.

26) In addition to Japan's principal argument that implementation reaches prior unliquidated
entries, Japan also has argued that – with respect to the five administrative reviews – the United States
has violated various additional provisions of the WTO agreements. These additional claims are fully
addressed in our written submissions, which demonstrate that these claims are premised on
misunderstandings of the WTO Agreements and mischaracterizations of the US response to the DSB's
recommendations and rulings in this dispute.

III. THE UNITED STATES HAS COMPLIED WITH THE DSB'S
RECOMMENDATIONS AND RULINGS WITH RESPECT TO THE CHALLENGED
SUNSET REVIEW

27. Japan argues incorrectly that the November 1999 sunset review of Anti-Friction Bearings
"could not, and cannot today, provide a valid le gal basis under Article 11.3 for the continued
maintenance of the anti-dumping order in question." To the contrary: absent a demonstration that
there is no WTO-consistent basis for the likelihoo d of dumping determination, Japan cannot prevail
upon its claim that the anti-dumping duty order should ha ve been terminated. As the United States
demonstrated in its written submissions, Japan's arguments are unfounded.

28. In the underlying dispute, both Japan's cha llenge and the Appellate Body's finding of WTO
inconsistency were limited to the extent th e United States relied on margins from previous
proceedings calculated with zeroing. The original likelihood of dump ing determination, however, did
not rest exclusively upon the margins that the Appell ate Body found inconsiste nt with Article 11.3 of
the AD Agreement. The remain ing margins – in fact, the majority of margins – cannot be
characterized as inconsistent with the AD Agreement b ecause they either predate the AD Agreement
or did not involve the use of a zeroing methodology. Each of these two categories of margins
independently supports the criterion that Commerce a pplied. And neither the original panel nor the
Appellate Body made any adverse findings regarding these margins.

29. In response, Japan incorrec tly argues that these two categories of margins cannot be relied
upon to support the sunset determination. Japan's ar guments are flawed procedurally. In the original
proceeding, Japan did not challenge the margins that were determined without zeroing or the margins
that predated the AD Agreement and the WTO. As such, Japan's assertions in this dispute that the
United States should have presented the argume nts defending its reliance upon non-zeroed margins
and pre-WTO margins in the original proceeding is unfounded. The Unite d States had no obligation
to defend these aspects of the November 1999 sunset review because Japan did not challenge them at
the time.

30. Second, it is incorrect to interpret the Appellate Body's findings in this dispute as prohibiting
the United States from relying upon margins calculated without zeroing. In the fifth administrative
review, for example, which covered part of the re levant sunset review period, Commerce reviewed
twenty-one respondents. For te n non-cooperating respondents, Comme rce applied a dumping margin
based upon pricing data in the petition. This above de minimis rate was determined without zeroing.
Because these respondents were not subsequent ly reviewed, their non-zeroed dumping margins
represented their most recent dumping experience th at is directly relevant to the likelihood of
dumping determination for this anti-dumping duty order. This vitiates any suggestion by Japan that
the anti-dumping duty order should have been terminated.

31. Third, Japan provides no textual basis for its argument that a Member cannot rely upon pre-
WTO margins in making a sunset determination. This Panel should not entertain Japan's unsupported
argument.

IV. THE UNITED STATES HAS COMPLIED WITH THE DSB'S
RECOMMENDATIONS AND RULINGS CONCERNING THE "AS SUCH"
INCONSISTENCY OF THE ZEROING PROCEDURES

32. The DSB's recommendations and rulings in the original dispute applied to the single measure
known as the "zeroing procedures," regardless of the comparison methodology used or the type of
anti-dumping proceeding. Effective 22 February 2007, the United States removed that single measure
by discontinuing zeroing in weighted-average to weighted-average comparisons in original
investigations. Japan, however, disregards the f act that the DSB's recommendations and rulings
pertained to a single measure.

33. The panel in the original proceeding was e xplicit that the zeroing procedures were a single
measure that applied in all contexts and when using all comparison methodologies. The
Appellate Body upheld the panel's conclusion, say ing that the zeroing procedures "simply reflect
different manifestations of a single rule or norm."

34. Japan took the very same position in the orig inal proceeding, where it argued that the zeroing
procedures were a single measure . Thus, according to Japan's own original view, the zeroing
procedures were a single measure that applied in a ll contexts. The original panel and the Appellate
Body agreed, but Japan would now like to forget that it ever made and won this argument.

35. In view of the findings of the panel and the Appellate Body, it logically follows that if the
United States stopped using zeroing in any one of th ese different contexts, then the single measure no
longer existed. Therefore, when Commerce announced that it would no longer apply the zeroing
procedures in weighted-average to weighted-average comparisons in original investigations, it
eliminated the single measure that was found to be "as such" inconsistent.

ANNEX E-3

CLOSING STATEMENT OF THE UNITED STATES

5 November 2008

 Mr. Chairperson, members of the Panel:

1. On behalf of the United States delegation, I would like to thank you and the members of the
Secretariat for your work on this dispute. We appreciated the opportunity to provide you with
preliminary thoughts on your questions and look fo rward to providing you with additional comments
in our written responses.

2. We would like to thank the Panel again for opening this hearing to the public. We note that
three third parties took the opportunity to make public statements. WTO Members and the public
have had an opportunity to see the Panel's professionalism and impartiality, which can only strengthen
the credibility of the WTO dispute settlement system.

Japan Misconstrues the US Argument on Measures Taken to Comply

3. Today in our closing statement we would first like to focus on a few points raised during the
course of the meeting concerning the issue of "measures taken to comply." As we have explained, the
United States came into complia nce with the Dispute Settlement Body's ("DSB") recommendations
and rulings with respect to the Ball Bearings revi ews through the incidental operation of the US anti-
dumping system when the WTO-inconsistent cash deposit rates were removed. The last such removal
occurred in 2005, following the 2003-04 administrativ e review of Ball Bearings. This was long
before the adoption of the DSB's recommendations and rulings. The measure bringing the United
States into compliance in each instance was the act of removing the WTO-inconsistent border
measure. This removal did not transform any and all subsequent administrative reviews of the same
anti-dumping order of Ball Bearings into measures taken to comply just because they allegedly bear
some relationship to the same anti-dumping duty order. And the Dispute Settlement Understanding
("DSU") does not provide for such a sweeping expansi on of a compliance panel's terms of reference.
Moreover, contrary to Japan's assertion, the Unite d States has never maintained that subsequent
reviews are measures taken to comply.
1 We have always stated that it was the act of removing the
WTO-inconsistent border measure that brought the United States into compliance.

4. Japan attempts to disparage the US ar gument by asserting that the United States views
compliance prior to the DSB's recommendations a nd rulings as some sort of "convenient accident."
2
However, as we explained yesterday, it is not unusua l for a Member to come into compliance with the
DSB's recommendations and rulings when a WTO- inconsistent measure is removed through its
expiration over time, or otherwise through the operation of law. 3 (I direct the Panel to our footnote 3,
which cites to DSB minutes in which Members di scussed compliance occurring before adoption of
the DSB's recommendations and rulings.) Nothing precludes an Article 21.5 panel from finding that a

1 Japan Opening Statement, paras. 6-7.
2 Japan Opening Statement, para. 18.
3 See, e.g., Minutes of the DSB Meeting on 23 May 1997, WT/DSB/M/33, Consideration of Appellate
Body and Panel Reports in US – Woven Wool Shirts and Blouses from India, p. 11; Minutes of the DSB Meeting
on 12 December 2000, WT/DSB/M/94, Implementa tion of the Recommendations of the DSB in Guatemala –
Definitive Anti-Dumping Measures on Grey Portland Cement from Mexico, paras. 42-43.

Member has come into compliance in the fashion we have described, and as the United States has
done in this dispute.

5. As to the administrative reviews subject to the DSB's recommendations and rulings, this
Panel should find that the United States has remo ved the WTO-inconsistent border measures. The
Panel should also reject Japan's attempt to include subsequent reviews of Ball Bearings in the scope of
this proceeding.

The United States Has Eliminated the Zeroing Procedures

6. The Appellate Body and the pa nel in the original proceeding found the zeroing procedures to
be a single measure that was applied whenever the US Department of Commerce ("Commerce")
calculated margins of dumping, regardless of the comparison methodology.
4 It follows logically that
when Commerce discontinued zeroing in one contex t – that is, in making W-to-W comparisons in
investigations – the United States eliminated the single measure known as the zeroing procedures.

