UNITED STATES – ANTI-DUMPING MEASURE ON SHRIMP FROM ECUADOR
Document: Request for the Establishment of a Panel by Ecuador
Date: 9 June 2006
Document codes: WT/DS335/6
Complainant: Ecuador
Respondent: U.S.
Third parties: Brazil, Chile, China, EU, India, Japan, South Korea, Mexico, Thailand
Dispute stage: Panel
Agreements cited: Art. 2.4.2  Anti-dumping

UNITED STATES – ANTI-DUMPING MEASURE ON SHRIMP FROM ECUADOR

Request for the Establishment of a Panel by Ecuador

 The following communication, dated 8 June 2006, from the delegation of Ecuador to the
Chairman of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.

 Upon the instruction of my authorities, I here by convey the request of the Government of
Ecuador for the establishment of a panel under Article XXIII of the General Agreement on Tariffs and
Trade 1994 ("GATT 1994"), Articles 4 and 6 of the Understanding on Rules and Procedures
Governing the Settlement of Disputes ("DSU"), a nd Article 17 of the Agreement on Implementation
of Article VI of the General Agreement on Ta riffs and Trade 1994 ("Anti-Dumping Agreement")
regarding certain measures imposed by the United States, as further described below.

A. Consultations

 On 17 November 2005, the Government of Ecuador requested cons ultations with the
Government of the United States under Article 4 of the DSU, Article XXII of the GATT 1994, and
Article 17 of the Anti-Dumping Agreement concerning anti-dumping measures involving Certain
Frozen Warmwater Shrimp from Ecuador, Inv. no. A- 331-802. See Notice of Final Determination of
Sales at Less Than Fair Value: Certain Fr ozen and Canned Warmwater Shrimp from Ecuador,
69 Fed. Reg. 76913, 23 December 2004, and Notice of Amended Final Determination of Sales at Less
Than Fair Value and Antidumping Duty Order: Certain Frozen Warmwater Shrimp from Ecuador,
70 Fed. Reg. 5156, 1 February 2005.

 Consultations were held on 31 January 2006 and on several occasions thereafter. These
consultations provided helpful clarifications, but have not completely resolved the dispute.

B. Summary of the Facts

 The United States initiated its anti-dumping inv estigation against certain frozen warmwater
shrimp from Ecuador on 27 January 2004. See 69 Fed. Reg. 3876. The DOC conducted its
investigation of the extent of dumping under the st atutory authority provided by the Tariff Act of
1930, as amended, 19 U.S.C. § 1673, et seq., and under the regulatory authority provided in 19 C.F.R.
Part 351. As noted above, the DOC published its fi nal margin determination on 23 December 2004.
Following a final affirmative determination of ma terial injury by the US International Trade
Commission (70 Fed. Reg. 3943, 27 January 20 05), the DOC published its amended final margin
determination and anti-dumping duty order on 1 February 2005. The DOC's final margin
determination and amended final margin determination, as well as its anti-dumping duty order,
reflected and contained anti-dumping margins that were calculated by using "zeroing."

 The DOC's "zeroing" of negative anti-dumping ma rgins in anti-dumping investigations more
specifically means the following: (1) different "model s," i.e., types, of products are identified using
"control numbers" that specify the most relevant pr oduct characteristics; (2) weighted average prices
in the U.S. and weighted average normal values in the comparison market are calculated on a model-
specific basis for the entire period of investigati on; (3) the weighted average normal value of each
model is compared to the weighted average U.S. price for that same model; (4) to calculate the
dumping margin for an exporter, the amount of dump ing for each model is summed and then divided
by the aggregated U.S. price for all models; (5) before summing the total amount of dumping for all
models, all negative margins on individual models ar e set to zero. Through this method, the DOC
calculates margins of dumping and collects anti-du mping duties in amounts that exceed the actual
extent of dumping by the investigated companies.

 The DOC used zeroing in determining the fi nal anti-dumping margins for the two Ecuadorian
exporters for which anti-dumping margins above the 2 per cent de minimis level were calculated in
both the final and the amended final affirmative determination of sales at less than fair value in the
investigation of Certain Frozen Warmwater Shri mp from Ecuador cited above, as well as for "all
other" Ecuadorian exporters that were not separately investigated. The DOC's unpublished Issues and
Decision Memorandum, dated 23 December 2004, as well as other documents contained in the
administrative record of the investigation, includi ng computer programs, describe in more detail the
DOC's use of zeroing in the Ecuadorian shrimp investigation.

 The DOC's use of zeroing in the Ecuadorian sh rimp investigation appears to be similar
or identical to the investigation method that w as held to be inconsistent with the Anti-Dumping
Agreement in United States – Final Dumping Determination on Softwood Lumber from Canada
(Panel Report, WT/DS264/R, and Appellate B ody Report, WT/DS264/AB/R, adopted 31 August
2004), and in United States – Laws, Regulations and Methodology for Calculating Dumping Margins
("Zeroing") (Panel Report, WT/DS294/R, and Appella te Body Report, WT/DS294/AB/R, adopted
9 May 2006).

C. Measures and Claims

 The DOC's Final Determination, the DOC's Amended Final Determin ation, and the DOC's
anti-dumping duty order applied zeroing in its inv estigation of Certain Frozen Warmwater Shrimp
from Ecuador (referred to collectively below as the "m easures"). The use of zeroing in each of these
measures to calculate the margins of dumpi ng for the two exporters with margins above de minimis
and "all other" exporters is in consistent with the obligations of the United States under the
Anti-Dumping Agreement. Specifically, Ecuador considers that the measures are inconsistent with
the first sentence of Article 2.4.2 of the Anti-Dumping Agreement.

 The foregoing paragraph is provided without pr ejudice to any arguments that the Government
of Ecuador may develop and present to the panel regarding the WTO-inconsistency of the measures at
issue.

D. Request

 Ecuador requests, pursuant to Article 6 of the DSU and Article 17.4 of the Anti-Dumping
Agreement, that the Dispute Settle ment Body establish a panel to examine this matter, with the
standard terms of reference set out in Article 7.1 of the DSU. Ecuador asks that its request be placed
on the agenda for the next meeting of the Dispute Settlement Body to be held on 19 June 2006.