UNITED STATES – CONTINUED EXISTENCE AND APPLICATION OF ZEROING METHODOLOGY
Document: Report of the Panel
Date: 1 October 2008
Document codes: WT/DS350/R
Complainant: EU
Respondent: U.S.
Third parties: Brazil, China, Egypt, India, Japan, South Korea, Mexico, Norway, Taiwan, Thailand
Dispute stage: Appellate Body
Agreements cited: Art. 2.1, 2.4, 2.4.2, 5.8, 9.1, 9.3, 9.5, 11, 1, 11.1, 11.3, 11.2, 2  Anti-dumpingArt. VI:1, VI:2  GATT 1994Art. 18.4  Anti-dumpingArt. XVI:4  Agreement Establishing the World Trade Organization

UNITED STATES – CONTINUED EXISTENCE AND
APPLICATION OF ZEROING METHODOLOGY

Report of the Panel

I. INTRODUCTION
1.1 On 2 October 2006, the European Comm unities ("EC") requested consultations 1 with the
United States of America ("United States" or "US" ) pursuant to Article 4 of the Understanding on
Rules and Procedures Governing the Settlement of Di sputes ("DSU"); Article XXII:1 of the General
Agreement on Tariffs and Trade 1994 ("GATT 1994"); and Articles 17.2 and 17.3 of the Agreement
on Implementation of Article VI of the Gene ral Agreement on Tariffs and Trade 1994 ("Anti-
Dumping Agreement" or "Agreement") with rega rd to the practice and methodologies for calculating
dumping margins involving the use of zeroing, and the application of zeroing in certain specified anti-
dumping measures. In its request for further consultations 2, dated 9 October 2006, the European
Communities added two measures to its initial request.
1.2 On 10 May 2007, the European Commun ities requested the Dispute Settlement
Body ("DSB") to establish a panel pursuant to Article s 2.1 and 6.1 of the DSU; Article XXII:2 of the
GATT 1994; and Articles 17.4 and 17.5 of the Anti-Du mping Agreement "with regard to an 'as such'
measure or measures providing for the practic e or methodologies for calculating dumping margins
involving the use of zeroing, and the applica tion of zeroing in certain specified anti-dumping
measures maintained by the United States...".3
1.3 At its meeting on 4 June 2007, the DSB established a panel pursuant to the request of the
European Communities in document , in accordance with Article 6 of the DSU.
1.4 The Panel's terms of reference are the following:
"To examine, in the light of the relevant provisions of the covered agreements cited
by the European Communities in document WT/DS350/6, the matter referred to
the DSB by the European Communities in that document, and to make such findings
as will assist the DSB in making the recommendations or in giving the rulings
provided for in those agreements."
1.5 On 29 June 2007, the European Communities requested the Director-General to determine the
composition of the Panel, pursuant to paragraph 7 of Article 8 of the DSU. This paragraph provides:
"If there is no agreement on the panelists within 20 days after the date of the
establishment of a panel, at the request of either party, the Director-General, in
consultation with the Chairman of the DSB and the Chairman of the relevant Council
or Committee, shall determine the com position of the panel by appointing the
panelists whom the Director-General consid ers most appropriate in accordance with
any relevant special or additional rules or procedures of the covered agreement or
covered agreements which are at issue in th e dispute, after consulting with the parties
to the dispute. The Chairman of th e DSB shall inform the Members of the
composition of the panel thus formed no later than 10 days after the date the
Chairman receives such a request."
1.6 On 6 July 2007, the Director-General accordingly composed the Panel as follows:
Chairperson: Dr. Faizullah Khilji

1 WT/DS350/1.
2 WT/DS350/1/Add.1.
3 WT/DS350/6.

 Members: Mr. Michael Mulgrew
 Ms Lilia R. Bautista

1.7 Brazil, China, Egypt, India, Japan, Korea, Mexico, Norway, Chinese Taipei and Thailand
reserved their rights to participate in the panel proceedings as third parties.
1.8 Following the resignation on 8 November 2007 of Ms Lilia R. Bautista, the parties, on
27 November 2007, appointed a new Panel Member. A ccordingly, the composition of the Panel is as
follows:
Chairperson: Dr. Faizullah Khilji

 Members: Mr. Michael Mulgrew
 Ms Andrea Marie Brown

1.9 The Panel met with the parties on 29-30 January 2008 and on 22 April 2008. The meetings
with the parties were opened to public viewing. The Panel met with the third parties on
30 January 2008. A portion of the Panel's meeting with the third parties was also opened to public
viewing.
1.10 Following the second meeting with the parties, and pursuant to a request from the
United States made on 2 May 2008, to which the European Communities did not object, the Panel
provided the parties with the opportunity to make comments on the relevance of the Appellate Body
report in US – Stainless Steel (Mexico) to this dispute as well as to comment on each other's
comments.
II. FACTUAL ASPECTS
2.1 This dispute involves the EC's claims re garding the continued application by the
United States of anti-dumping duties resulting fr om the anti-dumping orders enumerated in 18 cases
4,
as calculated or maintained in place at a level in excess of the margin of dumping that in the EC's
view would have resulted from the correct applica tion of the relevant provisions of the Anti-Dumping
Agreement. The European Commun ities also challenges the specific instances of application of what
it describes as the "zeroing methodology" in 4 anti-dumping investigations, 37 periodic reviews and

4 The EC's panel request describes this measure as "[t]he continued application of, or the application of
the specific anti-dumping duties resulting from the anti-du mping orders enumerated from I to XVIII in the
Annex to the present request..." In its submissions to the Panel, the European Communities uses slightly
different descriptions to refer to the measure at issue. Although it generally refers to this measure as "the
application or continued application" of the 18 anti-dumping duties at issue, in some instances it only uses the
term "continued application". In response to questioning, the European Communities stated that "the use of this
slightly different phrasing is for ease of reference and ease of understanding only, and has no incidence on the
legal assessment to be conducted by the Panel". Respon se of the European Communities to Question 1(b) from
the Panel Following the First Meeting. For ease of reference, in our report, we also refer to this measure as "the
continued application" of the 18 duties at issue. The United States acknowledges that for ease of reference the
Panel may choose to use the term "continued applica tion" as a shortcut for "continued application or
application". Regarding the second component of the term that the Panel prefers to use, however, the
United States notes that the European Communities challenges "the continued application or application of anti-
dumping duties in 18 cases ", not "the continued application or application of 18 anti-dumping duties ", and
requests the Panel to use a description that conveys this difference. Put differently, the United States
emphasises the difference between the continued application of duties per se and the continued application of
duties arising from different anti-dumping cases. Request by the United States for the Review of Precise
Aspects of the Interim Report of the Panel, paras. 3- 6. We would like to reiterate that the abbreviated
description that we use to refer to the measure at issu e is for ease of reference only and by no means prejudges
our legal reasoning (supra, paras. 7.40-7.67) regarding the WTO-compatibility of such measure.

11 sunset reviews pertaining to the same 18 cases. The 18 cases and the 52 proceedings pertaining to
such cases are listed in the annex to the EC's panel request. The European Communities does not
challenge the zeroing methodology "as such" in this dispute.5
2.2 Zeroing, according to the European Communities, is a methodology that fails to take into
consideration the totality of export transactions in the calculation of margins of dumping for the
product under consideration as a whole. Specifically , the European Communities takes issue with the
use of zeroing in investigations where the normal value and the export price are compared on a
weighted average-to-weighted average ("WA-WA") basis (referred to by the European Communities
as "model zeroing")
6, periodic reviews where margins are calculated on the basis of a weighted
average normal value and individual export transac tions ("WA-T") (referred to by the European
Communities as "simple zeroing") 7, and sunset reviews where the investigating authorities rely on
previous margins obtained through either model or simple zeroing.
III. PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS
3.1 The European Communities requests the Panel to find that:
"(a) The United States failed to comply with Articles 2.4, 2.4.2, 9.3, 11.1, 11.3 of the
Anti-Dumping Agreement, Articles VI:1 and VI:2 of the GATT 1994, and
Article XVI:4 of the WTO Agreement sin ce it continues applying duties which were
calculated by using zeroing in the 18 anti-dumping measures mentioned in the Annex
to the EC's Panel request.
(b) The United States violated Articles 2.4 and 2.4.2 of the Anti-Dumping Agreement as
well as Articles VI:1 and VI:2 of the GATT 1994 when applying model zeroing in
the 4 original investigation proceedings me ntioned in the Annex to the EC's Panel
request.
(c) The United States violated Articles 2.4, 2.4.2, 9.3 and 11.2 of the Anti-Dumping
Agreement as well as Articles VI:1 and VI:2 of the GATT when using zeroing in the
37 administrative review proceedings incl uded in the Annex to the EC's Panel
request.
(d) The United States violated Articles 2.1, 2.4, 2.4.2, 11.1 and 11.3 of the Anti-Dumping
Agreement in the sunset review proceedi ngs mentioned in the Annex to the EC's
Panel request when relying on margins of dumping calculated in prior investigations
using the zeroing methodology."
8
3.2 The European Communities also requests the Pa nel to suggest, pursuant to Article 19 of
the DSU, that the United States cease using zeroi ng when calculating dumping margins in any anti-
dumping proceeding in connection with the 18 cases identified in the annex to the EC's panel request.
3.3 The United States asks the Panel to reject the EC's "as applied" claims regarding periodic
reviews, sunset reviews, and investigations 9 and find that the United States has not acted

5 First Written Submission of the European Communities, para. 2.
6 See para. 7.7 below for an explanation of the term "model zeroing".
7 See paras. 7.159-7.160 below for an explanation of the term "simple zeroing".
8 First Written Submission of the European Communities, para. 264.
9 The United States, in these proceedings, does not contest the alleged inconsistency with Article 2.4.2
of the Agreement of zeroing in investigations where the weighted aver age normal value is compared with the
weighted average export price. It, however, disagrees with the claims developed by the European Communities
under other provisions of the Agreement and Article VI of the GATT 1994 regarding such zeroing. Thus, the

inconsistently with the Anti-Dumping Agreement a nd the GATT 1994. The United States also raises
three preliminary objections regarding the Panel’s terms of reference.
10 First, the United States asks
the Panel to find that 14 of the 52 anti-dumping dete rminations, and the contin ued application of the
18 anti-dumping duties at issue are outside the Panel’s terms of reference because they were not
included in the EC's consultations request. Second, the United States requests that the Panel find that
the EC's reference in its panel request to the c ontinued application of the 18 anti-dumping duties does
not meet the specificity requirement of Article 6.2 of the DSU. Third, the United States asks the
Panel to find that four preliminary measures identif ied in the EC's panel request are not within the
Panel's terms of reference because the identification of the mentioned measures did not meet the
conditions laid down in Article 17.4 of the Agreement.
IV. ARGUMENTS OF THE PARTIES
4.1 The arguments of the parties are set out in their written submissions and oral statements to the
Panel and their answers to questions. The parties' s ubmissions and oral statements are attached to this
report as annexes (see List of Annexes, pages iv and v).
V. ARGUMENTS OF THE THIRD PARTIES
5.1 Brazil, China, Egypt, India, Japan, Korea, Mexico, Norway, Chinese Taipei and Thailand
reserved their rights to participate in the Panel pro ceedings as third parties. Brazil, China, Egypt,
India and Mexico did not present written submission s and China, Egypt and Thailand did not submit
oral statements to the Panel. The arguments of Japan, Korea, Norway and Chinese Taipei are set out
in their written submissions and oral statements, the arguments of Brazil, India and Mexico are set out
in their oral statements, while Thailand's arguments are set out in its written submission to the Panel.
The third parties' written submissions and oral stat ements are attached to this report as annexes (see
List of Annexes, pages iv and v).
VI. INTERIM REVIEW
6.1 On 27 June 2008, we submitted our interim report to the parties. On 11 July 2008, both
parties submitted written requests for the review of precise aspects of the interim report. On
25 July 2008, both parties submitted their comments on the other party's request for review. None of
the parties requested an interim review meeting.
6.2 We set out our treatment of the parties' request s below. In addition to the changes explained
in the following paragraphs, we have, where necessa ry, made technical revisions to our report and
corrected typographical and other minor errors found in the interim report.
A.
REQUEST OF THE EUROPEAN COMMUNITIES
6.3 First, the European Communities requests the Panel to reconsider its assessment of the
evidence submitted by the European Communities rega rding the seven periodic reviews discussed in
paragraphs 7.151-7.157 below and to find that the European Communities has shown prima facie that
the USDOC used the simple zeroing methodology in the mentioned reviews. The United States
argues that the European Communities should not be provided an opportunity to make a prima facie
case at this late stage of the proceedings. The Unite d States submits that the interim review stage is

US request that the Panel dismiss the EC's "as applied" claims regarding zeroing in investigations where the
weighted average normal value is compared with the weighted average export price pertains to claims other than
the one under Article 2.4.2. See, Response of the Un ited States to Question 15 from the Panel following the
First Meeting.
10 First Written Submission of the United States, paras. 42-46.

only for parties to make comments on precise aspects of the Panel's interim report, not for a party to
make a prima facie case that it failed to make until that point in time. The United States recalls the
opportunities that the Panel provided for the European Communities to explain the factual bases of its
assertions regarding the seven reviews at issue. Since the European Communities failed to take
advantage of those opportunities to demonstrate the factual bases of its claims regarding the seven
reviews at issue, it should not be given another chance to do that at the interim review stage.
6.4 Although we understand the US con cern regarding the relative lateness in the EC's attempt to
explain the factual bases of its claims regarding the seven periodic reviews at issue, we see no
provision in the DSU that would preclude us fro m assessing the EC's explanations. Nor has the
United States cited such a legal provision in its argum entation in this regard. We therefore proceed to
our assessment of the EC's comments.
6.5 The European Communities first makes gene ral comments concerning all seven periodic
reviews, followed by comments specifically addressi ng evidence submitted in connection with five of
the seven reviews at issue.
6.6 The European Communities commences its general comments by recalling the USDOC
notice published on 27 December 2006, which reads in relevant parts:
"In its March 6, 2006 Federal Register notice, the Department proposed only that it
would no longer make average-to-average comparisons in investigations without
providing offsets for non-dumped comparisons . The Department made no proposals
with respect to any other comparison methodology or any other segment of an
antidumping proceeding, and thus declin es to adopt any such modifications
concerning those other methodologies in this proceeding."
11 (emphasis in original)
6.7 According to the European Communities, this part of the USDOC's notice means that:
"[T]he USDOC expressly stated that it was not modifying any aspect of its
comparison methodologies for calculating dum ping, other than the abandonment of
zeroing when making average-to-average co mparisons in original investigations.
Thus, since the results of all the administrative reviews covered by this dispute were
published before the date of the publication of the USDOC Notice ( i.e.,
27 December 2006), it should be concluded that the European Communities has made
a prima facie case that the United States actually ap plied simple zeroing also in those
seven administrative reviews. "12 (footnote omitted, italic emphasis in original,
underline emphasis added)
6.8 In the view of the European Communities, this Federal Register notice creates a presumption
that simple zeroing was used in the seven reviews at issue becau se they were conducted before the
issuance of the notice. 13 In this regard, the European Communities also notes our reasoning in
paragraph 7.200 below as to whether the same no tice showed that the USDOC had used model
zeroing in the four investigations at issue in th ese proceedings. The United States responds that such
a broad statement cannot be evidence of the fact th at zeroing was used in each of the seven periodic
reviews at issue. "To the cont rary, because each assess ment review involves a distinct product,

11 Exhibit EC-90, p. 77724.
12 Request by the European Communities for the Review of Precise Aspects of the Interim Report of
the Panel, p. 2.
13 Request by the European Communities for the Review of Precise Aspects of the Interim Report of
the Panel, p. 6.

country, period of time, and sales data, the [Europ ean Communities] must demonstrate that zeroing
occurred in each of the individual administrative reviews challenged."
14
6.9 We note that the context in which we ac cepted the inference made by the European
Communities in paragraph 7.200 below is remarkably different from the context in connection with
the EC's claims regarding the alleged use of simple zeroing in the seven periodic reviews at issue.
The part of the USDOC's notice quoted in paragraph 7.200 makes a specific reference to
investigations where a particular comparison met hodology is used and states that the USDOC will no
longer use that methodology without taking into c onsideration the results of all comparisons.
Logically, this means that until the date of the po licy change, the methodology at issue was used by
the USDOC without considering the results of all comparisons. Because the particular comparison
methodology described there, WA-WA, was the me thodology in which what we call "model zeroing"
was routinely used in investigations, and the inves tigations at issue were completed before the policy
change, we concluded that the European Communities had showed prima facie that the USDOC used
model zeroing in investigations completed before this policy change. By contrast, the USDOC's
policy change makes no specific reference to pe riodic reviews and the methodologies that may be
used in such reviews. It simply mentions that the USDOC is not changing the methodologies it uses
in investigations where methodologies other than WA-WA are used, and in other anti-dumping
proceedings. As such, we find this statement to be too broad to support the EC's argument that the
USDOC used simple zeroing in all periodic reviews ca rried out before the effective date of the policy
change at issue. We therefore reject the EC's contention in this regard.
6.10 The European Communities argues that the f act that the USDOC's Issues and Decision
Memoranda pertaining to the seven periodic reviews at issue do not mention the methodology used is
not determinative of whether simple zeroing was used in such reviews. We agree with the European
Communities. Nowhere in our report do we impl y that such memoranda constitute the only way
through which the European Communities could de monstrate that the USDOC used the simple
zeroing methodology in the seven reviews at issue. In paragraphs 7.151-7.157 below, we only note
that the USDOC's Issues and Decision Memoranda pe rtaining to the mentioned reviews do not shed
light on the methodology used.
6.11 The European Communities also asserts that given the several years of WTO litigation against
the United States regarding the zeroing methodology, it should not be disputed that simple zeroing
was used in the seven periodic re views at issue. The United St ates responds that prior dispute
settlement reports are only binding with regard to th e resolution of the disputes they concern and that
the US response or reaction to such reports is irrelevant for purposes of these proceedings. We
disagree with the EC's contention. We do not consid er that the existence of past disputes against the
United States regarding zeroing discharges the Eur opean Communities' burden of proving in this
dispute that the simple zeroing methodology was us ed in specific periodic reviews challenged. We
consider that whether the United States complied with the DSB recommendations and rulings in past
disputes is irrelevant to our task in these proceed ings, since every dispute stands on its own merits.
This is so, even if, as the European Communities argues, such past disputes concern the same measure
that is at issue in these proceedings.
6.12 The EC's general comments are followed by sp ecific comments regarding five of the seven
periodic reviews at issue. These reviews are: Steel Concrete Reinforcing Bars From Latvia (Period of
Review:
1 September 2002 – 31 August 2003 ), Stainless Steel Bar From Germany (Period of Review: 1
March 2004 – 28 February 2005) , Stainless Steel Bar From Germany (Period of Review: 2 August
2001 – 28 February 2003) , Stainless Steel Bar From Italy (Period of Review: 2 August 2001 – 28
February 2003) and Certain Pasta From Italy (Period of Review: 1 July 2004 – 30 June 2005).

14 Comments of the United States on the Request by the European Communities for the Review of
Precise Aspects of the Interim Report of the Panel, para. 6.

6.13 Regarding the periodic review in Steel Concrete Reinforcing Bars From Latvia (Period of
Review: 1 September 2002 – 31 August 2003) , the European Communities asserts that the calculation
tables submitted in Exhibit EC-35 show that zeroi ng was used because the percentage of value with
anti-dumping margins and the percentage of quan tity with anti-dumping margins used was not
100 per cent. This means that "for the remaining transactions, no 'dumping' was found and no 'offsets'
were provided."15 The European Communities also argues th at the standard programme used by the
USDOC in the review at issue contained the zeroing line which excluded the comparisons with
negative results. According to the European Comm unities, when read together, the tables and the
standard programme show that simple zeroing was used in the periodic review at issue.
6.14 Regarding the periodic reviews in Stainless Steel Bar From Germany (Period of Review:
1 March 2004 – 28 February 2005) and Stainless Steel Bar From Germany (Period of Review:
2 August 2001 – 28 February 2003) , the European Communities refe rs to the calculation tables
submitted in Exhibits EC-57 and EC-58 and argues that such tables show that zeroing was used in the
two reviews at issue. The European Communities also draws attention to the f act that the columns in
the mentioned two tables, which show calculations with zeroing, correspond to the margins calculated
by the USDOC and hence the figures in such co lumns are accurate. Th e European Communities
contends that the standard computer programme used by the USDOC in these reviews contained the
zeroing line which would eliminate comparisons with negative results.
6.15 Regarding the periodic review in Stainless Steel Bar From Italy (Period of Review:
2 August 2001 – 28 February 2003) , the European Communities submits that the calculation table
submitted in Exhibit EC-62 shows that the percen tage of value with anti-dumping margins and the
percentage of quantity with anti-dumping margins used was not 100 per cent. This means that zeroing
was used in this review because "for the re maining transactions, no 'dumping' was found and no
'offsets' were provided."16 The European Communities also argu es that the standard programme used
by the USDOC in the review at issue contained the zeroing line which excluded the comparisons with
negative results. According to the European Comm unities, when read together, the table and the
standard programme show that simple zeroing was used in the periodic review at issue.
6.16 Regarding the periodic review in Certain Pasta From Italy (Period of Review: 1 July 2004 –
30 June 2005), the European Communities submits that the calculation table submitted in Exhibit EC-
65 shows that the percentage of value with anti-dum ping margins and the percentage of quantity with
anti-dumping margins used was not 100 per cent. Th is means that zeroing was used in this review
because "for the remaining transactions, no 'dum ping' was found and no 'offsets' were provided." 17
The European Communities also ar gues that the standard programme used by the USDOC in the
review at issue contained the zeroing line which excluded the comparisons with negative results.
According to the European Communities, when read together, the table and the standard programme
show that simple zeroing was used in the periodic review at issue.
6.17 The United States objects to the EC's arguments. The US comments in this regard apply to all
five periodic reviews with respect to which the European Communities asks the Panel to change its
findings. The United States submits that because the calculation tables submitted by the European
Communities in connection with the five reviews at issue were not generated by the USDOC, the
United States is not in a position to confirm their accuracy. Such tables, therefore, do not show that
zeroing was applied in the periodic reviews at issue. The United States also asserts that there is no

15 Request by the European Communities for the Review of Precise Aspects of the Interim Report of
the Panel, pp. 2-3.
16 Request by the European Communities for the Review of Precise Aspects of the Interim Report of
the Panel, p. 5.
17 Request by the European Communities for the Review of Precise Aspects of the Interim Report of
the Panel, p. 6.

such thing as a "standard computer programme" that the USDOC uses in every periodic review, nor is
there a programme that requires zeroing. The United St ates, therefore, invites the Panel to reject the
EC's request with regard to the five periodic reviews at issue.
6.18 Having carefully considered the EC's comments regarding the five periodic reviews addressed
in the preceding paragraphs, we do not see any reas on to change our conclusion that the European
Communities failed to show prima facie that the USDOC used simple zeroing in such reviews. We
have, however, modified paragra ph 7.151 and paragraphs 7.154 thr ough 7.157 of our report in order
to reflect certain concerns mentioned in the EC 's comments and to set out our reasoning in more
detail.
6.19 The European Communities asserts that there ar e no other documents av ailable regarding the
five periodic reviews at issue and therefore it is for the United States to rebut the prima facie case
made by the European Communities. The European Communities contends that the United States has
failed to unconditionally accept the prior adopted Appellate Body reports regarding zeroing and
asserts that the United States should not be allowe d to evade its international obligations by
withholding information from the exporters, th e European Communities and the Panel in these
proceedings. The United States objects, arguing that it has not contested documents that it was able to
authenticate in these proceedings and that it can not confirm the accuracy of other documents
contained in the EC's exhibits. The United Stat es recalls that the European Communities has the
burden of making a prima facie case to the effect that the USDO C used simple zeroing in the five
periodic reviews at issue.
6.20 We recall that according to the principles c oncerning burden of proof applicable in WTO
dispute settlement,
18 it is for each party to submit evidence of factual assertions that it makes. In order
to make out a prima facie case that the USDOC acted incons istently with the Anti-Dumping
Agreement by using simple zeroing in the five peri odic reviews at issue, therefore, the European
Communities must submit evidence of the underlying factual assertion. The European Communities
has met that burden with regard to 29 of the 37 periodic reviews which are within our terms of
reference in these proceedings. It has not, however, done so with rega rd to the five reviews that the
European Communities addresses in its request for re view of the interim report. The European
Communities having failed in this regard, there is nothing for the United States to rebut - we cannot
expect the United States to rebut a prima facie case that has not been made by the European
Communities. With regard to the EC's assertion that the United States withholds information from the
exporters, the European Communities and the Panel, we recall that pursuant to Article 13 of the DSU,
the Panel has the right to seek information from any individual or body it deems appropriate,
including the parties to a dispute. 19 If the European Communities believed that the United States was
withholding necessary information, it could have ask ed the Panel to seek such information from the
United States. It did not do so. 20 We make no representations as to whether such a request would

18 See infra, para. 7.6.
19 Considering Article 13.1 of the DSU, and other provisions, the Appellate Body concluded in Canada
– Aircraft that "a panel has broad legal authority to request information from a Member that is a party to a
dispute, and ... a party so requested has a legal duty to provide such information." Appellate Body Report,
Canada – Measures Affecting the Export of Civilian Aircraft ("Canada – Aircraft") , WT/DS70/AB/R, adopted
20 August 1999, DSR 1999:III, 1377, para. 197.
20 In its response to a question from the Panel fo llowing the Second Meeting with the Parties, the
European Communities stated that "in case the Panel would consider it necessary to obtain the detailed margin
calculations for each of the cases covered by these seve n exhibits, it should reques t copy of these detailed
calculations from the [United States]." Response of the European Communities to Question 1(c) From the Panel
Following the Second Meeting. Such a general statemen t clearly does not suffice as a request to the Panel to
seek specific factual inform ation from the USDOC pursuant to its authority under Article 13. Moreover, we
consider that it would be inappropriate for a panel to exercise its authority to seek information based on its own

have been granted had it been made in a timely fashi on. What is clear is that in the absence of such a
request, there is in our view no basis upon which to conclude that the United States improperly
withheld information, thereby preventing the European Communities from making out its prima facie
case. Thus, we can see no reason why the United St ates should be expected to rebut a factual
assertion unsupported by relevant evidence from the party making the assertion. In effect, this would
be much the same as drawing an adverse inference against the Untied States in this regard. While a
panel has the authority to draw such inferences where information it requested is not provided, 21 such
an inference should not be drawn by a panel light ly, and only where the circumstances warrant, which
they do not in this case.
6.21 The European Communities contends that should the Panel reject the EC's request with regard
to the above-mentioned five periodic reviews, the Panel should refer to 30 periodic reviews, not 29, in
paragraphs 7.183 and 8.2(b) below. The United States objects, arguing that the European
Communities fails to exclude from 37 the one review which the Panel excluded from the scope of its
terms of reference on the grounds that the Eu ropean Communities challenged a preliminary
determination in connection with the mentione d review. As the United States argues, and as
explained in paragraph 7.158 below, we have found that the periodic review in Certain Hot Rolled
Carbon Steel Flat Products from the Netherlands
 (Period of Review: 1 November 2004 –
31 October 2005) is not within the scope of our terms of reference on the grounds that the review at
issue involved a preliminary determination made by the USDOC. Together with our other
conclusions concerning reviews not properly before us, it therefore follows that our conclusions
regarding the use of simple zeroing in periodic re views only apply to 29 of the 37 periodic reviews
challenged by the European Communities in these proceedings.
6.22 Second, the European Communities requests th e Panel to change the second sentence in
paragraph 7.179 to "Such an objective assessment, including the standard of review pursuant to
Article 17.6(ii) of the Anti-Dumping Agreement, does not, of course, occur in a vacuum". According
to the European Communities, this would reconcile different statements found in our report regarding
permissible interpretations of a treaty provision. The United States disagrees with the EC's request.
The United States argues that paragraph 7.179 addr esses the Panel's duty to carry out an objective
assessment pursuant to Article 11 of the DSU an d that the additional phrase requested by the
European Communities concerns the standard of review. While acknowledging that Article 17.6(ii)
of the Anti-Dumping Agreement supplements Article 11 of the DSU, the United States contends that
it would be incorrect to state that the "objectiv e assessment" obligation in cludes the standard of
review under Article 17.6(ii). We see no legal ba sis for the change proposed by the European
Communities. Nor would such a modification serve to clarify our reasoning. We therefore decline to
modify our finding in this regard.
6.23 Third, the European Communities invites the Pane l to reconsider its finding in paragraph 8.7
below not to make a suggestion as to how the Unite d States has to bring its measures into compliance
with its WTO obligations. The European Communities argues that making suggestions as provided
for under the second sentence of Article 19.1 of the DS U would contribute to the prompt resolution of
this dispute. The European Communities also draw s attention to the fact that the United States has
failed to implement DSB recommendations and rulings in the past disputes where the use of the
zeroing methodology in various contexts was condemned. The United States submits that the
authority given to panels under Article 19.1 of th e DSU should not be lightly exercised by panels.
The United States reiterates its argument that th e DSU does not allow a suggestion of the kind
requested by the European Communities, i.e., one that would clarify the scope of a potential
compliance panel that may or may not be established in the future for the resolution of this dispute.

judgement as to what information is necessary for a party to prove its case, as opposed to seeking information in
order to elucidate its understanding of the facts and issues in the dispute before it.
21 Appellate Body Report, Canada – Aircraft, supra, note 19, para. 203.