7. At yesterday's session, Japan relied on the ex istence of separate findings of inconsistency
against the zeroing procedures in an attempt to show that the United States had not complied with the
DSB's recommendations and rulings. However, the ex istence of separate rulings does not mean that
there were also separate measures. 5 Rather, there was one single measure – the zeroing procedures –
as Japan itself argued in the original proceeding. And the DSB's recommendations and rulings
required the United States to remove that single, WTO-inconsistent measure, which it has done.

8. Japan also asserted that if the Panel finds that the single measure was withdrawn, then it
should conclude that the original measure was replaced by "new zeroing procedures."
6 Japan, as the
complaining Member, has the burden of proving the existence of such a replacement measure. The
Panel must be satisfied that Japan has met this burde n, and, as the Appellate Body has noted, "a panel
must not lightly assume the existence of a 'rule or norm' constituting a measure of general and
prospective application, especially when it is not expressed in the form of a written document."
7
Japan has not demonstrated the existence of a ne w measure, and the Panel should reject Japan's
assertion of a new, WTO-inconsistent replacement measure.

The United States Has Complied With the DSB' s Recommendations and Rulings With Respect
to the Five Administrative Reviews

9. With respect to the five administrative review s, the United States has explained at this panel
meeting and throughout its written submissions that it has prospectively complied with the DSB's
recommendations and rulings in this dispute. Prospective compliance was achieved because these
administrative reviews were withdrawn and no longer serve as the basis for any anti-dumping liability
on entries occurring after the conclusion of the reasonable period of time ("RPT"). Because
implementation obligations do not exist with respect to entries occurring prior to the conclusion of the
RPT, no further action is required.

10. In its opening statement, Japan made much of liquidation instructions that Commerce issued
after the conclusion of the RPT.
8 These liquidation instructions a pplied to prior entries – that is,
entries occurring prior to the conclusion of the RPT. Because implementation obligations do not exist
with respect to prior entries, these liquidation instru ctions are irrelevant to compliance with the DSB's
recommendations and rulings in this dispute.

5 Japan Opening Statement, paras. 37-40.
6 Japan Opening Statement, para. 45.
8 See, e.g., Japan Opening Statement, para 46.

11. The importance of implementation obligations w ith respect to the five administrative reviews
only applying to post RPT-entries is paramount. In prospective systems implementation obligations
are necessarily limited to post-RPT entries. The same must be true for retrospective systems,
otherwise, retrospective systems would be unfair ly obligated to implement in two manners, with
respect to both prior and post-RPT entries. There is no basis in the covered agreements for adding to
the implementation obligations of Members operating retrospective systems. To the contrary, the
Appellate Body stated in this dispute that the AD Agreement is neutral as between retrospective and
prospective systems, and the AD Agreement does not favour one system or place one system at a
disadvantage.
9

This Panel Should Reject Japan's Claims Concerning the Sunset Review of Anti-Friction
Bearings

12. With respect to the challenged sunset revi ew of Anti-Friction Bearings, Japan has raised
several new arguments before this Panel. Japan argues that Commerce cannot rely on certain pre-
WTO margins of dumping and margins of dumping a pplied to Japanese respondents that refused to
cooperate in certain assessment proceedings.
10 These arguments could have been made in the original
proceeding, but were not, and in raising them now , Japan has not met its burden of establishing the
WTO-inconsistency as to the new arguments.

13. It is clear from the original sunset de termination that Commerce considered all dumping
margins from prior reviews which were conducte d after the imposition of the anti-dumping duty
order.
11 The margins, the majority of which were calculated without zeroing, demonstrate that
Japanese respondents continued to dump at above de minimis levels after the imposition of the anti-
dumping order. Because Japanese respondents con tinued to dump, even when the anti-dumping
duties were in effect, Commerce made a reasone d and adequate conclusion that dumping would
continue if the anti-dumping order was revoked.

14. Mr. Chairman and members of the Panel, we appreciate this opportunity to present these
closing comments and look forward to continuing to work with you on these important issues.

10 Japan Second Written Submission, paras. 194-95; Japan Opening Statement, paras. 118-30.
11 Exh. US-A24 at n. 3.

ANNEX E-4

THIRD PARTY ORAL STATEMENT OF CHINA

1. Thank you, Mr. Chairman, and distinguished members of the Panel. China appreciates this
opportunity to present its views on the following issues raised in this Panel proceeding.

2. The first issue is that the United States has not fully complied with the DSB's
recommendations and rulings regarding the zeroing procedures.

3. China recalls that the DSB has ruled that "as such" measures challenged by Japan that
maintaining zeroing procedure in original inves tigation by W-to-W, T-to-T comparison method and
maintaining zeroing procedure in periodic review s and new shipper reviews by any comparison
method are inconsistent with Artic les 2.4.2, 2.4, 9.3 and 9.5 of the Anti-Dumping Agreement and
Article VI:2 of the GATT 1994.

4. To the best information available, China unde rstands that at the end of reasonable period of
time ("RPT"), the United States only abandoned zeroing procedure in original investigation by W-to-
W comparison method. Thus, China agrees with Japan that the United States' omission to take action
to implement the DSB's recommendations and rulings that the zeroing procedures are WTO-
inconsistent in the following situations: (i) in T- to-T comparisons in original investigations; (ii)
under any comparison methodology in periodic reviews; and (iii) under any comparison methodology
in new shipper reviews.

5. The second issue is that the United States has not taken any action to comply with the DSB's
recommendations and rulings regarding the five periodic reviews.

6. China recalls that the DSB has ruled that " as applied" measures challenged by Japan that by
applying zeroing procedures in the 11 periodic reviews identified in Japan's Request for the
Establishment of a Panel, the United States acted in consistently with Articles 2.4 and 9.3 of the Anti-
Dumping Agreement and Article VI:2 of the GATT 1994.

7. However, the United States argued that in each periodic review case, a prior periodic review
determination is superseded by a subsequent review , and that since the periodic reviews challenged in
the original dispute do not exist any more with new cash deposit rates, the United States is not
required to do anything to implement.

8. China disagrees with the Unite d States. Such interpretation of subsequent review would
undermine the objective and purpose of the WTO di spute settlement system and would make it
impossible for a Member to get remedy.

9. Further, China agrees with Japan that since after the end of the RPT, the United States would
collect definitive anti-dumping duties at importer-specific assessment rates determined with zeroing in
these reviews. Even the challenged measures which we re WTO-inconsistent were superseded by the
subsequent reviews, they continue to produce legal effects after the end of the RPT.

10. China hereby supports Japan's views that the Panel should find that the United States has not
taken any action to comply with the DSB's recommendations and rulings regarding the five periodic
reviews.

11. The third issue is that the three subsequent administrative reviews of ball bearings from
Japan are within the scope of this proceeding.

12. China believes that the Panel should find that the three subsequent administrative reviews
constitute "measures taken to comply" for purposes of Article 21.5 of the DSU.

13. China notes that the United States argued that the three subsequent administrative reviews are
not "measures taken to comply". However, as the A ppellate Body held in US-Soft Lumber IV (21.5)
that " An implementing Member cannot decide for itse lf whether or not a measure is "taken to
comply"; instead, a compliance panel must objec tively assess whether a challenged measure meets
the requirements of Article 21.5".

14. China agrees with Japan that the three sub sequent administrative reviews have "sufficiently
close links" to the recommendations and rulings of the DSB and shall be subject to review by an
Article 21.5 panel, and that "A rticle 21.5 must be interpreted to prevent the implementing Member
from undermining the substantive disciplines in the covered agreements and also the dispute
settlement mechanism in the DSU".

15. Once again, China thanks the Panel for this opportunity and hopes that these comments will
prove to be useful.

ANNEX E-5

EXECUTIVE SUMMARY OF THE THIRD PARTY ORAL STATEMENT
OF THE EUROPEAN COMMUNITIES

5 November 2008

I. INTRODUCTION

1. The European Communities generally agrees w ith the claims and arguments raised by Japan
in this case and regrets the position adopted by th e United States, which still today continues taking
positive acts to collect anti-dumping duties based on zeroing, despite the thousand of pages of adopted
DSB reports ruling against the United States on this matter.

