UNITED STATES – SUNSET REVIEW OF ANTI-DUMPING DUTIES ON CORROSION- RESISTANT CARBON STEEL FLAT PRODUCTS FROM JAPAN
Document: Report of the Appellate Body
Date: 15 December 2003
Document codes: WT/DS244/AB/R
Complainant: Japan
Respondent: U.S.
Third parties: Brazil, Canada, Chile, EU, India, South Korea, Norway
Dispute stage: Appellate Body
Agreements cited: Art. VI, X  GATT 1994Art. 2, 3, 5, 6, 11, 12, 18.3, Annex II  Anti-dumpingArt. XVI:4  Agreement Establishing the World Trade Organization

UNITED STATES – SUNSET REVIEW OF ANTI-DUMPING DUTIES ON CORROSION-
RESISTANT CARBON STEEL FLAT PRODUCTS FROM JAPAN

AB-2003-5

Report of the Appellate Body

APPELLATE BODY

United States – Sunset Review of Anti-
Dumping Duties on Corrosion-Resistant
Carbon Steel Flat Products from Japan

Japan, Appellant
United States, Appellee

Brazil, Third Participant
Chile, Third Participant
European Communities, Third Participant
India, Third Participant
Korea, Third Participant
Norway, Third Participant

 AB-2003-5

 Present:

 Taniguchi, Presiding Member
 Abi-Saab, Member
 Ganesan, Member

I. Introduction
1. Japan appeals certain issues of law and lega l interpretations in the Panel Report,
United States – Sunset Review of Anti-Dumping Duties on Corrosion-Resistant Carbon Steel Flat
Products from Japan (the "Panel Report"). 1 The Panel was established to consider a complaint by
Japan against the United States regarding the continuation of anti-dumping duties on certain
corrosion-resistant carbon steel flat products from Japan following the conduct of a five-year, or
"sunset", review of those duties.
2. On 29 July 1992, USDOC initiated an anti-dumping investigation covering, inter alia, certain
corrosion-resistant carbon steel flat products from Japan. 2 As a result of this investigation, USDOC
issued an order on 19 August 1993, imposing de finitive anti-dumping duties on those corrosion-
resistant steel products at the rate of 36.41 percent ad valorem for KSC, NSC, and "all others". 3 On

1, 14 August 2003.
2"Initiation of Antidumping Duty Investigations and Postponement of Preliminary Determinations:
Certain Hot-Rolled Carbon Steel Flat Products, Certain Cold-Rolled Carbon Steel Flat Products, Certain
Corrosion-Resistant Carbon Steel Flat Products, and Certain Cut-to-L ength Carbon Steel Plate From Various
Countries", United States Federal Register, 29 July 1992 (Volume 57, Number 146), p. 33488. (Exhibit
JPN-12(a) submitted by Japan to the Panel)
3"Antidumping Duty Orders: Certain Corrosion-Resistant Carbon Steel Flat Products From Japan",
United States Federal Register, 19 August 1993 (Volume 58, Number 159), p. 44163. (Exhibit JPN-12(e)
submitted by Japan to the Panel)

1 September 1999, USDOC published a notice of initia tion of a sunset review of the CRS order.
4 In
the final results of that review, USDOC determined that revocation of the CRS order "would be likely
to lead to continuation or recurrence of dumping". 5 USITC subsequently determined that revocation
of the CRS order "would be likely to lead to con tinuation or recurrence of material injury to an
industry in the United States within a reasonably foreseeable time."
6 Accordingly, the United States
did not revoke the CRS order.7
3. Before the Panel, Japan argued that certain provisions of the Tariff Act 8, the SAA 9, the
implementing regulations10, and the Sunset Policy Bulletin 11 were, both "as such" and as applied in
the CRS sunset review, inconsistent with Articles VI and X of the GATT 1994, Articles 2, 3, 5, 6, 11,
12, and 18 of the Anti-Dumping Agreement, and Article XVI:4 of the WTO Agreement.12

4"Initiation of Five-Year ("Sunset") Reviews of Antidumping and Countervailing Duty Orders or
Investigations of Carbon Steel Plates and Flat Products", United States Federal Register, 1 September 1999
(Volume 64, Number 169), p. 47767. (Exhibit JPN-8(a) submitted by Japan to the Panel) "Transition orders"
are defined as orders that were in effect on 1 January 1995, when the WTO Agreement entered into force. The
CRS order is a transition order and is therefore treat ed as having been issued on 1 January 1995.
(Section 751(c)(6)(C) and (D) of the Tariff Act, Exhibit JPN-1(d) submitted by Japan to the Panel) For
transition orders, the obligation to conduct a sunset review is an obligation to conduct such a review within five
years of 1 January 1995. See also Un ited States' first submission to the Panel, para. 29 and Article 18.3 of the
Anti-Dumping Agreement.
5"Corrosion-Resistant Carbon Steel Flat Products from Japan; Final Results of Full Sunset Review of
Antidumping Duty Order", United States Federal Register, 2 August 2000 (Volume 65, Number 149), p. 47380
at p. 47381. (Exhibit JPN-8(d) submitted by Japan to the Panel)
6"Certain Carbon Steel Products from Australia, Be lgium, Brazil, Canada, Finland, France, Germany,
Japan, Korea, Mexico, The Netherlands, Poland, Romania, Spain, Sweden, Taiwan, and The United Kingdom",
USITC Publication 3364, November 2000, p. 58. (Exhibit JPN-9(b) submitted by Japan to the Panel)
7Panel Report, para. 2.1.
8Under United States statutory law, reviews of anti-dumping duty "orders" are governed primarily by
Sections 751 and 752 of the Tariff Act, which corresp ond, respectively, to Sections 1675 and 1675a of Title 19
of the United States Code. (Exhibit JPN-1(d) and (e) submit ted by Japan to the Panel) As the participants and
the Panel have referred primarily to Sections 751 and 752 of the Tariff Act, rather than to Sections 1675 and
1675a of Title 19 of the United States Code, we will also refer to the Tariff Act provisions in this Report.
9Statement of Administrative Action, H.R. 5110, H.R. Doc. 316, Volume 1, 103d Congress, 2nd
Session, 656 (1994). (Exhibit JPN-2 submitted by Japan to the Panel)
10"Procedures for Conducting Five-Year ("Sunset") Reviews of Antidumping and Countervailing Duty
Orders", United States Federal Register, 20 March 1998 (Volume 63, Number 54), p. 13516 (Exhibit JPN-5
submitted by Japan to the Panel), codified in Part 35 1 of Title 19 of the Regula tions. (Exhibit JPN-3 submitted
by Japan to the Panel)
11"Policies Regarding the Conduct of Five-Year ("Sunset") Reviews of Antidumping and
Countervailing Duty Orders; Policy Bulletin", United States Federal Register, 16 April 1998 (Volume 63,
Number 73), p. 18871. (Exhibit JPN-6 submitted by Japan to the Panel)
12Panel Report, para. 2.2. On appeal, Japan's "as such" challenges are limited to the Sunset Policy
Bulletin.

4. In the Panel Report, circulated to Members of the WTO on 14 August 2003, the Panel found
that the United States laws, regulations and policies challenged by Japan are not inconsistent with the
Anti-Dumping Agreement, the GATT 1994, or the WTO Agreement, either as such or as applied in the
CRS sunset review. Specifically, the Panel found that it did not need to address two of Japan's
claims13 and that:
(d) In respect of the dumping margins used in sunset reviews:
(i) Japan has failed to show that the Sunset Policy
Bulletin as such is inconsis tent with Articles 2.2.1,
2.2.2, 2.4, 11.3 and 18.3 of the Anti-dumping
Agreement,
…
(iii) the DOC did not act inconsistently with Article 2.4,
or, in the alternative, Article 11.3, of the Anti-
dumping Agreement regarding the administrative
review dumping margins which it relied upon as a
basis for its likelihood of continuation or recurrence
of dumping determinations in this sunset review,
…
(e) In respect of determination of likelihood of continuation or
recurrence of dumping on an order-wide basis in sunset
reviews:
(i) Japan has failed to show that the Sunset Policy
Bulletin as such is inconsistent with Articles 6.10 and
11.3 of the Anti-dumping Agreement regarding the
basis of the likelihood of continuation or recurrence
of dumping determinations in sunset reviews,
(ii) the DOC did not act inconsistently with Articles 6.10
and 11.3 of the Anti-dumping Agreement by making
its likelihood determination in this sunset review on
an order-wide basis,

13Panel Report, para. 8.1(d)(ii) (regarding USDOC's alleged reliance in the CRS sunset review on the
dumping margins determined in the original investigation) and para. 8.1(d)(iv) (regarding the reporting by
USDOC of those dumping margins to USITC for purposes of USITC's sunset review of the CRS order).

