UNITED STATES – ANTI-DUMPING MEASURES ON CERTAIN SHRIMP AND DIAMOND SAWBLADES FROM CHINA
Document: Report of the Panel Addendum
Date: 8 June 2012
Document codes: WT/DS422/R/Add.1; WT/DS422/R.
Complainant: China
Respondent: U.S.
Third parties: EU, Honduras, Japan, South Korea, Thailand, Vietnam
Dispute stage: Panel
Agreements cited: Art. 2.4.2  Anti-dumping

UNITED STATES – ANTI-DUMPING MEASURES ON
CERTAIN SHRIMP AND DIAMOND
SAWBLADES FROM CHINA

Report of the Panel

Addendum

 This addendum contains Annexes A to D to the Report of the Panel to be found in document

ANNEX A

FIRST WRITTEN SUBMISSIONS OF THE PARTIES
OR EXECUTIVE SUMMARIES THEREOF

Contents Page
Annex A-1 Executive summary of the first written submission of China A-2
Annex A-2 First written submission of the United States A-10

ANNEX A-1

EXECUTIVE SUMMARY OF THE FIRST
WRITTEN SUBMISSION OF CHINA

I. Introduction

1. In this dispute, the People’s Republic of China (“China”) contends that the anti-dumping duty
orders imposed by the United States of Am erica (“United States”) on Shrimp and Diamond
Sawblades from China, as amended, and the fi nal determinations made by the United States
Department of China (“USDOC”), as amended, lead ing to these orders, with the application of the
“zeroing” methodology, are inconsistent with the firs t sentence of Article 2.4.2 of the Agreement on
Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (“Anti-Dumping
Agreement”).

2. On 28 February 2011 and 22 July 2011, Chin a requested consultations with the United States.
Consultations were held on 11 May 2011 and 8 Se ptember 2011. While these consultations failed to
resolve the dispute, they assisted in clarifying the issues before the parties, and enabled the parties to
reach a Procedures Agreement on 13 October 2011. According to the agreem ent, China has agreed
that it would provide the necessary evidence and arguments to support its allegations, while the
United States has agreed not to cont est China’s claim that the measures at issue are inconsistent with
Article 2.4.2, first sentence, of the Anti-Dumping Agreement, on the grounds stated in the Appellate
Body report in US – Softwood Lumber V.

II. Procedural History of the Shrimp and Diamond Sawblades Investigations

 A. The Shrimp Investigation

3. On 27 January 2004, the USDOC initiated an anti-dumping investigation on certain frozen
and canned warmwater shrimp from China (Investigation No. A–570–893). On 8 December 2004, the
USDOC published the Shrimp Final Determinati on, in which the USDOC calculated dumping
margins for four mandatory respondents respectively: (i) Allied Pacific Group (“Allied”): 84.93%; (ii)
Yelin Enterprise Co., Hong Kong (“Yelin”): 82.27% ; (iii) Shantou Red Garden Foodstuff Co., Ltd.
(“Red Garden”): 27.89%; and (iv) Zhanjiang Guo lian Aquatic Products Co., Ltd. (“Zhanjiang
Guolian”): 0.07%. For 35 coope rating non-mandatory respondents that passed the USDOC’s
separate-rate test, the USDOC established a Separate Rate of 55.23%, which was a single weighted-
average margin based on the dumping margins calcu lated for the mandatory respondents, excluding
any margins that are zero, de minimis, or based entirely on adverse facts available.

4. Following a final determination of injury by the United States International Trade
Commission (“USITC”), on 1 February 2005, th e USDOC issued the Shrimp Amended Final
Determination to correct the ministerial errors ma de in the Shrimp Final Determination and an anti-
dumping duty order on Shrimp. In the Shrimp Ame nded Final Determination, the dumping margin of
Allied was amended to 80.19%, while the marg ins of other mandatory respondents remained
unchanged. As a consequence of the change in Alli ed’s dumping margin, the Separate Rate was also
recalculated to 53.68%.

5. On 17 August 2006, the USDOC issued the Sh rimp Second Amended Fi nal Determination,
which granted the Separate Rate to an additional 11 Chinese exporters who were subject to PRC-wide
rate previously.

6. On 2 September 2010, the USDOC issued an amended final determ ination pursuant to a
decision made by the United States Court of International Trade (“USCIT”). On 26 April 2011, the
USDOC issued an amended anti-dumping duty order th at included dusted shrimp within the scope of
the orders. This amended determination did not involve any changes to the dumping margins of
Allied, Yelin, Red Garden, or the Separate Rate.

7. On 24 May 2011, as a result of a remand orde r by the USCIT, the USDOC issued the Shrimp
Remand Determination, through which it revised th e surrogate values for inputs and hours of labour
used in margin calculations, and determined the ma rgins of Allied and Yelin to be 5.07% and 8.45%
respectively. However, the Separate Rate was not revised in the Shrimp Remand Determination.

8. On April 29, 2011, as a result of the affirmative dumping and injury-likelihood
determinations by the USDOC and the USITC, th e USDOC published a notice of the continuation of
the anti-dumping duty orders on Shrimp. Consequent ly, the above-mentioned duty orders have been
extended and remained in effect as of the date of China’s First Written Submission.

9. A table of the dumping margins of the thr ee mandatory respondents and the Separate Rate
calculated in each determination at issue is provided as follows:

 Shrimp Final Determination Shrimp Amended Final
Determination
Shrimp Remand
Determination
Allied 84.93% 80.19% 5.07%
Yelin 82.27% 82.27% 8.45%
Red Garden 27.89% 27.89% N/A
Separate Rate 55.23% 53.68% N/A

 B. The Diamond Sawblades Investigation

10. On 21 June 2005, the USDOC initiated an anti-dumping investigation on diamond sawblades
and parts thereof from China (Investigation No. A–570–900). On 22 May 2006, the USDOC
published the Diamond Sawblades Final Determination, in which it calculated a dumping margin of
2.50% for AT&M.

11. On 22 June 2006, the USDOC published an amendment to the Diamond Sawblades Final
Determination, and revised the dumping margin of AT&M to be 2.82%. On 4 November 2009, the
USDOC published an anti-dumping duty order on imports of Diamond Sawblades from China,
applying a rate of 2.82% to AT&M.

III. The Measures at Issue

12. The specific measures adopted by the United Stat es that are subject to China’s challenge in
this dispute are as follow:

 A. The Shrimp Investigation

 Notice of Final Determination of Sales at Less Than Fair Value: Certain Frozen and
Canned Warmwater Shrimp From the Pe ople's Republic of China, 69 Federal
Register 70997 (8 December 2004);

 Notice of Amended Final Determination of Sales at Less Than Fair Value and
Antidumping Duty Order: Certain Frozen Warmwater Shrimp From the People's
Republic of China, 70 Federal Register 5149 (1 February 2005);

 Certain Frozen Warmwater Shrimp from th e People's Republic of China: Notice of
Second Amended Final Determination of Sal es at Less Than Fair Value, 71 Federal
Register 47484 (17 August 2006);

 Certain Frozen Warmwater Shrimp From Braz il, India, the People's Republic of China,
Thailand, and the Socialist Republic of Vietnam: Notice of Amended Fina l Determinations of
Sales at Less Than Fair Va lue Pursuant to Court Decision, 75 Federal Register 53947 (2
September 2010);

 Certain Frozen Warmwater Shrimp From Braz il, India, the People's Republic of China,
Thailand, and the Socialist Republic of Viet nam: Amended Antidumping Duty Orders in
Accordance with Final Court Decision, 76 Federal Register 23277 (26 April 2011);

 Certain Frozen Warmwater Shrimp From the Pe ople's Republic of China: Notice of Amended
Final Determination of Sales at Less Than Fair Value Pursuant to C ourt Decision, 76 Federal
Register 30100 (24 May 2011).

13. For the purpose of this dispute, China’s cha llenge relates to the following specific aspects of
the final determination and the anti-dumping duty order, as amended and extended, by the USDOC, in
connection with the Shrimp investigation: (i) th e use by the USDOC of the “zeroing” methodology in
determining the final dumping margins, as amended, for Allied, Yelin and Red Garden; (ii) the
reliance upon the individual dumping margins calculat ed with the application of “zeroing” in
calculating the Separate Rate as amended, applicable to the cooperating non-mandatory respondents
that passed the separate-rate test in the investigation.

 B. The Diamond Sawblades Investigation

 Final Determination of Sales at Less Than Fair Value and Final Partial Affirmative
Determination of Critical Circumstances: Diamond Sawblades and Parts Thereof from the
People's Republic of China, 71 Federal Register 29303 (22 May 2006);

 Notice of Amended Final Determination of Sales at Less Than Fair Value: Diamond
Sawblades and Parts Thereof from the People's Republic of China, 71 Federal Register 35864
(22 June 2006);

 Diamond Sawblades and Parts Thereof from the Pe ople's Republic of China and the Republic
of Korea: Antidumping Duty Orders, 74 Federal Register 57145 (4 November 2009).

14. For the purpose of this dispute, China’s cha llenge relates to the following specific aspect of
the final determination and the anti-dumping duty order, as amended, by the USDOC, in connection
with the Diamond Sawblades inves tigation - the use by the USDOC of the “zeroing” methodology in
determining the final dumping margin, as amended, for AT&M.

