UNITED STATES – ANTI-DUMPING MEASURES ON CERTAIN SHRIMP AND DIAMOND SAWBLADES FROM CHINA
Document: Agreement on Procedures between China and the United States
Date: 14 October 2011
Document codes: WT/DS422/4
Complainant: China
Respondent: U.S.
Third parties: EU, Honduras, Japan, South Korea, Thailand, Vietnam
Dispute stage: Panel
Agreements cited: Art. 2.4.2  Anti-dumping

UNITED STATES – ANTI-DUMPING MEASURES ON CERTAIN
SHRIMP AND DIAMOND SAWBLADES FROM CHINA

Agreement on Procedures between China and the United States

 The following communication, dated 13 October 2011, from the delegation of China and the
delegation of the United States to the Chairperson of the Dispute Settlement Body, is circulated at the
request of those delegations.

 The People's Republic of China ("China") and the United States of America would like to
inform the Dispute Settlement Body of the attach ed Agreement on Procedures between China and the
United States with respect to the dispute (DS422).

We request that you please circulate the attached agreement to the Members of the Dispute Settlement
Body in the WT/DS422 document series.

United States - Anti-Dumping Measures on Certain Shrimp and Diamond Sawblades from China
(WT/DS422)

Agreement on Procedures between China and the United States

On February 28, 2011, the Government of Chin a ("China") requested consultations with the
United States under Article 4 of the Understanding on Rules and Procedures Governing the
Settlement of Disputes ("DSU"), Article XXII:1 of the General Agreement on Tariffs and Trade 1994
("GATT 1994"), and Article 17 of the Agreement on Implementation of Article VI of the General
Agreement on Tariffs and Trade 1994 ("Anti-Dumping Agreement"), with respect to anti-dumping
measures on certain frozen warmwater shrimp from China. (). On July 22, 2011, China
requested additional consultations with respect to anti-dumping measures on diamond sawblades and
parts thereof from China. ( 1). On May 11, 2011 and September 8, 2011,
consultations were held by China and the United St ates (hereinafter the "parties"); together these
consultations covered all the measure s referenced in the Panel Request pursuant to Article 6.2 of the
DSU. These consultations have enabled the parti es to agree on the following procedures for purposes
of this dispute:
1. Should China request the establishment of a panel in this dispute, China's panel request will
be the one attached to this agreement (the "Pan el Request"). The United St ates will not oppose the
establishment of a panel at the first Dispute Settleme nt Body ("DSB") meeting following the filing of
the Panel Request by China. The pa rties agree to make every effort to ensure that they compose the
panel without recourse to the Director-General under Article 8.7 of the DSU.
2. The parties will cooperate to enable the panel to circulate its report as quickly as possible in
light of the requirements of the DSU. To that end, the parties will work to reach agreement on
working procedures that aim to expedite the panel proceedings. The parties will jointly ask the panel
to adopt these procedures, which will enable it to co mplete its work within three months after the
composition of the panel. The parties also agree to request the panel to ask that the parties file only
one written submission each, and that the panel forego meetings with the parties, or, at most, have
only one substantive meeting with the parties. The parties also agree to share drafts of their respective
written submissions prior to submitting them to the pa nel and to take all reasonably available steps to
accelerate the proceeding.
3. China will provide the necessary evidence and argu ments to support its allegations, including
the computer programs and output logs generated by the United States Department of Commerce that
were used to calculate the challenged dumping marg ins. The United States will not contest China's
claim that the measures identified in the Panel Requ est are inconsistent with Article 2.4.2, first
sentence, of the Anti-Dumping Agreement, on the grounds stated in United States - Final Dumping
Determination on Softwood Lumber from Canada , WT/DS264/AB/R, Report of the Appellate Body
adopted 31 August 2004.
4. China will not request that the panel suggest, pur suant to Article 19.1, second sentence, of the
DSU, ways in which the United States could implement the panel's recommendations.
5. Provided that the panel's finding is limited to a finding that one or more of the challenged
measures, as identified in the Panel Request, is incons istent with Article 2.4.2, first sentence, of the
Anti-Dumping Agreement, the parties agree that, pursuant to Article 21.3(b) of the DSU, the
reasonable period of time for bringing each such measure into conformity with the Anti-Dumping
Agreement will be eight months, beginning on the date on which the DSB adopts the panel report.

