UNITED STATES – MEASURES RELATING TO ZEROING AND SUNSET REVIEWS
Document: Report of the Appellate Body
Date: 9 January 2007
Document codes: WT/DS322/AB/R
Complainant: Japan
Respondent: U.S.
Third parties: Argentina, China, EU, Hong Kong, India, South Korea, Mexico, New Zealand, Norway, Taiwan, Thailand
Dispute stage: Implementation & Compliance
Agreements cited: Art. 2.1, 2.4, 2.4.2, 9.1, 9.2, 9.3, 5.8, 3, 9.5, 11.1, 11.2, 11.3, 1  Anti-dumpingArt. VI  GATT 1994Art. 18.4  Anti-dumpingArt. XVI:4  Agreement Establishing the World Trade Organization

( 07-0081)

UNITED STATES – MEASURES RELATING TO ZEROING
AND SUNSET REVIEWS

AB-2006-5

Report of the Appellate Body

APPELLATE BODY

Japan, Appellant/Appellee
United States, Appellant/Appellee

Argentina, Third Participant
China, Third Participant
European Communities, Third Participant
Hong Kong, China, Third Participant
India, Third Participant
Korea, Third Participant
Mexico, Third Participant
New Zealand, Third Participant
Norway, Third Participant
Thailand, Third Participant

 AB-2006-5

 Present:

 Sacerdoti, Presiding Member
 Abi-Saab, Member
 Ganesan, Member

I. Introduction
1. Japan and the United States each appeals certa in issues of law and legal interpretations
developed in the Panel Report,
(the "Panel Report").
1 The Panel was established to consid er a complaint by Japan concerning the
calculation of margins of dumping by the United States based on a methodology that disregards the
amounts by which the export prices are above the normal value in certain transactions.2
2. Before the Panel, Japan challenged, under the Agreement on Implementation of Article VI of
the General Agreement on Tariffs and Trade 1994 (the " Anti-Dumping Agreement "), the General
Agreement on Tariffs and Trade 1994 (the "GATT 1994"), and the Marrakesh Agreement
Establishing the (the "WTO Agreement"):

1, 20 September 2006.
2See Panel Report, paras. 2.1 and 7.1. The Panel noted that, "with regard to periodic reviews and new
shipper reviews, Japan challenges zeroing not only with respect to the calculation of margins of dumping but
also with respect to the calculation of assessment rates ." (Panel Report, footnote 630 to para. 7.1) (original
emphasis)

(a) the United States' "zeroing procedures"
3 and the "standard zeroing line"4, "as such", in
the context of "original investigations" 5, "periodic reviews"6, "new shipper reviews"7,
"changed circumstances reviews"8, and "sunset reviews"9; and
(b) the application of the "zeroing proce dures" in one "original investigation" 10, in
11 "periodic reviews"11, and in two "sunset reviews".12
3. In the Panel Report, circulated to Members of the World Trade Organization (the "WTO") on
20 September 2006, the Panel made the followi ng findings in respect of "model zeroing" 13 and
"simple zeroing"14:

3Before the Panel, Japan used the term "zeroing" to denote the methodology under which the United
States Department of Commerce (the "USDOC") "disregards intermediate negative dumping margins ... through
the USDOC's AD Margin Calculation Computer Programme and other related procedures, in the process of
establishing the overall dumping margin for the product as a whole". (Panel Report, footnote 668 to para. 7.45,
quoting Request for the Establishment of a Panel by Japan, para. 1(a)-(d) (attached as Annex III to this Report))
The Panel used the term "zeroing procedures" to refer to "the zeroing methodology per se, as distinguished from
the standard zeroing line". (Ibid., para. 7.47)
4The term "standard zeroing line" is used in the Pa nel Report to refer to a specific line of computer
programming code used by the USDOC when it develops a specific computer program to calculate a margin of
dumping in a particular anti-dumping proceeding. (See Panel Report, paras. 4.17 and 7.20, and footnote 644 to
para. 7.20)
5In our discussion, we use the term "original inves tigations" to refer to investigations within the
meaning of Article 5 of the Anti-Dumping Agreement.
6In our discussion, we use the term "periodic review" to describe the periodic review of the amount of
anti-dumping duty, as required by Section 751(a) of the Tariff Act of 1930 (the "Tariff Act").
7In our discussion, we use the term "new shipper review" to describe the review to establish an
individual weighted-average dumping margin for the exporter or foreign producer, as required by
Section 751(2)(B)(i)(II) of the Tariff Act. That provi sion requires the USDOC to review and determine the
individual dumping margin for an exporter or foreign producer that did not export the product during the
original period of investigation.
8In our discussion, we use the term "changed circumstances review" to describe the review of a final
affirmative dumping determination or su spension agreement, as required by Section 751(b) of the Tariff Act.
That provision requires the USDOC to review a final dumping determination or a suspension agreement based
upon a request by an interested party demonstrating th at changed circumstances warrant a review of such a
determination.
9In our discussion, we use the term "sunset review" to describe the review of an anti-dumping duty
order at the end of five years, as required by Section 751(c) of the Tariff Act. That provision requires the
USDOC to conduct a review to determine whether revocation of the anti-dumping duty order would likely lead
to continuation or recurrence of dumpi ng and of material injury five years after the date of publication of an
anti-dumping duty order.
10See Exhibit JPN-10 submitted by Ja pan to the Panel; further details may be found in Panel Report,
para. 2.3.
11The 11 periodic reviews challenged by Japan are listed in Exhibits JPN-11 through JPN-21 submitted
by Japan to the Panel; further details may be found in Panel Report, para. 2.3.
12The two sunset reviews challenged by Japan are listed in Exhibits JPN-22 and JPN-23 submitted by
Japan to the Panel; further details may be found in Panel Report, para. 2.3.

(a) By maintaining model zeroing procedures in the context of original investigations,
the United States Department of Commerce (t he "USDOC") acts inconsistently with
Article 2.4.2 of the Anti-Dumping Agreement.
(b) By using model zeroing in the anti-dumping i nvestigation of imports of cut-to-length
carbon quality steel products from Japan, the USDOC acted inconsistently with
Article 2.4.2 of the Anti-Dumping Agreement.
(c) By maintaining simple zeroing procedures in the context of original investigations,
the USDOC does not act inconsistently with Articles 1, 2.1, 2.4, 2.4.2, 3.1-3.5, 5.8,
and 18.4 of the Anti-Dumping Agreement, Articles VI:1 and VI:2 of the GATT 1994,
and Article XVI:4 of the WTO Agreement.
(d) By maintaining simple zeroing procedures in the context of periodic reviews and new
shipper reviews, the USDOC does not act inconsistently with Articles 1, 2.1, 2.4,
2.4.2, 9.1-9.3, 9.5, and 18.4 of the Anti-Dumping Agreement, Articles VI:1 and VI:2
of the GATT 1994, and Article XVI:4 of the WTO Agreement.
(e) By applying simple zeroing in the 11 periodic reviews listed in Exhibits JPN-11
through JPN-21, the USDOC did not act inconsistently with Articles 1, 2.1, 2.4, 2.4.2,
and 9.1-9.3 of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the
GATT 1994.

13The Panel used the term "model zeroing" to refe r to the methodology wh ereby the USDOC "makes
[weighted] average-to-[weighted] aver age [("W-W")] comparisons of expor t price and normal value within
individual 'averaging groups' established on the basis of physical characteristics ('models') and disregards any
amounts by which average export prices for particular models exceed normal value in aggregating the results of
these multiple comparisons to calculate a weighted average margin of dumping." (Panel Report, para. 7.2)
(footnote omitted)
14The Panel used the term "simple zeroing" to refer to the methodology whereby the USDOC
"determines a weighted average margin of dumping based on [weighted] average-to-transaction [("W-T")] or
transaction-to-transaction [("T-T")] comparisons between export price and normal value and disregards any
amounts by which export prices of individual transactions exceed normal value in aggregating the results of
these multiple comparisons." (Panel Report, para 7.3)

(f) Japan has failed to make a prima facie case that, by maintaining zeroing procedures
in the context of changed circumstances reviews and sunset reviews, the USDOC acts
inconsistently with Articles 2 and 11 of the Anti-Dumping Agreement.
(g) By relying on dumping margins calculated in previous proceedings in the sunset
reviews of corrosion-resistant carbon steel from Japan and of anti-friction bearings
from Japan, the United States International Trade Commission (the "USITC") and the
USDOC did not act inconsistently with Articles 2 and 11 of the Anti-Dumping
Agreement.
15
4. On 11 October 2006, Japan notified the Dispute Se ttlement Body (the "DSB") of its intention
to appeal certain issues of law covered in the Pane l Report and certain legal interpretations developed
by the Panel, pursuant to Article 16.4 of the Understanding on Rules and Procedures Governing the
Settlement of Disputes (the "DSU"), and filed a Notice of Appeal16 pursuant to Rule 20 of the Working
Procedures for Appellate Review (the "Working Procedures").17 On 18 October 2006, Japan filed an
appellant's submission.18 On 23 October 2006, the United States notified the DSB of its intention to
appeal certain issues of law covered in the Panel Re port and certain legal interpretations developed by
the Panel, pursuant to Article 16.4 of th e DSU, and filed a Notice of Other Appeal 19 pursuant to
Rule 23 of the Working Procedures. On 26 October 2006, the United States filed an other appellant's
submission.20 On 6 November 2006, Japan and the Un ited States each filed an appellee's
submission21 and China, the European Communities, Korea, Mexico, Norway, and Thailand each
filed a third participant's submission. 22 On the same day, Argentina, Hong Kong, China, India, and
New Zealand each notified its intention to appear at the oral hearing as a third participant and to make
an oral statement.23

15See Panel Report, paras. 7.258-7.259. The Panel decided to exercise judicial economy and did not
rule on Japan's claim that maintaining model zeroing procedures in the context of original investigations was
inconsistent with Articles 1, 2.1, 2.4, 3.1-3.5, 5.8, and 18.4 of the Anti-Dumping Agreement , Articles VI:1
and VI:2 of the GATT 1994, and Article XVI:4 of the WTO Agreement. The Panel also decided to exercise
judicial economy and did not rule on Japan's claim that the use of model zeroing in the anti-dumping
investigation of imports of cut-to-length carbon qua lity steel products from Japan was inconsistent with
Articles 1, 2.4, and 3.1-3.5 of the Anti-Dumping Agreement. (Ibid., para. 7.260)
16WT/DS322/12 (attached as Annex I to this Report).
17WT/AB/WP/5, 4 January 2005.
18Pursuant to Rule 21 of the Working Procedures.
19WT/DS322/13 (attached as Annex II to this Report).
20Pursuant to Rule 23(3) of the Working Procedures.
21Pursuant to Rules 22 and 23(4) of the Working Procedures.
22Pursuant to Rule 24(1) and (3) of the Working Procedures.
23Pursuant to Rule 24(2) of the Working Procedures.

5. By letter dated 20 October 2006, Japan request ed authorization from the Appellate Body
Division hearing the appeal to correct a clerical error in its appellant's submission, pursuant to
Rule 18(5) of the Working Procedures . On 23 October 2006, the Division invited, pursuant to
Rule 18(5), all participants and third participants to comment on Japan's request. No objection to
Japan's request was received and, on 25 October 2006, the Division authorized Japan to correct the
clerical error in its appellant's submission.
6. The oral hearing in this appeal was held on 20 November 2006. The participants and the third
participants (with the exception of Argentina, Hong Kong, China, and India) presented oral arguments
and responded to questions posed by the Members of the Division hearing the appeal.
II. Arguments of the Participants and the Third Participants
A. Claims of Error by Japan – Appellant
1. Zeroing As Such in Transaction-to-Transaction Comparisons in Original
Investigations
7. Japan submits that the Appellate Body should reverse the Panel's finding that the zeroing
procedures are not "as such" inconsistent w ith Articles 2.1, 2.4, and 2.4.2 of the Anti-Dumping
Agreement and Articles VI:1 and VI:2 of the GATT 199 4 when used in transaction-to-transaction
("T-T") comparisons of export price and normal value in original investigations. Japan's appeal is
based on several arguments.
8. First, Japan submits that zeroing is inconsis tent with the definitions of "dumping" and
"margins of dumping" in Article 2.1 of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of
the GATT 1994. Pursuant to these provisions, "'dumpi ng' and 'margins of dumping' must be defined
in relation to the 'product' under investigation as a whole." 24 Thus, if an investigating authority
conducts multiple comparisons for individual trans actions or for groups of transactions, it must
aggregate "the results of all of the multiple comparisons, including those where the export price
exceeds the normal value".25 The requirement in Article 2.1 to aggregate multiple comparison results
to produce a margin of dumping for the "product" as a whole applies to all types of comparisons,
including when an investigating authority conducts model-specific weighted average normal value-to-
weighted average export price ("W-W") comparis ons, transaction-specific weighted average normal

24Japan's appellant's submission, para. 9 (referring to Appellate Body Report, US – Softwood Lumber V
(Article 21.5 – Canada) , paras. 89 and 91; Appellate Body Report, US – Zeroing (EC) , paras. 126-129;
Appellate Body Report, EC – Bed Linen , para. 53; and Appellate Body Report, US – Softwood Lumber V ,
para. 99).
25Appellate Body Report, US – Zeroing (EC) , para. 127 (quoted in Japan's appellant's submission,
para. 81).

value-to-prices of individual export transactions ("W-T") comparisons, and T-T comparisons.
26 Japan
argues that, by disregarding negative comparison re sults, "the United States' 'dumping' determination
excludes an entire category of the export transactions that form part of the 'product'". 27 According to
Japan, the United States therefore "makes a 'dumpi ng' determination solely for a part of the
investigated product, not for the product as a whole."28
9. Japan underscores that the Panel erred in finding that Article 2.1 of the Anti-Dumping
Agreement and Article VI:1 of the GATT 1994 do not re quire that dumping be defined on a "product-
wide" basis.29 Referring to the Appellate Body Report in US – Softwood Lumber V (Article 21.5 –
Canada), Japan asserts that "no inference could be drawn from the fact that [the] phrase ['all
comparable export transactions'] does not appear in relation to the [T-T] methodology", because,
under T-T comparisons, export transactions are not sub-divided into models. 30 Japan further notes
that the Appellate Body found, in that case, that the reference to "export prices" and "a comparison" in
the text of Article 2.4.2 "suggests an overall cal culation exercise involving aggregation of these
multiple transactions" 31 and therefore provides "a textual basis for the product-wide definition of
'dumping' and 'margins of dumping' in the cont ext of [T-T] comparisons in Article 2.4.2." 32 Japan
also dismisses the Panel's "'difficulty' in understa nding the phrase 'multiple comparisons ... at an
intermediate stage'" 33 as requiring an aggregation of intermediate comparisons, claiming that the
Appellate Body's finding in US – Zeroing (EC) clarified that this phrase means that aggregation is
required whenever "multiple model- or transaction-specific comparisons are made".34
10. Secondly, Japan contends that the Panel erred in accepting the United States' argument that, if
zeroing is prohibited in the context of the W-T comparison methodology set out in the second
sentence of Article 2.4.2 of the Anti-Dumping Agreement , "the use of this [methodology] will
necessarily always yield a result identical to that of a [W-W] comparison" methodology under the

26Japan's appellant's submission, para. 82 (referring to Appellate Body Report, US – Softwood
Lumber V, paras. 97-98; Appellate Body Report, US – Zeroing (EC) , para. 132; and Appellate Body Report,
US – Softwood Lumber V (Article 21.5 – Canada), paras. 89 and 122).
27Ibid., para. 11.
28Ibid.
29Ibid., para. 96.
30Ibid., para. 98 (quoting Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) ,
para. 91).
31Ibid., para. 101 (quoting Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) ,
para. 87).
32Ibid., para. 102.

first sentence.35 Japan notes that the Appellate Body rejected a similar argument made by the United
States in US – Softwood Lumber V (Article 21.5 – Canada) .36 In doing so, the Appellate Body noted
that the second sentence, "[b]eing an exception, cannot determine the interpretation of the two
methodologies provided in the first sentence". 37 The Appellate Body further noted the "considerable
uncertainty regarding how precisely th e third methodology should be applied" 38, observing that, in
that case, Japan had suggested that the W-T comp arison methodology should be applied only to those
transactions that make up the pricing pattern. In the same case, the United States had argued that it
would apply the W-T comparison methodology to tho se transactions falling within the pricing pattern
and the W-W comparison methodology to the remain ing export transactions. However, Japan points
out, "the United States failed to explain how precisely the results of the two comparison
methodologies would be combined".39
11. Turning to the requirement to make a "fair comp arison" in the first sentence of Article 2.4 of
the Anti-Dumping Agreement , Japan argues that the Appellate Body addressed, in US – Softwood
Lumber V (Article 21.5 – Canada) , "the fairness of the United States' zeroing procedures under
Article 2.4"40, and notes that "[t]he zeroing procedures at i ssue in that dispute are the same as those at
issue in the current dispute." 41 Like the Panel in this case, "the panel in US – Softwood Lumber V
(Article 21.5 – Canada) ruled that zeroing was 'fair' under Article 2.4 because it was permitted under
the 'more specific provisions of Article 2.4.2'." 42 Japan notes that the Appellate Body disagreed,
stating, inter alia , that "the introductory clause to Article 2.4.2 expressly makes it '[s]ubject to the
provisions governing fair comparison' in Article 2.4." 43 In Japan's view, "like the panel in US –
Softwood Lumber V (Article 21.5 – Canada) , the Panel in this dispute misinterpreted the relationship

35Panel Report, para. 7.127 (quoted in Japan's appellant's submission, para. 116). (emphasis added)
36Japan's appellant's submission, para. 117 (referring to Appellate Body Report, US – Softwood
37Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 97 (quoted in
Japan's appellant's submission, para. 117).
38Japan's appellant's submission, para. 118 (quoting Appellate Body Report, US – Softwood Lumber V
(Article 21.5 – Canada), para. 98).
39Ibid.
40Ibid., para. 128.
41Ibid.
42Ibid., para. 129 (referring to Panel Report, US – Softwood Lumber V (Article 21.5 – Canada) ,
para. 5.75).
43Ibid. (quoting Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada), para. 136).

between Articles 2.4 and 2.4.2."
44 According to Japan, "[t]he Panel should have commenced its
analysis under Article 2.4, not under Article 2.4.2."45
12. Japan refers to the reasoning of the Appellate Body in US – Softwood Lumber V (Article 21.5
– Canada) and submits that, on the same grounds, th e Appellate Body should find that the
maintenance of the United States' zeroing procedures is "as such" inconsistent with Article 2.4 in this
case. In addition, Japan submits that the salient features of the zeroing procedures further support the
Appellate Body's conclusion that zeroing is unfair. 46 Japan recalls that, "[u]nder the zeroing
procedures, the United States makes an initial comp arison for all comparable export transactions, but
in aggregating the comparison results into an overall margin, it includes solely the positive
comparison results, disregarding negative results . However, the dumping determination resulting
from this 'partial' comparison of selected transactions is then applied to all export transactions on a
product-wide basis for purposes of: [making] an inju ry determination; deciding whether to terminate
or pursue an investigation; justifying the im position of duties; and assessing the amount of duties
due."47 Japan concludes that, "[i]n light of these featur es, the 'partial' comparison that occurs pursuant
to the zeroing procedures is 'inherently biased' and not 'fair'."48
2. Zeroing As Such in Periodic Reviews and New Shipper Reviews
13. Japan also requests that the Appellate Body reverse the Panel's finding that zeroing, as it
relates to periodic revi ews and new shipper revi ews, is not "as such" inconsistent with Articles 2.1,
2.4, 9.1-9.3, and 9.5 of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the GATT 1994.
14. In relation to periodic reviews, Japan submits that the chapeau of Article 9.3 requires a
comparison of "'the anti-dumping duties collected on all entries of the subject product from a given
exporter or foreign producer with that exporter's or foreign producer's margin of dumping for the
product as a whole' to ensure that the total am ount of the former does not exceed the latter." 49
Pursuant to Article 11.1 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994, "anti-
dumping duties may be imposed 'to counteract dumping', which arises because of a 'foreign producer's

44Japan's appellant's submission, para. 130 (referring to Panel Report, US – Softwood Lumber V
(Article 21.5 – Canada), para. 5.75).
45Ibid., para. 130.
46Ibid., para. 134.
47Ibid. (referring to Appellate Body Report, US – Softwood Lumber V, para. 99).
48Ibid., para. 134.

or exporter's pricing behaviour', and not that of an importer."50 In other words, "[a]lthough duties may
be imposed on and collected from importers, margins of dumping are determined for foreign
exporters or producers ."51 Japan points out that the Appellate Body has found that "when multiple
comparisons are made in a periodic review in a retrospective assessment system, the results of all
comparisons must be aggregated to establish the margin of dumping", and that it reached a similar
conclusion regarding the refund of duties under a prospective system.
52 According to Japan, "[t]he
Panel, therefore, erred in finding that the im position of duties on individual import transactions
constitutes the determination of a margin of dum ping for those transactions, and it incorrectly
examined the broader contextual implications of Article 9 ... in the context of a [prospective normal
value] system." 53 Japan submits that Article 9.3 requir es investigating authorities to calculate a
margin of dumping for the product as a whole for a gi ven exporter or foreign producer, and to ensure
that the total amount of duties imposed does not exceed that margin of dumping. 54 According to
Japan, the United States violates these requirements by virtue of zeroing, which causes "the total
amount of dumping [to be] overstated by the amount of excluded negative values".
55 In consequence,
the United States collects "more definitive anti-dumping duties than it would absent zeroing". 56 Japan
submits, therefore, that the United States acts inconsiste ntly with Articles 2.1, 2.4, 9.1, 9.2, and 9.3 of
the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the GATT 1994 by applying a zeroing
methodology that results in "amounts of assessed anti-dumping duties that exceed[] the foreign
producers' or exporters' margins of dumping".57
15. In a similar vein, with respect to new shipper reviews, Japan underscores that the Panel erred
in finding that, when the margin of dumping for a new shipper review is de termined by using a W-T
comparison, "there is no general requirement to determine dumping and margins of dumping for the
product as a whole". 58 Japan emphasizes that, under Article 9.5, an authority must "aggregate the
results of all of the multiple comparisons, includi ng those where the export price exceeds the normal

50Japan's appellant's submission, para. 155 (referring to Appellate Body Report, US – Zeroing (EC) ,
para. 129). (emphasis by Japan)
51Ibid. (original emphasis)
52Ibid., para. 159 (referring to Appellate Body Report, US – Zeroing (EC) para. 132; and Appellate
Body Report, US – Softwood Lumber V (Article 21.5 – Canada), para. 112).
53Ibid., para. 161. (footnote omitted)
54Ibid., para. 166.
55Ibid., para. 167.

value."
59 According to Japan, such "interpretation [is] also based on the definition of 'dumping' in
Article VI:1 of the GATT 1994 and of 'margin of dumping' in Article VI:2." 60 Accordingly, Japan
requests the Appellate Body to reverse the Panel's finding that the zeroing procedures are not "as
such" inconsistent with Articles 2.1, 2.4, and 9.5 of the Anti-Dumping Agreement and Articles VI:1
and VI:2 of the GATT 1994, when maintained for use in new shipper reviews.61
3. Zeroing As Applied in Periodic Reviews and Sunset Reviews
16. For the same reasons as those set out above, Japan submits that the Panel erred in finding that
zeroing, as applied by the USDOC in the 11 periodic review determinations at issue in this case, is not
inconsistent with Articles 2.1, 2.4, 9.1, 9.2, and 9.3 of the Anti-Dumping Agreement and Articles VI:1
and VI:2 of the GATT 1994. Japan therefore requests the Appellate Body to reverse these findings
and to find, instead, that the United States acted inconsistently with its obligations under these
provisions.
62
17. Japan further requests the Appellate Body to re verse the Panel's finding that the two specific
sunset review determinations identified in Exhi bits JPN-22 and JPN-23 are not inconsistent with
Articles 2 and 11 of the Anti-Dumping Agreement. According to Japan, the Panel's only reason for
rejecting Japan's "as applied" sunset review cl aims was its "incorrect finding that zeroing is
permissible in periodic reviews under Article 9.3". 63 Japan disputes this finding and argues, instead,
that these sunset review determinations are w ithout "proper foundation", because the USDOC relied
on "legally flawed" margins from periodic reviews calculated using zeroing. 64 Japan requests the
Appellate Body to reverse the Panel's finding that the United States was entitled to rely on margins of
dumping calculated in periodic reviews using zeroing in the two sunset reviews at issue in this case
and to find, instead, that the United States act ed inconsistently with Article 11.3 of the Anti-Dumping
Agreement.65 Furthermore, "[b]ecause the violations of Article 11.3 stem from the reliance upon
margins of dumping calculated using the zeroing procedures that violated Articles 2.1 and 2.4 of the

59Japan's appellant's submission, para. 182 (quoting Appellate Body Report, US – Zeroing (EC) ,
para. 127).
60Ibid.
61Ibid., para. 190.
62Ibid., para. 178.
63Ibid., para. 196.
64Ibid., paras. 191 and 193.
65Ibid., paras. 197.