IV. The Use of “Zeroing” by the USDOC in the Measures at Issue

A. Overview

15. Throughout the two original investigations at issue, the USDOC has consistently applied the
“zeroing” methodology in calculating dumping margins for individually investigated exporters. In
applying this methodology, the USDOC: (1) identifie d different “models” ( i.e. types) of products
using “control numbers” (i.e. CONNUM) that specify the most relevant product characteristics; (2)
calculated weighted average prices in the Unite d States and weighted average normal values on a
model-specific basis for the entire period of inves tigation; (3) compared the weighted average normal
value of each model to the weighted average U.S. pr ice for that same model; (4) in order to calculate
the dumping margin for an exporter, summed the amount of dumping for each model and then divided
it by the aggregate U.S. price for all models; and (5) before summing the total amount of dumping for
all models, effectively set all negative margins on individual models to zero (“Five Components”).

16. Passages from the relevant published determin ations and unpublished decision memoranda of
the USDOC show that it has applied the Five Co mponents to calculate dumping margins for the
relevant exporters, and that the Se parate Rate in the Shrimp invest igation was calculated on the basis
of the individual dumping margins calculated with th e application of “zeroing”. China also submits
an expert statement from Ms. Valerie Owenby to fu rther substantiate the existence of the Five
Components in the logs and outputs generated by the USDOC in each of the two investigations with
respect to Allied, Yelin, Red Garden and AT&M, and to quantify the exact impact of “zeroing”.

17. As elaborated in the VO Statement, Ms. Owenby carried out a four-step analysis to confirm the
existence of the Five Components and to quantify the impact of “zeroing”:

 Step 1: Using the programs and the same databases as the USDOC did in the investigations at
issue, Ms. Owenby duplicated the USDOC calculations in each case by running the USDOC’s
computer programs (“SAS programs”). Upon executing the SAS programs, Ms. Owenby
generated logs and outputs duplicating the logs and outputs that were generated by the
USDOC. The “duplicate” calculations can serve as an accurate and proper basis to confirm
each of the Five Components and to quantif y the impact “zeroing” has on the overall
weighted-rage margins.

 Step 2: Ms. Owenby then identified exactly where each of the Five Components was
executed in the USDOC’s margin calculations by reference to the logs generated by the
USDOC and the logs generated by the duplicate results.

 Step 3: Ms. Owenby turned off “zeroing” fro m the duplicate versions of the USDOC
calculations by removing the specific programmi ng line that executes “zeroing” in the overall
margin calculations.

 Step 4: Ms. Owenby compared the overall wei ghted-average margin generated when zeroing
is removed to the USDOC’s overall weighted-average margin for each respondent to quantify
the exact impact of “zeroing”.

18. In short, China proves in its First Written Submission that the USDOC has, as a matter of
fact, “zeroed” in calculating dump ing margins for Allied, Yelin and Red Garden in the Shrimp
investigation and for AT&M in the Diamond Sawblad es investigation, and that the use of "zeroing"
has led the USDOC to find dumping where none woul d have otherwise been found or to calculate
dumping margins that are inflated.

B. The Shrimp Investigation

 1. Mandatory Respondents

19. The USDOC’s Shrimp Preliminary Dete rmination included a specific section entitled
“CONNUM Comments”, under which it stated, inter alia, that,

[o]n January 28, 2004, the Department re quested comments from interested parties
regarding the appropriate product characteristic criteria for the investigation matching
hierarchy for comparing the export price to normal value.
20. Furthermore, the USDOC explained in the Sh rimp Preliminary Determination how it made
comparison between U.S. price and normal value:

[t]o determine whether sales of certain fro zen and canned warmwater shrimp to the
United States of the four mandatory respondents were made at less than fair value, we
compared export price (“EP”) or constructed export price (“CEP”) to NV, as
described in the “U.S. Price” and “Normal Value” sections of this notice.
21. In its Issues and Decision Memorandum accomp anying the publication of the Shrimp Final
Determination, the USDOC stated in explicit terms that it had:

[…] made model-specific comparisons of weighted-average export prices with
weighted-average normal values of comparable merchandise…[It] then combined the
dumping margins found based upon these comparisons, without permitting non-
dumped comparisons to reduce the dumping margins found on distinct models of
subject merchandise , in order to calculate the weighted-average dumping margin.
(emphasis added)
22. The above statements of the USDOC unequivocally demonstrate that it had applied the Five
Components in its calculation of dumping marg ins for mandatory respondents in the Shrimp
investigation.

23. In addition, the Five Components in the USDOC’s dumping margin calculation are identified
in the chart in Exhibit VO-2 to the VO Statemen t (Exhibit CHN-18), where Ms. Owenby detailed the
specific lines and page numbers for each component in the logs generated by the USDOC. In
particular, the computer program used by the USDOC to calculate dumping margins contained the
following instructions:

PROC MEANS NOPRINT DATA = MARGIN;
WHERE EMARGIN GT 0;
VAR EMARGIN QTY11U VALUE;
OUTPUT OUT = ALLPUDD SUM = TOTPUDD MARGQTY MARGVAL;

24. The language “WHERE EMARGIN GT 0” causes the program to include only those sales
where the dumping margin (or “EMARGIN”) was greater than zero (or “GT 0”) in the calculation of
the total amount of dumping (“TOTPUDD”). Consequently, the calculation of the total amount of
dumping ignores all sales with negative dumping margin. It is thus evident that, the USDOC had
applied “zeroing” in calculating dumping margins which led the USDOC to find dumping where none
would have otherwise been found or to inflate the dumping margins.

25. As demonstrated by the VO Statement, in c ontrast to the dumping margins of the relevant
exporters calculated by the USDOC with the applica tion of “zeroing” in the Shrimp investigation, the

dumping margins calculated with the same data but without the application of “zeroing” would have
been negative or lower. Therefore, the USDOC has applied “zeroing” in calculating the dumping
margins of the relevant exporters in the Shrimp investigation which led it to find dumping where none
would have otherwise been found, or inflate the dumping margin.

 2. Separate Rate

26. As demonstrated in the Separate Rate Memo randum by the USDOC, the Separate Rate in the
Shrimp Amended Final Determination was a weighted -average margin based on the rate calculated
for Allied in Shrimp Amended Fi nal Determination (80.19%), and the rates calculated for Yelin
(82.27%) and Red Garden (27.89%) in the Shrimp Final Determination.

27. As discussed above, since the dumping marg ins for relevant mandatory respondents were
calculated with and impacted by the application of “zeroing”, the Separate Rate calculated on that
basis was also affected by the application of “zer oing”. Had the USDOC not applied “zeroing” in
calculating margins of these two mandatory respondent s, the Separate Rate in the Shrimp Amended
Final Determination would have dropped from 53.68% to 46.40%.

28. Therefore, it is indisputable that the USDOC has, in the Shrimp investigation, applied the
“zeroing” methodology in calculating the dumping margins for certain mandatory respondents, which,
as a factual matter, affected the results of the du mping margin calculations for Red Garden in the
Shrimp Final Determination and for Allied in the Sh rimp Amended Final Determination. Due to the
reliance on these individually calculated dumping margins, the Separate Rate calculated in the Shrimp
investigation is therefore affected by the application of “zeroing” as well.

 C. The Diamond Sawblades Investigation

29. The USDOC stated in the Diamond Sawblades Preliminary Determination that,

[o]n July 14, 2005, the Department requested comments from all interested parties on
proposed product characteristics and mode l match criteria to be used in the
designation of control numbers (“CONNUMs”) to be assigned to the subject
merchandise. … On August 5, 2005, the Department released the product
characteristics and model match criteria to be used in the designation of CONNUMs
to be assigned the subject merchandise.
30. It then declared that,

[t]o determine whether sales of diamo nd sawblades to the United States … were
made at less than fair value, we compar ed export price (“EP”) or constructed export
price (“CEP”) to normal value (“NV”), as described in the “U.S. Price”, and “Normal
Value” sections of this notice. We compar ed NV to weighted-average EPs and CEPs
in accordance with section 777A(d)(1) of the Act.
31. The USDOC, in its Issues and Decision Memorandum accompanying the publication of the
Diamond Sawblades Final Determination, stated in explicit terms that it:

…interprets this statutory definition to m ean that a dumping margin exists only when
normal value is greater than export or constructed e xport price. As no dumping
margins exist with respect to sales where nor mal value is equal to or less than export
or constructed export price, the Department will not permit these non-dumped sales to
offset the amount of dumping found with respect to other sales.

32. In addition, the Five Components in the USDOC’s dumping margin calculation are identified
in the chart in Exhibit VO-2 to the VO Statemen t (CHN-18), where Ms. Owenby detailed the specific
lines and page numbers for each component in the lo gs generated by the USDOC. Particularly, the
computer program used by the USDOC to cal culate AT&M’s dumping margin contained the
following instructions:

PROC MEANS NOPRINT DATA = MARGIN;
WHERE EMARGIN GT 0;
VAR EMARGIN QTYU VALUE;
OUTPUT OUT = ALLPUDD (DROP = _FREQ_ _TYPE_)
SUM = TOTPUDD MARGQTY MARGVAL;

33. Again, the language “WHERE EMARGIN GT 0” causes the program to include only those
sales where the dumping margin (or “EMARGIN”) was greater than zero (or “GT 0”) in the
calculation of the total amount of dumping (“TOTPU DD”). Thus, the calculation of the total amount
of dumping ignores all sales with negative dumping margin.