(f) In respect of the investigating authorities' obligation to
determine likelihood of continuation or recurrence of
dumping in sunset reviews:
(i) Japan has failed to show that the Sunset Policy
Bulletin as such is inconsistent with Article 11.3
regarding the investigating authorities' obligation to
determine likelihood of continuation or recurrence of
dumping in sunset reviews,
(ii) the DOC did not act inconsistently with Article 11.3
of the Anti-dumping Agreement in this sunset review
in making its determination regarding the likelihood
of continuation or recurrence of dumping,
…
(h) The US did not act inconsistently with Article 18.4 of the
Anti-dumping Agreement and Article XVI:4 of the WTO
Agreement.
14
5. Certain of these findings were based on the Pa nel's initial finding that "the Sunset Policy
Bulletin is not a mandatory legal instrument obligating a certain course of conduct and thus can not, in
and of itself, give rise to a WTO violation."
15
6. The Panel also found (and Japan does not app eal these findings) no inconsistency with the
United States' WTO obligations in respect of the ev identiary standards applicable to the self-initiation
of sunset reviews 16, the de minimis standard applicable in sunset reviews 17, cumulation in sunset
reviews18, USDOC's refusal to consider certain additional information submitted by NSC 19, or the
administration of the relevant United States laws and regulations. 20 In the light of these conclusions,
the Panel made no recommendations under Article 19.1 of the DSU.21

14Panel Report, para. 8.1.
16Panel Report, para. 8.1(a), finding no inconsistency w ith Articles 5.6, 11.1, 11.3, 12.1, or 12.3 of the
Anti-Dumping Agreement.
17Panel Report, para. 8.1(b), finding no inconsistency with Articles 5.8 or 11.3 of the Anti-Dumping
Agreement.
18Panel Report, para. 8.1(c), finding no inconsistency with Articles 3.3, 5.8, or 11.3 of the Anti-
Dumping Agreement.
19Panel Report, para. 8.1(f)(iii), finding no incons istency with Articles 6.1, 6.2, or 6.6 of the Anti-
Dumping Agreement.
20Panel Report, para. 8.1(g), finding no inconsistency with Article X:3(a) of the GATT 1994.
21Panel Report, para. 8.2.

7. On 15 September 2003, Japan notified the DSB of its intention to appeal certain issues of law
covered in the Panel Report and cer tain legal interpretations devel oped by the Panel, pursuant to
paragraph 4 of Article 16 of the DSU, and filed a Notice of Appeal pursuant to Rule 20 of the
Working Procedures .22 On 25 September 2003, Japan filed its appellant's submission. 23 O n
10 October 2003, the United States filed its appellee's submission. 24 On the same day, Brazil, Chile,
the European Communities, Korea, and Norway each filed a third participant's submission
25, and
India and Canada each notified its intention to appear at the oral hearing as a third participant.26
8. The oral hearing in the appeal was held on 30 October 2003. The participants and third
participants presented oral arguments (with the ex ception of India) and responded to questions by the
members of the Division hearing the appeal.
II. Arguments of the Participants and Third Participants
A. Claims of Error by Japan – Appellant
1. The Sunset Policy Bulletin "As Such"
9. Japan argues that the Panel erred in finding that the Sunset Policy Bulletin is not
"challengeable", as such, under the WTO Agreement. Japan asks the Appellate Body to reverse this
finding and to find that the Sun set Policy Bulletin sets forth " actionable administrative procedures"
27
that can give rise to a violation of Article 18.4 of the Anti-Dumping Agreement and Article XVI:4 of
the WTO Agreement.
10. Japan challenges the Panel's reasoning on this issu e in three respects. First, Japan argues that
the Panel erred in its analysis of the term "adm inistrative procedures" in Article 18.4 of the Anti-
Dumping Agreement . According to Japan, this term extends to the administration of anti-dumping
laws by investigating authorities and to rules adopt ed by such authorities. Moreover, existing WTO
jurisprudence recognizes that the "conformity" of a pa rticular written instrument such as the Sunset
Policy Bulletin with WTO rules and norms depends on its true nature and the manner in which it is
applied, rather than on its form or language alone . For this reason, Japan maintains that the term

22WT/DS244/7, 17 September 2003, attached as Annex 1 to this Report.
23Pursuant to Rule 21 of the Working Procedures.
24Pursuant to Rule 22 of the Working Procedures.
25Pursuant to Rule 24(1) of the Working Procedures.
26Pursuant to Rule 24(2) of the Working Procedures . By letter dated 14 October 2003, Canada
withdrew its notification and informed the Appellate Body that it would not attend the oral hearing.

"administrative procedures" encompasses administrativ e rules that appear to be discretionary but in
fact operate "substantively and effectively" as "mandatory rules."

28
11. Japan also asserts that the Panel erred in applying its own interpretation of the term
"administrative procedures" in Article 18.4. The Pane l stated that the Sunset Policy Bulletin is not an
administrative procedure under Article 18.4 because it is not a "pre-established rule that mandates
certain conduct for sunset reviews."
29 However, the Sunset Policy Bulletin was published before
USDOC had conducted any sunset review, and USDOC has consistently applied the rules therein in
all sunset reviews. Although the Sunset Policy Bulle tin is described in its own terms as "guidance",
this does not mean that it grants USDOC discretion to act in a WTO-consistent manner. In fact, the
Sunset Policy Bulletin contains explicit, written inst ructions to USDOC staff and is an official
instrument published in the United St ates Federal Register. Japan cont ends that the mandatory nature
of the Sunset Policy Bulletin is confirmed by its u se of the word "will" and by the fact that USDOC
strictly and consistently adheres to it, never having departed from it in more than 200 sunset reviews.
This conclusion cannot be changed simply by asser ting that USDOC may choose to depart from the
Sunset Policy Bulletin at some point in the future.
12. Second, Japan contends that the Panel inco rrectly applied the mandatory/discretionary
distinction. This distinction reflects a policy adopte d by certain panels rather than the text of the
covered agreements. In the present case, the Pane l should have examined the actual operation of the
Sunset Policy Bulletin, rather than adopting a rigi d dichotomy between mandatory and discretionary
rules based on the language of the Sunset Policy Bulletin alone. Had it done so, the Panel would have
recognized that this administrative procedure, wh ich was written and applied by an executive branch
agency (USDOC), differs from the more traditional situation in which the legislature writes the rules
and the executive determines how to implement them. Moreover, in US – Countervailing Measures
on Certain EC Products, the Appellate Body confirmed that a method developed by an administrative
agency to determine certain issues may be subject to challenge "as such". Japan also emphasizes that
Article 18.4 of the Anti-Dumping Agreement and Article XVI:4 of the WTO Agreement aim to
prevent "needless repetitive litigation" by requiri ng Members to take steps—including "writing
rules"—that ensure the conformity of their anti-dumping regimes with the Anti-Dumping
Agreement.30

29Panel Report, para. 7.137.

13. Third, Japan maintains that the Panel impr operly made its findings based purely on the
Panel's understanding of the Sunset Policy Bulletin as a whole, and in particular its reading of the
general language in the introductory "overview" sec tion of the Sunset Policy Bulletin. Instead of
focusing on the instrument as a whole, the Panel sh ould have carefully reviewed the specific rules
under challenge: namely, the requirement to make a determination in a suns et review on an order-
wide basis and the methods for determining the lik elihood of continuation or recurrence of dumping
in such a review. Those rules are mandatory and operate independently of other United States laws
and regulations on an ti-dumping. Japan's arguments on these sp ecific rules are outlined later in this
Report.31
2. Article 11.3 of the Anti-Dumping Agreement
14. Japan argues that the Panel erred in its genera l approach to interpreting Article 11.3 of the
Anti-Dumping Agreement due to its failure to apply the prope r standards of review. As regards the
legal standard of review, the Panel paid insufficien t attention to the relationship between Article 11.3
and the rest of the agreement and ignored the contex t of sunset reviews within the broader framework
of anti-dumping obligations. According to Japan , the Panel's approach was contrary to the
requirements of Article 31 of the Vienna Convention32 and, in particular, the requirement that treaty
terms be interpreted in good faith in accordance with their ordinary meaning and context. Concerning
the factual standard of review, the Panel failed to consider the principle of good faith under Article 26
of the Vienna Convention . According to Japan, this principle imposes an obligation on Members'
domestic authorities to act in an objective, unbiased and even-handed manner that respects
fundamental fairness. Japan contends, therefore, that in a sunset review consistent with Article 11.3
of the Anti-Dumping Agreement , investigating authorities must make their determination without
favouring any party.
(a) The Dumping Margins Used in the CRS Sunset Review
15. Japan states that the Panel erred in fi nding that USDOC, in making its likelihood
determination in the CRS sunset review, did not act inconsistently with Article 2.4 or Article 11.3 of
the Anti-Dumping Agreement by relying on dumping margins that were determined in previous
administrative reviews using a "zeroing" methodology. 33 Japan asks the Appellate Body to reverse