Anti-Dumping Agreement and Articles VI:1 and VI:2 of the GATT 1994, Japan submits the two
challenged sunset reviews also violate these provisions."66
B. Arguments of the United States – Appellee
1. Zeroing As Such in Transaction-to-Transaction Comparisons in Original
Investigations
18. The United States argues that the Panel was correct in finding that Articles 2.1, 2.4, and 2.4.2
of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the GATT 1994 do not establish a
general prohibition of zeroing. In the United Stat es' view, Japan's interpretation of these provisions
contradicts, for several reasons, the ordinary m eaning, the negotiating history, and the Appellate
Body's interpretation of the relevant treaty texts.
19. First, the United States considers that the Pane l was correct in concluding that Article 2.1 of
the Anti-Dumping Agreement and Article VI of the GATT 1994 do not require that investigating
authorities establish margins of dumping "for the 'product' under investigation as a whole". 67 T h e
United States disagrees with Japan's ar gument that the Appellate Body, in US – Softwood Lumber V
(Article 21.5 – Canada) , found that "dumping" and "margins of dumping" cannot occur at a
transaction-specific level, because the phrases "pr oduct as a whole" and "product under investigation
as a whole" did not form part of the Appellate Body's reasoning in that case. 68 The United States
further submits that "because the phrase 'all comparable export transactions' in Article 2.4.2 is limited
to the [W-W] [comparison] context, the 'product as a whole' rationale for precluding zeroing in the
original US – Softwood Lumber [V] report is likewise limited to the [W-W] context."69 For the United
States, "the terms 'dumping' and 'margin of dum ping' do not necessarily requi re the aggregation of
[T-T] comparisons and the provision of an offset for one transaction against another." 70 Therefore,
according to the United States, the Panel was correct in finding that the ordinary meaning, context,
and negotiating history of Article 2.1 of the Anti-Dumping Agreement and Article VI of the
GATT 1994 "provide[] no basis for concluding that zer oing is prohibited by requiring an examination
of aggregated transactions."71

66Japan's appellant's submission, para. 197. (footnote omitted)
70Ibid., para. 18.

20. Secondly, the United States considers that the Panel's textual analysis of Article 2.4.2 "rests
on a permissible interpretation" of the Anti-Dumping Agreement.
72 The United States submits that the
Panel was correct in concluding that dumping can occu r at a transaction-specific level, since "a [T-T]
comparison is inherently conducted at the level of an individual transaction, and Article 2.4.2 does not
speak to the methodology for converting those indi vidual comparisons into 'margins of dumping'". 73
The United States considers that the use of the pl ural in "margins of dumping" in the text of
Article 2.4.2 implies that "there is one comparis on of normal value and export price, that each such
comparison is a margin of dumping, and that all su ch comparisons constitute 'margins of dumping'". 74
Therefore, according to the United States, "there is no basis for concluding that a [T-T] comparison
must produce one margin, or that in calculating any such margin, the negative results from one
comparison must be offset against the positive results from another."75
21. In addition, the United States submits that th e Panel was correct in finding that a general
prohibition of zeroing would deprive the me thodology provided under the second sentence of
Article 2.4.2 of its effectiveness. For the United States, the Panel correctly concluded that "the
principle of effective treaty interpretation mean t that zeroing had to be permitted [in W-T
comparisons] in order to avoid rendering the [W-T] comparison a nullity" 76, given that, absent
zeroing, W-T and W-W comparisons would produce the same results. The United States recalls that
Japan tried to rebut this argument before the Panel by stating that the "results of a[] [W-W] and [W-T]
comparison would differ because the inves tigating authority would only examine a subset of export
transactions in a[] [W-T] comparison." 77 When confronted with ev idence that the USDOC "would
examine all transactions, along with the Panel's interim re port which explained that there is no basis
in Article 2.4.2 for examining a subset of such transactions, Japan withdrew its 2.4.2 claim, rather
than substantiate it." 78 Further, the United States dismisses Japan's argument that the "mathematical
equivalence" argument rests on an "untested hypothesis" 79, by referring to evidence in the US –

72United States' appellee's submission, para. 24. (footnote omitted)
74Ibid., para. 29. (footnote omitted)
75Ibid., para. 32. (footnote omitted)
77Ibid., para. 39 (referring to Japan's oral statement at the first Panel meeting, para. 52). (original
emphasis)
78Ibid., para. 41. (original emphasis)
79Ibid., para. 37 (referring to Japan's appellant's submission, para. 117, where Japan quotes the
Appellate Body Report in US – Softwood Lumber V (Article 21.5 – Canada) , at para. 97, as rejecting the so-
called "mathematical equivalence" argument on the basis that it "rests on a non-tested hypothesis").

Softwood Lumber V (Article 21.5 – Canada) dispute that demonstrates, according to the United States,
that the European Communities has actually used the W-T comparison in investigations.80
22. Thirdly, the United States disagrees with Japan 's argument that the Panel concluded that
zeroing in T-T comparisons was not inconsistent with the "fair comparison" requirement in Article 2.4
because zeroing was permitted under the "more specific" provisions of Article 2.4.2. 81 For the United
States, the Panel examined the fair comparison requirement in Article 2.4 as an "independent legal
obligation"82, and, on that basis, reasoned that "a gene ral prohibition on zeroing in Article 2.4 was not
a proper interpretation of the [ Anti-Dumping Agreement] because it would render the second sentence
of Article 2.4.2 inutile." 83 The United States dismisses Japan's argument that zeroing is unfair
because it "artificially inflates the magnitude of dumping", as predicated on the assumption that
zeroing is prohibited. 84 According to the United States, zer oing does not produce an "artificially
inflated" magnitude of dumping but, rather, the correct magnitude of the margin of dumping. 85 The
United States further submits that the "fair comparis on" requirement must be neutrally defined, as the
Appellate Body itself has recognized "the 'need' to balance ... the rights and obligations of respondents
with those of other interested parties", including the domestic industry.86
2. Zeroing As Such in Periodic Reviews and New Shipper Reviews
23. The United States requests the Appellate Body to uphold the Panel's finding that zeroing is
consistent with Article 9.3 of the Anti-Dumping Agreement. The United States agrees with the Panel's
conclusion that "Article 9.3 cont ains no language requiring such an aggregate examination of export
transactions in determining the final liability fo r payment of anti-dumping duties under Article 9.3.1
or in determining the amount, if an y, of refund due under Article 9.3.2." 87 In the United States' view,
the Panel took note of the "important contextual s upport" provided by Article 9.4(ii) and prospective
normal value systems in its examination of Article 9. 88 The United States agrees with the Panel's
rejection of Japan's argument that "in a prospective normal value system final liability for payment of

80United States' appellee's submission, para. 44 (referring to Case T-274/02, Ritek Corp. and Prodisc
Technology Inc. v. Council of the European Union , 24 October 2006, para. 94, annexed as Attachment-1 to the
United States' appellee's submission).
81Ibid., para. 48.
82Ibid., para. 49.
83Ibid., para. 50.
84Ibid., para. 51.
85Ibid.
86Ibid., para. 52 (referring to Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews,
para. 243).
88Ibid., para. 55.

antidumping duties must be determined through a review under Article 9.3.2."
89 Like the Panel, the
United States believes that it would be "inconsistent with the prospective nature of such a system" if
the liability for duty payments "were calculated on the basis of a retrospective examination of
transactions".90 Therefore, according to the United States, "[t]he margin of dumping and the ceiling
on the liability for antidumping duties are mathematically equivalent". 91 This, for the United States,
corroborates the Panel's conclusion that "margins [of dumping] may be calculated on the basis of a
single transaction, rather than an aggregation of transactions."92
24. The United States considers that Japan's argum ents on appeal are based on the "product as a
whole" theory, which the Panel correctly found to be limited to W-W comparisons in original
investigations.93 Contrary to Japan's assertion, the Un ited States argues that the Panel made no
finding that margins of dumping under Article 9.3 are determined on an im porter-specific basis.
Rather, the United States submits that the Panel conc luded that Article 9 does not require aggregation
of multiple export transactions, because "there is no indication in the text of the Anti[-D]umping
Agreement that the drafters intended to create a sy stem of duty liability on the part of importers by
establishing the ceiling for such liability on the totality of transactions by exporters." 94 The United
States also challenges Japan's assertion that the Pa nel confused margins of dumping with the amount
of anti-dumping liability. According to the Unite d States, "[t]he Panel carefully examined the
difference between the margin of dumping and the amount of the duty, particularly noting that in a
prospective normal value system, final liability for payment of antidumping duties attaches at the time
of importation, rather than retrospectively."
95
25. The United States further submits that "Japan's arguments [with respect to] Article 2.4 in
assessment reviews are the same as those [with resp ect to] investigations, and for the same reason,
they [should] fail."96
26. The United States agrees with Japan that the reasons that led the Panel to conclude that the
use of zeroing in periodic reviews is consistent with Article 9.3 of the Anti-Dumping Agreement also
led to the conclusion that zeroing in new shi pper reviews is consistent with Article 9.5.97 The United

90Ibid. (quoting Panel Report, para. 7.204).
91Ibid., para. 56.
92Ibid., para. 60.
93Ibid., para. 61.
94Ibid., para. 64. (original emphasis)
96Ibid., para. 69.

States, however, disagrees with Japan that the Panel failed to analyze the impact of the text,
"determining individual margins of dumping for any exporters or producers" who have not exported
during the period of investigation, in Article 9. 5 when concluding that zeroing was permitted in the
context of new shipper reviews.98 For the United States, the Panel did precisely that when it expressly
found that, even "in conjunction with a requirement to establish margins of dumping for exporters or
foreign producers", "there is no general requireme nt to determine dumping and margins of dumping
for the product as a whole." 99 The United States further submits that "[n]othing in the text of
Article 9.5 implies that the 'individual margins of dumping' are necessarily and always a 'single'
dumping margin determined on the basis of the 'product as a whole' for each exporter or producer."100
3. Zeroing As Applied in Periodic Reviews and Sunset Reviews
27. The United States requests the Appellate Body to uphold the Panel's findings that it did not
act inconsistently with Articles 2.1, 2.4, 9.1, 9.2, and 9.3 of the Anti-Dumping Agreement in applying
zeroing in the 11 periodic reviews challenged by Japan. 101 The United States considers that these
findings are merely consequential to Japan's appeal with respect to the Panel's findings that zeroing in
the context of duty assessment proceedings is not " as such" inconsistent with these provisions. For
the same reasons as those adduced with respect to Japan's appeal of the Panel's "as such" findings
under Articles 2.1, 2.4, 9.1, 9.2, and 9.3 of the Anti-Dumping Agreement, the United States submits
that the Panel's conclusions with respect to Japan's "as applied" claims in the 11 periodic reviews at
issue in this dispute "should be affirmed".102
28. Regarding zeroing "as applied" in the context of the two sunset review proceedings at issue in
this dispute, the United States contends that the Panel did not err in its conclusion that zeroing is
permissible in determining margins of dumping in assessment reviews. On this basis, the United
States submits that the Panel's conclusions with r espect to Japan's "as app lied" claims in the two
sunset reviews at issue in this dispute "should be affirmed".103
C. Claims of Error by the United States – Other Appellant
29. The United States challenges the Panel's finding that the zeroing procedures used by the
USDOC, as they relate to original investigations in which margins of dumping are calculated on the

98See United States' appellee's submission, para. 71.
100Ibid., para. 73.
101See Exhibits JPN-11 through JPN-21 submitted by Japan to the Panel.
103Ibid., para. 75.

basis of T-T or W-T comparisons, constitute a me asure that can be challenged "as such" in WTO
dispute settlement. The United States' challenge is based on several arguments.
30. First, the United States contends that the Panel failed to make an objective assessment of the
matter before it—including an objective assessment of the facts of the case—as required by Article 11
of the DSU, by concluding that a single unwritten ru le or norm exists by virtue of which the USDOC
will apply zeroing in any anti-dumping proceeding, regardless of the comparison methodology used.
In the United States' view, the evidence relied on by the Panel "does not support the proposition that
there are rules or norms taken by the United States concerning the use of zeroing as it relates to [T-T]
and [W-T] comparisons in investigations."
104 In support of its view, the United States points out that
it has never applied the W-T comparison methodology in original investigations, and has only once
applied the T-T comparison methodology, after the Pane l in this dispute was established. Moreover,
the USDOC has "never pronounced on how it would conduct such comparisons, including whether it
would or would not 'zero' in connection with those comparisons."
105
31. Referring to the Appellate Body Report in US – Zeroing (EC) , the United States further
emphasizes that, "particularly when the measure alle ged is unwritten, the evidence of the existence of
a measure must in fact relate to the full scope of the measure claimed, and that there can be no finding
of such a measure where su ch evidence does not exist." 106 The United States argues that, "[j]ust as a
single measure may often consist of elements that may themselves be considered measures, the
Panel's error may be viewed either as having fa iled to identify the precise content of a single
measure—that is, whether any 'zeroing procedures' ma intained by [the USDOC] actually relate to
[T-T] and [W-T] comparisons in investigations—o r as having failed to establish the existence of
separate [USDOC] 'zeroing procedures' as they re late to each of these comparison[] [methodologies]
in investigations."
107 The United States notes in this regard th at "the approach taken by the panel and
Appellate Body in US – Zeroing (EC), and by Japan in its consultation request [in this dispute], was to
consider the existence of separate measures for each context."108
32. The United States also submits that the Panel di d not discuss the types of investigations in
which the W-W, T-T, and W-T comparison methodol ogies can be used, and whether the USDOC has

104United States' other appellant's submission, para. 26. The United States does not challenge the
Panel's finding regarding zeroing procedures as they relate to original investigations based on W-W
comparisons. The United States acknowledges that "there is at least an evidentiary record in connection with
those questions". (Ibid., para. 3)
105Ibid., para. 2.
106Ibid., para. 14. (footnote omitted)
107Ibid., footnote 22 to para. 14.
108Ibid.

engaged in any of these comparisons in investiga tions, periodic reviews, and changed circumstances
reviews. Moreover, according to the United Stat es, the Panel Report provides no evidence that the
USDOC's comments in the periodic review of anti -friction bearings, to which the Panel referred,
pertain to T-T or W-T proceedings in investigations.109
33. The United States further notes that the statements made by the United States Department of
Justice that the Panel relied on were made in c onnection with cases that did not involve T-T or W-T
comparisons in investigations. 110 Moreover, "none of [these] statements does anything more than
describe what [the USDOC] had done in the p ast—in connection with [W-W] comparisons in
investigations and [W-T] comparisons in reviews." 111 According to the United States, the same
applies to the statements cited by the Panel from the United States Congress and the United States
Court of International Trade.112
34. The United States concludes that "[t]he eviden ce put forward by Japan in this proceeding
simply does not support the Panel's finding that [the USDOC] maintains an unwritten zeroing measure
regardless of the basis of the dumping comparison and in all antidumping proceedings." 113 Moreover,
"[t]he Panel made no effort to 'carefully examin e the concrete instrumentalities that evidence the
existence of the purported "rule or norm"' relating to [the USDOC]'s use of zeroing in the context of
[T-T] and [W-T] comparisons in investigations , because there are no such instrumentalities." 114 As a
result, the United States argues that the Panel "faile d to make an objective assessment of the matter",
as required by Article 11 of the DSU.115
35. The United States further notes that the Panel re lied on the criteria set forth by the Appellate
Body in US – Zeroing (EC) to determine the existence of a measur e that is challengeable "as such":
whether the rule or norm embodied in that measur e is attributable to the responding Member; the
precise content of the rule or norm; and whethe r the rule or norm has general and prospective
application.116 The United States submits that the term "a ttributable to" means "taken" by a Member
within its territory, because Article 3.3 of the DS U refers to a measure "taken" by a Member and
Article 4.2 refers to a measure "taken" within th e territory of a Member. According to the United

109United States' other appellant's submission, para. 29 and footnote 45 thereto.
110Ibid., para. 30.
111Ibid.
112Ibid.
113Ibid., para. 31.
114Ibid. (quoting Appellate Body Report, US – Zeroing (EC), para. 198).
115Ibid., para. 31.
116Ibid., para. 4 (referring to Panel Report, para. 7.43; and Appellate Body Report, US – Zeroing (EC),
para. 198).

States, this suggests that "as such" challenges of "a mere abstract pr inciple" are not contemplated by
the DSU.
117 Thus, "the Panel exceeded its terms of re ference by including within the scope of the
dispute measures not taken by the United States."118
36. The United States further argues that the zeroing procedures as they relate to T-T and W-T
comparisons in original investigations are not w ithin the Panel's terms of reference, because Japan
failed to identify these measures in its request for consultations.119 The United States notes that it "did
not raise this issue in the Panel proceedings because it was focusing on the fact that these 'measures'
[did] not exist at all." 120 However, "a failure to consult is a jurisdictional matter and, as such, can be
raised at any time."121
37. As a separate matter, the United States requests the Appellate Body to declare moot the
Panel's findings regarding Articles 1, 2.1, 2. 4, 2.4.2, 3.1-3.5, 5.8, and 18.4 of the Anti-Dumping
Agreement, Articles VI:1 and VI:4 of the GATT 1994, and Article XVI:4 of the WTO Agreement as
they apply to T-T comparisons in original investig ations, arguing that these findings were made in
respect of a measure that did not fall within the Panel's terms of reference.122
D. Arguments of Japan – Appellee
38. Japan requests the Appellate Body to reject the United States' other appeal in its entirety and
to uphold the Panel's finding that the zeroing proced ures constitute a measure that can be challenged
"as such" in WTO dispute settlement proceedings , including as they relate to W-T and T-T
comparisons in original investigations. Japan cons iders that, in reaching its conclusion that a single
rule or norm exists that mandates the application of zeroing in all circumstances, the Panel conducted
an assessment of the facts and evidence as required by Article 11 of the DSU, and acted within the
limits of its discretion as the "trier of facts". Jap an submits the following reasons in support of its
contention.
39. First, Japan contends that the United Stat es failed to produce any evidence showing that
differences between the three specific comparison me thodologies exist as far as zeroing is concerned
that required the Panel to undertake a comparison- specific assessment of the evidence before it.

117United States' other appellant's submission, para. 6 (referring to Appellate Body Report, US –
118Ibid., para. 31.
119Ibid., para. 18.
120Ibid., footnote 29 to para. 18.
121Ibid. (referring to Appellate Body Report, US – Carbon Steel, para. 123).
122Ibid., para. 33.

According to Japan, the differences in comparis on methodologies and anti-dumping proceedings do
not "imply any difference in the operation or appli cation of the zeroing procedures that requires an
independent assessment whether a rule or norm exists for each setting." 123 Thus, there was "no need
for the Panel to have parsed the evidence as to each specific comparison method[ology] and
procedural [context]" in its determination that there exists a single rule or norm that can be challenged
as such.124 Japan argues that, instead of introducing evid ence that demonstrates that the content or
operation of the zeroing measure would be different in the W-T and T-T comparison methodologies in
original investigations, the United States merely refers to statements by the Appellate Body, the Panel,
and Japan to support its contention that the Pa nel should have assessed the evidence before it
specifically for each type of proceeding and for each comparison methodology. 125 Japan submits that
none of these statements establish that the Panel should have assessed the ev idence exclusively with
respect to the specific comparison methodology to which it related.
40. Secondly, Japan submits that the evidence before the Panel was sufficient for it to conclude
that the zeroing rule or norm covers W-T and T-T comparisons in original investigations. Japan
maintains that "long-standing GATT and WTO jurispr udence holds that actual application of the rule
or norm is not required", although th e Appellate Body recognized, in US – Zeroing (EC) , that
"systematic application" may be relevant in determining that an unwritten rule or norm exists, and can
be challenged as such. 126 In any event, Japan argues that "[ t]he Panel had before it considerable
evidence of the actual and ... systematic applica tion of the [United States'] zeroing procedures in
numerous cases, across all procedural contexts that have arisen thus far." 127 Specifically, Japan
presented to the Panel evidence demonstrating that the USDOC included the zeroing procedures in the
dumping determination in an investigation invo lving the W-W comparison methodology, in an
investigation involving the T-T comparison met hodology, in 11 periodic reviews (involving W-T
comparisons), in one new shipper review (involving the W-T comparison methodology), and in two
sunset reviews (in which the USDOC relied on zeroe d margins of dumping calculated on the basis of
W-W comparisons). In each of these cases, the subs tantive content of the zeroing procedures applied
by the USDOC was identical: "the USDOC disregarded negative comparison results where export
price exceeds normal value."
128 In these circumstances, Japan argues that "the Panel's reliance on the
'systematic application' of the zeroing procedures in every procedural context that has arisen to date

124Ibid., para. 67.
125See Ibid., paras. 72-85.
126Ibid., para. 92.
127Ibid., para. 93.
128Ibid., para. 95.

was objective and well within the bounds of its discretion."
129 Japan also considers that the Panel
acted within its discretion in relying on ot her evidence presented by Japan—which included, inter
alia, statements by government agencies and courts in the United States—to support its conclusion
that "the zeroing procedures are always an element in [United States] anti-dumping proceedings, no
matter what the procedural context or comparison method[ology] employed."130
41. Thirdly, Japan disputes the United States' asserti on that Japan's request for consultations did
not identify the zeroing procedures in the context of T-T and W-T comparisons in original
investigations. According to Japan, its request fo r consultations "broadly identifies, as one of the
'measures' subject to consultati ons, the United States' practice of 'zeroing', or the treatment of
'transactions with negative dumping margins as having margins equal to zero in determining weighted
average dumping margins'." 131 Therefore, in identifying the m easure subject to consultations, Japan
did not limit its request to any particular compar ison methodology. Japan concludes that the zeroing
procedures as they relate to T-T and W-T comparisons in original investigations were properly within
the Panel's terms of reference in this dispute.132
42. Finally, Japan contests the United States' request for the Appellate Body to declare moot the
Panel's findings with respect to the consistency of the zeroing procedures in T-T comparisons in
original investigations with Articles 1, 2.1, 2.4, 2.4.2, 3.1-3.5, 5.8, and 18.4 of the Anti-Dumping
Agreement.
E. Arguments of the Third Participants
43. Pursuant to Rule 24(2) of the Working Procedures, Argentina, Hong Kong, China, India, and
New Zealand chose not to submit a third participant' s submission but attended the oral hearing. New
Zealand, in its statement at the oral hearing, addr essed issues relating to Articles 2.4.2, 3, and 3.1 of
the Anti-Dumping Agreement. New Zealand argued, inter alia, that a general prohibition of zeroing
would deprive the three comparison methodologies set out in Article 2.4.2 of their full effect. New
Zealand also argued that non-dumped transactions should be treated consistently throughout the
investigation, including for purposes of calculating margins of dumping and making an injury
determination under Article 3.

129Japan's appellee's submission, para. 101. (footnote omitted)
130Ibid., para. 108. (footnote omitted)
131Ibid., para. 21.
132Ibid., para. 22. (footnote omitted)

1. China
44. China argues that the Panel erred in finding th at the zeroing procedures are not "as such"
inconsistent with Articles 2.1, 2.4, and 2.4.2 of the Anti-Dumping Agreement and Articles VI:1
and VI:2 of the GATT 1994 when used in T-T compar isons in original investigations. China submits
that the T-T comparison methodology fulfils the same function as the W-W comparison methodology,
and "also involves multiple comparisons if the produ ct under investigation has more than one export
transaction."133 Referring to the Appellate Body Report in US – Softwood Lumber V , China
emphasizes that Articles 2.1 and 2.4.2 of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of
the GATT 1994 require that "dumping" and "margins of dumping" be established "for the product
under investigation as a whole ".134 In China's view, this indicates that investigating authorities are
required to aggregate intermediate comparison results to establish a margin of dumping for a product.
China further argues that the term "margins of dumping" has "the same meaning for [W-W] and [T-T]
comparisons"135, and that prohibiting zeroing in the context of W-W comparisons while permitting it
in T-T comparisons "is illogic[al]". 136 Moreover, China maintains th at the zeroing procedures in the
context of T-T comparisons in original investiga tions are inconsistent with the "fair comparison"
requirement of Article 2.4, because zeroing introduces an "inherent bias" that may not only distort the
magnitude of a dumping margin, but may also lead to a wrongful finding of the very existence of
dumping.137
45. China further argues that the requirement im posed by Article 2.1 that "dumping" and
"margins of dumping" must be established for the product as a whole applies to the entire
Anti-Dumping Agreement . Referring to the findings of the Appellate Body in US – Zeroing (EC) ,
China submits that Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994
establish that the margin of dumping for the product as a whole "operates as a 'ceiling' for the [total]
amount of [anti-dumping duties]" that may be collected in periodic reviews.
138 China argues that, by
systematically disregarding all negative comparison results, the zeroing procedures result in an
assessment of an anti-dumping duty that exceeds th e foreign producers' or exporters' margins of
dumping. This, according to China, is inconsistent with Articles 2.1, 9.1, 9.2, and 9.3 of the
Anti-Dumping Agreement and Articles VI:1 and VI:2 of the GATT 1994.

133China's third participant's submission, para. 23.
134Ibid., para. 25. (original emphasis)
135Ibid., para. 30.
136Ibid., para. 31.
137Ibid., para. 45 (quoting Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review ,
para. 135). See also para. 48.
138Ibid., para. 58.

46. China further submits that "the USDOC['s] zeroing procedures in new shipper reviews are
inconsistent with Articles 2.1 and 9.5 of the [Anti-Dumping] Agreement and Articles VI:1 and VI:2 of
the GATT 1994."
139 The term "individual margins of dumping" under Article 9.5 also refers to a
margin of dumping that "must be established for the product under investigation as a whole".140
2. European Communities
47. The European Communities argues that the Pa nel erred in concluding that zeroing is
permissible when calculating margins of dumping on the basis of T-T comparisons in original
investigations. For the European Communities, Articles 2.1, 2.4, and 2.4.2 of the Anti-Dumping
Agreement require that dumping margins are always calculated for the product as a whole and,
therefore, when only "certain export transactions" are selected, the dumping margin is not calculated
"for the product as a whole".
141 In this regard, the European Communities underscores that "[t]he
results of [T-T] intermediate comparisons are not margins of dumping for the product as a whole."142
48. The European Communities submits that the W-T comparison methodology in the second
sentence of Article 2.4.2 is an exception to the "normal" rule in the first sentence of that provision. It
provides three criteria for identifying a pattern when dumping is targeted to certain purchasers,
regions, or time periods. 143 According to the European Comm unities, this exceptional methodology
"contains within it the possibility of focusing on the export transactions making up the targeted
dumping pattern."144 However, the European Communities subm its that, in aggregating intermediate
results to calculate a margin of dumping for the produ ct as a whole, "an investigating authority cannot
effectively select certain export transactions as th e basis for the calculation of the dumping margin,
excluding others, in whole or in part, other than on the basis of the three express targeted dumping
criteria."145
49. The European Communities further argues that the Panel erred in finding that zeroing was
permissible under the T-T comparison methodolog y, because it did not consider properly the
Appellate Body Report in US – Softwood Lumber (Article 21.5 – Canada) . The European
Communities points out that, in that case, the Appellate Body found that the use of zeroing when
using the T-T methodology in original proceedings is inconsistent with Artic les 2.4 and 2.4.2 of the

139China's third participant's submission, para. 15.
140Ibid., para. 68.
141European Communities' third participant's submission, para. 2. (emphasis omitted)
142Ibid., para. 5. (original emphasis)
143See Ibid., paras. 6-7.
144Ibid., para. 7.
145Ibid.

