UNITED STATES – LAWS, REGULATIONS AND METHODOLOGY FOR CALCULATING DUMPING MARGINS ("ZEROING")
Document: Recourse to Article 21.5 of the DSU by the European Communities Request for Consultations
Date: 12 July 2007
Document codes: WT/DS294/22
Complainant: EU
Respondent: U.S.
Third parties: Argentina, Brazil, China, Taiwan, Hong Kong, India, Japan, South Korea, Mexico, Norway, Thailand, Turkey
Dispute stage: Implementation & Compliance
Agreements cited: Art. 1, 2.1, 2.4, 5.8, 9.1, 9.3, 9.5, 11  Anti-dumpingArt. VI  GATT 1994Art. 18.4  Anti-dumpingArt. XVI:4  Agreement Establishing the World Trade OrganizationArt. 3  Anti-dumping

UNITED STATES – LAWS, REGULATIONS AND METHODOLOGY FOR
CALCULATING DUMPING MARGINS ("ZEROING")

Recourse to Article 21.5 of the DSU by the European Communities

Request for Consultations

 The following communication, dated 9 July 2007, from the delegation of the European
Communities to the delegation of the United States and to the Chairman of the Dispute Settlement
Body, is circulated in accordance with Article 21.5 of the DSU.

 On 9 May 2006, the Dispute Settlement Body (the "DSB") adopted the Appellate Body
Report and the Panel Report, as modified by the Appellate Body, in the case WT/DS294 " ". The
resulting DSB rulings found that the United States' administrative practice (the zeroing methodology
in original investigations in which the weighted -average-to-weighted-average comparison method is
used) and other measures (15 original investigations
1 and 16 "administrative reviews" 2 in which
zeroing was used), including each of the assessment in structions issued pursuant to any of one of
these measures, were inconsistent with Article VI of the General Agreement on Tariff and Trade 1994
("GATT 1994") and the Agreement on implementa tion of Article VI of the GATT 1994 (the
"AD Agreement"). The DSB recommended that the United States brings those measures into
conformity with its obligations under those Agreements.

 On 30 May 2006, the United States informed the DSB that it intended to implement the
recommendations and rulings of the DSB in a ma nner consistent with its WTO obligations, but
needed a reasonable period of time to do so. Th e parties agreed under Article 21.3(b) of the
Understanding on rules and proce dures governing the settlement of disputes ("DSU") that the United
States would have until 9 April 2007 to implemen t the recommendations and rulings of the DSB
(WT/DS294/19).

 On 27 December 2006, the United States publishe d a notice whereby it announced that it was
abandoning "zeroing" in average-to-average comparis ons in anti-dumping original investigations (see
Antidumping Proceedings: Calculation of th e Weighted–Average Dumping Margin during an
Antidumping Investigation; Final Modification published in 71 FR 77722). The final modification

1 Listed in WT/DS294/7/Rev.1, cases 1 to 15 on pages 5-6.
2 Listed in WT/DS294/7/Rev.1, cases 16 to 31 on pages 14-15. The term "administrative review" is a
term of US municipal law that is not used in the AD Agreement. A US "administrative review" involves an
investigation into and a re-calculation of the existence and degree of an exporter's margin of dumping during the
review investigation period, contemporaneous with the imports for which final liability is being assessed. An
"administrative review" investigation also results in th e fixing of a new "cash deposit" rate to be applied
prospectively to future imports, pending the next "administrative review".

became effective on 22 February 2007 (see Antidumping Proceedings: Calculation of the Weighted–
Average Dumping Margin in Antidumping Investigations; Change in Effective Date of Final
Modification, published in 72 FR 3783, 26 January 2007).

 Subsequently, the US began a recalculation of the margins of dumping in 12 of the 15 original
investigations (the anti-dumping measures having been previously revoked in three of the 15 original
investigations). The United States issued its final fi ndings in 11 of the original investigations on 9
April 2007 ("Section 129 determinations")
3 which entered into effect on 23 April 2007 (published in
72 FR 25261, 4 May 2007).

 On 4 May 2007, the parties concluded an agreement on the procedures under Articles 21 and
22 of the DSU ("sequencing agreement")
4 with a view to facilitating the procedures for a resolution of
the dispute.

 The European Communities considers that the following aspects of the measures taken by the
US to comply with its WTO obligations are unsatisfactory:

1. The Section 129 determinations entered into force on 23 April 2007, not on the date of
9 April 2007 as agreed by the parties under Article 21.3(b) of the DSU. This is inconsistent
with Article 17(14) and Article 21, including 21.3 and 21.3(b) of the DSU and with the
agreement between the parties concerning the reasonable period of time.