II. THE UNITED STATES HAS FAILED TO COMPLY WITH THE "AS SUCH"
FINDINGS AGAINST ZEROING IN THE ADOPTED DSB REPORTS

2. With respect to the "as such" findings agai nst the use of zeroing contained in the adopted
DSB reports in the original dispute, the European Communities fails to understand the US entrenched
position in this compliance proceeding. The single ru le or norm subject to the original proceeding –
and that the United States was obliged to bri ng into conformity – was the use of zeroing in any anti-
dumping proceeding. Since the United States has merely eliminated zeroing in one t y p e o f a n t i -
dumping proceedings ( i.e., original investigations) and with respect to one comparison methodology
(i.e., W-to-W), the European Communities agrees with Japan that the United States has failed to fully
comply with the DSB's recommendations and rulings in the original dispute.

III. THE US THEORY ON IMPLEMENTATION BASED ON DATE OF ENTRY
SHOULD BE REJECTED

3. In the European Communities' view, in li ght of the circumstances of this case, the date of
entry for the purpose of assessing compliance by the Un ited States with the DSB's recommendations
and rulings in the original dispute is irrelevant. The European Communitie s agrees with Japan that
prompt compliance as mandated by Article 21.1 of the DSU at least requires the United States to stop
taking any positive acts providing for the final paymen t of duties or retention of cash deposits based
on zeroing with respect to those entries not finally liquidated before the end of the reasonable period.
In other words, it requires the United States, in a simple accounting exercise, to collect the proper
(and WTO-consistent) amount of duties on entries pending for final liquidation after the end of the
reasonable period of time (i.e., 24 December 2007).

A. THE UNITED STATES MISUNDERSTANDS THE ANTI-DUMPING AGREEMENT

4. The European Communities considers that th e arguments brought by the United States to
support its implementation theory based on the date of entry fundamentally show its misunderstanding
of the basic principles set out by the Anti-Dumping Agreement. Indeed, the Anti-Dumping Agreement
disciplines actions taken by WTO Members against dumping. The set of actions which fall under the
disciplines of the Anti-Dumping Agreement certainly include the moment when the anti-dumping duty
is collected. In this respect, the European Communities observes that the Anti-Dumping Agreement
employs different terminology in its provisions when referring to the obligations contained therein.
For instance, Article 1 of the Anti-Dumping Agreement states that "an anti-dumping measure shall be

applied only under the circumstances provided in Arti cle VI of the GATT 1994". The term "applied"
can be understood in a broad sense, including any actions taken by WTO Members in the application
of anti-dumping measures. Similarly, Articles 8.1, 9.1, 10.4, 11.2, 11.3, 12.2.1, 12.2.2 and 18.3 of the
Anti-Dumping Agreement refer to general terms like "impose" or "imposition" of anti-dumping duties.
When looking at the GATT 1994, Article VI:2 uses a more specific language when stating that "in
order to offset or prevent dumping, a contracting party may levy on any dumped product an anti-
dumping duty no greater in amount than the margin of dumping in respect of such a product". The
term "levy" is defined in Footnote 12 of the Anti-Dumping Agreement as "the definitive or final legal
assessment or collection of a duty or tax". Thus, levying anti-dumping duties includes legal
assessments and collection of duties. A more spec ific language is also found in Article 9 of the Anti-
Dumping Agreement. As mentioned in its title, Article 9 of the Anti-Dumping Agreement deals with
the "Imposition and Collection of Anti-Dumping Duties" ( emphasis added). Indeed, while Article 9.1
deals with the imposition of anti-dumping duties in gene ral terms, Article 9.2 contains a more specific
obligation when stating that "[w]hen an anti-dumping duty is imposed in respect of any product, such
anti-dumping duty shall be collected in the appropriate amounts in each case" ( emphasis added). It
results from the language of Article 9 of the Anti-Dumping Agreement (and in particular its
paragraphs 1 and 2) that there is a differen ce between imposition and collection of anti-dumping
duties. In other words, the fact that the Anti-Dumping Agreement uses different terms implies in this
particular context that each of them must have a particular meaning. Indeed, according to their textual
meaning, "impose" means "to establish or apply by authority" whereas "collect" is "to claim as due
and receive payment for".

5. More importantly, Article 9.2 of the Anti-Dumping Agreement establishes an obligation that
any anti-dumping duty imposed on any product must "b e collected in the appropriate amounts in each
case". In other words, the Anti-Dumping Agreement clearly regulates the actions of collection of anti-
dumping duties, specifying that in each case such collection of duties must be made in the appropriate
amounts. Thus, in light of Articles 9.2 and 9.3 of the Anti-Dumping Agreement , any action of
collection of anti-dumping duties (as any decision to assess duties at a particular amount) must not
exceed the margin of dumping as established under Article 2 of the Anti-Dumping Agreement . The
Appellate Body has also acknowledged the relevance of the term "collection" of anti-dumping duties
when stating that "pursuant to Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the
GATT 1994, investigating authorities are required to ensure that the total amount of anti-dumping
duties collected on the entries of a product from a given exporter shall not exceed the margin of
dumping established for that exporter" (emphasis added).

6. Therefore, in the European Communities' vi ew, the US implementation theory based on the
date of entry essentially ignores that the Anti-Dumping Agreement comprehensively regulates how
WTO Members can apply anti-dumping measures, including
actions for collecting duties. Logically,
those actions are relevant for assessing compliance with the DSB's recommendations and rulings as
well as the covered agreements.

B. MEMBERS' IMPLEMENTATION OBLIGATIONS IN LIGHT OF THE EXISTENCE OF
DOMESTIC LITIGATION

7. In this case, the US obligation resulting fro m the DSB's recommendations and rulings in the
original dispute was to stop using zeroing by the end of the reasonable period of time at the latest .
Neither this obligation nor the WTO rights have ch anged as a result of domestic litigation. The fact
that the United States in accordance with its municipal law could not collect those duties before the
end of the reasonable period of time because importers have exercised their legal rights for judicial
review does not imply that those actions of collection of duties based on zeroing after the end of the
reasonable period of time can escape from the obligati on to comply with the adopted DSB reports in
this dispute. Otherwise, those actions disciplined by the Anti-Dumping Agreement would not be
subject to WTO-scrutiny.

8. More fundamentally, if dom estic litigation would not have any effect on the Member's
implementation obligations – as the United States suggests – the obligation to provide for adequate
judicial review of anti-dumping determinations pursuant to Article 13 of the Anti-Dumping Agreement
would be meaningless. Thus, the US approach lead s to absurd results and would allow Members to
circumvent compliance with adopted DSB reports . Nowhere in the covered agreements it is
mentioned or intended that certain "acts" of WT O Members are not subject to scrutiny under the
WTO Agreements. Therefore, regardless of the existence of domestic litigation , the acts of collection
of duties based on zeroing after the end of the reasonable period of time (as well as the US omissions
in this respect) must be in conformity with the US obligations as derived from the DSB's
recommendations and rulings in the original dispute and, in particular, with the Anti-Dumping
Agreement.

C. COMPLIANCE AS REQUESTED BY JAP AN WOULD BE PROSPECTIVE IN NATURE

9. The European Communities agre es with Japan that the United States would comply with the
DSB's recommendations and rulings in a prospective manner in this case if it stops taking any positive
acts providing for the final payment of duties or retention of cash deposits based on zeroing with
respect to those entries not finally liquidated before the end of the reasonable period.

10. The United States is not required in this cas e to "undo" past acts as to prior unliquidated
entries, simply because the final anti-dumping lia bility in accordance with the US retrospective
system of duty assessment is determined at a later stage than the time of importation. Consequently,
since with respect to unliquidated entries after the end of the reasonable period of time the final
amount of anti-dumping liability has not yet been established ( i.e., the USCBP has not liquidated the
duties or such liquidation has not become fina l and conclusive pending the outcome of domestic
litigation), the United States must in a simple accounting exercise make its calculations so as to
properly reflect the degree of dumping that occurred at least with effect from the end of the
reasonable period of time. Otherwise, insofar as the United States continues collecting duties based
on zeroing with respect to those entries, the measu re challenged in the original dispute continues
effectively in place.

11. Finally, the European Communities would also like to add that the Panel can examine Japan's
arguments relating to the ILC Articles in light of Article 31.3(c) of the Vienna Convention on the Law
of Treaties.