Anti-Dumping Agreement.146 Similarly, the European Communities argues that the Panel erred in
finding that zeroing in the context of duty assessment proceedings is not inconsistent with Article 9.3
of the Anti-Dumping Agreement and Article VI:2 of the GATT 199 4, because the Appellate Body
concluded in US – Zeroing (EC) that the use of zeroing when applying the W-T comparison
methodology in assessment proceedings is inconsistent with those provisions.147
50. Noting that Japan does not appeal the Panel's fi ndings with respect to Article 2.4.2 of the
Anti-Dumping Agreement in the context of duty assessment proceedings, the European Communities
argues that the provisions of Article 2.4.2 apply whenever an investigating authority determines
margins of dumping, including duty assessment pro ceedings. The European Communities draws this
conclusion from the ordinary meaning of the phrase "the existence of margins of dumping during the
investigation phase" in Article 2.4.2, which "r efers to a period of time during which a dumping
margin exists (that is, an investigation period), not a period of time during which it is established." 148
The European Communities finds additi onal support for this position in "the immediate context of
Article VI:2 of the GATT 1994, which defines the term 'margin of dumping' [as] a unitary concept"
throughout the Anti-Dumping Agreement.149
51. The European Communities further asserts that Articles 5, 11.4, and 18, as well as numerous
cross-references between Articles 5, 3.3, 7, and 10 of the Anti-Dumping Agreement , provide no
support for the position that the word "investigati on" is to be interpreted as having a "special
meaning" limited to original investigations under Article 5. 150 For the European Communities, "there
is no reason why the unitary concept of 'margi n of dumping' should change during an assessment
proceeding, when a contemporaneous margin of dumping for each exporter is investigated and
determined".151 For the same reason, the European Communities maintains that "zeroing in
newcomer proceedings under Article 9.5 of the Anti-Dumping Agreement, whether using the [W-T]
method[ology] or some other method[ology], is inc onsistent with Articles 9.5, 2.1 and 2.4 of the
Anti-Dumping Agreement, and Articles VI:1 and VI:2 of the GATT 1994."152
52. With respect to prospective normal value sy stems, the European Communities argues that
"[t]he possibility of imposing duties on the basi s of a prospective normal value indicated in

146European Communities' third participant's submission, para. 10 (referring to Appellate Body Report,
US – Softwood Lumber V (Article 21.5 – Canada), para. 147).
148Ibid., paras. 12 and 13. (original emphasis)
149Ibid., para. 15. (original emphasis)
150Ibid., para. 16.
151Ibid., para. 17. (original emphasis)
152Ibid., para. 18.

Article 9.4(ii) is subject always to the possibility of refund under Article 9.3.2."
153 For the European
Communities, this shows that investigating authorities may initially capture targeted dumping, subject
to the possibility of refunds under Article 9.3.2.
53. The European Communities agrees with Japan that "any measure adopted following a sunset
proceeding in which the investigating authority determines or relies on a margin of dumping
calculated using zeroing is inconsistent with Articles 11.3, 2.1 and 2.4 of the Anti-Dumping
Agreement."
154 For the European Communities, this is pa rticularly true in this case, because the
United States' investigating authority relied on ma rgins of dumping calculated with the use of zeroing
procedures in assessment review proceedings.
54. The European Communities further submits that the Appellate Body has, in US – Zeroing
(EC), already made findings regarding the existence and precise content of an "as such" United States'
measure, namely, the "zeroing methodology". 155 The European Communities argues that, in the
present dispute, "the Panel has made all the necessar y factual findings concerning the existence and
precise content of the 'as such' [United States'] measure with respect to original proceedings,
assessment proceedings and newcomer proceedings." 156 Finally, the European Communities argues
that "the factual and evidential situation with respect to zeroing is remarkable" because of the
existence of a written print-out of a computer progr am that contains the zeroing rule, and because of
the mathematical character of the zeroing rule, "which eliminates all scope for ambiguity or
interpretation in its implementation".157
3. Korea
55. Korea argues that the Panel erred in finding th at zeroing in T-T comparisons in original
investigations and in subsequent reviews is consistent with the Anti-Dumping Agreement. In Korea's
view, zeroing is prohibited "in all anti-dumping pr oceedings and dumping calculations since the
methodology constitutes a direct violation of Articles 2.4.2 and 9.3 of the [ Anti-Dumping]
Agreement."158 Korea agrees with the Panel that zero ing procedures are measures that can be
challenged "as such", but disagrees with the Pane l's conclusion that margins of dumping can be
defined for a single export transaction. 159 According to Korea, "[w]hen the investigating authorities

153European Communities' third participant's submission, para. 15. (original emphasis)
154Ibid., para. 19.
155Ibid., para. 22.
156Ibid.
157Ibid., para. 24 (referring to Exhibits JPN-6 and JPN-7 submitted by Japan to the Panel).
158Korea's third participant's submission, para. 5.
159Ibid., para. 7.

choose to engage in multiple comparisons, they are required to combine the results of those
comparisons to determine the overall dump ing margin for the product as a whole." 160 Korea refers to
the Appellate Body statement in US – Softwood Lumber V (Article 21.5 – Canada) that "Article 2.4.2
does not admit an interpretation that would allo w the use of zeroing under the [T-T] comparison
methodology."161 Korea emphasizes that zeroing "[systemati cally] excludes certain results in a [T-T]
comparison, [and, as such,] it is inconsistent with Article 2.4.2" 162, and therefore "must be prohibited"
in all anti-dumping proceedings.163
56. Korea further submits that the chapeau of Ar ticle 9.3 does not permit the use of zeroing in
subsequent reviews. Referring to th e rulings of the Appellate Body in US – Zeroing (EC) , Korea
argues that "in subsequent reviews, the investig ating authority must compare the anti-dumping duties
collected on all entries of the subject product from a given exporter or foreign producer with that
exporter's or foreign producer's margin of dumping for the product as a whole taking into account all
intermediate comparisons made." 164 Korea claims that "to set a clear and reasonable legal standard
applicable to both original investigations and s ubsequent reviews, the zeroing methodology's arbitrary
exclusion of certain data in subsequent reviews must also be prohibited."165
57. For all these reasons, Korea requests the Appellate Body "to follow its own logic" and find
that the zeroing methodology is inconsistent with the Anti-Dumping Agreement and "prohibited in all
anti-dumping proceedings". 166 In Korea's view, zeroing is inconsistent with the "fair comparison"
requirement in Article 2.4. In support of its ar gument, Korea refers to previous findings of the
Appellate Body 167, including the finding that the use of zeroing under the T-T comparison
methodology "artificially inflates the magnitude of dumping, resulting in higher margins of dumping
and making a positive determina tion of dumping more likely". 168 Korea agrees with this finding and
submits that, "by disregarding 'negative' dumping ma rgins and including solely the 'positive' dumping

160Korea's third participant's submission, para. 8.
161Ibid., para. 9 (quoting Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) ,
para. 123).
162Ibid.
163Ibid.
165Ibid.
166Ibid., para. 11.
167Ibid., para. 13 (referring to Appellate Body Report, EC – Bed Linen , paras. 55 and 59; Appellate
Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 134; Appellate Body Report, US –
Softwood Lumber V, para. 63; and Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) ,
para. 138).
168Ibid., para. 14 (quoting Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) ,
paras. 138 and 142).

margins, 'zeroing' in all dumping calculations and proceedings creates a partial result in favo[u]r of a
finding of dumping."
169 According to Korea, "such systematic exclusions of negative comparisons do
not ensure a 'fair comparison' as required by Articles 2.4 and 2.4.2".170
4. Mexico
58. Mexico agrees with Japan that the Panel erre d in finding that zeroing in the context of T-T
comparisons in original investigati ons is consistent "as such" with Ar ticles 2.1, 2.4, and 2.4.2 of the
Anti-Dumping Agreement and Articles VI:1 and VI:2 of th e GATT 1994. Mexico notes that the
Appellate Body has found, in previous cases, that Article 2.1 of the Anti-Dumping Agreement and
Articles VI:1 and VI:2 of the GATT 1994 "define th e terms 'dumping' and 'margins of dumping' in
relation to the product under inves tigation or review 'as a whole'". 171 Mexico agrees with Japan that
the zeroing procedures "necessarily disregard all negative comparison results, under any comparison
method[ology]", thereby excluding "an entire category of the export transactions that form part of the
'product'".172 Mexico submits that the Panel wrongly assu med that the requirement to calculate a
margin of dumping for the "product as a whole" was derived solely from the reference to "all
comparable export transactions" in Article 2.4.2, and applies only to W-W comparisons in original
investigations.173 Mexico underscores that, in US – Softwood Lumber V (Article 21.5 – Canada) , the
Appellate Body dismissed this view.174
59. Mexico further argues that the Panel's fi ndings with respect to the "mathematical
equivalence" between the W-W and W-T comparis on methodologies are also erroneous. Mexico
submits that the assumption of "mathematical equivalence" "is demonstrably false as a matter of
mathematics, and is also erroneous as a matter of proper legal interpretation."
175 For Mexico, "the
mathematical equivalence on which the Pane l relies does not apply if the monthly [W-T]
methodology is employed."176

169Korea's third participant's submission, para. 15. (original emphasis)
170Ibid.
171Mexico's third participant's submission, para. 8 (referring to Appellate Body Report, US – Zeroing
(EC), para. 126, in turn, quoting Appellate Body Report, US – Softwood Lumber V , paras. 92-93); see also
Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , paras. 89 and 91; and Appellate
Body Report, EC – Bed Linen, para. 53).
173Ibid., para. 15.
174Ibid., para. 18.
175Ibid., para. 19.
176Ibid., para. 20.

60. Mexico also claims that the Panel erred in finding that zeroing does not violate the "fair
comparison" requirement of Article 2.4. In this regard, Mexico points to the statement of the
Appellate Body in US – Softwood Lumber V (Article 21.5 – Canada) that "zeroing under the [T-T]
comparison methodology is difficult to reconcile w ith the notions of impartiality, even-handedness,
and lack of bias reflected in the 'fair comparison' requirement in Article 2.4."177
61. Mexico further argues that the Panel erroneously concluded that the requirement to calculate
margins of dumping for the product as a whole does not apply to periodic reviews under Article 9.3.
Mexico asserts that this requirement extends to periodic reviews not only because of the express
reference to Article 2 in the chapeau of Article 9. 3, but also because the definitions of "dumping" and
"margins of dumping" in Article 2.1 of the Anti-Dumping Agreement and Article VI of the
GATT 1994 apply "throughout" the Anti-Dumping Agreement.178 Referring to the Appellate Body's
findings in US – Zeroing (EC) , Mexico considers that it is not possible to interpret the term "margins
of dumping" "as applying on a transaction-specific basis in periodic reviews". 179 In Mexico's view,
this would be contrary to the obligation "to compare the anti-dumping duties collected on all entries
of the subject product from a given exporter or fo reign producer with that exporter's or foreign
producer's margin of dumping for the product as a whole ".180 Mexico claims that "there is a clear
distinction between the assessment or collection of duties and the margin of dumping that establishes
the ceiling on the amount of duties that can be assessed or collected."181 Mexico adds that, while there
is "a prohibition on determining margins of du mping at the sub-level of individual import
transactions, it is clearly permissible to assess duties on an import- or importer-specific basis as long
as the amount of duties assessed does not exceed the margin of dumping for the product, as
established for the exporter or foreign producer."182
62. Finally, Mexico submits that the Panel erred in finding that zeroing in the context of new
shipper reviews and sunset reviews is not in consistent with Articles 9.5 and 11.3 of the Anti-Dumping
Agreement. In Mexico's view, the requirement of Arti cle 2.1 to establish the margin of dumping for
the product as whole, and the "fair comparison" re quirement in Article 2.4, apply to the entire

177Mexico's third participant's submission, para. 36 (quoting Appellate Body Report, US – Softwood
178Ibid., paras. 42 and 43 (quoting Appellate Body Report, US – Softwood Lumber V , para. 93; and
Appellate Body Report, EC – Bed Linen, para. 51).
179Ibid., para. 47. (footnote omitted)
180Ibid., para. 49 (quoting Appellate Body Report, US – Zeroing (EC) , para. 132). (emphasis added by
Mexico)
181Ibid., para. 51.
182Ibid., para. 52 (referring to Appellate Body Report, US – Zeroing (EC), paras. 130-131).

Anti-Dumping Agreement , including in the context of new shipper reviews and sunset reviews.
183
Mexico relies on the Appellate Body Report in US – Corrosion-Resistant Steel Sunset Review to
support its position that "the United States' relia nce upon these [dumping] margins [calculated with
zeroing] in connection with sunset reviews also is inconsistent with the 'fairness requirement' under
Article 2.4."184
5. Norway
63. Norway submits that the prohibition of zeroing is not limited to original investigations in
which margins of dumping are calculated on the basis of W-W comparisons. Instead, "all forms of
zeroing in all forms of proceedings" under the Anti-Dumping Agreement are prohibited, because
zeroing results in margins that are not established for the "product as a whole".185 Norway asserts that
Articles 2.1, 5.8, 6.10, 9.2, 9.3, and 9.5 of the Anti-Dumping Agreement , as well as Articles VI:1
and VI:2 of the GATT 1994, define "dumping" and "mar gins of dumping" in relation to a "product".
Moreover, in Norway's view, the Appellate Body's fi ndings in past cases make it clear that margins of
dumping must be calculated for the product as a whole in all proceedings under the Anti-Dumping
Agreement.186
64. Norway submits that the Appellate Body's ru ling that zeroing in the W-W methodology does
not result in a margin of dumping for the product as a whole "applies equally to other forms of
zeroing and to other forms of [anti-dumping] proceedings". 187 Norway agrees with Japan that "the
requirement in Article 2.1 ... to aggregate multip le comparison results to produce a margin of
dumping for the product as a whole applies both when an authority conducts ... model-specific [W-W]
comparisons, ... transaction-specific [W-T] comparisons and multiple [T-T] comparisons." 188 Norway
concludes that it would be "illogical" to interpret the Anti-Dumping Agreement in a manner that would

183Mexico's third participant's submission, paras. 58-61.
184Ibid., para. 63.
185Norway's third participant's submission, pa ra. 7 (referring to Appellate Body Report, EC – Bed
Linen, para. 53; Appellate Body Report, US – Softwood Lumber V , para. 99; Appellate Body Report, US –
Zeroing (EC), para 127; and Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada),
paras. 89 and 122).
186Ibid., paras. 10-20 (referring to Appellate Body Report, EC – Bed Linen, para. 53; Appellate Body
Report, US – Softwood Lumber V, paras. 93 and 99; Appellate Body Report, US – Zeroing (EC), para 126; and
Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada), paras. 105, 107, and 108).
187Ibid., para. 24 (referring to Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review,

"allow the investigating authorities to apply a duty in a review, where the requirements of the Anti-
[D]umping Agreement would have made it illegal to impose [such] a duty in the first place."189
65. Norway further argues that the Panel erred in fi nding that the use of zeroing procedures is not
inconsistent with the "fair comparison" requirement in Article 2.4 of the Anti-Dumping Agreement.
Norway emphasizes that "the Panel erred when considering Article 2.4 as lex specialis in regard to
Articles 2.4.2 and 9.3" of the Anti-Dumping Agreement.190 Norway submits that previous Appellate
Body findings indicate that "there is an inherent bias in a zeroing methodology" and that zeroing is
not a "fair comparison". 191 Although Norway acknowledges that the Appellate Body made these
findings in connection with W-W and T-T comparisons in original investigations, this interpretation
should also be extended to W-T comparisons gi ven the "overarching role" of the chapeau of
Article 2.4.192
66. Similarly, with respect to periodic reviews, Norw ay is of the view that there is an obligation
to calculate one single margin for the product as a w hole. Norway submits that zeroing is prohibited
in periodic reviews by virtue of the "fair comparison" requirement in Article 2.4. 193 Since the
"[a]greement-wide" definition of dumping also applie s to the definition of "margins of dumping" for
purposes of new shipper reviews, Norway concl udes that the prohibition of zeroing, based on
Articles 2.1 and 2.4 "logically extends to Article 9.5".194
67. Norway concludes that, since zeroing is contrary to Article 2.4, it follows that sunset reviews
relying on dumping margins calculated by usi ng zeroing procedures may be contrary to both
Article 2.4 and Article 11.3. 195 Norway disagrees with the distinction drawn by the Panel between
"margins from original investigations [and] those from any periodic review" 196, and considers that
"[t]he key issue is whether the margin that the investigating authorities relied upon [was] calculated
with or without zeroing."197

189Norway's third participant's submission, para. 30.
190Ibid., para. 32.
191Ibid., para. 34 (referring to Appellate Body Report, EC – Bed Linen , para. 55; Appellate Body
Report, US – Corrosion-Resistant Steel Sunset Review , para. 135; and Appellate Body Report, US – Softwood
192Ibid., para. 35.
194Ibid., para. 39.
195Ibid., para. 38.
197Ibid., para. 38.

6. Thailand

68. Thailand argues that the Panel erred in finding th at the use of zeroing in T-T comparisons or
in the context of periodic, new shipper, and sunset reviews is consistent with Articles 2.1, 2.4,
and 2.4.2 of the Anti-Dumping Agreement. According to Thailand, the Panel's finding that zeroing is
permitted in certain circumstances is based on its erroneous assumption that there is no requirement in
the Anti-Dumping Agreement to calculate a margin of dumping for the product under investigation as
a whole. Thailand asserts that the Panel's findings "are inconsistent both with the express language of
the Anti-Dumping Agreement and the previous jurisprudence of the Appellate Body." 198 Thailand
submits that the Appellate Body has held that, "whe never an investigating authority uses intermediate
comparisons between subgroups of export prices and normal values—whether on a model-by-model,
[T-T] or any other basis—as a step to arrive at the overall dumping margin for that product, the
investigating authority may not, in aggregating tho se intermediate comparisons, 'zero' the results of
some of those comparisons."199
69. Thailand also considers that the Panel misinterpreted the 1960 Report of the Group of Experts
by reading a single sentence "out of context". 200 In Thailand's view, the Group of Experts' Report,
when read in full, does not suggest that "it is permissible to determine dumping with respect to a
different universe of goods than is used to determine injury or, in doing so, to 'zero' the export prices
for the goods under investigation." 201 To the contrary, according to Th ailand, it is entirely consistent
with the interpretation that dumping must be de termined for the "product" under investigation.
Thailand notes that the Group of Experts' Re port emphasizes that "a determination of both dumping
and injury ... made for each importation" would be the "ideal method". 202 In that circumstance, "there
would be symmetry between the universe of goods with respect to which the determination of
dumping and injury would be made and, therefore, th e determinations could also be said to be made
with respect to the same 'product'." 203 Therefore, Thailand claims that "[n]othing in the Group of
Experts' Report suggests that it may be permissible, in determining dumping margins on a 'product'

198Thailand's third participant's submission, para. 7.
199Ibid., paras. 8 and 9 (referring to Appellate Body Report, US – Softwood Lumber V (Article 21.5 –
Canada), para. 94).
200Ibid., para. 14 (referring to GATT Second Report of the Group of Experts, Anti-Dumping and
Countervailing Duties, L/1141, adopted 27 May 1960, BISD 9S/194).
201Ibid., para. 15.
202Ibid., paras. 14 and 15. (original emphasis)
203Ibid., para. 15.

basis, to reduce systematically the prices of certa in importations in a manner that makes it more likely
that the 'product' will be found to be dumped."204
70. Finally, Thailand disagrees with the Panel's d escription of the "fair comparison" requirement
of Article 2.4 as "indeterminate" and reflec ting a "somewhat subjective" determination. 205 T h e
concept of fairness is, in Thailand's view, essentially "an objective standard, designed to reduce, if not
eliminate, subjectivity from the investigating authority's determination." 206 Thailand concludes that
zeroing is inconsistent with Article 2.4, not because of its effect on the outcome per se, but because its
use deprives the exporter of its "equal chance of success" in the investigation.207
III. Issues Raised in This Appeal
71. The following issues are raised in this appeal:
(a) whether the Panel erred in finding that the United States' "zeroing procedures",
inasmuch as they relate to the calculation of margins of dumping on the basis of
transaction-to-transaction and weighted average normal value-to-transaction
comparisons in original investigations, constitute a measure that can be challenged, as
such, in WTO dispute settlement; and, in so doing, whether the Panel failed to make
an objective assessment of the matter before it, as required by Article 11 of the DSU;
(b) whether the Panel erred in finding that th e United States does not act inconsistently
with Articles 2.1, 2.4, and 2.4.2 of the Anti-Dumping Agreement and Articles VI:1
and VI:2 of the GATT 1994, by maintaining "zeroing procedures" when calculating
margins of dumping on the basis of transaction-to-transaction comparisons in original
investigations;

204Thailand's third participant's submission, para. 18.
206Ibid.
207Ibid., para. 20.

(c) whether the Panel erred in finding that th e United States does not act inconsistently
with Articles 2.1, 2.4, and 9.1-9.3 of the Anti-Dumping Agreement and Articles VI:1
and VI:2 of the GATT 1994, by maintaining "zeroing procedures" in periodic
reviews;
(d) whether the Panel erred in finding that th e United States does not act inconsistently
with Articles 2.1, 2.4, and 9.5 of the Anti-Dumping Agreement and Articles VI:1
and VI:2 of the GATT 1994, by maintaining "zeroing procedures" in new shipper
reviews;
(e) whether the Panel erred in finding that the United States did not act inconsistently
with Articles 2.1, 2.4, and 9.1-9.3 of the Anti-Dumping Agreement and Articles VI:1
and VI:2 of the GATT 1994, in applying "zeroing procedures" in the 11 periodic
reviews at issue in this appeal; and
(f) whether the Panel erred in finding that th e United States did not act inconsistently
with Articles 2 and 11 of the Anti-Dumping Agreement in the sunset reviews at issue
in this appeal, by relying on margins of dumping calculated in previous proceedings
using "zeroing procedures".
IV. Zeroing As Such in Original Investigations Based on Transaction-to-Transaction and
Weighted Average-to-Transaction Comparisons
72. We first examine the preliminary issue of whet her the Panel erred in finding that the United
States' "zeroing procedures", inasmuch as they rela te to the calculation of margins of dumping on the
basis of transaction-to-transaction ("T-T") and wei ghted average normal value-to-prices of individual
export transactions ("W-T") comparisons in original investigations
208, constitute a measure that can be
challenged, as such, in WTO dispute settlement. This is the subject of the United States' other appeal.
73. The measures challenged by Japan before the Panel were the "zeroing procedures" and the
"standard zeroing line". 209 Japan claimed before the Panel th at these "measures" were, as such,
inconsistent with various provisions of the Anti-Dumping Agreement and the GATT 1994 in the

208In our discussion, we use the term "original investigations" to refer to investigations within the
meaning of Article 5 of the Anti-Dumping Agreement.
209The term "standard zeroing line" is used in the Pa nel Report to refer to a specific line of computer
programming code used by the USDOC when it develops a specific computer program to calculate a margin of
dumping in a particular anti-dumping proceeding. (See Panel Report, paras. 4.17 and 7.20, and footnote 644
thereto)

context of original investigations, periodic revi ews, new shipper reviews, changed circumstances
reviews, and sunset reviews.210
74. The Panel first reviewed the nature and scope of "measures" that may be subject to "as such"
challenges in WTO dispute settlement. The Pa nel recalled the Appellate Body's finding in US –
Corrosion-Resistant Steel Sunset Review that, "[i]n principle, any act or omission attributable to a
WTO Member can be a 'measure' of that Me mber for purposes of WTO dispute settlement
proceedings."211 The Panel further recalled the Appellate Bo dy's statement that measures that can be
subject to WTO dispute settlement include not only acts applying a law in a specific situation, but also
"acts setting forth rules or norms that are intende d to have general and pr ospective application." 212
The Panel also noted the conclusion of the Appellate Body in that case that, in principle, there is no
bar to "non-mandatory measures" being challenged as such.213
75. For purposes of determining the existence of su ch a rule or norm, the Panel recalled the
Appellate Body's finding, in US – Zeroing (EC), that a "panel must not lightly assume the existence of
a 'rule or norm' constituting a measure of general and prospective application, especially when it is not
expressed in the form of a written document" 214, and that, when a challenge is brought against such a
rule or norm, "a complaining party must clear ly establish, through arguments and supporting
evidence, at least that the alleged 'rule or norm' is attributable to the responding Member; its precise
content; and indeed, that it does have general and prospective application."215 On this basis, the Panel
concluded that the question it was required to addr ess in this dispute was whether it is possible to
identify the precise content of the zeroing procedur es, whether the zeroing procedures are attributable
to the United States, and whether they can be cons idered to be a "rule or norm" intended to have
general and prospective application.216
76. On the basis of an assessment of the evidence before it, the Panel concluded that "a rule or
norm exists providing for the application of zeroi ng whenever [the] USDOC calculates margins of