34. As demonstrated by the VO Statement, in contrast to the 2.82% calculated by the USDOC
with the application of “zeroing” in the Diam ond Sawblades Amended Final Determination, the
dumping margin for AT&M with the same data but without the application of “zeroing” would have
been negative, i.e. no dumping would have been found for AT&M. Ther efore, the USDOC has
applied “zeroing” in calculating the dumping margin for AT&M which led it to find dumping where
none would have otherwise been found.

 D. Summary

35. The impact of the USDOC’s use of “zeroing” is summarized in the table below.

 Final Determination Amended Final
Determination Remand Determination
Zeroing No Zeroing Zeroing No Zeroing Zeroing No Zeroing
Allied 84.93% N/A 80.19% 79.70% 5.07% Negative
Yelin 82.27% 82.27% N/A N/A 8.45% Negative
Red Garden 27.89% 14.01% N/A N/A N/A N/A
Separate Rate N/A N/A 53.68% 46.40% 17.32% 14.01%
AT&M N/A N/A 2.82% Negative N/A N/A

V. Legal Argument: Violation of Article 2.4.2 of the Anti-Dumping Agreement

36. In US – Softwood Lumber V , the Appellate Body interpreted th e terms “margins of dumping”
and “all comparable export transactions” in Article 2.4.2 in an “integrated manner”, leading to its
conclusion that, where “an investigating authority has chosen to undertake multiple comparisons, the
investigating authority necessarily has to take into account the results of all those comparisons in
order to establish margins of dumping for the product as a whole under Article 2.4.2.”

37. As China demonstrates in its First Written S ubmission, the Five Components that have been
established to exist in the “zeroing” methodology us ed by the USDOC in the Shrimp and Diamond
Sawblades investigations at issu e are identical to the “zeroing” me thodology described at paragraph
64 of the Appellate Body report in US – Softwood Lumber V in all legally relevant respects.

38. Furthermore, the parties have reached the Pr ocedures Agreement applicable to the resolution
of this dispute, providing that the United States wi ll not contest that the measures identified in the
panel request are inconsistent with Article 2.4.2, first sentence of the Anti-Dumping Agreement on the
grounds stated in US-Softwood Lumber V.

39. For the same reasons as articulated by the Appellate Body in US – Softwood Lumber V and by
the panels in US – Shrimp (Ecuador), US – Shrimp (Thailand), and US – Retail Carrier Bags
(Thailand), the use of the zeroing methodology by the USDOC in calculating the dumping margins of
certain exporters in the Shrimp and Diamond Sawblad es investigations at issue was inconsistent with
Article 2.4.2, first sentence, of the Anti-Dumping Agreement. While the Panel is not bound to follow
the Appellate Body’s reasoning in previous cases, it has been acknowledged that adopted Appellate
Body Reports “create legitimate expectations among WTO Members”, and that “following the
Appellate Body’s conclusions in earlier disputes is not only appropriate, but is what would be
expected from panels, especially where the issues are the same.”

40. With regard to the issue of Separate Rate in the Shrimp investigation, as a factual matter,
China establishes in its First Written Submission that in the Shrimp Amended Final Determination,
the calculation of the Separate Rate was based on a weighted average of three company-specific rates,
two of which were calculated by the USDOC with the use of “zeroing” (the rate for Red Garden in the
Shrimp Final Determination, and the rate for Allied in the Shrimp Amended Final Determination). As
a legal matter, China also establishes that the us e of “zeroing” in calculating these two company-
specific rates is inconsistent with Article 2.4.2, first sentence, of the Anti-Dumping Agreement.
Accordingly, the calculation of the Separate Rate in the Shrimp investigation “necessarily
incorporates this inconsistent methodology [of zeroi ng]”, and thus violates Article 2.4.2, first
sentence, of the Anti-Dumping Agreement.

VI. Request for Finding and Recommendations

41. For the reasons set forth in China’s First Wr itten Submission, China respectfully requests that
the Panel find that:

 (i) in the calculation of the dumping margin s for Allied, Yelin and Red Garden in the
Shrimp investigation, by the use of “zeroing” methodology, the United States acted
inconsistently with Article 2.4.2, first sentence, of the Anti-Dumping Agreement;

 (ii) in the calculation of the Separate Rate in the Shrimp investigation, by relying on
company-specific dumping margins that were calculated by the use of “zeroing”
methodology, the United States acted inconsiste ntly with Article 2.4.2, first sentence,
of the Anti-Dumping Agreement; and,

 (iii) in the calculation of the dumping margin for AT&M in the Diamond Sawblades
investigation, by the use of “zeroing” methodology, the United States acted
inconsistently with Article 2.4.2, first sentence, of the Anti-Dumping Agreement.

42. China respectfully requests that the Pane l recommend that the United States bring the
challenged measures into conformity with its obligations under the Anti-Dumping Agreement.

ANNEX A-2

FIRST WRITTEN SUBMISSION
OF THE UNITED STATES

1. The United States notes that the parties to this dispute have reached an Agreement on
Procedures to permit expeditious resolution of this dispute. 1 In its request for a panel, China claims
that the United States has breached its obligations under Article 2.4.2, first sentence, of the Agreement
on Implementation of Article VI of the GATT 1994. The basis of China’s claim is the U.S. Department
of Commerce’s (Commerce) use of “zeroing” when calculating the dumping margins for certain
exporters in the investigation of Certain Frozen Warmwater Shrimp From the People's Republic of
China and the investigation of Diamond Sawblades and Parts Thereof from the People's Republic of
China.2

2. China describes, both in its request for a panel, and in its first written submission,
Commerce’s use of “zeroing” in the calculation of the dumping margin for certain exporters as
follows: Commerce (1) identified different “models,” i.e., types, of products based on the most
relevant product characteristics; (2) calculated we ighted average prices in the U.S. and weighted
average normal values in the comparison market on a model-specific basis, for the entire period of
investigation; (3) compared the weighted average normal value of each model to the weighted average
U.S. price for that same model; (4) calculated the dumping margin for an exporter by summing the
amount of dumping for each model and then dividing it by the aggregated U.S. price for all models;
and (5) set to zero all negative margins on indivi dual models before summing the total amount of
dumping for all models.
3 The United States acknowledges the accuracy of China’s description of
Commerce’s use of “zeroing” in calculating the dumping margins specifically challenged by China in
this dispute.

3. China further states that the rate assigned to the cooperating non-mandatory respondents (the
Separate Rate) was calculated as a weighted-average margin based on the dumping margins calculated
for mandatory respondents, excluding any rates that are zero, de minimis or based entirely on adverse
facts available.
4 The United States acknowledges the accuracy of China's description of the Separate
Rate calculation in the investigation on warmwater shrimp.

4. To substantiate its factual claims, Chin a has provided evidence consisting of Commerce’s
published determinations, issues and decision memora nda, and computer programs used to calculate
the margins of dumping related to the final determinati ons in the original investigations at issue. The
United States reviewed the factual evidence submitte d by China and does not contest that certain of
the submitted documentation, including the com puter programs used to calculate the dumping
margins,5 were generated by Commerce during its conduct of the investigations at issue.

1 See WT/DS422/4 (October 14, 2011).
2 WT/DS422/3 (October 14, 2011), pp. 1-3.
3 See WT/DS422/3, p. 3; First Written Submission of China , 30 January 2012, para. 24 (hereinafter
“China First Written Submission.”)
5 The United States confirms that the program output logs, contained in the following exhibits, were
generated by Commerce in its calculation of the marg ins at issue: CHN-18:VO-8, Final Remand Results
Analysis Memo_Yelin (2); CHN-18: VO-17, Final Re mand Results Analysis memo_Allied; CHN-18: VO-20,
Final Results SAS LOG & OUTPUT Red Garden; CHN-18: VO-21, USDOC's Analysis for the Final Remand
Redetermination of Certain Frozen and Canned Warmwater Shrimp from the People's Republic of China:
Shantou Red Garden Foodstuff Co., Ltd. ("Red Garden"); CHN-18: VO-24, USDOC's Calculation of the
Weighted Average Section A Rate; and CHN-18: VO-26, USDOC’s ministerial error memorandum ATM

5. For the investigation of Certain Frozen Warmwater Shrimp From the People's Republic of
China, China clarifies that it is not challenging Comm erce’s calculation of the dumping margin for
Zhanjiang Guolian Aquatic Products Co ., Ltd. or the “PRC-wide rate.” 6 China states that it
challenges the use of “zeroing” to calculate dumping margins for the following entities: Allied Pacific
Group, Yelin Enterprise Co., Hong Kong, Shantou Re d Garden Foodstuff Co., Ltd., and the reliance
on margins that contain “zeroing” when calculating the Separate Rate.7