6. Subject to the consultation requirements of sec tion 129(b) of the Uruguay Round Agreements
Act ("URAA"), 19 U.S.C. §3538(b), the United States will use section 129(b) to recalculate margins
of dumping (subject to the exclusion of Zhanjiang G uolian Aquatic Products Co., Ltd, in paragraph 7,
below) and to issue a new determination in orde r to render the anti-dumping measures on certain
frozen warmwater shrimp from China and the anti-dumping me asures on diamond sawblades and
parts thereof from China consistent with the r ecommendations and rulings of the DSB and the Anti-
Dumping Agreement. In particular, the Unite d States will implement such recommendations and
rulings in respect of the Final Determination, as amended by any and all amended final determinations
which are effective at the time of implementation. If any such recalculation that is performed under
section 129(b) results in a change in a cash deposit rate or revocation, in part or in whole, for the anti-
dumping measures on certain frozen warmwater shri mp from China or the anti-dumping measures on
diamond sawblades and parts thereof from China, th e new cash deposit rate or revocation will have
prospective effect only, taking effect no sooner than the date on which the United States Trade
Representative directs the United States Secretary of Commerce to implement its recalculation of the
margins and new determination, as set forth in section 129(c)(1) of the URAA, 19 U.S.C. §
3538(c)(1).
7. The parties also mutually understand that the scope of China's Panel Request does not include
any claim regarding the margin of dumping calcu lated for Zhanjiang Guolia n Aquatic Products Co.,
Ltd. in the anti-dumping duty investigation on certa in frozen warmwater shrimp from China or the
margin of dumping determined solely on the basis of adverse facts available in either anti-dumping
duty investigation. The parties agree that they will inform the panel in their written submissions,
whether made jointly or separately, that they are seeking findings consistent with this understanding.
Accordingly, to the extent that the findings ar e consistent with this understanding, implementation
would not involve a recalculation of such margins of dumping.

For The People's Republic of China

Mme. ZHAO Hong
Chargé d'Affaires
For the United States of America

H.E. Mr. Michael Punke
Ambassador

ANNEX

 (WT/DS422)
Request for the Establishment of a Panel by China
On February 28, 2011 and July 22, 2011, the People's Republic of China ("China") requested
consultations with the United States of America pursuant to Article 4 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes ("DSU"), Article XXII:1 of the General
Agreement on Tariffs and Trade 1994 ("GATT 1994") and Article 17 of the Agreement on
Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 ("Anti-Dumping
Agreement") with regard to the "zeroing" practi ce by the United States Department of Commerce (
"USDOC") in its anti-dumping measures on certain frozen warmwater shrimp from China 1 and
diamond sawblades and parts thereof from China2 respectively.
Consultations were held on May 11, 2011 and September 8, 201 1. While these consultations
assisted in clarifying the issues before the parties, they failed to resolve the dispute.
Therefore, China respectfully requests, pursuan t to Article XXIII of the GATT 1994, Articles
4 and 6 of the DSU, and Article 17.4 of the Anti- Dumping Agreement, that the Dispute Settlement
Body ("DSB") establish a panel to examine this matter.
Specific Measures at Issue
(1) Frozen Warmwater Shrimp
The United States initiated an anti-dumping inves tigation of certain frozen warmwater shrimp
from China on January 27, 2004 (Investigation No. A–570–893). The specific measures at issue in
this dispute are the anti-dumping order imposed by the United States on certain frozen warmwater
shrimp from China, as amended, and the final dete rmination by the USDOC, as amended, leading to
that order. To be specific, these measures include:
 Notice of Final Determination of Sales at Less Than Fair Value: Certain Frozen and Canned
Warmwater Shrimp From the People's Republic of China , 69 Federal Register 70997
(December 8, 2004);
 Notice of Amended Final Determination of Sal es at Less Than Fair Value and Antidumping
Duty Order: Certain Frozen Warmwater Shr imp From the People's Republic of China , 70
Federal Register 5149 (February 1, 2005);
 Certain Frozen Warmwater Shrimp from the People's Republic of China: Notice of Second
Amended Final Determination of Sales at Less Than Fair Value ， 71 Federal Register 47484
(August 17, 2006);
 Certain Frozen Warmwater Shrimp From Brazil, India, the People's Republic of China,
Thailand, and the Socialist Republic of Vietnam: Notice of Amended Final Determinations of
Sales at Less Than Fair Value Pursuant to Court Decision , 75 Federal Register 53947
(September 2, 2010);