31Infra, paras. 20-21 and 26-28.
32Vienna Convention on the Law of Treaties , done at Vienna, 23 May 1969, 1155 U.N.T.S. 331; 8
International Legal Materials 679.
33Japan states that, in calculating these margins, "DOC zeroed—literally, DOC ignored—negative
margins." (Japan's appellant's submission, para. 39)

this finding and to find that USDOC's reliance on these dumping margins was inconsistent with
Article 2.4 in conjunction with Article 2.1, and that it was therefore also inconsistent with Article 11.3
of the Anti-Dumping Agreement.
16. In Japan's view, the Panel incorrectly interp reted the word "dumping" in Article 11.3 by
taking an overly narrow view of the textual and cont extual aspects of this provision. For Japan, it
made "no sense"

34 for the Panel to read the word "dumping" in Article 11.3 as having nothing to do
with the framework for the determination of dumping contained in Article 2. As Article 2 is the key
provision defining this word, Japan contends that the obligations of Article 2 apply wherever the word
"dumping" appears in the Anti-Dumping Agreement.
17. Japan argues that the Panel made three specifi c mistakes in interpreting the word "dumping"
in Article 11.3. First, the Panel failed to ac knowledge the significance of the opening words of
Article 2.1: "[f]or the purpose of this Agreem ent". Second, the Panel interpreted the terms
"dumping" and "determination" in Article 11.3 inc onsistently with their meaning in Article 2,
incorrectly assuming that the phrase "likely to lead to continuation or recurrence" in Article 11.3 alters
the "core concept" of dumping. 35 In fact, the only difference in the concepts of dumping under
Articles 2 and 11.3 is the time period to which they apply. Third, the Pane l erroneously concluded
that, for the determination to be made under Artic le 11.3, "it is not necessary for dumping to have
been found to exist".36 Japan argues that, in order to find a likelihood of continuation of dumping, the
authorities must first find that dumping exists at th e time of the sunset review. According to Japan,
this is a "fundamental prerequisite" and the aut horities cannot determine that dumping is likely to
continue without establishing it.37
18. Japan maintains that the Panel failed to c onsider whether the evidence on which USDOC
based its determination under Article 11.3 was valid and consistent with Article 2. USDOC based its
determination on margins that had been calculated using a methodology that "zeroed" out negative
margins. If USDOC had not used this methodology in calculating dumping margins for NSC during
the last administrative review before the sunset review, USDOC would have found that NSC was not
dumping. Therefore, at the time of the sunset review, there would have been no dumping to
"continue". Japan emphasizes that the point is not whether a precise calculation of likely dumping

35Ibid., para. 28.
36Panel Report, para. 7.179.

margins is required in a sunset review but, rath er, whether the evidence on which the CRS sunset
review determination was based is consistent with Article 2. As "zeroing" is inconsistent with
Article 2.4 in conjunction with Article 2.1, the evidence on which USDOC relied to determine the
existence of dumping was "legally defective". 38 USDOC therefore had no WTO-consistent evidence
of the existence of dumping or its likely continuati on. As a result, Japan argues, the United States
acted inconsistently with Article 2.4 in conjunction with Article 2.1 and, therefore, Article 11.3.
19. Japan contends that the Panel also erred in invo king, in support of its finding, the fact that,
during the CRS sunset review, NSC did not challenge USDOC's reliance on dumping margins
calculated using a zeroing methodology. For Japan, that NSC did not raise this issue in the CRS
sunset review is irrelevant to the WTO-inconsistenc y of this practice. Indeed, it was reasonable for
NSC not to have challenged the zeroing methodology because zeroing is a well-established practice of
the United States and NSC had no possibility of overturning it under United States law. Moreover, in
Thailand – H-Beams, the Appellate Body recognized that the issues raised in a domestic anti-dumping
proceeding may differ from those raised in a WTO dis pute settlement proceeding. Japan adds that it
is now raising this issue because, unlike USDOC, the WTO has the authority to decide whether
zeroing is consistent with the Anti-Dumping Agreement.
(b) Order-Wide Basis of Likelihood Determination
(i) Challenge to the Sunset Policy Bulletin "As Such"
20. Japan challenges the Panel's finding that Japan failed to show th at the Sunset Policy Bulletin
"as such" is inconsistent with Articles 6.10 and 11.3 of the Anti-Dumping Agreement in stating that
USDOC will make its likelihood determination in a s unset review on an order-wide basis. Japan asks
the Appellate Body to reverse this finding and to find that Section II.A.2 of the Sunset Policy Bulletin,
as such, is inconsistent with Articles 6.10 and 11.3, in conjunction with Article 2, of the Anti-
Dumping Agreement.
21. Japan contends that the Panel erred in concl uding that the Sunset Policy Bulletin does not
create a "mandatory" rule that USDOC must make an order-wide determination in a sunset review.
Section II.A.2 of the Sunset Policy Bulletin pr ovides that USDOC "will" make an order-wide
determination, and USDOC has no discretion to assess whether this is appropr iate or to make an
exception based on the facts of a particular sunset review. Japan argues that the Sunset Policy
Bulletin requires USDOC to make its likelihood dete rmination on an order-wide basis. For reasons

elaborated in the following section
39, Japan maintains that this requirement is inconsistent with
Articles 6.10 and 11.3 of the Anti-Dumping Agreement.
(ii) Challenge to the Sunset Policy Bulletin "As Applied"
22. Japan challenges the Panel's finding that USDOC di d not act inconsistently with Articles 6.10
and 11.3 of the Anti-Dumping Agreement in making its likelihood determination in the CRS sunset
review on an order-wide basis. Japan asks the Appe llate Body to reverse this finding and to find that
USDOC acted inconsistently with Articles 6.10 and 11.3, in conjunction with Article 2, of the Anti-
Dumping Agreement in making its likelihood determination in the CRS sunset review on an order-
wide basis.
23. Japan argues that the Panel failed to appreciate the proper relationship between Articles 2, 6,
and 11.3 of the Anti-Dumping Agreement. The word "dumping", for purposes of the Anti-Dumping
Agreement including Article 11.3, is defined in Article 2. The substantive rule in Article 2.1 is itself
informed by the evidentiary rule in Article 6.10, which states that the margin of dumping must be
established on a company-specific basis. Thus, a de termination that dumping exists under Article 2.1
must be based on a positive, company-specific margin of dumping. The use of the word "dumping" in
Article 11.3 imposes the same requirement on investigating authorities in establishing the existence of
dumping in making a likelihood determination in a sun set review. Therefore, according to Japan, the
likelihood determination under Artic le 11.3 must also be made and applied on a company-specific
basis.40
24. Japan adds that the need for sunset review de terminations to be made on a company-specific
basis is confirmed by Article 11.4, which provides specifically that the procedural and evidentiary
rules in Article 6 apply to sunset reviews. Th e Panel failed to give th is cross-reference proper
interpretive weight and ignored the text and context of Article 6 in finding that the rule in Article 6.10
is substantive rather than procedural. Japan argues that the Appellate Body recognized in
Thailand – H-Beams and EC – Tube or Pipe Fittings that the requirements of Article 6 are
procedural, even though some of them may also have substantive implications. The title of Article 6
is "Evidence", and Article 6.14 refers to the "pro cedures set out above". In Japan's view, the first
sentence of Article 6.10 contains a rule that is pro cedural or evidentiary in the sense that it requires a

39Infra, paras. 23-25.
40In addition, Japan explained in response to questioning at the oral hearing that, in its view, if
investigating authorities make an affirmative likelihood determination in respect of one company and a negative
likelihood determination in respect of another company, th ey must terminate the duty with respect to the latter
company.

determination of the existence of dumping (whether under Article 2 or Article 11) to be based on
evidence of positive, company-specific dumping margins.
25. Japan also states that the CRS sunset review demonstrates why company-specific
determinations are required under Ar ticle 11.3. In particular, in the absence of zeroing, the dumping
margin for NSC in the latest administrative revi ew would have been negative, whereas the dumping
margin for KSC would have remained positive. An objective evaluation of these facts would
necessarily involve distinct analyses and separate dete rminations with respect to NSC and KSC. Yet
USDOC made only one, order-wide determination. Th erefore, Japan maintains that USDOC failed to
comply with the requirement under Article 11.3 to make a company-specific likelihood determination.
(c) The Factors Considered by USDOC in Making a Likelihood
Determination
(i) Challenge to the Sunset Policy Bulletin "As Such"
26. Japan challenges the Panel's finding that Japan failed to show th at the Sunset Policy Bulletin
"as such" is inconsistent with Article 11.3 of the Anti-Dumping Agreement in that it unduly limits the
factors to be taken into account by USDOC in making its likelihood determination in a sunset review.
Japan asks the Appellate Body to reverse this findi ng and to find that Sections II.A.3 and 4 of the
Sunset Policy Bulletin are, as such, inconsistent with Article 11.3 of the Anti-Dumping Agreement.
27. Japan maintains that Sections II.A.3 and 4 of the Sunset Policy Bulletin create mechanical
rules that are not found in the Tariff Act or the SAA. The first rule under Section II.A.3 applies to
"continuation" cases, which arise when USDOC finds th at dumping exists at the time of the sunset
review. In these cases, USDOC is required to make an affirmative determination of the likely
"continuation" of dumping if it finds that dumping exists at a level above de minimis (0.5 percent).
USDOC therefore makes its determination based on this single fact, without considering any other
facts or conducting any analysis of probable fu ture events. The second and third rules of
Section II.A.3 apply to "recurrence" cases, which arise when USDOC finds no dumping at the time of
the sunset review. Taken together, the second and third rules require USDOC to make an affirmative
determination of the likely "recurrence" of dumping unless it finds that import volumes are at or
above those existing before the order was issued. Japan argues that USDOC consistently applies
these three rules mechanically, desp ite the inclusion of the word "normally" in the Sunset Policy
Bulletin.