6.24 Having analyzed the arguments presented in the EC's comments on our interim report, we
consider that it fully and clearly expresses our vi ews, and therefore see no reason to change our
analysis regarding the suggestion requested by the European Communities. We therefore reject the
EC's request.
B.
REQUEST OF THE UNITED STATES
6.25 First, the United States requests that we modify paragraph 1.10 of our report to reflect the fact
that it was following a request by the United States that the Panel invited parties to make comments
on the relevance to this dispute of the Appellate Body report in US – Stainless Steel (Mexico). In case
the US request is granted, the European Communities requests that we also mention that the European
Communities did not object to the US request. We have modified paragraph 1.10 in order to
accommodate both parties' requests.
6.26 Second, the United States requests the Panel to ch ange the description used for the measure at
issue in connection with the EC's claim regardi ng the continued application of the duties resulting
from 18 cases specified in the EC's panel request. The United States notes that the EC's panel request
takes issue with the continued application of, or the application of the specific anti-dumping duties
resulting from 18 different cases identified in the a nnex thereto. The United States therefore argues
that the Panel should describe the measure at issue in this regard as "the continued application or
application of anti-dumping duties in 18 cases" th roughout this report, instead of "continued
application of 18 anti-dumping duties". The Unit ed States, however, considers that for ease of
reference, the Panel may prefer to use "continued application". That is, the United States does not
take issue with the Panel using "the continued ap plication" instead of "continued application or
application" in the description of the measure at issue. The United States, however, requests the Panel
to refer to "anti-dumping duties in 18 cases" instead of "18 anti-dumping duties" in the description of
this measure. In other words, the United States argues that the Panel should use, at a minimum,
"continued application of anti-dumping duties in 18 c ases" instead of "continued application of the 18
anti-dumping duties". Although the United States rai ses this issue in connection with paragraph 3.3
of our report, it requests the Panel to apply this change to the entirety of the report.
6.27 The European Communities objects to the US request. The European Communities, however,
argues that should the Panel agree to change the descr iption used to refer to the measure at issue, it
should use the actual language found in the EC's panel request, i.e., "the continued application of, or
the application of the specific anti-dumping duties resulting from the anti-dumping orders in
18 cases".
6.28 We recall, and the United States also acknowledges, that in footnote 4 of our report, we
observe that the European Communities uses different formulations to describe the measure at issue in
its panel request and in different places of its subm issions to the Panel, and explain that for ease of
reference we refer to this measure as "the continue d application of the 18 duties" at issue. It is
therefore clear that the term that we use is only in tended to facilitate the multiple references that we
make to the measure at issue throughout our report, and by no means prejudges the legal significance
that different descriptions for the same measure might have. We have nevertheless changed the
placement of footnote 4 and modified its content in order to further clarify this point.
6.29 Third, the United States requests the Panel to modify paragraph 7.8 to clarify that the terms
mentioned in that paragraph were used by past panels and the Appellate Body to describe the
measures at issue in other disputes. The European Communities did not object to this request, and we
have made the requested modification.
6.30 Fourth, the United States contends that the Panel should change the sixth sentence of
paragraph 7.12 to clarify that the US argument concerned the EC's addition of 14 measures in its

panel request, rather that the description of "the matter" in general. The European Communities
argues that there is no need for such a change because the senten ce at issue provides an accurate
description of the US argument and the modificatio n sought by the United States would repeat what
the last sentence of the paragraph at issue says.
6.31 We agree with the European Communities that the sentence at issue correctly describes the
US argument. We recall that this sentence fi nds basis in the US submissions to the Panel. 22 We also
note that the gist of the modification sought by the United States, i.e., the argument that measures not
identified in the EC's consultations request fall out side the Panel's terms of reference, is already
conveyed in the last sentence of paragraph 7.12. We therefore decline to make the modification
requested by the United States.
6.32 Fifth, the United States refers to paragraph 7.25 of our report and argues that it would be
inaccurate to consider that the United States does not dispute the similarity between the EC's claims in
connection with the 38 determinati ons identified in the EC's consulta tions request and the claims in
connection with the 14 determinations identified for the first time in the EC's panel request. Because
each determination is separate and distinct from the others, so are claims pertaining to such
determinations. The United States therefore reque sts that we modify the mentioned paragraph to
eliminate this inaccuracy. The European Communities argues that the United States misconstrues the
Panel's statement in the mentioned paragraph and contends that there is no need to modify it.
6.33 We note that the relevant part of paragra ph 7.25 notes the similarity between the claims that
the European Communities raises in connection with the 38 determinations identified in the EC's
consultations request and the claims raised in connection with the add itional 14 determinations
identified in its panel request. The paragraph at is sue then mentions that the United States does not
contest this similarity. This statement thus does not address the similarities or dissimilarities between
the 38 and the 14 determinations, but rather betw een the claims concerning those determinations . We
have nevertheless modified paragraph 7.25 in order to further clarify this point.
6.34 Sixth, the United States argues that it would not be accurate to state that as part of its request
for a preliminary ruling in connection with the 14 additional measures identified in the EC's panel
request, the United States cited the Appellate Body decision in US – Certain EC Products without
elaboration. The United States requests the Panel to correct the relevant part of paragraph 7.26 in
order to eliminate this inaccuracy. The European Communities did not object to this request, and we
have modified paragraph 7.26 in order to more accurately reflect the US argument in this regard.
6.35 Seventh, the United States requests the Panel to change the phrase "indeterminate number of
measures", used in paragraphs 7. 31, 7.34 and 7.42 below, to "indeterminate measures" because the
latter explains the US arguments more accurately . The European Communities contends that the
phrase at issue, which is frequently used in th e US submissions, accurately reflects the US position
and invites the Panel to decline the US request. We note that the phrase at issu e has been used by the
United States itself in its submissions to the Panel. 23 Furthermore, we are not convinced that this
change would have any significan ce in our assessment of the EC's claims regarding the continued
application of the 18 anti-dumping duties. We therefore decline to make a modification to our
findings in this regard.
6.36 Eighth, the United States argues that paragraph 7. 32 contains two different arguments that the
United States made in its Second Written Submission and requests that this paragraph be modified in
order to better reflect those arguments. The Eu ropean Communities contends that should the Panel
agree to make the requested modification it s hould use the actual language found in the US

22 First Written Submission of the United States, paras. 55-58.
23 See, for instance, First Written Submission of the United States, paras. 44, 51, 66, 67 and 69.

submission. We have modified paragraph 7.32 and added paragraph 7.53 in or der to provide a more
accurate description of the US arguments.
6.37 Ninth, the United States argues that paragraph 7.33 fails to fully reflect the US argument
regarding the EC's characterization of the continua tion of the 18 duties as a measure and requests that
this paragraph be modified. The European Communities did not object to this request, and we have
made the requested modification to the mentioned paragraph.
6.38 Tenth, the United States contends that the last two sentences of paragraph 7.44 do not
accurately reflect the US argument concerning the nature of the EC's claims on the continued
application of the 18 duties and invites the Panel to modify it. The European Communities submits
that the Panel should reject the US request since the language that the United States suggests renders
the meaning of the sentences at i ssue confusing. The European Communities requests the Panel to
take this into consideration shoul d the Panel consider to make the requested modification. We have
modified paragraph 7.44 taking into consideration the views of both parties.
6.39 Eleventh, the United States argues that para graph 7.71 of our report does not reflect
accurately the US arguments regarding the prel iminary determinations that the European
Communities challenges in these proceedings. The Un ited States requests that we change the last
sentence of the mentioned paragraph to clarify th at the United States asserts that the European
Communities failed to comply with any one of the two conditions set out under Article 17.4 of the
Agreement. The European Commun ities objects to the US request and argues that the paragraph at
issue should not be modified as it accurately describ es the US argument. Furthermore, the European
Communities recalls that it did address the issue of the significant impact of the preliminary
determinations at issue. We have modified pa ragraph 7.71 in order to reflect the US arguments
regarding the preliminary determinations at issue, and in addition, have m odified paragraph 7.73 in
order to clarify that the European Communities ra ised the issue of the impact of preliminary
determinations made by the USDOC.
6.40 Twelfth, the United States takes issue with the st atement in paragraph 7.80 of our report that
the United States has not made substantive counte r-arguments regarding the EC's claims on the
continued application of the 18 duties. The United States argues that because the European
Communities stated that the legal basis of its cl aims regarding the continued application of the
18 duties was identical to that of its claims re garding the 52 determinations, the US arguments
concerning the EC's claims with respect to the 52 determinations equally respond to the EC's claims
with respect to the continued application of the 18 duties. In addition, the United States directs the
Panel's attention to the substantive arguments it made regarding the EC's claim under Article XVI:4 of
the WTO Agreement in connection with the continue d application of the 18 duties. The European
Communities submits that where the United States intended to incorporate parts of its previous
submissions in these proceedings, it did so explicitly. There is, however, no such reference in the US
submissions that would make the US arguments with respect to the 52 determinations equally
applicable to the continued application of th e 18 duties. The European Communities therefore
requests the Panel to reject the US request.
6.41 We agree with the European Co mmunities that there is no indication in the US submissions
that the US arguments with respect to the EC's claim concerning the 52 determinations were also
applicable to the EC's claims with respect to the continued application of the 18 duties. In any event,
we recall that we have not addressed any of the EC's claims regarding the continued application of the
18 duties since we have concluded th at this measure falls outside our terms of reference. We have,
however, modified paragraph 7.80 to reflect th e US arguments regarding the EC's claim under
Article XVI:4 of the WTO Agreement in connection with the continued application of the 18 duties.

6.42 The United States also requested that we delete paragraph 6.78 of our interim report because
it did not reflect the arguments it had made regard ing the EC's claim under Article XVI:4 of the WTO
Agreement. The European Communities objected and argued that the Panel should only modify this
paragraph to reflect the US arguments in this re gard. Since we have summarized these US arguments
in the new paragraph 7.80 of our report, we have deleted paragraph 6.78 of our interim report.
6.43 Thirteenth, the United States requests the Pa nel to replace the word "concedes" with
"recognizes" in the second sentence of paragraph 7.88 because the United States did not concede the
WTO-inconsistency of model zeroing in investiga tions, it simply recognized the Appellate Body's
findings in US – Softwood Lumber V and acknowledged that the same reasoning was applicable to the
EC's claim in this dispute. For the same reas ons, the United States requests the Panel to modify
paragraphs 7.105 and 7.120 of the report. The European Communities objects to the US request. The
European Communities notes that the United States di d not contest the WTO-inconsistency of model
zeroing in investigations a nd acknowledged that the Appellate Body's reasoning in US – Softwood
Lumber V was "equally applicable" with respect to the EC's claims in this dispute.
6.44 We have modified paragraphs 7.88, 7.105 and 7. 120 in order to more accurately describe the
US position with regard to the WTO-consistency of model zeroing in investigations.
6.45 Fourteenth, the United States requests three modifications to paragraph 7.123 of our report so
that the US arguments regarding zeroing in periodi c reviews are better reflected. The European
Communities did not object to this request, and we have made the requested modifications.
6.46 Fifteenth, the United States argues that the last sentence of paragraph 7.127 does not
accurately reflect the US position regarding the WTO- consistency of model zeroing in investigations
and requests the Panel to modify the mentioned sen tence. The European Communities did not object
to this request, and we have modified the sentence at issue in order to better reflect the US position.
6.47 Sixteenth, the United States requests the Panel to make three changes in paragraph 7.129 of
our report in order to more accurately reflect th e US arguments. The European Communities did not
object to this request, and we have made the requested changes to paragraph 7.129.
6.48 Seventeenth, the United States requests the Panel to make modifications to paragraphs 7.159
and 7.161 so that the calculation methodology used by the USDOC in periodic reviews is better
described. The European Communities did not object to this request, and we have made the requested
modifications.
6.49 Eighteenth, the United States requests that a modi fication be made to pa ragraph 7.162 of our
report to more accurately reflect the basis of one of the aspects of the Appellate Body's reasoning in
US – Stainless Steel (Mexico) . More specifically, the United States takes issue with the use of the
phrase "product as a whole" and submits that becaus e the Appellate Body in the mentioned decision
did not rely on this phrase, the Panel should also refrain from using it. The European Communities
objects to the US request. The European Communiti es contends that because the Appellate Body in
US – Stainless Steel (Mexico) did use the concept of "product as a whole" in its reasoning, the Panel
can also use it when referring to the Appellate Bo dy decision. To support this contention, the
European Communities refers to paragraphs of the Appellate Body decision other than those cited in
paragraph 7.162 of our report. In paragraph 7.162 of our report, we cite specific paragraphs of the
Appellate Body decision at issue where, strictly sp eaking, the concept of "product as a whole" is not
mentioned. We have therefore modified paragr aph 7.162 in order to more accurately reflect the
Appellate Body's decision in this regard.
6.50 Nineteenth, the United States requests the Panel to modify the third sentence of
paragraph 7.180 to clarify that security and predic tability for the multilateral trading system may be

provided if panels undertake an objective examinati on and do not add to or diminish the rights and
obligations of Members. According to the United St ates, "providing security and predictability to the
multilateral trading system" is not distinct from "not adding to or diminishing the rights and
obligations of Members". The European Communiti es submits that the Panel should reject the US
request. The European Communities considers the statement in the sen tence at issue to be correct.
We consider that while the proposition that when panels do not add to or diminish the rights and
obligations of Members, this provides security and predictability to the multilateral trading system
may be true in a general sense, it is not a prop osition which can be discerned from the text of the
DSU. Furthermore, we do not consider that the modification requested by the United States would
clarify our reasoning or facilitate the resolution of this dispute. We therefore reject the US request.
6.51 Twentieth, the United States contends that the Panel should modify its statement in
paragraph 7.194 to state that it was not clear whether the past dumping margins relied upon by the
investigating authorities in the sunset review at issue in US – Corrosion-Resistant Steel Sunset Review
had been calculated inconsistently with Article 2.4 of the Anti-Dumping Agreement. The European
Communities did not object to this request, and we ha ve modified paragraph 7. 194 in order to more
accurately reflect the facts pertaining to the sunset review at issue in the mentioned dispute.
6.52 Twenty-first, the United States submits that th e Panel should modify the third sentence of
paragraph 8.4 below in order to better describe th e US argument regarding the suggestion that the
European Communities seeks from the Panel. Th e European Communities did not object to this
request, and we have made the requested modification in order to better reflect the US argument.
6.53 We have also corrected some minor errors in our interim report, which the United States
brought to our attention.
VII. FINDINGS
A.
RELEVANT PRINCIPLES REGARDING STANDARD OF REVIEW , TREATY INTERPRETATION AND
BURDEN OF PROOF
1. Standard of Review
7.1 Article 11 of the DSU, which provides the standa rd of review for WTO panels in general,
requires panels to carry out an "objective assessment of the matter", an obligation that applies to all
aspects of a panel's examination of the "matter", both factual and legal.24
7.2 Article 17.6 of the Anti-Dumping Agreement sets forth the special standard of review that
applies in dispute settlement proceedings under the Anti-Dumping Agreement. This provision reads:
"In examining the matter referred to in paragraph 5:
(i) in its assessment of the facts of the matter, the panel shall determine whether
the authorities' establishment of the facts was proper and whether their
evaluation of those facts was unbiased and objective. If the establishment of
the facts was proper and the evaluation was unbiased and objective, even

24 Article 11 of the DSU provides in part:
"The function of panels is to assist the DSB in discharging its responsibilities under this
Understanding and the covered agreements. Acco rdingly, a panel should make an objective
assessment of the matter before it, including an objective assessment of the facts of the case
and the applicability of and conformity with th e relevant covered agreements, and make such
other findings as will assist the DSB in making the recommendations or in giving the rulings
provided for in the covered agreements."

though the panel might have reached a different conclusion, the evaluation
shall not be overturned;
(ii) the panel shall interpret the rele vant provisions of the Agreement in
accordance with customary rules of interpretation of public international law.
Where the panel finds that a relevant provision of the Agreement admits of
more than one permissible interpretati on, the panel shall find the authorities'
measure to be in conformity with the Agreement if it rests upon one of those
permissible interpretations."
Thus, taken together, Article 11 of the DSU a nd Article 17.6 of the Anti-Dumping Agreement
establish the standard of review that we must a pply with respect to both the factual and the legal
aspects of this dispute.

2. Rules of Treaty Interpretation
7.3 Article 3.2 of the DSU provides that the dispute settlement system serves to clarify the
provisions of the covered agreements "in accordance with customary rules of interpretation of public
international law". It is generally accepted that these customary rules are reflected in Articles 31-32
of the Vienna Convention on the Law of Treaties ("Vienna Convention" ). Article 31(1) of the
Vienna Convention provides:
"A treaty shall be interpreted in good faith in accordance with the ordinary meaning
to be given to the terms of the treaty in their context and in the light of its object and
purpose."
7.4 In the context of disputes under the Anti-Dumping Agreement, the Appellate Body has stated
that:
"The first sentence of Article 17.6(ii), echoing closely Article 3.2 of the DSU, states
that panels 'shall' interpret the provisions of the AD Agreement 'in accordance with
customary rules of interpretation of public international law'. Such customary rules
are embodied in Articles 31 and 32 of the Vienna Convention on the Law of Treaties
('Vienna Convention' ). Clearly, this aspect of Article 17.6(ii) involves no 'conflict'
with the DSU but, rather, confirms that th e usual rules of treaty interpretation under
the DSU also apply to the AD Agreement. …
The second sentence of Article 17.6(ii) … presupposes that application of the rules of
treaty interpretation in Articles 31 and 32 of the Vienna Convention could give rise to,
at least, two interpretations of some provisions of the AD Agreement, which, under
that Convention, would both be ' permissible interpretations'. In that event, a measure
is deemed to be in conformity with the AD Agreement 'if it rests upon one of those
permissible interpretations'."
25 (emphasis in original)
7.5 Thus, under the Anti-Dumping Agreement, the sam e rules of treaty interpretation apply as in
other disputes, with one distinction being that Artic le 17.6(ii) provides explicitly that if we find more
than one permissible interpretation of a provision of the Anti-Dumping Agreement, we are required to
uphold a measure that rests on one of those interpretations.

25 Appellate Body Report, United States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products
from Japan ("US – Hot-Rolled Steel"), WT/DS184/AB/R, adopted 23 August 2001, DSR 2001:X, 4697, paras. 57
and 59.

3. Burden of Proof
7.6 In WTO dispute settlement, a party claiming a violation of a provision of the WTO
Agreement by another Member has the burden to assert and prove its claim.
26 The European
Communities, as the complaining party, must therefore make a prima facie case of violation of the
relevant provisions of the agreements at issue, wh ich the United States must refute. We also note that
it is generally for each party asserting a fact, whethe r complainant or respondent, to provide proof
thereof.27 It follows that it is also for the United States to provide eviden ce for the facts which it
asserts. In this regard, we recall that a prima facie case is one which, in the absence of effective
refutation by the other party, requires a panel, as a matter of law, to rule in favour of the party
presenting the prima facie case.
B. THE TERMS "MODEL ZEROING" AND "SIMPLE ZEROING"
7.7 This dispute concerns the application in certain anti-dumping proceedings of a certain
methodology that the European Communities describes as "zeroing". This particular methodology,
which is used in the calculation of the margin of dumping, in the view of the European Communities,
does not reflect all the export transactions. More specifically, the European Communities takes issue
with the use of the zeroing methodology in three di fferent contexts. First, the European Communities
challenges the use of zeroing in the context of inv estigations where the WA normal value is compared
with the WA export price for different models of the product under consideration and where such
model-specific results are subseque ntly aggregated in the calculation of the margin for the product
under consideration. The European Communiti es describes this methodology as "model zeroing".
Second, the European Communities challenges the u se of zeroing in periodic reviews where the WA
normal value is compared with individual export transactions. The European Communities calls this
"simple zeroing". Finally, the European Communiti es takes issue with the use in sunset reviews of
dumping margins calculated either through model zer oing in prior investigations and/or through
simple zeroing in prior periodic reviews.
7.8 We note that the terms used by the European Communities to describe different calculation
methodologies are not found in the Anti-Dumping Agreement or the GATT 1994. We also note,
however, that these terms have been used by prior pa nels and the Appellate Body in the description of
the specific measures at issue in those disputes. We will, therefore, also use the same terms in
describing the methodologies at issue in this dispute. We would like to underline, however, that such
use is for ease of reference only, and does not prejudge our assessment of the WTO-compatibility of
the measures at issue.
C.
TERMS OF REFERENCE
7.9 The European Communities does not raise an y "as such" claims in this dispute. 28 That is, the
European Communities does not challenge the WTO-consistency of the zeroing methodology per se.
All of the EC's claims are "as applied" claims, i.e., they concern the use of the zeroing methodology in
connection with certain anti-dumping duties or in cer tain anti-dumping proceedings. The EC's claims
relate to two sets of measures adopted by the United States:
"First, the European Communities challenges the application or continued application
of specific anti-dumping duties resulting from the 18 anti-dumping orders in the

26 Appellate Body Report, United States – Measure Affecting Imports of Woven Wool Shirts and Blouses
from India ("US – Wool Shirts and Blouses "), WT/DS33/AB/R and Corr.1, adopted 23 May 1997,
DSR 1997:I, 323 at 337.
27 Ibid.
28 First Written Submission of the European Communities, para. 2.

Annex to the Panel request as calculated or maintained in place pursuant to the most
recent administrative review or, as the case may be, original proceeding or changed
circumstances or sunset review proceeding , since these anti-dumping duties are
calculated and are maintained in place at a level in excess of the dumping margin
which would result from the correct application of the Anti-Dumping Agreement.
Second, the European Communities ch allenges the application of zeroing (i.e., either
using the model or simple zeroing tec hnique) as applied in 52 anti-dumping
proceedings, including original proceedings, administrative review proceedings and
sunset review proceedings listed in the Annex to the Panel request." 29 (emphasis
added)
7.10 The United States presents three preliminary objections regarding the claims that the
European Communities raises in connection with certa in measures and requests the Panel to find that
such claims fall outside the Panel's terms of refere nce. Our assessment with regard to each one of
these three preliminary objections is provided below.
1. Measures Not Included in the European Communities' Consultations Request
(a) Arguments of the Parties
(i) United States
7.11 The United States argues that the EC's panel re quest contains measures not included in its
consultations request. In this respect, the United States takes issue with two sets of measures. First,
the United States contends that the EC's consu ltations request does not reference the continued
application of 18 specific anti-dumping duties. Second, the United States argues that some of the
52 measures that reflect the specific instances of application of the zeroing methodology were not
included in the EC's consultations request. More specifically, the United States recalls that the EC's
initial consultations request
30 was limited to 38 specific measures, i.e., 33 periodic reviews, four
original investigations and one sunset revi ew. The EC's additional consultations request 31 added two
additional periodic reviews of which one was th en ongoing. The EC's panel request, however,
identifies 52 measures, adding 14 measures to the 38 that were subjected to consultations. The
14 new measures were seven final and three then-o ngoing sunset reviews and three final and one
then-ongoing periodic reviews.
7.12 The United States notes that under Article 7.1 of the DSU, it is the complaining party's panel
request that determines a panel's te rms of reference. Article 4.7 of the DSU, however, stipulates that
the complaining Member may request the establishmen t of a panel only with respect to measures that
have been subjected to consultations between the pa rties. Furthermore, the United States notes that
Article 4.4 of the DSU requires that the consultations request identify the speci fic measures at issue.
According to the United States, there is a cl ear progression between the measures discussed in
consultations and those that appear in the panel request. In this regard, the United States finds support
in the Appellate Body's finding, in Brazil – Aircraft, that "Articles 4 and 6 of the DSU ... set forth a
process by which a complaining party must request consultations, and consul tations must be held,
before a matter may be referred to the DSB for the establishment of a panel." 32 The United States is of
the view that the matter which determines a panel's terms of reference, both in the context of the DSU

29 First Written Submission of the European Communities, paras. 34-35.
30 WT/DS350/1.
31 WT/DS350/1/Add.1.
32 Appellate Body Report, Brazil – Export Financing Programme for Aircraft ("Brazil – Aircraft "),
WT/DS46/AB/R, adopted 20 August 1999, DSR 1999:III, 1161, para. 131.

and Articles 17.3 through 17.5 of the Anti-Dumping Ag reement, is the matter that is raised in the
complaining party's consultations and panel requests. Hence, measures not identified in the
consultations request cannot subsequently be brough t into the scope of a dispute through the panel
request.
7.13 Based on this reasoning, the United States requ ests the Panel to rule that the 14 of the
52 measures raised in the EC's panel request, and the measure described as "the application or
continued application of the 18 anti-dumping duties," which were identified for the first time in the
EC's panel request, are not within the Panel's term s of reference, and to refrain from making findings
with regard to such measures.
(ii) The European Communities
7.14 The European Communities notes that the subject ma tter of this dispute has been described as
the "continued existence and application of the zer oing methodology" in its request for consultations,
and remained unchanged afterwards. The EC's consultations request refers to the country and the
product concerned in describing 18 anti-dumping dut ies, which the United States argues are outside
the Panel's terms of reference. It also cites, w ith reference to the country and the product concerned,
specific anti-dumping proceedings where the contested zeroing methodology was used by
the USDOC. The description in the EC's pa nel request follows the same approach, i.e., it identifies
both the continued application of the 18 anti-dumping duties and the specific proceedings where
zeroing was used, by reference to the country and the product at issue.
7.15 The European Communities acknowledges that some of the specific anti-dumping
proceedings identified in its panel request did not appear in its consultations request. It asserts,
however, that such measures are nevertheless within th e Panel's terms of reference. According to the
European Communities, as long as the consultations and the panel requests concern essentially the
same matter, Articles 4 and 6 of the DSU, as interp reted in the relevant case law, do not require that
the measures identified in these two documents be the same. Since the measures identified in the EC's
consultations request and the 14 measures identified in its panel request are defined by reference to
the relevant countries and the products, the Eur opean Communities contends that they concern
essentially the same matter. Furthermore, the Euro pean Communities asserts that the 14 measures at
issue fall within the Panel's terms of reference since they have a direct relationship with the measures
listed in the consultations request. According to the European Communities, therefore, its claims
pertaining to the 14 measures that appear for the first time in its panel request and the claims
regarding the continued application of the 18 an ti-dumping duties are within the Panel's terms of
reference.
(b) Evaluation by the Panel
7.16 The US request for a preliminary ruling regarding measures that are allegedly not identified in
the EC's consultations request concerns two sets of measures: a) the 14 additional specific anti-
dumping proceedings, and b) the co ntinued application of the 18 an ti-dumping duties. Below, we
provide our evaluation of the US request regarding these two sets of measures, respectively.
(i) The 14 Additional Anti-Dumping Proceedings
7.17 There is no disagreement between the parties th at 14 specific anti-dumping proceedings that
were identified in the EC's panel request had not been identified in its consultations request. The
United States argues that claims pertaining to measures not identified in the EC's consultations request
fall outside the Panel's terms of reference. Th e European Communities argues that its claims in
connection with the 14 proceedings at issue are wi thin the Panel's terms of reference because its
consultations and panel requests concern essentially the same matter, i.e., continued existence and

application of the zeroing methodology. The Eur opean Communities contends that its claims in
connection with the 14 proceedings fall under th e Panel's terms of reference also because the
14 proceedings have a direct relationship to the 38 proceedings identified in its consultations request.
7.18 Since it is factually undisputed that the EC's pa nel request refers to 14 proceedings that were
not identified in its consultations request, the issue to be resolved in this regard is the extent to which
the EC's consultations request affects our terms of reference. In other words, the basic issue is
whether the fact that certain measures were not iden tified in the EC's consultations request precludes
us addressing claims raised in the EC's panel request in connection with such measures. If we find
that claims pertaining to measures not identified in the EC's consultations request fall outside the
Panel's terms of reference, we shall refrain from addressing such claims. If not, we have to address
these claims.
7.19 We note that pursuant to Article 7.1 of the DSU, the terms of reference of a panel are
governed by the matter referred to the DSB in the complaining Member's panel request. 33 Article 6.2
of the DSU sets out the requirements that apply to requests for the establishment of a panel:
"The request for the establishment of a pane l shall be made in writing. It shall
indicate whether consultations were held, identify the specific measures at issue and
provide a brief summary of the legal basis of the complaint sufficient to present the
problem clearly. In case the applicant re quests the establishment of a panel with
other than standard terms of reference, th e written request shall include the proposed
text of special terms of reference."
According to Article 6.2, therefore, a panel request must identify the specific measures at issue and
must provide a brief summary of the legal basis of the complaint . Together, these two elements
comprise the "matter referred to the DSB", which fo rms the basis for a panel's terms of reference
under Article 7.1 of the DSU. It is important th at the panel request be sufficiently clear for two
reasons: First, it defines the scope of the dispute. Second, it serves the due process objective of
notifying the parties and third parties of the nature of a complainant's case.34
7.20 The US request for a preliminary ruling concerns the significance, if any, that a complaining
party's consultations request has on a panel's terms of reference. We generally note that the DSU does
not contain a provision that addresses this sp ecific issue. Article 4 of the DSU, entitled
"Consultations", provides in relevant parts:
"Article 4
Consultations

4. ... Any request for consultations shall be submitted in writing and shall give
the reasons for the request, including id entification of the measures at issue and an
indication of the legal basis for the complaint.