2. The US failed to properly implement the DS B recommendations and rulings with respect to
the 16 administrative reviews found to be incons istent with the US' WTO obligations since
"zeroing" was not eliminated in any of the a bove-mentioned measures. Th is is inconsistent
with Article 2, including 2.1, 2.4 and 2.4.2, Article 9.3 and Article 11, including Article 11.1
and 11.2 of the AD Agreement and Article VI:2 of the GATT 1994.

3. With respect to Case No. 11 - Stainless Steel Sheet and Strip in Coils from Italy (A-475-824),
which concerns an original investigation, in respect of which there have been a number of
subsequent review investigations, the US failed to properly implement the DSB
recommendations and rulings since to date "zeroing" has not been eliminated and duties
calculated with zeroing continue to be imposed, co llected or liquidated. This is inconsistent
with Article 2, including 2.1, 2.4 and 2.4.2, Article 5.8, Article 9.3 and Article 11, including
11.1 and 11.2 of the AD Agreement and Article VI:2 of the GATT 1994.

4. With respect to all measures (original inves tigations and administrative reviews) that were
found inconsistent with the US' WTO obligations , the US continues to impose, collect or
liquidate anti-dumping duties at a rate inflated by "zeroing" beyond 9 April 2007. With regard
to those measures which were revoked by the Section 129 determinations, the US continues to
impose, collect or liquidate anti-dumping duties after 9 April 2007. This is inconsistent with
Article 2, including 2.1, 2.4 and 2.4.2, Article 5.8, Article 9.3 and Article 11, including 11.1
and 11.2 of the AD Agreement and Articles VI:1 and VI:2 of the GATT 1994.

5. In three cases (Case No. 2: Stainless Steel Bar from France (A-427-820), Case No. 4:
Stainless Steel Bar from Italy (A-475-829) and Case No. 5: Stainless Steel Bar from the
United Kingdom (A-412-822) ) in the Section 129 determinati ons, which concerned original

3 The term "Section 129 determination" is a term of US municipal law that is not used in the AD
Agreement. It is used in this consultation request withou t prejudice to the correct categorisation of the measures
at issue under one or more provisions of the AD Agreement.
4 "Understanding between the United States and the European Communities Regarding Procedures
under Articles 21 and 22 of the DSU" (WT/DS294/21, 9 May 2007).

investigations, the US re-determinations led to an unjustified increase in the "all others rate".
This is inconsistent with Article 2, Article 5. 8, Article 6.8 and Annex II, Article 9, including
9.2, 9.3 and 9.4, and Article 18.1 of the AD Agreement.

6. With respect to original investigations in which the recalculation of dumping margins led to
the conclusion that some expor ters were not dumping or had de minimis dumping margins,
the US maintained the Anti-Dumping order without establishing whether the remaining
amount of dumped imports was causing injury to the domestic industry and whether this
volume of dumped imports was not negligible. This is inconsistent with Articles 3.1, 3.2, 3.5,
5.8 of the AD Agreement and Article VI:1 of the GATT 1994.

7. With regard to the 15 original investiga tions and 16 administrative reviews, the US has
continued zeroing in the administrative reviews of these measures that now determine the
cash deposit rates and in other reviews of these measures. Details of the reviews in question
are set out in the annex. This is inconsistent with Article 2, including 2.1, 2.4 and 2.4.2,
Article 9.3, and Article 11, including 11.1, 11.2 and 11.3 of the AD Agreement and
Articles VI:1 and VI:2 of the GATT 1994.

 The European Communities therefore considers that there exists a disagreement as to the
existence or consistency with a c overed agreement of the measures taken to comply with the rulings
and recommendations of the DSB.

 For the reasons mentioned above, and without prejudice to its rights under the WTO, the
European Communities hereby requests the United States of America to enter into consultations under
Article XXII:1 of the GATT 1994, Articles 4 and 21.5 of the DSU, Article 17 of the AD Agreement and
Paragraph 1 of the sequencing agreement, with respect to the issues identified above.

 The European Communities reserves its rights in respect of all other aspects of the United
States' purported compliance with its obligations in this case.

 We look forward to receiving your reply to the present request and to fixing a mutually
convenient date for consultations.