210The term "zeroing procedures" is used in the Pane l Report to refer to the United States' "zeroing
methodology" per se , as distinguished from the "standard zeroing line". (See Panel Report, para. 7.47) The
Panel concluded that the "standard zeroing line" is not a measure that can be challenged as such. (See Ibid.,
para. 7.46) This finding of the Panel is not appealed by Japan. For a description of the United States' "zeroing
procedures", see supra, footnote 3.
211Ibid., para. 7.37 (referring to Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review,
para. 81).
212Ibid. (quoting Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review, para. 82).
213Ibid., para. 7.39 (referring to Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review,
para. 88).
215Ibid. (quoting Appellate Body Report, US – Zeroing (EC), para. 198).
216Ibid., para. 7.45.

dumping or duty assessment rates."
217 The Panel noted that the eviden ce before it was "sufficient to
identify the precise content of what Japan terms as 'zeroing procedures', that these procedures are
attributable to the United States, and that they are a rule or norm of general and prospective
application".218 The Panel therefore found that the United States' "zeroing procedures" constitute "a
measure which can be challenged as such."219
77. Before examining the participants' arguments on appeal, we note that the United States' other
appeal is limited to the question whether "zeroing procedures" constitute a measure that can be
challenged as such, inasmuch as they relate to T-T and W-T comparisons in original investigations;
the United States does not appeal the Panel's finding regarding "zeroing procedures", as far as
weighted average normal value-to-weighted averag e export price ("W-W") comparisons in original
investigations are concerned.
220 The United States "acknowledges that there is at least an evidentiary
record" in connection with W-W comparisons. 221 The United States also does not appeal the Panel's
finding inasmuch as it relates to "zeroing procedures" in the context of periodic reviews and new
shipper reviews.222
A. The Measure at Issue
78. The United States contends that the Panel failed to make an objective assessment of the
matter before it—including an objective assessment of the facts of the case—as required by Article 11
of the DSU, when it concluded that a single rule or norm exists by virtue of which the USDOC will
apply zeroing in any anti-dumping proceeding, regardless of the comparison methodology used.
According to the United States, the evidence relie d on by the Panel "does not support the proposition
that there are rules or norms taken by the United St ates concerning the use of zeroing as it relates to
[T-T] and [W-T] comparisons in investigations."
223 In support of its view, the United States points
out that, in original investigations, it has ne ver applied the W-T comparison methodology and has
only once applied the T-T comparison methodology. Moreover, the USDOC has "never pronounced
on how it would conduct such comparisons, includi ng whether it would or would not 'zero' in
connection with those comparisons."
224 The United States therefore submits that measures that did

217Panel Report, para. 7.50.
218Ibid., para. 7.55.
219Ibid., para. 7.58.
220United States' other appellant's submission, para. 3.
221Ibid.
222United States' response to questioning at the oral hearing.
223United States' other appellant's submission, para. 26.
224United States' other appellant's submission, para. 2.

not exist at all have been found by the Panel to be "measures" that can be challenged, as such, in
WTO dispute settlement.
79. The United States emphasizes that, "particularly when the measure alleged is unwritten, the
evidence of the existence of a measure must in fact relate to the full scope of the measure claimed,
and that there can be no finding of such a measure where such ev idence does not exist." 225 The
United States argues that, "[j]ust as a single measure may often consist of elements that may
themselves be considered measures, the Panel's error may be viewed either as having failed to identify
the precise content of a single measure—that is, whet her any 'zeroing procedures ' maintained by [the
USDOC] actually relate to [T-T] and [W-T] compar isons in investigations—or as having failed to
establish the existence of separate [USDOC] 'zeroi ng procedures' as they relate to each of these
comparison[] [methodologies] in investigations."226
80. According to the United States, "[t]he eviden ce put forward by Japan in this proceeding
simply does not support the Panel's finding that [the USDOC] maintains an unwritten zeroing measure
regardless of the basis of the dumping comparison and in all antidumping proceedings." 227 Moreover,
the Panel has made "no effort to 'carefully exam ine the concrete instrume ntalities that evidence the
existence of the purported "rule or norm"' relating to [the USDOC]'s use of zeroing in the context of
[T-T] and [W-T] comparisons in investigations, because there are no such instrumentalities."228
81. In contrast, Japan maintains that "[t]he Panel had before it considerable evidence of the actual
and, indeed, systematic application of [zeroing] in numerous cases, across all procedural contexts that
have arisen thus far." 229 Japan emphasizes that, in each of th ese cases, the substantive content of the
zeroing procedures was identical: the USDOC disregarded comparison results where the export price
exceeded the normal value.
230 Japan also points out that the United States failed to produce any
evidence to demonstrate that differences in comparison methodologies, or differences in anti-dumping
proceedings, would "imply any difference in the op eration or application of the zeroing procedures
that requires an independent assessment whether a rule or norm exists for each setting."231 Thus, there
was "no need for the Panel to have parsed the evidence as to each specific comparison [methodology]

225Ibid., para. 14. (footnote omitted)
226Ibid., footnote 22 to para. 14.
227Ibid., para. 31.
228Ibid. (quoting Appellate Body Report, US – Zeroing (EC), para. 198).
230See Ibid., para. 95.

and procedural [context]" in its de termination that there exists a single rule or norm that can be
challenged as such.
232
82. As we see it, the United States' challenge under Article 11 of the DSU is directed at the
Panel's appreciation and weighing of the evidence. The Appellate Body has stated on several
occasions that panels enjoy a certain margin of di scretion in assessing the credibility and weight to be
ascribed to a given piece of evidence. 233 At the same time, the Appellate Body has underscored that
Article 11 of the DSU requires panels "to take acc ount of the evidence put before them and forbids
them to wilfully disregard or distort such evidence." 234 Moreover, panels must not "make affirmative
findings that lack a basis in the ev idence contained in the panel record." 235 Provided that a panel's
assessment of evidence remains with in these parameters, the Appellate Body will not interfere with
the findings of the panel.236
83. The evidence before the Panel in this case in cluded model computer programs used by the
USDOC that serve as a basis for programs used in specific original investigations and periodic
reviews. These programs include an instructi on to apply zeroi ng through the "standard zeroing
line".237 The Panel also had evidence before it regardi ng the application of the zeroing procedures in
16 different anti-dumping proceedings, in cluding four original investigations 238, one new shipper
review239, and 11 periodic reviews.240
84. Although the Panel did not consider the "standa rd zeroing line" to be a measure in itself 241, it
found that zeroing has been a "constant feature of [the] USDOC's practice for a considerable period of

232Ibid., para. 67.
233See Appellate Body Report, EC – Hormones , para. 132. See also Appellate Body Report, EC –
Sardines, para. 299.
234Appellate Body Report, US – Carbon Steel , para. 142. See also Appellate Body Report, EC –
Hormones, para. 133.
235Ibid. See also Appellate Body Report, US – Wheat Gluten, paras. 160-162.
236See Appellate Body Report, US – Gambling, para. 330.
237Exhibits JPN-6, at 15, and JPN-7, at 16, submitted by Japan to the Panel.
238Exhibits JPN-8, JPN-10A, JPN-22A, JPN-22B, and JPN-23C submitted by Japan to the Panel.
239Exhibit JPN-9 submitted by Japan to the Panel.
240Exhibits JPN-11 through JPN-21 submitted by Japan to the Panel; further details may be found in
Panel Report, para. 2.3.
241Panel Report, para. 7.46.

time".242 The Panel further found that the "standard zeroing line" "has been included in the vast
majority of computer program[s] used by [the] USDOC to calculate margins of dumping ... and [even]
where the line has not been included , [the] USDOC has used other methods to exclude export prices
higher than the normal value from the numerator of the weighted average margin of dumping." 243 In
addition, the Panel noted that the United States had "not identified a single case in which a decision
was taken to provide such an offset."244
85. Moreover, the Panel observed that the evidence before it "shows that what is at issue goes
beyond the simple repetition of the applicati on of a certain methodology to specific cases." 245
According to the Panel, "[t]he manner in which [t he] USDOC's use of zeroing has been characterized
in statements by [the] USDOC [and] other United Stat es' agencies and courts ... confirms that [the]
USDOC's consistent application of zeroing reflects a deliberate policy." 246 For the Panel, the USDOC
"has repeatedly stated that '[it does] not allow' e xport sales at prices above normal value to offset
dumping margins on other export sales, has referred to its 'practice' or 'methodology' of not providing
for offsets for non-dumped sales, has pointed out th at the United States Court of Appeals for the
Federal Circuit has ruled that the 'zeroing practice' ... is a reasonable interpretation of the law, that the
US Congress was aware of [the] USDOC's me thodology when it adopted the Uruguay Round
Agreements Act, and that not granting an offset for non-dumped sales 'has consistently been an
integral part of the [USDOC]'s [W-W] analysis'." 247 The Panel added that "the United States
Department of Justice has stated that the USDOC 'has consistently applied its practice of treating non-
dumped sales as sales with a margin of zero since the implementation of the [Uruguay Round
Agreements Act]' and has referred to [the] USDO C's 'long-standing methodology' and to 'the zeroing
practice, which has been followed for at least 20 y ears' and which 'predated the passage of the latest
major amendment of the Anti-dumping law'."248 Finally, the Panel noted that the "United States Court
of International Trade has stat ed that '[the USDOC's] zeroing methodology in its calculation of
dumping margins is grounded in long-standing practice'."249

242Panel Report, para. 7.51.
243Ibid.
244Ibid.
245Ibid., para. 7.52.
246Ibid.
247Ibid. (footnotes omitted)
248Ibid. (footnote omitted)
249Ibid.

86. The United States argues that the statements whic h the Panel deemed to reflect a "deliberate
policy" consist "primarily of quotations from one assessment review".
250 Although this may be so, we
cannot fault the Panel for concluding that these stat ements, when considered in conjunction with the
other evidence before the Panel, lend support to the conclusion that a single rule or norm of general
and prospective application that provides for disreg arding negative comparison results exists. As the
Appellate Body has previously said, the appreciation of "a given piece of evidence is part and parcel
of the fact-finding process and is, in principle, left to the discretion of a panel as the trier of facts."251
87. The thrust of the United States' argument is that context-specific evidence is required to
demonstrate the existence of the zeroing proce dures in T-T and W-T comparisons in original
investigations.252 In other words, according to the United States, the existence of a rule or norm
requiring the application of zeroing must be examined separately for each comparison methodology
and for each type of anti-dumping proceeding. Japan submitted evidence to the Panel indicating that
zeroing is a constant feature whenever a margin of dumping is calculated regardless of the comparison
methodology used. In contrast, the United States did not adduce evidence of a single case in which
zeroing was not applied.
253 Nor did it indicate how the use of alternative comparison methodologies
would make a difference in the operation or appli cation of the zeroing procedures. Moreover, the
United States did not explain why the rati onale underlying the zeroing procedures in W-W
comparisons in original investigations, or W-T comparisons in periodic reviews 254, does not apply to
the calculation of margins of dumping on the basis of T-T and W-T comparisons in original
investigations. The fact that the consistency of zeroing may be challenged in relation to a specific
comparison methodology, or a specific type of anti-dumping proceeding, does not necessarily mean
that the existence of a general rule or norm dire cting its use must be established through evidence of

250United States' other appellant's submission, para. 29. (footnote omitted)
252United States' other appellant's submission, para. 14 and footnote 22 thereto.
253Panel Report, para. 7.51.
254The United States acknowledges that there is an evidentiary record to support a finding as to the
existence of the "zeroing procedures" in these contexts. (United States' response to questioning at the oral
hearing. See also United States' other appellant's submission, para. 3)

the actual application of those procedures in all possible situations, as long as they were applied
every time the occasion arose.255
88. In sum, we agree with the Panel's unders tanding of the Appellate Body's previous
jurisprudence and the manner in which the Panel frame d the question before it. We also consider that
the Panel had sufficient evidence before it to conc lude that the "zeroing procedures" under different
comparison methodologies, and in different stages of anti-dumping proceedings, do not correspond to
separate rules or norms, but simply reflect different manifestations of a single rule or norm. 256 The
Panel also examined ample evidence regarding the preci se content of this rule or norm, its nature as a
measure of general and prospective application, and its attribution to the United States. In our view,
the Panel properly assessed this evidence. We therefore disagree with the United States that the Panel
did not assess objectively the issue of whether a single rule or norm exists by virtue of which the
USDOC applies zeroing "regardless of the basis upon which export price and normal value are
compared and regardless of the type of proceeding in which margins are calculated."257
B. Japan's Request for Consultations
89. In support of its claim under Article 11 of th e DSU, the United States asserts that Japan's
request for consultations258 did not include a reference to any "zeroing measure" in the context of W-T
or T-T comparisons in original investigations. 259 The United States argues that "Japan's failure to
consult on any such measures means that they are no t within the terms of reference of this dispute,
and the Appellate Body should reverse the Panel's fi nding as to the existence of such [United States]

255The United States attributes significance to the fact that Japan abandoned its claim before the Panel
regarding the consistency of zeroing in the context of W-T comparisons in original investigations. According to
the United States, this confirms that Japan "appreciated that the evidence [before the Panel] did not support the
existence of a [United States] unwritten measure" as it re lates to W-T comparisons in original investigations.
(United States' other appellant's submission, para. 23) Before the Panel, Japan rejected the notion that the
withdrawal of its claim regarding the use of zeroing under the second senten ce of Article 2.4.2 indicated a lack
of evidentiary basis upon which to conclude that the zeroing procedures apply in the context of the W-T
comparisons in original investigations. Japan claimed, instead, that "there is a single [ zeroing] measure that
applies to [W-W] comparisons, [T-T] comparisons and [W-T] comparisons, used in any type of anti-dumping
proceeding" and that "[w] ith respect to [that] single zeroing measure , Japan makes a series of claims ." (Panel
Report, para. 6.19) (original emphasis)
257Ibid., para. 7.53. (footnote omitted)
258See Request for Consultations by Japan, WT/DS322/1, 29 November 2004.
259United States' other appellant's submission, para. 17. The United States referred to Articles 6.2
and 7.1 of the DSU in its Notice of Other Appeal and in its other appellant's submission. However, at the oral
hearing, the United States explained that it is not requesting the Appellate Body to make a specific finding that
the Panel failed to comply with these provisions. Inst ead, the United States refers to those provisions as
arguments in support of its claim that the Panel acted inconsistently with Article 11 of the DSU. We understand
the references to Articles 3.3 and 4.2 in the United States' Notice of Other Appeal and in the United States' other
appellant's submission in the same way.

measures on that basis."
260 The United States explains that "[it] did not raise this issue in the Panel
proceedings because it was focusing on the fact that these 'measures' do not exist at all" 261, but adds
that a failure to consult is a jurisdictional matter that can be raised at any time.
90. Japan disagrees with the United States for two reaso ns. First, Japan asserts that its request for
consultations did identify the zeroing procedures as a single "measure" on which it wished to consult,
without limitation as to its application in any particular comparison methodology. Secondly, Japan
argues that the United States' failure to object before the Panel to the alleged lack of consultations
means it relinquished its right to consult, and that the Panel was not required to explore the issue on
its own initiative.
91. A panel's terms of reference are circumscribed by the "specific measures at issue" and the
"legal basis of the complaint" (that is, "claims") set out in the complaining party's request for the
establishment of a panel. 262 Japan's panel request identifies th e measures subject to an "as such
challenge" in the following terms:
In original investigations, periodic reviews, new shipper reviews,
sunset reviews, and changed circumstances reviews where the
redetermination of margins of dumping occurs, the United States
Department of Commerce ("USDO C") disregards intermediate
negative dumping margins calculated by comparing normal value and
export price, including on a weighted average-to-weighted average
basis, weighted average-to-trans action basis, and transaction-to-
transaction basis , through the USDOC's AD Margin Calculation
computer program and other related procedures, in the process of
establishing the overall dumping margin for the product as a whole
("hereinafter collectively referred to as "Zeroing").
263 (emphasis
added)
92. Japan's panel request, thus, refers to zeroing in the context of all types and stages of
anti-dumping proceedings, and in all comparison methodologies. The United States does not appear
to dispute this. Rather, the United States argues that, because Japan's request for consultations does
not include a reference to zeroing in the contex t of all comparison methodologies in original
investigations, zeroing in the context of T-T and W-T comparisons in original investigations is outside
the Panel's terms of reference.

260United States' other appellant's submission, para. 18.
261Ibid., para. 18 and footnote 29 thereto.
262Article 7.1 of the DSU. Article 6.2 of the DSU provides that a panel request shall "identify the
specific measures at issue and provide a brief summary of the legal basis of the complaint sufficient to present
the problem clearly."
263Request for the Establishment of a Panel by Japan, WT/DS322/8, 7 February 2005 (attached as
Annex III to this Report), p. 2, item B.1.(a).

93. Japan's request for consultations refers, in the relevant part, to:
... certain measures imposed by the United States including: (1) the
zeroing practice by which the United States Department of
Commerce ("USDOC") treats transactions with negative dumping
margins as having margins equal to zero in determining weighted
average dumping margins in anti-dumping investigations,
administrative reviews, and sunset reviews, and also in assessing the
final anti-dumping duty liability on entries upon liquidation ...

(6) the methodology of the United States for determining dumping
margins and material injury in anti-dumping investigations ...
264
94. We do not agree with the United States' readi ng of Japan's request for consultations. A
careful examination of this request indicates that th e use of "zeroing procedures" in the context of all
types and stages of anti-dumping proceedings, and regardless of the comparison methodology used,
was covered by that request.
95. The language in Japan's request for consultations should, in our view, have sufficiently alerted
the United States to the fact that Japan wished to consult on zeroing in the context of all comparison
methodologies, including T-T and W-T comparisons in original investigations. Put differently, the
measure upon which Japan wished to consult was the United States' "methodology ... for determining
dumping margins ... in [original] investigations". 265 That "zeroing procedures" may manifest
themselves differently when calculating a margin of dumping under the W-W, T-T, and W-T
comparison methodologies does not necessarily mean that these manifestations of zeroing would have
to be listed in a request for consultations.
266
96. For these reasons, we disagree with the Un ited States' contention that the "zeroing
procedures", inasmuch as they relate to T-T and W-T comparisons in original investigations, were not
within the Panel's terms of reference. 267 In these circumstances, we need not rule on Japan's
contention that the "United States' failure to rai se the alleged lack of consultations on its zeroing

264Request for Consultations by Japan, WT/DS322/1, 29 November 2004, p. 1.
265Ibid., p. 2, item (6).
266Articles 4 and 6 of the DSU do not "require a precise and exact identity between the specific
measures that were the subject of consultations and th e specific measures identified in the [panel] request"
(Appellate Body Report, Brazil – Aircraft , para. 132 (emphasis in original)), as long as the complaining party
does not expand the scope of the dispute. Requiring such an identity "would substitute the request for
consultations for the panel request." (Appellate Body Report, US – Upland Cotton , para. 293) We need not
reach this question because we have found above that the use of "zeroing procedures" in the context of all types
of anti-dumping proceedings, and regardless of the comparison methodology used, was covered in both the
request for consultations and in the panel request, which defines a panel's terms of reference.
267United States' other appellant's submission, para. 18.

procedures in the context of [W T] and [T-T] compar isons in original investig ations until this appeal
means that it 'consented to the lack of consulta tions' on these measures, and 'relinquished whatever
right to consult it may have had'."
268 Accordingly, we uphold the Panel's finding, in paragraph 7.58 of
the Panel Report, that the "zeroing procedures" c onstitute a measure which can be challenged as such
and, therefore, dismiss the United States' claim that the Panel acted inconsistently with Article 11 of
the DSU by concluding that the zeroing procedures, as they relate to original investigations based on
transaction-to-transaction and weighted averag e normal value-to-prices of individual export
transactions comparisons, constitute a measure that can be challenged, as such, in WTO dispute
settlement.
97. The United States additionally requests the Appe llate Body to declare moot the Panel's
finding that the "zeroing procedures", inasmuch as they relate to T-T comparisons in original
investigations, are consistent w ith various provisions of the Anti-Dumping Agreement and the
GATT 1994.269 This request is premised on our reve rsing the Panel's finding that the "zeroing
procedures" in T-T comparisons in original investig ations constitute a measure that can be challenged
as such. Given that this condition is not met, we need not rule on this request of the United States.270
V. Zeroing As Such in Original Investigations, Periodic Reviews, and New Shipper Reviews
98. We turn now to certain issues ra ised by Japan in this appeal. 271 Before the Panel, Japan
referred to both "model zero ing" and "simple zeroing" 272 procedures, and claimed that the USDOC's
"zeroing procedures", as they relate, inter alia, to original investigations , periodic reviews, and new
shipper reviews, are inconsistent, as such, with certain provisions of the Anti-Dumping Agreement and
the GATT 1994.
99. The Panel found that, by maintaining "model ze roing procedures" when calculating margins
of dumping on the basis of W-W comparisons in original investigations, the United States acted
inconsistently with Article 2.4.2 of the Anti-Dumping Agreement .
273 The United States does not
appeal this finding of the Panel.

268Japan's appellee's submission, para. 18 (quoting Appellate Body Report, Mexico – Corn Syrup
(Article 21.5 – US), para. 63).
269United States' other appellant's submission, paras. 32-33 and 34(b).
270We examine the WTO-consistency of zeroing under the T-T comparison methodology below.
271These issues are described, supra, in para. 71(b)-(d).
272For a description of "model zeroing" and "simple zeroing" see, supra, footnotes 13 and 14.
273Panel Report, para. 7.86.

100. The Panel, however, rejected Japan's claims regarding "simple zeroing procedures" in T-T
comparisons in original investigations. The Panel took the view that it is "permissible" to interpret
Articles 2.1 and 2.4.2 of the Anti-Dumping Agreement, as well as Article VI of the GATT 1994, to
mean that "there is no general requirement to determine dumping and margins of dumping for the
product as a whole." 274 According to the Panel, "the fact that the terms 'dumping' and 'margin of
dumping' in Article 2.1 of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the
GATT 1994 are defined in relation to 'product' and 'products' does not warrant the conclusion that
these terms, by definition, cannot apply to indi vidual transactions and inherently require an
examination of export transactions at an aggregate level in which the same weight is accorded to
export prices that are above normal value as to export prices that are below normal value." 275 I n
addition, the Panel reasoned that, because "'dumping' occurs when the export price of a product is less
than its normal value, the fact that Article 2.4. 2 expressly permits the use of a [T-T] comparison
[methodology] ... logically means that a Member may treat transactions in which export prices are less
than normal value as being more relevant than transactions in which export prices exceed normal
value."276 The Panel further held that "in the context of the [T-T comparison] methodology in the first
sentence of Article 2.4.2 the term 'margins of du mping' can be understood to mean the total amount
by which transaction-specific export prices are less than transaction-specific normal values."277
101. As contextual support for its line of reasoning, the Panel also examined what it called the
"logical impossibility of reconciling a general prohibition of zeroing with the express provision for the
use of [a W-T comparison methodology] in the second sentence of Article 2.4.2." 278 The Panel took
the view that such a "general prohibition" of zeroing under all the three methodologies listed in
Article 2.4.2 would be contrary to the principle of effective treaty interpretation, because it would
mean that the application of the W-T compar ison methodology provided in the second sentence of
Article 2.4.2 would "necessarily always yield" the sam e mathematical result as the application of the
W-W comparison methodology provided in the first sentence of the same provision. 279 In addition,
the Panel saw no basis in the text of Article 2. 4.2 to support the view that zeroing, while not
prohibited under the W-T comparison methodol ogy, is prohibited under the T-T comparison
methodology.280

274Panel Report, para. 7.142.
275Ibid., para. 7.112.
276Ibid., para. 7.119.
277Ibid.
278Ibid., para. 7.114.
279Ibid., para. 7.127.
280See Ibid., para. 7.139.

102. On this basis, the Panel concluded that, "b y maintaining simple zeroing procedures in the
context of original investigations", the USDOC does not act inconsistently with Articles 2.1 and 2.4.2
of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the GATT 1994.
281
103. With regard to Article 2.4 of the Anti-Dumping Agreement, the Panel took the view that the
"'fair comparison' requirement may not be interpre ted in a manner that renders [the] more specific
provisions of the [ Anti-Dumping] Agreement completely inoperative." 282 Because the Panel had
found that zeroing was permissible in T-T comparis ons under Articles 2.4.2 and 9, it concluded that
zeroing does not breach the "fair comparison" requirement in Article 2.4.283
104. The Panel applied the same line of reasoning in rejecting Japan's claims relating to zeroing in
the context of periodic reviews and new shipper reviews.284
105. Japan challenges these findings on appeal. Japan argues that, pur suant to Article 2.1 of the
Anti-Dumping Agreement and Articles VI:1 and VI:2 of the GATT 1994, "'dumping' and 'margins of
dumping' must be defined in relation to th e 'product' under investigation as a whole." 285 Japan
emphasizes that the definition of "dumping" in Artic le 2.1 and the "fair comparison" requirement in
Article 2.4 "are overarching rules in the Anti-Dumping Agreement that an authority must respect when
it makes a determination of 'dumping' in any anti-dumping proceeding." 286 Because the zeroing
procedures lead to addressing only a "sub-part" of the product in a dumping determination, they
violate Articles 2.1, 2.4, and 2.4.2 of the Anti-Dumping Agreement, as well as Articles VI:1 and VI:2
of the GATT 1994.287 Similarly, in periodic reviews under Article 9.3, in order to ensure that the total
amount of duties collected does not exceed the margin of dumping, as required by that provision, an
authority must establish a dumping margin for the expor ter or foreign producer consistently with the
definitions of "dumping" and "margin of dumping" in Article 2.1 of the Anti-Dumping Agreement ,
and Articles VI:1 and VI:2 288 of the GATT 1994, and with the "fair comparison" requirement in
Article 2.4 of the Anti-Dumping Agreement . Japan adds that "[a]n authority must also determine

281Panel Report, para. 7.143.
282Ibid., para. 7.158.
283See Ibid., para. 7.159.
284See Ibid., paras. 7.210, 7.211, 7.216, 7.218 and 7.219.
285Japan's appellant's submission, para. 9. (footnote omitted)
286Ibid., para. 15.
287See Ibid., paras. 9 and 16.
288Ibid., para. 16 (referring to Appellate Body Report, US – Zeroing (EC), paras. 130-133).