1 See G/ADP/D87/1, G/L/953, WT/DS422/1.
2 See G/ADP/D87/1/Add.1, G/L/953/Add.1, WT/DS422/1/Add.1.

 Certain Frozen Warmwater Shrimp From Brazil, India, the People's Republic of China,
Thailand, and the Socialist Republic of Vi etnam: Amended Antidumping Duty Orders in
Accordance with Final Court Decision, 76 Federal Register 23277 (April 26, 2011);3
 Certain Frozen Warmwater Shrimp From the Pe ople's Republic of China: Notice of Amended
Final Determination of Sales at Less Than Fair Value Pursuant to Court Decision , 76 Federal
Register 30100 (May 24, 2011);
 as well as any amendments to the measures identified above.
In the final determination, as amended, th e USDOC used the "zeroing" methodology in
determining the final dumping margins for thr ee individually investigated Chinese exporters 4, for
which margins above the 2 per cent de minimis level were calculated.

(2) Diamond Sawblades and Parts Thereof

The United States initiated an anti-dumping i nvestigation of diamond sawblades and parts
thereof from China on June 21, 2005 (Investigation No. A-570-900). The specific measures at issue
in this dispute are the anti-dumping order imposed by the United States on diamond sawblades and
parts thereof from China, as amended, and the final determination by the USDOC, as amended,
leading to that order. To be specific, these measures include:
 Final Determination of Sales at Less Than Fair Value and Final Partial Affirmative
Determination of Critical Circumstances: Di amond Sawblades and Parts Thereof from the
People's Republic of China, 71 Federal Register 29303 (22 May 2006);
 Notice of Amended Final Determination of Sales at Less Than Fair Value: Diamond
Sawblades and Parts Thereof from the People's Republic of China, 71 Federal Register 35864
(22 June 2006);
 Diamond Sawblades and Parts Thereof from the Pe ople's Republic of China and the Republic
of Korea: Antidumping Duty Orders, 74 Federal Register 57145 (4 November 2009);
 as well as any amendments to the measures identified above.
In the final determination, as amended, th e USDOC used the "zeroing" methodology in
determining the final dumping margins for thr ee individually investigated Chinese exporters
5, for
which margins above the 2 per cent de minimis level were calculated.

3 On April 29, 2011, as a result of the determinations by the USDOC and the International Trade
Commission (“ITC”) that revocation of the antidumping duty orders on certain frozen warmwater shrimp from
Brazil, India, China, Thailand, and the Socialist Republic of Vietnam (“Vietnam”) would be likely to lead to
continuation or recurrence of dumping and of material in jury to an industry in the United States within a
reasonably foreseeable time, the USDOC published a notice of the continuation of these antidumping duty
orders. See Certain Frozen Warmwater Shrimp From Brazil, India, the People’s Republic of China, Thailand,
and the Socialist Republic of Vietnam: Continuation of Antidumping Duty Orders , 76 Federal Register 23972
(April 29, 2011).
4 The three exporters are Allied P acific Group ("Allied"), Yelin Enterprise Co Hong Kong ("Yelin")
and Shantou Red Garden Foodstuff Co., Ltd. ("Red Garden").
5 The three exporters are Advanced Technology & Materials Co., Ltd. (including Beijing Gang Yan
Diamond Products Company and Yichang HXF Circular Saw Industrial Co., Ltd.) (“AT&M”), Bosun Tools
Group Co., Ltd. (“Bosun”) and Hebei Jikai Industrial Group Co., Ltd. (“Hebei Jikai”).