33 That a panel's terms of reference are determined by the complaining Member's panel request is a well
established canon of WTO dispute settlement. See, for instance, Appellate Body Report, United States –
Countervailing Duties on Certain Corrosion-Resistant Carbon Steel Flat Products from Germany ("US – Carbon
Steel"), WT/DS213/AB/R and Corr.1, adopted 19 December 2002, DSR 2002:IX, 3779, para. 124.
34 Appellate Body Report, Brazil – Measures Affecting Desiccated Coconut ("Brazil – Desiccated
Coconut"), WT/DS22/AB/R, adopted 20 March 1997, DSR 1997:I, 167, p. 22.

7. If the consultations fail
 to settle a dispute within 60 days after the date of
receipt of the request for consultations , the complaining party may request the
establishment of a panel . The complaining party may request a panel during the 60-
day period if the consulting parties jointly consider that consultations have failed to
settle the dispute." (emphasis added)
7.21 Article 17 of the Anti-Dumping Agreement wh ich contains parallel provisions regarding
consultations between Members of the WTO rega rding matters that arise under the mentioned
agreement, provides in relevant parts:
"Article 17
Consultation and Dispute Settlement
17.1 Except as otherwise provided herein, the Dispute Settlement Understanding
is applicable to consultations and the settlement of disputes under this Agreement.

17.3 If any Member considers that any benef it accruing to it, directly or indirectly,
under this Agreement is being nullified or impaired, or that the achievement of any
objective is being impeded, by another Memb er or Members, it may, with a view to
reaching a mutually satisfactory resolution of the matter, request in writing
consultations with the Member or Members in question . Each Member shall afford
sympathetic consideration to any request from another Member for consultation.
17.4 If the Member that requested consulta tions considers that the consultations
pursuant to paragraph 3 have failed to achiev e a mutually agreed solution, and if final
action has been taken by the administering authorities of the importing Member to
levy definitive anti-dumping duties or to accept price undertakings, it may refer the
matter to the Dispute Settlement Body ("DSB"). When a provisional measure has a
significant impact and the Member that requested consultations considers that the
measure was taken contrary to the provisi ons of paragraph 1 of Article 7, that
Member may also refer such matter to the DSB.
17.5 The DSB shall, at the request of the complaining party, establish a panel to
examine the matter based upon:
(i) a written statement of the Member making the request indicating how a
benefit accruing to it, directly or indirec tly, under this Agreement has been nullified
or impaired, or that the achieving of the objectives of the Agreement is being
impeded, and
(ii) the facts made available in conform ity with appropriate domestic procedures
to the authorities of the importing Member.
..." (emphasis added)
Article 4.4 of the DSU provides that a consultations request has to identify the measures at issue and
indicate the legal basis of the complaint. Article 4.7 of the DSU, in turn, stipulates that if the parties
fail to settle the dispute within 60 days from the re ceipt of the consultations request, the complaining
Member may request the establishment of a panel. Article 17.1 of the Anti-Dumping Agreement
provides that the DSU applies to the consultations a nd the settlement of disputes that arise under the

Anti-Dumping Agreement. Article 17.3 of the An ti-Dumping Agreement states that if a Member
considers that any benefit accruing to it, directly or indirectly, under the mentioned Agreement is
nullified or impaired, or that the achievement of any objective is impeded by another Member, it may
request consultations with the Member concerned. Ar ticle 17.4 states that if the parties fail to settle
the dispute through consultations, the complaining Me mber may refer the matter to the DSB to seek
the establishment of a panel. Finally, Article 17.5 s tipulates that the DSB shall, in such a situation,
establish a panel to resolve the dispute.
7.22 The provisions cited above do not directly address the issue of whether a complaining
Member is barred from raising claims in connectio n with measures identified in its panel request,
which were not identified in its consultations request . Article 6.2, entitled "Establishment of Panels",
requires that a panel request mention whether consultations were held, but it does not stipulate that the
scope of the consultations request limits the scope of the claims that may subsequently be raised
before a panel. Article 4.7 of the DSU provides that if parties fail to settle "the dispute" within 60
days, the complaining Member may request the establis hment of a panel. Similarly, Article 17.4 of
the Anti-Dumping Agreement provides that if consu ltations fail, the complaining Member may refer
"the matter" to the DSB. These provisions, in our view, support the argument that as long as the
consultations request and the panel request concern the same matter, or dispute, claims raised in
connection with measures identified in the complain ing Member's panel request would fall within a
panel's terms of reference even if those precise measures were not identified in the consultations
request.
7.23 We note that this issue also arose in some prio r disputes and that our reasoning in this case
finds support in the reasoning developed by panels and the Appellate Body in those disputes. In
Canada – Aircraft, the panel reasoned that as long as the c onsultations and panel requests refer to the
"same dispute", claims pertaining to that dispute would fall under the panel's terms of reference. 35
According to that panel, this approach would observe the defendant's due process rights and at the same
time recognize that the nature of the dispute could change between consultations and the establishment
of a panel. 36 It follows that the scope of a consultations request and that of a panel request do not
necessarily have to be identical. This reasoning was also followed by the panel in Brazil – Aircraft. The
panel in that case underlined the fact that a WT O panel's terms of reference are governed by the
complaining Member's panel request, as opposed to its consultations request. 37 While acknowledging

35 The panel in Canada – Aircraft held:
"Accordingly, our terms of reference are determined by document WT/DS70/2, i.e., Brazil's
request for establishment of this Panel. Th is document refers expressly to "financing …
provided by the Export Development Corporation …". In principle, therefore, EDC
"financing" falls within our jurisdiction. As noted above, EDC "financing" would only fall
outside our jurisdiction if EDC "financing" were not part of the "dispute" on which Brazil had
requested consultations. In our view, Brazil requ ested consultations in respect of a "dispute"
concerning prohibited export subsidies allegedly provided to the Canadian civil aircraft
industry by inter alia EDC. This "dispute" is also the subject of Brazil's request for
establishment of this Panel. Since the EDC "financing" identified in Brazil's request for
establishment of a panel was part of the same "dispute" with respect to which consultations
were requested, we find that EDC "finan cing" falls within the Panel's jurisdiction. "
(emphasis added)
Panel Report, Canada – Measures Affecting the Export of Civilian Aircraft ("Canada –
Aircraft"), WT/DS70/R, adopted 20 August 1999, upheld by Appellate Body Report, WT/DS70/AB/R,
DSR 1999:IV, 1443, para. 9.14.
36 Ibid., para. 9.12.
37 The panel in Brazil – Aircraft held:
"We recall that our terms of reference are base d upon Canada's request for establishment of a
panel, and not upon Canada's request for consultations. These terms of reference were
established by the DSB pursuant to Article 7.1 of the DSU and establish the parameters for
our work. Nothing in the text of the DSU or Article 4 of the SCM Agreement provides that

that the complaining Member should seek the establishment of a panel with regard to the same dispute
that was subjected to c onsultations, the panel in Brazil – Aircraft reasoned that this does not require a
precise identity between the matter that was subject to consultations and that with respect to which the
establishment of a panel was requested.
38 On appeal, the Appellate Body upheld the panel's reasoning
and reiterated the fact that the DSU does not require precise identity between the measures identified in
the complaining Member's consultations request and those identified in its panel request.39
7.24 The United States contends that the ruling of the Appellate Body in Brazil – Aircraft is not
relevant to the issue presented in this case. In the view of the United States, although the new
measures in Brazil – Aircraft were regulatory instruments that entailed periodic re-enactments of
identical measures, the measures added to the EC's panel request in this case are new and legally
distinct determinations by the USDOC. Although the 14 new measures concern the same products
originating in the same countries, they resulted from proceedings that are independent from those
identified in the EC's consultations request.40
7.25 In our view, whether the new measures were taken in proceedings that, as a matter of US law,
are independent from one another is but one relevant consideration in deciding whether such new
measures are within our terms of reference. We note that the 14 and the 38 measures concern
different determinations pertaining to the same products originating in the same countries.
Furthermore, these two groups of measures entail the alleged use of the same methodology, zeroing,
which is the gist of the EC's claims before us. In terms of the formulation of the EC's claims, there is
no difference whatsoever between these two sets of me asures. That is, the claims that the European

the scope of a panel's work is governed by the scope of prior consultations." (footnote omitted,
emphasis added)
Panel Report, Brazil – Export Financing Programme for Aircraft ("Brazil – Aircraft "), WT/DS46/R,
adopted 20 August 1999, as modified by Appellate Body Report, WT/DS46/AB/R, DSR 1999:III, 1221, para. 7.9.
38 "Accordingly, we consider that a panel may c onsider whether consultations have been held
with respect to a 'dispute', and that a prelimin ary objection may properly be sustained if a
party can establish that the required consultations had not been held with respect to a dispute.
We do not believe, however, th at either Article 4.7 of the DSU or Article 4.4 of the SCM
Agreement requires a precise identity between th e matter with respect to which consultations
were held and that with respect to which esta blishment of a panel was requested." (footnote
omitted)
Panel Report, Brazil – Export Financing Programme for Aircraft ("Brazil – Aircraft "), WT/DS46/R,
adopted 20 August 1999, as modified by Appellate Body Report, WT/DS46/AB/R, DSR 1999:III, 1221, para. 7.10.
39 "We do not believe, however, that Articles 4 and 6 of the DSU, or paragraphs 1 to 4 of
Article 4 of the SCM Agreement , require a precise and exact identity between the specific
measures that were the subject of consultati ons and the specific measures identified in the
request for the establishment of a panel... We are confident that the specific measures at issue
in this case are the Brazilian export subsidies for regional aircraft under PROEX.
Consultations were held by the parties on these subsidies, and it is these same subsidies that
were referred to the DSB for the establishment of a panel. We emphasize that the regulatory
instruments that came into effect in 1997 and 1998 did not change the essence of the export
subsidies for regional aircraft under PROEX." (footnote omitted, italic emphasis in original,
underline emphasis added)
Appellate Body Report, Brazil – Aircraft, supra, note 32, para. 132. We also note that the panels in
Japan – Agricultural Products II, Mexico – Anti-Dumpi ng Measures on Rice and US – Steel Plate also made
similar findings. See, Panel Report, Japan – Measures Affecting Agricultural Products ("Japan – Agricultural
Products II"), WT/DS76/R, adopted 19 March 1999, as modified by Appellate Body Report, WT/DS76/AB/R,
DSR 1999:I, 315, para. 8.4(i); Panel Report, Mexico – Definitive Anti-Dumping Measures on Beef and Rice,
Complaint with Respect to Rice ("Mexico – Anti-Dumping Measures on Rice "), WT/DS295/R, adopted
20 December 2005, as modified by Appellate B ody Report, WT/DS295/AB/R , DSR 2005:XXIII, 11007,
para. 7.41; Panel Report, United States – Anti-Dumping and Countervailing Measures on Steel Plate from India
("US – Steel Plate"), WT/DS206/R and Corr.1, adopted 29 July 2002, DSR 2002:VI, 2073, para. 7.18.
40 Second Written Submission of the United States, para. 13.

Communities raises in connection with the 38 a nd the 14 measures at issue are identical. The
United States does not dispute this similarity between the claims. In our assessment of the US request
for a preliminary ruling, we consider that the subs tantive similarity between the two sets of measures
at issue, and the fact that they concern the same country and the same product outweigh the fact that
they represent independent determinations under US law.
7.26 The United States maintains that its arguments on this issue are supported by the reasoning of
the Appellate Body in US – Certain EC Products. Specifically, the United States cites paragraphs 70
and 82 of that report.
41 The Appellate Body's reasoning in that case, however, shows that it carried
out a very detailed analysis regarding the relati onship between the two measures at issue in that
dispute and came to the conclusion that these measur es were not sufficiently related so as to allow the
complaining party to raise claims in connection w ith the (new) measure that was identified for the
first time in its panel request. Among others, the Appellate Body analysed differences regarding:
(a) the content of the measures 42, (b) the government agenci es that issued the measures 43 and (c) the
legal linkage between the measures.44
7.27 Given the striking similarities between the 14 new measures and the 38 measures identified in
the EC's consultations request, however, we do not agree that the Appellate Body's reasoning in US –
Certain EC Products undermines our reasoning outlined above.
7.28 We recall that there is a considerable similar ity between the 38 measures that were identified
in the EC's consultations request and those that appe ared for the first time in the EC's panel request.
These two sets of measures relate to the same products originating in the same countries. More
importantly, the legal nature of the EC's claims regarding the additional 14 measures does not in any
way differ from that of the 38 measures identified in the EC's consultations request. The 14 measures
entailed the same types of zeroing methodology as the 38 measures. Hence, it is clear that the EC's
consultations request and its panel request refer to the same subject matter, the same dispute. We
therefore reject the US request for a preliminary ru ling in this regard and find that the 14 measures at
issue are within our terms of reference.
(ii) Continued Application of 18 Anti-Dumping Duties
7.29 We recall that in addition to the 14 new measu res that we have discussed, the United States
also requests that the Panel find that the EC's claims pertaining to the continued application of the
18 anti-dumping duties also fall outside the Panel's terms of reference because this measure was
identified for the first time in the EC's panel reque st. Parties disagree as to whether the continued
application of the 18 anti-dumping duties was iden tified in the EC's consultations request. The
United States asserts that this measure was identif ied for the first time in the EC's panel request
whereas the European Communities contends that it wa s also identified in its consultations request.
We note our finding below (para. 7.61) that the EC's claims regarding the continued application of the
18 anti-dumping duties fall outside our terms of re ference because this purported measure does not
meet the specificity requirement set out under Article 6.2 of the DSU. We therefore need not, and do
not, address the US assertion that the continued application of the 18 duties at issue also falls outside
our terms of reference on the grounds that it was not raised in the EC's consultations request.

41 First Written Submission of the United States, pa ras. 59-60; Second Written Submission of the
United States, para. 11.
42 Appellate Body Report, United States – Import Measures on Certain Products from the
European Communities ("US – Certain EC Products "), WT/DS165/AB/R, adopted 10 January 2001,
DSR 2001:I, 373, para. 74.
43 Ibid., para. 75.
44 Ibid., paras. 76-77.

2. Specificity of the European Communities' Reference to 18 Cases
(a) Arguments of the Parties
(i) United States
7.30 The United States recalls that the Panel's terms of reference are set by the claims raised in the
EC's panel request. Pursuant to Article 6.2 of the DSU, the EC's panel request has to identify, inter
alia, the specific measures at issue. The United States notes that the EC's panel request refers to the
continued application of 18 specific anti-dum ping duties resulting from anti-dumping orders
enumerated in the Annex to its panel request, as calcu lated or maintained in the most recent periodic
review or, as the case may be, original proceed ing or changed circumstances or sunset review
proceeding. The United States contends that as fa r as the EC's claim regarding the application or
continued application of the 18 duties is concerned, the panel request fails to identify the specific
measures at issue, as required under Article 6.2 of th e DSU. According to the United States, it is not
clear which specific measure this claim refers to.
7.31 The United States notes the EC's statement that "t he application or continued application of
the 18 duties" would also cover any subsequent pr oceeding that would modify such duty levels and
argues that this formulation effectively requests the Panel to make findings on measures that are not in
existence as of the date of the Panel's establishmen t. The United States asserts that such a description
fails to meet the specificity standard of Article 6.2 of the DSU. The United States argues that the
European Communities asks the Panel to make findi ngs that would apply to an indeterminate number
of measures, which, according to the United States, the DSU does not allow.
7.32 The United States also points out that the Eur opean Communities seems to indicate that the
18 measures cover the application or continued appl ication of the "zeroing" methodology in 18 cases.
According to the United States, to the extent the European Communities is saying that it is
challenging the application or con tinued application of zeroing in 18 cases (a description not found
anywhere in its panel request), that "measure" lack s specificity. The United States argues that "[t]he
[European Communities] cannot make a generalized reference to the application of zeroing in
18 broadly-defined cases without indicating the exact determinations where 'zeroing' was applied."
45
7.33 The United States objects to the EC’s argument asking the Panel to treat each duty as a free-
standing measure. According to the United States, "the [European Communities] ignores the fact that,
for any given importation, the antidumping duty assessed depends on a particular underlying
administrative determination, whether that be an original investigation, assessment review, new
shipper review, or changed circumstances review, while the continuation of that duty depends on an
underlying sunset review." 46 The United States contends that "the [European Communities] must
identify the specific determination leading to the par ticular application or continued application of an
antidumping duty, and cannot merely refer to 'duty' in a general and detached way." 47 T h e
United States finds inconsistency in the Europ ean Communities arguing on the one hand that it does
not raise any "as such" claims in this case and on the other hand presenting th e application of a duty
as a self-standing measure.48
7.34 The United States argues that permitting the European Communities to submit claims in
connection with an indeterminate number of measures would seriously prejudice the US right of
defence in these proceedings. The Un ited States also contends that the European Communities has to

45 Second Written Submission of the United States, para. 23.
46 (footnote omitted) Second Written Submission of the United States, para. 25.
47 Ibid.
48 Second Written Submission of the United States, para. 26.

comply with the requirements of the DSU regarding the identification of the specific measure at issue
irrespective of whether failure to do so would prejudice the US due process rights since the DSU
contains no such requirement.
(ii) European Communities
7.35 The European Communities disagrees with the US assertion that the EC's panel request refers
to an indeterminate number of measures. The Eu ropean Communities notes that, with regard to the
continued application of the 18 duties, the EC's pa nel request identifies the measures at issue with
adequate precision: "a duty rate based on the u se of the zeroing methodology which is being applied
against imports of a specific product from a specific country". 49 The European Communities argues
that this description is consistent with the requi rements of the DSU just as the description of the
practice of "zeroing" was considered to be so by the Appellate Body in previous zeroing disputes.
According to the European Communities, as long as the cases from which arose the 18 duties at issue
are described in the EC's panel request by refe rence to the countries, products and duty levels
concerned, the fact that reference is not made to the last proceeding where such duties were modified,
is irrelevant.50
7.36 The European Communities notes, and disagrees wi th, the US point of view that measures
challenged in WTO dispute settlement should either be a framework law, or a specific anti-dumping
proceeding such as an investigation, a periodic re view or a sunset review. According to the
European Communities, as long as the content of the measure is properly described in the
complaining Member's panel request, the form in which the measure manifests itself is irrelevant.51
7.37 The European Communities submits that, as elabor ated in the WTO juri sprudence, a measure
which is closely related to the measure identified in the complaining party's panel request also falls
within a panel's terms of reference. Accordingly, measures introduced subsequent to the EC's panel
request would fall in this Panel's te rms of reference to the extent th at they are related to the 18 anti-
dumping duties specifically cited in such request.
7.38 The European Communities posits that the rationale behind the specificity requirement of
Article 6.2 of the DSU is to protect the parties' due process rights in dispute settlement proceedings.
It follows from the EC's argument that the Unite d States has to show that the alleged lack of
specificity with regard to the 18 duties at issue has prejudiced its due process rights. The European
Communities contends, however, that the United States has failed to show such prejudice.
(b) Arguments of Third Parties
(i) Japan
7.39 Japan submits that the EC's panel request defin es with sufficient clarity the measure at issue
with regard to the 18 anti-dumping duties applied by the United States. Japan asserts that the practice
of zeroing is applied in all proceedings pertaining to an anti-dumping duty, including duty assessment
proceedings, changed circumstances reviews and sunset reviews. It follows that the application or
continued application of the 18 anti-dumping duti es at issue constitutes a measure for purposes of
WTO dispute settlement. Japan recalls the US argum ent with regard to the implementation of the
DSB recommendations and rulings in the past zeroing disputes that since the periodic reviews, found
to be WTO-inconsistent, were superseded by sub sequent periodic reviews, the United States did not
have to take any step with regard to the implem entation of such rulings and recommendations. Japan

49 Second Written Submission of the European Communities, para. 53.
50 Response of the European Communities to the US Request for Preliminary Rulings, para. 37.
51 Second Written Submission of the European Communities, para. 55.

argues that this approach undermines the effectiven ess of WTO dispute settlement and that the EC's
description of the measure at issue in this dispute effectively precludes this possibility.
(c) Evaluation by the Panel
7.40 We recall that it is the EC's panel request that determines our terms of reference in these
proceedings. Article 6.2 of the DSU stipulat es that a panel request has to identify the specific
measures at issue and provide a brief summary of the legal basis of the complaint. We note that the
controversy regarding the EC's claim in connectio n with the continued application of the 18 anti-
dumping duties at issue concerns the identification of the specific measures at issue. There is no
disagreement between the parties regarding the inclusion in the EC's panel request of a brief summary
of the legal basis of the complaint.
7.41 At the outset, we would like to address an ar gument raised by the European Communities,
which concerns the burden of proof. The Eur opean Communities argues that the United States does
not dispute that the measure identified by the Eu ropean Communities exists, nor does it contest the
precise content of such measure as describ ed by the European Communities. The
European Communities therefore contends that the US preliminary objection in this regard lacks
merit.
52 We note, however, that the United States do es object to the identification of the specific
measures at issue and that is the very reason why it has raised this preliminary objection.
Furthermore, we recall that in accordance with the rules governing the burden of proof which we have
to apply in this case (supra, para. 7.6), it is for the European Communities to make a prima facie case
before the burden shifts to the United States to rebut it.
7.42 The European Communities explicitly states that it is not raising any "as such" claims in this
dispute.53 That is, the European Communities is not challenging the zeroing methodology "as such",
because, according to the European Communities, this has alre ady been decided by the Appellate
Body. All of the EC's claims, therefore, are to be considered as challenging particular instances of
application of the zeroing methodology. There is no disagreement between the parties that the EC's
claims regarding the 52 proceedings concern the application of the zeroing methodology in specific
instances. The nature of the EC's claims rega rding the continued application of the 18 duties,
however, has not been made clear. The United States argues that the way this measure is described in
the EC's panel request amounts to challenging an indeterminate number of measures and requests the
Panel to find, on the grounds of lack of specifici ty, that the EC's claims in connection with the
continued application of the 18 duties fall outside the Panel's terms of reference. The European
Communities, however, contends that its description of the measures at issue is in compliance with
the DSU since it identifies the countries and the pr oducts concerned in connection with each one of
the 18 duties at issue.
7.43 The issue therefore is whether the continued a pplication of the 18 duties at issue has been
identified in the EC's panel request in a manner that meets the specificity standard set out under
Article 6.2.
7.44 We note that the discussions between the parties in this regard partly focus on whether the
EC's claims regarding the continued application of the 18 duties are "as such" or "as applied" claims.
The European Communities argues that the measures at issue with rega rd to its claim regarding the
continued application of the 18 duties are instances of application
 of the zeroing methodology, not the
methodology "as such". According to the European Communities, in order to be subject to dispute
settlement, a measure needs not be "a norm or instrument". The European Communities contends that

52 Response of the European Communities to Question 1(a) from the Panel Following the First
Meeting.
53 First Written Submission of the European Communities, para. 2.

"the mere fact that ... the measure has a life stretchi ng an indeterminate time into the future, is no bar
to the measure being subject to dispute settlement". 54 The United States, for its part, recalls that the
European Communities argues that it is not raising any "as such" claims in this case which, according
to the United States, means that all of the EC’s clai ms should be considered "as applied" claims. The
United States argues that the EC’s attempt to describe a duty as a free-standing measure creates, by
the EC’s own admission, some sort of ambiguous "as applied/as such" measure. According to the
United States, it is not clear whether the Europ ean Communities is in f act making an "as such"
claim.55
7.45 At the outset, we recall the Appellate Body's pronouncement that "[i]n principle, any act or
omission attributable to a WTO Member can be a measure of that Member for purposes of dispute
settlement proceedings".56 We note that the distinction between "as such" and "as applied" claims is
not found in the text of the DSU. It has been deve loped in the jurisprudence. It is well known that
some GATT panels, as well as WTO panels and th e Appellate Body, have examined not only
measures consisting of acts that appl y to particular situations, but also those consisting of acts setting
forth rules or norms that have ge neral and prospective application. 57 Claims taking issue with
measures of general and prospective application ar e generally called "as such" claims, whereas those
targeting acts that apply to specific situations are called "as applied" claims.
7.46 In our view, the distinction between "as such" and "as applied" claims does not govern the
definition of a measure for purposes of WTO dispute settlement, nor is this distinction intended to
replace or override the requirements of Article 6. 2 of the DSU as to how measures have to be
identified in a panel request. In principle, the me re fact that a measure do es not fall under either of
these categories should not determine whether the id entification of that measure conforms to the
requirements of Article 6.2 of the DSU. Consequen tly, even if we refer to this distinction in our
assessment of the issue before us, we shall refrain from attributing a decisive function to it. Rather,
we shall base our assessment on the provisions of th e DSU, Article 6.2 thereof in this instance, and
evaluate the text of the EC's panel request in light of the cited provision.
7.47 With that in mind, we now turn to the EC's panel request. The EC's panel request identifies
the specific measures at issue in this dispute in the following manner:
"The measures at issue and the legal basis of the complaint include, but are not
limited to, the following:
The continued application of, or the application of the specific anti-dumping duties
resulting from the anti-dumping orders enumer ated from I to XVIII in the Annex to
the present request as calculated or mainta ined in place pursuant to the most recent
administrative review or, as the case may be, original proceeding or changed
circumstances or sunset review proceedi ng at a level in excess of the anti-dumping
margin which would result from the correct application of the Anti-Dumping
Agreement (whether duties or cash deposit rates or other form of measure).
In addition to these measures , the administrative reviews, or, as the case may be,
original proceedings or changed circumstan ces or sunset review proceedings listed in

54 Response of the European Communities to Question 3 From the Panel Following the First Meeting.
55 Closing Statement of the United States at the First Meeting, paras. 11-13; Second Written
Submission of the United States, para. 26.
56 Appellate Body Report, United States – Sunset Review of Anti-Dumping Duties on Corrosion-
Resistant Carbon Steel Flat Products from Japan (" US – Corrosion-Resistant Steel Sunset Review "),
WT/DS244/AB/R, adopted 9 January 2004, DSR 2004:I, 3, para. 81.
57 For a comprehensive citation of such panel and Appellate Body reports, see Appellate Body Report,
US – Corrosion-Resistant Steel Sunset Review, Ibid., footnote 80.

the Annex (numbered 1 to 52
) with the specific anti-dumping orders and are also
considered by the EC to be measures subj ect to the current request for establishment
of the panel in addition to the anti-dumping orders." 58 (footnote omitted, emphasis
added)
7.48 We note that the panel request, and the EC's subm issions, take issue with two different sets of
measures. First, the European Communities identif ies 18 cases by reference to the country and the
product involved and argues that the continued appl ication of the duties calculated through zeroing in
such cases violates the Anti-Dumping Agreement. Second, the European Communities challenges the
use of zeroing in 52 specific anti-dumping proceed ings (investigations, duty assessment proceedings
and sunset reviews) that pertain to these 18 cases.
7.49 We note that the part of the EC's panel request challenged by the United States takes issue
with the continued application of the 18 anti-dumpi ng duties listed in the annex to the panel request,
as calculated or maintained in the most recent proc eeding pertaining to such duties. On its face, we
find this description ambiguous, particularly because the panel request does not sufficiently
distinguish between the continued application of the 18 duties and the use of zeroing in the 52 specific
proceedings at issue. Clearly, the continued appl ication of the 18 duties does not take issue with
zeroing per se because, as the European Communities acknowledges, the zeroing methodology "as
such" is not challenged in this dispute. Nor does it seem to take issue with specific proceedings, such
as investigations, different types of reviews, wher e zeroing has allegedly been applied. Otherwise,
there would have been no need to also challenge 52 specific proceedings that pertain to the same
duties.
7.50 We recall the Appellate Body's pronouncement that any act or omission can, in principle,
constitute a measure for purposes of WTO dispute settlement. 59 In our view, this statement clarifies
that the concept of a measure for purposes of WTO la w covers a wide range of acts or instruments.
The fact remains, however, that in order to su ccessfully raise claims against a measure, the
complaining Member must in the first place demonstr ate the existence and the precise content of such
measure, consistently with the requirements of Article 6.2 of the DSU. Unless the measure is
adequately identified in the complaining Member's panel request, therefore, that Member cannot raise
claims in connection with that purported measure.
7.51 The European Communities argues that as long as its panel request identifies the measure at
issue with reference to the country and the prod uct concerned, such description would meet the
requirements of Article 6.2 of the DSU. The European Communities cites the panel reports in
Argentina-Footwear and Canada-Wheat to support the view that it is the identification of the measure
at issue, not the exact description of the legal inst rument in which the measure is found, that matters
for purposes of Article 6.2 of the DSU. 60 As the European Communities notes, the issue in the cited
two cases was whether Article 6.2 of the DSU require d, in addition to the description of the specific
measure at issue, a full description of the legal inst rument in which the measure was found. In this
regard, we see a significant difference between the issue presented in those cases and the one before
us in this dispute. The issue in this case does not concern the description of the legal instrument that
embodies the challenged measure. Rather, the issue he re is the identification of the measure itself.
Hence, we do not consider the references to Argentina – Footwear and Canada – Wheat pertinent.
7.52 The European Communities contends that measures that are subsequent or closely related to
those identified in the complaining Member's pane l request also fall within a panel's terms of