6. Regarding the investigation of Diamond Sawblades and Parts Thereof from the People's
Republic of China , China states that it is challenging the use of “zeroing” to calculate the dumping
margin for Advanced Technology & Materials Co ., Ltd. (which includes Beijing Gang Yan Diamond
Products Company and Yichang HXF Ci rcular Saw Industrial Co., Ltd.).
8 China further explains that
its challenge “does not extend to the dumping margin s calculated for other individually investigated
respondents, the Separate Rate, or the PRC-wide rate.”9

7. China states that the “zeroing” methodology applied in Commerce’s calculation of the
dumping margins in the investigation of Certain Frozen Warmwater Shrimp From the People's
Republic of China and the investigation of Diamond Sawblades and Parts Thereof from the People's
Republic of China , is the same as the methodology found by th e Appellate Body to be inconsistent
with Article 2.4.2, first sentence, in US – Softwood Lumber Dumping .
10 China further states that it
considers Commerce’s use of th e “zeroing” methodology in calculating the dumping margins of
certain exporters of shrimp and sawblades from China to be inconsistent with Article 2.4.2, first
sentence, on the grounds set forth in the US – Softwood Lumber Dumping Appellate Body report.11

8. The United States recognizes that in US – Softwood Lumber Dumping the Appellate Body
found that the use of “zeroing” with respect to the average-to-average comparison methodology in
investigations was inconsistent with Article 2.4.2, by interpreting the terms “margins of dumping” and
“all comparable export transactions” as used in the fi rst sentence of Article 2.4.2, in an integrated
manner.
12 The United States acknowledges that this reas oning is equally applicable with respect to
China’s claims regarding the dumping margins specifically challenged in this dispute.

amended final results. The United States confirms that the following documentation submitted by China were
also generated by Commerce during its conduct of the investigation of Diamond Sawblades and Parts Thereof
from the People’s Republic of China: CHN-12 through CHN-15; CHN-21; CHN-22. The United States further
confirms that the following documentation submitted by China were generated by Commerce during its conduct
of the investigation of Certain Frozen Warmwater Shrimp From the People’s Republic of China : CHN-2
through CHN-11; CHN-19; CHN-20.
6 China First Written Submission, para. 7. In the two anti-dumping investigations at issue, Commerce
considered China to be a non-market economy ("NME") country, and applied a rebuttable presumption that all
companies within China are operating units of a single government -wide entity and, t hus, should receive a
single anti-dumping duty rate (known as the "PRC-wide rate"). Exporters wishing to rebut that presumption
must file an application and demonstrate the absence of government control, both de jure and de facto, over
their export activities. Respondents who satisfied these crite ria either received an individually calculated
dumping margin, if selected as mandatory respondents, or a "Separate Rate", if not selected as mandatory
respondents.
9 China First Written Submission, fn. 36.
10 China First Written Submission, para. 64; Appellate Body Report, United States – Final Dumping
Determination on Softwood Lumber from Canada, WT/DS264/AB/R, adopted 31 August 2004 (hereinafter “US
– Softwood Lumber Dumping”).
12 See US – Softwood Lumber Dumping (AB), paras. 62-117.

ANNEX B

WRITTEN SUBMISSIONS OF THE THIRD PARTIES

Contents Page
Annex B-1 Third-party submission of the European Union B-2
Annex B-2 Third-party submission of Japan B-5
Annex B-3 Third-party submission of Thailand B-7

ANNEX B-1

THIRD-PARTY SUBMISSION OF
THE EUROPEAN UNION

1. The European Union makes this third part y written submission because of its systemic
interest in the correct and consistent interpreta tion and application of th e covered agreements and
other relevant documents, in particular the General Agreement on Tariffs and Trade 1994 (" GATT
1994"), the Agreement on Implementation of Article VI of the General Agreement on Tariffs and
Trade 1994 (the "Anti-Dumping Agreement"), and the Dispute Settlement Understanding ("DSU").

2. At the outset, the European Union observes that there are many similarities between the
present dispute and the issue confronted by the panels in US – Shrimp (Ecuador) , US – Shrimp
(Thailand) and US – Retail Carrier Bags (Thailand) . In those disputes, the complaining party
challenged the conformity of an anti-dumping order adopted by the United States on the basis that the
methodology used to calculate the dumping margin s of the exporters concerned ("model zeroing")
infringed Article 2.4.2 of the Anti-Dumping Agreement for the reasons contained in the report of the
Appellate Body in US – Softwood Lumber V . In those disputes, the United States refrained from
contesting that legal claim and even agreed with the complaining party on the means and timing of the
implementation of the adopted DSB report.

3. In the present dispute, the Agreement on Pr ocedures between China and the United States
("Agreement on Procedures")
1 contains paragraphs by which the Parties agree on the procedures that
are to govern certain aspects of the Panel proceedi ngs. It also contains paragraphs by which the
Parties agree: that the United States will not contest the claim; that China will not request the Panel to
suggest, pursuant to Article 19.1 of the DSU, ways in which the United States could implement the
Panel's recommendations; and the ma nner and timing of implementation. 2 Thus, in the EU view, the
Agreement on Procedures not only resolves certain pro cedural issues, it also represents, at least in
part, a resolution or solution of the dispute between the Parties. However, neither Party refers in its
First Written Submission to Articles 3.6 or 12.7 of the DSU.

4. In the particular factual circumstances of the present case, the Eur opean Union welcomes the
prompt resolution of the dispute and does not obj ect to the manner of proceeding chosen by the
Parties. However, the European Un ion considers that the ability of parties to a dispute to agree on
certain matters and to then have such agreement translated into findings and recommendations of a
panel which are eventually adopted by the DSB is not unlimited. The manner of proceeding chosen by
the Parties cannot affect the rights of WTO Memb ers which are not parties to the Agreement on

1 Exhibit CHN-1.
2 The Parties have agreed that an y change in the cash deposit rate or revocation of the anti-dumping
order as a result of the recalculation of dumping margins pursuant to a Section 129 determination will take
effect no sooner than the date on which implementati on of the recalculated rate is directed (Agreement on
Procedures, para. 6). In this respect, the European Un ion observes that the US obligations resulting from the
Agreement on Procedures would appear to be far more li mited than the US obligations resulting from identical
violations found in other disputes. Indeed, the Appellate Body has twice rejected the relevance of the "date of
entry" for the purpose of assessing compliance with adopted DSB reports (Appellate Body Report, US – Zeroing
(Article 21.5 – EC) para. 309, and Appellate Body Report, US – Zeroing (Article 21.5 – Japan) , para. 169).
Thus, in the EU view, as all mutually agreed solutions sh all be consistent with the covered agreements and shall
not nullify or impair benefits accr uing to any Member under those agreements (Article 3.5 of the DSU), any
agreement between the Parties on implementation cannot alter the consequences of a recommendation pursuant
to Article 19.1 of the DSU, i.e., to bring the measure into full conformity with the covered agreements.

Procedures;3 nor can the approach chosen by the Parti es seek to obtain findings having equal weight
in practice vis-à-vis other WTO Members as a "conventional" panel report.

5. Under these circumstances, Article 11 of the DSU gains special relevance. Notwithstanding
the absence of disagreement between the parties, a panel has a basic obligation under Article 11 of the
DSU to make an objective assessment of the matter before it, including an objective assessment of the
facts of the case.
4 Such assessment should include the facts, evidence and legal argument. A panel
should therefore exercise particular care in this resp ect, particularly where, as in this case, the dispute
touches on matters that the complaining party does not pursue. The Panel should particularly
distinguish between finding that the Parties agree with respect to a particular fact, evidentiary matter
or legal issue; and the Panel itself making such finding.

6. Taking into account the above considerations , the European Union would like to make two
remarks on the submissions of the Parties.

7. First, the European Union observ es that the description made by China
5 of the methodology
applied by the United States in the present case contai ns terminology which is incorrect in view of the
interpretation followed by the Appellate Body. In par ticular, China states that the dumping margin for
an exporter was calculated "by summing up the amount of dumping for each model" and that the
USDOC "set to zero all negative margins on individual models" ( emphasis added ). However, the
Appellate Body has already clarified that dumping can be found to exist only "for the product under
investigation as a whole, and cannot be found to exis t for a product type, model, or category of that
product" and that "the results of model-specific comparisons are not margins of dumping within the
meaning of Article 2.4.2, but rather constitute intermediate calculati ons that need to be taken into
consideration in the calculation of the margin of dumping for the product under consideration as a
whole" (emphasis added).6 Consequently, the European Union su ggests that the Panel use the proper
terminology as indicated by the Appellate Body.7

8. Second, the European Union observes that pane ls and the Appellate Body have found the use
of zeroing in original investigations to be inconsistent with Article 2.4.2 of the Anti-Dumping
Agreement in many disputes so far.
8 The European Union notes that the Appellate Body Report in US-
Stainless Steel (Mexico) addresses in general terms the releva nce of previous panel and Appellate
Body reports.9 In this respect, the final sentence of para graph 160 refers to "an adjudicatory body" (in
the singular), which seems to indicate that the phrase refers to the situation in which it is the same
body in both the previous case and the case to be decided. That is, it refers to the situation in which a
panel might be called upon to resolve the same lega l issue that it has previously resolved; or the