'margins of dumping' in new shipper reviews under Article 9.5 consistently with these
requirements."289
106. The United States argues that these findings of the Panel should be upheld. According to the
United States, the Panel correctly c oncluded that Article 2.1 of the Anti-Dumping Agreement and
Article VI of the GATT 1994 do not require investigating authorities to establish margins of dumping
for a "product as a whole".
290 For the United States, "the terms 'dumping' and 'margin of dumping' do
not necessarily require the aggregation of [T-T comparison results] and the provision of an offset for
one transaction against another."291 According to the United States, the Panel correctly concluded that
the prohibition of zeroing in W-W comparisons in or iginal investigations does not apply to T-T or
W-T comparisons and, thus, cannot serve as the source of any alleged general prohibition of zeroing.
The United States also dismisses Japan's argument th at zeroing is "unfair" because it "artificially
inflates the magnitude of dumping", as this argument is predicated on the assumption that zeroing is
prohibited in T-T comparisons. 292 According to the United States, zeroing does not produce an
"artificially inflated" magnitude of dumping but, rather, the correct magnitude of the margin of
dumping.293 The United States further agrees with the Panel that Article 9.3 of the Anti-Dumping
Agreement "contains no language requiring such an aggr egate examination of export transactions in
determining the final liability for payment of anti-dumping duties under Article 9.3.1 or in
determining the amount, if any, of refund due under Article 9.3.2." 294 In relation to new shipper
reviews, the United States adds that "[n]othing in th e text of Article 9.5 implies that the 'individual
margins of dumping' are necessarily and always a 's ingle' dumping margin determined on the basis of
the 'product as a whole' for each exporter or producer."295
107. Our analysis begins with a discussion of the fundamental disciplines that apply under the
Anti-Dumping Agreement and the GATT 1994 to all anti-dumping proceedings, including original
investigations, periodic reviews, and new shipper revi ews. We will then examine Japan's claim that
zeroing in T-T comparisons in original investigations is, as such, inconsistent with Articles 2.1, 2.4,
and 2.4.2 of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the GATT 1994. Finally, we
examine Japan's claim that zeroing in periodic reviews and new shipper reviews is, as such,

289Japan's appellant's submission, para. 17. (original emphasis)
291Ibid.
292Ibid., para. 51.
293Ibid.

inconsistent with Articles 2.1, 2.4, 9.1-9.3, and 9.5 of the Anti-Dumping Agreement and Articles VI:1
and VI:2 of the GATT 1994.
A. The Concepts of "Dumping" and "Margins of Dumping"
108. First, we recall that dumping is defined in Article VI:1 of the GATT 1994 as occurring when
a "product" of one country is introduced into the commerce of another country at less than the normal
value of the "product". Consistent with this de finition, Article VI:2 provides for the levying of
anti-dumping duties in respect of a "dumped product" in order to offset or prevent the injurious effect
of dumping.
109. This definition of dumping is carried over into the Anti-Dumping Agreement by Article 2.1.
Furthermore, by virtue of the opening phrase of Article 2.1—"[f]or the purposes of this Agreement"—
this definition applies throughout the Agreement.
296 Thus, the terms "dumping", as well as "dumped
imports", have the same meaning in all provisions of the Agreement and for all types of anti-dumping
proceedings, including original investigations, new shipper reviews, and periodic reviews. In each
case, they relate to a product because it is the product that is intr oduced into the commerce of another
country at less than its normal value in that country.
110. Article VI:2 defines "margin of dumping" as the difference between the normal value and the
export price and establishes the link between "dumping" and "margin of dumping".
297 The margin of
dumping reflects the magnitude of dumping. It is also one of the factors to be taken into account to
determine whether dumping causes or threatens material injury.
298 Article VI:2 lays down that "[i]n
order to offset or prevent dumping, a Member may levy on any dumped product an anti-dumping duty
not greater in amount than the margin of dumping in respect of such product." Thus, the margin of
dumping also is defined in relation to a "product".
111. Secondly, the Anti-Dumping Agreement prescribes that dumping determinations be made in
respect of each exporter or foreign producer examined. This is because dumping is the result of the
pricing behaviour of individual e xporters or foreign producers. Ma rgins of dumping are established
accordingly for each exporter or foreign producer on the basis of a comparison between normal value
and export prices, both of which relate to the prici ng behaviour of that exporter or foreign producer.
In order to assess properly the pricing behaviour of an individual exporter or foreign producer, and to
determine whether the exporter or foreign producer is in fact dumping the product under investigation

 296See Appellate Body Report, US – Softwood Lumber V , para. 93. See also Appellate Body Report,
US – Corrosion-Resistant Steel Sunset Review, paras. 109 and 127.
 297See Appellate Body Report, US – Zeroing (EC), para. 125.
298Article 3.4 of the Anti-Dumping Agreement.

and, if so, by which margin, it is obviously necessar y to take into account the prices of all the export
transactions of that exporter or foreign producer.
112. Other provisions of the Anti-Dumping Agreement also make it clear that "dumping" and
"margins of dumping" relate to the exporter or fore ign producer. Article 6.10 requires, "as a rule",
that investigating authorities determine "an indivi dual margin of dumping for each known exporter or
producer".299 Similarly, Article 9.4 of the Anti-Dumping Agreement refers to situations where
anti-dumping duties are applied to exporters or foreign producers not examined individually in an
investigation, and provides that such duties sha ll not exceed "the weighted average margin of
dumping established with respect to the selected exporters". In addition, Article 9.5 indicates that the
purpose of new shipper reviews is to determine "i ndividual margins of dumping for any exporters or
producers in the exporting country in question who have not exported the product" and refers to a
"determination of dumping in respect of such producers or exporters".
113. Thirdly, the Anti-Dumping Agreement and the GATT 1994 are not concerned with dumping
per se, but with dumping that causes or threatens to cause material injury to the domestic industry.
300
Article 3.1 stipulates that a determination of injury shall be based on an objective examination of both
the volume of the dumped imports and the effect of the dumped imports on prices in the domestic
market for like products, and the consequent imp act of these imports on domestic producers of such
products. Furthermore, Article 3.5 of the Anti-Dumping Agreement lays down that "[t]he authorities
shall also examine any known factors other than the dumped imports which at the same time are
injuring the domestic industry and the injuries caused by these other factors must not be attributed to
dumped imports." Among the non-attribution factors lis ted in this Article are "the volume and prices
of imports not sold at dumping prices".
114. Thus, it is evident from the design and architecture of the Anti-Dumping Agreement that:
(a) the concepts of "dumping" and "margins of dumpi ng" pertain to a "product" and to an exporter or
foreign producer; (b) "dumping" and "dumping marg ins" must be determined in respect of each
known exporter or foreign producer examined; (c) anti-dumping duties can be levied only if dumped

299In certain cases, however, an investigating authority may, in accordance with Articles 6.10 and 9.4 of
the Anti-Dumping Agreement , determine an anti-dumping duty rate to be applied to exporters and foreign
producers who were not individually examined. Article 8.1 also speaks of voluntary undertakings in relation to
exporters.
300In this regard, Article VI:1 of the GATT 1994 states that dumping "is to be condemned if it causes or
threatens material injury to an established industry in the territory of a Member or materially retards the
establishment of a domestic industry". Article VI:6(a) al so stipulates that no anti-dumping duty shall be levied
unless the importing Member "determines that the effect of the dumping ... is such as to cause or threaten
material injury to an established domestic industry, or is such as to retard materially the establishment of a
domestic industry." Article 11.1 of the Anti-Dumping Agreement further provides that "[a]n anti-dumping duty
shall remain in force only as long as and to the extent necessary to counteract dumping which is causing injury."

imports cause or threaten to cause material inju ry to the domestic industry producing like products;
and (d) anti-dumping duties can be levied only in an amount not exceeding the margin of dumping
established for each exporter or foreign producer.
301 These concepts are interlinked. They do not
vary with the methodologies followed for a determin ation made under the various provisions of the
Anti-Dumping Agreement.
115. A product under investigation may be defined by an investigating authority. 302 B u t
"dumping" and "margins of dumping" can be found to exist only in relation to that product as defined
by that authority. They cannot be found to exist for only a type, model, or category of that product. 303
Nor, under any comparison methodology, can "dumping" and "margins of dumping" be found to exist
at the level of an individual transaction. 304 Thus, when an investigating authority calculates a margin
of dumping on the basis of multiple comparisons of normal value and export price, the results of such
intermediate comparisons are not, in themselves, margins of dumping. 305 Rather, they are merely
"inputs that are [to be] aggregated in order to establish the margin of dumping of the product under
investigation for each exporter or producer."
306
116. Having reviewed certain fundamental concepts of the Anti-Dumping Agreement relevant to
this appeal, we turn to examine Japan's claim that zeroing, in relation to the T-T comparison
methodology in original investigations, is, as such, inc onsistent with Articles 2.1, 2.4, and 2.4.2 of the
Anti-Dumping Agreement and Articles VI:1 and VI:2 of the GATT 1994.

301We note in this regard that Article 9.1 of the Anti-Dumping Agreement encourages levy of
anti-dumping duties at less than the margin of dumping if such lesser duty would be adequate to remove the
injury to the domestic industry.
302This definition is usually made in the light of an application under Article 5.2 of the Anti-Dumping
Agreement or, in special circumstances, under Article 5.6 of the Anti-Dumping Agreement.
303See Appellate Body Report, US – Softwood Lumber V, paras. 93 and 96.
304See Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , paras. 87-93. See
also Appellate Body Report, US – Softwood Lumber V, paras. 93 and 96.
305Appellate Body Report, US – Softwood Lumber V, para. 97; Appellate Body Report, US – Softwood
306Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 87. See also
paras. 94 and 114 (quoting Appellate Body Report, US – Softwood Lumber V, para. 98).

B. Determination of Margins of Dumping Based on Transaction-to-Transaction
Comparisons in Original Investigations
1. Article 2.4.2 of the Anti-Dumping Agreement
117. We note at the outset that, although Japan withdr ew, at the interim revi ew stage, its claim
regarding the W-T comparison methodology provid ed for in the second sentence of Article 2.4.2 307,
the Panel drew guidance from that sentence for its in terpretation of the first sentence of Article 2.4.2,
as well as Articles 2.1, 2.4, and 9.3 of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the
GATT 1994.
118. Article 2.4.2 sets out three comparison methodol ogies that investigating authorities may use
to calculate margins of dumping. The first sentence of Article 2.4.2 provides for two comparison
methodologies (W-W and T-T) involving symmetrical comparisons of normal value and export price.
Article 2.4.2 stipulates that these two methodologi es "shall normally" be used by investigating
authorities to establish margins of dumping. As an exception to the two normal methodologies, the
second sentence of Article 2.4.2 sets out a third comparison methodology which involves an
asymmetrical comparison between we ighted average normal value and prices of individual export
transactions. This methodology may be used only if the following two conditions are met: (i) that the
authorities find a pattern of export prices that differ significantly among different purchasers, regions,
or time periods; and (ii) that an explanation is provided as to why such differences cannot be taken
into account appropriately by the use of a W-W or T-T comparison.
(a) The First Sentence of Article 2.4.2 of the Anti-Dumping Agreement
119. Under the T-T comparison methodology at issue in this appeal, the margin of dumping is
established by a comparison between the normal value and the export price in individual transactions.
The issue before us is whether zeroing procedures are, as such, inconsistent with the first sentence of
Article 2.4.2 in the context of T-T comparisons in original investigations.
120. Recently, in US – Softwood Lumber V (Article 21.5 – Canada) , the Appellate Body dealt for
the first time with a determination of margins of dumping based on T-T comparisons in an original

307The Panel noted that the withdrawal of Japan's claim under the second sentence of Article 2.4.2
"does not in any way detract from the significance of this sentence as an important contextual element that must
necessarily be taken into account in any analysis of the issue of zeroing." (Panel Report, para. 7.127 and
footnote 765 thereto) We agree that the second senten ce of Article 2.4.2 may be relevant for the interpretation
of the first sentence, irrespective of the withdrawal by Japan of its claim under that sentence.

investigation. For the Appellate Body, the refere nce in the first sentence of Article 2.4.2 to "'a
comparison' in the singular suggest[ed] an overall calculation exercise involving aggregation of these
multiple transactions."
308 Therefore, "[t]he transaction-specific results are mere steps in the
comparison process" and the "individual transaction comparisons are not the final results of the
calculation, but, rather, are inputs for the overall calculation exercise."
309 Thus, the text of
Article 2.4.2 indicates that the calculation of a margin of dumping using the T-T comparison
methodology is a "multi-step exercise in which the results of transaction-specific comparisons are
inputs that are [to be] aggregated in order to establish the margin of dumping of the product under
investigation for each exporter or producer."
310 The Appellate Body found that, in aggregating the
results of transaction-specific comparisons, "an invest igating authority must consider the results of all
of the comparisons and may not disregard the results of comparisons in which export prices are above
normal value." 311 The Appellate Body concluded, theref ore, that zeroing, as applied in the
determination made on the basis of the T-T comparison methodology at issue in that case, was
inconsistent with Article 2.4.2 of the Anti-Dumping Agreement.
121. We see no reason to depart from the Appellate Body's reasoning in US – Softwood Lumber V
(Article 21.5 – Canada) , which is in consonance with the Appe llate Body's approach in the earlier
case of US – Softwood Lumber V and is consistent with the funda mental disciplines that apply under
the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the GATT 1994, as highlighted above. In
the latter case, the Appellate Body held that, "[i]f an investigating authority has chosen to undertake
multiple comparisons, the investigating authority n ecessarily has to take into account the results of all
those comparisons in order to establish marg ins of dumping for the product as a whole under
Article 2.4.2."
312 The Appellate Body addressed there the issue of model zeroing under the W-W
comparison methodology in an original investigation. That methodology involved the division of the
product under investigation into sub-groups of identical, or similar, product types. In aggregating the
results of the sub-group comparisons to calcu late the dumping margin for the product under
investigation, the USDOC had treated as zero the r esults of the sub-groups in which weighted average
normal value was equal to or less than the weighted average export price. Thus, zeroing did not occur

308Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 87. The Appellate
Body explained that the reference in the first sentence of Article 2.4.2 to "export prices", in the plural, in the
phrase "a comparison of normal value and export prices on a [T-T] basis" "suggests that the comparison will
generally involve multiple transactions". (Ibid.)
309Ibid.
310Ibid.
311Ibid., para. 122.
312Appellate Body Report, US – Softwood Lumber V, para. 98. (original emphasis)

within the sub-groups but occurred across the sub-gr oups in the process of aggregating the results of
the sub-group comparisons.313
122. The Appellate Body held that dumping and margins of dumping can be found to exist only for
the product under investigation as a whole, and that they cannot be found to exist for a type, model, or
category of that product. The comparisons at the sub-group level are not margins of dumping within
the meaning of Article 2.4.2. It is only on the basi s of aggregating all these "intermediate values" that
an investigating authority can establish margins of dumping for the product under investigation as a
whole. The Appellate Body therefore found th at the model zeroing was inconsistent with
Article 2.4.2 of the Anti-Dumping Agreement.314
123. We fail to see why, if, for the purpose of establis hing a margin of dumping, such a product is
dealt with under the T-T comparison methodology in an original investigation, zeroing would be
consistent with Article 2.4.2 of the Anti-Dumping Agreement . If anything, zeroing under the T-T
comparison methodology would inflate the margin of dumping to an even greater extent as compared
to model zeroing under the W-W comparison methodol ogy. This is because zeroing under the T-T
comparison methodology disregards the result of each comparison involving a transaction in which
the export price exceeds the normal value, wherea s under the W-W comparison methodology, zeroing
occurs, as noted above, only across the sub-groups in the process of aggregation.
124. We do not consider that the absence of the phr ase "all comparable export transactions" in the
context of the T-T comparison methodology suggests that zeroing should be permissible under that
methodology. Because transactions may be divi ded into groups unde r the W-W comparison
methodology, the phrase "all comparable export tran sactions" requires that each group include only
transactions that are comparable and that no expo rt transaction may be left out when determining
margins of dumping under that methodology. Furthermore, the W-W comparison methodology
involves the calculation of a weighted average export price. By contrast, under the T-T comparison
methodology, all export transactions are taken into account on an individual basis and matched with
the most appropriate transactions in the domestic market. Therefore, the phrase "all comparable
export transactions" is not pertinent to the T-T comp arison methodology. Consequently, no inference
may be drawn from the fact that these words do not appear in relation to this methodology.
315

313See Appellate Body Report, US – Softwood Lumber V, para. 64.
314The Panel in this dispute adhered to the finding of the Appellate Body in Softwood Lumber V , and
concluded that the model zeroing procedures of the United States in W-W comparisons in the context of original
investigations are, as such, incons istent with Article 2.4.2 of the Anti-Dumping Agreement . (Panel Report,
para. 7.85) The United States has not appealed this finding of the Panel.
315See Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada), para. 91.

125. We acknowledge that the W-W and T-T comparis on methodologies are distinct and may not
produce identical results. However, as the Appellate Body stated in US – Softwood Lumber V
(Article 21.5 – Canada), the W-W and T-T comparison methodologies "fulfil the same function", they
are "alternative means for establishing margins of dumping", and "there is no hierarchy between
them".
316 It would therefore be "illogical to interpret the [T-T] comparison methodology in a manner
that would lead to results that are systematically different from those obtained under the [W-W]
methodology".317 Indeed, if zeroing is prohibited under the W-W comparison methodology and
permitted under the T-T comparison methodology, th e application of the T-T methodology would
lead to results that are systematically different from those obtained through the application of the
W-W methodology. Moreover, by systematically disregarding comparison results involving export
transactions occurring at prices above the normal value, the zeroing methodology fails to establish
margins of dumping for the product under investigation properly, as required under Article 2.4.2.
126. We recall that the Anti-Dumping Agreement requires the determination of an individual
margin of dumping for each known exporter or foreign producer. 318 If it is permissible to determine a
separate margin of dumping for each transaction, th e consequence would be that several margins of
dumping could be found to exist for each known exporter or foreign producer. The larger the number
of export transactions, the greater the number of such transaction-specific margins of dumping for
each exporter or foreign producer. This would creat e uncertainty and divergences in determinations
to be made in original investigations and subsequent stages of anti-dumping proceedings.
319
127. As we have stated, the Anti-Dumping Agreement does not contemplate the determination of
dumping or a margin of dumping at the mode l- or transaction-specific level. The Anti-Dumping
Agreement contemplates the aggregation of all the comparisons made at the transaction-specific level
in order to establish an individual margin of dumping for each exporter or foreign producer examined.
As we understand it, the position of the United States is that Article 2.4.2 does not address the issue of
aggregation of transaction-specific comparison results, but if aggregation is performed, the results of
comparisons where the export transactions occurred above normal value may be disregarded in the
calculation of the margin of dumping, because such transactions do not involve dumping.

316Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada), para. 93.
317Ibid. See also Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) ,
footnote 238 to para. 141.
318See, supra, paras. 111, 112, and 114, and Articles 6.10 and 9.4 of the Anti-Dumping Agreement.
319For example, when the investigating authority considers imports as being "dumped" for the purposes
of an injury determination under Article 3; and, when assessing the amount of anti-dumping duty to be levied
on the "product" under Articles 9.2-9.5 of the Anti-Dumping Agreement, and Article VI:2 of the GATT 1994.

128. In this respect, we recall that the Anti-Dumping Agreement deals with injurious dumping and
that the "volume of dumped imports" is a critical factor in injury determination. 320 As we understand
it, under United States law, if an exporter or foreign producer is found to be dumping, the USITC may
include all imports from that exporter or forei gn producer in the volume of dumped imports for
purposes of determining injury. 321 If, as a consequence of zeroing, the results of certain comparisons
are disregarded only for purposes of calculating marg ins of dumping, but taken into consideration for
determining injury, this would mean that the sa me transactions are treated as "non-dumped" for one
purpose, and as "dumped" for another purpose. This is not in consonance with the need for consistent
treatment of a product in an anti-dumping investigation.322
129. For these reasons, we disagree with the Panel that dumping may be determined at the level of
individual transactions, and that multiple comparison results are margins of dumping in themselves.323
We also disagree with the Panel that the terms "product" and "products" can apply to individual
transactions and do not require an examination of export transactions at an aggregate level.324 Nor can
we agree with the Panel that "a Member may treat transactions in which export prices are less than
normal value as being more relevant than transactions in which export prices exceed normal value."
325
Accordingly, we disagree with the Panel's finding th at, "in the context of the [T-T] methodology in
the first sentence of Article 2.4.2, the term 'margi ns of dumping' can be understood to mean the total

320See, supra, paras. 113-114.
321We recognize that the issue of injury determination is not before us in this case. We are not
suggesting that an injury determina tion would be vitiated if the volume of imports involved in the zeroed
transactions is not taken into account for the purposes of the injury determination.
322In US – Softwood Lumber V, the Appellate Body stated:
Our view that "dumping" and "margins of dumping" can only be established
for the product under investigation as a whole is in consonance with the
need for consistent treatment of a product in an anti-dumping investigation.
Thus, having defined the product under investigation, the investigating
authority must treat that product as a whole for, inter alia, the following
purposes: determination of the volume of dumped imports, injury
determination, causal link between dumped imports and injury to domestic
industry, and calculation of the margin of dumping. Moreover, according to
Article VI:2 of the GATT 1994 and Article 9.2 of the Anti-Dumping
Agreement, an anti-dumping duty can be levied only on a dumped product.
For all these purposes, the product und er investigation is treated as a
whole[.]
(Appellate Body Report, US – Softwood Lumber V, para. 99) (original emphasis)
323See Appellate Body Report, US – Softwood Lumber V , para. 97; Appellate Body Report, US –
Zeroing (EC ), para. 132; and Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) ,
paras. 87-93.
324See Panel Report, para. 7.112.
325Ibid., para. 7.119.

amount by which transaction-specific export prices are less than transaction-specific normal
values."
326
(b) The Panel's Contextual Arguments Relating to the Second Sentence
of Article 2.4.2 of the Anti-Dumping Agreement
130. We turn next to the second sentence of Article 2.4.2 of the Anti-Dumping Agreement from
which the Panel drew contextual support for its finding that zeroing is permitted under the T-T
comparison methodology in original investigations. This sentence reads:
A normal value established on a weighted average basis may be
compared to prices of individual export transactions if the authorities
find a pattern of export prices which differ significantly among
different purchasers, regions or time periods, and if an explanation is
provided as to why such differences cannot be taken into account
appropriately by the use of a wei ghted average-to-weighted average
or transaction-to-transaction comparison.
131. We recall that, under the first sentence of Artic le 2.4.2, an investigating authority is
"normally" required to use either of the two sy mmetrical comparison methodologies provided for in
that sentence. The second sentence of Arti cle 2.4.2 provides an asymmetrical comparison
methodology to address a pattern of "targeted" dumping found among certain purchasers, in certain
regions, or during certain time periods. By its term s, this methodology may be used if two conditions
are met: first, that the investigating authoriti es "find a pattern of export prices which differ
significantly among different purchasers, regions or time periods"; and secondly, that an
"explanation" be provided as to why such differen ces in export prices cannot be taken into account
appropriately by the use of either of the two symmetrical comparison methodologies set out in the first
sentence of Article 2.4.2. The second requirement t hus contemplates that there may be circumstances
in which targeted dumping could be adequate ly addressed through the normal symmetrical
comparison methodologies. The asymmetrical methodology in the second sentence is clearly an
exception to the comparison methodologies which normally are to be used.
132. In its reasoning, the Panel assumed that there was a "logical impossibility of reconciling a
general prohibition of zeroing with the express pr ovision for the use of a [W-T comparison
methodology] in the second sentence of Article 2.4.2."
327 According to the Panel, if zeroing were
prohibited under all comparison methodologies, app lication of the second sentence of Article 2.4.2
would always yield results that would be "mathema tically equivalent" to those obtained by applying
the W-W comparison methodology, thereby re ndering the second sentence of Article 2.4.2 inutile.

326Panel Report, para. 7.119.
327Ibid., para. 7.114.