58 WT/DS350/6, p. 3.
59 Supra, note 56.
60 Response of the European Communities to the US Request for Preliminary Rulings, paras. 37-38.

reference.61 The European Communities provides exam ples from the jurisprudence in order to
support this proposition. For instance, the Eur opean Communities cites the panel decision in Japan –
Film. Regarding the specificity requirement of Article 6.2, that panel reasoned:
"The question thus becomes whether the ordinary meaning of the terms of Article 6.2,
i.e., that "the specific measures at issue" be identified in the panel request, can be met
if a "measure" is not explicitly described in the request. To fall within the terms of
Article 6.2, it seems clear that a "measure" not explicitly described in a panel request
must have a clear relationship to a "measure" that is specifically described therein, so
that it can be said to be "included" in the specified "measure". In our view, the
requirements of Article 6.2 would be met in the case of a "measure" that is subsidiary
or so closely related to a "measure" specifically identified, that the responding party
can reasonably be found to have received ad equate notice of the scope of the claims
asserted by the complaining party. The tw o key elements -- close relationship and
notice -- are inter-related: only if a "measure " is subsidiary or closely related to a
specifically identified "measure" will notice be adequate. For example, we consider
that where a basic framework law dealing w ith a narrow subject matter that provides
for implementing "measures" is specified in a panel request, implementing
"measures" might be considered in appropr iate circumstances as effectively included
in the panel request as well for purposes of Article 6.2. Such circumstances include
the case of a basic framework law that sp ecifies the form and circumscribes the
possible content and scope of implementing "measures". As explained below, this
interpretation of Article 6.2 is consistent with the context and the object and purpose
of Article 6.2, as well as past panel practice."
62 (emphasis added)
"In our view, "measures" that are subsidiary or closely related to specified "measures"
can be found to be "adequately identifie d" as that concept was applied in the
Bananas III case."63 (emphasis in original)
7.53 The United States argues that the EC’s challenge to the application or continued application
of duties related to all subsequent and previously unidentified proceedings is not the equivalent of the
situation in Japan – Film, as the European Communities claims. According to the United States, the
application or continued application of anti-dumpi ng duties results from distinct legal proceedings
leading to a final determination. Each proceeding, whether an original investigation, administrative
review, or sunset review, involves different time periods, different entries of merchandise, and
different information and data. The United States argu es that this is not the equivalent of the situation
in Japan – Film, which involved a challenge to subsequent regulations issued under a law of general
application.64
7.54 We have two observations regardi ng the EC's reference to this panel report. First, the factual
circumstances of Japan – Film were considerably different from those before us. In Japan – Film, a
measure was identified in the complaining Member's panel request consistently with Article 6.2, and
another measure which was closely related to the me asure already identified in the panel request was
raised in the subsequent panel proceedings. Th e issue in the present dispute, however, centres on
whether the description of the measure in the EC's panel request meets the requirements of
Article 6.2. Second, the measures that the panel in Japan – Film found to be closely related to the
measures specifically raised in the complaining pa rty's panel request were in existence during the

61 Ibid., para. 43.
62 Panel Report, Japan – Measures Affecting Consumer Photographic Film and Paper ("Japan – Film"),
WT/DS44/R, adopted 22 April 1998, DSR 1998:IV, 1179, para. 10.8.
63 Ibid., para. 10.10.
64 Second Written Submission of the United States, paras. 21-22.

panel proceedings.
65 In other words, there was no disagre ement regarding the existence of the
subsequent measures. The issue was whether the subsequent measures were sufficiently related to
those identified in the panel request such that they could properly be consid ered within the panel's
terms of reference. The same applies to the measures challenged in EC – Bananas III 66 and
Argentina – Footwear67, also cited by the European Communitie s. In the dispute at hand, however,
parties disagree as to the very existence of th e measure identified in the EC's panel request, i.e., the
continued application of the 18 duties. We therefore do not consider the reasoning of the panel in
Japan – Film to be relevant to the issue presented in these proceedings.
7.55 The European Communities argues that the measures to which the phrase "continued
application of the 18 duties" refers, are duties. In this regard, a duty refers to "an anti-dumping duty
on a particular product exported from the [Eur opean Communities] and imported into the
[United States]"
68 which remains in place from imposition until termination. The
European Communities describes the content of the duty as being duty rates calculated on the basis of
zeroing. The European Communities provides an e xplanation of what zeroing is. The European
Communities refers to the past Appellate Body reports on zeroing and contends that:
"In US – Zeroing (EC) and in US – Zeroing (Japan), the Appellate Body has accepted
that both the EC and Japan have described the "precise content" in the context of the
methodology itself. It necessarily follows that what the EC has described in each of
the 18 measures – which is the same - also meets the "precise content"
requirement."69 (footnotes omitted, italic emphasis in original, underline emphasis
added)
We note that the European Communities argues that the content of the specifi c measures at issue in
connection with the continued application of the 18 duties is the same as the content of the measures
addressed by the Appellate Body in US – Zeroing (EC) and US – Zeroing (Japan) . This argument
equates the continued application of the 18 duties at issue with the zeroing methodology "as such",
addressed in the cited two prior disputes. Given th e EC's clear statement that it is not challenging
zeroing "as such" in this case, we find this proposition to be internally inconsistent and reject it.
7.56 The European Communities also asserts:
"The "norm or instrument" in this cont ext is the zeroing methodology "as such" –
although it is not necessary to demonstrate that a "measure" is a "norm or instrument"
in order for it to be subject to dispute settlement. The 18 measures are instances of
the application of the zeroing methodology. In the view of the EC, in order for the 18
measures to be measures for the purposes of dispute settlement, they do not need to
be characterised as "norms or instruments". However, they are as much "norms or
instruments" as is, for example, a programme under the SCM Agreement . The mere
fact that duties (or subsidies) vary over time; and that the measure has a life stretching

65 Ibid., paras. 10.12-10-19.
66 Panel Report, European Communities – Regime for the Importation, Sale and Distribution of Bananas,
Complaint by Ecuador ("EC – Bananas III (Ecuador) "), WT/DS27/R/ECU, adopted 25 September 1997, as
modified by Appellate Body Report, WT/DS27/AB/R, DSR 1997:III, 1085, para. 7.27.
67 Panel Report, Argentina – Safeguard Measures on Imports of Footwear ("Argentina –
Footwear (EC)"), WT/DS121/R, adopted 12 January 2000, as modified by Appellate Body Report,
WT/DS121/AB/R, DSR 2000:II, 575, para. 8.37.
68 Response of the European Communities to Question 1(a) from the Panel Following the First
Meeting.
69 Ibid.

an indeterminate time into the future, is no bar to the measure being subject to dispute
settlement."70 (emphasis added)
We note that the European Communities attempts to categorize the continued application of the
18 duties somewhere in between zeroing "as such" a nd zeroing "as applied". In principle, we agree
with the EC's proposition that in order for the cont inued application of the 18 duties to constitute a
measure, it need not constitute a norm or instrument. In our view, the title attributed to a measure has
no bearing on whether it constitutes a measure fo r purposes of WTO dispute settlement. The fact
remains, however, that the European Communities h as to demonstrate the existence and the precise
content of the purported measure. In this regard, we also do not consider pertinent the fact that the
European Communities places the continued applicati on of the 18 duties between an "as such" and an
"as applied" claim. Such categorization in th e abstract does not provide sufficient explanation
regarding the existence and the precise content of the alleged measure. We also disagree with the
analogy that the European Communities makes betwee n the continued application of the 18 duties at
issue and a subsidy programme. A subsidy progra mme may be identified through different means,
including the relevant legal instruments, payments made by the governments, etc. In this case,
however, the European Communities challenges the con tinued application of 18 duties, which, in and
of itself, does not amount to the identification of a measure. We recall that zeroing "as such" and "as
applied" in various types of anti-dumping proceed ings may be, and has been, challenged in WTO
dispute settlement. We note, however, that what the European Communitie s describes as a measure
in these proceedings is the continued application of 18 duties, in isolation from any proceeding in
which such duties have been calculated, allegedly through zeroing. As such, we do not consider this
to represent a measure in and of itself.
7.57 Regarding the difference between the continued application of the 18 duties and the use of
zeroing in the 52 anti-dumping proceedings identified in its panel request, the European Communities
argues:
"Finally, the Panel asks the EC to explai n the difference between the 18 measures at
issue and the 52 measures at issue. As note d above, the first set of measures disputed
by the EC constitute the application or continued application of the zeroing
methodology in the form of anti-dumping duties which are calculated with zeroing in
the 18 cases referred to in the Annex – each of which has a specific US DOC
reference number. The 52 measures at i ssue constitute documents pursuant to which
the duty is first imposed, or varied and/or finally collected. There may be a partial
overlap between the two sets of measures in the sense that the 52 measures may be
regarded as specific documentary manifestations of, or instances of the application of,
the 18 measures. However, the two sets of measures are different since the
18 measures are defined at a more general level than the 52 measures. As a result, the
EC considers that findings concerning the 18 measures will have a broader impact
than those concerning the 52 measures."71 (emphasis added)
7.58 The European Communities acknowledges that th ere is some overlap between these two sets
of measures. We recall that Article 6.2 of the DSU requires that the specific measures at issue be
identified in the complaining Member's panel request. This obligation, in our view, applies to each
and every measure regarding which the complaining Member considers to raise claims. In the dispute
at hand, this means that if the European Communiti es wishes to raise claims in connection with the
continued application of the 18 duties at issue, it has to, in the first place, identify that measure
independently from other measures with regard to which it raises other claims. In the face of the EC's

70 Response of the European Communities to Question 3 from the Panel Following the First Meeting.
71 Response of the European Communities to Question 1(a) from the Panel Following the First
Meeting.

acknowledgement that there is overlap between the continued application of the 18 duties and the
52 proceedings, we find illogical the EC's argument th at the former is within the Panel's terms of
reference.
7.59 In our view, another flaw in the EC's argumen ts regarding the continued application of the
18 duties at issue is that the European Communities seems to seek a remedy which would affect anti-
dumping proceedings that the USDOC may conduct in the future. Indeed, the European Communities
does not deny this fact:
"The EC is not asking the Panel to make findings about "future measures", any more
than a Member that seeks findings about an SCM programme is seeking findings
about future instances of the application of such programme. Rather, the EC is
seeking findings with respect to a measure that , by its own terms, has a life (that is, a
period of time during which it is destined to be in force) that stretches into the future

That is no bar to the measure being the subject of dispute settlement." 72 (italic
emphasis in original, underline emphasis added)
"However, the two sets of measures are different since the 18 measures are defined at
a more general level than the 52 measures. As a result, the EC considers that findings
concerning the 18 measures will have a broader impact than those concerning the
52 measures."73 (emphasis added)
We note that the remedy sought by the European Co mmunities will affect the determinations that the
USDOC might make in anti-dumping proceedings that may be conducted in the future. In other
words, if granted, the findings sought by the Eu ropean Communities will have an impact on measures
that did not exist at the time of the establishment of the Panel, nor during the panel proceedings. In
our view, Article 6.2 of the DSU, in principle, does not allow a panel to make findings regarding
measures that do not exist as of the date of the pa nel's establishment. There may be exceptional cases
where panels may consider to make findings on measures not identified in the complaining party's
panel request if circumstances justify it. For that to happen, however, the new measure or measures
have to constitute "a measure" within the meaning of Article 6.2 of the DSU and have to come into
existence during the panel proceedings.
7.60 We note that the European Communities repeated ly refers to the US alleged failure to
implement the DSB recommendations and rulings in the past zeroing cases. This suggests that the
European Communities somehow links its claims rega rding the continued application of the 18 duties
at issue to the US alleged failure to implemen t the DSB recommendations and rulings in the past
zeroing cases. The European Communities does not argue that the measures at issue in this dispute
are measures taken to comply with the DSB reco mmendations and rulings in previous zeroing cases
within the meaning of Article 21.5 of the DSU. 74 It, however, submits that the fact that the
United States failed to implement the DSB recommenda tions and rulings in previous zeroing cases is
relevant to the Panel's assessment of the EC's claims in this case:
"From the perspective of the need for security and predicta bility, the fact that past
Appellate Body Reports have already decided the issues before the Panel, and that the

72 Response of the European Communities to Question 5(b) from the Panel Following the First
Meeting.
73 Response of the European Communities to Question 1(a) from the Panel Following the First
Meeting.
74 Response of the European Communities to Question 4(a) from the Panel Following the First
Meeting.

entire US defence is premised on rejecting those past Appellate Body Reports, is
legally relevant to the Panel's assessment of all the EC claims."75
The European Communities does not, however, articul ate how exactly the US alleged failure to
implement the DSB recommendations and rulings in th e past zeroing cases is legally relevant to the
present dispute. In our view, each dispute settle ment proceeding at the WTO is independent from
others, except proceedings initiated under Article 21. 5 of the DSU which are naturally linked to the
relevant original proceedings. Under Article 21.5 of the DSU, a Member is entitled to bring a case
against another Member that fails to comply with the DSB recommendations and rulings following an
original proceeding.76 The European Communities clearly po ints out that it does not see these panel
proceedings as a forum where the alleged non-compli ance in some past cases may be discussed. Yet,
it argues, without convincing reasoning, that such no n-compliance is somehow relevant to the Panel's
evaluation of the EC's claims in this case. For th e reasons that we have e xplained, this proposition
lacks a legal basis.
7.61 On the basis of the foregoing considerations, we find that the European Communities failed to
identify the specific measure at issue in connection with its claims regarding the continued application
of the 18 anti-dumping duties at issue. Consequently, we find that such claims do not fall within our
terms of reference in these proceedings.
7.62 The European Communities contends that th e purpose of the specificity requirement
embodied in Article 6.2 of the DSU is to protect th e defendant's due process rights. Thus, in order to
prevail in its request for a preliminary ruling with regard to the continued application of the 18 duties
at issue, the United States has to show that the alleged imperfection in the EC's panel request has
prejudiced the US due process rights. Since the United States has not shown such prejudice, the Panel
should find the EC's claims in connection with the c ontinued application of the 18 duties to be within
its terms of reference. The European Comm unities cites the Appellate Body reports in EC –
Computer Equipment and Korea – Dairy , and the panel report in Canada – Wheat to support its
argument.77 The United States disagrees with the EC's contention and maintains that neither
Article 6.2 of the DSU nor any other provision of the WTO Agreement contains such a prejudice
requirement. According to the United States, if the complaining Member's panel request fails to
identify the specific measures at i ssue, claims in connection with such measures would fall outside a
panel's terms of reference.78
7.63 We recall that a panel can only address claims that are raised in the complaining Member's
panel request, consistently with th e requirements of Article 6.2 of the DSU. We note that neither
Article 6.2 of the DSU nor any other provision of the WTO Agreement supports the argument that the
defendant has to show prejudice in cases where the complaining Member's panel request falls short of
the requirements of Article 6.2. Such argument would undermine the due process objective embodied
in Article 6.2 because it would allow the complaining Member to correct the inadequacies in its panel
request, during panel proceedings.
79
7.64 We note that the Appellate Body's statement in EC – Computer Equipment , which the
European Communities cites, was ma de in the particular circumstances of that dispute. The main

75 Response of the European Communities to Question 4(a) from the Panel Following the First
Meeting.
76 Indeed, the European Communities used this option in the US – Zeroing (EC) dispute and initiated a
proceeding against the United States under Article 21.5 of the DSU. See, WT/DS294/25.
77 Response of the European Communities to the US Request for Preliminary Rulings, paras. 40-42.
78 Second Written Submission of the United States, para. 28.
79 Panel Report, Japan – Countervailing Duties on Dynami c Random Access Memories from Korea
("Japan – DRAMs (Korea)"), WT/DS336/R, adopted 17 December 2007, as modified by Appellate Body Report,
WT/DS336/AB/R, para. 7.9.

issue in that dispute concerned the meaning of a specific term that was used in the complaining
Member's panel request. The Appellate Body noted that this term had a generic meaning in the
relevant industry and that it had been used in the consultations between the parties prior to the filing
of the complaining Member's panel request. On that basis, the Appellate Body concluded that
because the defendant's right to defend itself had not b een prejudiced by the alleged lack of clarity in
the text of the panel request, the fundamental due process right had not been violated.
80
7.65 In our view, the Appellate Body's reasoning in Korea – Dairy also related to the particular
circumstances of that dispute. In that dispute, the Appellate Body addressed the issue of whether or
not mere citation in a panel request of the releva nt treaty articles would meet the requirements of
Article 6.2 of the DSU, and reasoned that this i ssue should be assessed on a case by case basis. In
resolving that issue in that particular dispute, the Appellate Body inquired whether the defendant's
right to defend itself had been prejudiced by the me re citation of the relevant treaty articles in the
complaining Member's panel request.81
7.66 We do not read the Appellate Body's reasoning in these two disputes to mean that Article 6.2
of the DSU contains a prejudice requirement. As fa r as the preliminary ruling made by the panel in
Canada – Wheat Exports and Grain Imports is concerned, we note that the issue in that case was the
kind of information that the complaining Member's pa nel request has to contain "in the absence of an
explicit identification of a measure of general application by name". 82 We do not see anything in that
ruling which would suggest that Article 6.2 should be interpreted as containing a prejudice requirement.
7.67 We therefore do not agree with the EC's argument that the United States has to demonstrate that
the flaw in the EC's panel request has prejudiced its right to defend itself in these proceedings.
3. Inclusion of Ongoing Proceedings in the European Communities' Panel Request
(a) Arguments of the Parties
(i) United States
7.68 The United States points out that four of the measures identified in the EC's panel request
were preliminary results of periodic or sunset reviews. Such preliminary results, in the US view, do
not constitute "final action" within the meaning of Article 17.4 of the Anti-Dumping Agreement. The
United States notes that Article 17.4 allows the initiation of dispute settlement proceedings with
regard to provisional measures if certain criteria ar e met, and asserts that the European Communities
has not shown that these criteria have been met in this case. The United States therefore requests the
Panel to decide that these four preliminary determinations do not fall within its terms of reference.
(ii) European Communities
7.69 The European Communities acknowledges that four of the measures identified in its panel
request, i.e., three preliminary sunset determinations a nd one preliminary determination in a periodic
review, did not constitute final measures. Th e European Communities contends, however, that,

80 Appellate Body Report, European Communities – Customs Classification of Certain Computer
Equipment ("EC – Computer Equipment "), WT/DS62/AB/R, WT/DS67/AB/R, WT/DS68/AB/R, adopted
22 June 1998, DSR 1998:V, 1851, para. 70.
81 Appellate Body Report, Korea – Definitive Safeguard Measure on Imports of Certain Dairy Products
("Korea – Dairy"), WT/DS98/AB/R, adopted 12 January 2000, DSR 2000:I, 3, para. 127.
82 Panel Report, Canada – Measures Relating to Exports of Wheat and Treatment of Imported Grain
("Canada – Wheat Exports and Grain Imports"), WT/DS276/R, adopted 27 September 2004, upheld by Appellate
Body Report, WT/DS276/AB/R, DSR 2004:VI, 2817, para. 6.10.

whether preliminary or definitive, any measure adopt ed subsequent to the specific measures identified
in the EC's panel request, falls within the Panel's terms of reference.
(b) Evaluation by the Panel
7.70 It is factually uncontested that four of the 52 measures identified in the EC's panel request
were preliminary determinations made by the USDOC. These include three preliminary results of
sunset reviews and one preliminary result of a periodic review. These four preliminary
determinations are:
Type of Proceeding Product and Country Relevant
Exhibits
Sunset review
Steel concrete reinforcing bars from Latvia
A-449-804

EC-70
Periodic review
Certain hot rolled carbon steel flat products from the
Netherlands
A-421-807
(Period of Review: 1 November 2004 - 31 October 2005)
EC-59
Sunset review
Certain hot rolled carbon steel flat products from the
Netherlands
A-421-807

EC-77
Sunset review
Certain Pasta from Italy
A-475-818

EC-78

7.71 The United States contends that the four preliminary determinations at issue are outside the
Panel's terms of reference because they do not constitute final action within the meaning of
Article 17.4 of the Anti-Dumping Agreement. Th e United States recalls the two conditions set out
under Article 17.4 of the Agreemen t which have to be met in pr oceedings challenging preliminary
determinations and argues that none of them were met by the Euro pean Communities with regard to
the four preliminary determinations at issue. Th at is, the United States contends that the European
Communities did not raise a claim against the pre liminary determinations under Article 7.1 of the
Agreement nor demonstrate a significant impact of those determinations.
83
7.72 Article 17.4 of the Anti-Dumping Agreement provides:
"If the Member that requested consultations considers that the consultations pursuant
to paragraph 3 have failed to achieve a mutually agreed solution, and if final action
has been taken by the administering authorities of the importing Member to levy
definitive anti-dumping duties or to accept price undertakings, it may refer the matter
to the Dispute Settlement Body ("DSB"). When a provisional measure has a
significant impact and the Member that requested consultations considers that the
measure was taken contrary to the pr ovisions of paragraph 1 of Article 7 , that
Member may also refer such matter to the DSB." (emphasis added)
7.73 Article 17.4 generally stipulates that a Memb er may challenge definitive measures imposed
by other Members. It states that exceptionally a provisional anti-dumping measure may be challenged
if it has a significant impact and if the complaining Member shows that the provisional measure was

83 First Written Submission of the United States, footnote 69.

taken inconsistently with the provisions of Article 7. 1 of the Agreement. Article 7.1 lays down three
conditions for the imposition of a provisional anti-dumping measure.
84 Thus, the EC's claim
regarding the four preliminary measures at issu e may be accepted only if the European Communities
proves that the conditions set out under Article 7.1 of the Agreement have not been met with regard to
such measures. Although the European Communities generally argues that "the preliminary
determinations carried out by the USDOC have an impact on the final duty level which may result
from the latest proceeding"85, it does not raise any claim under Article 7.1 in these proceedings. This
indicates that the EC's claims regarding the four preliminary measures at issue are not within the
Panel's terms of reference.
7.74 The European Communities cites the panel report in Mexico – Corn Syrup in support of its
argument. We note, however, that the only claim regarding provisional measures in that case related to
an alleged violation of Article 7.4 of the Agreement that sets the maximum duration of such measures.
In other words, there was no allegation in Mexico – Corn Syrup regarding a violation of Article 7.1. 86
The panel in Mexico – Corn Syrup was of the view that "a claim regarding the duration of a provisional
measure relates to the definitive anti-dumping duty". 87 This explains why the panel did not expect the
complaining Member in that case to demonstrate the existence of the two conditions set out under
Article 17.4 for challenging a provisional anti -dumping measure. Thus, the panel report in Mexico –
Corn Syrup does not support the EC's position in this dispute.
7.75 In response to questioning, the European Co mmunities contends that it is not challenging
provisional measures within the meaning of Article 17.4 of the Anti-Dumping Agreement in this case.
The EC's panel request describes the measure at is sue as the continued application of anti-dumping
duties resulting from the anti-dumping orders anne xed to its panel request "as calculated or
maintained in place pursuant to the mo st recent [anti-dumping proceedings]". 88 I n t h e v i e w o f t h e
European Communities, this description "compr ises any subsequent measure adopted by the
[United States], including preliminary determinati ons setting out the duty levels (wrongly calculated
by applying zeroing) and insofar as those duties are still in place". 89 The European Communities
contends that the Panel should take into consideration the speci fic circumstances of this dispute in
resolving this issue. According to the European Communities, such specific circumstances include
the nature of the zeroing methodology and the fact that the United States refuses to implement the
DSB recommendations and rulings pertaining to past zeroing disputes.90
7.76 We note that the EC's response is internal ly inconsistent. On the one hand, the
European Communities argues that the four prel iminary measures have to be considered as
"subsequent measures" to the general description of the measure in its panel request and therefore fall

84 Article 7.1 of the Agreement provides:
"Provisional measures may be applied only if:
(i) an investigation has been initiated in accordan ce with the provisions of Article 5, a public
notice has been given to that effect and interested parties have been given adequate
opportunities to submit information and make comments;
(ii) a preliminary affirmative determination has been made of dumping and consequent injury
to a domestic industry; and
(iii) the authorities concerned j udge such measures necessary to prevent injury being caused
during the investigation."
85 Response of the European Communities to the US Request for Preliminary Rulings, para. 54.
86 Panel Report, Mexico – Anti-Dumping Investigation of High Fructose Corn Syrup (HFCS) from the
United States ("Mexico – Corn Syrup"), WT/DS132/R and Corr.1, adopted 24 February 2000, DSR 2000:III, 1345,
para. 7.48.
87 Ibid., para. 7.53.
88 Response of the European Communities to Question 6 from the Panel Following the First Meeting.
89 Ibid.
90 Ibid.

within the terms of reference of the Panel. On th e other hand, it contends that this dispute presents
special circumstances with regard to the identification of the specific measures at issue and invites the
Panel to take into consideration such circumstances.
7.77 Both arguments offered by the European Communiti es in this regard lack a legal basis in the
Agreement. We are also of the view that the a lleged special circumstances of this dispute cannot
override the plain text of Article 17.4 which subj ects the claims against provisional measures to
certain conditions. We therefore conclude that the EC's claims regarding the four preliminary
measures at issue are outside our terms of reference in these proceedings.
D. CONTINUED APPLICATION OF 18 ANTI-DUMPING DUTIES
1. Arguments of the Parties
(a) European Communities
7.78 The European Communities does not challenge the practice of zeroing "as such" because it
argues that zeroing as such has already b een condemned in previous cases. The
European Communities challenges the continued application of the 18 duties stemming from the
18 cases listed in the annex to its panel request. Ac cording to the European Communities, in addition
to the alleged WTO-inconsistency of applying zeroing in the calculation of dumping margins in
various proceedings pertaining to these 18 cases, the continued application of the duties resulting from
such proceedings itself constitutes a measure. Th e European Communities contends that these duties
are applied at rates that exceed th e real margins that would have been obtained without zeroing. The
European Communities asserts that the continued a pplication of these 18 duties is inconsistent with
Articles 2.4, 2.4.2, 9.3, 11.1, 11.3 of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the
GATT 1994 because they reflect margins obtained through zeroing. The European Communities
argues that for the same reasons that zeroing in the context of investigations, periodic reviews and
sunset reviews is inconsistent with Articles 2.4, 2.4.2, 9.3, 11.1, 11.3 of the Anti-Dumping Agreement
and Articles VI:1 and VI:2 of the GATT 1994, the continued application of the duties resulting from
the application of zeroing is inconsistent with the same provisions.
7.79 The European Communities also argues that th e continued application of these 18 duties is
inconsistent with Article XVI:4 of the WTO Agreemen t. The EC's argumentation in this regard is
two-fold. First, the European Communities submits that because th e continued application of the
18 duties at issue violates Articles 2.4, 2.4.2, 9.3, 11.1, 11.3 of the Anti-Dumping Agreement and
Articles VI:1 and VI:2 of the GATT 1994, it also violates Article XVI:4 of the WTO Agreement.
This, according to the European Communities, indicates that the Un ited States failed to ensure the
consistency of its laws, regulati ons and administrative procedures with its WTO obligations. Second,
the European Communities contends that by continuing to apply model and simple zeroing procedures
– which are administrative procedures within the m eaning of Article XVI:4 of the WTO Agreement –
in proceedings initiated after the date of adoption of the first Appellate Body report finding zeroing to
be WTO-inconsistent, the United States has violat ed its obligation under Article XVI:4 of the WTO
Agreement.
(b) United States
7.80 The United States argues that the EC's clai m under Article XVI:4 of the WTO Agreement
depends on a finding of inconsis tency in connection with the other claims that the European
Communities raises. It suggests that since the Un ited States has not acted inconsistently with the
other WTO obligations cited by the European Co mmunities, the Panel must find no violation of
Article XVI:4 of the WTO Agreement. The United St ates also counters the EC's argument that the
United States is in violation of Article XVI:4 of the WTO Agreement because it continues to apply

measures that have been found to be WTO-incons istent by the WTO Appellate Body in some past
disputes. In this regard, the United States reca lls the Appellate Body's own pronouncement that
Appellate Body and panel reports ar e only binding with respect to th e resolution of the disputes that
they concern.
91 In the view of the United States, th e approach advocated by the European
Communities would make Appellate Body and panel reports binding on all Members, a result that
would have no basis in legal texts. The Unite d States has not submitted arguments regarding the
claims that the European Communitie s raised under Articles 2.4, 2.4.2, 9.3, 11.1, 11.3 of the Anti-
Dumping Agreement and Articles VI:1 and VI :2 of the GATT 1994 concerning the continued
application of the 18 duties.
2. Arguments of Third Parties
(a) Japan
7.81 Japan notes that under US law, anti-dumping orde rs provide the legal basis for the imposition
of anti-dumping duties following an investigation. The amounts of the duty may subsequently change
depending on different types of reviews. Japan argues that pursuant to Article 6.2 of the DSU, such
an order constitutes a measure susceptible to a chal lenge in WTO dispute settlement. Similarly, it
constitutes "final action" within the meaning of Article 17.4 of the Anti-Dumping Agreement.
3. Evaluation by the Panel
7.82 We note that, except for the claim under Ar ticle XVI:4 of the WTO Agreement, the
substantive legal basis of the EC's claims regardi ng the continued application of the 18 duties at issue
does not differ from its claims with regard to th e 52 measures imposed in investigations, periodic
reviews or maintained following sunset reviews. In response to questioning, the European
Communities argues that the Panel should refrain from applying judicial economy with regard to the
claims in connection with the continued application of the 18 duties. Applying judicial economy with
regard to the EC's claims concer ning the continued application of the 18 duties at issue would, in the
EC's view, constitute false judicial economy.
92 On the other hand, the European Communities states
that if the Panel finds for the European Communi ties with regard to its claims concerning the
continued application of the 18 duties, it may apply judicial economy with regard to the EC's claims
regarding the use of zeroing in the 52 specific proceedings.
7.83 We recall our finding above (para. 7.61) that the EC's claims in connection with the continued
application of the 18 duties at issue do not fall within our terms of reference in these proceedings. We
therefore decline to address such claims.
E. ZEROING IN INVESTIGATIONS
1. Arguments of the Parties
(a) European Communities
7.84 The European Communities challenges the use of zeroing in four investigations. The
European Communities develops its arguments on the basis of the specifics of one of these
investigations, Purified Carboxymethylcellulose from the Netherlands , but argues that the same
arguments also apply to the other three investiga tions. The European Communities argues that in the
dumping calculations in the mentioned investigation, the USDOC used a methodology which the
European Communities refers to as "model zeroing". Under this methodology, the USDOC