D. PROSPECTIVE AND RETROSPECTIVE ANTI-DUMPING SYSTEMS LEAD TO
IDENTICAL RESULTS

12. The European Communities disagrees with the unfounded statements made by the
United States as regards the EC's alleged "practice" and requests the Panel to disregard them. Under
both systems equality is achieved since they are subj ect to the obligation contained in Article 9.3 of
the Anti-Dumping Agreement that the amount of anti-dumping duty must not exceed the margin of
dumping established under Article 2. Like the Un ited States, the European Communities is not
prevented from applying the WTO-consistent methodology to previous entries pursuant to an act or
decision taken after the end of the reasonable period of time, thereby complying with the DSB's
recommendations and rulings in a prospective manner. This is precisely what the United States is
refusing to do in the present case.

E. CONCLUSION

13. In sum, in light of the circumstances of this case, the European Communities considers that
the US theory of compliance based on the date of entry must be rejected. Immediate compliance as
mandated by Article 21.1 of the DSU implies that the United States must have stopped using zeroing

after the end of the reasonable period of time, including actions for collection of duties based on
zeroing with respect to prior unliquidated entries.

IV. THE UNITED STATES HAS FAILED TO COMPLY WITH THE DSB'S
RECOMMENDATIONS AND RULINGS AS REGARDS THE SUNSET REVIEW AT
ISSUE

14. In the European Communities' view, in orde r to comply with the DSB's recommendations and
rulings in the original dispute, the United States at least should have carried out a new determination
of likelihood of recurrence of dumping in order to ju stify its conclusion that the sunset review at hand
should remain in place. However, the United Stat es has failed to do so. Thus, the United States
cannot use this proceeding to provide the basis for th e maintenance of the sunset review at hand; nor
the United States can have a "second chance" in this compliance proceeding to defend a measure
which was found to be inconsistent with the Anti-Dumping Agreement . Consequently, the
European Communities considers that the original determination of recurrence of dumping still relies
on the same dumping margins based on zeroing which were found to be WTO-in consistent and, thus,
the original violation of Article 11.3 of the Anti-Dumping Agreement also continues in light of the US
omissions in the present case.

V. THE SUBSEQUENT REVIEWS FALL UNDER THE SCOPE OF THIS
COMPLIANCE PANEL

15. The European Communities cons iders that the subsequent reviews brought by Japan in this
proceeding fall under the scope of this compliance Panel. In the European Communities' view, as
illustrated by the Appellate Body in US – Softwood Lumber IV (21.5) , when examining whether a
measure can be considered as "measure taken to comply" falling under the jurisdiction of a
compliance panel, the fact that such a measure was issued before the adoption of the DSB reports is
only one of the elements which should be c onsidered. However, in any case, the effects of the
measure concerned is the relevant factor to determine whether or not that measure may be examined
in proceedings under Article 21.5 of the DSU. In this respect, the timing, direction or intention of the
measure as taken by the Member concerned cannot limit the scope of an Article 21.5 panel. Therefore,
in the European Communities' view, the US position concerning the relevance of the timing of the
subsequent reviews to actually break the clo se connexion with the DSB's recommendations and
rulings in the original dispute should be rejected; more so when as in this case, the United States has
admitted in its submissions the close relationship between the subsequent reviews and the original
measures.

16. Even if the timing of the subsequent reviews were to be a relevant factor in determining
whether or not those measures may be exam ined in this compliance proceeding, the
European Communities considers that the US omissions in this case ( i.e., the fact that it has not
stopped collecting duties based on zeroing resulting from the determinations made pursuant to those
subsequent reviews) also fall under the scope of th is compliance proceeding. Those are actions (and
omissions) in connection with the subsequent reviews that took place after the end of the reasonable
period of time.

17. Moreover, the Appellate Body in US – Upland Cotton (21.5)
 observed that where a violation
was found to exist (in particular, a violation of the SCM Agreement arising from a subsidy which had
caused serious prejudice) and the Member in question continues violating the same relevant
provisions of the covered agreements (in that case, th e same subsidy under the same conditions and
criteria), then there is a particularly close relationship between the new measure and the DSB's
recommendations and rulings in the original dispute. Otherwise, the Member concerned would not be
able to obtain adequate relief as a result of the dispute settlement procedures, contrary to the objective
of prompt settlement and prompt compliance set out in Articles 3.3 and 21.1 of the DSU. In the
present case, there was a violation ( i.e., use of zeroing in the original measures) and the violation has

continued (since the United States has continued applying zeroing in the subsequent reviews).
Therefore, it follows that those subsequent review s (as well as US omissions ) fall under the scope of
this compliance Panel.

18. Finally, as regards Japan's supplemental su bmission, the European Communities considers
that the results of a periodic review concerning ball bearings entering the United States during the
period 1 May 2006 – 30 April 2007 fall under the terms of reference of this Panel. The requirement to
"identify the specific measure at issue" contained in Article 6.2 of the DSU does not have a temporal
scope; rather, it implies that the description of the measures at issue in the panel request must allow
the Member concerned to know the precise content of those measures on a s ubstantive basis. Since
Japan identified the administrative reviews concerne d in its Panel Request and the US municipal law
provides for limited means to amend those meas ures (namely, pursuant to a new administrative
review), the United States cannot argue that it fa ils to know the specific measures falling under the
scope of this proceeding.

ANNEX E-6

THIRD PARTY ORAL STATEMENT OF HONG KONG, CHINA

5 November 2008

 Mr. Chairman, members of the Panel:

1. Hong Kong, China welcomes this opportunity to present its views as a third party before the
Panel. We have provided a written submission on certain issues regarding this dispute on
8 August 2008. It is our intention to make a brief statement today in addition to our written
submission.

2. The practice of zeroing is one of the most contentious issues in anti-dumping. Hong Kong,
China's position on this methodology is long standing and persistent. Zeroing is WTO-inconsistent and
should not be used in any anti-dumping determination.

3. Yet, the present proceedings are not to consid er the question of its illegality, for that has
already been answered conclusively by the original Panel and the Appellate Body.

4. The focus of this Panel is on whether the re commendations and rulings of the DSB have been
fully complied with. More specifically, it is to answer a basic and fundamental question: do the WTO-
inconsistent procedures of zeroing continue to be used after the end of the reasonable period of time
and do they continue to produce legal effects . With reference to our third party written submission,
Hong Kong, China submits that the answer to the question is in the affirmative.

5. It is recalled that in our written submissi on, implementation obligations for respectively
unliquidated entries and cash deposit rates have been highlighted and discussed in detail. We are not
going to repeat today the arguments in our written submission. Suffice it to point out that after the
reasonable period of time, the US has continued to liquidate entries and apply cash deposit rates on
the basis of the zeroing procedures. In this rega rd, the WTO-inconsistent procedures have continued
to produce legal effects on the imports concerned.

6. We would also like to take this opportunity to respond briefly to the specific contention of the
US regarding the alleged "inequalities" between th e implementation obligations for "retrospective"
and "prospective" anti-dumping systems. Hong Kong, China submits that under both duty assessment
systems, a WTO Member's fundamental obligations pertaining to implementation are the same i.e. the
Member, under whatever system, is required to ensure that the actions it takes as of the end of the
reasonable period of time are WTO-consistent. The question of "inequalities" does not arise. While a
Member has full discretion to adopt its own duty assessment system provided that it is not
inconsistent with the Member's WTO obligations, specific features of that system, for instance
periodic reviews, unliquidated entries and cash deposit rates under the US' system, should not become
justifications for differentiated implementation oblig ations after the reasonable period of time for the
Member concerned. In the premises, a WTO Member should not take any actions which are contrary
to the DSB's recommendations and rulings and s hould cease the WTO-inconsistent practice under the
prospective implementation system.

7. Hong Kong, China agrees with Japan that sub sequent periodic reviews should be regarded as
"measures taken to comply" under Article 21.5 of th e DSU. Accepting the US' argument that they are
merely "incidental" under the US retrospective duty assessment system would result in an absurd
situation whereby a Member could continue to u se the WTO-inconsistent zeroing practice perpetually
without any meaningful remedy to the complainants under the DSU.

