UNITED STATES – MEASURES RELATING TO SHRIMP FROM THAILAND
Document: Request for the Establishment of a Panel by Thailand
Date: 18 September 2006
Document codes: WT/DS343/7
Complainant: Thailand
Respondent: U.S.
Third parties: Brazil, Chile, China, EU, India, South Korea, Japan, Mexico, Vietnam
Dispute stage: Appellate Body
Agreements cited: Art. 2.4.2, 2.1, 2.4, 9.3, 18.1, 7, 9.1, 9.2, 9.3, 7.4  Anti-dumpingArt. VI:2  GATT 1994Art. 7.2  Anti-dumpingArt. XI:1, I:1, II:1, X:3(a), XX  GATT 1994

UNITED STATES – MEASURES RELATING TO SHRIMP FROM THAILAND

Request for the Establishment of a Panel by Thailand

 The following communication, dated 15 Septem ber 2006, from the delegation of Thailand to
the Chairman of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.

 Upon instructions from my authorities, I wish to convey the request of the Government of the
Kingdom of Thailand ("Thailand") for the establishmen t of a panel pursuant to Article XXIII of the
General Agreement on Tariffs and Trade 1994 (t he "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 the General Agreement on Tariffs
and Trade 1994 (the "AD Agreement") with respect to certain measures imposed by the United States
relating to imports of certain frozen warmwater shrimp ("shrimp") from Thailand.

 On 24 April 2006, Thailand requested consulta tions with the United States pursuant to
Article 4 of the DSU, Article XXII:1 of the GATT 1994, and Articles 17.2, 17.3 and 17.4 of the
AD Agreement.1 Consultations were held in Gene va on 1 August 2006. However, these
consultations failed to resolve the dispute.

 Thailand considers that the specific measures at issue, as described herein, are inconsistent
with the provisions of the GATT 1994 and the AD Agreement described below:

1. The Specific Measures at Issue:

 There are two measures imposed by the United States relating to imports of shrimp from
Thailand at issue in this dispute.

 (a) The Anti-Dumping Duty Measure

 The first measure consists of the investigati on, determinations, and order that led to the
imposition of anti-dumping duties on imports of sh rimp from Thailand (the "Anti-Dumping Duty
Measure"). The United States initiated this inves tigation on 27 January 2004, pursuant to section 732
of the Tariff Act of 1930, as amended (the "Act"), in respect of certain frozen and canned warmwater
shrimp imported from Thailand and several other countries.
2 On 28 July 2004, pursuant to section
733 of the Act, the United States Department of Co mmerce ("USDOC") preliminarily determined that

1 WT/DS343/1, G/L/776, G/ADP/D66/1 (27 April 2006).
2 Initiation of Antidumping Duty Investigations: Certain Frozen and Canned Warmwater Shrimp from
Brazil, Ecuador, India, Thailand, the People's Republic of China and the Socialist Republic of Vietnam ,
69 Fed. Reg. 3876 (27 January 2004).

certain frozen and canned warmwater shrimp from Th ailand were being dumped in the United States
(the "Preliminary Determination").
3 On 23 December 2004, the USDOC published a final
determination that frozen and ca nned warmwater shrimp from Tha iland were being dumped in the
United States (the "Final Determination"). 4 Following a determination by the US International Trade
Commission that the US domestic industry was mate rially injured by imports of frozen warmwater
shrimp from Thailand but that there was no injury or threat thereof to the US domestic industry by
reason of imports of canned wa rmwater shrimp from Thailand, 5 the USDOC published an amended
final determination of dumpi ng and an anti-dumping duty order imposing definitive anti-dumping
duties only on imports of certain frozen warmwater shrimp from Thailand (the "Amended Final
Determination").6

 The measure at issue includes the use by the US DOC, in the course of its investigation and in
the Preliminary, Final and Amended Final Determ inations, of the practice known as "zeroing" to
calculate dumping margins for each investigated Thai exporter. Under this practice, in calculating
overall weighted-average dumping margins for each i nvestigated Thai exporter, the USDOC set to
zero the results of intermediate comparisons of export price and normal value for which the export
price exceeded the normal value. The effect of th e use of this practice was artificially to create
margins of dumping where none would otherwise ha ve been found or, at a minimum, to inflate
margins of dumping and hence to impose inaccurate definitive anti-dumping measures on imports of
shrimp from Thailand.