91 First Written Submission of the United States, para. 159.
92 Response of the European Communities to Question 2 from the Panel Following the First Meeting.

categorized the subject product into models, and made calculations for each model through the WA-
WA method. In the aggregation of such model- specific calculations, however, the USDOC ignored
the results where the WA export price exceeded th e WA normal value. This, in the EC's view,
inflated the margin of dumping for the product unde r consideration as a whole. According to the
European Communities, the 14.88 per cent marg in of dumping calculated by the USDOC, in Purified
Carboxymethylcellulose from the Netherlands , would have been 12.15 per cent without model
zeroing.
7.85 The European Communities submits that the USDO C acted inconsistently with Article 2.4.2
of the Agreement by using model zeroing in the f our investigations at issue. According to the
European Communities, the definition of dumpi ng found in Article 2.1 of the Agreement and
Article VI:1 of the GATT 1994 applies to the product under consideration as a whole, and not to a
type, model or category of that product. Article 2.4.2 also requires dumping determinations to be
made with regard to the produc t under consideration as a whole. Investigating authorities may
categorize the product into models in the process of calculating the margin of dumping for the product
under consideration as a whole. Such model-spec ific calculations, however, are not margins of
dumping, but results that have to be used in the calculation of the margin of dumping for the product
under consideration as a whole. The authorities, theref ore, must take into consideration the results of
all model-specific calculations in the calculation of the margin of dumping for the product under
consideration as a whole. The USDOC acted in consistently with the obligation set out under
Article 2.4.2 of the Agreement by excluding the re sults of model-specific comparisons where the WA
export price exceeded the WA normal value.
7.86 The European Communities also contends that model zeroing used by the USDOC in the four
investigations at issue is inconsistent with Artic le 2.4 of the Agreement. The European Communities
asserts that the requirement to carry out a fair comparison between the normal value and the export
price pursuant to Article 2.4 constitutes an indepe ndent and overarching obligation. That is, the
general obligation laid down in the first sentence of Article 2.4 is independent from the more specific
obligations found elsewhere in that article. Thus, the obligation to make a fair comparison applies not
only to price comparability but also to subparagraphs 2.4.1 and 2.4.2. According to the
European Communities, model zeroing is inherently biased and unfair because it inflates the margin
of dumping. As a methodological choice that system atically favours the interests of petitioners and
prejudices the interests of exporters, model zeroing cannot be considered as allowing a fair
comparison within the meaning of Article 2.4.
7.87 The European Communities also contends th at the use of model zeroing in the four
investigations at issue conflicted with the obliga tions set out under Articles VI:1 and VI:2 of the
GATT 1994.
(b) United States
7.88 The United States acknowledges that the USDOC applied model zeroing in the four anti-
dumping investigations at issue. The United States also recognizes that in US – Softwood Lumber V,
the Appellate Body found the use of this type of zero ing to be inconsistent with Article 2.4.2 of the
Agreement and that this reasoning is equally applicable to the EC's claim in these proceedings. The US
acknowledgement, however, is limited to the EC's claim under Article 2.4.2 of the Agreement. The
United States rejects other claims that the Eu ropean Communities raises regarding zeroing in
investigations. Specifically, the United States contests the EC's claims under Articles 2.1 and 2.4 of the
Agreement because these are definitional provisions which do not impose independent obligations. The

United States asserts that a finding under Article 2.4.2 would suffice to resolve the EC's claim regarding
the four investigations at issue.
93
2. Arguments of Third Parties
(a) India
7.89 India notes that despite past panel and Appellate Body rulings that found zeroing to be
inconsistent with Articles 2.4.2, 9.3, 11.2 and 11.3 of the Agreement, the United States continues to
use this methodology in the calculation of dumping margins, with the exception of investigations
where the WA-WA method is used. In India's vi ew, zeroing inflates dumping margins, leads to a
positive finding of dumping in cases where there would have been no dumping absent zeroing and
taints the investigating authorities' evaluation of the impact of dumped imports. India therefore
requests the Panel to reiterate the conclusion that th e use of zeroing in connection with all comparison
methodologies and all anti-dumping proceedings is WTO-inconsistent.
(b) Japan
7.90 Japan bases its arguments regarding the use of zeroing in investigations on the Appellate
Body reports in the past zeroing disputes. Japan contends that Article 2.1 and the first sentence of
Article 2.4.2 of the Agreement require investigati ng authorities to calculate dumping with respect to
the product under consideration as a whole. The zeroing methodology applied by the USDOC in
investigations fail to meet this requirement becau se in the aggregation of model-specific calculations
it ignores the intermediate results where the export price exceeds th e normal value. According to
Japan, the comparison results pertaining to mode ls of the product under consideration do not
constitute margins of dumping. They are merely intermediate results that have to be aggregated in the
calculation of the margin of dumping for the product under consideration as a whole. Hence, the
USDOC's use of zeroing in investigations is inconsis tent with the obligations set forth in Articles 2.1
and 2.4.2 of the Agreement.
7.91 Japan submits that the zeroing methodology that the USDOC uses in investigations inflates
the margin of dumping by ignoring intermediate results where the export price exceeds the normal
value. Hence it does not provide for an impartial, even-handed and unbiased dumping determination.
It follows that the USDOC's dumping determinations in investigations are inconsistent with the fair
comparison obligation found under Article 2.4 of the Agreement.
(c) Korea
7.92 Korea notes that the Appellate Body has found zeroing to be WTO-inconsistent in all anti-
dumping proceedings and invites the Panel to reiterate this general finding. More specifically, Korea
recalls that the Appellate Body has found the use of zeroing in investigations where the normal value
and the export price are compared on a WA-WA basis to be inconsistent with Articles 2.4.2 and 2.4 of
the Agreement. Korea invites the Panel to also find that the use of zeroing in investigations where the
normal value and the export price are compared on a WA-WA basis is inconsistent with Articles 2.4.2
and 2.4 of the Agreement.
(d) Norway
7.93 Norway recalls that in the previous zeroing cases, the Appellate Body found zeroing to be
inconsistent with the requirements of the An ti-Dumping Agreement. Although the doctrine of stare
decisis does not apply in WTO dispute settlement, Norway argues that in the interest of certainty,

93 First Written Submission of the United States, paras. 155-156.

foreseeability and equality before the law, panels and the Appellate Body should not depart from
precedents without showing good reason. Norway submits that adopted reports create legitimate
expectations among WTO Members and should therefor e be followed by panels to the extent the
issues are similar. Norway argues that this case do es not present factual or legal arguments different
from those in the past zeroing cases. The Panel sh ould therefore not depart from the precedents in
making its findings and recommendations.
7.94 Furthermore, Norway contends that adopted panel and Appellate Body reports affect the
WTO Members' obligations within the meaning of Article XVI:4 of the WTO Agreement. According
to Norway, although the DSB recommendations and ruli ngs in a given case only affect parties to that
dispute, such rulings and recommendations also expl ain the obligations of all Members in general.
Hence, according to Norway, WTO Members have to take into consider ation adopted panel and
Appellate Body reports in adopting or maintaining their domestic laws and regulations.94
7.95 Norway notes the Appellate Body's findings regarding zeroing and considers that the
prohibition in this regard is not limited to i nvestigations and to the WA-WA methodology. In
Norway's view, zeroing is prohibited in all anti -dumping proceedings and with regard to all
comparison methodologies because: a) Article 2.1 requires dumping determinations to be made for
the product under consideration as a whole and b) zeroing is contrary to the fair comparison
requirement under Article 2.4.
7.96 With regard to WTO panels' task as treaty in terpreters, Norway argues that the purpose of
treaty interpretation is to reach "the one and only interpre tation of a term". 95 According to Norway,
panels in US – Stainless Steel (Mexico) and US – Zeroing (Japan) committed certain legal errors in
their interpretation of the relevant treaty provisions. First, they did not base their interpretation of the
terms "product" and "margin of dumping" on the relevant treaty provisions, as required by the
principles laid down in Articles 31 and 32 of the Vienna Convention. Instead, they came up with their
own interpretation, which they then considered as a permissible interpretation within the meaning of
Article 17.6(ii) of the Anti-Dumping Agreement. Second, these panels resorted to Article 17.6(ii)
without first exhausting all possible means in order to achieve one possible interpretation for the legal
provisions before them. Norway invites this Pane l not to commit the same errors and to follow the
persuasive reasoning of the Appellate Body that has found zeroing to be inconsistent in all anti-
dumping proceedings and in connection with all types of comparison methodologies.
(e) The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu
7.97 The Separate Customs Territory of Taiwan , Penghu, Kinmen and Matsu ("TPKM") argues
that the definition of dumping under Article 2.1 of the Agreement applies to all anti-dumping
proceedings, including duty assessment proceedings. The TPKM therefore asserts that the dumping
determinations in such proceedings should also c onform with the disciplines set forth under Article 2,
including subparagraphs 2.4 and 2.4.2 thereof.
7.98 According to the TPKM, dumping has to be est ablished with respect to the product under
consideration as a whole. It follows that any cal culation that omits some export transactions will be
inconsistent with the Anti-Dumping Agreement. The TPKM contends that the term "investigation"
under Article 2.4.2 does not relate solely to origin al investigations conducte d under Article 5 of the
Agreement. This expression does not have the same meaning in all instances where it appears in the
Agreement. The TPKM argues that the term "investig ation", as used under Article 2.4.2, refers to the
investigative activity undertaken in all kinds of anti-dumping proceedings. According to the TPKM,

the object and purpose of Article 2 would be undermined if Articles 2.4 and 2.4.2 were interpreted as
being applicable to original investigations only.
7.99 The TPKM asserts that Article 2.4 of the Agreemen t contains an obligation to carry out a fair
comparison between the normal value and the export price by taking into account the prices of all
sales pertaining to the product under consideration. The authorities cannot disregard some of these
transactions. The omission of certain export pri ces amounts to overcorrecting the injury caused by
dumping and goes beyond the limits of the permissi on for resorting to anti-dumping measures. This
obligation applies to all types of anti-dumping proceedings.
7.100 The TPKM concludes that the US application of the zeroing methodology in all anti-dumping
proceedings under its law, including re views, is inconsistent with Artic les 2.1, 2.4, 2.4.2, 9.3, 11.1,
11.2 and 11.3 of the Anti-Dumping Agreement, as well as Articles VI:1 and VI:2 of the GATT 1994.
The TPKM invites the Panel to follow the Appellate Body's jurisprudence and find zeroing to be
WTO-inconsistent in all anti-dumping proceedings a nd in connection with all types of comparison
methodologies.
(f) Thailand
7.101 Thailand submits that zeroing is inconsistent w ith both the letter and the spirit of the Anti-
Dumping Agreement and Article VI of the GATT 1994. Zeroing either gives rise to a finding of
dumping in cases where there is no dumping, or inflates the true margin of dumping. Thailand
generally agrees with the European Communities with regard to the clai ms raised in this dispute.
Thailand contends that this Panel should follow the reasoning of the Appellate Body enunciated in the
past zeroing cases and find the measures at issu e to be inconsistent with the Anti-Dumping
Agreement. Otherwise, argues Thailand, the securi ty and predictability that the dispute settlement
mechanism is to provide to the multilateral trad ing system would be undermined. There is, in
Thailand's view, no counterargument presented in th is case that would justify a departure from the
Appellate Body's jurisprudence on zeroing.
7.102 Thailand also disagrees with the US view that dumping may be determined with regard to a
specific import transaction. Nor does Thailand agree with the proposition that the payment of the
duty in a prospective normal value system constitu tes final liability. Thailand argues that the
calculation of the amount of the duty to be paid by an importer in the context of a prospective normal
value system does not entail a calculation of a margin of dumping. It would therefore be illogical to
compare the determination made in a duty assessmen t proceeding with the calculation of the duty to
be paid in a prospective normal value system.
3. Evaluation by the Panel
7.103 The four investigations at issue are the following:

Product and Country Involved Relevant Exhibits
Purified carboxymethylcellulose from Sweden
USDOC Case No: A-401-808 EC-28
Purified carboxymethylcellulose from the
Netherlands
USDOC Case No: A-421-811
EC-26
Purified carboxymethylcellulose from Finland
USDOC Case No: A-405-803 EC-29
Chlorinated Isocyanurates from Spain
USDOC Case No: A-469-814 EC-30

7.104 The United States concedes that the USDOC a pplied model zeroing in these investigations.
Furthermore, the United States acknowledges th at the reasoning of the Appellate Body in US –
Softwood Lumber V, which found model zeroing in investigations to be inconsistent with Article 2.4.2 of
the Agreement, applies to the EC's claim at issue.96 The United States has not submitted any argument
to counter the EC's proposition that model zeroing is inconsistent with Article 2.4.2 of the Agreement.
7.105 Given the US acknowledgement that the Appellate Body's reasoning US – Softwood Lumber V
regarding the WTO-compatibility with Article 2.4.2 of the Agreement of model zeroing in
investigations is equally applicable with regard to the contested investigations in these proceedings, the
issue of burden of proof becomes particularly important with regard to the assessment of the claim at
issue. We recall that pursuant to the principles governing the burden of proof which we follow in these
proceedings (supra, para. 7.6), it is for the complaining Member to make a prima facie case with regard
to a claim that it asserts, before the burden shifts to the defendant to rebut such case. The United States
does not contest the EC's claim under Article 2.4.2 against model zeroing in investigations. In our view,
however, the US acknowledgement does not discharge the European Communities from its obligation
to present a prima facie case regarding the alleged inconsistency with Article 2.4.2 of the Agreement
of model zeroing in investigations. 97 Regardless of the US acknowledgement, therefore, we have to
assess whether the EC's arguments are sufficient to make a prima facie case. It is only then that we
can find that the United States acted inconsistently with its WTO obligations. In our view, our
obligation to carry out an "objective assessment of the facts of the case and the applicability of and
conformity with the relevant c overed agreements" as set forth in Article 11 of the DSU lends support
to the approach that we are taking in this regard. With this in mind, we now proceed to assess the
claim presented by the European Communities.
7.106 The European Communities argues that model zeroi ng in investigations is inconsistent with
the obligation set forth under 2.4.2 of the Agreemen t because it precludes the investigating authorities
from making a determination of dumping for the produc t under consideration as a whole. This occurs
through the exclusion, from the ultimate calcula tion made for the product under consideration as a
whole, of the results of model-specific comparis ons where the WA export price exceeded the WA
normal value. The European Co mmunities also asserts that model zeroing in investigations is
inconsistent with Article 2.4 of the Agreement be cause it represents a methodology that is inherently
biased and unfair. Finally, the European Communiti es contends that model zeroing in investigations
contradicts the obligations set forth under Articles VI:1 and VI:2 of the GATT 1994.
7.107 We consider it appropriate to commence our analysis with the alleged violation of
Article 2.4.2 of the Agreement and then move on to the other allegations to the extent necessary to
resolve the dispute. Article 2.4.2 provides:

96 First Written Submission of the United States, paras. 155-156.
97 We note that this very issue arose in the last tw o zeroing disputes and the panels reasoned that the
defendant's acknowledgement regarding the WTO-inconsistency of the measure at issue did not discharge the
complaining Member from its obligation to make a prima facie case. See, Panel Report, United States – Anti-
Dumping Measures on Shrimp from Ecuador ("US – Shrimp (Ecuador) "), WT/DS335/R, adopted
20 February 2007, para. 7.9; Panel Report, United States – Final Anti-Dumping Measures on Stainless Steel
from Mexico ("US –Stainless Steel (Mexico) "), WT/DS344/R, adopted 20 May 2008, as modified by Appellate
Body Report, WT/DS344/AB/R, para. 7.52.

"Article 2
Determination of Dumping

2.4.2 Subject to the provisions governing fair comparison in paragraph 4, the
existence of margins of dumping during the investigation phase shall normally be
established on the basis of a comparison of a weighted average normal value with a
weighted average of prices of all comparable export transactions
 or by a comparison
of normal value and export prices on a transaction-to-transaction basis. A normal
value established on a weighted average basis may be compared to prices of
individual export transactions if the author ities 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 weighted av erage-to-weighted average or transaction-to-
transaction comparison." (emphasis added)
7.108 Article 2.4.2 permits the use of three differe nt methodologies for dumping determinations in
anti-dumping investigations. The first two, i.e., the WA-WA and the transaction-to-transaction
methodologies, are set out in the first sentence and the third, i.e., the WA-T methodology, in the
second sentence. The claim at issue concerns the use of th e WA-WA methodology. The first
sentence of Article 2.4.2 provides that in inves tigations where dumping determinations are based on
the WA-WA methodology, the WA normal value has to be compared with the WA of prices of "all
comparable export transactions". This, in our vi ew, suggests that the authorities cannot exclude from
their calculations any export transaction made duri ng the relevant period of investigation. The
European Communities articulates its claim under Article 2.4.2 in pa rallel to the reasoning of the
Appellate Body in the past zeroing cases, including US – Softwood Lumber V . We recall the US
acknowledgement that the Appellate Body's reasoning in US – Softwood Lumber V is equally applicable
to the EC's claim under Article 2.4.2 in these proceedings.
7.109 In US – Softwood Lumber V , the Appellate Body started out by clarifying that Article 2.4.2
permits multiple averaging.
98 This means that the investigating authorities may categorize the subject
product under different models, carry out a compar ison on the basis of a WA normal value and a WA
export price for each such model, and then aggregat e such model-specific results in the calculation of
the margin of dumping for the product under consider ation as a whole. The Appellate Body opined
that where the WA-WA methodology is used, Articl e 2.4.2 requires the investigating authorities to
take into consideration the average of pr ices of all comparable export transactions. 99 The Appellate
Body then moved on to the issue of whether this obligation was limited to model-specific
comparisons or whether it also applied to the aggregation of such comparisons. In the view of the
Appellate Body, this hinged upon the interpreta tion of the terms "dumping" and "margins of
dumping" in the Anti-Dumping Agreement.
100 According to the Appellate Body, the definition of the
term "dumping" under Article 2.1 refers to the product under consideration as a whole as defined by
the investigating authorities in the relevant investig ation. Furthermore, the phrase "[f]or the purpose
of this Agreement" in Article 2.1 indicates that this definition of dumping applies throughout the Anti-
Dumping Agreement, including in the context of Ar ticle 2.4.2. Thus, the Appellate Body came to the

98 Appellate Body Report, United States – Final Dumping Determination on Softwood Lumber from
Canada ("US – Softwood Lumber V "), WT/DS264/AB/R, adopted 31 August 2004, DSR 2004:V, 1875, para. 81.
99 Ibid., para. 86.
100 Ibid., para. 90.

conclusion that dumping can be found to exist only "for the product under investigation as a whole,
and cannot be found to exist for a product type, model, or category of that product".101
7.110 The Appellate Body expressed the view that th e obligation set forth under Article 2.4.2, to
take into account the weighted average of prices of all comparable export transactions, applies not
only to the model-specific comparisons, but also to their aggregation for purposes of establishing the
margin of dumping for the product under consideration as a whole. 102 According to the Appellate
Body, the results of model-specific comparisons ar e not margins of dumping within the meaning of
Article 2.4.2, but rather constitute intermediate calculations that need to be taken into consideration in
the calculation of the margin of dumping for the product under consideration as a whole. 103
Consequently, when authorities use multiple aver aging in their dumping determinations in
investigations, Article 2.4.2 requires the inclusion of all model-specific comparisons in the calculation
of the margin of dumping for the product under consideration as a whole.
7.111 We agree with the Appellate Body's view that the phrase "all comparable export transactions"
in Article 2.4.2 requires the authorities to take into consideration the WA of the prices of all
comparable export transactions in the calculation of dumping margins in investigations where the
WA-WA methodology is used. Mode l zeroing conflicts with this obligation because it excludes from
the calculation of the margin of dumping for the pr oduct under consideration as a whole the results of
model-specific comparisons where the WA export price exceeds the WA normal value. Thus, we find
that model zeroing is inconsistent with the obligatio n set out under Article 2.4.2 of the Agreement. It
follows that the United States acted inconsistently with the obligation set out under Article 2.4.2 by
using model zeroing in the four investigations at issue.
104
7.112 Having found model zeroing in investigations to be inconsistent with the obligation set out
under Article 2.4.2 of the Agreement, we need not, and do not, address the EC's claims under
Article 2.4 of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the GATT 1994.
F. ZEROING IN PERIODIC REVIEWS
1. Arguments of the Parties
(a) European Communities
7.113 The European Communities argues that the USDOC applied what the European Communities
calls "simple zeroing" in 37 periodic reviews liste d in the annex to the EC's panel request. The
European Communities develops its arguments in this regard on the basis of the specifics of one of
these periodic reviews, Ball Bearings from Italy , and points out that the same arguments also apply
with regard to the remaining periodic reviews. In the periodic review at issue, the USDOC calculated
assessment rates for the entries made during the period of review and the new cash deposit rate for
future entries. In so doing, the USDOC used th e WA-T methodology. Hence, the USDOC started its
dumping calculations by making various comparis ons between a WA norma l value and individual
export transactions. The results of these comparisons were then aggregated in order to obtain the
overall WA dumping margin. In this aggregation, the USDOC ignored the results of comparisons
where the export price exceeded the WA norma l value. This, in the view of the
European Communities, inflated the overall marg in of dumping. In the periodic review of Ball

101 Ibid., para. 96.
102 Ibid., para. 98.
103 Ibid., para. 97.
104 We would like to note that the views of the majority of the Panel regarding the Appellate Body's
interpretation on the issue of "the product under consideration as a whole" are subject to the comments found in
paras. 7.162-7.169 below.

Bearing from Italy , for instance, both margins calculated for the two respondents, 2.52 and 7.65 per
cent, would have been negative had the USDOC not applied simple zeroing.
7.114 The European Communities submits that by usin g simple zeroing in the 37 periodic reviews
at issue, the USDOC acted inconsistently with th e obligations set out under Articles 2.1, 2.4, 2.4.2
and 9.3 of the Anti-Dumping Agreement as well as Articles VI:1 and VI:2 of the GATT 1994. The
European Communities argues that although Article 9.3 of the Agreement does not prescribe a
specific method for the assessment of duties, as point ed out by the Appellate Body, the margin of
dumping calculated for the product under considerat ion as a whole operates as a ceiling for the duty
assessed under Article 9.3. In the view of the Eu ropean Communities, simple zeroing applied by the
USDOC in the 37 periodic reviews at issue lead to ma rgins that were higher than the exporters' true
margins because this method ignored the results of comparisons where the export price exceeded the
WA normal value. Hence, according to the Europ ean Communities, the USDOC acted inconsistently
with Articles 2 and 9.3 of the Agreement.
105
7.115 The European Communities argues that, as reasoned by the Appellate Body, the fair
comparison requirement embodied in Article 2.4 applies to duty assessment proceedings under
Article 9.3 of the Agreement. The simple zeroing methodology used by the USDOC in periodic
reviews is inherently biased and unbalanced. It systematically and inevitably results in a higher
margin. It follows that simple zeroing in periodic reviews is inconsistent with Article 2.4 of the
Agreement.
7.116 The European Communities characterizes all an ti-dumping proceedings as an investigation
and argues that Article 2.4.2 applies not only to original investigations, but to all anti-dumping
proceedings, including periodic reviews. Hence, ma rgins of dumping in periodic reviews have to be
calculated consistently with the provisions of Article 2.4.2, i.e., for the product under consideration as
a whole.
7.117 The European Communities contends that the use of simple zeroing in the periodic reviews at
issue was inconsistent with Article 2.4.2 of the Agreement, for two reasons. First, the
European Communities argues that th e USDOC acted inconsistently with Article 2.4.2 by using the
third comparison methodology without observing the conditions laid down in the second sentence of
Article 2.4.2. Second, the European Communities po sits that the USDOC acted inconsistently with
Article 2.4.2 by ignoring the results of intermedia te comparisons where the export price exceeded the
WA normal value.
7.118 Finally, the European Communities asserts th at the USDOC acted inconsistently with
Article 11.2 of the Agreement in the periodi c reviews at issue. According to the
European Communities, the calculation of the new cash deposit rate in a periodic review constitutes a
review into whether the continued imposition of the duty is necessary within the meaning of
Article 11.2. The European Communities argues that the effects of the calculation of the new cash
deposit rates and the reviews under Article 11.2 are the same. The European Communities contends
that the USDOC acted inconsistently with the oblig ation set out under Article 11.2 because it failed to
determine whether the continued imposition of the dut y was necessary to offset "dumping" within the
meaning of Article 2, i.e., as calculated for the product under co nsideration as a whole. Instead, the
USDOC analyzed the need for the continued impositi on of the duty against something that did not
constitute "dumping" within the meaning of Article 2.
7.119 Regarding the Appellate Body report in US – Stainless Steel (Mexico) , the European
Communities notes that the report once again confirms the WTO-inconsistency of simple zeroing in
periodic reviews and invites the Panel to take the same approach.