8. Hong Kong, China therefore submits that the Panel should find that the US fails to comply
with the DSB's recommendations and rulings in the original dispute and would respectfully request
the Panel to take into consideration our views a nd arguments as set out in our written submission and
this oral statement during their deliberations.

9. Thank you for your attention.

ANNEX E-7

THIRD PARTY ORAL STATEMENT OF THE REPUBLIC OF KOREA

5 November 2008

Mr. Chairman and members of the Panel:

1. The Republic of Korea ("Korea") appreciates th is opportunity to present its views to the Panel
as a third party in this important dispute. Through this statement, Korea provides an overview of the
key issues included in Korea's third party submission dated August 8, 2008.

2. In Korea's view, although the Dispute Settlement Body ("DSB") unambiguously held that the
application of "zeroing" by the United States Depa rtment of Commerce ("USDOC") in the original
investigations, periodic reviews and sunset reviews constitutes violation of various provisions of the
Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994
("Anti-Dumping Agreement"), and although the United States had the benefit of an 11-month long
reasonable period of time ("RPT") for the implementation of the DSB recommendations and rulings,
the United States has simply failed to implement them.

3. In Korea's view, to comply with the recommenda tions and rulings of the DSB in this dispute,
the United States would have to "withdraw" or "eli minate" the challenged measure, or take otherwise
comparable action, before the expiration of the RP T. In this case, howev er, the record evidence
proves that the USDOC has continued to apply the WTO-inconsistent zeroing practice in the original
investigations, periodic reviews and sunset reviews even after 24 December 2007 when the 11-month
RPT ended. Korea therefore submits that the United States has failed to implement the DSB
recommendations and rulings in due course.

4. The DSB ruled that the zeroing practice is WTO-inconsistent in both W-to-W comparison
methodology and T-to-T comparison methodology in orig inal investigations. In its final notice of
27 December 2006, however, the USDOC declared th at it would no longer apply the zeroing practice
only in W-to-W comparisons in original investigati ons. Korea is not aware of any other subsequent
statement of the USDOC in this regard. The st atement of 27 December 2006 and the absence of
subsequent statements (or action) relating to the issue should lead the Panel to find that the United
States has failed to implement the decisions of the DSB with respect to the T-to-T comparison
methodology in original investigations.

5. In the parties' substantive meeting held yest erday, the United States appeared to maintain the
position that since the zeroing is allegedly a si ngle measure, withdrawing the practice in W-W
comparison methodology alone should be regarded as full compliance of the DSB decisions. Korea
submits that this argument is illogical. In fact , the Appellate Body in the original proceeding
specifically stated that:

 We also consider that the Panel had sufficient evidence before it to conclude that the "zeroing
procedures" under different comparison methodologies, and in different stages of anti-

dumping proceedings, do not correspond to separate rules or norms, but simply reflect
different manifestations of a single rule or norm.
1

The zeroing practice as a whole may be a single measure, but this does not mean that a remedial
action in one aspect exonerates the implementing Member from taking all necessary actions to bring
the challenged measure into full compliance. Kore a submits that the DSB in the original dispute
explicitly held that, to bring th e measure into full compliance with the covered agreements, not only
the W-W comparison methodology but also T-T comp arison methodology must be addressed by the
United States.

6. In addition, the United States has also faile d to implement the recommendations and rulings
of the DSB concerning the administrative reviews cha llenged by Japan in the current proceedings. In
Korea's view, the United States appears to rely on unique traits of its administrative review
mechanism so as to circumvent the decisions of the DSB. We are concerned that the US position
would effectively insulate administrative reviews from any meaningful oversight by a panel or the
Appellate Body: under that approach there would be no viable remedy available for a Member who
successfully challenged an administrative review by another Member in an original panel procedure.

7. To the extent the USDOC continues to appl y zeroing, after the RPT, in its administrative
reviews in the course of finally liquidating the entr ies, Korea submits that the United States has failed
to implement the recommendations and rulings of the DSB. Korea also submits that, unlike other
instances where a Member's measure is officially terminated, an administrative review does not
simply disappear simply because a new, subsequent review is under way or completed. The results of
the previous review may still affect interested pa rties and subsequent, equally critical procedures.
Accepting the argument that an administrative review has been terminated, hence no further action is
required, simply because of the existence of a ne w administrative review would basically open the
door for the situation where a Member revokes a WTO-inconsistent measure during the RPT and
promptly introduces a new, equally inconsistent measure the whole purpose of which is to circumvent
a good faith implementation obligation.

8. Therefore, by all accounts, a challenged admini strative review has not been terminated yet
simply because there is a new administrative review going on or completed if the new review, though
technically separate, is a virtual extension of th e originally challenged measure. An administrative
review found to be WTO-inconsistent thus e qually requires adequate implementation by the
implementing Member irrespective of existence or completion of a subsequent review or reviews.
Korea thus requests the Panel to hold that th e United States has failed to implement the DSB
recommendations and rulings in this respect.

9. Also, in the original dispute the DSB ruled that by relying on margins of dumping calculated
in previous proceedings using the zeroing procedures in the two sunset reviews, the United States
acted inconsistently with Article 11.3 of the Anti-Dumping Agreement. Korea understands that
despite the DSB recommendations and rulings the United States has failed to take any particular
action to bring its WTO-inconsistent sunset re view into conformity with the Anti-Dumping
Agreement and that as a result of th e failure the anti-dumping order against antifriction bearings still
remains in effect.

10. In Korea's view, given the way sunset reviews are conducted by the USDOC, they cannot be
separated from previous anti-dumping proceedings. As the United States has not implemented the
decisions of the DSB in original investigati ons (T-T comparisons) and periodic reviews, and
continues to apply the zeroing practice in these pr ocedures, one could reasonably argue that the
subsequent sunset reviews stand to be tainted by the previous investigations and periodic reviews

1 United States-Measures Relating to Zeroing and Sunset Reviews, WT/DS322/AB/R (9 January 2007),
para. 88.

unless and until the zeroing practice is fully eliminat ed in these prior proceedings. As such, Korea
submits that the United States has also failed to im plement the decisions of the DSB with respect to
the sunset reviews.

11. Korea respectfully submits that for the reas ons stated above the Panel should hold that the
United States has failed to comply with the reco mmendations and rulings of the DSB in the original
dispute.

12. Korea appreciates this opportunity to present its views to the Panel.

ANNEX E-8

THIRD PARTY ORAL STATEMENT OF MEXICO

I. INTRODUCTION

1. Thank you, Mr Chairman and members of the Panel. I appreciate the opportunity to appear
before you today to present the views of Mexico in these proceedings. The purpose of this oral
statement is to offer a few brief points concer ning the arguments put forward by Japan and the
United States that have particular significan ce to Mexico as a Member likewise seeking US
compliance with the reports concerning zeroing.

Failure to Comply with an "As Such" Ruling
2. Firstly, Mexico is troubled by the United St ates' continuing failure to comply with its
obligations stemming from the DSB's "as such" fi ndings in relation to zeroing in administrative
reviews. Mexico recalls that the DSB found that zeroing is inconsistent "as such" with Articles 2.4
and 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994 when applied in periodic
reviews, regardless of the comparison methodology that is employed.
1 The United States, as it must,
has unconditionally accepted that dete rmination and expressly agreed with Japan to comply with its
obligation to bring the inconsistent zeroing measur es into compliance with its WTO obligations by
24 December 2007.

3. Clearly the only action that the United States has taken at all to comply with the DSB's
rulings on an "as such" measure in this dispute has been to stop the use of zeroing in original
investigations and, even then, only where comparison s are made on an average-to-average basis. In
taking this inadequate action, the United States made it clear that it was taking no action to eliminate
zeroing in any other context, including in the context of periodic reviews.
2 In fact, as Japan has
indicated, notwithstanding the DSB's recommendations in this case, the United States continues to
apply zeroing without exception in periodic review s conducted after the expiration of the reasonable
period of time (RPT) for compliance.3

4. The United States does not deny any of these f acts but argues instead that, given that it has
complied by eliminating zeroing in original inv estigations where comparisons are made on an
average-to-average basis, the United States has "elimi nated the single measure that was subject to the
DSB's recommendations and rulings by the end of th e RPT, and has therefore fully implemented the
DSB's recommendations and rulings with respect to the zeroing procedures". 4 This argument is
transparently false and cannot excuse the United States' failure to comply with its obligations.