3 DSU, Article 3.2.
4 Panel Report, Colombia – Indicative Prices , para. 181; and Appellate Body Report, US – Gambling,
para. 281 ("[W]hen a panel rules on a claim in the absence of evidence and supporting arguments, it acts
inconsistently with its obligations under Article 11 of the DSU").
5 China's First Written Submission, para. 24 (confirmed by the US First Written Submission, para. 2).
6 Appellate Body Report, United States – Final Dumping Determination on Softwood Lumber from
Canada ("US – Softwood Lumber V"), paras 81 – 90; see also Appellate Body Report, US – Continued Zeroing,
7 See, e.g., Appellate Body Report, US – Zeroing (Japan), footnote 13.
8 See Appellate Body Report, EC – Bed Linen , para. 66; Appellate Body Report, US – Softwood
Lumber V, para. 117; Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 124;
Appellate Body Report, US – Zeroing (Japan), para. 138; and Appellate Body Report, US – Zeroing (EC), para.
222. In addition, model zeroing in original investigations has been found to be inconsistent with Article 2.4.2 of
the Anti-Dumping Agreement by all panels that have examined that practice, including the panels in EC – Bed
Linen, EC – Tube or Pipe Fittings, US – Softwood Lumber V, US – Zeroing (EC), US – Zeroing (Japan), and US
– Shrimp (Ecuador), US – Shrimp (Thailand) and US – Continued Zeroing.
9 Appellate Body Report, US – Stainless Steel (Mexico), paras 157 – 162.

situation in which the Appellate Body might be cal led upon to resolve the same legal issue that it has
already resolved. We note that the phrase refers to "cogent reasons" as the basis for a change in view.
By contrast, the European Union notes that pa ragraph 161 of the Appellate Body Report in US –
Stainless Steel (Mexico) addresses the hierarchical relationshi p between panels and the Appellate
Body. It concludes that the relevance of clarifi cation provided by the Appellate Body on issues of
legal interpretation is not limited to the application of a particular provision in a specific case. There is
no express reference to "cogent reasons". Finally, in paragraph 162 of the Ap pellate Body Report in
US – Stainless Steel (Mexico) the Appellate Body states that it was deeply concerned about the panel's
decision to depart from well-established Appellate Bo dy jurisprudence clarifying the interpretation of
the same legal issues.

9. In view of this, the European Union requests the Panel to carry out an objective assessment of
the matter before it, taking into account the well-es tablished Appellate Body jurisprudence clarifying
the interpretation of the same legal issues.

10. Finally, the European Union notes that the Panel's letter dated 27 January 2012 invites the
third parties to inform the Panel of their position with respect to the need for an oral hearing in this
case, whilst the timetable does not foresee any oral hearing (although it also provides that one could
be organised should that prove necessary). The Eu ropean Union notes that Article 10(2) of the DSU
affords third parties the right to make written submissions to a panel and the opportunity to be heard
by a panel . Whilst, pursuant to Article 12(1) of the DSU, panels have the authority to vary the
working procedures set out in Appendix 3 of the DSU, they must do so within the limits set by the
DSU. In this particular case, the European Union conf irms that it waives its right to be heard by the
panel, on condition that there is also to be no h earing with the parties, in person or by remote
communication.

ANNEX B-2

THIRD-PARTY SUBMISSION OF JAPAN

Table of Reports

Short Form Full Citation
US – AD Measures on PET
Bags
Panel Report, United States – Anti-Dumping Measures on Polyethylene Retail
Carrier Bags from Thailand, WT/DS383/R, adopted 18 February 2010
US – Shrimp (Ecuador) Panel Report, United States – Anti-Dumping Measure on Shrimp from
Ecuador, WT/DS335/R, adopted 20 February 2007
US – Softwood Lumber
Dumping
Appellate Body Report, United States - Final Dumping Determination on
Softwood Lumber from Canada, WT/DS264/AB/R, adopted 31 August 2004
US – Zeroing (Korea) Panel Report, United States – Use of Zeroing in Anti-Dumping Measures
Involving Products from Korea, WT/DS402/R, adopted 24 February 2011

1. This dispute is one of the numerous di sputes brought to the WTO dispute settlement
procedure concerning “zeroing” used in the United States’ anti-dumping procedures. Japan, as shown
by its own recourse to the WTO dispute settlement procedure, has an interest in the issue of the WTO-
consistency and implementation by the United States regarding “zeroing”.

2. The basis of claim by the People’s Republic of China (“China”) is that the United States
Department of Commerce’s use of “zeroing” wh en calculating the dumping margins for certain
investigated exporters in the investigation of Shrimp and Diamond Sawblades from China is
inconsistent with the United States’ obligations under the first sentence of Article 2.4.2 of the
Agreement of Implementation of Article VI of the GATT 1994 ( Anti-Dumping Agreement ). Japan
totally supports the China’s claim. Japan sh ares the same recognition with China that in US –
Softwood Lumber Dumping the Appellate Body found that the use of “zeroing” in calculating margins
of dumping on the basis of a comparison of a wei ghted average normal value with a weighted average
of prices of all comparable export transactions (the “weighted-average-to-weighted-average
methodology”) in investigations was inconsistent with the first sentence of Article 2.4.2 of the Anti-
Dumping Agreement.
1

3. Japan notes that the United States also does not contest that the measures identified in the
panel request are inconsistent with Article 2.4.2 of the Anti-Dumping Agreement on the grounds
stated in US – Softwood Lumber Dumping.2

4. In this regard, Japan recalls that the reasoning shown in US – Softwood Lumber Dumping was
equally applicable to US – Shrimp (Ecuador) , US – AD Measures on PET Bags and US – Zeroing
(Korea). In these cases, the panels correctly conclude d the use of “zeroing” in calculating margins of
dumping in the investigations on the basis of the “weighted-average-to-weighted-average
methodology” was inconsistent with the first sentence of Article 2.4.2 of the Anti-Dumping
Agreement.
3

1 Appellate Body Report, US – Softwood Lumber Dumping , paras.62-117, First Written Submission of
China, paras. 63-67.
2 First Written Submission of the United States, paras. 7-8.
3 Panel Report, US – Shrimp (Ecuador) , para.8.1, Panel Report, US – AD Measures on PET Bags ,

5. In light of the foregoing, Japan agrees with the request of China that the Panel should find
that the United States acted inconsistently with the requirement of the first sentence of Article 2.4.2 of
the Anti-Dumping Agreement . Japan expects that the United States would take appropriate actions
with respect to measures at issue so that “prompt settlement of situations”, as stated in Article 3.3 of
the Understanding on Rules and Procedures Governing the Settlement of Disputes, will be achieved.

ANNEX B-3

THIRD-PARTY SUBMISSION OF THAILAND

1. Thailand appreciates the opportunity to presen t to the Panel its views on China's complaint
against the United States’ use of the practice known as "zeroing" on certain frozen and canned
warmwater shrimp and diamond saw blades and parts thereof from Ch ina. Thailand notes that the
parties have reached a procedural agreement to permit expeditious resolution of this dispute. 1 These
procedures appear to be similar to those used by Thailand and the United States in US –
Anti-Dumping Measures on PET Bags . Thailand welcomes the use of these procedures to facilitate
the speedy resolution of this dispute.

2. In Thailand's view, the Appellate Body's ru lings to date on the issue of zeroing have
coherently and consistently addressed the numerous different arguments put before it in each dispute.
Put simply, the Appellate Body has held that when ever an investigating authority uses intermediate
comparisons between subgroups of export prices and normal values – whether on a model-by-model,
transaction-by-transaction or any other basis – as a step to arrive at the overall dumping margin for
that product, the investigating authority may not, in aggregating those intermediate comparisons,
“zero” the results of some of those comparisons . Regardless of whether each successive Appellate
Body report states this principle in identical te rms, addresses all of the different methodologies in
which zeroing can be used, or repeats all of the re asoning of previous reports, Thailand considers this
principle to have been fully and correctly reasoned by the Appellate Body and to apply equally and
fully to the issues that are before the Panel in this case.

3. Given the clarity and consistency of the A ppellate Body's rulings on zeroing, as expanded to
address the varied arguments presented in each succe ssive case, Thailand need not comment in detail
on the legal issue presented in this case. In Th ailand's view, the legal issue has been addressed,
directly or indirectly, in the Appellate Body's rulings, including in US – Softwood Lumber V,
2 and by
the panels in the disputes US – Shrimp (Ecuador) 3, US – Shrimp (Thailand) 4 and US – Anti-Dumping
Measures on PET Bags 5, where the use of the zeroing methodology by the United States’ Department
of Commerce (“USDOC”) in calculating the dumping margins of relevant exported products were
found inconsistent with Article 2.4.2, first sente nce, of the Agreement on Implementation of Article
VI of the General Agreement on Tariffs and Trade 1994 (the “Anti-Dumping Agreement”).

