UNITED STATES - CERTAIN MEASURES REGARDING ANTI-DUMPING METHODOLOGY
Document: Request for Consultations by Brazil
Date: 21 September 2001
Document codes: WT/DS239/1; G/L/480; G/ADP/D37/1
Complainant: Brazil
Respondent: U.S.
Dispute stage: Consultation
Agreements cited: Art. 5.8, 11  Anti-dumping

UNITED STATES - CERTAIN MEASURES REGARDING ANTI-DUMPING
METHODOLOGY
Request for Consultations by Brazil
The following communication, dated 18 September 2001, from the Permanent Mission of
Brazil to the Permanent Mission of the United States and to the Chairman of the Dispute Settlement
Body, is circulated in accordance with Article 4.4 of the DSU.
Upon instruction from my authorities, I hereby wish to convey the request of the Government
of Brazil for consultations with the United States pursuant to Article 4 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes (DSU), Article XXIII of the General
Agreement on Tariffs and Trade 1994 (GATT 1994) and Article 17 of the Agreement on
Implementation of Article VI of GATT 1994 (A nti-Dumping Agreement), including Article 17.4
thereof.
Article 5.8 of the Anti-Dumping Agreement determines that the margin of dumping shall be
considered to be de minimis if this margin is less than 2 per cent, expressed as a percentage of the
export price. Article 18.3 of the Anti-Dumping Agreement determines that its provisions "shall apply
to investigations, and reviews of existing measures, initiated pursuant to applications which have been
made on or after the date of entry into force for a Member of the WTO". Furthermore, the de minimis
threshold established in Article 5.8 of the Agreement is also applicable to the context of Article 11,
which governs the rules pertaining to the duration of the duty. Pursuant to Article 11.1, an anti-
dumping duty can remain in force "only as long as and to the extent necessary to counteract dumping
which is causing injury". Since Article 11 does not contain a separate definition of "dumping which is
causing injury", the definitions established elsewhere in the Agreement are applicable in this context.
Prior to the Uruguay Round, the United States Department of Commerce´s practice was to
treat as de minimis margins of 0.5 per cent or less for both investigations and reviews in anti-dumping
cases. After the conclusion of the WTO Agreements, the United States changed its statutory laws in
apparent compliance with the provisions contained in Articles 5.8 and 18.3 of the Anti-Dumping
Agreement. Section 213 of United States law, contained in the Uruguay Round Agreements Act
(URAA) of 1994 (amending Section 733(b)(3) of the Tariff Act of 1930), establishes that a 2 per cent
margin is de minimis. However, in applying this statute, the U.S. Department of Commerce applies a
2 per cent de minimis rule only in the case of investigations; it allows for a de minimis margin of
merely 0.5 percent in the case of reviews, even when such reviews are meant to determine whether the
antidumping duty order should be revoked. This standard is expressed in Section 351.106(c) of the
United States Department of Commerce's regulations.
WT/DS239/1, G/L/480

In spite of the Article´s plain language, the U.S. Government´s position, as expressed by the
United States Department of Commerce´s comments to Article 5.8 of the Anti-Dumping Agreement,
is that the article applies only to dumping investigations, but not to reviews, irrespective of their
purpose.
Brazil understands that the requirements of Article 5.8 apply both to investigations and to at
least reviews of anti-dumping duty orders contemplated in Article 11.2, for the revocation of such
orders. It is the Brazilian Government's position that the United States´ current legislation and rules
on the subject, that is, Section 213 of URAA and Section 351.106(c) of the Department of Commerce
regulations, is in a departure from the Anti-Dumping Agreement. Current U.S. methodology
regarding reviews is, therefore, unauthorized by WTO Agreements.
A panel established by the WTO Dispute Resolution Body concluded that the practice of
"zeroing" when establishing "the existence of margins of dumping", as applied by the
European Communities in anti-dumping investigations, was inconsistent with Article 2.4.2 of the
Anti-Dumping Agreement. This finding was rece ntly upheld by the Appellate Body. (Cotton-type
bed linen from India, WT/DS141/AB/R, 1 March 2001 (AB2000-13)) Although the dispute
underlying this decision involved the investigative phase of the anti-dumping proceeding, Article 9.3
of the Anti-Dumping Agreement provides that the amount of anti-dumping duty shall not exceed the
margin of dumping as established under Article 2. Thus, the principle of fair comparison set forth in
Article 2.4.2 is equally applicable to reviews as well as investigations. For this reason, Brazil
understands that the practice of zeroing is disallowed under Article 2 when calculating the dumping
margin in reviews as well as investigations. The United States Department of Commerce currently
applies the identical practice of "zeroing" when establishing the dumping margin in investigations and
reviews. This methodology, as interpreted by th e Panel and the Appellate Body, is unauthorized by
the Anti-Dumping Agreement.
In light of the DSU provisions governing this matter, including Article 4.3 thereof, as well as
Article 17 of the Anti-Dumping Agreement, my aut horities look forward to receiving in due course
the reply of the United States to this request. Brazil is ready to consider with the United States
mutually convenient dates to hold consultations in Geneva.
The Government of Brazil reserves the right to raise additional factual or legal points related
to the aforementioned measure during the course of consultations.