The Panel further assumed that, if zeroing were permitted under the W-T comparison methodology, it
should, by logical implication, be permitted under the T-T comparison methodology as well.328
133. We recall that the Appellate Body had occasion to discuss this "mathematical equivalence"
argument in US – Softwood Lumber V (Article 21.5 – Canada) , but rejected it for several reasons.
The Appellate Body said, inter alia, that "[o]ne part of a provision setting forth a methodology is not
rendered inutile simply because, in a specific set of circumstances , its application would produce
results that are equivalent to those obtained fro m the application of a comparison methodology set out
in another part of that provision." 329 The Appellate Body also found that the mathematical
equivalence argument is based on certain assumptions that may not hold good in all situations. The
Appellate Body further observed that the second sentence provides for an "exception", and as such,
"the comparison methodology in the second sentence of Article 2.4.2 ([W-T]) alone cannot determine
the interpretation of the two methodologies provid ed in the first sentence, that is, [T-T] and
[W-W]."330 In addition, the Appellate Body noted th at, even if W-W and W-T methodologies were to
yield equivalent results in certain situations, this would not be sufficient to compel a finding that
zeroing is permissible under the T-T comparison me thodology, because the mathematical equivalence
argument does not relate to this methodology. 331 The Appellate Body added that it could be argued,
in reverse, that "the use of zeroing under the two comparison methodologies set out in the first
sentence of Article 2.4.2 would enable investigating authorities to capture pricing patterns constituting
'targeted dumping', thus rendering the third methodology inutile."332
134. As regards the relationship between th e T-T comparison methodology and the W-T
comparison methodology of the second sentence of Article 2.4.2, the Panel's reasoning appears to
assume that the universe of export transactions to which these two comparison methodologies apply is
the same, and that these two methodologies differ only in that, under the W-T comparison
methodology, a normal value is established on a wei ghted average basis, while it is established on a
transaction-specific basis under the T-T comparison methodology. Thus, according to the Panel, if

328Panel Report, paras. 7.138 and 7.139.
329Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 99. (emphasis
added)
330Ibid., para. 97.
331See Ibid., para. 99.
332Ibid., para. 100. (original emphasis) See also Panel Report, para. 7.125. There, the Panel recognized
that "to interpret Article 2.4.2 as permitting the use of zeroing under the [T-T] method[ology] raises the question
under what circumstances it would not be possible to take account of a pattern of export prices described in the
second sentence of Article 2.4.2 by using the [T-T] method[ology]."

zeroing is permitted under the W-T comparison methodol ogy in the second sentence of Article 2.4.2,
it should logically be permitted under the T-T comparison methodology as well.
333
135. We disagree with the assumption underlying th e Panel's reasoning. The emphasis in the
second sentence of Article 2.4.2 is on a "pattern", namely a "pattern of export prices which differs
significantly among different purchasers, regions or time periods." The prices of transactions that fall
within this pattern must be found to differ significantly from other export prices. We therefore read
the phrase "individual export transactions" in that sen tence as referring to the transactions that fall
within the relevant pricing pattern. This univer se of export transactions would necessarily be more
limited than the universe of export transactions to which the symmetrical comparison methodologies
in the first sentence of Article 2.4.2 would appl y. In order to unmask targeted dumping, an
investigating authority may limit the application of the W-T comparison methodology to the prices of
export transactions falling within the relevant pattern.
136. For these reasons, we are unable to agree w ith the Panel that the second sentence of
Article 2.4.2 provides contextual support for a finding that zeroing is permissible under the T-T
comparison methodology. We wish to emphasize, however, that our analysis of the second sentence
of Article 2.4.2 is confined to addressing the cont extual arguments drawn by the Panel from that
provision.
(c) Conclusion
137. In the light of our analysis of Article 2.4.2 of the Anti-Dumping Agreement, we conclude that,
in establishing "margins of dumping" under the T-T comparison methodology, an investigating
authority must aggregate the results of all the tr ansaction-specific comparisons and cannot disregard
the results of comparisons in which export prices are above normal value.
334
138. Accordingly, we reverse the Panel's finding, in paragraphs 7.143 and 7.259(a) of the Panel
Report, that the United States does not act in consistently with Article 2.4.2 of the Anti-Dumping
Agreement by maintaining zeroing procedures when calculating margins of dumping on the basis of
T-T comparisons in original investigations, and find, instead, that the United States acts inconsistently
with that provision.

333See Panel Report, para. 7.139.
334Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada), para. 122.

2. Article 2.1 of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the
GATT 1994
139. As a consequence, we reverse the Panel's findings, in paragraphs 7.143 and 7.259(a) of the
Panel Report, that "simple zeroing" in original investigations is not inconsistent with Article 2.1 of the
Anti-Dumping Agreement and Articles VI:1 and VI:2 of the GATT 1994, because these findings are
simply based on the Panel's findings and r easoning relating to Article 2.4.2 of the Anti-Dumping
Agreement, which we have reversed. The Panel o ffers no additional reasoning that could
independently support its findings under Article 2.1 of the Anti-Dumping Agreement and Articles VI:1
and VI:2 of the GATT 1994.
140. We note that Japan requests the Appellate Body not only to reverse the Panel's findings of
consistency, but also to find that the United States acted inconsistently with these provisions in using
zeroing in the context of T-T comparisons in origin al investigations. At the oral hearing, Japan
confirmed that it wished us to complete the Panel's legal analysis to this effect. Article 2.1 of the
Anti-Dumping Agreement and Article VI:1 of the GATT 1994 are definitional provisions. They set
out a definition of "dumping" for the purposes of the Anti-Dumping Agreement and the GATT 1994.
The definitions in Article 2.1 and Article VI:1 are no doubt central to the interpretation of other
provisions of the Anti-Dumping Agreement , such as the obligations relating to, inter alia , the
calculation of margins of dumping, volume of dumped imports, and levy of anti-dumping duties to
counteract injurious dumping.
335 But, Article 2.1 and Article VI:1, read in isolation, do not impose
independent obligations. As we have found that the United States acts inconsistently with
Article 2.4.2 of the Anti-Dumping Agreement by maintaining zeroing procedures in original
investigations on the basis of T-T comparisons, we do not consider it necessary to make additional
findings on Japan's claims under these provisions. Japan has not explained why such additional
findings under Article 2.1 of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the
GATT 1994 would be necessary to resolve this dispute.336
3. Article 2.4 of the Anti-Dumping Agreement
141. Next, we examine whether zeroing is inconsistent with the "fair comparison" requirement in
Article 2.4 of the Anti-Dumping Agreement.

335See Appellate Body Report, US – FSC (Article 21.5 – EC) , para. 85. See also Appellate Body
Report, US – DRAMS, para. 205 and footnote 377 thereto.
336Appellate Body Report, Australia – Salmon , para. 223. We recognize that Article VI:2 of the
GATT 1994 is not merely a definitional provision. Nevertheless, given our finding under Article 2.4.2 of the
Anti-Dumping Agreement, we do not consider it necessary to make an additional finding on Japan's claim under
Article VI:2 of the GATT 1994 for purposes of resolving this dispute.

142. Regarding the relationship between Articles 2. 4 and 2.4.2, the Panel stated that the
"somewhat indeterminate standard of fairness underl ying the 'fair comparison' requirement may not
be interpreted in a manner that renders more specific provisions of the [ Anti-Dumping] Agreement
completely inoperative."
337
143. On appeal, Japan submits that the Panel erred in making Article 2.4 subject to the allegedly
"more specific" provisions of Article 2.4.2. In Japan's view, this is contrary to the introductory phrase
of Article 2.4.2. We agree with Japan that the Panel's reasoning implies that the "fair comparison"
requirement in Article 2.4 is de pendent on Article 2.4.2. The Pa nel appears to have considered
Article 2.4.2 as lex specialis. To the extent that it did, this would not be a correct representation of the
relationship between the two provisions. Rather the introductory clause to Article 2.4.2 expressly
makes it "[s]ubject to the provisions governing fair comparison" in Article 2.4.338
144. Japan further argues that, "[u]nder the zeroing procedures, the United States makes an initial
comparison for all comparable export transactions, but in aggregating the comparison results into an
overall margin, it includes solely the positive comparison results, disregarding negative results." 339
According to Japan, "the 'partial' comparison th at occurs pursuant to the zeroing procedures is
'inherently biased' and not 'fair'"340 in T-T comparisons in original investigations.
145. In contrast, the United States contends that zer oing does not produce an "artificially inflated"
magnitude of dumping but, rather, the corr ect magnitude of the margin of dumping. 341 The United
States further submits that the "fair comparison" requirement must be neutrally defined, as the
Appellate Body itself has recognized "the 'need' to balance ... the rights and obligations of respondents
with those of other interested parties", including the domestic industry.342
146. The Appellate Body has previously made it clear that the use of zeroing under the T-T
comparison methodology distorts the prices of cer tain export transactions because the "prices of
[certain] export transactions [made] are artificially reduced."343 In this way, "the use of zeroing under
the [T-T] comparison methodology artificially infl ates the magnitude of dumping, resulting in higher

337Panel Report, para. 7.158.
338Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada), para. 133.
340Ibid.
342Ibid., para. 52 (referring to Appellate Body Report, US – Oil Country Tubular Goods Sunset
Reviews, para. 243).
343 Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada), para. 139.

margins of dumping and making a positive de termination of dumping more likely." 344 The Appellate
Body has further stated that "[t]his way of calcula ting cannot be described as impartial, even-handed,
or unbiased."345 As the Appellate Body has previously found, under the first sentence of Article 2.4.2,
"an investigating authority must c onsider the results of all the comparisons and may not disregard the
results of comparisons in which export prices are above normal value." 346 Therefore, we consider that
zeroing in T-T comparisons in original investiga tions is inconsistent with the fair comparison
requirement in Article 2.4.
147. Accordingly, we reverse the Panel's finding, in paragraphs 7.161 and 7.259(a) of the Panel
Report, that the United States does not act inconsistently with Article 2.4 of the Anti-Dumping
Agreement by maintaining zeroing procedures when calculating margins of dumping on the basis of
T-T comparisons in original investigations, and find, instead, that the United States acts inconsistently
with that provision.
C. Zeroing As Such in Periodic Reviews and New Shipper Reviews
148. We now examine Japan's claims relating to zeroing, as such, in periodic reviews and new
shipper reviews. We first analyze Japan's appe al as it relates to Articles 9.3 and 9.5 of the
Anti-Dumping Agreement and Article VI:2 of the GATT 1994. Next, we examine Japan's appeal
relating to the "fair comparison" requirement set out in Article 2.4 of the Anti-Dumping Agreement.
Finally, we review Japan's claims under Articles 2.1, 9.1, and 9.2 of the Anti-Dumping Agreement and
Article VI:1 of the GATT 1994.
1. Articles 9.3 and 9.5 of the Anti-Dumping Agreement and Article VI:2 of the
GATT 1994
149. The Panel found that the United States does not act inconsistently with Articles 2.1, 2.4,
9.1-9.3, and 9.5 of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the GATT 1994 by
maintaining "zeroing procedures"347 in periodic reviews and new shipper reviews.348
150. In reaching this conclusion, the Panel re lied on its earlier reasoning regarding the
permissibility of zeroing procedures in original in vestigations. Its reasoning was also based on its
understanding of the concept of "dumping" and "m argins of dumping", as well as on its interpretation

344Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada), para. 142.
345Ibid.
346See, supra, para. 137. See also Appellate Body Report, US – Softwood Lumber V (Article 21.5 –
Canada), para. 122.
347See, supra, footnote 3.
348Panel Report, paras. 7.216, 7.219, 7.222, and 7.259(b).

of the second sentence of Article 2.4.2 of the Anti-Dumping Agreement .
349 Under the Panel's
rationale, the terms "dumping" and "margins of dumping", as they appear in Article 9 of the
Anti-Dumping Agreement, refer to results of transaction-specific comparisons.
151. As we have stated350, "dumping" and "dumping margins" under the Anti-Dumping Agreement
are defined in relation to the product under inv estigation. Thus, "dumping" and "margins of
dumping" can be found to exist only at the level of a "product": they cannot be found to exist at the
level of a type, model, or category of a product under cons ideration; nor can they be found to exist at
the level of an individual transaction. 351 Rather, "if a margin of dumping is calculated on the basis of
multiple comparisons made at an intermediate stage, it is only on the basis of aggregating all these
intermediate results that an investigating aut hority can establish margins of dumping for the product
as a whole."352 We therefore disagree with the Panel's a pproach, which is premised on the view that
the terms "dumping" or "margins of dumping" can have different meanings under different provisions
of the Anti-Dumping Agreement.
(a) Periodic Reviews and Importer-Specific Duty Assessment
152. We examine next the "important co nsiderations specific to Article 9" 353 identified by the
Panel as supporting its view that it is permissibl e to interpret Article VI of the GATT 1994 and
relevant provisions of the Anti-Dumping Agreement "to mean that there is no general requirement to
determine dumping and margins of dumping for the product as a whole, which, by itself or in
conjunction with a requirement to establish margin s of dumping for exporters or foreign producers,
entails a general prohibition of zeroing."354
153. The "important considerations" identified by the Panel relate to the ope ration of retrospective
and prospective duty assessment systems under Articles 9.3.1 and 9.3.2 of the Anti-Dumping
Agreement. The Panel noted that these provisions specify how to implement the requirement in
Article 9.3 "that the amount of anti-dumping duty not exceed the margin of dumping". 355 The Panel's

349Panel Report, para. 7.194.
350See, supra, paras. 108-115.
351See Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada), para. 104; Appellate
Body Report, US – Zeroing (EC), para. 126; and Appellate Body Report, US – Softwood Lumber V, para. 93.
352Appellate Body Report, US – Zeroing (EC) , para. 132. Rather, they are merely "inputs that are
aggregated in order to establish the margin of dumping of the product under inves tigation for each exporter or
producer." (Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada), para. 87)
353Panel Report, para. 7.196.
354Ibid.
355Ibid., para. 7.198. (original emphasis)

interpretative approach also relies on Article 9.4(ii), which refers to the calculation of the "liability for
payment" of anti-dumping duties "on the basis of a prospective normal value".356
154. The Panel stated that, under Articles 9.3.1 and 9.3.2, a margin of dumping is calculated for
determining the final liability for payment of anti-dumping duties in a retrospective duty assessment
system, and for determining the amount of anti-dumping duty that must be refunded in a prospective
duty assessment system. 357 The Panel added that "the obligation to pay an anti-dumping duty is
incurred on an importer- and import-specific basis." 358 For the Panel, "the importer- and import-
specific character of the payment of anti-dumping duties must be taken into account in interpreting the
meaning of 'margin of dumping.'" 359 Under the Panel's rationale, if certain export sales to a given
importer are made at prices above normal value, tho se sales do not need to be taken into account in
determining the margin of dumping for the relevant exporter that has made the sale to the importer.
155. We are unable to agree with the reasoning of the Panel. As the Appellate Body has stated
previously, under Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994,
investigating authorities "are required to ensure that the total amount of anti-dumping duties collected
on the entries of a product from a given exporter sh all not exceed the margin of dumping established
for that exporter" 360, in accordance with Article 2. 361 Put differently, "the margin of dumping
established for an exporter or foreign producer operates as a ceiling for the total amount of anti-
dumping duties that can be levied on the entries of the subject product (from that exporter) covered by
the duty assessment proceeding." 362 The Appellate Body has further emphasized that "[a]lthough
Article 9.3 sets out a requirement regarding th e amount of the assessed anti-dumping duties, it does
not prescribe a specific methodology according to which the duties should be assessed." 363 I n

356Article 9.4(ii) provides that an anti-dumping duty applied to imports from exporters or foreign
producers not examined individually shall not exceed, "where the liability for payment of anti-dumping duties is
calculated on the basis of a prospective normal value, the difference between the weighted average normal value
of the selected exporters or producers and the export prices of exporters or producers not individually
examined."
357Panel Report, para. 7.198.
358Ibid. (original emphasis)
359Ibid., para. 7.199.
360Appellate Body Report, US – Zeroing (EC), para. 130.
361The chapeau of Article 9.3 provid es that "[t]he amount of anti- dumping duty shall not exceed the
margin of dumping as established in Article 2."
362Appellate Body Report, US – Zeroing (EC), para. 130. (original emphasis)
363Appellate Body Report, US – Zeroing (EC) , para. 131. The Appellate Body has stated that, "under
the methodology currently applied by the USDOC to asse ss anti-dumping duties, the aggregation of the results
of the multiple comparisons performed at an intermediate stage might result in a negative value, for a given
importer, if zeroing is not allowed. Of course, this wo uld not mean that the authorities would be required under
the Anti-Dumping Agreement or Article VI of the GATT 1994 to compensate an importer for the amount of that
negative value (that is, when export prices exceed normal value)." (Ibid., footnote 234 to para. 131)

particular, the Appellate Body has underscore d that "a reading of Article 9.3 of the Anti-Dumping
Agreement and Article VI:2 of the GATT 1994 does not suggest that final anti-dumping duty liability
cannot be assessed on a transaction- or importer-specific basis, or that the investigating authorities
may not use specific methodologies that reflect the distinct nature and purpose of proceedings
governed by these provisions, for purposes of assessi ng final anti-dumping duty liability, provided
that the total amount of anti-dumping duties that ar e levied does not exceed the exporters' or foreign
producers' margins of dumping."
364
156. Finally, the Panel expresses its concern that, if a Member applies a retrospective duty
assessment system, it "may be precluded from collecting anti-dumping duties in respect of particular
export transactions at prices less than normal value to a particular importer at a particular point of
time because of prices of export transactions to other importers at a different point in time that exceed
normal value."
365 This concern is not well founded. The concept of dumping relates to the pricing
behaviour of exporters or foreign producers; it is the exporter, not the importer, that engages in
practices that result in situations of dumping. 366 At the time of importation, an administering
authority may collect duties, in the form of a cash deposit, on all export sales, including those
occurring at above the normal value. However, in a review proceeding under Article 9.3.1, the
authority is required to ensure that the total amount of anti-dumping duties collected from all the
importers of that product does not excee d the total amount of dumping found in all sales made by the
exporter or foreign producer, calculated accordi ng to the margin of dumping established for that
exporter or foreign producer without zeroing. The same "ceiling" applies in review proceedings under
Article 9.3.2, because the introductory clause of Article 9.3 applies equa lly to prospective and
retroactive duty assessment systems.
(b) Arguments Related to Prospective Normal Value Systems
157. Next, we examine the Panel's reasoning relating to Article 9.4(ii) of the Anti-Dumping
Agreement, which deals with the calculation of the liability for payment of anti-dumping duties on the
basis of a so-called "prospective normal value".
367

364Ibid. (original emphasis)
365Panel Report, para. 7.199.
366Appellate Body Report, US – Zeroing (EC), para. 129.
367In a prospective normal value system, the authorities announce in advance a prospective normal
value that applies to future entries of a given product and anti-dumping duties are assessed on the basis of the
difference between this "prospective norm al value" and the prices of individual export transactions for that
product.

158. Before the Panel, Japan argued that the collec tion of a variable duty on an entry-by-entry
basis under a prospective normal value system doe s not involve the establishment of margins of
dumping with respect to individual export transactio ns, because the actual margin of dumping in such
a system is only determined in a review under Artic le 9.3.2. Moreover, according to Japan, in a
prospective normal value system, "the final liability for duties must be assessed in a review under
Article 9.3.2".368
159. The Panel disagreed, noting that Japan's argument was "inconsistent with the prospective
nature of such a system". 369 The Panel added that "[i]t is clear from the text of Article 9.4(ii) of the
[Anti-Dumping] Agreement that in a prospective normal value system ' liability for payment of
anti-dumping duties is calculated on the basis of a prospective normal value'." 370 Moreover,
"[a]lthough Article 9.3.2 provides for a refund procedure when the amount of anti-dumping duties is
assessed on a prospective basis, a requirement that arguably also applies to prospective normal value
systems referred to in Article 9.4(ii), a refund pr ocedure in a prospective duty assessment system is
not a determination of final liability fo r payment of anti-dumping duties ."371 The Panel further noted
that "[t]he phrase 'determination of the final liabilit y for payment of anti-dumping duties' is used in
Article 9.3.1 in connection with retrospectiv e duty assessment procedures but does not figure in
Article 9.3.2."372
160. The Panel stated that, "notwithstanding the po ssibility of a refund, liability for payment of
anti-dumping duties is final in a prospective normal value system at the time of importation of a
product."373 This may be so, but it does not mean that the anti-dumping duty collected at the time of
importation represents a "margin of dumping". 374 Nor does it mean that the total amount of
anti-dumping duties that are levied can exceed the exporter's or foreign producer's "margin of
dumping". Under a prospective normal value syst em, exporters may choose to raise their export
prices to the level of the prospective normal valu e in order to avoid liability for payment of anti-
dumping duties on each export transaction. However, under Article 9.3.2, the amount of duties
collected is subject to review so as to ensure that, pursuant to Article 9.3 of the Anti-Dumping
Agreement, the amount of the anti-dumping duty collected does not exceed the margin of dumping as

368Panel Report, para. 7.202 (quoting Japan's oral statement at the second Panel meeting, para. 32).
(emphasis added)
369Ibid., para. 7.204. (original emphasis)
370Ibid. (emphasis added by the Panel)
371Ibid. (original emphasis)
372Ibid.
373Ibid., para. 7.205.
374See, supra, para. 114.

established under Article 2.
375 It is open to an importer to request a refund if the duties collected
exceed the exporter's margin of dumping. Whether a refund is due or not will depend on the margin
of dumping established for that exporter.
161. The Panel stated that, in a prospective nor mal value system, "liability for payment of
anti-dumping duties is incurred only to the extent that prices of individual export transactions are
below normal value."
376 Therefore, Article 9.4(ii) "confirms that the concept of dumping can apply
on a transaction-specific basis to prices of indivi dual export transactions below the normal value." 377
The Panel also stated that "[i]f in a prospective normal value system individual export transactions at
prices less than normal value can attract liability for payment of anti-dumping duties, without regard
to whether or not prices of other export transacti ons exceed normal value", there is no reason why
duties may not be similarly assessed under the United States' retrospective duty assessment system.378
162. We are unable to agree. Under any system of duty collection, the margin of dumping
established in accordance with Article 2 operates as a ceiling for the amount of anti-dumping duties
that could be collected in respect of the sales made by an exporter. To the extent that duties are paid
by an importer, it is open to that importer to clai m a refund if such a ceiling is exceeded. Similarly,
under its retrospective system of duty collection, the United States is free to assess duty liability on a
transaction-specific basis, but the total amount of anti-dumping duties that are levied must not exceed
the exporters' or foreign producers' margins of dumping.
379
163. The Anti-Dumping Agreement is neutral as between different systems for levy and collection
of anti-dumping duties. The Agreement lays down the "margin of dumping" as the ceiling for
collection of duties regardless of the duty assess ment system adopted by a WTO Member, and
provides for a refund if the ceiling is exceeded. It is therefore incorrect to say that the Anti-Dumping
Agreement favours one system, or places another system at a disadvantage.

375Panel Report, para. 7.198.
376Ibid., para. 7.205.
377Ibid.
378Ibid., paras. 7.206.
379See Appellate Body Report, US – Zeroing (EC), para. 131.

(c) New Shipper Reviews
164. The Panel's reasoning, which we rejected 380, relates to periodic reviews under Article 9.3, as
well as to new shipper reviews under Article 9.5. On appeal, Japan not es in this regard that the Panel
"gave no separate interpretive consideration" to the latter types of reviews.381
165. Article 9.5 of the Anti-Dumping Agreement makes it clear that, upon request, investigating
authorities "shall promptly carry out a review for the purpose of determining individual margins of
dumping" for exporters or foreign producers that di d not ship the subject product during the period of
investigation.
382 As noted above 383, under the Anti-Dumping Agreement , dumping determinations
relate to the exporter, and both "dumping" and "mar gins of dumping" relate to the pricing behaviour
of the exporter. Moreover, negative comparison r esults may not be disregarded when calculating a
margin of dumping for an exporter. For the same reasons, we consider that zeroing, in establishing
"individual margins of dumping" for new shippers, is also inconsistent with Article 9.5 of the
Anti-Dumping Agreement.
166. In the light of these considerations, we reverse the Panel's finding, in paragraphs 7.222
and 7.259(b) of the Panel Report, that the United States does not act inconsistently with Articles 9.3
and 9.5 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994 by maintaining zeroing
procedures in periodic reviews a nd new shipper reviews, and find , instead, that the United States acts
inconsistently with these provisions.
2. Article 2.4 of the Anti-Dumping Agreement
167. We turn next to examine whether zeroing in pe riodic reviews and new shipper reviews is, as
such, inconsistent with the "fair compar ison" requirement in Article 2.4 of the Anti-Dumping
Agreement.
168. If anti-dumping duties are assessed on the basis of a methodology involving comparisons
between the export price and the normal value in a manner which results in anti-dumping duties being
collected from importers in excess of the amount of the margin of dumping of the exporter or foreign
producer, then this methodology cannot be viewed as involving a "fair comparison" within the

380See, supra, paras. 150 and 151.
382This is subject to the proviso that such new shippers "can show that they are not related to any of the
exporters or producers in the exporting country who ar e subject to the anti-dumping duties on the product."
(Article 9.5 of the Anti-Dumping Agreement)
383See, supra, paras. 111-112 and 114.

meaning of the first sentence of Article 2.4.
384 This is so because such an assessment would result in
duty collection from importers in excess of the margin of dumping established in accordance with
Article 2, as we have explained previously.385
169. Accordingly, we reverse the Panel's finding, in paragraphs 7.219 and 7.259(b) of the Panel
Report, that zeroing in the context of periodic reviews and new shipper reviews is not, as such,
inconsistent with Article 2.4 of the Anti-Dumping Agreement , and find , instead, that zeroing, is, as
such, inconsistent with that provision.
3. Articles 2.1, 9.1 and 9.2 of the Anti-Dumping Agreement and Article VI:1 of
the GATT 1994
170. As a consequence, we reverse the Panel's findings, in paragra phs 7.216, 7.222, and 7.259(b)
of the Panel Report, that zeroing is not, as such, in consistent with Articles 2.1, 9.1, and 9.2 of the
Anti-Dumping Agreement and Article VI:1 of the GATT 1994, because these findings are based on
the Panel's findings and reasonings relating to Articles 2.4, 2.4.2, and 9.3 of the Anti-Dumping
Agreement and Article VI:2 of the GATT 1994, which we have reversed. The Panel offers no
additional reasoning that could independently suppor t its findings under Articles 2.1, 9.1, and 9.2 of
the Anti-Dumping Agreement and Article VI:1 of the GATT 1994.
171. Japan requests us not only to reverse the Pane l's findings, but also to find that the United
States acted inconsistently with these provisions. Having found that the United States acts
inconsistently with Articles 9.3 and 9.5 of the Anti-Dumping Agreement and Article VI:2 of the
GATT 1994 by maintaining zeroing procedures in peri odic reviews and new shipper reviews, we do
not consider it necessary to ru le on Japan's claims under Articles 2.1, 9.1, and 9.2 of the
Anti-Dumping Agreement and Article VI:1 of the GATT 1994.
386
VI. Zeroing As Applied in Periodic Reviews
172. The Panel found that zeroing, as applied by the United States in the periodic reviews at issue
in this appeal, is not inconsis tent with Articles 1, 2.1, 2.4, 2.4.2, and 9.1-9.3 of the Anti-Dumping
Agreement and Articles VI:1 and VI:2 of the GATT 1994. 387 In support of its findings, the Panel
referred to the reasoning that led it to conclude that zeroing, as it relates to periodic reviews, is not, as

384For our interpretation of Article 2.4 see, supra, para. 146.
385See, supra, para. 155.
386Our approach here is consistent with the Appellate Body's approach in US – Zeroing (EC) . (See
Appellate Body Report, US – Zeroing (EC), para. 147)
387Panel Report, paras. 7.225-7.227.

such, inconsistent with certain provisions of the Anti-Dumping Agreement and Articles VI:1 and VI:2
of the GATT 1994.388
173. On appeal, Japan challenges the Panel's findi ngs under Articles 2.1, 2.4, 9.1-9.3 of the
Anti-Dumping Agreement and Articles VI:1 and VI:2 of the GATT 1994. Japan requests the
Appellate Body to reverse these findings and find, in stead, that the United States acted inconsistently
with its obligations under these provisions. 389 Japan does not, however, pursue its claims under
Articles 1 and 2.4.2 of the Anti-Dumping Agreement.390
174. We have found 391 that zeroing, as it relates to periodic re views, is, as such, inconsistent with
Articles 2.4 and 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994. We further
recall that the Appellate Body has previously found zeroing, as applied in periodic reviews, to be
inconsistent with Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994, on
the grounds that application of that methodology "result[s] in amounts of assessed anti-dumping
duties that exceed[ed] the foreign producers' or exporters' margins of dumping".
392
175. In the periodic reviews at issue in this case, the USDOC assessed the anti-dumping duties
according to a W-T comparison methodology in whic h, for each individual importer, comparisons
were carried out between the export price of each individual transaction made by the importer and a
contemporaneous average normal value. The resu lts of these multiple comparisons were then
aggregated to calculate the anti-dumping duties owed by each individual importer. If, for a given
individual transaction, the export price exceeded the contemporaneous average normal value, the
USDOC, at the aggregation stage, disregarded the r esult of this individual comparison. Because the
results of such comparisons were systematica lly disregarded, the amount of anti-dumping duties
collected in the periodic reviews at issue exceeded the exporters' proper margins of dumping.
176. For these reasons, we reverse the Panel's finding, in paragraphs 7.227 and 7.259(c) of the
Panel Report, that zeroing, as applied by the United St ates in the 11 periodic review determinations at
issue in this appeal, is not inconsistent with Articles 2.1, 2.4, 9.1, and 9.3 of the Anti-Dumping
Agreement and Articles VI:1 and VI:2 of the GATT 1994, and find , instead, that the United States
acted inconsistently with its obliga tions under Articles 2.4 and 9.3 of the Anti-Dumping Agreement
and Article VI:2 of the GATT 1994.