4. Thailand notes that the United States, in its First Written Submission, acknowledges the
accuracy of China’s description of the USDOC’s use of “zeroing” in calculating the dumping margins
specifically challenged by China in this dispute and of China’s description of the Separate Rate
calculation in the investigation on warmwater shrimp. Further, the United States does not contest that
certain of the submitted documentation from Chin a, including the computer programs used to
calculate the dumping margins were generated by th e USDOC during its conduct of the investigation
at issue.

5. The United States, in its First Written Submission, also recognizes that in US – Softwood
Lumber V, the Appellate Body found that the use of “zeroi ng” with respect to the average-to-average
comparison methodology in investigations was incons istent with Article 2.4.2, by interpreting the
terms “margins of dumping” and “all comparable export transactions” as used in the first sentence of

1 See WT/DS422/4 (14 October 2011).
2 Appellate Body Report, US – Softwood Lumber V, paras. 86-103.
3 Panel Report, US – Shrimp (Ecuador), para. 7.41.
4 Panel Report, US – Shrimp (Thailand), paras. 7.35-7.36.
5 Panel Report, US – Anti-Dumping Measures on PET Bags, paras. 7.24-7.25.

Article 2.4.2, in an integrated manner.
6 The United States finally acknowledges that this reasoning is
equally applicable with respect to China’s cl aims regarding the dumping margins specifically
challenged in this dispute.

6. Thailand respectfully requests the Panel to reach the conclusions in this dispute consistently
with the jurisprudence on this issue.

6 See Appellate Body Report, US-Softwood Lumber V, paras. 62-117.

TABLE OF CASES

Short Title Full Case Title and Citation
US – Anti-Dumping Measures on
PET Bags
Panel Report, United States – Anti-Dumping Measures on Polyethylene Retail
Carrier Bags from Thailand, WT/DS383/R, adopted 18 February 2010
US – Softwood Lumber V Appellate Body Report, United States – Final Dumping Determination on Softwood
Lumber from Canada, WT/DS264/AB/R, adopted 31 August 2004
US – Shrimp (Ecuador) Panel Report, United States – Anti Dumping Measure on Shrimp from Ecuador,
WT/DS335/R, adopted 20 February 2007
US – Shrimp (Thailand)
Panel Report, United States – Measures Relating to Shrimp from Thailand ,
WT/DS343/R, adopted 1 August 2008, as modified by Appellate Body Report
WT/DS343/AB/R, WT/DS345/AB/R

ANNEX C

REQUEST FOR THE ESTABLISHMENT
OF A PANEL

Contents Page
Annex C-1 Request for the establishment of a panel by China C-2

ANNEX C-1

REQUEST FOR THE ESTABLISHMENT
OF A PANEL BY CHINA

14 October 2011

 (11-5120)
 Original: English

Request for the Establishment of a Panel by China

 The following communication, dated 13 October 2011, from the delegation of China to the
Chairperson of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.

On February 28, 2011 and July 22, 2011, the People's Republic of China ("China") requested
consultations with the United States of America pursuant to Article 4 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes ("DSU"), Article XXII:1 of the General
Agreement on Tariffs and Trade 1994 ("GATT 1994") and Article 17 of the Agreement on
Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 ("Anti-Dumping
Agreement") with regard to the "zeroing" practi ce by the United States Department of Commerce (
"USDOC") in its anti-dumping measures on certain frozen warmwater shrimp from China
1 and
diamond sawblades and parts thereof from China2 respectively.
Consultations were held on May 11, 2011 and September 8, 201 1. While these consultations
assisted in clarifying the issues before the parties, they failed to resolve the dispute.
Therefore, China respectfully requests, pursuant to Article XXIII of the GATT 1994,
Articles 4 and 6 of the DSU, and Article 17.4 of the Anti-Dumping Agreement, that the Dispute
Settlement Body ("DSB") establish a panel to examine this matter.
Specific Measures at Issue
(1) Frozen Warmwater Shrimp

1 See G/ADP/D87/1, G/L/953, WT/DS422/1.
2 See G/ADP/D87/1/Add.1, G/L/953/Add.1, WT/DS422/1/Add.1.

The United States initiated an anti-dumping inves tigation of certain frozen warmwater shrimp
from China on January 27, 2004 (Investigation No. A–570–893). The specific measures at issue in
this dispute are the anti-dumping order imposed by the United States on certain frozen warmwater
shrimp from China, as amended, and the final dete rmination by the USDOC, as amended, leading to
that order. To be specific, these measures include:
 Notice of Final Determination of Sales at Less Than Fair Value: Certain Frozen and Canned
Warmwater Shrimp From the People's Republic of China , 69 Federal Register 70997
(December 8, 2004);
 Notice of Amended Final Determination of Sal es at Less Than Fair Value and Antidumping
Duty Order: Certain Frozen Warmwater Shr imp From the People's Republic of China , 70
Federal Register 5149 (February 1, 2005);
 Certain Frozen Warmwater Shrimp from the People's Republic of China: Notice of Second
Amended Final Determination of Sales at Less Than Fair Value ， 71 Federal Register 47484
(August 17, 2006);
 Certain Frozen Warmwater Shrimp From Brazil, India, the People's Republic of China,
Thailand, and the Socialist Republic of Vietnam: Notice of Amended Final Determinations of
Sales at Less Than Fair Value Pursuant to Court Decision , 75 Federal Register 53947
(September 2, 2010);
 Certain Frozen Warmwater Shrimp From Brazil, India, the People's Republic of China,
Thailand, and the Socialist Republic of Vi etnam: Amended Antidumping Duty Orders in
Accordance with Final Court Decision, 76 Federal Register 23277 (April 26, 2011);
3
 Certain Frozen Warmwater Shrimp From the Pe ople's Republic of China: Notice of Amended
Final Determination of Sales at Less Than Fair Value Pursuant to Court Decision , 76 Federal
Register 30100 (May 24, 2011);
 as well as any amendments to the measures identified above.
In the final determination, as amended, th e USDOC used the "zeroing" methodology in
determining the final dumping margins for thr ee individually investigated Chinese exporters 4, for
which margins above the 2 per cent de minimis level were calculated.
(2) Diamond Sawblades and Parts Thereof
The United States initiated an anti-dumping i nvestigation of diamond sawblades and parts
thereof from China on June 21, 2005 (Investigation No. A-570-900). The specific measures at issue
in this dispute are the anti-dumping order imposed by the United States on diamond sawblades and

3 On April 29, 2011, as a result of the determinations by the USDOC and the International Trade
Commission ("ITC") that revocation of the antidumping duty orders on certain frozen warmwater shrimp from
Brazil, India, China, Thailand, and the Socialist Republic of Vietnam ("Vietnam") would be likely to lead to
continuation or recurrence of dumping and of material in jury to an industry in the United States within a
reasonably foreseeable time, the USDOC published a notice of the continuation of these antidumping duty
orders. See Certain Frozen Warmwater Shrimp From Brazil, India, the People’s Republic of China, Thailand,
and the Socialist Republic of Vietnam: Continuation of Antidumping Duty Orders , 76 Federal Register 23972
(April 29, 2011).
4 The three exporters are Allied P acific Group ("Allied"), Yelin Enterprise Co Hong Kong ("Yelin")
and Shantou Red Garden Foodstuff Co., Ltd. ("Red Garden").

parts thereof from China, as amended, and the final determination by the USDOC, as amended,
leading to that order. To be specific, these measures include:
 Final Determination of Sales at Less Than Fair Value and Final Partial Affirmative
Determination of Critical Circumstances: Diamond Sawblades and Parts Thereof from the
People's Republic of China, 71 Federal Register 29303 (22 May 2006);
 Notice of Amended Final Determination of Sales at Less Than Fair Value: Diamond
Sawblades and Parts Thereof from the People's Republic of China, 71 Federal Register 35864
(22 June 2006);
 Diamond Sawblades and Parts Thereof from the Pe ople's Republic of China and the Republic
of Korea: Antidumping Duty Orders, 74 Federal Register 57145 (4 November 2009);
 as well as any amendments to the measures identified above.
In the final determination, as amended, th e USDOC used the "zeroing" methodology in
determining the final dumping margins for thr ee individually investigated Chinese exporters
5, for
which margins above the 2 per cent de minimis level were calculated.
In respect of the two investigations identif ied above, the USDOC's methodology of "zeroing"
negative dumping margins may be described more specifically in the following:
a) different "models", i.e., types, of products are identified based on the most relevant
product characteristics;
b) weighted average prices in the United States and weighted average normal values in the
comparison market are calculated on a model-specific basis for the entire period of
investigation;
c) the weighted average normal value of each m odel is compared to the weighted average
United States price for that same model;
d) to calculate the dumping margin for an exporter, the amount of dumping for each model
is summed and then divided by the aggregated United States price for all models; and
e) before summing the total amount of dumping for all models, all negative margins on
individual models ( i.e., where the weighted average normal value is less than the
weighted average export price ) are set to zero.
Through this method, the USDOC calculates margins of dumping and collects cash deposits in
amounts that exceed the actual extent of dumping, if any, by the said individually investigated
exporters.
In addition, in respect of the anti-dumping inv estigation of certain frozen warmwater shrimp,
on the basis of the individual dumping margins cal culated with the application of zeroing, the

5 The three exporters are Advanced Technology & Materials Co., Ltd. (including Beijing Gang Yan
Diamond Products Company and Yichang HXF Circular Saw Industrial Co., Ltd.) ("AT&M"), Bosun Tools
Group Co., Ltd. ("Bosun") and Hebei Jikai Industrial Group Co., Ltd. ("Hebei Jikai").