105 First Written Submission of the European Communities, para. 197.

(b) United States
7.120 The United States argues that a general prohibition on zeroing applicable in the context of
periodic reviews cannot be reconciled with the inte rpretation articulated by the Appellate Body in US
– Softwood Lumber V, wherein the Appellate Body found that zer oing was prohibited in the context of
WA-WA comparisons because the phrase "all comparable export transactions" in Article 2.4.2 meant
that dumping must be determined for the "product as a whole". The United States contends that the
Appellate Body subsequently, erroneously, extended the concept of "product under consideration as a
whole" beyond this narrow context and ruled th at dumping cannot be determined for individual
transactions. The United States invites the Panel to make its own objective assessment of the matter
before it and to refrain from adopting the Appellate Body's reasoning that fails to accept a permissible
interpretation of the relevant treaty provisions, inconsistently with the standard of review laid down in
Article 17.6(ii) of the Anti-Dumping Agreement.
7.121 The United States asserts that Article 2.1 of the Agreement and Article VI:1 of the
GATT 1994 contain definitional provisions that do not impose independent legal obligations. They
are, however, important tools for the interpretation of the other relevant treaty provisions. The
United States submits that dumping may occur in a single export transaction. There is no support in
the GATT 1994 or the Anti-Dumping Agreement for the proposition that injurious dumping that
occurs in a single transaction is mitigated by anot her transaction made at a non-dumped price. The
United States finds support for this reading of the concept of dumping in the GATT practice as well as
the negotiating history of the Uruguay Round Anti-Dumping Agreement. The United States submits
that the Appellate Body in US – Softwood Lumber V interpreted the expression "all comparable export
transactions" under Article 2.4.2 of the Agreement to m ean that when multiple averaging is used in an
investigation, the results of all comparisons have to be taken into account in the aggregation of such
comparisons. Subsequently, however, the Appellate Body ruled that zeroing is prohibited whenever
multiple comparisons are made.
7.122 According to the United States, the Agreemen t does not support the argument that the word
"product" generally refers to the "product under consideration as a whole". The United States argues
that in certain instances under the Anti-Dumping Agreement and the GATT 1994, the word "product"
is used to refer to individual transactions, rather than the product under consideration as a whole. In
the same vein, the United States argues that in a pr ospective normal value system, the word "product"
necessarily refers to a single transaction.
7.123 The United States submits that the phrase "investigation phase" in Article 2.4.2 limits the
application of this provision to investigations. Interpreting Article 2.4.2 as applying to duty
assessment proceedings under Article 9.3 would, theref ore, render the terms of Article 2.4.2, which
expressly limit its application to investigations, inutile. The United States contends that numerous
provisions in the Anti-Dumping Agreement, as well as previous panel and Appellate Body findings
invalidate the contention that every anti-dumpi ng proceeding, including duty assessment proceedings
under Article 9.3, constitutes an investigation within the meaning of Article 2.4.2. The United States
argues that because the application of Article 2. 4.2 is limited to the investigation phase of the
proceeding, the Anti-Dumping Agreement does not support a prohibition on zeroing within the
context of Article 9 periodic reviews.
7.124 The United States also disagrees with the EC's as sertion that Article 2.4.2 applies to periodic
reviews by virtue of the cross-reference found in Article 9.3 to Article 2. According to the
United States, this cross-reference is subject to the li mitations that Article 2 itself contains. It follows
that Article 2.4.2 does not apply to periodic revi ews since its text limits its application to
investigations. The United States notes that th e European Communities implies that the USDOC
should have shown that the conditi ons, laid down in the second sentence of Article 2.4.2, for the use
of the asymmetrical third methodology were met before using it in periodic reviews. The

United States disagrees with this proposition becau se Article 2.4.2 itself limits its application to
investigations. Furthermore, the United States submit s that Article 9.4(ii) specifically allows the use
of the WA-T methodology in duty assessment proceedings.
7.125 The United States submits that an interpreta tion that extends the prohibition on zeroing
beyond the context of investigations where the WA -WA methodology is used would strip the second
sentence of Article 2.4.2 of the Agreement of an y meaning. More specifically, the United States
contends that if zeroing is prohibited in all cont exts, the exceptional WA-T methodology provided for
in the second sentence of Article 2.4.2 would math ematically yield the same result as the WA-WA
methodology. Such an approach would be incons istent with the principle of effective treaty
interpretation. In this regard, the United States notes that the European Court of First Instance
approved zeroing in the context of the WA-T met hodology based on the "mathematical equivalence"
argument.
7.126 The United States argues that the EC's interpreta tion of the word "product" in the context of
periodic reviews under Article 9.3 would render the pr ospective normal value systems retrospective.
It would also preclude the achievement of the purpose of imposing an anti-dumping duty, i.e.,
counteracting injury caused by dumping.
7.127 The United States contends that zeroing in pe riodic reviews is not inconsistent with
Article 2.4 of the Agreement. According to the United States, the EC's claim under Article 2.4 is built
on the presumption that the term "margin of dumping" as used under Article 9.3 cannot be interpreted
to refer to individual transactions. Because Article 9.3 does not exclude such an interpretation, the
EC's claim under Article 2.4 cannot be sustained. The United States also di sagrees with the EC's
proposition that zeroing is inherently unfair. Ther e is, according to the United States, no support in
the Agreement for this proposition. A method cannot be labelled as fair or unfair simply because it
gives rise to a higher or lower margin of dumpi ng. The United States argues that interpreting
Article 2.4 as generally prohibiting zeroing would render the distinctions between WA-WA and WA-
T methodologies found in Article 2.4.2 meaningless and would thus be inconsistent with the principle
of effective treaty interpretation.
106
7.128 Finally, the United States asserts that Article 11.2 does not apply to periodic reviews. A
periodic review carried out under Article 9.3 of the Agreement does constitute a review of the
continued need for the imposition of the anti-dumpi ng duty. The United States argues that a review
under Article 11.2 focuses on the continuation or recurre nce of injury if the duty is removed, whereas
a periodic review is simply about determining a varying duty rate.
7.129 Regarding the Appellate Body report in US – Stainless Steel (Mexico) , the United States
submits that this report is "deeply flawed" and that this Panel should not follow the reasoning in it.
More specifically, the United States contends that the Appellate Body's reasoning regarding the
WTO-inconsistency of simple zeroing in periodic reviews lacks a legal basis. Furthermore, the
United States asserts that the Appellate Body improperly attaches a binding effect to adopted
Appellate Body reports. According to the United St ates, the drafters of the WTO Agreement had no
such intention. In this regard, the United St ates recalls that the WTO Agreement empowers the
Ministerial Conference and the General Council, not the Appellate Body, to provide authoritative
interpretation of the provisions of the WTO Agreement. The United States also notes that Articles 3.2
and 19.2 of the DSU provide that the recommendations and rulings of the DSB, and the findings and
recommendations of panels and the Appellate Bo dy cannot add to, or diminish, the rights and
obligations of WTO Members. The United Stat es maintains that the obligation laid down in
Article 11 of the DSU requires this Panel to carry out its own objective assessment of the matter
before it. In this regard, the United States notes that the panel in US – Stainless Steel (Mexico)

106 First Written Submission of the United States, para. 145.

concluded that the concern over a consistent line of jurisprudence should not override a panel’s task to
carry out an objective assessment through an interp retation of the relevant treaty provisions in
accordance with the custom ary rules of interpretation of public in ternational law. The United States
considers that an objective assessment should lead the Panel to depart from the Appellate Body's
reasoning regarding the WTO-consistency of simple zeroing in periodic reviews.
2. Arguments of Third Parties
(a) Brazil
7.130 Brazil notes that despite numerous findings of inconsistency regarding the practice of zeroing,
the United States continues to apply it. According to Brazil, rulings in the past zeroing cases against
the United States have reaffirmed the WTO-inconsiste ncy of this methodology. Brazil also notes that
most of the arguments put forward by the United States in this case have been tested and rejected by
panels and the Appellate Body. Brazil disagrees with the main arguments on which the US defence is
based in this case. Brazil generally contends that the main concepts of Article 2 of the Agreement,
i.e., "product", "margins of dumping" and "fair compar ison" apply to dumping determinations in all
anti-dumping proceedings. In Brazil's view, the Agreement links the concept of "dumping" to
"product", not to "transaction". Thus, there is no support in the Agreement for the US argument that
dumping can be defined with respect to individua l import transactions. Dumping is defined in
relation to the product as a whole and this de finition applies to all kinds of anti-dumping
investigations, be it original investigations, review investigations or sunset investigations. Like
"dumping", the concept of "margins of dumping" is also defined in relation to the product under
consideration as a whole. The margin of dumping may not be properly established without taking into
consideration results of all intermediate calculati ons made for the product under consideration as a
whole. The margin of dumping established on the b asis of all such intermediate calculations operates
as a ceiling at which the resulting anti-dumping duty ma y be collected. In this regard, Brazil submits
that the concepts of "dumping", "margins of dum ping" and "product under consideration as a whole"
are interlinked. Brazil also argues that zeroing runs counter to the fair comparison requirement of
Article 2.4 of the Agreement because it results in ar tificially high margins of dumping and therefore
makes a finding of dumping more likely.
7.131 Brazil disagrees with the US arguments regarding the last sentence of Article 2.4.2. This
article lays down an exceptional methodology. This methodology, however, cannot run counter to the
principles underlying the Anti-Dumping Agreemen t which, according to Brazil, do not endorse
zeroing per se . Brazil also disagrees with the argum ent that because different anti-dumping
proceedings have different purposes, they are not necessarily subject to the same disciplines. No
matter what the purpose of each of these proceedings is, the bottom line for Brazil is that they all deal
with some sort of dumping margin calculation and that calculation has to be carried out in accordance
with the disciplines of Article 2 of the Agreement. Furthermore, Brazil notes that even assuming that
these proceedings have different purposes, the flaws in the determinations made in one proceeding
necessarily affect the determinations in subsequent proceedings.
7.132 Brazil does not find convincing the arguments pr esented by the United States regarding the
negotiating history of the Agreement. According to Brazil, the main issue underlying this dispute is
the US consistent failure to abide by the DSB rulin gs that have condemned zeroing. Brazil therefore
invites the Panel to reiterate that zeroing is inco nsistent with the Agreement in all anti-dumping
proceedings and irrespective of the methodology applied.
(b)
 Japan
7.133 Japan bases its arguments regarding the use of zeroing in periodic reviews on the Appellate
Body reports in the past zeroing disputes. Japan notes the chapeau of Article 9.3 of the Agreement

which provides that "[t]he amount of the anti-dumping duty shall not exceed the margin of dumping
as established under Article 2". This, in Japan's vi ew, parallels the text of Article VI:2 of the
GATT 1994. It also reinforces the provision of Article 9.1 that the amount of the duty cannot be more
than the margin of dumping. According to Japan , the cross-reference in Article 9.3 to Article 2
indicates that the authorities have to calculate the margin of dumping in administrative reviews with
regard to the product under consideration as a whole. It follows that if the authorities decide to carry
out intermediate comparisons in the course of thei r dumping determinations in such reviews, they
have to take into account the results of all such comparisons in the calcu lation of the margin of
dumping for the product under consideration as a whol e. Japan argues that Article 6.10 of the
Agreement precludes the calculation of margins of dumping for individual import transactions. It also
requires that margins be calculated for foreign pr oducers or exporters, not for importers. Japan
considers that authorities may assess duties on th e basis of import transactions as long as such
assessment does not lead to a duty above the ma rgin of dumping calculated for the product under
consideration as a whole and with respect to the exporter or foreign producer at issue.
7.134 Japan disagrees with the US argument that Ar ticle 9.4(ii) of the Agreement which allows
prospective normal value systems, lends support to the view that dumping margins may be calculated
for individual import transactions. In this regard , Japan asserts that the concept of "margin of
dumping" should not be confused with "amount of the duty". Members may apply different methods
with regard to assessing the amount of the duty to be paid. The margin of dumping calculated in
conformity with the disciplines of Article 2, however, operates as a ceiling on duty assessment.
Hence, the duty assessed cannot go beyond the margin of dumping calculated for the product under
consideration as a whole and with re gard to the exporter or foreign pr oducer at issue. Japan therefore
concludes that the use of zeroing in periodic review s is inconsistent with Articles 2.1 and 9.3 of the
Agreement. Japan, however, does not take any positi on with regard to the a lleged inconsistency of
such zeroing with Articles 2.4.2 and 11.2 of the Agreement.
7.135 Japan argues that the use of zeroing in periodic reviews is also inconsistent with the fair
comparison obligation under Article 2.4 of the Agr eement because it leads to a margin in excess of
the true margin of the relevant exporters or foreign producers.
7.136 Japan recalls that the Appellate Body is hierar chically superior to panels and that it has
consistently held in the past ca ses that dealt with zeroing that such practice is WTO-inconsistent
irrespective of the proceeding where it is used and the comparison methodology applied by the
investigating authorities. Japan ar gues that the need to provide se curity and predictability to the
multilateral trading system, set forth in Article 3.2 of the DSU, requires this Panel to follow the
Appellate Body's reasoning. Japan recognizes that pa nels may, in exceptional circumstances, depart
from the Appellate Body's reasoning, but argues that this dispute presents no such circumstances.
Japan therefore contends that in order to discharge its obligation to carry out an objective examination
of the matter before it, the Panel should rely on the Appellate Body's reasoning.
(c) Korea
7.137 Korea contends that Article 2.4 of the Agreement contains an obligation which is independent
from the rest of Article 2. This obligation app lies to all anti-dumping proceedings, including periodic
reviews. According to Korea, a comparison that fails to take into consideration all export transactions
cannot constitute fair comparison within the meaning of Article 2.4. Such a method, in Korea's view,
leads to an unfair comparison. The use of zeroing by the USDOC in periodic reviews, therefore, is
inconsistent with the fair comparison requirement embodied in Article 2.4, because it disregards the
results of intermediate comparisons where the export price exceeds the normal value.
7.138 Korea further submits that the term "inves tigative phase" under Article 2.4.2 has a broad
scope that covers periodic reviews. According to Korea, the word "investigation" within the meaning

of Article 2.4.2 refers to the inquiry carried out by the authorities, rather than to a particular segment
of the proceedings. It follows that the use of the zeroing methodology in periodic reviews also
conflicts with Article 2.4.2. Korea rejects the US arguments that purport to distinguish periodic
reviews from investigations. Since both of th ese proceedings entail dumping margin calculations,
they have to be subjected to the same legal di sciplines. Korea therefore argues that the USDOC's
margin calculations in periodic reviews is WTO-incons istent both with regard to the final liability of
importers and the new cash deposit rate for exporters or foreign producers.
7.139 Korea agrees with the EC's argument that Article 11.2 applies to periodic reviews and that the
use of zeroing in such reviews also conflicts with the obligation set forth under the mentioned Article.
Korea also argues that the use of zeroing in periodic reviews is inconsistent with Article 9.3 of the
Agreement.
7.140 Regarding the relevance of past Appellate B ody reports on the issue of zeroing, Korea
contends that the Panel should follow the reasoning de veloped and repeated in such reports. This, in
Korea's view, is critical with regard to maintaini ng the integrity of WTO dispute settlement. On this
issue, Korea also draws attention to the fact that that the United States asserts that the Panel should
refrain from following the Appellate Body's reas oning on zeroing, while at the same time citing
Appellate Body's other reports in order to strengthen its legal arguments presented to the Panel.
(d) Mexico
7.141 Mexico generally agrees with the European Co mmunities with regard to the relevance to
these proceedings of past Appellate Body reports on the issue of zeroing. Mexico recalls the
Appellate Body's reports that found zeroing "as such " to be WTO-inconsistent and argues that the
position taken by the United States in this case frust rates the purpose of allowing "as such" claims in
WTO dispute settlement, which is to eliminate the root of WTO-inconsistent behaviour. Mexico
notes that the measures at issue in this case and th e arguments presented by the United States are the
same as those in the past zeroing cases and therefore invites the Panel to follow the Appellate Body's
reasoning. This, in Mexico's view, would also be consistent with the Panel's obligation to carry out an
objective examination of the matter before it, as required under Article 11 of the DSU. Mexico argues
that not following the Appellate Body's reasoning in this case would undermine the need to provide
security and predictability to the multilateral trading system as set forth under Article 3.2 of the DSU.
7.142 Mexico disagrees with the US assertion that the Appellate Body's legal reasoning in the past
zeroing cases has shifted over time. According to Mexico, the Appellate Body's reasoning has been
the same starting from the first zeroing case, i.e., EC – Bed Linen . The Appellate Body based its
reasoning on Articles VI:1 and VI:2 of the GATT 1994 and Article 2.1 of the Anti-Dumping
Agreement which define "dumping" , for purposes of all anti-dumping pr oceedings, with reference to
the product under consideration as a whole. The Ap pellate Body recognized that the authorities could
carry out multiple comparisons in the calculation of the margin of dumping but noted that the results
of all such comparisons had to be taken into acc ount in determining the final margin for the product
under consideration as a whole. Furthermore, it held that it was exporters or foreign producers, not
importers, that dumped. Finally, the Appellate Body opined that th is would ensure consistency in
anti-dumping proceedings in the sense that the defini tion of "dumped imports" would be the same for
purposes of dumping and injury determinations. Me xico therefore disagrees with the US argument
that the Appellate Body's reasoning is based on th e phrase "all comparable export transactions" under
Article 2.4.2 of the Agreement.
7.143 Mexico draws attention to the difference betw een duty collection systems and the calculation
of margins of dumping. Mexico acknowledges that the Agreement provides discretion as to different
duty collection systems that Members may adopt. Regardless of the system chosen, however, duties

collected continue to be subject to Article 9.3 of the Agreement which stipulates that duties cannot
exceed the margin of dumping established under Article 2.
(e) Norway
7.144 Norway contends that the three comparison methodologies provided for under Article 2.4.2 of
the Agreement constitute the only methods that may be used in all anti-dumping proceedings,
including assessment reviews. Norway notes th at Article 9.3 does not prescribe a methodology
regarding duty assessment proceedings. According to Norway, however, the cross-reference to
Article 2 should be interpreted to mean that the au thorities have to observe the disciplines of Article 2
in their determinations in duty assessment pro ceedings. Furthermore, Norway asserts that
Article 2.4.2 also applies to duty assessment pro ceedings. Norway agrees with the EC's proposition
that the word "investigation" w ithin the meaning of Article 2.4.2 does not refer to original
investigations. Rather, it refers to the inquiry carri ed out by investigating authorities in different anti-
dumping proceedings, including assessment proceedi ngs. Limiting the scope of application of
Article 2.4.2 to original investigations would, in Norway's view, lead to absurd results.
3. Evaluation by the Panel
(a) Relevant Facts
7.145 The European Communities provided copies of the USDOC's Issues and Decision
Memoranda for 30 of the 37 periodic reviews at issue. The United States agrees that these
memoranda show that simple zeroing was u sed in the relevant 30 periodic reviews.
107 The EC's
claims regarding simple zeroing in periodic reviews concern the following 37 periodic reviews:
Number Product and Country Involved Period of Review Relevant
Exhibits
1 Steel Concrete Reinforcing Bars From Latvia
USDOC No: A-449-804
1 September 2004 –
31 August 2005 EC-33
2 Steel Concrete Reinforcing Bars From Latvia
USDOC No: A-449-804
1 September 2003 –
31 August 2004 EC-34
3 Steel Concrete Reinforcing Bars From Latvia
USDOC No: A-449-804
1 September 2002 –
31 August 2003 EC-35&EC-81
4 Ball Bearings and Parts Thereof From Italy
USDOC No: A-475-801
1 May 2004 –
30 April 2005 EC-31
5 Ball Bearings and Parts Thereof From Italy
USDOC No: A-475-801
1 May 2003 –
30 April 2004 EC-36
6 Ball Bearings and Parts Thereof From Italy
USDOC No: A-475-801
1 May 2002–30
April 2003 EC-37
7 Ball Bearings and Parts Thereof From Italy
USDOC No: A-475-801
1 May 2001 –
30 April 2002 EC-38
8
Ball Bearings and Parts Thereof From
Germany
USDOC No: A-428-801
1 May 2004 –
30 April 2005 EC-39
9
Ball Bearings and Parts Thereof From
Germany
USDOC No: A-428-801
1 May 2003 –
30 April 2004 EC-40
10 Ball Bearings and Parts Thereof From
Germany
1 May 2002 –
30 April 2003 EC-41

107 Response of the United States to Question 1(b) From the Panel Following the Second Meeting.

Number Product and Country Involved Period of Review Relevant
Exhibits
USDOC No: A-428-801
11
Ball Bearings and Parts Thereof From
Germany
USDOC No: A-428-801
1 May 2001 –
30 April 2002 EC-42
12 Ball Bearings and Parts Thereof From France
USDOC No: A-427-801
1 May 2004 –
30 April 2005 EC-43
13 Ball Bearings and Parts Thereof From France
USDOC No: A-427-801
1 May 2003 –
30 April 2004 EC-44
14 Ball Bearings and Parts Thereof From France
USDOC No: A-427-801
1 May 2002 –
30 April 2003 EC-45
15 Ball Bearings and Parts Thereof From France
USDOC No: A-427-801
1 May 2001 –
30 April 2002 EC-46
16 Stainless Steel Bar From France
USDOC No: A-427-820
1 March 2004 –
28 February 2005 EC-47&EC-82
17 Stainless Steel Bar From France
USDOC No: A-427-820
1 March 2003 –
29 February 2004 EC-48&EC83
18
Stainless Steel Sheet And Strip In Coils From
Germany
USDOC No: A-428-825
1 July 2004 –
30 June 2005 EC-49
19
Stainless Steel Sheet And Strip In Coils From
Germany
USDOC No: A-428-825
1 July 2003 –
30 June 2004 EC-50
20
Stainless Steel Sheet And Strip In Coils From
Germany
USDOC No: A-428-825
1 July 2002 –
30 June 2003 EC-51
21
Stainless Steel Sheet And Strip In Coils From
Germany
USDOC No: A-428-825
1 July 2001 –
30 June 2002 EC-52
22 Stainless steel plate in coils From Belgium
USDOC No: A-423-808
1 May 2003 –
30 April 2004 EC-53
23 Stainless steel plate in coils From Belgium
USDOC No: A-423-808
1 May 2002 –
30 April 2003 EC-54
24
Ball Bearings and Parts Thereof From the
United Kingdom
USDOC No: A-412-801
1 May 2003 –
30 April 2004 EC-55
25
Ball Bearings and Parts Thereof From the
United Kingdom
USDOC No: A-412-801
1 May 2002 –
30 April 2003 EC-56
26 Stainless Steel Bar From Germany
USDOC No: A-428-830
1 March 2004–28
February 2005
EC-57 & EC-
84& EC-
88&EC-89
27 Stainless Steel Bar From Germany
USDOC No: A-428-830
2 August 2001–28
February 2003 EC-58&EC-85
28
Certain Hot-Rolled Carbon Steel Flat
Products From the Netherlands
USDOC No: A-421-807
(PRELIMINARY RESULTS)
1 November 2004 –
31 October 2005 EC-59
29
Certain Hot-Rolled Carbon Steel Flat
Products From the Netherlands
USDOC No: A-421-807
1 November 2002 –
31 October 2003 EC-60

Number Product and Country Involved Period of Review Relevant
Exhibits
30
Certain Hot-Rolled Carbon Steel Flat
Products From the Netherlands
USDOC No: A-421-807
3 May 2001 –
31 October 2002 EC-61
31 Stainless Steel Bar From Italy
USDOC No: A- 475-829
2 August 2001 –
28 February 2003 EC-62&EC86
32
Stainless Steel Sheet & Strip In Coils From
Italy
USDOC No: A-475-824
1 July 2002 –
30 June 2003 EC-63
33
Stainless Steel Sheet & Strip In Coils From
Italy
USDOC No: A-475-824
1 July 2001 –
30 June 2002 EC-64
34 Certain Pasta From Italy
USDOC No: A-475-818
1 July 2004 –
30 June 2005 EC-65&EC-87
35 Certain Pasta From Italy
USDOC No: A-475-818
1 July 2003 –
30 June 2004 EC-66
36 Certain Pasta From Italy
USDOC No: A-475-818
1 July 2002 –
30 June 2003 EC-67
37 Certain Pasta From Italy
USDOC No: A-475-818
1 July 2001 –
30 June 2002 EC-68

7.146 As far as the remaining seven periodic revi ews are concerned, th e European Communities
initially did not submit copies of the USDOC's Issues and Decision Memoranda. Following the
second meeting with the parties, the Panel asked the European Communities why the copies of such
memoranda had not been submitted for the seven peri odic reviews at issue and invited it, if it so
wished, to do so. In response, the European Commun ities stated that the copies of the memoranda in
connection with the seven periodic reviews at is sue had not been submitted because, unlike those
submitted in connection with the ot her 30 periodic reviews, the memoranda pertaining to the seven
reviews did not contain any discussion on the issue of simple zeroing. 108 The European Communities
attached to its response copies of the memoranda that belonged to the seven reviews. In addition, the
European Communities submitted, along with its res ponse to the Panel's question, copies of the two
margin programmes used in one of the seven reviews, i.e., Stainless Steel Bar From Germany (Period
of Review: 1 March 2004 – 28 February 2005).
7.147 With regard to the submission by the Europ ean Communities of the two margin programmes
pertaining to the periodic review in Stainless Steel Bar From Germany , the United States argues that
such submission runs counter to paragraph 14 of the Panel's Working Procedures because this
constitutes new factual evidence which may only be submitted in the circumstances described in
paragraph 14. The United States contends that the Panel gave the European Communities the
opportunity to submit copies of the relevant I ssues and Decision Memoranda, and argues that the
submission of margin programmes fell outside the scope of such opportunity.109
7.148 Paragraph 14 of our Working Procedures provides:
"Each party shall submit all factual evidence to the Panel no later than during the first
substantive meeting, except with respect to evidence necessary for purposes of

108 Response of the European Communities to Question 1(c) From the Panel Following the Second
Meeting.
109 Comment of the United States on the Response of the European Communities to Question 1(c)
From the Panel Following the Second Meeting.

rebuttals or answers to questions. Exceptions to this procedure will be granted upon a
showing of good cause. The other party shall be accorded a period of time for
comment, as appropriate, on any new factual evidence submitted after the first
substantive meeting."
Paragraph 14 provides that all factual evidence has to be submitted not later than during the Panel's
first substantive meeting. However, it also contains certain exceptions. Thus, paragraph 14 allows for
the submission of factual evidence after the first subs tantive meeting of the Panel: a) when this is
necessary for purposes of rebuttals and answers to questions, or b) upon good cause shown.
Paragraph 14 also stipulates that where additiona l factual evidence is submitted after the first
substantive meeting, the other party shall be given an opportunity to comment on it. We disagree with
the narrow interpretation presented by the United Stat es regarding the language in our question to the
European Communities. The question at issue reads in relevant parts:
"Please explain the reason why the Europ ean Communities has not submitted a copy
of the USDOC's Issues and Decision Memorandum in relation to 7 of the 36 Exhibits
contained in the table above. You may, if you so wish, submit copies of the
Memoranda pertaining to the mentioned 7 administrative reviews, along with your
answers to these questions."
110
The reason why we invited the European Communities to submit copies of the relevant Issues and
Decision Memoranda pertaining to the seven peri odic reviews at issue is because that was the
document that the European Communities had submitted in connection with the other 30 reviews. We
anticipated that the same memoranda pertaining to the seven reviews would also contain discussions
regarding the methodology used in such reviews. We did not intend to limit the submission of
evidence along with the EC's response to the question at issue to such memoranda.
7.149 We note that the European Communities submitted the additional factual information at issue
along with its response to the Panel's question. We also note that the United States has had an
opportunity to comment on the documents submitted al ong with the EC's response. We therefore
disagree with the US view that the submission of the two calculation tables conflicted with
paragraph 14 of our Working Procedures. In any ev ent, as explained in para. 7.154 below, we have
found that the two computer programmes submi tted by the European Communities have not
demonstrated that simple zeroing was used in the periodic review at issue.
7.150 We now turn to our assessment of the eviden ce submitted by the European Communities with
regard to the seven periodic reviews in which th e Issues and Decision Memoranda do not contain any
discussion on the methodology used by the USDOC.
(i) Steel Concrete Reinforcing Bars From Latv ia (Period of Review: 1 September 2002 –
31 August 2003)
7.151 In order to demonstrate that the USDOC used simple zeroing in this periodic review, the
European Communities submitted, in Exhibit EC-35, th e copy of the Federal Register where the Final
Results of the USDOC's determinations were publis hed, documents showing the standard computer
programme that the USDOC used in this review, th e application of that programme to the producer
subject to this review and tables that show the r esults of the calculations with and without zeroing.
We note that the Final Results published by the USDOC in the Federal Register do not mention
whether simple zeroing was used in the review at issue. We also note that none of the other
documents submitted by the European Communities we re issued by the USDOC during the review at
issue. The relevant parts of the programmes that we re allegedly used in the review at issue contain

110 Question 1(c) From the Panel Following the Second Meeting.

certain computer commands which do not necessarily show that the simple zeroing methodology was
used by the USDOC. We do not consider that tabl es that allegedly contain results with and without
zeroing necessarily show that simple zeroing was actua lly used in the periodic review at issue. The
European Communities also submitted, in Exhibi t EC-81, the copy of the USDOC's Issues and
Decision Memorandum. This Memorandum, however, does not mention whether simple zeroing was
applied. We therefore consider that the Europ ean Communities has failed to demonstrate as a matter
of fact that simple zeroing was used by the USDOC in this periodic review.
(ii) Stainless Steel Bar From France (Period of Review: 1 March 2004 – 28 February 2005)
7.152 With regard to this periodic review, the Eu ropean Communities submitted, in Exhibit EC-47,
the copy of the Federal Register where the Fina l Results of the USDOC's determinations were
published and, in Exhibit EC-82, the copy of th e USDOC's Issues and Decision Memorandum. None
of these two documents shows that simple zeroing was used in this review. We therefore consider
that the European Communities has failed to dem onstrate that simple zeroing was used by the
USDOC in this periodic review.
(iii) Stainless Steel Bar From France (Period of Review: 1 March 2003 – 29 February 2004)
7.153 With regard to this periodic review, the Eu ropean Communities submitted, in Exhibit EC-48,
the copy of the Federal Register where the Fina l Results of the USDOC's determinations were
published and, in Exhibit EC-83, the copy of the USDOC's Issues and Decision Memorandum.
Neither of these documents demonstrates that simple zeroing was used in this review. We therefore
consider that the European Communities has failed to demonstrate that simple zeroing was used by
the USDOC in this periodic review.
(iv) Stainless Steel Bar From Germany (Period of Review: 1 March 2004 – 28 February 2005)
7.154 With regard to this periodic review, the Eu ropean Communities submitted, in Exhibit EC-57,
the copy of the Federal Register where the Fina l Results of the USDOC's determinations were
published, the standard programme used by the US DOC in the margin calculations in this periodic
review, and a table showing the results with and w ithout zeroing. We note that the Final Results
published by the USDOC in the Federal Register do not mention whether simple zeroing was used in
the review at issue. The tables showing margin calculations with and without zeroing were not
generated by the USDOC during the review at issu e. The European Communities also submitted,
along with its Response to Question 1(c) From the Panel Following the Second Meeting, Exhibits EC-
88 and EC-89 containing two margin programmes used in this periodic review and Exhibit EC-84
containing the copy of the USDOC's Issues and Decision Memorandum. The documents containing
the margin programmes were not generated by the USDOC during the review at issue. Nor is it
readily discernable from these documents that th e simple zeroing methodology was used in this
periodic review. The USDOC's Is sues and Decision Memorandum does not shed light on this issue
either. We therefore consider that the European Communities has failed to demonstrate that simple
zeroing was used by the USDOC in this periodic review.
(v) Stainless Steel Bar From Germany (Period of Review: 2 August 2001 – 28 February 2003)
7.155 With regard to this periodic review, the Eu ropean Communities submitted, in Exhibit EC-58,
the copy of the Federal Register where the Fina l Results of the USDOC's determinations were
published, the standard programme used by the USDOC in the margin calculations in this review as
well as two tables showing the results with and w ithout zeroing. We note that the Final Results
published by the USDOC in the Federal Register do not mention whether simple zeroing was used in
the review at issue. The tables showing margin calculations with and without zeroing were not
generated by the USDOC during the review at issu e. Nor does the copy of the USDOC's Issues and