ANNEX

I. Reviews of the measures imposed in the 15 original investigations condemned in DS294

Product MS
DOC Case
Number
(ITC Case
No)
DOC Final Determination ITC Determination AD Order Subsequent reviews
1. Certain hot-rolled
carbon steel
NL A-421-807
(A-903)
66 FR 50408, October 3, 2001
(amended: 66 FR 55637,
November 2, 2001)
November 2001 66 FR 59565,
November 29, 2001
Administrative Reviews
3 May 2001 – 31 Oct 2002
(69FR 43801, July 22 2004)
4.8%

1 Nov 2002 – 31 Oct 2003
(70FR 18366, April 11, 2005)
4.42%

1 Nov 2004 – 31 Oct 2005
(72FR 34441, June 22, 2007)
2.26%

2. Stainless steel bar F A-427-820
(A-913)
67 FR 3143, January 23, 2002 February 2002 67 FR 10385,
March 7, 2002
Administrative Reviews:

1 March 2003 – 29 February
2004 (70 FR 46482,
August 10, 2005)
Ugitech 14.98%

1 March 2004 – 28 February
2005 (71 FR 30873, May 31
2006)
Ugitech 9.68%

Sunset Review: DOC Final
Determination 72 FR 30772,
June 4, 2007

Product MS
DOC Case
Number
(ITC Case
No)
DOC Final Determination ITC Determination AD Order Subsequent reviews
3. Stainless steel bar G A-428-830
(A-914)
67 FR 3159, January 23, 2002
(amended: 67 FR 10382, March 7,
2002)
February 2002 67 FR 10382,
March 7, 2002
Administrative Reviews:

2 August 2001–28 February
2003
(69 FR 32982, June 14, 2004)
BGH 0.52%

1 March 2004–28 February
2005
(71 FR 52063, September 1,
2006)
BGH 0.73%

Sunset Review: DOC
Preliminary Determination
72 FR 29970, May 30, 2007

4. Stainless steel bar I A-475-829
(A-915)
67 FR 3155, January 23, 2002
(amended: 67 FR 8228, February
22, 2002)
February 2002 67 FR 10384,
March 7, 2002
Administrative Review:

2 August 2001–28 February
2003
(69 FR 32984, June 14, 2004)
Foroni 4.03%
Ugine 33%

Sunset Review: DOC Final
Determination 72 FR 30772,
June 4, 2007

Page 6 Product MS
DOC Case
Number
(ITC Case
No)
DOC Final Determination ITC Determination AD Order Subsequent reviews
5. Stainless steel bar UK A-412-822
(A-918)
67 FR 3146, January 23, 2002 February 2002 67 FR 10381, March 7,
2002
Administrative review:

1 March 2005 – 28 February
2006(72 FR 15106, March
30, 2007) Enpar Special
Alloys 33.87%

Sunset Review:
DOC Final Determination 72
FR 30772, June 4, 2007

6. Stainless Steel Wire
Rod
SW A-401-806
(A-774)
63 FR40449, July 29,1998 September 1998 63 FR49329,
September 15, 1998
Administrative reviews:

1 Sept. 2004 – 31 August
2005 (72FR 26337, May 9,
2007)
Fagersta 19.36%

Sunset Review:
Continuation order, 69 FR
50167, August 13, 2004

7. Stainless Steel Wire
Rod
E A-469-807
(A-773)
63 FR40391, July 29,1998 September 1998 63 FR 49330,
September 15, 1998
Administrative review:

5 March 1998 – 31 August
1999 (66 FR 10988, February
21, 2001) Roldan SA 0,8 %

Sunset Review:
Continuation Order
69FR 50167, August 13, 2004

8. Stainless Steel Wire
Rod
I A-475-820
(A-770)
63 FR40422, July 29,1998 September 1998 63 FR 49327,
September 15, 1998
Sunset Review:
Continuation Order
69FR 50167, August 13, 2004

Product MS
DOC Case
Number
(ITC Case
No)
DOC Final Determination ITC Determination AD Order Subsequent reviews
9. Certain Stainless
Steel Plate in Coils
B A-423-808
(A-788)
64 FR15476, March 31, 1999 May 1999 64 FR 27756,
May 21, 1999
(amended by 68 FR
20114 April 24, 2003)
See case 18 below

10. Stainless Steel
Sheet and Strip in
Coils
F A-427-814
(A-797)
64 FR30820, June 8, 1999 July 1999 64 FR 40562,
July 27, 1999
See Cases 25 & 26 below

Measure revoked July 2004
(70 FR 44894, August 4,
2005)

11. Stainless Steel
Sheet and Strip in
Coils
I A-475-824
(A-799)
64 FR30750, June 8, 1999 July 1999 64 FR 40567,
July 27, 1999
See cases 21 & 22 below
12. Stainless Steel
Sheet and Strip in
Coils
UK A-412-818
(A-804)
64 FR30688, June 8,1999 July 1999 64 FR 40555,
July 27,1999
Measure revoked: July 2004
(70 FR 44894, August 4,
2005)