USDOC further calculated a weighted-average margin (known as the "separate ra te") that applies to
the cooperating non-mandatory respondents6.
The USDOC's unpublished Issues and Decisi on Memorandums as well as other documents
contained in the administrative record of the investigations, including the computer programs,
describe in more detail the USDOC's use of zeroi ng in the anti-dumping investigations of frozen
warmwarter shrimp and diamond sawblades and parts thereof from China.
China considers that these measures are inconsiste nt with the obligations of the United States
under the provisions of the GATT 1994 and the Anti-Dumping Agreement described below.
The Legal Basis of the Complaint
Through the use of "zeroing," the United States treats transactions with negative dumping
margins as having margins equal to zero in determ ining weighted average dumping margins in an
anti-dumping investigation.
The use of "zeroing" led the United States to find dumping where none would have otherwise
been found or to calculate dumping margins that ar e inflated. China considers that, in the specific
measures at issue as identified above, the USDOC' s use of "zeroing" in cal culating the margins of
dumping for the individually investigated exporters and the "separate rate" for the cooperating non-
mandatory respondents is inconsistent with th e obligations of the United States under the Anti-
Dumping Agreement. Specifically, China considers th at the measures are inconsistent with the first
sentence of Article 2.4.2 of the Anti-Dumping Agreement.
The "zeroing" methodology that the USDOC used in its anti-dumping investigations of shrimp
and diamond sawblades from China is virtually iden tical to the methodology that was held to be
inconsistent with the obligations of the Unite d States under the Anti-Dumping Agreement in the
following disputes: United States - Final Dumping Determination on Softwood Lumber from
Canada7; United States - Anti-Dumping Measures On Shrimp from Ecuador 8; United States - Anti-
Dumping Measures on Polyethylene Retail Carrier Bags from Thailand 9; and United States -
Measures Relating to Shrimp from Thailand10.
The forgoing paragraphs are provided without prejudice to any arguments that China may
develop and present to the panel regarding the WTO-inconsistency of the measures at issue.
Request for the Establishment of a Panel
Accordingly, China requests pursuant to Article XXIII of the GATT 1994, Articles 4 and 6 of
the DSU, and Article 17.4 of the Anti-Dumping Agr eement, that the DSB establish a panel with the
standard terms of reference as set out in Article 7.1 of the DSU. China asks that this request be placed
on the agenda of the meeting of the DSB scheduled for October 25, 2011.
August 31, 2004.
8 Panel Report, WT/DS335/R, adopted on February 20, 2007.
9 Panel Report, WT/DS383/R, adopted on May 20, 2008.
10 Panel Report, WT/DS343/R, adopted as modified by the Appellate Body on August 1, 2008.

ANNEX D

AGREEMENT ON PROCEDURES BETWEEN THE PARTIES

Contents Page
Annex D-1 Agreement on Procedures betw een China and the United States D-2

ANNEX D-1

AGREEMENT ON PROCEDURES BETWEEN THE PARTIES

14 October 2011

 (11-5121)
 Original: English

Agreement on Procedures between China and the United States

 The following communication, dated 13 October 2011, from the delegation of China and the
delegation of the United States to the Chairperson of the Dispute Settlement Body, is circulated at the
request of those delegations.

 The People's Republic of China ("China") and the United States of America would like to
inform the Dispute Settlement Body of the attach ed Agreement on Procedures between China and the
United States with respect to the dispute (DS422).

We request that you please circulate the attached agreement to the Members of the Dispute Settlement
Body in the WT/DS422 document series.

United States - Anti-Dumping Measures on Certain Shrimp and Diamond Sawblades from China
(WT/DS422)

Agreement on Procedures between China and the United States

On February 28, 2011, the Government of Chin a ("China") requested consultations with the
United States under Article 4 of the Understanding on Rules and Procedures Governing the
Settlement of Disputes ("DSU"), Article XXII:1 of the General Agreement on Tariffs and Trade 1994
("GATT 1994"), and Article 17 of the Agreement on Implementation of Article VI of the General
Agreement on Tariffs and Trade 1994 ("Anti-Dumping Agreement"), with respect to anti-dumping
measures on certain frozen warmwater shrimp from China. (WT/DS422/1). On July 22, 2011, China
requested additional consultations with respect to anti-dumping measures on diamond sawblades and
parts thereof from China. (WT/DS422/1/Add. 1). On May 11, 2011 and September 8, 2011,
consultations were held by China and the United St ates (hereinafter the "parties"); together these
consultations covered all the measure s referenced in the Panel Request pursuant to Article 6.2 of the
DSU. These consultations have enabled the parti es to agree on the following procedures for purposes
of this dispute:
1. Should China request the establishment of a panel in this dispute, China's panel request will
be the one attached to this agreement (the "Pan el Request"). The United St ates will not oppose the
establishment of a panel at the first Dispute Settleme nt Body ("DSB") meeting following the filing of
the Panel Request by China. The pa rties agree to make every effort to ensure that they compose the
panel without recourse to the Director-General under Article 8.7 of the DSU.
2. The parties will cooperate to enable the panel to circulate its report as quickly as possible in
light of the requirements of the DSU. To that end, the parties will work to reach agreement on
working procedures that aim to expedite the panel proceedings. The parties will jointly ask the panel
to adopt these procedures, which will enable it to co mplete its work within three months after the
composition of the panel. The parties also agree to request the panel to ask that the parties file only
one written submission each, and that the panel forego meetings with the parties, or, at most, have
only one substantive meeting with the parties. The parties also agree to share drafts of their respective
written submissions prior to submitting them to the pa nel and to take all reasonably available steps to
accelerate the proceeding.
3. China will provide the necessary evidence and argu ments to support its allegations, including
the computer programs and output logs generated by the United States Department of Commerce that
were used to calculate the challenged dumping marg ins. The United States will not contest China's
claim that the measures identified in the Panel Requ est are inconsistent with Article 2.4.2, first
sentence, of the Anti-Dumping Agreement, on the grounds stated in United States - Final Dumping
Determination on Softwood Lumber from Canada , WT/DS264/AB/R, Report of the Appellate Body
adopted 31 August 2004.
4. China will not request that the panel suggest, pur suant to Article 19.1, second sentence, of the
DSU, ways in which the United States could implement the panel's recommendations.
5. Provided that the panel's finding is limited to a finding that one or more of the challenged
measures, as identified in the Panel Request, is incons istent with Article 2.4.2, first sentence, of the
Anti-Dumping Agreement, the parties agree that, pursuant to Article 21.3(b) of the DSU, the
reasonable period of time for bringing each such measure into conformity with the Anti-Dumping
Agreement will be eight months, beginning on the date on which the DSB adopts the panel report.

6. Subject to the consultation requirements of sec tion 129(b) of the Uruguay Round Agreements
Act ("URAA"), 19 U.S.C. §3538(b), the United States will use section 129(b) to recalculate margins
of dumping (subject to the exclusion of Zhanjiang G uolian Aquatic Products Co., Ltd, in paragraph 7,
below) and to issue a new determination in orde r to render the anti-dumping measures on certain
frozen warmwater shrimp from China and the anti-dumping me asures on diamond sawblades and
parts thereof from China consistent with the r ecommendations and rulings of the DSB and the Anti-
Dumping Agreement. In particular, the Unite d States will implement such recommendations and
rulings in respect of the Final Determination, as amended by any and all amended final determinations
which are effective at the time of implementation. If any such recalculation that is performed under
section 129(b) results in a change in a cash deposit rate or revocation, in part or in whole, for the anti-
dumping measures on certain frozen warmwater shri mp from China or the anti-dumping measures on
diamond sawblades and parts thereof from China, th e new cash deposit rate or revocation will have
prospective effect only, taking effect no sooner than the date on which the United States Trade
Representative directs the United States Secretary of Commerce to implement its recalculation of the
margins and new determination, as set forth in section 129(c)(1) of the URAA, 19 U.S.C. §
3538(c)(1).
7. The parties also mutually understand that the scope of China's Panel Request does not include
any claim regarding the margin of dumping calcu lated for Zhanjiang Guolia n Aquatic Products Co.,
Ltd. in the anti-dumping duty investigation on certa in frozen warmwater shrimp from China or the
margin of dumping determined solely on the basis of adverse facts available in either anti-dumping
duty investigation. The parties agree that they will inform the panel in their written submissions,
whether made jointly or separately, that they are seeking findings consistent with this understanding.
Accordingly, to the extent that the findings ar e consistent with this understanding, implementation
would not involve a recalculation of such margins of dumping.