28. Japan argues that these rules are based on the presumptions that, if the duty is terminated, all
responding parties will (i) export their products at volumes at least as high as before the order was
issued; and (ii) lower their export price to be low normal value in order to achieve such export
volumes. USDOC does not adopt any mechanisms to confirm that th ese presumptions are correct in
the circumstances of particular sunset reviews, and USDOC has no discretion to consider the case-
specific facts that may rebut these presumptions. Moreover, responding parties wishing to show
"good cause" for USDOC to consider other factor s must direct their arguments to the factors
contained in the three rules, namely the exis tence of dumping and depressed import levels. The
mechanical application of these rules means that the outcome of the sunset review is predetermined in
favour of the domestic industry. As the three rules in Section II.A.3 of the Sunset Policy Bulletin are
inconsistent with Article 11.3, so too is the ru le in Section II.A.4, which states that USDOC will
normally make a negative likelihood determination wh ere dumping ceased after the order was issued
and import volumes remained stable or increased. For reasons elaborated in the following section
41,
Japan therefore maintains that Sections II.A.3 and 4 of the Sunset Policy Bulletin are inconsistent with
Article 11.3 of the Anti-Dumping Agreement.
(ii) Challenge to the Sunset Policy Bulletin "As Applied"
29. Japan challenges the Panel's finding that USDOC did not act inconsistently with Article 11.3
of the Anti-Dumping Agreement in making its likelihood determina tion in the CRS sunset review.
Japan asks the Appellate Body to reverse this findi ng and to find that USDOC acted inconsistently
with Article 11.3 of the Anti-Dumping Agreement in the methodology and evidentiary standards that
it applied in making its likelihood determination in the CRS sunset review.
30. Japan contends that the Panel made two specific e rrors in relation to this issue. First, the
Panel failed to review whether USDOC made its lik elihood determination in the CRS sunset review
based on positive evidence evaluated in an even-handed, fair, unbiased, and objective manner. The
only evidence USDOC considered was the dumpi ng margins determined in the previous
administrative reviews and the decline in import volumes following the imposition of the CRS order.
USDOC's examination of this evidence did not meet the requisite standard of evaluation. As regards
the previously-determined dumping margins, the mere existence of recent dumping is not sufficient to
substantiate a determination of likely future dumping. USDOC's automatic presumption to the
contrary predetermined the outcome of the CRS sunset review in favour of the domestic industry. As
for the decline in import volumes, USDOC's examina tion of this evidence was irrelevant to its

41Infra, paras. 30-32.

determination because it would in any event have ma de an affirmative determination based solely on
the alleged current dumping. In addition, Japan maintains that USDOC relied on past import
volumes that were more than five years old, ignored all intervening developments, and never
considered why import volumes fell.
31. Second, Japan emphasizes that, a lthough the Panel properly identified the requirements for a
likelihood determination under Article 11.3, it failed to apply those requirements correctly to the CRS
sunset review. Article 11.3 requires USDOC to make an unbiased "determination" that termination of
the duty is "likely" to lead to the continuation or recurrence of dumping. This provision imposes a
"serious burden"
42 on USDOC to make its likelihood determination according to probable, rather
than possible, outcomes and to base its determination on a fresh analysis of positive, credible
evidence. In Japan's view, the burden is not on th e responding parties to demonstrate that future
dumping is unlikely if the duty is terminated, but rather on USDOC to demonstrate that future
dumping is likely.
32. According to Japan, USDOC did not meet this burden in the CRS sunset review. USDOC did
not collect evidence supporting and detracting from the likelihood of future dumping, consider the
likely movements of normal value and export price in the absence of the CRS order, nor issue a
questionnaire to respondents to obtain all relevant information. Moreover, USDOC did not properly
examine the evidence of "other factors" submitted by NSC. USDOC's treatment of this evidence
demonstrates that it uses the "good cause" standard to justify its practice of restricting the evidence to
import volume trends and dumping margins determined in previous administrative reviews. Limiting
the evidence in this way helps US DOC to ensure a likelihood determination that favours the domestic
industry. According to Japan, USDOC therefore failed to make an unbiased and objective
determination in accordance with Article 11.3.
B. Arguments of the United States – Appellee
1. The Sunset Policy Bulletin "As Such"

33. The United States argues that the Panel was corr ect in finding that the Sunset Policy Bulletin
is not a measure that can be challenged "as such". The United States asks the Appellate Body to
uphold this finding.
34. The United States makes two main arguments regard ing this issue. First, the United States
contends that the Sunset Policy Bulletin is not a legal instrument under United States law and that,

therefore, it is not a "measure". The Sunset Policy Bulletin is not an instrument with a functional life
of its own, independent of other instruments. Rather, it operates on the basis of, and within the
parameters set by, the Tariff Act and the implemen ting regulations. The purpose of the Sunset Policy
Bulletin is to provide guidance to USDOC in assessing the facts in each sunset review. This guidance
increases transparency and informs interested partie s of USDOC's likely approach in given factual
circumstances. However, USDOC may depart fro m the Sunset Policy Bulletin in any particular
sunset review, provided that it explains its reasons for doing so. Accordin g to the United States,
Japan's argument that USDOC has consistently fo llowed the Sunset Policy Bulletin rather than
conducting an independent analysis in every sunset review simply takes issue with the Panel's
findings of fact.
35. The United States disputes Japan's view that th e Sunset Policy Bulletin is a "pre-established
rule" and an "administrative procedure" because it was published in the United States Federal Register
before the first sunset review. Japan failed to est ablish before the Panel th at, as a matter of United
States municipal law, publication of the Sunset Po licy Bulletin in the Federa l Register transformed
that bulletin from policy guidance into a "measure ". The United States argues that, as the Panel
found, the Sunset Policy Bulletin cannot be deemed to be a measure purely by virtue of the form in
which it is maintained, or the time at which it was published.
36. The United States also disputes Japan's sugges tion that the Sunset Policy Bulletin is a
measure because USDOC allegedly adheres strictly to its provisions. The Sunset Policy Bulletin is
"comparable to agency precedent"

43 and, under United States law, such precedent is not binding.
Administrative practice of this kind cannot evolve into an administrative procedure or a measure
solely because USDOC has conducted a number of sun set reviews in which it adhered to the Sunset
Policy Bulletin. According to the United States, the panel in US – Steel Plate recognized that a
practice does not become a measure by virtue of its being repeated.
37. Second, the United States argues that even if the Sunset Policy Bulletin were a measure
susceptible to challenge in the present proceedings, it is not inconsistent with the United States' WTO
obligations because it does not mandate WTO-incons istent action. Japan bears the burden of
demonstrating that the Sunset Policy Bulletin "m andates" WTO-inconsistent action or precludes
WTO-consistent action. In fulfillin g this burden, Japan would need to produce evidence of the scope
and meaning of the Sunset Policy Bulletin within Un ited States municipal law. However, as already
explained, administrative precedent such as the Su nset Policy Bulletin has no functional life of its
own, regardless of how often it is repeated. Th e United States argues that, consistent with this

interpretation, the Appellate Body indicated in US – Carbon Steel that an agency's consistent
practice may comprise evidence of the meaning of a challenged law, but not evidence that such
practice is itself a measure.
38. The United States emphasizes that the Appellate Body report in US – Countervailing
Measures on Certain EC Products does not address the question of whether non-binding
administrative precedent or practice can be challenged as a measure. In fact, panels have consistently
concluded that such practice cannot be cha llenged in this way, for example, in US – Steel Plate and
US – Export Restraints . The United States argues that even if such practice could be challenged as a
measure, the Appellate Body has consistently a pplied the mandatory/discre tionary distinction to
preclude a finding of WTO-inconsistency where the relevant measure does not mandate the breach of
a WTO obligation.
39. The United States points out that the Sunset Policy Bulletin does not contain rules that
USDOC is required to follow. Rather, the Sun set Policy Bulletin "simply addresses the limited
universe of practical scenarios that could ari se in the period after imposition of the order". 44 T h e
outcome in each sunset review is not predetermine d by the provisions of the Sunset Policy Bulletin.
Rather, the outcome depends on the facts of each case and must be supported by evidence on the
record. If USDOC decided to modify its analysis in a way that would represent a change from past
practice, it would explain this change and normally give parties an opportunity to comment on it. The
United States therefore maintains that USDOC may reach similar results based on similar facts, not
because it follows the fixed rules of the Sunset Policy Bulletin, but because it adopts consistent
analysis for similar factual situations.
2. Article 11.3 of the Anti-Dumping Agreement
(a) The Dumping Margins Used in the CRS Sunset Review
40. The United States argues that the Panel was corr ect in finding that the United States did not
act inconsistently with Article 2.4 or, in the alternative, Article 11.3 of the Anti-Dumping Agreement
in relying on the administrative review dumping margins while making its likelihood determination in
the CRS sunset review. The United States requests the Appellate Body to uphold this finding.
41. According to the United States, Japan's appeal regarding "zeroing" is premised on factual
findings that the Panel did not make. First, th e Panel made no factual finding as to whether the
dumping margins on which USDOC relied were calculated using the methodology proscribed by the

