UNITED STATES – LAWS, REGULATIONS AND METHODOLOGY FOR CALCULATING DUMPING MARGINS ("ZEROING")
Document: Notification of an Appeal by the European Communities 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
Date: 17 January 2006
Document codes: WT/DS294/12
Complainant: EU
Respondent: U.S.
Third parties: Argentina, Brazil, China, Taiwan, Hong Kong, India, Japan, South Korea, Mexico, Norway, Thailand, Turkey
Dispute stage: Implementation & Compliance
Agreements cited: Art. 1, 2.1, 2.4, 5.8, 9.1, 9.3, 9.5, 11  Anti-dumpingArt. VI  GATT 1994Art. 18.4  Anti-dumpingArt. XVI:4  Agreement Establishing the World Trade OrganizationArt. 3  Anti-dumping

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

Notification of an Appeal by the European Communities

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 17 January 2006, from the Delegation of the European
Commission, is being circulated to Members.

Pursuant to Article 16.4 and Article 17 of the DSU the European Communities hereby notifies
to the Dispute Settlement Body its decision to app eal to the Appellate Body certain issues of law
covered in the Panel report and cer tain legal interpretations devel oped by the Panel in the dispute

(). Pursuant to Rule 20(1) of the Working Procedures for Appellate Review , the
European Communities simultaneous files this Notice of Appeal with the Appellate Body Secretariat.
The European Communities considers that the Pa nel has failed to correctly apply customary
rules of interpretation of public international la w, as required by Article 3.2 of the DSU and
Article 17.6(ii) of the Agreement on Implementation of Article VI of the General Agreement on Tariffs
and Trade 1994 ( Anti-Dumping Agreement ), particularly as reflected in Articles 31 and 32 of the
Vienna Convention on the Law of the Treaties.
For the reasons set out in its submissions to the Panel, and for the reasons to be further
elaborated in its submissions to the Appellate B ody, the European Communities appeals, and requests
the Appellate Body to modify or reverse the legal findings and conclusions of the Panel, with respect
to the following errors :
(a) the Panel erred when it found that the Un ited States did not act inconsistently with
Articles 9.3 and 2.4 of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the
GATT 1994, despite the fact that the United States did not ensure, in the measures at
issue described in the third sen tence of para 2.6 of the Pane l Report, in the context of
the "administrative review" proceedings liste d in Exhibits EC-16 to EC-31, that the
rate and amount of anti-dumping duty did not exceed the true margin of dumping
established in accordance with Article 2, b ecause the United States did not calculate a
margin of dumping for the product as whole
 (Panel Report, paras 8.1(f) and (e),
and 7.288, 7.284 and 7.248 to 7.285);
(b) the Panel erred when it found that the Un ited States did not act inconsistently with the
obligation to make a fair comparison contai ned in the first sentence of Article 2.4 of
the Anti-Dumping Agreement when, in the measures at i ssue described in the third