For The People's Republic of China

Mme. ZHAO Hong
Chargé d'Affaires
For the United States of America

H.E. Mr. Michael Punke
Ambassador

ANNEX

 (WT/DS422)
Request for the Establishment of a Panel by China
On February 28, 2011 and July 22, 2011, the People's Republic of China ("China") requested
consultations with the United States of America pursuant to Article 4 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes ("DSU"), Article XXII:1 of the General
Agreement on Tariffs and Trade 1994 ("GATT 1994") and Article 17 of the Agreement on
Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 ("Anti-Dumping
Agreement") with regard to the "zeroing" practi ce by the United States Department of Commerce (
"USDOC") in its anti-dumping measures on certain frozen warmwater shrimp from China 1 and
diamond sawblades and parts thereof from China2 respectively.
Consultations were held on May 11, 2011 and September 8, 201 1. While these consultations
assisted in clarifying the issues before the parties, they failed to resolve the dispute.
Therefore, China respectfully requests, pursuan t to Article XXIII of the GATT 1994, Articles
4 and 6 of the DSU, and Article 17.4 of the Anti- Dumping Agreement, that the Dispute Settlement
Body ("DSB") establish a panel to examine this matter.
Specific Measures at Issue
(1) Frozen Warmwater Shrimp
The United States initiated an anti-dumping inves tigation of certain frozen warmwater shrimp
from China on January 27, 2004 (Investigation No. A–570–893). The specific measures at issue in
this dispute are the anti-dumping order imposed by the United States on certain frozen warmwater
shrimp from China, as amended, and the final dete rmination by the USDOC, as amended, leading to
that order. To be specific, these measures include:
 Notice of Final Determination of Sales at Less Than Fair Value: Certain Frozen and Canned
Warmwater Shrimp From the People's Republic of China , 69 Federal Register 70997
(December 8, 2004);
 Notice of Amended Final Determination of Sal es at Less Than Fair Value and Antidumping
Duty Order: Certain Frozen Warmwater Shr imp From the People's Republic of China , 70
Federal Register 5149 (February 1, 2005);
 Certain Frozen Warmwater Shrimp from the People's Republic of China: Notice of Second
Amended Final Determination of Sales at Less Than Fair Value ， 71 Federal Register 47484
(August 17, 2006);
 Certain Frozen Warmwater Shrimp From Brazil, India, the People's Republic of China,
Thailand, and the Socialist Republic of Vietnam: Notice of Amended Final Determinations of
Sales at Less Than Fair Value Pursuant to Court Decision , 75 Federal Register 53947
(September 2, 2010);

1 See G/ADP/D87/1, G/L/953, WT/DS422/1.
2 See G/ADP/D87/1/Add.1, G/L/953/Add.1, WT/DS422/1/Add.1.

 Certain Frozen Warmwater Shrimp From Brazil, India, the People's Republic of China,
Thailand, and the Socialist Republic of Vi etnam: Amended Antidumping Duty Orders in
Accordance with Final Court Decision, 76 Federal Register 23277 (April 26, 2011);
3
 Certain Frozen Warmwater Shrimp From the Pe ople's Republic of China: Notice of Amended
Final Determination of Sales at Less Than Fair Value Pursuant to Court Decision , 76 Federal
Register 30100 (May 24, 2011);
 as well as any amendments to the measures identified above.
In the final determination, as amended, th e USDOC used the "zeroing" methodology in
determining the final dumping margins for thr ee individually investigated Chinese exporters 4, for
which margins above the 2 per cent de minimis level were calculated.

(2) Diamond Sawblades and Parts Thereof

The United States initiated an anti-dumping i nvestigation of diamond sawblades and parts
thereof from China on June 21, 2005 (Investigation No. A-570-900). The specific measures at issue
in this dispute are the anti-dumping order imposed by the United States on diamond sawblades and
parts thereof from China, as amended, and the final determination by the USDOC, as amended,
leading to that order. To be specific, these measures include:
 Final Determination of Sales at Less Than Fair Value and Final Partial Affirmative
Determination of Critical Circumstances: Di amond Sawblades and Parts Thereof from the
People's Republic of China, 71 Federal Register 29303 (22 May 2006);
 Notice of Amended Final Determination of Sales at Less Than Fair Value: Diamond
Sawblades and Parts Thereof from the People's Republic of China, 71 Federal Register 35864
(22 June 2006);
 Diamond Sawblades and Parts Thereof from the Pe ople's Republic of China and the Republic
of Korea: Antidumping Duty Orders, 74 Federal Register 57145 (4 November 2009);
 as well as any amendments to the measures identified above.
In the final determination, as amended, th e USDOC used the "zeroing" methodology in
determining the final dumping margins for thr ee individually investigated Chinese exporters
5, for
which margins above the 2 per cent de minimis level were calculated.

3 On April 29, 2011, as a result of the determinations by the USDOC and the International Trade
Commission (“ITC”) that revocation of the antidumping duty orders on certain frozen warmwater shrimp from
Brazil, India, China, Thailand, and the Socialist Republic of Vietnam (“Vietnam”) would be likely to lead to
continuation or recurrence of dumping and of material in jury to an industry in the United States within a
reasonably foreseeable time, the USDOC published a notice of the continuation of these antidumping duty
orders. See Certain Frozen Warmwater Shrimp From Brazil, India, the People’s Republic of China, Thailand,
and the Socialist Republic of Vietnam: Continuation of Antidumping Duty Orders , 76 Federal Register 23972
(April 29, 2011).
4 The three exporters are Allied P acific Group ("Allied"), Yelin Enterprise Co Hong Kong ("Yelin")
and Shantou Red Garden Foodstuff Co., Ltd. ("Red Garden").
5 The three exporters are Advanced Technology & Materials Co., Ltd. (including Beijing Gang Yan
Diamond Products Company and Yichang HXF Circular Saw Industrial Co., Ltd.) (“AT&M”), Bosun Tools
Group Co., Ltd. (“Bosun”) and Hebei Jikai Industrial Group Co., Ltd. (“Hebei Jikai”).

In respect of the two investigations identif ied above, the USDOC's methodology of "zeroing"
negative dumping margins may be described more specifically in the following:
a) different "models", i.e., types, of products are identified based on the most relevant
product characteristics;
b) weighted average prices in the United Stat es and weighted average normal values in
the comparison market are calculated on a m odel-specific basis for the entire period of
investigation;
c) the weighted average normal value of each m odel is compared to the weighted average
United States price for that same model;
d) to calculate the dumping margin for an exporter, the amount of dumping for each
model is summed and then divided by the aggregated United States price for all
models; and
e) before summing the total amount of dumping for all models, all negative margins on
individual models ( i.e., where the weighted average normal value is less than the
weighted average export price ) are set to zero.
Through this method, the USDOC calculates margins of dumping and collects cash deposits in
amounts that exceed the actual extent of dumping, if any, by the said individually investigated
exporters.
In addition, in respect of the anti-dumping inv estigation of certain frozen warmwater shrimp,
on the basis of the individual dumping margins cal culated with the application of zeroing, the
USDOC further calculated a weighted-average margin (known as the "separate ra te") that applies to
the cooperating non-mandatory respondents
6.
The USDOC's unpublished Issues and Decisi on Memorandums as well as other documents
contained in the administrative record of the investigations, including the computer programs,
describe in more detail the USDOC's use of zeroi ng in the anti-dumping investigations of frozen
warmwarter shrimp and diamond sawblades and parts thereof from China.
China considers that these measures are inconsiste nt with the obligations of the United States
under the provisions of the GATT 1994 and the Anti-Dumping Agreement described below.
The Legal Basis of the Complaint
Through the use of "zeroing," the United States treats transactions with negative dumping
margins as having margins equal to zero in determ ining weighted average dumping margins in an
anti-dumping investigation.
The use of "zeroing" led the United States to find dumping where none would have otherwise
been found or to calculate dumping margins that ar e inflated. China considers that, in the specific
measures at issue as identified above, the USDOC' s use of "zeroing" in cal culating the margins of
dumping for the individually investigated exporters and the "separate rate" for the cooperating non-
mandatory respondents is inconsistent with th e obligations of the United States under the Anti-

6 Such non-mandatory respondents were also required to pass the "separate-rate test" in order to receive
the separate rate.

Dumping Agreement. Specifically, China considers th at the measures are inconsistent with the first
sentence of Article 2.4.2 of the Anti-Dumping Agreement.
The "zeroing" methodology that the USDOC used in its anti-dumping investigations of shrimp
and diamond sawblades from China is virtually iden tical to the methodology that was held to be
inconsistent with the obligations of the Unite d States under the Anti-Dumping Agreement in the
following disputes: United States - Final Dumping Determination on Softwood Lumber from
Canada
7; United States - Anti-Dumping Measures On Shrimp from Ecuador 8; United States - Anti-
Dumping Measures on Polyethylene Retail Carrier Bags from Thailand 9; and United States -
Measures Relating to Shrimp from Thailand10.
The forgoing paragraphs are provided without prejudice to any arguments that China may
develop and present to the panel regarding the WTO-inconsistency of the measures at issue.
Request for the Establishment of a Panel
Accordingly, China requests pursuant to Article XXIII of the GATT 1994, Articles 4 and 6 of
the DSU, and Article 17.4 of the Anti-Dumping Agr eement, that the DSB establish a panel with the
standard terms of reference as set out in Article 7.1 of the DSU. China asks that this request be placed
on the agenda of the meeting of the DSB scheduled for October 25, 2011.