388Panel Report, para. 7.226.
390See Ibid. and footnote 213 thereto. Japan also states that it is not pursuing its claim under
Article 18.4 of the Anti-Dumping Agreement.
391See, supra, paras. 166 and 169.

177. In relation to Articles 2.1 and 9.1 of the Anti-Dumping Agreement and Article VI:1 of the
GATT 1994, we note that Japan requests us not only to reverse the Panel's findings, but also to find
that the United States acted inconsistently with these provisions. At the oral hearing, Japan confirmed
that it wished us to complete the Panel's legal an alysis to this effect. However, having found that
zeroing, as applied by the USDOC in the 11 periodic revi ew determinations at issue in this dispute, is
inconsistent with Articles 2.4 and 9.3 of the Anti-Dumping Agreement and Article VI:2 of the
GATT 1994, we do not consider it necessary to make additional findings on Japan's claims under
Articles 2.1 and 9.1 of the Anti-Dumping Agreement and Article VI:1 of the GATT 1994 for the
reasons set out earlier.
393
VII. Margins of Dumping in Sunset Reviews
178. Before the Panel, Japan argued that tw o specific sunset review determinations 394 were
inconsistent with Articles 11.1 and 11.3 of the Anti-Dumping Agreement, because they were based on
margins of dumping that were calculated inconsiste ntly with Articles 2.1, 2.4, and 2.4.2 of the
Anti-Dumping Agreement.
179. The Panel agreed with Japan that the USDOC "relied on" margins of dumping established in
prior proceedings when making its likelihood-of-dumping determination. 395 Noting, however, that
"the margins of dumping relied upon by [the] US DOC were margins calculated during periodic
reviews"396, and recalling its previous finding that the Anti-Dumping Agreement does not prohibit
zeroing in the context of such reviews, the Pane l found that the USDOC did not act inconsistently
with Articles 2 and 11 of the Anti-Dumping Agreement.397
180. Japan challenges this finding on appeal. Acco rding to Japan, the Panel's only reason for
rejecting Japan's claim was the Panel's "incorrect finding that zeroing is permissible in periodic
reviews under Article 9.3." 398 Japan, therefore, requests the Appe llate Body to reverse the Panel's

392Appellate Body Report, US – Zeroing (EC), para. 133.
393See, supra, para. 140.
394"Final Results of Expedited Sunset Reviews: Antifriction Bearings From Japan" (USDOC sunset
review in case number A-588-804), United States Federal Register , Vol. 64, No. 213 (4 November 1999),
p. 60275 (Exhibit JPN-22 submitted by Japan to the Panel) ; "Final Results of Full Sunset Reviews: Corrosion-
Resistant Carbon Steel Flat Products from Japan" (USDOC sunset review in case number A-588-826), United
States Federal Register, Vol. 65, No. 149 (2 August 2000), p. 47380 (Exhibit JPN-23 submitted by Japan to the
Panel).
395See Panel Report, para. 7.255. In our discussion, we refer to the USDOC's determination of
continuation or recurrence of dumping as the "likelihood-of-dumping determination".
396Ibid., para. 7.256.
397See Ibid., para. 7.257.

finding under Articles 2 and 11 of the Anti-Dumping Agreement and to find, instead, that, in relying
on these previously determined margins, the United States acted inconsistently with Article 11.3 of
the Anti-Dumping Agreement. Japan also claims that, "[b]ecause the violations of Article 11.3 stem
from the reliance upon margins of dumping calculated using the zeroing procedures" that are
inconsistent with Articles 2.1 and 2.4 of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of
the GATT 1994, the underlying sunset reviews are also inconsistent with these provisions.
399
181. In contrast, the United States argues that the Panel did not err in its conclusion that zeroing is
permissible in determining margins of dumping in pe riodic reviews. The United States, therefore,
submits that the Panel's conclusions with respect to Japan's "as applied" claims in the two sunset
reviews at issue in this dispute should be affirmed.400
182. The Appellate Body has previously indicated that the ordinary meanings of the terms
"determine" and "review" in the text of Article 11.3 of the Anti-Dumping Agreement requires a
"reasoned conclusion on the basis of information gath ered as part of a process of reconsideration and
examination" by an investigating authority. 401 Moreover, a sunset re view determination under
Article 11.3 must be on the basis of a "rigorous examination" 402 leading to "reasoned and adequate
conclusions"403, and be supported by "positive evidence" and a "sufficient factual basis".404
183. In US – Corrosion-Resistant Steel Sunset Review , the Appellate Body explained that, "should
investigating authorities choose to rely upon dumping margins in making their likelihood
determination, the calculation of these margins must conform to the disciplines of Article 2.4."
405 The
Appellate Body added that, "[i]f these margins were legally flawed because they were calculated in a
manner inconsistent with Article 2.4, this could give rise to an inconsistency not only with Article 2.4,

399Ibid., para. 197. We note that, on appeal, Japan does not pursue its claims regarding Articles 1,
2.4.2, 9.1-9.3, 11.1, and 18.4 of the Anti-Dumping Agreement and Article XVI:4 of the WTO Agreement. (See
Ibid., para. 197 and footnote 233 thereto) We further note that Japan does not appeal the Panel's conclusion
regarding the USITC's likelihood-of-injury determination. Nor does Japan appeal the Panel's finding that Japan
had failed to make a prima facie case that, by maintaining zeroing pr ocedures in the context of changed
circumstances and sunset reviews, the USDOC acted inconsistently with Articles 2 and 11 of the Anti-Dumping
Agreement.
400See United States' appellee's submission, para. 75.
401Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , para. 283 (quoting
Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review, para. 111).
402Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review, para. 113.
403Ibid., para. 114 (quoting Panel Report in US – Corrosion-Resistant Steel Sunset Review, para. 7.271).
404Ibid.
405Ibid., para. 127. See also Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews ,
para. 180.

but also with Article 11.3 of the Anti-Dumping Agreement ."
406 In such circumstances, "the
likelihood[-of-dumping] determination could not constitute a proper foundation for the continuation
of anti-dumping duties under Article 11.3."407
184. In the present case, the Panel found, as a matter of fact, that, in its likelihood-of-dumping
determination, the USDOC relied "on margins of dumping established in prior proceedings". 408 The
Panel further found that these margins were calculated during periodic reviews "on the basis of simple
zeroing".409
185. We have previously concluded410 that zeroing, as it relates to periodic reviews, is inconsistent,
as such, with Article 2.4 and Article 9.3. As th e likelihood-of-dumping determ inations in the sunset
reviews at issue in this appeal relied on margin s of dumping calculated inconsistently with the
Anti-Dumping Agreement, they are inconsistent with Article 11.3 of that Agreement.
186. For these reasons, we reverse the Panel's finding, in paragr aphs 7.257 and 7.259(e) of the
Panel Report, that the United States acted c onsistently with Articles 2 and 11 of the Anti-Dumping
Agreement by relying on margins of dumping calculated in previous proceedings in the sunset reviews
at issue in this case, and find , instead, that the United States acted inconsistently with Article 11.3 of
the Anti-Dumping Agreement.
187. In these circumstances, we do not consider it necessary to rule on whether the same sunset
review determinations are also inconsis tent with Articles 2.1 and 2.4 of the Anti-Dumping Agreement
and Articles VI:1 and VI:2 of the GATT 1994. Furthermore, Japan has not explained why additional
findings under these provisions would be necessary to resolve the dispute.411
VIII. Article 17.6(ii) of the Anti-Dumping Agreement
188. The Panel and the United States have referred to Article 17.6(ii) of the Anti-Dumping
Agreement412, which provides:

406Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 127. See also
Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , para. 180; and Appellate Body
Report, US – Anti-Dumping Measures on Oil Country Tubular Goods, para. 181.
407Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review, para. 130.
408Panel Report, para. 7.255.
409Ibid., para. 7.256.
410See, supra, paras. 166 and 169.
411Appellate Body Report, Australia – Salmon, para. 223. See also Japan's responses to questions at the
oral hearing.
412See Panel Report, para. 7.142. See also United States' appellee's submission, paras. 30 and 34.

(ii) the panel shall interpret the relevant provisions of the
Agreement in accordance with cust omary rules of interpretation of
public international law. Where the panel finds that a relevant
provision of the Agreement admits of more than one permissible
interpretation, the panel shall find the authorities' measure to be in
conformity with the Agreement if it rests upon one of those
permissible interpretations.
189. In our analysis, we have been mindful of the st andard of review provided in Article 17.6(ii).
However, we consider that there is no room for r ecourse to the second sentence of Article 17.6(ii) in
this appeal. This is because, in our view, Ar ticles 2.4, 2.4.2, 9.3, 9.5, and 11.3 of the Anti-Dumping
Agreement and Articles VI:1 and VI:2 of the GATT 1994, when interpreted in accordance with
customary rules of interpretation of public intern ational law, as required by the first sentence of
Article 17.6(ii), do not admit of another interpretation of these provisions as far as the issue of zeroing
before us is concerned.
IX. Findings and Conclusions
190. For the reasons set forth in this Report, the Appellate Body:
(a) upholds the Panel's finding, in paragraph 7.58 of the Panel Report, that the United
States' "zeroing procedures" constitute a m easure which can be challenged as such
and, therefore, dismisses the United States' claim that the Panel acted inconsistently
with Article 11 of the DSU by concluding th at the zeroing procedures, as they relate
to original investigations based on tran saction-to-transaction and weighted average
normal value-to-prices of individual expor t transactions comparisons, constitute a
measure that can be challenged, as such, in WTO dispute settlement;
(b) reverses the Panel's finding, in paragraphs 7. 143, 7.161, and 7.259(a) of the Panel
Report, that the United States does not act inconsistently with Articles 2.1, 2.4,
and 2.4.2 of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the
GATT 1994, and finds , instead, that the United Stat es acts inconsistently with
Articles 2.4 and 2.4.2 of the Anti-Dumping Agreement by maintaining zeroing
procedures when calculating margins of dumping on the basis of transaction-to-
transaction comparisons in original investigations;
(c) reverses the Panel's findings, in paragraphs 7.216, 7.219, 7.222, and 7.259(b) of the
Panel Report, that the United States does not act inconsistently with Articles 2.1, 2.4,
and 9.1-9.3 of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the
GATT 1994, and finds , instead, that the United Stat es acts inconsistently with

Articles 2.4 and 9.3 of the Anti-Dumping Agreement and Article VI:2 of the
GATT 1994 by maintaining zeroing procedures in periodic reviews;
(d) reverses
 the Panel's findings, in paragraphs 7. 216, 7.219, 7.222 and 7.259(b) of the
Panel report, that the United States does not act inconsistently with Articles 2.1, 2.4,
and 9.5 of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the
GATT 1994, and finds , instead, that the United Stat es acts inconsistently with
Articles 2.4 and 9.5 of the Anti-Dumping Agreement by maintaining zeroing
procedures in new shipper reviews;
(e) reverses the Panel's findings, in paragraphs 7. 227 and 7.259(c) of the Panel Report,
that the United States did not act inconsistently with Articles 2.1, 2.4, and 9.1-9.3 of
the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the GATT 1994, and
finds
, instead, that the United States acted inc onsistently with Articles 2.4 and 9.3 of
the Anti-Dumping Agreement and Article VI:2 of the GATT 1994 by applying
zeroing procedures in the 11 periodic reviews at issue in this appeal;
(f) reverses the Panel's finding, in paragraphs 7. 257 and 7.259(e) of the Panel Report,
that the Unites States did not act inconsistently with Articles 2 and 11 of the
Anti-Dumping Agreement in the sunset reviews at issu e in this appeal, when it relied
on margins of dumping calculated in previous proceedings through the use of zeroing,
and finds, instead, that the United States acted in consistently with Article 11.3 of the
Anti-Dumping Agreement.
191. The Appellate Body recommends that the DSB request the United States to bring its
measures, found in this Report, and in the Panel Repor t as modified by this Report, to be inconsistent
with the Anti-Dumping Agreement and with the GATT 1994, into conformity with its obligations
under those Agreements.

Signed in the original in Geneva this 14th day of December 2006 by:

Giorgio Sacerdoti
Presiding Member

 _________________________ _________________________
 Georges Abi-Saab A.V. Ganesan
 Member Member

ANNEX I

11 October 2006

 (06-4940)
 Original: English

Notification of an Appeal by Japan
under Article 16.4 and Article 17 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes (DSU),
and under Rule 20(1) of the Working Procedures for Appellate Review

 The following notification, dated 11 October 2006, from the Delegation of Japan, is being
circulated to Members.

 Pursuant to Articles 16.4 and 17 of the Understanding on Rules and Procedures Governing
the Settlement of Disputes ("DSU") and Rule 20 of the Working Procedures for Appellate Review ,
Japan hereby notifies its decision to appeal to the A ppellate Body certain issues of law covered in the
Panel Report on (WT/DS322/R)
("Panel Report"), and certain legal interpretations developed by the Panel in this dispute. Japan seeks
review by the Appellate Body of the Panel's findings and conclusions that:
1. By maintaining the zeroing procedures for use in original investigations under a transaction-
to-transaction comparison method , the United States acts consistently with Articles 2.1, 2.4
and 2.4.2 of the Agreement on Implementation of Articl e VI of the General Agreement on
Tariffs and Trade 1994 (" Anti-Dumping Agreement "), and Articles VI:1 and VI:2 of the
General Agreement on Tariffs and Trade 1994 ("GATT 1994").413 This conclusion is based on
an erroneous interpretation and application of these provisions. In particular, the Panel erred
in law in finding that:
(i) Articles 2.1 and 2.4.2 and Articles VI :1 and VI:2 do not require that
"dumping" and "margins of dumping" be determined for the "product" under
investigation as a whole and, instead, permit a determination of dumping for
individual export transactions;414

413See Panel Report, paras. 7.143, 7.161 and 7.259(a).
414See, for example, Panel Report, paras. 7.92 to 7.102, 7.104 to 7.112, 7.118 to 7.120, 7.139, and 7.141
to 7.143.

(ii) Article 2.4.2 permits the use of the zeroing procedures under the transaction-
to-transaction comparison method set out in the first sentence of that
provision;
415 and,
(iii) Article 2.4 is subject to the allegedly "more specific" provisions of Articles
2.4.2 and 9, and the zeroing procedures entail a "fair comparison" of export
price and normal value.416
2. By maintaining the zeroing procedures for use in periodic reviews , the United States acts
consistently with Articles 2.1, 2.4, 9.1, 9.2 and 9.3 of the Anti-Dumping Agreement , and
Articles VI:1 and VI:2 of the GATT 1994. 417 This conclusion is based on an erroneous
interpretation and application of these provisions. In particular, the Panel erred in law in
finding that:
(iv) Articles 2.1, 9.1, 9.2 and 9.3, and Articles VI:1 and VI:2, do not require, for
purposes of periodic reviews, that "dum ping" and "margins of dumping" be
determined for the "product" under investigation as a whole and, instead,
permit a determination of dumping for individual export transactions;
418
(v) Articles 9.1, 9.2 and 9.3, and Articles VI:1 and VI:2, permit, as a
consequence, the assessment of the maximum amount of anti-dumping duties
payable on the basis of a transaction-specific margin of dumping, instead of a
margin of dumping for the "product" as a whole, for the foreign exporter or
producer;
419 and,
(vi) Article 2.4 is subject to the "more specific" provisions of Articles 2.4.2 and 9,
and the zeroing procedures involve a "fair comparison" of export price and
normal value under this provision.420
3. By applying the zeroing procedures in eleven periodic reviews identified in Exhibits JPN-11 to
JPN-21, the United States acted consistently with Articles 2.1, 2.4, 9.1, 9.2 and 9.3 of the Anti-
Dumping Agreement , and Articles VI:1 and VI:2 of the GATT 1994. 421 This conclusion is
based on an erroneous interpretation and app lication of these provisions, as described in
paragraph 2 above.422
4. By maintaining the zeroing proce dures for use in new shipper reviews , the United States acts
consistently with Articles 2.1, 2.4 and 9.5 of the Anti-Dumping Agreement, and Articles VI:1
and VI:2 of the GATT 1994. 423 This conclusion is based on an erroneous interpretation and
application of these provisions. In particular, the Panel erred in law in finding that:

415See, for example, Panel Report, paras. 7.118 to 7.120, 7.127 to 7.143.
416See, for example, Panel Report, paras. 7.157 to 7.161.
417See Panel Report, paras. 7.216, 7.219, 7.222, and 7.259(b).
418See, for example, Panel Report, paras. 7.194 to 7.209, 7.216, 7.221 and 7.222.
419See, for example, Panel Report, paras. 7.194 to 7.209, 7.216, 7.221 and 7.222.
420See, for example, Panel Report, paras. 7.218 and 7.219. See also Panel Report, paras. 7.157 to 7.160,
and 7.196 to 7.209.
421See Panel Report, paras. 7.227 and 7.259(c).
422See Panel Report, paras. 7.226 and 7.227.
423See Panel Report, paras. 7.216, 7.219, 7.222, and 7.259(b).

(vii) Articles 2.1 and 9.5, and Articles VI:1 and VI:2, do not require that
"dumping" and "margin of dumping" be determined for the "product" under
investigation as a whole and, instead, permit a determination of dumping for
individual export transactions;
424 and,
(viii) Article 2.4 is subject to the "more specific" provisions of Articles 2.4.2 and 9,
and the zeroing procedures involve a "fair comparison" of export price and
normal value.425
5. By relying, in the two sunset reviews identified in Exhibits JPN-22 and JPN-23, on margins
of dumping calculated using the zeroing procedur es in previous periodic reviews, the United
States acted consistently with Articles 2.1, 2.4 and 11.3 of the Anti-Dumping Agreement.426
This conclusion is in error because it is based on the Panel's erroneous conclusion, described
in paragraph 2 above, that the zeroing procedures are permitted in periodic reviews.427
 In sum, Japan considers that the Panel erred in law in the interpreta tion and application of
Articles 2.1, 2.4, 2.4.2, 9.1, 9.2, 9.3, 9.5 and 11.3 of the Anti-Dumping Agreement, and Articles VI:1
and VI:2 of the GATT 1994. Japan requests that, u pon reversal of the Panel's erroneous findings and
conclusions identified above, the A ppellate Body resolve this dispute promptly by finding that the
United States violates these provisions by maintaining and applying the zeroing procedures.

424See, for example, Panel Report, paras. 7.194 to 7.209, 7.216, 7.221 and 7.222.
425See, for example, Panel Report, paras. 7.218 and 7.219. See also Panel Report, paras.7.157 to 7.160
and 7.196 to 7.209.
426See Panel Report, paras. 7.257 and 7.259(e).
427See also Panel Report, paras. 7.256 and 7.257.

ANNEX II

23 October 2006

 (06-5130)
 Original: English

Notification of an Other Appeal by the United States

under Article 16.4 and Article 17 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes (DSU),
and under Rule 23(1) of the Working Procedures for Appellate Review

 The following notification, dated 23 October 2006, from the Delegation of the United States,
is being circulated to Members.

Pursuant to Rule 23 of the Working Procedures for Appellate Review , the United States
hereby notifies its decision to appeal to the Appellate Body certain issues of law covered in the Report
of the Panel on (WT/DS322/R)
("Panel Report") and certain legal interpretations developed by the Panel in this dispute.

 The United States seeks review by the Appellate Body of the Panel's finding and related legal
interpretations that the United States maintains a measure referred to as "zeroing procedures" in
transaction-to-transaction and average-to-transac tion comparisons in the context of original
investigations.
428 This finding is in error and is based on an erroneous application of the law and
related legal interpretations. In addition, the Panel failed to ma ke an objective assessment of the
matter before it in connection with the issue of th e existence of "zeroing procedures" that may be
challenged as such in transaction-to-transaction and average-to-transaction comparisons in the context
of original investigations, including a failure to ma ke an objective assessment of the facts of the case,
contrary to Article 11 of the Understanding on Rules and Procedures Governing the Settlement of
Disputes ("DSU"). The Panel's finding and related lega l interpretations were also contrary to
Articles 3.3, 4.2, 6.2, and 7.1 of the DSU.

428Panel Report, paras. 7.34 through 7.59, 7.90, 7.143, 7.161, 7.166, 7.170, 7.175, and 7.259(a).

ANNEX III

7 February 2005

 (05-0498)
 Original: English

Request for the Establishment of a Panel by Japan

 The following communication, dated 4 February 2005, from the delegation of Japan to the
Chairperson of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.

 Upon instructions from my authorities, I hereby wish to convey the request of the
Government of Japan for the establishment of a panel pursuant to Article XXIII of the General
Agreement on Tariffs and Trade 1994 (the "GATT 1994"), Articles 4 and 6 of the Understanding on
Rules and Procedures Governing the Settlement of Disputes (the "DSU"), and Article 17 of the
Agreement on Implementation of Article VI of GATT 1994 (the "Anti-Dumping Agreement")
regarding certain measures imposed by the United States.

A. Consultations

 On 24 November 2004, the Government of Japan requested consultations with the
Government of the United States under Article 4 of the DSU, Article XXII:1 of the GATT 1994, and
Article 17.2 of the Anti-Dumping Agreement.
429 Consultations were held on 20 December 2004,
which allowed a better understanding of the positions of the parties, but failed to achieve a mutually
agreed solution of the dispute.

B. Measures and Claims

 Pursuant to Article 6 of the DSU and Article 17 of the Anti-Dumping Agreement, Japan
considers that the specific measures identified in this request are inconsistent with the United States'
obligations under the Marrakesh Agreement Esta blishing the World Trade Organization (the
"Marrakesh Agreement"), including the agreements a nnexed thereto. By infringing those obligations,
the United States' measures nullify or impair benefits accruing to Japan directly or indirectly under
such agreements, as set forth in Article 3.8 of the DSU. Specifically, the Un ited States has acted in a
manner inconsistent with the provisions of th e Anti-Dumping Agreement, the GATT 1994, and the
Marrakesh Agreement that are identified below.

429WT/DS322/1 (24 November 2004).

1. The Government of Japan considers that the United States measures including laws,
regulations and administrative procedures, as such, are inconsistent with certain provisions of the
Anti-Dumping Agreement, the GATT 1994, and the Marrakesh Agreement, for the following reasons.