sentence of para 2.6 of the Panel Report, in the context of the "administrative review"
proceedings listed in Exhibits EC-16 to EC -31, the United States used a methodology
that, absent targeted dumping, involved asymmetrical comparison between "normal
value" and "export price", in which, at an intermediate stage in the calculation of the
margins of dumping, the prices at which export transactions above "normal value"
were made were effectively adjusted downwards ("zeroing" any negative intermediate
results) (Panel Report, paras 8.1(e), 7.284, 7.248 to 7.275, 7.281 to 7.283 and 7.285);
(c) the Panel erred when it found that the Un ited States did not act inconsistently with the
third to fifth sentences of Article 2.4
 of the Anti-Dumping Agreement when, in the
measures at issue described in the third sentence of para 2.6 of the Panel Report, in
the context of the "administrative review" proceedings listed in Exhibits EC-16 to
EC-31, the United States used a methodology that involved, at an intermediate stage
in the calculation of the margins of dumping, a zeroing adjustment not demonstrated
to have been made for a difference affec ting price comparability (Panel Report,
paras 8.1(e), 7.284, 7.276 to 7.283 and 7.285);
(d) the Panel erred when it found that the Un ited States did not act inconsistently with
Article 2.4.2
 of the Anti-Dumping Agreement when, in the measures at issue described
in the third sentence of para 2.6 of the Panel Report, in the context of the
"administrative review" proceedings listed in Exhibits EC-16 to EC-31, the United
States used a methodology that involved asymmetrical comparison between "normal
value" and "export price", and in which, at an intermediate stage in the calculation of
the margins of dumping, the prices at whic h export transactions above "normal value"
were made were effectively adjusted downwards ("zeroing" any negative intermediate
amounts), without complying with the cond itions and obligations set out in that
provision (Panel Report, paras 8.1(d), 7.223, 7.142 to 7.222 and 7.285);
(e) the Panel erred when it found that the Standard Zeroing Methodology
 used by the
United States in "administrative review" proceedings is not inconsistent with Articles
2.4, 2.4.2, 9.3, 11.1, 11.2, 1 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 (Panel Report,
paras 8.1(g) and 7.289 to 7.291);
(f) the Panel erred when it exercised judicial economy on the question of whether the
Manual is a measure inconsistent with Articles 2.4, 2.4.2, 5.8, 9.3, 9.5, 11.1, 11.2,
11.3, 1 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 (Panel Report, paras 7.107 and 7.289
to 7.294);
(g) the Panel erred when it found, in the c ontext of "administrative review" proceedings ,
that Section 351.414(c)(2) of the Regulations is not as such inconsistent with Articles
2.4, 2.4.2, 9.3, 11.1, 11.2, 1 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 (Panel Report,
paras 8.1(g) and 7.289 to 7.291);
(h) the Panel erred when it found, with r espect to new shipper proceedings, changed
circumstances proceedings, and sunset proceedings , that the Standard Zeroing
Methodology and Section 351.414(c)(2) of the Regulations are not as such
inconsistent with Articles 2.4, 2.4.2, 9.3, 9.5, 11.1, 11.2, 11.3, 1 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 (Panel Report, paras 8.1(h) and 7.292 to 7.294);

(i) the Panel erred when it exercised judicial economy on the question of whether or not
"administrative review" proceedings based on model zeroing are consistent with
Article 9.3 of the Anti-Dumping Agreement (Panel Report, paras 6.4 to 6.6 and 7.34);
(j) the Panel erred when it exercised judicial economy on the question of whether or not
model zeroing is consistent with Article 2.4 of the Anti-Dumping Agreement (Panel
Report, paras 8.2, 7.33 and 7.108);
(k) the Panel erred when it dismissed the EC's claims under Articles 11.1 and 11.2 of the
Anti-Dumping Agreement (Panel Report, paras 8.1(f), 7.143 and 7.286 to 7.288);
(l) the Panel erred when it dismissed other of the EC's claims, considered by the Panel to
be "dependent" (Panel Report, paras 8.1(f), 8.2, 7.34, 7.109 and 7.286 to 7.288); and
(m) the Panel failed to make an objective assessment of the matter before it, including (as
appropriate) an objective assessment of the facts of the case and th e applicability of
and conformity with the relevant covered agreements, as required by Article 11 of the
DSU.
 The EC had also claimed before the Panel that the Standard Zeroing Procedures used by
the United States are a measure or part of a measure and are inconsistent with Articles 2.4, 2.4.2, 5.8,
9.3, 1 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. It appears to the EC that th e Panel has considered these
Standard Zeroing Procedures to be part of or a reflection of the methodology that it held to be as such
inconsistent with the obligations of the US in the ca se of original proceedings (and consistent with the
obligations of the US in the case of "administrat ive review" proceedings). However, this is not
expressly stated by the Panel and if the Appellate Bo dy should consider this not to be the case (and
that bringing the methodology into conformity with the WTO obligations of the US would not
necessarily require bringing the Pr ocedures into conformity), the EC conditionally appeals and asks
the Appellate Body to find that the Standard Zeroing Procedures
 are as such inconsistent with the
obligations of the US in the case of original pr oceedings, "administrative review" proceedings, new
shipper proceedings, changed circumstances proceed ings and sunset proceedings. (Panel Report,
paras 8.1(c), 7.106 and 7.96 to 7.97; Panel Report, paras 8.1(g) and 7.289 to 7.291; and Panel Report,
paras 8.1(h) and 7.292 to 7.294).
 With regard to Practice , the EC appeals the exercise of judicial economy by the Panel with
respect to the US Practice of zeroing in original proceedings, "administra tive review" proceedings,
new shipper proceedings, changed circumstances proceedings and sunset proceedings.
 The EC also requests the Appellate Body to complete the analysis of the Panel where it
reverses or modifies findings of the Panel and comp letion of the analysis is necessary to resolve this
dispute.