13. Certain Cut-to-
Length Carbon-Quality
Steel Plate
F A-427-816
(A-816)
64 FR73143, December 29,1999 Fe bruary 2000 65 FR 6585,
February 10, 2000
Measure revoked: February
2005 (70 FR 72787,
December 7, 2005)

14. Certain Cut-to-
Length Carbon-Quality
Steel Plate

I A-475-826
(A-819)
64 FR73234, December 29,1999 Fe bruary 2000 65 FR 6585,
February 10, 2000
Sunset review:

Continuation Order (70FR
72607, December 6, 2005)

15. Certain Pasta I A-475-818
A-734)
61 FR30326, June 14, 1996
(amended by 66 FR65889,
December 21,2001)
July 1996 61 FR38547
July 24, 1996

See Cases 19 & 20 below

II. Reviews subsequent to the 16 administrative reviews condemned in DS294

Product MS No Case Final Results Company
Subsequent Reviews
16. Industrial
Nitrocellulose
F A-427-009 66 FR 54213,
October 26, 2001

Bergerac NC Two subsequent Administrative reviews were
rescinded, covering the periods :
1 August 2000 – 31 July 2001
1 August 2002 – 31 July 2003

Measure revoked : (69 FR 52231, August 25, 2004)

17. Industrial
Nitrocellulose
UK A-412-803 67 FR 77747,
December 19, 2002

Imperial Chemical
Industries
Two subsequent Administrative reviews were
rescinded, covering the periods :
1 July 2001 – 30 June 2002
1 July 2002 – 30 June 2003

Changed circumstance review (Dec, 2003) confirmed
the rate of 3.06% to apply to Troon Investments,
successor to ICI

Measure revoked : (69 FR 52231, August 25, 2004)

18. Stainless steel
plate in coils
B A-423-808 67 FR 64352, October 18, 2002 ALZ NV &
TrefilARBED (affiliated
US importer) – Same
company Ugine & ALZ,
N.V. Belgium (U&A
Belgium).
Two subsequent reviews resulting in change to rate:

1 May 2002 – 30 April 2003
(70FR 2999, January 19, 2005)
2.71%

1 May 2003 – 30 April 2004
(70FR 72789, December 7, 2005)
2.96%

Sunset Review: Continuation Order 70 FR 41202,
July 18, 2005

Product MS No Case Final Results Company
Subsequent Reviews
19. Certain pasta I A-475-818 67 FR 300, January 3, 2002
Amended: 67 FR 5088,
February 4, 2002
1) Ferrara

2) Pallante

3) PAM

Ferrara: Order revoked in February 2005 following
third consecutive review where the company had
de minimis rate (70FR6832, February 9, 2005)

Pallante: Order revoked in November 2005 following
third consecutive review where the company had
de minimis rate (70 FR71464, November 29, 2005)

PAM
: Two subsequent reviews resulting in change to
rate:

1 July 2001 – 30 June 2002
(69FR 6255, February 10, 2004)
45.49%

1 July 2002 – 30 June 2003
(70FR 6832, February 9, 2005)
4.78%

Sunset review: DOC Final Determination 72FR 5266
February 5, 2007

20. Certain pasta I A-475-818 68 FR 6882, February 11, 2003

Pastifi Garofalo One subsequent re view resulting in change to rate:

1 July 2001 – 30 June 2002
(69 FR 22761, April 27, 2004)
2.57%

One review rescinded covering period:
1 July 2002 – 30 June 2003

21. Stainless steel
sheet strip coils
I A-475-824 67 FR 1715, January 14, 2002

Acciai Speciali Terni
SpA

See Case 22

Page 10 Product MS No Case Final Results Company
Subsequent Reviews
22. Stainless steel
sheet strip coils
I A-475-824 68 FR 6719, February 10, 2003

Acciai Speciali Terni
SpA
Two subsequent reviews resulting in change to rate:

1 July 2001 – 30 June 2002
(68FR 69382, December 12, 2003)
1.62%

1 July 2002 – 30 June 2003
(70FR 13009, March 17, 2005)
3.73%

Sunset review: Continuation Order 70 FR 44886,
August 4, 2005

23. Granular
polytetrafluoenthylene
I A-475-703 67 FR 1960, January 15, 2002

Ausimont SpA See Case 24

24. Granular
polytetrafluoenthylene
I A-475-703 68 FR 2007, January 15, 2003

Ausimont SpA Two subsequent Administrative reviews were
rescinded, covering the periods :
1 August 2002 – 31 July 2003
1 August 2003 – 31 July 2004