Appellate Body in EC – Bed Linen . Second, the Panel made no factual finding as to whether
USDOC would have calculated negative dumping margin s in the administrative reviews if it had not
used such a methodology. As recognized in the Appellate Body Report in Australia – Salmon ,
appellate review does not extend to claims based on factual findings that the Panel did not make or
upon facts that are not undisputed. Accordingly, the Appellate Body should dismiss in its entirety
Japan's appeal regarding zeroing. The United States argues that, otherwise, Members will be able to
use sunset reviews "as a back door"

45 to challenge other measures.
42. The United States also maintains that EC – Bed Linen is legally and factually irrelevant to
USDOC's likelihood determination in the CRS sunset review. First, the methodology of the European
Communities that the Appellate Body considered in EC – Bed Linen involved the calculation of
dumping margins on a basis different from that used by USDOC in the administrative reviews. In that
case, the European Communities calculated margins on an "average-to-average" basis whereas, in this
case, USDOC did so on an "average-to-transaction" b asis. Second, the United States argues that
EC – Bed Linen concerned an anti-dumping investigation, whereas the present appeal concerns a
sunset review of an anti-dumping duty.
43. The United States contends that the Panel correc tly found that the substantive disciplines of
Article 2 regarding the calculation of dumping marg ins in making a determination of dumping do not
apply to the making of a likelihood determinati on under Article 11.3. The introductory words of
Article 2.1 do not mean that every provision of Article 2 applies throughout the Anti-Dumping
Agreement, as evidenced by the fact that certain provisions of Article 2 are expressly stated not to
apply to reviews. 46 Article 11.3 of the Anti-Dumping Agreement does not prescribe a methodology
for making a likelihood determination; nor does it re quire quantification of past or future dumping.
In fact, according to the United States, Japan con cedes that the likelihood determination is not tied to
a specific amount of dumping. In the view of th e United States, this concession cannot be reconciled
with Japan's argument that the provisions of Article 2 regarding the calculation of dumping margins
apply to sunset reviews.

46For example, the United States refe rs to the words "during the inves tigation phase" in Article 2.4.2.
(United States' appellee's submission, footnote 66 to para. 44)

(b) Order-Wide Basis of Likelihood Determination
(i) Challenge to the Sunset Policy Bulletin "As Such"
44. The United States argues that the Panel was correct in finding that Japan failed to show that
the Sunset Policy Bulletin as such is incons istent with Articles 6.10 and 11.3 of the Anti-Dumping
Agreement regarding the basis on which the likelihood determ ination is made in sunset reviews. The
United States asks the Appellate Body to uphold this finding.
45. In the view of the United States, the Panel correctly identified the two questions to be
answered in examining an "as such" claim: firs t, whether the alleged measure mandates a certain
course of action; and second, whether that course of ac tion is consistent with the relevant obligations.
The Panel considered that it made more sense to begin by addressing the first of these questions, and
Japan has not shown that in doing so the Panel comm itted a legal error. The United States maintains
that, as a result of the Panel's finding that the Suns et Policy Bulletin is not a measure that can be
challenged in WTO dispute settlement proceedings , the Panel was not required to address the second
question.
(ii) Challenge to the Sunset Policy Bulletin "As Applied"
46. The United States argues that the Panel was corr ect in finding that the United States did not
act inconsistently with Articles 6.10 and 11.3 of the Anti-Dumping Agreement in making its
likelihood determination in the CRS sunset review on an order-wide basis. The United States asks the
Appellate Body to uphold this finding.
47. The United States emphasizes that, pursuant to Article 11.4, only the provisions of Article 6
"regarding evidence and procedure" are incorporated into Article 11. As the Panel found, no
substantive obligation is imposed on investigati ng authorities to calculate dumping margins in a
sunset review. Accordingly, the procedural or evidentiary requirements of Article 6 regarding the
calculation of such margins do not apply to Article 11.3. In particular, the United States maintains
that the procedural requirement in Article 6. 10 that dumping margins be calculated on a company-
specific basis does not apply to sunset reviews.
48. The United States contends that the provisions of Articles 11.3, 9.2, and 9.4 confirm that
investigating authorities are not required to make th eir likelihood determination in a sunset review on
a company-specific basis. Article 11.3 does not prescribe a methodology that investigating authorities
must follow in making their likelihood determination. Nor does Article 11, as a whole, describe any

criteria for making a likelihood determination focu sing on individual companies. In particular,
Article 11.3 "does not distinguish between the speci ficity required" for the likelihood determination
regarding dumping and that regarding inju ry, "and the latter determination is inherently order-
wide."

47 Article 11.3 also does not refer to making a determination for individual companies.
Instead, it provides for a review of the "definitive" duty. Pursuant to Article 9.2, such a duty is
imposed on a product-specific basis rather than a company-specific basis. Similarly, the United States
maintains that Article 9.4 assumes that a definitiv e duty is imposed on a product rather than with
respect to individual companies, thus enabling duti es to be applied to suppliers not included in the
anti-dumping investigation.
(c) The Factors Considered by USDOC in Making a Likelihood
Determination
(i) Challenge to the Sunset Policy Bulletin "As Such"
49. The United States argues that the Panel was correct in finding that Japan failed to show that
the Sunset Policy Bulletin "as such" is in consistent with Article 11.3 of the Anti-Dumping Agreement
regarding the obligation to make a likelihood determination in sunset reviews. The United States asks
the Appellate Body to uphold this finding. For r easons described in relation to the previous issue
48,
the United States argues that the Panel was correct in declining to consider further Japan's "as such"
claim regarding this issue.
(ii) Challenge to the Sunset Policy Bulletin "As Applied"
50. The United States maintains that the Panel was correct in finding that the United States did
not act inconsistently with Article 11.3 of the Anti-Dumping Agreement in making its likelihood
determination in the CRS sunset review. The United States requests the Appellate Body to uphold
this finding.
51. According to the United States, Article 11.3 of the Anti-Dumping Agreement does not
prescribe a methodology that investigating aut horities must follow in making their likelihood
determination. Article 11.3 is a "specific impl ementation of the general rule" in Article 11.1. 49 A
sunset review under Article 11.3 focuses on future behaviour and not on the current existence of
dumping. According to the United States, footnote 22 to Article 11.3 confirms that Article 11.3 does
not require investigating authorities to calculate the precise amount of dumping in any given year or

47United States' appellee's submission, para. 33. (original emphasis)
48Supra, para. 45.

in the future because the current existence of a specific amount of dumping is not determinative of the
likelihood that dumping will continue or recur.
52. The United States contends that the Panel properly assessed USDOC's conduct of the CRS
sunset review according to the appropriate standa rd. The Panel examined whether USDOC based its
determination on positive evidence evaluated in an obj ective manner. The Panel correctly found that
USDOC had a sufficient factual basis to allow it to draw reasoned and ade quate conclusions that
dumping was likely to continue or recur if the CRS order were revoked. 50 Japan's objection to this
finding goes to the Panel's assessment of the facts before it and the weight accorded to those facts. As
Japan does not argue that the Panel failed to dischar ge its function correctly under Article 11 of the
DSU, the United States maintains that Japan's challe nge to the Panel's finding falls outside the scope
of appellate review pursuant to Article 17.6 of th e DSU, as interpreted by the Appellate Body in
EC – Hormones.
53. The United States adds that the Panel correc tly identified the "positive evidence" on which
USDOC based its likelihood determination. Specifi cally, this comprised evidence of dumping and
declining import volumes after the CRS order was issued. The evidence of dumping was contained in
the results of the two administrative reviews of the CRS order, the second of which was completed
only one month before USDOC issued its preliminary results in the CRS sunset review. The evidence
of import volumes indicated that imports had declin ed substantially after the CRS order was imposed
and remained depressed for the period prior to the CRS sunset review. As the Panel has found, based
on this evidence, it was reasonable for USDOC to make an affirmative likelihood determination.
54. The United States disagrees with Japan's argume nt that USDOC's analysis was based on
limited facts and a methodology that predetermined th e result. A likelihood determination in a sunset
review inevitably rests on facts relating to the past and present. USDOC found that Japanese
suppliers had continued to dump since the imposition of the CRS order and that there was no evidence
to suggest that they would cease dumping if the CRS order were revoked. USDOC afforded NSC an
opportunity to explain its behaviour in the CRS suns et review. Yet, according to the United States,
although NSC attempted to explain why its import volumes were depressed, it did not attempt to
explain or disprove its ongoing dumping or why this would stop if the CRS order were revoked.