 (b) The Continuous Bond Requirement

 The second measure consists of the requirement imposed by the United States on importers of
shrimp from Thailand subject to the Anti-Dumping Duty Measure to maintain a continuous bond in
the amount of the applicable anti-dumping duty marg in multiplied by the value of imports of shrimp
imported by the importer in the preceding year in order to secure the payment of anti-dumping duties
(the "Continuous Bond Requirement"). The Contin uous Bond Requirement has been imposed at the
time of entry on all imports of shrimp from Thailand subject to anti-dumping duties since
approximately 1 February 2006. The Continuous Bond Requirement has been imposed pursuant to
the US Customs and Border Protection ("CBP") agency's Amendment to Bond Directive 99-3510-004
for Certain Merchandise Subject to Antidumpi ng/Countervailing Cases, dated 9 July 2004 (the
"Amended Bond Directive"),
7 the document entitled "Clarifica tion to July 9, 2004 Amended
Monetary Guidelines for Setting Bond Amounts for Special Categories of Merchandise Subject to
Antidumping and/or Countervailing Duty Cases", also posted on CBP's website,
8 and the document

3 Notice of Preliminary Determination of Sales at Less Than Fair Value, Postponement of Final
Determination, and Negative Critical Circumstances De termination: Certain Frozen and Canned Warmwater
Shrimp from Thailand, 69 Fed. Reg. 47100 (4 August 2004).
4 Notice of Final Determination of Sales at Less Than Fair Value, Postponement of Final
Determination, and Negative Final Determination of Critical Circumstances: Certain Frozen and Canned
Warmwater Shrimp from Thailand, 69 Fed. Reg. 76918 (23 December 2004).
5 Certain Frozen or Canned Warmwater Shrimp and Prawns from Brazil, China, Ecuador, India,
Thailand, and Vietnam [Investigations Nos. 1063-1068 (Final)] , 70 Fed. Reg. 3943 (27 January 2005) and
USITC Publication 3748, Certain Frozen or Canned Warmwater Shrimp and Prawns from Brazil, China,
Ecuador, India, Thailand, and Vietnam: Investigations Nos. 1063-1068 (Final) (January 2005).
6 Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty
Order: Certain Frozen Warmwater Shrimp from Thailand, 70 Fed. Reg. 5145 (February 1, 2005).
7 The Amended Bond Directive is posted on CBP's website at
http://www.cbp.gov/xp/cgov/import/add_cvd/bonds/07082004.xml (last accessed on 12 September 2006).
8 Posted at http://www.cbp.gov/linkhandler/cgov/import/add_cvd/bonds/bond_clarification.ctt/bond_
clarificaiton.doc (last accessed on 12 September 2006).

entitled "Current Bond Formulas", also posted on CBP's website. 9 10 The measure at issue includes
any amendments or extensions to the Continuous Bond Requirement, and any related or implementing
measures.

 Prior to the adoption of th e Amended Bond Directive and the imposition of the Continuous
Bond Requirement, importers of goods subject to US anti-dumping or countervailing duties were
required to maintain a minimum bond as general secu rity for compliance with customs regulations
(i.e., not specifically to secure the payment of anti-dumping or countervailing duties) only in the
amount of 10 per cent of the duties, taxes and f ees paid by the importer on the same merchandise
imported in the previous year. Pursuant to the Amended Bond Directive, CBP may designate imports
of categories of merchandise subject to anti-dumping or countervailing duties as "special categories"
and may require importers of goods deemed to be a "covered case" within such a "special category" of
merchandise to provide, at the time of importation, enhanced continuous bonds of sufficient value to
cover liability for anti-dumping duties, calculate d by multiplying the applicable anti-dumping or
countervailing duty margin by the value of imports of the goods imported by the importer in the
preceding year. In addition, the importers remain subject to the separate requirement of US anti-
dumping law to pay, at the time of importation, cash deposits of estimated anti-dumping duties in the
amount of the value of the merchandise multiplied by the applicable anti-dumping or countervailing
duty rate.

 Thailand understands that imports of sh rimp from Thailand and five other countries
11 that are
subject to anti-dumping duties have been designa ted as a "covered case" within the designated
"special category" of "agriculture/aquaculture" merchandise and have been subjected to the
Continuous Bond Requirement on that basis. Thai land understands that thes e imports constitute the
only case and goods to which the Continuous Bond Requirement has been applied to date.

2. Summary of the Legal Basis of the Complaint

 (a) The Anti-Dumping Duty Measure

 Thailand considers that the Anti-Dumping Duty M easure is inconsistent with Article VI of the
GATT 1994 and the provisions of the AD Agreement listed below:

 (i) Article 2.4.2 of the AD Agreement, which prohibits the use of zeroing in calculating
margins of dumping using the average-to -average and transaction-to-transaction
comparison methodologies. The use of zeroing to calculate margins of dumping is
inconsistent with this obligation.

 (ii) Article 2.1 of the AD Agreement, wh ich requires the investigating authority to
calculate a single margin of dumping for the "product" under investigation.

 (iii) Article 2.4 of the AD Agreement, which requires the investigating authority to make
a fair comparison between export price and normal value. The use of zeroing to alter

9 Posted at http://www.cbp.gov /linkhandler/cgov/import/communications_to_trade/pilot_program/
current_bond.ctt/current_bond.doc (last accessed on 12 September 2006).
10 CBP is the agency authorised under various statutory and regulatory provisions of US law to
administer US customs laws and regulations, including the authority to impose bonds pursuant to 19 U.S.C.
§1484, 19 U.S.C. §1502, 19 U.S.C. §1505, 19 U.S.C. §1623, and 19 U.S.C. §1673g, and the regulations
governing the amount and imposition of bonds codified at 19 C.F.R. 113.13 , 19 C.F.R. 113.40, and 19 C.F.R.
113.62, adopted pursuant to T.D. 84-213, 49 Fed. Reg. 41152 (19 October 1984).
11 These are Brazil, Ecuador, India, the People's Republic of China and Vietnam.

the results of certain intermediate comp arisons between export price and normal
value is inconsistent with this requirement.