Changed circumstance review (May,2003) confirmed
the rate of 12.08% to apply to Solvay Solexis, successor
to Ausimont

1 subsequent review resulting in change to rate:

1 August 2004 – 31 July 2005
(72FR 1980, January 17, 2007
39.13%

Sunset review: Continuation Order 70FR 76026,
Dec. 22, 2005

25. Stainless steel
sheet strip coils

F A-427-814 67 FR 6493, February 12, 2002
Amended
: 67 FR 12522, March 19,
2002

Ugine See Case 26

Product MS No Case Final Results Company
Subsequent Reviews
26. Stainless steel
sheet strip coils

F A-427-814 67 FR 78773 , December 26, 2002
Amended

68 FR 4171, January 28, 2003

Ugine 3 subsequent reviews resulting in change to rate:

1 July 2001 – 30 June 2002
(68FR 69379, December 12, 2003)
2.93%

1 July 2002 – 30 June 2003
(70 FR 7240, February 11, 2005)
9.65%

1 July 2003 – 30 June 2004
(71 FR 6269, February 7, 2006)
12.31%

Measure revoked : 70 FR 44894, August 4, 2005
27. Stainless steel
sheet strip coils
G A-428-825 67 FR 7668, February 20, 2002
Amended: 67 FR 15178, March 29,
2002

KTN See Case 28
28. Stainless steel
sheet strip coils
G A-428-825 68 FR 6716, February 10, 2003
Amended: 68 FR 14193, March 24,
2003

TKN (successor in
interest of KTN)
4 subsequent reviews resulting in change to rate:

1 July 2001 – 30 June 2002
(69FR 6262, February 10, 2004) 3.72%

1 July 2002 – 30 June 2003
(69 FR 75930, December 20, 2004) 7.03%

1 July 2003 – 30 June 2004
(70 FR 73729 December 13, 2005) 9.5%

1 July 2004 – 30 June 2005
(71 FR 74897, December 13, 2006) 2.45%

Sunset review: Continuation Order 70 FR 44886,
August 4 2005

Page 12 Product MS No Case Final Results Company
Subsequent Reviews
29. Ball bearings F A-427-801 67 FR 55780, August 30, 2002

SKF France SA and
Sarma
SKF: 4 subsequent reviews resulting in change to rate:

1 May 2001 – 30 April 2002
68 FR 43712, July 24, 2003
6.70%

1 May 2002 – 30 April 2003
69 FR 55574, September 15, 2004
5.25%

1 May 2003 – 30 April 2004
70 FR 54711, September 16, 2005
8.41%

1 May 2004 – 30 April 2005
71 FR 40064, July 14, 2006
12.57%

Sunset Reviews: Continuation Order 71 FR 54469,
September 15, 2006

30. Ball bearings I A-475-801 67 FR 55780, August 30, 2002

FAG Italia SpA

FAG: 4 subsequent reviews resulting in change to rate:

1 May 2001 – 30 April 2002
68 FR 35623, June 16, 2003
2.87%

1 May 2002 – 30 April 2003
69 FR 55574, September 15, 2004
4.79%

1 May 2003 – 30 April 2004
70 FR 54711, September 16, 2005
5.88%

1 May 2004 – 30 April 2005
71 FR 40064, July 14, 2006
2.52%

Product MS No Case Final Results Company
Subsequent Reviews
 SKF Industrie SpA SKF: 4 subsequent reviews resulting in change to rate:

1 May 2001 – 30 April 2002
68 FR 35623, June 16, 2003
5.08%

1 May 2002 – 30 April 2003
69 FR 55574, September 15, 2004
1.38%

1 May 2003 – 30 April 2004
70 FR 54711, September 16, 2005
2.59%

1 May 2004 – 30 April 2005
71 FR 40064, July 14, 2006
7.65%

Sunset Reviews: Continuation Order 71 FR 54469,
September 15, 2006

31. Ball bearings UK A-412-801 67 FR 55780, August 30, 2002

NSK Bearings Europe
Ltd

The Barden Corporation
UK
NSK Bearings:
No subsequent administrative reviews

Barden
: 1 subsequent administrative review rescinded
for period: 1 May 2001 – 30 April 2002

2 subsequent reviews resulting in change to rate:

1 May 2002 – 30 April 2003
69 FR 55574, September 15, 2004
4.10%

1 May 2003 – 30 April 2004
70 FR 54711, September 16, 2005
2.78%

Sunset Reviews: Continuation Order 71 FR 54469,
September 15, 2006