50Panel Report, paras. 7.271-7.272 and 7.278-7.283.

C. Arguments of the Third Participants
1. Brazil

55. Brazil argues that the Panel erred in concluding that the United States did not act
inconsistently with the Anti-Dumping Agreement or the WTO Agreement by applying a "zeroing"
methodology in sunset reviews. In particular, the Panel erred in findi ng no correlation between
Articles 2 and 11.3 of the Anti-Dumping Agreement . USDOC's practice of "zeroing" out negative
dumping margins in original investigations and revi ews is inconsistent with the United States' WTO
obligations. Brazil reaffirms its arguments before the Panel in this regard.
2. Chile
56. Chile argues that the Panel erred in concludi ng that the Sunset Policy Bulletin is not a
mandatory legal instrument. The Panel should have focused on the aims of the Sunset Policy Bulletin
and the manner in which it is used by USDOC. In particular, the Sunset Policy Bulletin is a binding
legal instrument establishing certain conditions th at are not found in the relevant statute and
regulations. Accordingly, USDOC must apply the S unset Policy Bulletin in order to comply with the
statute and regulations.
57. Chile contends that the Panel erred in finding that the disciplines applicable to original
investigations under the Anti-Dumping Agreement do not apply to sunset reviews. Although an
original investigation is different from a sunset review, this does not mean that the disciplines
envisaged in the Anti-Dumping Agreement for investigations do not apply to sunset reviews. Both
types of proceeding result in the imposition of an anti-dumping duty upon exporters of the relevant
product. Moreover, Article 11.1 sets out one of the "guiding principles"
51 of the Anti-Dumping
Agreement, according to which the continuation of an anti-dumping measure is an exception to the
general rule of termination. Chile argues that the reference to "dumping" in Article 11.1 is a reference
to dumping as defined in Article 2.
58. Chile maintains that the Panel erred in finding that Article 11.3 of the Anti-Dumping
Agreement does not require investigating authorities to make their likelihood determination in a
sunset review on a company-specific basis. Article 11.4 requires investigating authorities, in a sunset
review, to use the logic underlying the rules of evidence and procedure in Article 6, including
Article 6.10. In Chile's view, if investigating authorities do not make a company-specific likelihood

51Chile's third participant's submission, para. 3.

determination, they will not be able to determine the manner in which individual companies will
behave if the duty is terminated.
59. Chile suggests that the Panel erred in finding that USDOC's methodology for making the
likelihood determination in a sunset re view is not inconsistent with the Anti-Dumping Agreement .
Although the Anti-Dumping Agreement does not prescribe a methodology for making this
determination, USDOC's methodology pre-determin es the outcome of the sunset review because
USDOC will normally make an affirmative likeli hood determination based only on dumping margins
and import levels. Moreover, Ch ile contends that, in the CRS sunset review, USDOC relied on
margins that were not properly established.
3. European Communities
60. The European Communities contends that the Panel erred in concluding that the Sunset Policy
Bulletin is not an actionable measure "as such". The European Communities submits that the
mandatory/discretionary distinction is not based on any provision of the covered agreements. In this
regard, the European Communities agrees with the report of the panel in US – Section 301 Trade Act.
Accordingly, the Panel should have determined whether the Sunset Policy Bulletin was
"challengeable" based on the specific provisions of the Anti-Dumping Agreement, and Article 18.4 in
particular. The term "administrative procedures" in Article 18.4 applies to all rules and procedures
that guide proceedings under the Anti-Dumping Agreement and that are not legally binding. For
reasons advanced by Japan 52, the European Communities argues that the Sunset Policy Bulletin falls
within the meaning of this term. Further, even if the mandatory/discretionary distinction is relevant,
the Sunset Policy Bulletin is mandatory. Although USDOC may have a theoretical ability to depart
from the Sunset Policy Bulletin, it is "highly unlikely" to do so. 53 Thus, according to the European
Communities, as a practical matter the Sunset Po licy Bulletin is binding on USDOC staff and is
therefore mandatory.
61. The European Communities argues that the Panel erred in finding that Article 2 of the Anti-
Dumping Agreement does not apply in the context of a sunset review. Properly interpreted,
Article 11.3 does not require investigating authorities to calculate likely future dumping margins, but
it does require them to consider evidence of dum ping since the duty was imposed. In doing so, both
the definition of "dumping" in Article 2.1 and the requirements of Article 2 regarding the calculation

52European Communities' third participant's submissi on, referring to Japan's appellant's submission,
paras. 131-137.
53Ibid., para. 45.

of dumping margins apply. The European Communities agrees with Japan that it is irrelevant that
NSC did not challenge the "zeroing" methodology in the CRS sunset review.
62. According to the European Comm unities, the Panel also erred in concluding that the United
States did not act inconsistently with Article 11.3 in basing its likelihood determination in the CRS
sunset review exclusively on past dumping ma rgins and past import volumes. The likelihood
determination in a sunset review must be based on positive evidence. Past dumping margins and
import volumes are relevant to the likelihood determination, but aut horities must also rely on other
relevant factors in making that determination. Moreover, USDOC has an obligation to take into
account all relevant factors. The Sunset Policy Bulle tin is inconsistent with this obligation because it
requires importers to show "good cause" before USDOC will consider "other factors". The European
Communities also suggests that the Sunset Polic y Bulletin improperly limits the circumstances in
which an anti-dumping duty will be terminated following a sunset review.
4. Korea

63. According to Korea, the Panel should have considered and upheld Japan's claims under
Article 2.4 in addition to those under Article 11.3. The definition of dumping in Article 2 of the Anti-
Dumping Agreement applies throughout that agreement, including in sunset reviews under
Article 11.3. This interpretation is supported by the text, object and purpose of Article VI of the
GATT 1994 as well as the Anti-Dumping Agreement , including Articles 2, 11.1, and 11.3. As a
result, a determination of the existence of dumping that is based on a "zeroing" methodology is not a
determination of dumping within the meaning of Ar ticle 2. Korea argues th at such a determination
cannot form the basis for a likelihood determination under Article 11.3.
64. In Korea's view, the Panel erred in concluding that USDOC's likelihood determination in the
CRS sunset review was consistent with Article 11.3 of the Anti-Dumping Agreement . USDOC's
likelihood determination was based on positive dum ping margins calculated in recent administrative
reviews and statistics regarding import volumes since the imposition of the CRS order. These two
pieces of evidence alone cannot satisfy the requireme nts of positive evidence and a sufficient factual
basis for a likelihood determination under Article 11.3. Moreover, Korea maintains that USDOC's
definition of "dumping" in the CRS sunset review incorporated the impermissible practice of zeroing
and was therefore inconsistent with Article 11.3.

5. Norway
65. Norway contends that the Panel erred in find ing that the Sunset Policy Bulletin is not an
administrative procedure under Article 18.4 of the Anti-Dumping Agreement and that it is therefore
not challengeable, as such, under Article XVI:4 of the WTO Agreement . The term "administrative
procedures" in Article 18.4 of the Anti-Dumping Agreement encompasses administrative rules such
as the Sunset Policy Bulletin that may appear to be discretionary, but are consistently followed in
practice. In addition, the Panel drew an imprope r distinction between manda tory and discretionary
legislation. It applied this distinction mechanically to the Sunset Policy Bulletin even though this is
an instrument of an administrative agency and not a legislative rule. In Norway's view, when properly
applied, the mandatory/discretionary distincti on does not preclude the Sunset Policy Bulletin from
being "challengeable", as such, under the WTO Agreement.
66. According to Norway, the Panel erred in finding that Article 2 of the Anti-Dumping
Agreement does not apply in the context of a sunset review under Article 11.3. The definition of
"dumping" in Article 2 applies to Article 11.3 as well. Moreover, the dumping margins in the
administrative reviews were calculated using a " zeroing" methodology that is inconsistent with
Article 2.4. The evidence on which USDOC relied in making its likelihood determination in the CRS
sunset review was therefore "legally defective."

54 Norway argues that it is irrelevant that NSC did
not raise these concerns during the CRS sunset review.
67. Norway argues that the Panel erred in concluding that the Sunset Policy Bulletin, as such, is
not inconsistent with Articles 6.10 and 11.3 of the Anti-Dumping Agreement in stating that USDOC
will make its likelihood determina tion in a sunset review on an order-wide basis. The Panel should
have considered the mandatory nature of this sp ecific rule. For the reasons advanced by Japan,
Norway considers that Articles 6.10 and 11.3 of the Anti-Dumping Agreement require investigating
authorities to make their likelihood determination in a sunset review on a company-specific basis.
68. Norway adds that the Panel erred in concluding that the Sunset Policy Bulletin, as such, is not
inconsistent with Article 11.3 of the Anti-Dumping Agreement. The Sunset Policy Bulletin creates
narrow rules that necessarily l ead to USDOC making an affirmative likelihood determination in a
sunset review. According to Norway, these rules are consistently applied and rely on presumptions
rather than facts.