Decision Memorandum, submitted in Exhibit EC-85, de monstrate that simple zeroing was used. We
therefore consider that the Europ ean Communities has failed to demonstrate as a matter of fact that
simple zeroing was used by the USDOC in this periodic review.
(vi) Stainless Steel Bar From Italy (Period of Review: 2 August 2001 – 28 February 2003)
7.156 With regard to this periodic review, the Eu ropean Communities submitted, in Exhibit EC-62,
the copy of the Federal Register where the Fina l Results of the USDOC's determinations were
published, a copy of the application of the US DOC's standard computer programme and a table
showing the results of the calculations with zeroing. We note that the Final Results published by the
USDOC in the Federal Register do not mention whet her simple zeroing was used in the review at
issue. We also note that the calculation table a llegedly showing the results of calculations with
zeroing was not produced by the USDOC. Nor does the copy of the USDOC's Issues and Decision
Memorandum, submitted in Exhibit EC-86, demonstrat e that simple zeroing was used. We therefore
consider that the European Communities has failed to demonstrate that simple zeroing was used by
the USDOC in this periodic review.
(vii) Certain Pasta From Italy (Period of Review: 1 July 2004 – 30 June 2005)
7.157 With regard to this periodic review, the Eu ropean Communities submitted, in Exhibit EC-65,
the copy of the Federal Register where the Fina l Results of the USDOC's determinations were
published, a table that shows the application of the USDOC's computer programme to one of the
exporters in this review and another table that allegedly shows the results of margin calculations
without zeroing. We note that the Final Results publ ished by the USDOC in the Federal Register do
not mention whether simple zeroing was used in the review at issue. The calculation tables submitted
by the European Communities were not produced by the USDOC during the periodic review at issue.
Nor is it readily discernable from such tables that si mple zeroing was used. None of them, in our
view, shows that the simple zeroing methodology at issue in these proceedings was used by the
USDOC in the review at issue. Nor does the copy of the USDOC's Issues and Decision
Memorandum, submitted in Exhibit EC-87, show th at simple zeroing was used. We therefore
consider that the European Communities has failed to demonstrate that simple zeroing was used by
the USDOC in this periodic review.
7.158 The European Communities has not shown that si mple zeroing was used in the seven reviews
discussed above. The Panel's findings regarding the use of simple zeroing in periodic reviews shall,
therefore, not affect such reviews. 111 Furthermore, we recall our finding above (para. 7.77) that the
preliminary determinations identified in the EC's pane l request are not within our terms of reference.
Hence, the periodic review on Certain Hot-Rolled Carbon Steel Fl at Products From the Netherlands
(Period of Review: 1 November 2004 – 31 October 2005) (Exhibit EC-59) is not within our terms of
reference. Consequently, our reasoning below regarding the use of simple zeroing in periodic reviews
only applies to 29 of the 37 reviews challenged by the European Communities.
(b) Is Simple Zeroing in Periodic Reviews WTO-Inconsistent?
(i) Description of the Calculation Methodology Used By the USDOC in Periodic Reviews
7.159 We note that the parties do not disagree over the description of the calculation methodology
used by the USDOC to calculate margins of dumpi ng in periodic reviews. The United States has a
retrospective duty assessment system. Under the US system, the anti-dumping duty imposed
following an investigation does not constitute the final determination of liability for anti-dumping

111 The shaded lines in the table in para. 7.145 above represent the periodic reviews in which the Panel
considers that the European Communities has not demonstrated that simple zeroing was used.

duties on imports of the subject product into the United States. Rather, in the US system, an importer
deposits a security in the form of a cash deposit at the time of importation. Subsequently, the
importer may, on an annual basis, ask the USDOC to calculate the importer's final liability for anti-
dumping duties on all the imports made during the prev ious year. Such a request may also be made
by a domestic producer or a foreign exporter or pr oducer. In such a periodic review, the USDOC
carries out two calculations: it calculates the final liability for anti-dumping duties for the importer on
its imports during the period under review, and it calculates a new cash deposit rate for each exporter's
future entries. The first is an importer-specific calculation whereas the sec ond is exporter-specific.
Both calculations are based on no rmal value and export price data pertaining to the period under
review.
7.160 The method used by the USDOC with regard to the calculation of these two margins is the
same. The product under considera tion is separated into model groups and a monthly WA normal
value is determined for each model exported by e ach exporter subject to the review. Each export
transaction is compared against the relevant monthly WA normal value. These comparisons are then
aggregated, with the results of comparisons wh ere the export price exceeds the WA normal value
treated as zero. A WA margin of dumping is calcula ted for each exporter by dividing the aggregated
total by the total value of exports, and this beco mes the cash deposit rate for that exporter for the
subsequent period. The calculation of the importer-specific assessment rate is similar. The USDOC
compares the exporter-specific WA normal value for each model with the export price in each
transaction involving that exporter's product by the importer. These comparisons are then aggregated,
with the results of comparisons where the export pr ice exceeds the WA normal value treated as zero.
The aggregate total for all transactions is then di vided by the total value of imports made by the
importer. In other words, the numerator for th e exporter's WA dumping margin for the period of
review, i.e., the future cash deposit rate, is the total of the comparisons where the normal value
exceeds the export price and the denominator is the value of all exports from that exporter during the
period of review. The numerator fo r the importer-specific assessment ra te is the total of comparisons
for all transactions where the normal value exceeds the export price for all imports by that particular
importer, and the denominator is the total value of all imports by the importer.
7.161 If the final importer-specific duty calculated in a periodic review exceeds the original cash
deposit, the importer has to pay th e difference plus interest. When the opposite is the case, the
difference is reimbursed with interest. Where no pe riodic review is requested, the initial cash deposit
made at the time of importation is assessed as final duty.
(ii) Legal Analysis
7.162 The EC's claim regarding simple zeroing in periodic reviews raises a number of important
issues of treaty interpretation. The first is wh ether dumping may be determined on the basis of an
individual export transaction or whether it requires an aggregation of all export transactions made
within the period of review. The European Communities argues that dumping can only be determined
for the product under consideration as a whole, i.e., that all export transactions pertaining to the
product subject to a periodic review have to be taken into consid eration in the calculation of the
margin of dumping. According to the European Co mmunities, simple zeroing in periodic reviews is
inconsistent with Articles 2.1, 2.4, 2.4.2 and 9.3 of the Agreement because it precludes a dumping
determination for the product under considerati on as a whole. The United States disagrees and
maintains that this proposition does not have a basis in the Agreement. According to the
United States, it is a permissible interpretation of the Agreement that dumping may be determined for
individual export transactions. We are inclined to ag ree with this conclusion, for the reasons stated
most recently by the panel in US – Stainless Steel (Mexico) case.
112 We note, however, that the

112 We recall that the WTO-consistency of simple zeroi ng in periodic reviews has been raised in three
disputes so far, i.e. in US – Zeroing (EC), US – Zeroing (Japan) and US – Stainless Steel (Mexico). In all three

Appellate Body reversed the panel's findings in th is regard. Drawing on its previous reasoning, the
Appellate Body emphasized that dumping cannot be determined on the basis of individual export
transactions. According to the Appellate Body, "if it were permissible to determine a separate margin
of dumping for each individual transaction, several margins of dumping would exist for each exporter
and for the product under consideration".
113 This, in the Appellate Body 's view, cannot be reconciled
with the interpretation and application of sever al provisions of the Agreement, including a
determination of injury under Article 3, the accep tance of price undertakings under Article 8 and the
conduct of reviews provided for under Articles 11.2 and 11.3.114
7.163 A second issue, related to the first, is whet her dumping is necessarily an exporter-specific
concept or whether it may also be determined fo r individual importers. The European Communities
maintains that dumping is an exporter-specific con cept. The United States, however, disagrees and
asserts that this approach does not have a basis in the Agreement. We tend toward the view that
dumping is not necessarily and exclusively an exporte r-specific concept, finding the reasoning of the
panel in US –Stainless Steel (Mexico) to be persuasive. That panel drew attention, inter alia, to the
importer-specific nature of the payment of anti-dumping duties. According to the panel, the
proposition that a margin of dumping can be de termined for individual importers represents a
permissible interpretation of the relevant treaty prov isions within the meaning of Article 17.6(ii) of
the Anti-Dumping Agreement.115 We note, however, that on this point also, the Appellate Body in US
– Stainless Steel (Mexico) reversed the panel, reiterating that dumping necessarily is an exporter-
specific concept. The Appellate Body reasoned that certain elements of the definitional provisions
contained in Article 2.1 of the Anti-Dumping Ag reement and Article VI:1 of the GATT 1994 compel
the notion that dumping reflects the exporter's be haviour. The Appellate Body found contextual
support for its interpretation in other provisions of the Agreement, including Articles 2.3, 5.2(ii),
6.1.1, 6.7, 5.8, 6.10, 9.5, 8.1, 8.2, 8.5 and 9.4(i) and (ii). 116 The Appellate Body also restated the
overarching requirement of Article 9.3 that the le vel of anti-dumping duty cannot exceed the margin
of dumping as established under Article 2 of the Ag reement. The Appellate Body reasoned that
dumping can only be determined for the exporte r and in connection with the product under
consideration as a whole, and considered that th is definition of "dumping" applies throughout the
Agreement. Therefore, the Appellate Body reasoned, the margin of dumping calculated in accordance
with Article 2 establishes a ceiling for the total amount of anti-dumping duties that may be levied on
the imports of the subject product. The Appellate Body concluded that there is "no basis in
Article VI:2 of the GATT 1994 or in Articles 2 and 9.3 of the Anti-Dumping Agreement for
disregarding the results of comparisons where the export price exceeds the normal value when
calculating the margin of dumping for an exporter."
117

disputes, panels found simple zeroing in periodic reviews to be permissible under the Anti-Dumping
Agreement. All three panel reports were appealed and th e Appellate Body reversed the panels on this issue in
all three cases. We also note that in these cases the reasoning, respectively, of panels and the Appellate Body
has generally been consistent on the legal issues concerning simple zeroing in periodic reviews. The panels and
the Appellate Body have generally developed their reasoning based on previous reports. We note that the most
recent dispute in which simple zeroing in periodic reviews was at issue, US – Stainless Steel (Mexico), provides
a comprehensive summary of the main legal issues and arguments raised by parties in disputes concerning this
type of zeroing. For ease of reference, therefore, we have cited to the panel and the Appellate Body reports in
US – Stainless Steel (Mexico), which reflect these previous panel and Appellate Body reports, rather than citing
seriatim all earlier reports reaching similar conclusions.
113 Appellate Body Report, United States – Final Anti-Dumping Measures on Stainless Steel from
Mexico ("US – Stainless Steel (Mexico)"), WT/DS344/AB/R, adopted 20 May 2008, para. 99.
114 Ibid.
115 Panel Report, US – Stainless Steel (Mexico), supra, note 97, paras.7.124-7.128.
116 Appellate Body Report, US – Stainless Steel (Mexico), supra, note 113, paras. 83-96.
117 Ibid., para. 103. The Appellate Body noted, inter alia, that if simple zeroing in periodic reviews
were allowed under Article 9.3 of the Agreement, this would allow Members to circumvent the prohibition,

7.164 The United States argues that prohibiting simple zeroing in periodic reviews would favour
importers with high margins vis-à-vis importers with low margins. We share these concerns and we
note that the panel in US – Stainless Steel (Mexico) agreed with the US arguments in this regard.
118
The Appellate Body, however, revers ed the panel, observing that the prohibition of simple zeroing in
periodic reviews does not preclude Members from carrying out an importer-specific inquiry in
determining liability for the collection of anti-dumping duties, as long as the duty collected does not
exceed the exporter-specific margin of dumping estab lished for the product unde r consideration as a
whole.119
7.165 The United States directs our attention to the fact that a Group of Experts convened in 1960 to
consider certain issues regarding the operation of Article VI of the GATT 1947. This Group,
according to the United States, pointed out that the "ideal method" for the imposition of anti-dumping
duties would be based on an importer-specific determination of dumping and injury. 120 In our view,
the opinion presented in that report supports the conclusion that dumping could be determined for
individual importers. The Appellate Body in US – Stainless Steel (Mexico) , however, rejected this
argument, finding that interpretation of the Agreemen t in this regard does not necessitate an analysis
of supplementary means of interpretation provided for under Article 32 of the Vienna Convention.
Furthermore, the Appellate Body reasoned that the report does not clarify whether simple zeroing in
periodic reviews is allowed under the Anti-Dumping Agreement because it only reflects the views of
some of the negotiating parties well before the Anti-Dumping Agreement came into force.
121
7.166 The United States asserts that Article 9.4 ( ii) of the Agreement which provides for the
prospective normal value systems, lends support to the proposition that dumping may be interpreted in
relation to individual export transactions. We tend to agree with the proposition that the recognition
in the Agreement of a prospective normal value sy stem reinforces the argument that dumping may be
determined on the basis of individual export transactions, and note that the panel in US – Stainless
Steel (Mexico) also agreed with this point of view. 122 The Appellate Body, however, disagreed,
stating that "the Panel has failed to distinguish be tween duty 'collection' at the time of importation, on
the one hand, and determinations of the final duty liability of an importer and the margin of dumping
for an exporter, on the other hand".123 The Appellate Body highlighted the fact that the duty collected
at the time of importation under a prospective norma l value system does not represent the margin of
dumping within the meaning of Article 9.3 and noted that such duty is subject to review under Article
9.3.2.124
7.167 The United States asserts that if the Agreement is interpreted in a way that generally prohibits
zeroing, the third methodology provided for under the second sentence of Article 2.4.2 would yield
the same mathematical result as the first methodology. 125 This, according to the United States and the

under Article 2.4.2, on zeroing in investigations. According to the Appellate Body, "this means that the mere
act of conducting a periodic review would introduce zeroing following imposition of the anti-dumping duty
order". Ibid., para. 109.
118 Panel Report, US – Stainless Steel (Mexico), supra, note 97, para. 7.146.
119 Appellate Body Report, US – Stainless Steel (Mexico), supra, note 113, para. 113.
120 First Written Submission of the United States, para. 86.
121 Appellate Body Report, US – Stainless Steel (Mexico), supra, note 113, paras. 128-132.
122 Panel Report, US – Stainless Steel (Mexico), supra, note 97, paras. 7.130-7.133.
123 (footnote omitted) Appellate Body Report, US – Stainless Steel (Mexico) , supra, note 113,
para. 120.
124 Ibid.
125 We recall that the text of Article 2.4.2 reads:
"Subject to the provisions governing fair comparison in paragraph 4, the existence of margins
of dumping during the investigation phase shall normally be established on the basis of a
comparison of a weighted average normal value with a weighted average of prices of all
comparable export transactions or by a comp arison of normal value and export prices on a

panel in US – Stainless Steel (Mexico) , would render the second sentence of Article 2.4.2 inutile and
therefore run counter to the principle of effective trea ty interpretation. On this issue, we tend to agree
with the views expressed by the United States, as did the panel in US – Stainless Steel (Mexico) .126
The Appellate Body dismissed this concern, noting that "if the determination of weighted average
normal values was based on different time periods , dumping margin calculations under these two
methodologies would yield different mathematical results". 127 The Appellate Body also reiterated its
view that "[b]eing an exception, the comparison methodology in the second sentence of Article 2.4.2
(weighted average-to-transaction) alone cannot dete rmine the interpretation of the two methodologies
provided in the first sentence". 128 Furthermore, the Appellate Body reasoned that "[i]n 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".129
7.168 With regard to this last poin t, we note that the panel in US – Stainless Steel (Mexico) had
pointed out:
"This approach leaves certain questions una nswered. First, the Appellate Body has
not pointed to any textual basis for the prop osition that the export transactions to be
used in the third methodology would necessar ily be more limited than those in the
first two methodologies. In light of the text of Article 2.4.2, it is not evident to us that
dumping determinations in the third methodology could be limited to the subset of the
export transactions that fall within the rele vant price pattern. The second sentence of
Article 2.4.2 simply mentions that the authorities may, under certain circumstances,
compare prices of individual export transactions with the WA normal value. It does
not mention in any way whether such comparison may, or has to, be limited to the
subset of export transactions that fall with in the relevant price pattern. Second,
assuming that this proposition does in fact have a textual basis in the Agreement, the
Appellate Body did not explain how the au thorities would treat the remaining export
transactions. If, for instance, what the Appellate Body meant is that the export
transactions that do not fall within the relevant price pattern are to be excluded from
dumping determinations, this would mean disregarding them. Given the Appellate
Body's strongly expressed view that dumping has to be determined for the product
under consideration as a whole and hence a ll export transactions pertaining to the
product under consideration have to be taken into consideration by the authorities, we
do not consider that this can be what the A ppellate Body meant. Alternatively, if the
Appellate Body meant that the authorities would use the WA-WA methodology with
respect to the export transactions that do not fall within the relevant price pattern, and
combine these results with the results ob tained through the WA-T methodology for
the prices that fall within the pattern, we not e that such an approach would also lead
to the same mathematical result as the WA-WA methodology. We therefore do not

transaction-to-transaction basis. A normal value established on a weighted average basis may
be compared to prices of individual export tr ansactions 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 weight ed average-to-wei ghted average or
transaction-to-transaction comparison."
126 Panel Report, US – Stainless Steel (Mexico), supra, note 97, paras. 7.130-7.133.
127 (footnote omitted) Appellate Body Report, US – Stainless Steel (Mexico) , supra, note 113,
para. 126.
We note that the Appellate Body's rationale in this regard rests on the use of different data and must
logically yield a different mathematical result.
128 (footnote omitted) Appellate Body Report, US – Stainless Steel (Mexico) , supra, note 113,
para. 127.
129 (footnote omitted) Ibid.

consider that the Appellate Body's approach invalidates the mathematical equivalence
problem."
130 (footnote omitted)
The panel in that case expressed the view that the Appellate Body's reasoning regarding the
mathematical equivalence argument in earlier reports was not internally consistent. According to the
panel, although the Appellate Body expressed the view that while using the third methodology the
authorities would limit their dumping determinations to the subset of export transactions that fall
within the relevant price pattern, it did not explai n how the export transactions outside that pattern
would have to be treated. We share the concern rai sed by that panel in this regard and note that the
Appellate Body in US – Stainless Steel (Mexico) did not address this concern.
7.169 Having identified the issues raised by the EC's claim regarding simple zeroing in periodic
reviews, and having reviewed the arguments of the pa rties and the reports of previous panels and the
Appellate Body, we have generally found the r easoning of earlier panels on these issues to be
persuasive.131 We are, however, faced with a situation where the Appellate Body reports, adopted by
the DSB, have consistently reversed the findings in the mentioned panel reports that simple zeroing in
periodic reviews is not WTO-inconsistent. Therefore, before setting out any definitive findings on the
claim before us, we turn to an important systemic question.
(iii) The Role of Jurisprudence
7.170 Given the consistent line of reasoning underlyi ng the Appellate Body's conclusion regarding
simple zeroing in periodic reviews, resolution of the EC's claim before us necessarily requires
consideration of the role of adopted Appellate Body reports. We note that the net effect of adopted
Appellate Body or panel reports is not directly a ddressed in the DSU or in any covered agreement.
This issue, however, has arisen in past disput es and the Appellate Body has addressed it. In Japan –
Alcoholic Beverages II, the Appellate Body opined:
"Adopted panel reports are an important part of the GATT acquis. They are often
considered by subsequent panels. They create legitimate expectations among WTO
Members, and, therefore, should be taken into account where they are relevant to any
dispute. However, they are not binding, except with respect to resolving the
particular dispute between the parties to that dispute. In short, their character and
their legal status have not been cha nged by the coming into force of the WTO
Agreement."132 (footnote omitted, italic emphasis in original, underline emphasis
added)
The Appellate Body made this statement in the context of assessing the importance of adopted GATT
panel reports. 133 Its reasoning, however, also addresses the status of WTO panel reports. In its
reasoning, the Appellate Body underlines the fact that adopted panel reports create legitimate
expectations among WTO Members and opines that they should be taken into consideration by

130 Panel Report, US – Stainless Steel (Mexico), supra, note 97, para. 7.139.
131 We note, as the Appellate Body has recognized (Appellate Body Report, US – Stainless Steel
(Mexico), supra, note 113, para. 76), that Article 17.6(ii) of the Anti-Dumping Agreement allows for the
possibility of more than one permissible interpretation of its provisions. We are of the view that the position of
the United States, as reflected in the aforementioned panel reports, reflects at least one permissible interpretation
of the relevant provisions of the Anti-Dumping Agreement. While the interpretation presented by the European
Communities, and reflected in the Appellate Body reports on zeroing and the separate opinion of one Member
of the Panel, (infra paras. 9.1-9.10), may also be a permissible interpretation, we do not believe that it is the only
one.
132 Appellate Body Report, Japan – Taxes on Alcoholic Beverages ("Japan – Alcoholic Beverages II "),
WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, p. 14.
133 Ibid., pp. 12-13.

subsequent panels where the legal issues are similar, noting however, that such reports are not binding
outside the scope of the relevant dispute.
7.171 In the subsequent US – Shrimp (Article 21.5 – Malaysia) dispute, the Appellate Body extended
this reasoning to adopted Appellate Body reports.134 The Appellate Body endorsed the reference that the
panel in that case made to the Appellate Body's report and pointed out that "[the Appellate Body] would
have expected the [p]anel to do so". 135 Subsequently, in US – Oil Country Tubular Goods Sunset
Reviews, the Appellate Body went further regarding the role of adopted Appellate Body reports and
expressed the view that "following the Appellate Body's conclusions in earlier disputes is not only
appropriate, but is what would be expected from panels, especially where the issues are the same".136
7.172 The panel in US – Stainless Steel (Mexico) addressed the Appellate Body findings on the issue
of simple zeroing in periodic reviews in reaching its conclusion. In reaching its conclusion, which did
not follow these Appellate Body reports, the panel observed that although the DSU does not attribute a
binding effect to adopted panel or Appellate Body reports, "the Appellate Body de facto expects them to
do so to the extent that the legal issues addressed are similar".137 The panel recalled and endorsed the
view expressed by the panel in US – Zeroing (Japan) that "the concern over the preservation of a
consistent line of jurisprudence should not override a panel's task to carry out an objective examination
of the matter before it" as required under Article 11 of the DSU.138
7.173 On appeal, the Appellate Body recalled its previous findings in Japan – Alcoholic Beverages II,
US – Shrimp (Article 21.5 – Malaysia) and US – Oil Country Tubular Goods Sunset Reviews and
reiterated that "Appellate Body reports are not bindi ng, except with respect to resolving the particular
dispute between the parties". 139 Nonetheless, the Appellate Body noted, "[a]dopted panel and
Appellate Body reports are often cited by parties in support of legal arguments in dispute settlement
proceedings, and are relied upon by panels and the Appellate Body in subsequent disputes". 140
Furthermore, the Appellate Body pointed out, while enacting or modifying their national legislation,
Members often take into consideration the interpretation of the covered agreements developed in such
reports.141 According to the Appellate Body, therefore, "the legal interpretation embodied in adopted
panel and Appellate Body reports becomes part and parcel of the acquis of the WTO dispute
settlement system".142
7.174 In the view of the Appellate Body, the objectiv e examination obligation that Article 11 of the
DSU imposes on WTO panels is informed by the general provisions of Article 3 of the DSU,
including paragraph 2 thereof which provides that "[ t]he dispute settlement system of the WTO is a
central element in providing security and pred ictability to the multilateral trading system". 143
According to the Appellate Body, ensuring "security and predictability" in the dispute settlement

134 Appellate Body Report, United States – Import Prohibition of Certain Shrimp and Shrimp Products –
Recourse to Article 21.5 of the DSU by Malaysia ("US – Shrimp (Article 21.5 – Malaysia)"), WT/DS58/AB/RW,
adopted 21 November 2001, para. 109.
135 Ibid., para. 107.
136 Appellate Body Report, United States – Sunset Reviews of Anti-Dumping Measures on Oil Country
Tubular Goods from Argentina ("US – Oil Country Tubular Goods Sunset Reviews"), WT/DS268/AB/R, adopted
17 December 2004, DSR 2004:VII, 3257, para. 188.
137 (emphasis in original) Panel Report, US – Stainless Steel (Mexico), supra, note 97, para. 7.105.
138 Ibid.
139 (footnote omitted) Appellate Body Report, US – Stainless Steel (Mexico) , supra, note 113,
para. 158.
140 Ibid., para. 160.
141 Ibid.
142 Ibid.
143 Ibid., para. 157.

system, in turn, requires the development of a cons istent body of case law and applying it to the same
legal questions, absent cogent reasons.
144
7.175 In addition, the Appellate Body underlined the hierarchical structure provided for in the DSU
and opined:
"The creation of the Appellate Body by WTO Members to review legal
interpretations developed by panels shows that Members recognized the importance
of consistency and stability in the interpretation of their rights and obligations under
the covered agreements. This is essential to promote "security and predictability" in
the dispute settlement system, and to ensure the "prompt settlement" of disputes. The
Panel's failure to follow previously ad opted Appellate Body reports addressing the
same issues undermines the development of a coherent and predictable body of
jurisprudence clarifying Members' ri ghts and obligations under the covered
agreements as contemplated under the DSU."145 (emphasis added)
The Appellate Body's views in this regard, partic ularly of the phrase "security and predictability",
imply that the development of a consistent body of case law in order to clarify the rights and
obligations of WTO Members is necessary. The Appellate Body pointed out that any panel report that
fails to follow the case law developed through adopted panel and Appellate Body reports would
undermine this important function of jurisprudence.
7.176 Furthermore, the Appellate Body held:
"Clarification, as envisaged in Article 3. 2 of the DSU, elucidates the scope and
meaning of the provisions of the covered agreements in accordance with customary
rules of interpretation of public interna tional law. While the application of a
provision may be regarded as confined to the context in which it takes place, the
relevance of clarification contained in adopt ed Appellate Body reports is not limited
to the application of a particular provision in a specific case."146 (emphasis added)
In this part of its report, the Appellate Body expr essed the view that the legal interpretation contained
in adopted Appellate Body reports has implicatio ns that go beyond the specifics of the relevant
dispute. That is, according to the Appellate Bo dy, such interpretation has to be taken into
consideration in interpreting the rights and obligations of WTO Members.
7.177 The Appellate Body expressed deep concern that the panel in US – Stainless Steel (Mexico)
failed to follow the legal interp retation developed in the prior A ppellate Body reports regarding
simple zeroing in periodic reviews. According to the Appellate Body, "[t]he [p]anel's approach has
serious implications for the proper functioni ng of the WTO dispute settlement system[]". 147
Nonetheless, although Mexico had asked the Appellate Body to find that the panel's failure to follow
established Appellate Body reasoning on simple zeroi ng in periodic reviews was inconsistent with the
obligation to carry out an objective examinati on, as required under Article 11 of the DSU, the
Appellate Body declined to make such a finding, c oncluding that "the [p]anel's failure flowed, in
essence, from its misguided understanding of the legal provisions at issue".148