5. To start with, the United States has not accura tely described the DSB's recommendations on
this matter. Paragraph 190(c) of the Appellate B ody report, in which the relevant recommendations
adopted are summarized, states as follows:

1 Appellate Body Report, United States – Zeroing (Japan), para. 190(c).
2 See, e.g., Second Written Submission of Japan, para. 85 (citing Antidumping Proceedings:
Calculation of the Weighted-Average Dumping Margin During an Antidumping Duty Investigation , 71 Fed.
Reg. 77722, 77724 (Department of Commerce, 27 December 2006)(Exhibit JPN-35)).
3 Id., paras. 92-102.

[The Appellate Body] finds
 ... that the United States acts inconsistently with
Articles 2.4 and 9.3 of the Anti-Dumping Agreement and Article VI:2 of the
GATT 1994 by maintaining zeroing procedures in periodic reviews.

 This language clearly indicates that the DSB found that zeroing in administrative reviews is
"as such" contrary to the United States' obligati ons under Articles 4.2 and 9.3 of the Anti-Dumping
Agreement and Article VI:2 of the GATT 1994. Compliance with this recommendation logically
requires that the United States eliminate zeroing from periodic reviews, regardless of the comparison
methodology employed.

6. The fact that the DSB found that zeroing c onstitutes a "single measure" does not believe the
United States from the consequences of the DSB' s recommendations quoted above. Even if the
United States' obligations in this matter were view ed as relating to a single measure, the action taken
by the United States has not fully eliminated the offending measure, as it is obligated to do. To
comply with this obligation, the United States must eliminate zeroing in all four procedural settings
on which the DSB made recommendations.

7. The United States has also misinterpreted the DSB's recommendations with respect to the
substantive content of the "single measure." As Japan correctly notes
5, the precise substantive content
of the measure is the disregard of negative intermed iate comparison results in the aggregation of an
overall weighted-average dum ping margin and this substantive rule is applied in the same way in
different procedural settings. The United States does not, and cannot, claim that it has changed or
eliminated this substantive content of the rule.

8. In this dispute, the limited action taken by the United States to restrict the scope of the
measure in a single procedural context falls far shor t of its obligation to eliminate the measure in its
entirety and has left the measure unchanged in thr ee of the four areas in which the DSB made its
rulings: (i) original investigations using transaction-to-transaction comparisons; (ii) periodic reviews;
and (iii) new shipper reviews. This Panel must therefore find that the United States has failed to
comply with the DSB's "as such" recommendations and rulings within the RPT.

Subsequent Reviews as Measures Taken to Comply
9. With respect to the three administrative revi ews completed subsequent to the establishment of
the original panel, Mexico agrees with Japan that such reviews qualify as "measures taken to comply"
and are necessarily within the scope of this Ar ticle 21.5 proceeding because of the substantive
connections between those proceedings and the measu res covered by the original proceeding. The
DSB jurisprudence in this area is very clear th at subsequent measures are "inextricably linked,"
"clearly connected," or with "sufficiently close li nks" to the original measures as to fall within the
scope of subsequent Article 21.5 proceedings.
6

10. Mexico also agrees with Japan that the Unite d States has already effectively declared these
determinations to be "measures taken to comp ly" by repeatedly asserting that these subsequent
measures "supersede" or "withdraw" the original measures.

11. Mexico rejects the United States' claim that these reviews should not be considered "measures
taken to comply" because they were issued before the adoption of the DSB recommendations and
rulings in this case. As outlined in Japan's written submissions, the subjective intent or purpose of the
Member required to comply is not dispositive. What is dispositive is the identification of the

5 Second Written Submission of Japan, para. 72.
6 See, e.g., Australia – Leather (21.5) , para. 6.5; Australia – Salmon (21.5) , para. 7.10; and US –
Softwood Lumber IV (21.5), paras. 77-79.

measures through which compliance has or has not been achieved and whether these measures
achieve compliance or are as such consistent with th e Member's obligations to comply. Even if one
accepts the United States' assertion that compliance was achieved only as an "incidental consequence"
of these measures, the United States has placed these measures squarely within the scope of this
Article 21.5 proceeding. The Panel must therefore examine these reviews to determine whether they
are consistent with the DSB rulings and whether th ey have resulted in compliance. The United States
cannot have it both ways.

12. Furthermore, Mexico agrees with Japan th at the periodic reviews completed after the
establishment of this Article 21.5 Panel come within the Panel's jurisdiction because they share the
same substantive connections with the original proceedings and were identified with sufficient
precision in Japan's request for establishment of th is Panel. Mexico also agrees with Japan that
post-establishment measures can, and must have been
7 accepted as properly within the scope of an
Article 21.5 proceeding.

Periodic Reviews That Have Continuing Legal Effects

13. The United States has also taken no ac tion to implement the DSB's rulings and
recommendations with respect to five administrativ e reviews found to be WTO-inconsistent on an "as
applied" basis, even though tho se periodic reviews continue to pr oduce legal effects after the end of
the RPT.

14. Mexico agrees with Japan that recalculating the margins of dumping in those prior reviews is
necessary in order to implement the DSB's rulings in this case and to bring those measures into
conformity with the United States' obligations under the covered agreements.

15. While the United States asserts that these revi ews have been "superseded" or "revoked" by
subsequently completed administrative reviews, under the US legal system thes e reviews continue to
have significant legal effects after the RPT. Without a recalculation by the United States, such
continuing legal effects would include not only the potential application of the assessment of
importer-specific duties to entries that remain unli quidated after the RPT, as identified by Japan, but
also other continuing legal effects such as the u se of the miscalculated exporter-specific margins of
dumping in the context of subsequent five-yearly reviews and other domestic revocation proceedings.
Mexico notes, for example, that under the US Department of Commerce ("USDOC") regulations,
exporters may seek revocation of an anti-dumping duty order on the basis, inter alia, of the absence of
dumping in three consecutive reviews. USDOC has taken the position that it cannot reconsider prior
dumping-margin results in subse quent review determinations.
8 Therefore, the original review
determination results have a direct continuing prospective legal impact on subsequent review
proceedings, at least to the extent that the correctly calculated dumping margins would be zero or
de minimis. In this respect, the exporter-specific marg ins of dumping at issue for Japan continue to
exist and are legally operable indefinitely unless and until recalculated.

16. Mexico also agrees with Japan that the oblig ation to recalculate the margins of dumping in
these prior administrative reviews does not constitute a "retrospective" remedy. As Japan correctly
notes, the measure that the United States is obliged to implement does not require repayment of duties
that have already been assessed and collected on en tries finally liquidated. Instead, the compliance
obligation focuses on future (i.e., post-RPT) actions to collect anti-dumping duties or to render
revocation or future five-yearly review decisions on the basis of the margins erroneously calculated in
those subsequent reviews.

7 See, e.g., Australia – Salmon (21.5), para. 23 (finding that "future measures" were within the scope of
panel review and that the complying Member knew that such measures could be subject to review).
8 See Stainless Steel from Mexico.

17. Mexico agrees with Japan that the DSB cannot be reasonably interpreted to allow a Member
to deliberately, and perpetually, evade its substan tive obligations under the agreements. Such a result
would render the substantive provisions of the agreements inoperative, contrary to the established
principles of treaty interpretation. Moreover, such an outcome is not appropriate inasmuch as the
legal effects of the five-yearly periodic reviews survive subsequent review determinations.

18. Lastly, the position adopted by Japan does not create inequality between prospective and
retrospective systems. Under both systems, the ob ligation to remove inconsistent measures in the
calculation of anti-dumping margins would be enforced. In contrast, the interpretation offered by the
United States would allow Members with retrospectiv e systems to perpetually evade their obligations
to calculate margins in administrative reviews without zeroing, whereas Members with prospective
systems would be required to comply with their obligations by recalculating either the original
investigation margins or the margins determined in a subsequent review proceeding requested by the
importers.

Conclusion

 Mr Chairman, members of the Panel, this concludes Mexico's oral statement. Thank you for
your attention.

ANNEX E-9

THIRD PARTY ORAL STATEMENT OF NORWAY

5 November 2008

1. Norway would like to thank the members of th e Panel for the opportunity to make a statement
at this meeting, and for opening up this part of the third party session to a public viewing.