54Norway's third participant's submission, para. 17.

III. Preliminary Issues
69. Two preliminary issues arise with respect to the scope of Japan's appeal. The first concerns
Japan's request, in its Notice of Appeal
55, that we reverse the finding of the Panel in paragraph 8.1(d)
of the Panel Report that:
In respect of the dumping margins used in sunset reviews:
(i) Japan has failed to show that the Sunset Policy
Bulletin as such is inconsis tent with Articles 2.2.1,
2.2.2, 2.4, 11.3 and 18.3 of the Anti-dumping
Agreement.
70. Japan's appellant's submission cont ains no arguments in support of its request that we reverse
this finding. At the oral hearing, Japan confirmed that it is not pursuing its appeal of
paragraph 8.1(d)(i) of the Panel Report. In ot her words, concerning the dumping margins used in
sunset reviews, Japan's appeal does not cha llenge—and we therefore do not address—the Panel's
finding regarding the consistency of the Sunset Policy Bulletin as such with the Anti-Dumping
Agreement. Rather, Japan's appeal concerning the dumping margins used in sunset reviews is limited
to the issue of whether the Panel erred in finding that, in the CRS sunset review , USDOC did not act
inconsistently with Article 2.4 or Article 11.3 of the Anti-Dumping Agreement by relying on
dumping margins calculated in previous admini strative reviews allegedly using a "zeroing"
methodology. We address this issue in Section VI.C of this Report.
56
71. The second preliminary issue was raised by the United States in its appellee's submission.
According to the United States, Japan's "claims"
57 that the Panel failed to apply the correct legal and
factual standards of review in interpreting Article 11.3 fall outside the scope of appellate review
because Japan's Notice of Appeal did not refer to Article 11 of the DSU or Article 17.6 of the Anti-
Dumping Agreement and did not allege that the Panel erred in its application of the standards of
review prescribed in those provisions. In consequence, the United States argues, we are precluded
from finding that the Panel acted inconsistently with Article 11 of the DSU or Article 17.6 of the
Anti-Dumping Agreement.
58 At the oral hearing, Japan explaine d that the references in its appellant's
submission to these standards of review 59 form part of Japan's "reasoning" in support of its appeal of
certain findings by the Panel regarding Article 11.3 of the Anti-Dumping Agreement, but that Japan is
not asking us to find that the Panel acted inconsisten tly with Article 11 of the DSU or Article 17.6 of

55WT/DS244/7, 17 September 2003, p. 2, attached as Annex 1 to this Report.
56See infra paras. 118-138.
58United States' response to questioning at the oral hearing.
59Japan's appellant's submission, paras. 3-15.

the Anti-Dumping Agreement. Therefore, the issue of whether Japan's Notice of Appeal included any
allegations of inconsistency with Article 11 of the DSU or Article 17.6 of the Anti-Dumping
Agreement has become moot. We have not been asked to make findings in relation to these provisions,
and we make no findings on them.60
IV. Issues Raised in this Appeal
72. The following issues are raised in this appeal:
(a) whether the Panel erred in finding, in paragr aphs 7.145, 7.195, and 7.246 of the Panel
Report, that the Sunset Policy Bulletin is not a mandatory legal instrument and thus is
not a measure that is "challengeable", as such, under the Anti-Dumping Agreement or
the WTO Agreement;
(b) whether the Panel erred in finding, in para graphs 7.170, 7.184, and 8.1(d)(iii) of the
Panel Report, that the United States did not act inconsistently with Article 2.4 or
Article 11.3 of the Anti-Dumping Agreement by relying, in the CRS sunset review,
on dumping margins calculated in previous administrative reviews allegedly using a
"zeroing" methodology;
(c) as regards the making of likelihood determinations on an order-wide basis:
(i) whether the Panel erred in finding, in pa ragraph 8.1(e)(i) of the Panel Report,
that Japan failed to show that the Sunset Policy Bulletin, as such , is
inconsistent with Article 6. 10 or Article 11.3 of the Anti-Dumping
Agreement in stating that USDOC will make its determination in a sunset
review on an "order-wide" basis;
(ii) whether the Panel erred in finding, in paragraphs 7.208 and 8.1(e)(ii) of the
Panel Report, that the United States did not act inconsistently with
Article 6.10 or Article 11.3 of the Anti-Dumping Agreement in making its
determination in the CRS sunset review on an "order-wide" basis;

60We have already held that a claim, by an appellant, that a panel erred under Article 11 of the DSU,
and a request for a finding to this e ffect, must be included in the Notice of Appeal, and clearly articulated and
substantiated in an appellant's submission with specific arguments. (Appellate Body Report, US –
Countervailing Measures on Certain EC Products, para. 74; Appellate Body Report, Japan – Apples, para. 127;
and Appellate Body Report, US – Steel Safeguards, para. 498)

(d) as regards the factors considered by USDOC in making a likelihood determination:
(i) whether the Panel erred in finding, in pa ragraph 8.1(f)(i) of the Panel Report,
that Japan failed to show that the Sunset Policy Bulletin, as such , is
inconsistent with Article 11.3 of the Anti-Dumping Agreement in that it
limits the factors to be taken into account by USDOC in determining, in a
sunset review, if the expiry of the duty would be likely to lead to continuation
or recurrence of dumping;
(ii) whether the Panel erred in finding, in paragraphs 7.283 and 8.1(f)(ii) of the
Panel Report, that the United States did not act inconsistently with
Article 11.3 of the Anti-Dumping Agreement in the CRS sunset review in
determining that dumping was likely to continue or recur; and
(e) whether the Panel erred in finding, in pa ragraphs 7.315 and 8.1(h) of the Panel
Report, that, with respect to the Sunset Policy Bulletin, the United States did not act
inconsistently with Article 18.4 of the Anti-Dumping Agreement or Article XVI:4 of
the WTO Agreement.
V. Is the Sunset Policy Bulletin "Challengeable" As Such?
A. The Sunset Policy Bulletin
73. Before turning to Japan's appeal on this issu e, we wish to set out certain background
information concerning the Sunset Policy Bulleti n. This document forms part of the overall
framework within which "sunset" reviews of anti- dumping or countervailing duties are conducted in
the United States. Sunset reviews became part of United States law when the United States
implemented the Uruguay Round agreements through the URAA.

61 The URAA consists of a broad-
ranging package of new laws as well as modifications to existing United States trade laws, such as the
Tariff Act. With respect to sunset reviews, th e URAA added Sections 751(c) and 752 to the Tariff
Act. These statutory provisions governing sun set reviews were in turn implemented through
amendments to the Regulations. 62 Section 218 of Part 351 of Title 19 of the Regulations sets forth a
number of detailed rules and pro cedures for USDOC to follow in c onducting sunset reviews, as well
as specific rules that apply to interested parties.

61Uruguay Round Agreements Act, Public Law 103- 465, 108 Stat. 4809, wh ich became law in the
United States on 8 December 1994. (Exhibit JPN-1(a) submitted by Japan to the Panel)
62Supra, footnote 10.

74. Japan's request for establishment of a panel 63 referred to these statutory and regulatory
provisions, as well as to the SAA 64 and the Sunset Policy Bulletin. 65 The Sunset Policy Bulletin,
together with a request for comments thereon, w as published by USDOC in the United States Federal
Register in 1998, before the United States had conducted any sunset review of anti-dumping or
countervailing duties. In the Sunset Policy Bu lletin, USDOC sets forth "policies regarding the
conduct of five-year ('sunset') reviews ... pursuant to the provisions of sections 751(c) and 752 of the
Tariff Act of 1930, as amended, and [USDOC's] regulations". 66 In developing the Sunset Policy
Bulletin, USDOC drew on "the guidance provided by the legislative history accompanying the
URAA, specifically the Statement of Administrative Action". 67 The Sunset Policy Bulletin is
"intended to complement the applicable statutory and regulatory provisions by providing guidance on
methodological or analytical issues not explic itly addressed by the statute and regulations".
68
According to the Sunset Policy Bulletin, these stat utory and regulatory provisions assign to USDOC
the responsibility, in sunset reviews of anti-dumping duties, of, inter alia , determining whether
revocation of an anti-dumping duty order would be likely to lead to continuation or recurrence of
dumping. This appeal concerns certain provision s contained in Section II.A of the Sunset Policy
Bulletin, entitled "Determination of Likelihood of Continuation or Recurrence of Dumping".
B. Japan's Appeal
75. Before the Panel, Japan claimed, inter alia , that certain provisions of the Sunset Policy
Bulletin are, "as such", inconsistent with relevant United States obligations under the Anti-Dumping
Agreement.69

63WT/DS244/4, 5 April 2002.
64The SAA, which was submitted to the United St ates Congress along with the proposed URAA,
"represents an authoritative expression by the Administration concerning its views regarding the interpretation
and application of the Uruguay Round agreements". (SAA, p. 656)
65See infra, footnote 69.
66Sunset Policy Bulletin, p. 18871.
67Ibid., p. 18872.
68Ibid., pp. 18871 and 18872.
69Japan's "as such" claims, to the extent relevant to this appeal, related to: (i) Section II.A.2 of the
Sunset Policy Bulletin, regarding the making of determinations in sunset reviews on an order-wide basis; and
(ii) Sections II.A.3 and 4 of the Sunset Policy Bulletin, regarding the factors considered by USDOC in making a
determination in a sunset review. In its request for establishment of a panel, Japan's "as such" claims referred to
both the SAA and the Sunset Policy Bulletin. However, in response to a question from the Panel, Japan
clarified that it was not challenging the WTO-consistency of the SAA. Accordingly, the Panel construed Japan's
"as such" claims as claims against the Sunset Policy Bulletin alone. (Panel Report, paras. 7.113, 7.195, and
7.246) In this appeal, too, Japan's "as such" claims relate solely to the Sunset Policy Bulletin.