144 Ibid., para. 160.
145 Ibid., para. 161.
146 Ibid.
147 Ibid., para. 162.
148 Ibid.

7.178 In light of this recent report, we consider it necessary to review our obligations regarding
decision-making. We therefore start with the general obligations on panels set out in Article 11 of the
DSU, which provides in relevant part:
"Function of Panels
The function of panels is to assist the DSB in discharging its responsibilities under
this Understanding and the covered agreements. Accord ingly, a panel should make
an objective assessment of the matter before it, including an objective assessment of
the facts of the case and the applicability of and conformity with the relevant covered
agreements, and make such other findi ngs as will assist the DSB in making the
recommendations or in giving the rulings provided for in the covered agreements."
7.179 Clearly, the guiding principle for the work of this or any other panel is the injunction that a
panel undertake an "objective assessment" with regard to both the facts and the law relevant to the
dispute before it. Such an objective assessment does not, of course, occur in a vacuum. Other
provisions of the DSU give context to this task. Important contextual elements which must be taken
into account are found in Article 3.2 of the DSU, which provides:
"The dispute settlement system of the WTO is a central element in providing security
and predictability to the multilateral trading system. The Members recognize that it
serves to preserve the rights and obligations of Members under the covered
agreements, and to clarify the existing provi sions of those agreements in accordance
with customary rules of interpretation of public international law. Recommendations
and rulings of the DSB cannot add to or diminish the rights and obligations provided
in the covered agreements." (emphasis added)
Thus, Article 3.2 establishes that the WTO dispute settlement system is intended to provide security
and predictability to the multilateral trading system. In this regard, of par ticular relevance among the
elements that the WTO dispute settlement syst em comprises are the consultations process,
examination of facts and law by panels, appeal on issues of law, and disciplines on the
implementation of DSB recommendations and rulings following a dispute, including recourse to
proportioned retaliation. All of these elements operate together to provide security and predictability
to the multilateral trading system. The Appellate Bo dy suggests that security and predictability in the
dispute settlement system per se is a purpose served by the developm ent of a consistent body of case
law based on panels following the reasoni ng of adopted Appellate Body reports. 149 We agree that
security and predictability in the multilateral trading system may also be furthered by the development
of consistent jurisprudence and applying it to th e same legal questions, absent cogent reasons to do
otherwise. In our view, it is obviously incumbent upon any panel to consider prior adopted Appellate
Body reports, as well as adopted panel reports, a nd adopted GATT panel repor ts, in undertaking the
objective assessment required by Article 11. Prio r adopted reports form part of the GATT/WTO
acquis, and, as stated by the Appellate Body, creat e legitimate expectations among WTO Members,
and, therefore, should be taken in to account where they are relevant. 150 However, we do not consider
that the development of binding jurisprudence is a contemplated element to enable the dispute
settlement system to provide security and predictability to the multilateral trading system.
7.180 Clearly, it is important for a panel to have cogent reasons for any decision it reaches,
regardless of whether or not there are any releva nt adopted reports, and whether or not the panel
follows such reports. An essential part of a panel's task under Article 11 is to explain its objective
assessment of the matter before it. Such explanation, as well as the reasons given, serve to ensure that

149 Ibid., para. 160.
150 Appellate Body Report, Japan – Alcoholic Beverages II , supra, note 132, p. 14.

panels do not add to or diminish the rights and obligations of Members, while at the same time
furthering the goal of providing security and predic tability to the multilateral trading system through
the operation of the dispute settlement system. In our view, however, a panel cannot simply follow
the adopted report of another panel, or of the A ppellate Body, without careful consideration of the
facts and arguments made by the parties in the disput e before it. To do so would be to abdicate its
responsibilities under Article 11. By the same token, however, neither should a panel make a finding
different from that in an adopted earlier panel or Appellate Body report on similar facts and
arguments without careful consideration and explan ation of why a different result is warranted, and
assuring itself that its finding does not undermine the goals of the system.
7.181 As discussed above, we share a number of concerns raised by the panel in US – Stainless
Steel (Mexico), particularly with regard to the US mathematical equivalence argument. We recognize,
however, that the Appellate Body in its report reve rsed the panel's findings and this report gained
legal effect through adoption by the DSB. We note that this continues a series of consistent
recommendations made by the DSB over the past sev eral years following reports that addressed the
same issues based largely on the same arguments.
7.182 In addition to the goal of providing security and predictability to the multilateral trading
system, we recall that Article 3.3 of the DSU provides that "[t]he prompt settlement of situations in
which a Member considers that any benefits accrui ng to it directly or indirectly under the covered
agreements are being impaired by measures taken by another Member is essential to the effective
functioning of the WTO and the maintenance of a proper balance between the rights and obligations
of Members". Given the consistent adopted jurispru dence on the legal issues that are before us with
respect to simple zeroing in periodic reviews, we consider that providing prompt resolution to this
dispute in this manner will best serve the multiple goals of the DSU, and, on balance, is furthered by
following the Appellate Body's adopted findings in this case.
(iv) Conclusion
7.183 Based on the foregoing considerations, we conclude that the United States acted
inconsistently with its obligati ons under Article VI:2 of the GATT 1994 and Article 9.3 of the Anti-
Dumping Agreement by applying simple zeroing in the 29 periodic reviews at issue. Having found
that the United States acted inconsistently with its obligations under Article VI:2 of the GATT 1994
and Article 9.3 of the Anti-Dumping Agreement, we d ecline to make findings with regard to the EC's
claims under Articles 2.1, 2.4, 2.4.2 and 11.2 of th e Anti-Dumping Agreement and Article VI:1 of the
GATT 1994.
G.
ZEROING IN SUNSET REVIEWS
1. Arguments of the Parties
(a) European Communities
7.184 The European Communities challenges the use of zeroing in 11 sunset reviews carried out by
the USDOC. The European Communities elaborates its claims regarding the use of zeroing in sunset
reviews, with reference to one specific sunset review, Stainless Steel Sheet & Strip in Coils – Italy ,
but argues that the same claims apply to the other sunset reviews at issue. The
European Communities argues that as part of its sunset determinations, the USDOC relies on
previously-calculated dumping margins. Hence, it relies on margins calculated through zeroing. In
the sunset review of Stainless Steel Sheet & Strip in Coils – Italy , based on the existence of dumping
in the original investigation and the subsequent reviews, which had been calculated through zeroing,
the USDOC determined that dumping would likely continue or recur should the duty be terminated.

7.185 The European Communities notes that Article 11.3 of the Agreement does not define the
word "dumping". The definition of dumping under Ar ticle VI:1 of the GATT 1994 and Article 2.1 of
the Anti-Dumping Agreement, therefore, applies to s unset reviews. It follows that dumping margins
used in sunset reviews must conform to the provi sions of the Agreement, including Article 2. The
European Communities asserts that the margins used by the USDOC in the sunset review at issue had
been calculated inconsistently with Articles 2.1, 2.4 and 2.4.2 of the Agreement. For this reason, the
sunset determination reached through the USDOC's reliance on these WTO-inconsistent margins is
also inconsistent with the same provisions. C onsequently, argues the European Communities, the
USDOC also acted inconsistently with its obligations under Articles 11.1 and 11.3 of the Agreement.
(b) United States
7.186 The United States argues that the EC's claims re garding the use of zeroing in sunset reviews
has to be rejected because "[t]he [European Comm unities] has not demonstrated that a calculation
done in accordance with the EC's approach would result in zero or de minimis dumping margins in the
cited cases, leading to a revocation of the order".151
2. Arguments of Third Parties
(a) Japan
7.187 Japan contends that sunset determinations are inconsistent with the disciplines of the Anti-
Dumping Agreement to the extent they are based on past margins calculated through zeroing. Japan
does not take any position with regard to th e factual circumstances surrounding the sunset
determinations challenged by the European Co mmunities in these proceedings. Japan argues,
however, that to the extent that the USDOC used past margins established through zeroing, it acted
inconsistently with Articles 2.1, 2.4, 11.3 of th e Anti-Dumping Agreement and VI:1 and VI:2 of the
GATT 1994.
(b) Korea
7.188 In Korea's view, sunset reviews are the continuation of the previous anti-dumping
proceedings and cannot be separated from them. It fo llows that to the extent that the USDOC in its
sunset determinations relies on past margins calcula ted through zeroing, it violates the obligations set
forth under Articles 2.4, 2.4.2, 11.1 and 11.3 of the Agreement.
(c) Norway
7.189 Norway recalls the relevant Appellate Body repor ts and submits that to the extent that the
authorities in a sunset review rely on past dumping margins obtained through zeroing, such reliance
taints their sunset determinations. Norway disagrees with the US argument that the
European Communities has to demonstrate that a calculation without zeroing would result in zero or
de minimis margins. According to Norway , the EC's obligation is to show a breach of Article 11.3 of
the Agreement. It does not have to demonstrate what the past margins would have been without
zeroing. Nor does the Panel have to make such a determination for the United States.

151 First Written Submission of the United States, para. 154.

3. Evaluation by the Panel
(a) Relevant Facts
7.190 The EC's claims regarding the use of zeroi ng in sunset reviews concern the following
11 sunset reviews:
Number Country and Product Involved USDOC Final
Determination
Relevant
Exhibits
1 Steel Concrete Reinforcing Bars From Latvia
USDOC No: A-449-804
72 FR 16767
5 April 2007
(PRELIMINARY
RESULTS)
EC-70
2 Ball Bearings and Parts Thereof From Italy
USDOC No: A-475-801
70 FR 58183
5 October 2005 EC-71
3 Ball Bearings and Parts Thereof From Germany
USDOC No: A-428-801
70 FR 58183
5 October 2005 EC-72
4 Ball Bearings and Parts Thereof From France
USDOC No: A-427-801
70 FR 58183
5 October 2005 EC-73
5
Stainless Steel Sheet And Strip In Coils From
Germany
USDOC No: A-428-825
69 FR 67896
22 November 2004 EC-74
6 Stainless steel plate in coils From Belgium
USDOC No: A-423-808
69 FR 61798
21 October 2004 EC-75
7
Ball Bearings and Parts Thereof From the United
Kingdom
USDOC No: A-412-801
70 FR 58183
5 October 2005 EC-76
8
Certain Hot-Rolled Carbon Steel Flat Products
From the Netherlands
USDOC No: A-421-807
72 FR 7604
16 February 2007
(PRELIMINARY
RESULTS)
(ORDER
REVOKED)
EC-77
9 Stainless Steel Sheet & Strip In Coils From Italy
USDOC No: A-475-824
69 FR 67894
22 November 2004

EC-69
10 Certain Pasta From Italy
USDOC No: A-475-818
72 FR 5266
5 February 2007
(PRELIMINARY
RESULTS)
EC-78
11 Brass Sheet & Strip From Germany
USDOC No: A-428-602
71 FR 4348
26 January 2006 EC-79

7.191 We recall our finding above (para. 7.77) that th e preliminary determinations identified in the
EC's panel request fall outside our terms of refere nce in these proceedings. The three sunset reviews
in the table above in connection with which th e European Communities is challenging the USDOC's
preliminary determinations, therefore, will not be a ffected by our findings regarding zeroing in sunset

reviews.152 Our findings will only apply to eight of the 11 sunset determinations in the mentioned
table.
(b) Legal Analysis
7.192 We note that the resolution of the EC's claim regarding the USDOC's de terminations in the
eight sunset reviews at issue raises two issues: (a) Can the authorities rely on past dumping margins
obtained through zeroing, in making their determina tion regarding the likelihood of continuation or
recurrence of dumping in a sunset review? and (b ) Did the USDOC rely on past dumping margins
obtained through zeroing in making its likelihood determ inations in the sunset reviews at issue in
these proceedings?
7.193 With regard to the first issue, we shall commenc e our analysis with the text of Article 11.3 of
the Agreement. Article 11.3 reads:
"Notwithstanding the provisi ons of paragraphs 1 and 2, any definitive anti-dumping
duty shall be terminated on a date not la ter than five years from its imposition (or
from the date of the most recent review under paragraph 2 if that review has covered
both dumping and injury, or under this pa ragraph), unless the authorities determine,
in a review initiated before that da te on their own initiative or upon a duly
substantiated request made by or on be half of the domestic industry within a
reasonable period of time prior to that date, that the expiry of the duty would be likely
to lead to continuation or recurrence of dumping and injury. The duty may remain in
force pending the outcome of such a review." (footnote omitted)
7.194 Article 11.3 provides that an anti-dumping dut y shall terminate after five years from its
imposition unless the authorities determine, before th e expiry of the five-year period, that such
termination would lead to continuation or recurre nce of dumping and injury. It does not, however,
clarify the nature of such determination. Speci fically, it does not mention whether the authorities can
rely on past dumping margins in determining whet her the termination of the duty would lead to
continuation or recurrence of dumping and injury. Th is particular issue has arisen in WTO dispute
settlement and the Appellate Body has made findings on it. In US – Corrosion-Resistant Steel Sunset
Review, the Appellate Body held that "authorities c onducting a sunset review must act with an
appropriate degree of diligence and arrive at a reasoned conclusion on the basis of information
gathered as part of a process of reconsideration and examination".
153 The Appellate Body also
reasoned that the authorities are not required to calculate, or rely on, dumping margins in making their
likelihood determination. If, however, they choose to do so, such margins have to conform to the
disciplines embodied in Article 2 of the Agreement. Otherwise, the likelihood determination would

152 The order in Certain Hot-Rolled Carbon Steel Flat Products From the Netherlands (Exhibit EC-77)
was revoked on 23 April 2007. The effective date of revocation was subsequently changed to
29 November 2006. See, Response of the United States to Question 2(d) from the Panel Following the Second
Meeting. Both parties, in their Responses to Question 2(d) from the Panel Following the Second Meeting,
expressed agreement that the Panel could, in principle, make findings on a revoked measure. The
European Communities further stated that it would su ffice if the Panel only made findings regarding this
measure and not made recommendations. As stated in para. 7.77 above, the order at issue is not within our
terms of reference because it is one of the four prelimin ary measures identified in the EC's panel request. We
therefore need not, and do not, assess the issue of whether it would be appropriate to make findings and/or
recommendations with regard to this revoked order.
153 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review, supra, note 56, para. 111.

be inconsistent with Article 11.3 of the Agreement.
154 That is, reliance on WTO-inconsistent margins
would, in the Appellate Body's view, taint the authorities' sunset determination.155
7.195 The Appellate Body also applied this reasoning in the subsequent US – Zeroing (Japan)
dispute and held:
"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'. The Panel further found that these margins were calculated during
periodic reviews 'on the basis of simple zeroing'."156 (footnotes omitted)
"We have previously concluded that zeroing, as it relates to periodic reviews, is
inconsistent, as such, with Article 2.4 and Article 9.3. As the likelihood-of-dumping
determinations in the sunset reviews at issue in this appeal relied on margins of
dumping calculated inconsistently with the Anti-Dumping Agreement , they are
inconsistent with Article 11.3 of that Agreement." 157 (footnote omitted, emphasis in
original)
7.196 We find convincing the Appellate Body's reasoni ng that to the extent margins relied on in
sunset determinations are WTO-inconsistent the resulting sunset determination is also rendered WTO-
inconsistent. We have f ound model zeroing in investigations to be inconsistent with Article 2.4.2 of
the Anti-Dumping Agreement, and simple zeroing in periodic reviews to be inconsistent with
Article VI:2 of the GATT 1994 and Article 9.3 of the Anti-Dumping Agreement (paras. 7.111 and
7.183, respectively). We shall, therefore, find th at the USDOC's determinations in the eight sunset
reviews at issue were inconsistent with the USDOC obligation under Article 11.3 of the Agreement, if
we find that the USDOC in those determinations relied on margins obtained through model zeroing in
prior investigations or simple zeroing in prior periodic reviews.
7.197 This brings us to the second issue that we ha ve identified at the outset of our analysis, i.e.,
whether the European Communities has demonstrated as a matter of fact that the USDOC relied, in
the sunset reviews at issue, on prior margins obtained through zeroing.
7.198 The European Communities generally argues that in the sunset reviews at issue, the USDOC
used zeroed margins from prior investigations and periodic reviews. 158 We note, however, that the
European Communities builds its claim mainly on th e use of margins obtained through model zeroing
in the underlying investigations. 159 As the factual basis of this assertion, the European Communities
submitted to the Panel copies of the Issues and De cision Memoranda issued by the USDOC in the
sunset reviews at issue. The European Co mmunities argues, and the United States acknowledges 160,
that in the sunset reviews at issue, the USDOC used margins obtained in the underlying
investigations. The European Communities recalls that on 22 February 2007, the United States
formally changed its calculation methodology in i nvestigations and abolished model zeroing. The
European Communities contends that since the i nvestigations from which the USDOC took margins

154 Ibid., para. 127.
155 Ibid.
156 Appellate Body Report, United States – Measures Relating to Zeroing and Sunset Reviews ("US –
Zeroing (Japan)"), WT/DS322/AB/R, adopted 23 January 2007, para. 184.
157 Ibid., para. 185.
158 See, for instance, First Written Submission of the European Communities, paras. 242 and 263.
159 See, for instance, Comments of the European Communities on the US Response to Question 2(a)
from the Panel Following the Second Meeting.
160 Response of the United States to Question 2(e) from the Panel Following the Second Meeting.

in the sunset reviews at issue were carried out befo re this date, it is clear that such margins were
calculated through model zeroing.161
7.199 The mentioned policy change, published in the Federal Register, provides in relevant parts:
"The Department will no longer make average-to-average comparisons in
investigations without providing offsets for non-dumped comparisons."162
7.200 The United States does not deny this policy cha nge. Nor does it contest the EC's argument
that the investigations at issue were carried out before the effective date of the mentioned policy
change. It asserts, however, that "[s]uch a general statement ... does not provide specific evidence as
to whether zeroing was employed in the margins relied upon in each of the challenged sunset
reviews".
163 We disagree with the United States. We note that the European Communities has
submitted copies of the Memoranda prepared by the USDOC, which show that the latter used margins
obtained in the underlying investigations, carried out before the effective date of the USDOC's policy
change regarding margin calculations in investig ations. Thus, the European Communities has shown
prima facie that the margins in the investigations at i ssue were obtained through model zeroing. The
United States has not, however, submitted evidence to rebut this assertion. We therefore consider that
the European Communities has demonstrated that in the eight sunset reviews at issue, the USDOC
relied, either exclusively or along with margin s obtained in prior periodic reviews, on margins
obtained through model zeroing in prior investigations.
7.201 The United States posits that "[t]he [European Communities] has not demonstrated that a
calculation done in accordance with the EC's approach would result in zero or de minimis dumping
margins in the cited cases, leading to a revocation of the order". 164 The issue that the US argument
raises is whether the impact of zeroing on the margin s used by the USDOC in the sunset reviews at
issue has any bearing on the consistency with Article 11.3 of the USDOC's sunset determinations. In
our view, the impact of zeroing on the magnitude of margins obtained in the original investigations or
periodic reviews is not relevant to the WTO-consis tency of a subsequent sunset review where such
zeroed margins are used. To the extent that a su nset determination is based on previous margins
obtained through a methodology that is WTO-inconsis tent, the resulting sunset determination would
also become WTO-inconsistent.
7.202 Based on the foregoing, we find that the United States acted inconsistently with its obligations
under Article 11.3 of the Agreement by relying, in the eight sunset reviews at issue, on margins
obtained through model zeroing in prior investigatio ns. Having found that the United States violated
Article 11.3 of the Agreement in the sunset review s at issue, we need not, and do not, make findings
with regard to the EC's claims under Articles 2.1, 2.4, 2.4.2 and 11.1 of the Agreement.
VIII. CONCLUSIONS AND RECOMMENDATIONS
8.1 On the basis of the above findings, we conclude that:

161 Response of the European Communities to Question 2(b) from the Panel Following the Second
Meeting.
The United States argues that the EC's submission of new evidence, along with its Response to
Question 2(b) from the Panel Following the Second Meetin g, was inconsistent with Article 14 of our Working
Procedures. Comment of the United States on the EC's Response to Question 2(b) from the Panel Following the
Second Meeting. For the reasons that we have explai ned in paras. 7.147-7.149 above, we reject the US
contention. In any event, we note that we have not relied on the information at issue in our report.
162 Exhibit EC-90, p. 77722.
163 Comment of the United States on the EC's Response to Question 2(b) from the Panel Following the
Second Meeting.
164 First Written Submission of the United States, para. 154.

(a) The 14 anti-dumping proceedings that were id entified in the EC's panel request but
not in its consultations request are within our terms of reference,
(b) The EC's claims in connection with the c ontinued application of the 18 anti-dumping
duties are not within our terms of reference,
(c) The EC's claims regarding the four prelimin ary determinations identified in its panel
request are outside our terms of reference,
(d) The United States acted inconsistently
 with the obligation set out under Article 2.4.2
by using model zeroing in the four investigations at issue in this dispute,
(e) The United States acted inconsistently with its obligations under Article VI:2 of the
GATT 1994 and Article 9.3 of the Anti-Du mping Agreement by applying simple
zeroing in the 29 periodic reviews at issue in this dispute,
(f) The United States acted inconsistently with its obligations under Article 11.3 of the
Agreement by using, in the eight sunset reviews at issue in this dispute, dumping
margins obtained through model zeroing in prior investigations.
8.2 We have applied judicial economy with regard to:
(a) The EC's claims under Article 2.4 of the Anti-Dumping Agreement and Articles VI:1
and VI:2 of the GATT 1994 regarding the use of model zeroing in the four
investigations at issue in this dispute,
(b) The EC's claims under Articles 2.1, 2.4, 2.4.2 and 11.2 of the Anti-Dumping
Agreement regarding the use of simple zeroing in the 29 periodic reviews at issue in
this dispute,
(c) The EC's claims under Articles 2.1, 2.4, 2.4.2 and 11.1 of the Agreement regarding
the use, in the eight sunset reviews at issu e in this dispute, of margins obtained in
prior proceedings through the zeroing methodology.
8.3 We recommend that the DSB request the United States to bring its measures mentioned in
paragraphs 8.1(d), 8.1(e) and 8.1(f) above into conformity with its obligations under the WTO
Agreement.
8.4 The European Communities requests that we make a suggestion under the second sentence of
Article 19.1 of the DSU. The European Communities as ks the Panel to suggest that the steps that the
United States might take in the implementation of the DSB recommendations and rulings following
this dispute should be WTO-cons istent, particularly with regard to the issue of zeroing.
165 T h e
United States submits that there is no basis in the DSU for a panel to make a suggestion for the
purposes of avoiding unnecessary discussions about what might or might not fall within the scope of a
compliance panel. According to the United St ates, "[i]t is unreasonable that the [European
Communities] is even asking this Panel to start fro m the premise that there would be a dispute as to
compliance".166
8.5 Article 19.1 of the DSU provides:

165 Closing Statement of the European Communities at the Second Meeting.
166 Comment of the United States on the EC's Response to Question 4 from the Panel Following the
Second Meeting.

"Where a panel or the Appellate Body concl udes that a measure is inconsistent with a
covered agreement, it shall recommend that the Member concerned bring the measure
into conformity with that agreement. In addition to its recommendations, the panel or
Appellate Body may suggest ways in which the Member concerned could implement
the recommendations." (footnotes omitted)
8.6 Article 19.1 stipulates that when a panel or the Appellate Body finds a measure to be
inconsistent with a covered ag reement, it shall recommend that the measure be brought into
conformity with the relevant agreement. Furthermor e, it states that the panel or the Appellate Body
may suggest ways in which such recommendation may be implemented.
8.7 Having found that the United States acted incons istently with certain obligations that it
assumed under the Anti-Dumping Agreement and the GATT 1994 a nd having made our
recommendation as stipulated under Article 19.1, we decline to make a suggestion on how the DSB
recommendations and rulings may be implemented by the United States. In our view, it is evident
under the DSU, particularly Article 19.1 thereof, that Members must implement DSB
recommendations and rulings in a WTO-consistent manner. We cannot presume that Members might
act inconsistently with their WTO obligations in the implementation of DSB recommendations and
rulings. We therefore reject the EC's request.
IX. SEPARATE OPINION BY ONE MEMBER OF THE PANEL WITH REGARD TO
THE EUROPEAN COMMUNITIES' CL AIMS REGARDING ZEROING IN
INVESTIGATIONS AND ZEROING IN PERIODIC REVIEWS
9.1 I agree with the conclusions reached by the majo rity of the Members of this Panel regarding
all the claims raised by the European Communities in this dispute. I, however, disagree with the legal
reasoning developed by the majority regarding the EC 's claims on simple zeroing in periodic reviews,
and, in part
167, model zeroing in investigations and provide my opinion below.
9.2 I recall that zeroing disputes now have a long history in WTO dispute settlement and that
different panels and the Appellate Body have expressed their views on different types of zeroing on
multiple occasions.168 Although my views generally overlap w ith the Appellate Body's reasoning on
zeroing, I would like to emphasize that they re flect my objective examination of the facts and the
legal issues presented in this case, as required u nder Article 11 of the DSU, and not a simple
acceptance of the Appellate Body's opinion.
9.3 Considering that the approach that I take with regard to model zeroing in investigations and
simple zeroing in periodic reviews has been analy sed in great detail by the Appellate Body, I do not
intend to address all such details here. Instead, I shall emphasize the main points of my disagreement
with the majority's reasoning in this dispute.
9.4 The majority considers that a permissible in terpretation of the Anti-Dumping Agreement is
that dumping may be determined in connection with individual export transactions. I note, however,
that the majority also considers the alternative interpretation, i.e., that dumping may be determined for
the product under consideration as a whole, to be permissible within the meaning of Article 17.6(ii) of
the Anti-Dumping Agreement. 169 The issue, therefore, is whether the relevant provisions of the

167 My legal reasoning regarding model zeroing in investigations differs from that of the majority in
that, unlike the majority, I consider that model zeroing in investigations is inconsistent with Article 2.1 of the
Agreement because it precludes a determination of dumping for "the product under consideration as a whole", in
addition to being inconsistent with Article 2.4.2 as reasoned by the majority.
168 I would like to note that the approach described in footnote 112 above, also applies to my separate
opinion.
169 Supra, footnote 131.

Agreement allow more than one permissible interp retation regarding the WT O-consistency of model
zeroing in investigations and simple zeroing in periodic reviews.
9.5 In this regard, I agree with the view expressed by the Appellate Body that under Articles VI:1
and VI:2 of the GATT 1994 and Article 2.1 of the Anti-Dumping Agreement, "dumping" and
"margins of dumping" can only be found for the pr oduct under consideration as a whole. Like the
Appellate Body, I am of the view that there would be an anomaly if multiple margins were calculated
for the same exporter. In my view, a determination of dumping for the product under consideration as
a whole is also necessary in order to make a de termination regarding the volume of dumped imports,
injury and causal link.
170
9.6 In addition, I disagree with the majority's opinion that dumping is not necessarily and
exclusively an exporter-specific concept and that one can calculate an impor ter-specific margin of
dumping. In this regard, I find convincing the Appell ate Body's point of view that both Article VI:1
of the GATT 1994 and Article 2.1 of the Anti-Dump ing Agreement support the notion that dumping
necessarily reflects the exporter's behaviour. Furthermore, I agree with the contextual support that the
Appellate Body found in Articles 2.3, 5.2(ii), 6.1.1, 6.7, 5.8, 6.10, 9.5, 8.1, 8.2, 8.5 and 9.4(i) and (ii)
of the Anti-Dumping Agreement for the exporter-s pecific nature of dumping. In my view, no
provision in the Agreement suggests that dumpi ng margins may be established for individual
importers. Furthermore, I am of the view that th e reference to "margin of dumping" in Article 9.3
indicates that dumping may only be determined consis tently with the provisions of Article 2 and in
relation to the product under consideration as a whole for an exporter.
9.7 I disagree with the concerns expressed by the majority in this case that the prohibition of
simple zeroing in periodic reviews would favour importers with high margins vis-à-vis importers with
low margins. How an anti-dumping duty is to be coll ected is for the authorities to determine, the only
requirement is that the duty collected not exceed the exporter-specific margin of dumping calculated
for the product under consideration as a whole.
9.8 Although the majority refers to the report of a Group of Experts that convened in 1960, I do
not consider that it is necessary to have recourse to supplementary means of interpretation for the
textual interpretation makes it sufficiently clear th at dumping may only be determined for exporters
and in connection with the product under consideration as a whole.
9.9 I do not agree with the majority that the recognition of a prospective normal value system in
Article 9.4(ii) of the Anti-Dumping Agreement reinforces the argument that dumping may be
determined on the basis of individual export tran sactions. This reasoning mixes duty collection at the
time of importation with a determination of final duty liability. Article 9.3 of the Agreement makes it
clear that the amount of the duty collected at the time of importation does not represent a margin of
dumping. The duty collected at the time of importation, in my view, is subject to review under Article
9.3.2. I see nothing in the Agreement to suggest that the duty collected in a prospective normal value
system is exempt from a review under Article 9.3.
9.10 The majority expresses the view that certain qu estions relating to the alleged mathematical
equivalence between the first and the third met hodologies, in case zeroing is generally prohibited,
have not been addressed by the Appellate Body. In this regard, I would recall, and agree with, the
Appellate Body's explanation that, being an exceptio n to the two methodologies set out under the first
sentence of Article 2.4.2, the third methodology ca nnot be used as a basis to interpret such other
methodologies. Secondly, as noted by the Appella te Body, one could argue that if zeroing was

170 I would like to note that my views regarding "product under consideration as a whole" apply both to
model zeroing in investigations and simple zeroing in periodic reviews.

permitted under the first sentence of Article 2.4.2, this would enable investigating authorities to
capture pricing patterns constituting targeted dumping, thus rendering the third methodology inutile.