 (iv) Article 9.3 of the AD Agreement, whic h requires that the amount of the anti-dumping
duty must not exceed the margin of dumping. The imposition of dumping duties
inflated by the use of zeroing is inconsistent with this obligation.

 (b) The Continuous Bond Requirement

 Thailand considers that the Continuous B ond Requirement is inconsistent with the
requirements of Article VI of the GATT 1994, includi ng the requirements set out in Article VI:2 and
Note 1, paragraphs 2 and 3 to Ad Article VI of the GATT 1994, and the provisions of the
AD Agreement listed below:

 (i) The Continuous Bond Requirement is inconsistent with Article 18.1 of the
AD Agreement, in that it constitutes specif ic action against dumping of exports from
Thailand that was not taken in accordance with the provisions of GATT 1994, as
interpreted by the AD Agreement.

 (ii) The Continuous Bond Requirement is not a security for the payment of anti-dumping
duties "pending final determination of the facts of any case of suspected dumping" as
described in Article VI:2 and No te 1, paragraphs 2 and 3 to Ad Article VI of the
GATT 1994. The Continuous Bond Require ment is not a provisional measure
consistent with Article 7 of the AD Agreem ent as it is not applied in accordance with
the requirements of Article 7.1 of the AD Agreement and has been applied
subsequent to final determinations by the USDOC and the US International Trade
Commission.

 (iii) The simultaneous imposition of the Con tinuous Bond Requirement and the obligation
to make cash deposits of estimated duties is inconsistent with Article VI:2 and
Note 1, paragraphs 2 and 3 to Ad Article VI of the GATT 1994 and Article 7.2 of the
AD Agreement that permit only the imposition of either a bond or a cash deposit.

 (iv) The simultaneous imposition of the Con tinuous Bond Requirement and the obligation
to make cash deposits of estimated duties is inconsistent with Article VI:2 and
Note 1, paragraphs 2 and 3 to Ad Article VI of the GATT 1994 because it does not
constitute a "reasonable security" for the payment of anti-dumping duties.

 (v) The simultaneous imposition of the Con tinuous Bond Requirement and the obligation
to make cash deposits of estimated duties is inconsistent with Articles 7.2 and 7.5 of
the AD Agreement because the total amount of the security is greater than any
provisionally-estimated amount of dumping.

 (vi) The simultaneous imposition of the Con tinuous Bond Requirement and the obligation
to make cash deposits of estimated duti es is inconsistent with Article 7.5 and
Articles 9.1, 9.2 and 9.3 of the AD Agreem ent because it results in the collection of
anti-dumping duties that exceed the appropriate amounts within the meaning of
Article 9.2 and that exceed the margin of dumping as established under Article 2
within the meaning of Article 9.3.

 (vii) The duration of the Continuous Bond Requi rement is inconsistent with Article 7.4 of
the AD Agreement because it is not limited to as short a period as possible.

 Thailand further considers that the Continuous Bond Requirement violates the United States'
obligations under the GATT 1994 for the following reasons:

 (i) The Continuous Bond Requirement cons titutes a restriction on importation prohibited
under Article XI:1 of the GATT 1994 or, altern atively: (1) a duty or charge imposed
on or in connection with impor tation inconsistent with Artic le I:1 and Article II:1(a)
and (b) of the GATT 1994; or (2) a rule and formality or a method of levying duties
or charges in connection with importation in consistent with Article I:1 of the GATT
1994.

 (ii) By applying the Continuous Bond Requirement only to shrimp from Thailand and
five other countries, the United States fails to administer its customs laws, regulations
and administrative rulings in a uniform, im partial or reasonable manner and therefore
violates Article X:3(a) of the GATT 1994.

 (iii) The Continuous Bond Requirement is not justified by paragraph (d) of Article XX of
the GATT 1994 and in any case is not applied consistently with the requirements set
out in the chapeau of Article XX of the GATT 1994. Thailand considers in particular
that the Continuous Bond Requirement is not necessary to secure compliance with the
United States' laws and regulations and that it is applied in a manner constituting an
arbitrary and unjustifiable discrimination between Thailand and other countries where
the same conditions prevail and a disguised restriction on international trade.

 Accordingly, Thailand requests the establishmen t of a panel pursuant to Article XXIII of the
GATT 1994, Articles 4 and 6 of the DSU, and Article 17 of the AD Agreement.

 Thailand requests that the establishment of a pa nel in this matter be placed on the agenda of
the meeting of the Dispute Settlement Body scheduled for 28 September 2006.