76. The Panel declined to address the substance of Japan's "as such" claims against the provisions
of the Sunset Policy Bulletin because it found that:
… the Sunset Policy Bulletin is not a mandatory legal instrument
obligating a certain course of c onduct and thus can not, in and of
itself, give rise to a WTO violation.
70
… the Sunset Policy Bulletin is not a measure that is challengeable,
as such, under the WTO Agreement.71
… the Sunset Policy Bulletin is not challengeable as such under the
WTO Agreement.72
77. Japan asks us to reverse these findings and to fi nd that the Sunset Policy Bulletin sets forth
"actionable administrative procedures"
73 that can, as such, be challenged under, and that are
inconsistent with, the Anti-Dumping Agreement and Article XVI:4 of the WTO Agreement.
78. As a first step in examining Japan's appeal, we consider it important to distinguish between
two issues that the Panel did not seem to differentiate in its analysis. 74 The first issue concerns the
type of measures that may, as such, form th e subject matter of dispute settlement under the Anti-
Dumping Agreement . In other words, does the type of instrument itself—be it a law, regulation,
procedure, practice, or something else—govern whet her it may be subject to WTO dispute settlement?
The second issue concerns whether a measure's mandato ry or discretionary character determines if it
can, as such, be found to be inconsistent with the covered agreements.
79. In our view, the ambiguity created by the Pane l's approach stems from its use of the term
"challengeable". In other words, it is not clear to us whether the Panel's finding that, because the
Sunset Policy Bulletin is not a "mandatory legal instrument"
75, it is not "challengeable, as such"
76, is
to be understood as a finding that non-mandatory measures cannot, as su ch, constitute the specific

70Panel Report, para. 7.145.
71Ibid., para. 7.195.
72Ibid., para. 7.246.
74We drew attention to a similar "blurring" of two distinct issues by the panel in Guatemala – Cement I.
(Appellate Body Report, Guatemala – Cement I, para. 69)
75Panel Report, para. 7.145.
76Ibid., para. 7.195. See also para. 7.246.

measure at issue, or as a finding that non-mandatory meas ures cannot, as such, constitute a violation
of a Member's obligations.77
80. We consider below these two ways in which the Panel's finding can be understood.
C. The Type of Measures that Can, As Such, be the Subject of Dispute Settlement
Proceedings
81. We first examine whether there is any basi s for holding that non-mandatory measures cannot,
as such, be subject to dispute settlement under the Anti-Dumping Agreement. In so doing, we start
with the concept of "measure". Article 3.3 of th e DSU refers to "situations in which a Member
considers that any benefits accruing to it directly or indirectly under the covered agreements are being
impaired by measures taken by another Member ". (emphasis added) This phrase identifies the
relevant nexus, for purposes of dispute settleme nt proceedings, between the "measure" and a
"Member". In principle, any act or omission attributable to a WTO Member can be a measure of that
Member for purposes of dispute settlement proceedings.
78 The acts or omissions that are so
attributable are, in the usual case, the acts or omi ssions of the organs of the state, including those of
the executive branch.79
82. In addition, in GATT and WTO dispute settlement practice, panels have frequently examined
measures consisting not only of particular acts app lied only to a specific situation, but also of acts
setting forth rules or norms that are intended to have general and prospective application. 80 In other
words, instruments of a Member containing rules or norms could constitute a "measure", irrespective
of how or whether those rules or norms are applied in a particular instance. This is so because the

77For example, in footnote 103 to paragraph 7.119 of the Panel Report, the Panel seemed to equate "the
nature of 'measures' that may form part of the 'matter' re ferred to the DSB under the DSU" with "the nature of a
'measure' that is challengeable in WTO dispute settlement" and considered the latter to be "a fundamental matter
relating to our mandate and jurisdiction in this case."
78We need not consider, in this appeal, related issues such as the extent to which the acts or omissions
of regional or local governments, or even the actions of private entities, could be attributed to a Member in
particular circumstances.
79Both specific determinations made by a Member's executive agencies and regu lations issued by its
executive branch can constitute acts attributable to that Member. See, for example, the Panel Report in US –
DRAMS, where the measures referred to the panel included a USDOC determination in an administrative review
as well as a regulatory provision issued by USDOC.
80See, for example Panel Report, US – Superfund; Panel Report, US – Malt Beverages; Panel Report,
EEC – Parts and Components ; Panel Report, Thailand – Cigarettes ; Panel Report, US – Tobacco ; Panel
Report, Argentina – Textiles and Apparel; Panel Report, Canada – Aircraft; Panel Report, Turkey – Textiles;
Panel Report, US – FSC; Panel Report, US – Section 301 Trade Act; Panel Report, US – 1916 Act (EC); Panel
Report, US – 1916 Act (Japan) ; Panel Report, US – Hot-Rolled Steel ; Panel Report, US – Export Restraints ;
Panel Report, US – FSC (21.5 – EC) ; and Panel Report, Chile – Price Band System . See also Appellate Body
Report, US – Carbon Steel , paras. 156 and 157. See also Appellate Body Report, US – 1916 Act , footnotes 34
and 35 to paras. 60 and 61, respectively.

disciplines of the GATT and the WTO, as well as the dispute settlement system, are intended to
protect not only existing trade but also the security a nd predictability needed to conduct future trade.
This objective would be frustrated if instruments setting out rules or norms inconsistent with a
Member's obligations could not be brought befo re a panel once they have been adopted and
irrespective of any particular instance of application of such rules or norms.
81 It would also lead to a
multiplicity of litigation if instruments embodying rules or norms could not be challenged as such, but
only in the instances of their application. Thus, allowing claims against measures, as such, serves the
purpose of preventing future disputes by allowing th e root of WTO-inconsistent behaviour to be
eliminated.
83. Having outlined these general pr opositions, we next consider whether there are any
limitations upon the types of measures that may, as such, be the subject of dispute settlement under
the DSU or the applicable covere d agreement, in this case the Anti-Dumping Agreement. 82 As
regards the specific requirements of the Anti-Dumping Agreement , we have explained that
Article 17.4 precludes a panel from addressing individual acts (as opposed to measures "as such")
committed by an investigating authority in the c ontext of the initiation and conduct of anti-dumping
investigations unless one of the three types of measure lis ted in Article 17.4 is identified in the
request for establishment of a panel.
83 These measures are a definitive anti-dumping duty, the
acceptance of a price undertaking, and a provisi onal measure. We have also found, in
US – 1916 Act, that Article 17.4 does not place such a limit on a panel's jurisdiction to entertain
claims against legislation as such. Indeed, we stated in that appeal that no provision of the Anti-
Dumping Agreement precludes a panel from considering claims against legislation as such.84
84. Our reasoning for concluding that the panel in US – 1916 Act had jurisdiction to consider
legislation, as such, also applies in this case, where the relevant measures are specific provisions of an
administrative instrument issued by an executive agency pursuan t to statutory and regulatory
provisions. That reasoning was based on the GATT acquis and the language of the Anti-Dumping
Agreement, in particular Articles 17.3 and 18.4.

81Panel Report, US – Superfund, para. 5.2.2.
82We recall, in this regard, that Article 1.1 of the DSU applies the rules and procedures contained in the
DSU to "disputes brought pursuant to the consultation and dispute settlement provisions of the agreements listed in
Appendix 1", but that this general rule is, under Article 1.2 of the DSU, subject to the special or additional rules
and procedures on dispute settlement identified in Appendix 2 to the DSU. The Anti-Dumping Agreement is
listed as a covered agreement in Appendix 1 of the DSU. Articles 17.4 through 17.7 of the Anti-Dumping
Agreement are listed as special or additional rules in Appendix 2 to the DSU.
83Appellate Body Report, Guatemala – Cement I , paras. 79-80; Appellate Body Report, US – 1916
Act, paras. 72-74.
84Appellate Body Report, US – 1916 Act, paras. 63-82.