In respect of the two investigations identif ied above, the USDOC's methodology of "zeroing"
negative dumping margins may be described more specifically in the following:
a) different "models", i.e., types, of products are identified based on the most relevant
product characteristics;
b) weighted average prices in the United States and weighted average normal values in the
comparison market are calculated on a model-specific basis for the entire period of
investigation;
c) the weighted average normal value of each m odel is compared to the weighted average
United States price for that same model;
d) to calculate the dumping margin for an exporter, the amount of dumping for each model
is summed and then divided by the aggregated United States price for all models; and
e) before summing the total amount of dumping for all models, all negative margins on
individual models ( i.e., where the weighted average normal value is less than the
weighted average export price ) are set to zero.
Through this method, the USDOC calculates margins of dumping and collects cash deposits in
amounts that exceed the actual extent of dumping, if any, by the said individually investigated
exporters.
In addition, in respect of the anti-dumping inv estigation of certain frozen warmwater shrimp,
on the basis of the individual dumping margins cal culated with the application of zeroing, the
USDOC further calculated a weighted-average margin (known as the "separate ra te") that applies to
the cooperating non-mandatory respondents6.
The USDOC's unpublished Issues and Decisi on Memorandums as well as other documents
contained in the administrative record of the investigations, including the computer programs,
describe in more detail the USDOC's use of zeroi ng in the anti-dumping investigations of frozen
warmwarter shrimp and diamond sawblades and parts thereof from China.
China considers that these measures are inconsiste nt with the obligations of the United States
under the provisions of the GATT 1994 and the Anti-Dumping Agreement described below.
The Legal Basis of the Complaint
Through the use of "zeroing," the United States treats transactions with negative dumping
margins as having margins equal to zero in determ ining weighted average dumping margins in an
anti-dumping investigation.
The use of "zeroing" led the United States to find dumping where none would have otherwise
been found or to calculate dumping margins that ar e inflated. China considers that, in the specific
measures at issue as identified above, the USDOC' s use of "zeroing" in cal culating the margins of
dumping for the individually investigated exporters and the "separate rate" for the cooperating non-
mandatory respondents is inconsistent with th e obligations of the United States under the Anti-
Dumping Agreement. Specifically, China considers th at the measures are inconsistent with the first
sentence of Article 2.4.2 of the Anti-Dumping Agreement.

6 Such non-mandatory respondents were also required to pass the "separate-rate test" in order to receive
the separate rate.

The "zeroing" methodology that the USDOC used in its anti-dumping investigations of shrimp
and diamond sawblades from China is virtually iden tical to the methodology that was held to be
inconsistent with the obligations of the Unite d States under the Anti-Dumping Agreement in the
following disputes: United States - Final Dumping Determination on Softwood Lumber from
Canada7; United States - Anti-Dumping Measures On Shrimp from Ecuador 8; United States - Anti-
Dumping Measures on Polyethylene Retail Carrier Bags from Thailand 9; and United States -
Measures Relating to Shrimp from Thailand10.
The forgoing paragraphs are provided without prejudice to any arguments that China may
develop and present to the panel regarding the WTO-inconsistency of the measures at issue.
Request for the Establishment of a Panel
Accordingly, China requests pursuant to Article XXIII of the GATT 1994, Articles 4 and 6 of
the DSU, and Article 17.4 of the Anti-Dumping Agr eement, that the DSB establish a panel with the
standard terms of reference as set out in Article 7.1 of the DSU. China asks that this request be placed
on the agenda of the meeting of the DSB scheduled for October 25, 2011.