 Mr. Chairman, Members of the Panel,

2. This dispute raises a myriad of interesting an d important questions. As a third party, Norway
does not take upon itself to address all these questi ons. We have already in our written submission
discussed in some detail the scope of the Panel's jurisdiction. We will not repeat those arguments here
today, just add that we support the claim made by Japan in its supplemental submission regarding the
periodic review issued after the establishment of the Panel. It is Norway's view – for the reasons set
out by Japan – that also this measure must be with in the scope of the Panel's jurisdiction and therefore
part of these proceedings.

3. Today we will confine ourselves to some comme nts on what we see to be the core of this
case. Even if it raises several questions, the key issue of the case is really quite simple: It is about
compliance with WTO obligations.

4. All WTO Members have agreed to a disput e settlement system where "prompt compliance
with recommendations and rulings of the DSB" is vi ewed as "essential in order to ensure effective
resolution of disputes to the benefit of all memb ers". Under the DSU each and every Member is
obliged to comply with rulings and recommendations of the DSB immediately
, unless such immediate
compliance is impracticable, in which case one will be allowed a reasonable period of time (RPT) for
compliance. However, from the expiry of the RPT, any WTO-inconsiste nt measure must be
withdrawn, modified or replaced so as to ensure compliance with WTO obligations.

5. The United States did not in this case ensure co mpliance by the end of the RPT. In Norway's
view, this follows clearly from the facts and ev idence presented. The only implementing action that
has been put in place by the United States is the elimination of the use of zeroing procedures in
weighted average-to-weighted average comparisons in original investigations. The United States has
not, however, stopped using zeroing procedures in any
 of the other situations covered by the DSB
ruling in the original dispute.

6. Specifically, Japan challenges nine periodic revi ews. Five of the reviews were found to be
WTO-inconsistent in the original proceedings. These five reviews still provide the basis for collecting
definitive anti-dumping duties after the end of the R PT, and thereby continue to have legal effects.
The United States should – as an implementi ng measure – have recalculated the dumping
determination in those reviews without the use of zeroing methodologies. The United States did not
do so, and has therefore omitted to bring about comp liance with the recommendations and rulings of
the DSB in a timely fashion. The omission to r ecalculate also means that the Unites States still
violates Articles 2.4 and 9.3 of the Anti-Dumping Agreement as well as Article VI:2 of GATT 1994.

7. The United States claims that Japan when cha llenging the five periodic reviews, is requesting
"retrospective" relief. In Norway's view, this is not the case. No one has requested the United States
to withdraw, modify or replace an ything during the RPT. However, as just submitted, from the end

point of the RPT the United States should have ensu red WTO-conformity with regard to all measures
that were found to be WTO-inconsistent in the origin al dispute. What Japan is asking, is compliance
with the DSB recommendations and rulings from the end point of the RPT
. The United States is
requested to respect its WTO obligations and make sure that the anti-dumping duties collected after
the RPT are based on WTO-consistent importer-s pecific assessment rates. This cannot be
characterized as anything but "prospective" relief.

8. Turning now to the remaining four periodic re views. These were issued subsequent to the
original dispute, but must, nevertheless, be considered as "measures taken to comply" as they relate to
the same anti-dumping orders and continue the c ontested anti-dumping measures. When calculating
the dumping margin in the four reviews, the Unite d States used zeroing methodologies in defiance of
previous rulings by the Appellate Body. On this basis, there should be no doubt that the periodic
reviews at issue are inconsistent with Articles 2.4 and 9.3 of the Anti-Dumping Agreement, as well as
GATT Articles VI:1 and VI:2.

Mr. Chairman,

9. As stated in the beginning, this case is about compliance. In the original dispute the DSB
ruled that the United States should bring the meas ures at issue into conformity with its WTO
obligations. The United States has not done so – except with regard to one single situation.

10. The lack of real and good faith implementati on by the United States is regrettable. It has
turned dispute settlement with regard to zeroing into a never-ending story. Norway respectfully
requests the Panel to make the necessary findings so as to not allow this to continue.

 Thank you.

ANNEX E-10

THIRD PARTY ORAL STATEMENT OF THE SEPARATE CUSTOMS
TERRITORY OF TAIWAN, PENGHU, KINMEN AND MATSU

5 November 2008

1. Thank you, Mr. Chairman and distinguished members of the Panel, for giving us this
opportunity to present our views as a third party in this proceeding.

2. Pursuant to our systemic interest in the proper interpretation of, and practice under,
Article 21.5 of the Understanding on Rules and Pr ocedures Governing the Settlement of Disputes
("DSU"), we are presenting a brief oral statement, which we consider would help making the correct
interpretation of the term "measures taken to comply " that fall within the terms of reference of this
Panel. We will address this concern by examining the term in the following two contexts: first,
subsequent periodic reviews and, second, review conducted in 2006/2007 (06/07 review).

3. To analyze the term "measures taken to comply
" under Article 21.5 of the DSU, we would
need to first ascertain whether particular measures are within the scope of review by the Panel and
Appellate Body.

4. With respect to the subsequent periodic review s, we note that the US argued that "two of the
administrative review determinations identified by Japan in its Article 21.5 panel request - Review
No. 4 and No 5 - can not be considered measures ta ken to comply because they pre-date the adoption
of the DSB's recommendations and rulings on 23 January 2007."
1

5. While timing could be one of the factors Pane l may consider here, we would like to draw the
Panel's attention to Appellate Body's report in US - Softwood Lumber IV (21.5) where the AB pointed
out that compliance panels are not limited to reviewing measures that "have the objective of achieving
compliance."2 Further, measures can not be excluded from compliance proceedings "due to the
purpose for which they have been taken."3

6. The Appellate Body has recognized that "Artic le 21.5 proceedings involve, in principle, not
the original measure, but a new and different m easure that was not before the original panel." 4 Where
such new measures have "a particularly close relati onship 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 that those new measures are subject to review by an
Article 21.5 panel.
5

7. With respect to the reviews conducted in 200 6 and 2007, the parties have debated in their
supplementary submissions whethe r the 06/07 review conducted after the adoption of the Appellate
Body report of the current dispute are measures included in the scope of the current proceedings.

1 First Written Submission of the United States, para. 33.
2 Appellate Body Report, US - Softwood Lumber IV (21.5), para. 67 (italics removed).
3 Panel Report, US - Gambling (21.5), para. 6.24 (emphasis in original).
4 Appellate Body Report, US - Shrimp (21.5--Malaysia), paras. 85-87.
5 Appellate Body Report, US - Softwood Lumber IV (21.5), paras. 77-79.

8. We are of the view that the 06/07 review, t hough happened after the panel establishment, has
close relationship with the reviews challenged in the original proceedings and the steps taken to
comply with the DSB rulings and recommendations that should thus be included in the scope of the
current proceeding. This view can be further evidenced by the following facts:

9. First, the 06/07 review and the origin al reviews were all resulted from anti-dumping
proceedings conducted by the same authority, the United States Department of Commerce
("USDOC"), which is endowed with the power to issue orders based on the same set of laws and
regulations.
6 In addition, they are all in the same type of proceeding, i.e., the periodic review.

10. Secondly, those reviews were all conducted pursuant to anti-dumping order concerning "Ball
Bearing and Parts Thereof from Japan." 7 In other words, they are the same subject product from the
same exporting member. Furthermore, those review s all concern dumping dete rminations made with
respect to exports from the same companies.8

11. We note that Japan submitted that 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 conclusion that re lied upon the notion of the "same subject matter"
and the "same dispute." 9 While we found that the 06/07 review in the present dispute refers to "the
same subject matter" and "the same dispute" with respect to the periodic reviews for the purpose of
this proceeding, that particular ruling of the US-Zeroing II (EC) Panel may not be easily applied in the
current proceeding. In that dispute, the Pane l was addressing the issue of whether the measures
included in the panel request but not included in the consultations request fell within the scope of the
panel proceeding. The issues before the Panel in the current proceeding differ in a certain degree
from that context and would render an analogy difficult between that dispute and the current
proceeding.

12. The United States disagrees with the inclusi on of the 06/07 reviews as a "measure taken to
comply" mainly for two reasons: first, the 06/07 revi ew is not properly within the Panel's terms of
reference because they were not identified in Japan 's panel request with sufficient specificity, and
second, the 06/07 reviews did not exist at the time of panel establishment.