(a) In original investigations, periodic reviews, new shipper reviews, sunset reviews and
changed circumstances reviews where the redetermination of margins of dumping
occurs, the United States Department of Commerce ("USDOC") disregards
intermediate negative dumping margins cal culated by comparing normal value and
export price, including on a weighted-avera ge-to-weighted-average basis, weighted-
average-to-transaction basis, and transac tion-to-transaction basis, through the
USDOC's AD Margin Calculation computer program and other related procedures, in
the process of establishing the overall dumping margin for the product as a whole
(hereinafter collectively referred to as "Zeroing"). As a result, the USDOC artificially
inflates the dumping margins. Zeroing is inconsistent with:
(i) Articles 2.1, 2.4 and 2.4.2 of the Anti-Dumping Agreement because the
comparison of normal value and export price is not in conformity with those
provisions;
(ii) Articles 9.1, 9.2 and 9.3 of the Anti-Dumping Agreement through the
imposition and collection of anti-dumping duties in excess of the margin or
amount of dumping as properly determined pursuant to Article 2 of the Anti-
Dumping Agreement;
(iii) as to original investigations, Article 5.8 of the Anti-Dumping Agreement
insofar as de minimis dumping margins are determined to be greater than
de minimis as a result of the impermissible use of the Zeroing procedure, and
the Zeroing procedure results in the failure to immediately terminate an
investigation;
(iv) as to original investigations, Article 3.3 of the Anti-Dumping Agreement
insofar as the Zeroing procedure result s in the cumulative assessment of the
effect of imports for which dumping ma rgins are erroneously determined to
be greater than de minimis;
(v) as to new shipper reviews, changed circumstances reviews and sunset
reviews, Articles 9.5, 11.1, 11.2 and 11.3 of the Anti-Dumping Agreement to
the extent that dumping margins calculated by using the impermissible
Zeroing procedure results in erroneous determination; and
(vi) Article 1 of the Anti-Dumping Agreement, and Articles VI:1 and VI:2 of the
GATT 1994 to the extent that the Zeroing procedure and the resulting
imposition and collection of anti-dumping duties are inconsistent with the
Anti-Dumping Agreement.

(b) Injury investigations by the United States International Trade Commission ("USITC")
are inconsistent with:
(i) Article 3, including Articles 3.1, 3.2, 3.4 and 3.5, of the Anti-Dumping
Agreement insofar as the injury and causation determinations are based on
the examination of the inflated dumping margin and volume of "dumped
imports" that include imports from companies which would have been
excluded as non-dumped imports (due to the calculation of de minimis or

zero margins) had the margins been ca lculated without using the Zeroing
procedure;
(ii) Article 3.3 of the Anti-Dumping Agreem ent insofar as the Zeroing procedure
allows the cumulative assessment of th e effect of imports for which dumping
margins are erroneously determined to be greater than de minimis;
(iii) Article 5.8 of the Anti-Dumping Agreement insofar as the volume of dumped
imports or injury is determined not to be negligible as a result of the
impermissible use of the Zeroing procedure, and the USITC consequently
fails to immediately terminate the investigation; and
(iv) Articles 1 of the Anti-Dumping Agreement, and Articles VI:1 and VI:2 of the
GATT 1994 to the extent that the injury investigation and the resulting
imposition and collection of anti-dumping duties are inconsistent with the
Anti-Dumping Agreement.
(c) In sunset reviews, the USDOC and the US ITC base their determinations that the
expiry of an anti-dumping duty would be likel y to lead to continuation or recurrence
of dumping and injury on margins previously calculated using the Zeroing procedure.
Thus, the sunset reviews by the US authorities are inconsistent with:
(i) Articles 11.1 and 11.3 of the Anti-Dumping Agreement, insofar as the
likelihood determinations in the sunset reviews are based on dumping
margins determined using the Zeroing pr ocedure that is inconsistent with
Article 2 including Articles 2.4 and 2.4.2 of the Anti-Dumping Agreement;
and
(ii) Article 1 of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the
GATT 1994 to the extent that the sunset reviews and the resulting continued
imposition and collection of anti-dumping duties are inconsistent with the
Anti-Dumping Agreement.
(d) Changed circumstances reviews are inconsistent with:
(i) Articles 11.1 and 11.2 of the Anti-Dumping Agreement insofar as the
determinations in the changed circumstances reviews are based on dumping
margins determined using the Zeroing pr ocedure that is inconsistent with
Article 2, including Articles 2.4 and 2.4.2 of the Anti-Dumping Agreement;
and
(ii) Article 1 of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the
GATT 1994 to the extent that the changed circumstances reviews and the
resulting continued imposition and collection of anti-dumping duties are
inconsistent with the Anti-Dumping Agreement.
(e) By adopting and maintaining the WTO-inc onsistent measures identified above, the
United States has violated its obligations under Article 18.4 of the Anti-Dumping
Agreement and Article XVI:4 of the Marrakesh Agreement, because the United
States has failed to take all necessary steps, of a general or particular character, to
ensure the conformity of its laws, regulations and administrative procedures with the
provisions of GATT 1994 and the Anti-Dumping Agreement.

2. The Government of Japan also considers that the United States laws, regulations and
administrative procedures described above were applied in the specific original investigation, periodic
reviews and sunset reviews identified in the Annex to this panel request. As a result of the application
of the Zeroing procedure, the anti-dumping orders and determinations adopted in the proceedings
identified in the Annex are inconsistent with the following provisions of the Anti-Dumping
Agreement, the GATT 1994, and the Marrakesh Agreem ent for the same reasons as set out in point
B.1.(a)–(e) above:

(a) in the original investigation:
(i) Articles 1, 2.1, 2.4, 2.4.2, 3.1, 3.2, 3.3, 3.4, 3.5, 5.8, 9.1, 9.2 and 9.3 of the
Anti-Dumping Agreement, and Articles VI:1 and VI:2 of the GATT 1994;
and
(ii) Article 18.4 of the Anti-Dumping Ag reement and Article XVI:4 of the
Marrakesh Agreement ; and

(b) in the periodic and sunset reviews:
(i) Articles 1, 2.1, 2.4, 2.4.2, 9.1, 9.2, 9.3, 11.1 and 11.3 of the Anti-Dumping
Agreement, and Articles VI:1 and VI:2 of the GATT 1994; and
(ii) Article 18.4 of the Anti-Dumping Ag reement and Article XVI:4 of the
Marrakesh Agreement.
3. The foregoing measures include, and/or are a dopted or applied pursuant to, the following
United States laws, regulations, and administrative procedures:

 (1) the Tariff Act of 1930, as amended (in particular, by the Uruguay Round Agreements
Act of 1994 (the "URAA")), in particular, sections 731, 751, 752, 771(7), 771(35)(A),
771(35)(B) and 777A(d);

(2) the Statement of Administrative Action that accompanied the URAA, H.R. Doc. No.
103-316, vol. I;

(3) the implementing regulations of the USDOC, 19 C.F.R. section 351; and

(4) the USDOC Import Administration's Antidumping Manual (1997 edition), including
the AD Margin Calculation computer program(s) to which it refers.

 The foregoing text identifies the specific meas ures at issue and describes in brief the legal
bases for the Government of Japan's claims, and is without prejudice to any arguments that the
Government of Japan may develop and present to th e Panel regarding the WT O-inconsistency of the
measures at issue.

 Accordingly, the Government of Japan requ ests the establishment of a panel pursuant to
Article XXIII of the GATT 1994, Articles 4 and 6 of the DSU, and Article 17 of the Anti-Dumping
Agreement. The terms of reference shall be the te rms set out in Article 7 of the DSU and Article 17
of the Anti-Dumping Agreement. The Government of Japan requests that the establishment of a panel
in this matter be placed on the agenda of the meeting of the Dispute Settlement Body on
17 February 2005.

United States – Anti-Dumping Duties on Imports of Certain Cut-To-Length
Carbon-Quality Steel Plate Products from Japan

Specific Case No. 1

The measure

 This case concerns the imposition of anti -dumping duties on Certain Cut-To-Length Carbon-
Quality Steel Plate Products ("CTL Plate") from Japan (USDOC c ase number A-588-847,
64 FR 73215, 13 December 1999). The rate of the ad valorem anti-dumping duty was 10.78% for
Kawasaki Steel Corporation and all others.

Use of Zeroing

In the United States Department of Commerce's ("USDOC's") original investigation of CTL
Plate from Japan, the USDOC utilized the Zeroi ng procedure by which the USDOC disregards
negative dumping margins calculated for averaging gr oups in the process of establishing the dumping
margin for the product as a whole.

 This procedure is functionally identical to the pr ocedure that was held to be inconsistent with
the WTO Anti-Dumping Agreement in European Communities – Anti-Dumping Duties on Imports of
Cotton-Type Bed Linen from India (Panel Report, WT/DS141/R, and Appellate Body Report,
WT/DS141/AB/R, adopted 12 March 2001), and also in United States – Final Dumping
Determination on Softwood Lumber from Canada (Panel Report, WT/DS264/R, and Appellate Body
Report, WT/DS264/AB/R, adopted 31 August 2004).

 In addition, in the United States Internati onal Trade Commission's ("USITC's") affirmative
determination in Cut-to-Length Carbon Steel Plat e from Japan, Investigation No. 731-TA-820, the
USITC, pursuant to Section 771(7) of the Act, relied on a "magnitude of dumping" and "volume of
dumped imports," that were inflated by the use of the Zeroing procedure.

Dumping margin without Zeroing

 By using the above procedure, the USDOC calculated a dumping margin of 10.58% for
Kawasaki Steel Corporation, while without the Zero ing procedure (i.e. with the negative unit margins
included), the dumping margin would have been [lower].

United States – Anti-Dumping Periodic Review on Imports of Tapered Roller Bearings,
Four Inches or Less in Outside Diameter, and Components Thereof, From Japan

Specific Case No. 2

The measure

 This case concerns the imposition of anti-dum ping duties on Tapered Roller Bearings, Four
Inches or Less in Outside Diameter, and Compone nts Thereof, From Japan (USDOC case number
A-588-054, 66 Fed. Reg. 15078, 15 March 2001). The period of review is 1 October 1998 through 30
September 1999, and the rate of the ad valorem anti-dumping duty was 14.86% for Koyo Seiko Co.,
Ltd.

Use of Zeroing

 In this periodic review of Tapered Roller B earings, Four Inches or Less in Outside Diameter,
and Components Thereof, From Japan, the USDOC utilized the Zeroing procedure by which the
USDOC disregards negative dumping margins calculated for the export transactions under review in
the process of establishing the dumping margin for the product as a whole.

Dumping margin without Zeroing

 By using this procedure, the USDOC calculated a dumping margin of 14.86% for Koyo
Seiko Co., Ltd., while without the Zeroing procedur e (i.e. with the negative unit margins included),
the dumping margin would have been [negativ e], and no anti-dumping duty would have been
collected.

United States – Anti-Dumping Periodic Review on Imports of Tapered Roller Bearings
and Parts Thereof, Finished and Unfinished, From Japan

Specific Case No. 3

The measure

 This case concerns the imposition of anti-dum ping duties on Tapered Roller Bearings and
Parts Thereof, Finished and Unfinished, From Japan (USDOC case number A-588-604,
65 Fed. Reg. 11767, 6 March 2000). The period of review is 1 October 1997 through 30 September
1998, and the rate of the ad valorem anti-dumping duty was 17.58% for NTN Corporation.

Use of Zeroing

 In this periodic review of Tapered Roller Bearings and Parts Thereof, Finished and
Unfinished, From Japan, the USDOC utilized the sa me zZeroing procedure as that used in Specific
Case No. 2.

Dumping margin without Zeroing

 By using this procedure, the USDOC calculated a dumping margin of 17.58% for NTN
Corporation, while without the Zeroing procedure (i.e. with the negative unit margins included), the
dumping margin would have been [negative], and no anti-dumping duty would have been collected.

United States – Anti-Dumping Periodic Review on Imports of Tapered Roller Bearings
and Parts Thereof, Finished and Unfinished, From Japan

Specific Case No. 4

The measure

 This case concerns the imposition of anti-dum ping duties on Tapered Roller Bearings and
Parts Thereof, Finished and Unfinished, From Japan (USDOC case number A-588-604,
66 Fed. Reg. 15078, 15 March 2001). The pe riod of review is 1 October 1998 through
30 September 1999, and the rate of the ad valorem anti-dumping duty was 17.94% for Koyo Seiko
Co., Ltd.

Use of Zeroing

 In this periodic review of Tapered Roller Bearings and Parts Thereof, Finished and
Unfinished, From Japan, the USDOC utilized the same Zeroing procedure as that used in Specific
Case No. 2.

Dumping margin without Zeroing

 By using this procedure, the USDOC calculated a dumping margin of 17.94% for Koyo Seiko
Co., Ltd., while without the Zeroing procedure (i .e. with the negative unit margins included), the
dumping margin would have been [lower].

United States – Anti-Dumping Periodic Review on Imports of Ball Bearings
and Parts Thereof From Japan

Specific Case No. 5

The measure

 This case concerns the imposition of anti- dumping duties on Ball Bearings and Parts Thereof
From Japan (USDOC case number A-588-804, 65 Fed. Reg. 49219, 11 August 2000). The period of
review is 1 May 1998 through 30 April 1999, and the rate of the ad valorem anti-dumping duty was
6.14% for NTN Corporation.

Use of Zeroing

 In this periodic review of Ball Bearings a nd Parts Thereof From Japan, the USDOC utilized
the same Zeroing procedure as that used in Specific Case No. 2.

Dumping margin without Zeroing

 By using this procedure, the USDOC calculated a dumping margin of 6.14% for NTN
Corporation, while without the Zeroing procedure (i.e. with the negative unit margins included), the
dumping margin would have been [negative], and no anti-dumping duty would have been collected.

United States – Anti-Dumping Periodic Review on Imports of Cylindrical
Roller Bearings and Parts Thereof From Japan

Specific Case No. 6

The measure

 This case concerns the imposition of anti-dum ping duties on Cylindrical Roller Bearings and
Parts Thereof From Japan (USDOC case number A-588-804, 65 Fed. Reg. 49219, 11 August 2000).
The period of review is 1 May 1998 through 30 April 1999, and the rate of the ad valorem
anti-dumping duty was 3.49% for NTN Corporation.

Use of Zeroing

 In this periodic review of Cylindrical Rolle r Bearings and Parts Thereof From Japan, the
USDOC utilized the same Zeroing procedure as that used in Specific Case No. 2.

Dumping margin without Zeroing

 By using this procedure, the USDOC calculated a dumping margin of 3.49% for NTN
Corporation, while without the Zeroing procedure (i.e. with the negative unit margins included), the
dumping margin would have been [negative], and no anti-dumping duty would have been collected.

United States – Anti-Dumping Periodic Review on Imports of Spherical Plain
Bearings and Parts Thereof From Japan

Specific Case No. 7

The measure

 This case concerns the imposition of anti-dumping duties on Spherical Plain Bearings and
Parts Thereof From Japan (USDOC case number A-588-804, 65 Fed. Reg. 49219, 11 August 2000).
The period of review is 1 May 1998 through 30 April 1999, and the rate of the ad valorem
anti-dumping duty was 2.78% for NTN Corporation.

Use of Zeroing

 In this periodic review of Spherical Plain Bearings and Parts Thereof From Japan, the
USDOC utilized the same Zeroing procedure as that used in Specific Case No. 2.

Dumping margin without Zeroing

 By using this procedure, the USDOC calculated a dumping margin of 2.78% for NTN
Corporation, while without the Zeroing procedure (i.e. with the negative unit margins included), the
dumping margin would have been [negative], and no anti-dumping duty would have been collected.

United States – Anti-Dumping Periodic Review on Imports of Ball Bearings
and Parts Thereof From Japan

Specific Case No. 8

The measure

 This case concerns the imposition of anti- dumping duties on Ball Bearings and Parts Thereof
From Japan (USDOC case number A-588-804, 66 Fed. Reg. 36551, 12 July 2001). The period of
review is 1 May 1999 through 30 April 2000, and the rates of the ad valorem anti-dumping duty were
10.10% for Koyo Seiko Co., Ltd., 9.16% for NTN Corporation, and 4.22% for NSK Ltd.

Use of Zeroing

 In this periodic review of Ball Bearings a nd Parts Thereof From Japan, the USDOC utilized
the same Zeroing procedure as that used in Specific Case No. 2.

Dumping margin without Zeroing

 By using this procedure, the USDOC calculated dumping margins of 10.10% for Koyo Seiko
Co., Ltd., 9.16% for NTN Corporation, and 4.22% for NSK Ltd., while without the Zeroing procedure
(i.e. with the negative unit margins included), the dumping margins would have been [negative] for
Koyo Seiko Co., Ltd., [negative] for NTN Corpor ation, and [negative] for NSK Ltd., and no
anti-dumping duties would have been collected.

United States – Anti-Dumping Periodic Review on Imports of Cylindrical
Roller Bearings and Parts Thereof From Japan

Specific Case No. 9

The measure

 This case concerns the imposition of anti-dum ping duties on Cylindrical Roller Bearings and
Parts Thereof From Japan (USDOC case number A-588-804, 66 Fed. Reg. 36551, 12 July 2001). The
period of review is 1 May 1999 through 31 December 1999, and the rates of the ad valorem
anti-dumping duty were 5.28% for Koyo Seiko Co., Ltd. and 16.26% for NTN Corporation.

Use of Zeroing

 In this periodic review of Cylindrical Rolle r Bearings and Parts Thereof From Japan, the
USDOC utilized the same Zeroing procedure as that used in Specific Case No. 2.

Dumping margin without Zeroing

 By using this procedure, the USDOC calculated dumping margins of 5.28% for Koyo
Seiko Co., Ltd. and 16.26% for NTN Corporation, wh ile without the Zeroing procedure (i.e. with the
negative unit margins included), the dumping marg ins would have been [negative] for Koyo
Seiko Co., Ltd. and [negative] for NTN Corpora tion, and no anti-dumping duties would have been
collected.

United States – Anti-Dumping Periodic Review on Imports of Spherical
Plain Bearings and Parts Thereof From Japan

Specific Case No. 10

The measure

 This case concerns the imposition of anti-dumping duties on Spherical Plain Bearings and
Parts Thereof From Japan (USDOC case number A-588-804, 66 Fed. Reg. 36551, 12 July 2001). The
period of review is 1 May 1999 through 31 December 1999, and the rate of the ad valorem
anti-dumping duty was 3.60% for NTN Corporation.

Use of Zeroing

 In this periodic review of Spherical Plain Bearings and Parts Thereof From Japan, the
USDOC utilized the same Zeroing procedure as that used in Specific Case No. 2.

Dumping margin without Zeroing

 By using this procedure, the USDOC calculated a dumping margin of 3.60% for NTN
Corporation, while without the Zeroing procedure (i.e. with the negative unit margins included), the
dumping margin would have been [negative], and no anti-dumping duty would have been collected.

United States – Anti-Dumping Periodic Review on Imports of Ball Bearings
and Parts Thereof From Japan

Specific Case No. 11

The measure

 This case concerns the imposition of anti- dumping duties on Ball Bearings and Parts Thereof
From Japan (USDOC case number A-588-804, 67 Fed. Reg. 55780, 30 August 2002, as amended by
67 Fed. Reg. 63608, 15 October 2002). The period of review is 1 May 2000 through 30 April 2001,
and the rates of the ad valorem anti-dumping duty were 6.07% for NSK Ltd., 2.51% for Asahi Seiko
Co., Ltd., and 9.34% for NTN Corporation.

Use of Zeroing

 In this periodic review of Ball Bearings a nd Parts Thereof From Japan, the USDOC utilized
the same Zeroing procedure as that used in Specific Case No. 2.

Dumping margin without Zeroing

 By using this procedure, the USDOC calculated dumping margins of 6.07% for NSK Ltd.,
2.51% for Asahi Seiko Co., Ltd., and 9.34% for NTN Corporation, while without the Zeroing
procedure (i.e. with the negative unit margins in cluded), the dumping margins would have been
[negative] for NSK Ltd., [negativ e] for Asahi Seiko Co., Ltd., and [negative] for NTN Corporation,
and no anti-dumping duties would have been collected.

United States – Anti-Dumping Periodic Review on Imports of Ball Bearings
and Parts Thereof From Japan

Specific Case No. 12

The measure

 This case concerns the imposition of anti- dumping duties on Ball Bearings and Parts Thereof
From Japan (USDOC case number A-588-804, 68 Fe d. Reg. 35623, 16 June 2003). The period of
review is 1 May 2001 through 30 April 2002, and the rates of the ad valorem anti-dumping duty were
4.51% for NTN Corporation and 2.68% for NSK Ltd.

Use of Zeroing

 In this periodic review of Ball Bearings a nd Parts Thereof From Japan, the USDOC utilized
the same Zeroing procedure as that used in Specific Case No. 2.

Dumping margin without Zeroing

 By using this procedure, the USDOC calculated dumping margins of 4.51% for NTN
Corporation and 2.68% for NSK Ltd., while without the Zeroing procedure (i.e. with the negative unit
margins included), the dumping margins would ha ve been [negative] for NTN Corporation and
[negative] for NSK Ltd., and no anti-dumping duties would have been collected.

United States – Anti-Dumping Periodic Review on Imports of Ball Bearings
and Parts Thereof From Japan

Specific Case No. 13

The measure

 This case concerns the imposition of anti- dumping duties on Ball Bearings and Parts Thereof
From Japan (USDOC case number A-588-804, 69 Fed. Reg. 55574, 15 September 2004). The period
of review is 1 May 2002 through 30 April 2003, and the rates of the ad valorem anti-dumping duty
were 5.56% for Koyo Seiko Co., Ltd., 2.74% for NTN Corporation, 2.46% for NSK Ltd., and 3.37%
for Nippon Pillow Block Co., Ltd.

Use of Zeroing

 In this periodic review of Ball Bearings a nd Parts Thereof From Japan, the USDOC utilized
the same Zeroing procedure as that used in Specific Case No. 2.

Dumping margin without Zeroing

 By using this procedure, the USDOC calcul ated dumping margins of 5.56% for Koyo Seiko
Co., Ltd., 2.74% for NTN Corporation, 2.46% for NSK Ltd., and 3.37% for Nippon Pillow Block
Co., Ltd., while without the Zeroing procedure (i .e. with the negative unit margins included), the
dumping margins would have been [negative] for Koyo Seiko Co., Ltd., [negative] for NTN
Corporation, [negative] for NSK Ltd., and [negative] for Nippon Pillow Block Co., Ltd., and no anti-
dumping duties would have been collected.

United States – Sunset Review of Antifriction Bearings From Japan

Specific Case No. 14

The measure

 This case concerns the Final Results of th e USDOC in the Expedited Sunset Review of
Antifriction Bearings from Japan, in which the USDOC found that revocation of the anti-dumping
order on Ball Bearings from Japan would be likely to lead to continuation or recurrence of dumping
(USDOC case number A-588-804, 64 Fed. Reg. 60275, 4 November 1999); and the Determination of
the USITC in Certain Bearings from China, Fran ce, Germany, Hungary, Italy, Japan, Romania,
Singapore, Sweden, and the United Kingdom, Inv estigations Nos. AA-1921-143, 731-TA-341, 731-
TA-343-345, 731-TA-391-397, and 731-TA-399 (Revie w), that revocation of the anti-dumping order
on Ball Bearings from Japan would be likely to lead to continuation or recurrence of material injury
within a reasonably foreseeable time.

Use of Zeroing

 In making this determination, the USDOC speci fically relied on the "margins determined in
the original investigation and subsequent periodic reviews," and concluded that because "dumping has
continued over the life of the orde rs, the [USDOC] determines that dumping is likely to continue if
the orders were revoked." (64 Fed. Reg. at 60278.) Japan submits th at because the USDOC's
likelihood determination was based on margins in both the original investigation and subsequent
periodic reviews that were calculated using the Zero ing procedure, which is inconsistent with the
Anti-Dumping Agreement, the USDOC's decision not to revoke the anti-dumping order on Ball
Bearings from Japan is equally inconsistent with the Anti-Dumping Agreement.

 In addition, Japan submits that because the USITC relied on a "magnitude of dumping" and
"volume of dumped imports" that were inflated by the use of the Zeroing procedure,, the USITC's
likelihood determination and the decision not to revoke the anti-dumping order on Ball Bearings from
Japan are also inconsistent with the Anti-Dumping Agreement.

United States – Sunset Review of Corrosion-Resistant
Carbon Steel Flat Products From Japan

Specific Case No. 15

The measure

 This case concerns the Final Results of the USDOC in the Full Sunset Review of Corrosion-
Resistant Carbon Steel Flat Products From Japan, in which the USDOC concluded that revocation of
the anti-dumping order on Corrosion-Resistant Carbon Steel Flat Products from Japan would be likely
to lead to continuation or recurrence of dumping (USDOC case number A-588-826,
65 Fed. Reg. 47380, 2 August 2000); and the Determ ination of the USITC in Certain Carbon Steel
Products from Australia, Belgium, Brazil, Canada, Fi nland, France, Germany, Japan, Korea, Mexico,
Netherlands, Poland, Romania, Spain, Sweden, Ta iwan, and United Kingdom, Investigations Nos.
AA-1921-197, 701-TA-231, 319-320, 322, 325-328, 340, 342, and 348-350, and 731-TA-573-576,
578, 582-587, 604, 607-608, 612, and 614-618 (Review), that revocation of the anti-dumping order on
Corrosion-Resistant Carbon Steel Flat Products from Japan would be likely to lead to continuation or
recurrence of material injury within a reasonably foreseeable time.

Use of Zeroing

 In making this determination, the USDOC spec ifically relied on the margins determined in
the investigation, and concluded that because "dum ping has continued to occur throughout the life of
the order," dumping was likely to conti nue if the order was revoked. USDOC, Issues and Decision
Memo for the Full Sunset Review of Corrosion-Resistant Carbon Steel Flat Products from Japan;
Final Results at Comment 1 (2 August 2000). Japan submits that because the USDOC's likelihood
determination was based on margins in the original investigation that were calculated using the
Zeroing procedure, which is inc onsistent with the Anti-Dumping Agreement, the USDOC's decision
not to revoke the anti-dumping order on Corrosion-Resistant Carbon Steel Flat Products From Japan
is equally inconsistent with the Anti-Dumping Agreement.

 In addition, Japan submits that because the USITC relied on a "magnitude of dumping" and
"volume of dumped imports" that were inflated by the use of the Zeroing procedure, the USITC's
likelihood determination and the decision not to revoke the anti-dumping order on Corrosion-
Resistant Carbon Steel Flat Products from Japan are also inconsistent with the Anti-Dumping
Agreement.