13. With regard to the first reason, we note th at Japan in its request for Panel establishment
already identified: (i) five reviews at issue in th e original proceedings; (ii) three closely connected
reviews that the United States argued to have "s uperseded," and secured "withdrawal" of, certain
measures at issue in the original proceedings; and, (iii) "any subsequent closely connected
measure."
10 We consider the 06/07 review as a "sub sequent closely connected measure" to the
declared "measure taken to comply" and to the r ecommendations and rulings of the DSB that may be
susceptible to review by an Article 21.5 panel.

14. With regard to the second reason, were the United States' claim to sustain, the DSB will
require numerous panels to be established for one continuous WTO inconsistent measure. In US –
Zeroing II (EC), the panel recognized that, in appropriate circumstance, future measures identified in
a panel request can be included w ithin a panel's terms of referen ce, as long as they "constitute a
measure" within the meaning of Article 6.2 of the DSU and "come into existence during the panel
proceedings."
11 While this ruling has not been adopted, we consider the interpretation presented in
this ruling the proper interpretation which can ensure that "the dispute settlement system of the WTO

6 Executive Summary of Japan's Supplemental Submission (WT/DS322(21.5)), para. 4.
7 Id.
8 Id.
9 Executive Summary of Japan's Supplemental Submission (WT/DS322(21.5)), para. 7.
10 WT/DS322/27, para.12.
11 Panel Report, US—Zeroing II (EC) , para. 7.59.

is a central element in providing security and pr edictability to the multilateral trading system" as
stipulated by Article 3 of the DSU.

15. Mr. Chairman, distinguished Members of the Pa nel, in our view, the mandate of a compliance
panel is not limited to examining whether the implementing measure fully complies with the
recommendations and rulings adopted by the DSB.
12 For a panel "to fulfil its mandate under
Article 21.5, [it] must be able to take full account of the factual and legal background against which
relevant measures are taken, so as to determine the existence, or consis tency with the covered
agreements, of measures taken to comply." 13 While noting that "not…every assessment review will
necessarily fall within the jurisdiction of an Article 21.5 panel,"14 we would urge the Panel to consider
the 06/07 measure in its totality, taking into account the factual and legal background against which a
declared "measure taken to comply" is adopted, in determining whether the 06/07 review falls within
its terms of reference.

16. We hope that our submissions will be helpful fo r the Panel's analysis of the relevant issues in
this dispute, and we thank you for your attention.

12 Appellate Body Report, Canada – Aircraft (21.5- Brazil) , paras. 40-41; also, "panel proceedings
pursuant to Article 21.5 of the DSU involve, in principle, not the original measure, but a new and different
measure that was not before the original panel. Therefore, "in carrying out its review under Article 21.5 of the
DSU, a panel is not confined to examining the 'measure[ ] taken to comply' from the perspective of the claims,
arguments and factual circumstances that related to the measure that was the subject of the original
proceedings." Appellate Body Report, US - Shrimp (21.5--Malaysia), paras. 85-87.
13 Appellate Body Report, US - Softwood Lumber IV (Art. 21.5), para. 69.
14 US - Softwood Lumber IV (21.5)(AB), para. 93 (footnote omitted).

ANNEX E-11

THIRD PARTY ORAL STATEMENT OF THAILAND

5 November 2008

I. INTRODUCTION

1. Mr. Chairman and Members of the Panel: Th ailand appreciates the opportunity to present its
views to the Panel today. Thailand generally s upports the arguments made by Japan in its written
submissions
1 and will present just a few additional points this morning.

II. JURISDICTION OF THE PANEL

2. Firstly, regarding the jurisdiction of the Pane l, in the circumstances of this case Thailand
considers that all the measures brought by Japan in this proceeding, including the four subsequent
reviews superseding the periodic reviews that th e Dispute Settlement Body (DSB) found to be WTO-
inconsistent (reviews 4, 5, 6 and the 06/07 review),2 fall within the scope of this Panel's jurisdiction.

3. In this regard, Thailand agrees with the argu ments put forth by Japan and Norway that it is
not up to the implementing Member to decide whether a measure is "taken to comply."
3 T h e
Appellate Body, in United States – Softwood Lumber IV (21.5) , clearly stated that: "Panels and the
Appellate Body alike have found that what is a 'measure taken to comply' in a given case is not
determined exclusively by the implementing Member."4

4. In addition, past compliance panels such as Australia – Leather II (21.5) and Australia –
Salmon (21.5), have also considered measures that are "i nextricably linked" or "clearly connected,"
regardless of whether the implementing member designated such measures as having been taken to
comply, to be within each panel's terms of reference.
5 In this connection, we find particularly
persuasive Japan's arguments demonstrating that an undeniably strong link between the subsequent
reviews and the original measures exists in the specific component of all these measures, i.e., the
zeroing methodology used to make dumping determinations.6 We think this component is sufficiently
precise and would not be "too sweeping."7

5. Thailand fully supports the views of Japan and the European Communities that if the
subsequent reviews were excluded, concerned Me mbers would be forced into a "Groundhog Day"

1 First Written Submission of Japan, 30 June 2008 ("FWS") and Seco nd Written Submission,
27 August 2008 ("SWS").
2 Japan's FWS para. 53 and Japan's supplemental submission, 10 October 2008, para. 1.
3 Japan's FWS para. 63 and Norway's Third Party Submission, 8 August 2008, para. 12.
4 Appellate Body Report, US –SWL IV (21.5), para. 73. See also Panel Report, US – Gambling (21.5)
para. 6.24, wherein the Panel refuted the exclusion of "any potential 'measures taken to comply' due to the
purpose for which they may have been taken."
5 Panel Report , Australia – Automotive Leather II (21.5) , para. 6.5 and Panel Report, Australia –
Salmon (21.5), para. 7.10.
7 Appellate Body Report, US –SWL IV (21.5), para. 87.

scenario of never-ending litigation. 8 As a developing country with a limited amount of resources,
Thailand cannot afford to participat e in never-ending litigation cycles. In this instance, we recall that
Article 21.2 of the Understanding on Rules and Pr ocedures Governing the Settlement of Disputes
provides that "Particular attention should be paid to matters affecting the interests of developing
country Members with respect to measures which have been subject to dispute settlement."

6. For the foregoing reasons, we urge the Panel to consider all measures brought by Japan in this
proceeding to be within its jurisdiction.

III. ZEROING PROCEDURES

7. Regarding the "as such" findings against zeroing, the United States claims that it has
eliminated the zeroing procedures because "zeroing is no longer used in W-to-W comparisons in anti-
dumping investigations."
9 The United States thus views that it has complied with the
recommendations and rulings on zeroing procedures in this dispute. Thailand has the opposite view.
The DSB made four rulings regarding the inconsiste ncy of zeroing procedures in the present dispute:
it ruled against the use of zeroing in W-to-W and T-to-T comparisons in original investigations, and in
any comparison methodology in periodic and new shipper reviews.10 Like Japan, we do not agree that
implementing only one of these recommendations a nd rulings amounts to implementing all four of
them.11 In addition, Japan has shown that throughout the year 2008 the United States has used
zeroing procedures in more than 10 proceedings other than W-to-W comparisons.12

IV. PERIODIC AND SUNSET REVIEWS

8. On the issue of periodic and sunset reviews, we generally agree with Japan's arguments and
will not repeat them here. However, we woul d like to express our strong reservations about the
"Catch-22" condition which would surely arise if th e Panel accepts the argument of the United States
that implementation applies only to new entries that enter the United States on or after the end of the
reasonable period of time. This condition woul d allow implementing authorities to escape the
requirements of Article 9.3 of the Anti-Dumping Agreement, and as a result, unduly leave other
Members without recourse to relief when zeroing is u sed in administrative reviews. If this argument
is accepted, there would be no effective remedy w ith respect to Article 9.3 review determinations
taken by any Member – under either a prospective or retrospective system – with respect to any issue,
not just zeroing.

V. CONCLUSION

9. Thailand trusts that these views will assist the Panel in its consideration of these issues. We
will be happy to respond to any questions the Panel may have, and we thank you again for this
opportunity to present our views.

Body Report, paras. 190 (b) – (d).
11 Japan's SWS, para. 74.
12 Japan's SWS, para. 100 (exhibit JPN-46) and supplemental submission, para. 32 (exhibit JPN-68).