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DISPUTE SETTLEMENT: DISPUTE DS344

United States — Final Anti-dumping Measures on Stainless Steel from Mexico

This summary has been prepared by the Secretariat under its own responsibility. The summary is for general information only and is not intended to affect the rights and obligations of Members.

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Appellate Body and Panel Reports Adopted

Complaint by Mexico. 

On 26 May 2006, Mexico requested consultations with the United States concerning a series of final anti-dumping determinations by the US Department of Commerce concerning imports of stainless steel sheet and strip in coils from Mexico for the period between January 1999 and June 2004.  It also addresses: (i) certain sections of the US Tariff Act of 1930, as amended;  (ii) the Statement of Administrative Action that accompanied the Uruguay Round Agreements;  (iii) specific sections of the US Department of Commerce’s regulations codified at Title 19 of the US Code of Federal Regulations;  (iv) the 1997 edition of the Import Administration Antidumping Manual; and (v) the methodology employed by the US Department of Commerce to determine the overall margin of dumping for the product subject to the original investigation and administrative reviews, whereby the Department disregarded (“zeroed”) negative dumping margins.

Mexico considers that the above laws, regulations, administrative practices and methodologies both “as such” and as applied in the above determinations resulted in the nullification and impairment of benefits directly or indirectly accruing to Mexico under the WTO Agreement and the Agreements annexed thereto.  In particular, Mexico claims that the US laws, regulations, administrative practices, methodologies and determinations in question are inconsistent at least with:

• Articles VI:1 and VI:2 of the GATT 1994;
    
• Articles 1, 2.1, 2.4, 2.4.2, 5, 6.10, 9 (including but not limited to 9.3), 11 and 18 of the Anti-Dumping Agreement;  and
   
• Article XVI:4 of the WTO Agreement.

On 9 June 2006, Japan requested to join the consultations.

On 12 October 2006, Mexico requested the establishment of a panel. At its meeting on 26 October 2006, the DSB established a panel. Chile, China, the European Communities, Japan and Thailand reserved their third-party rights. On 15 December 2006, Mexico requested the Director-General to compose the Panel. On 20 December 2006, the Director-General composed the Panel.

On 21 May 2007, the Chairman of the Panel informed the DSB that the Panel would not be able to complete its work in six months in light of scheduling conflicts and that it expected to complete its work in November 2007.

On 20 December 2007, the Panel report was circulated to Members. The Panel concluded that:  (a) model zeroing in investigations as such is inconsistent with Article 2.4.2 of the Anti-Dumping Agreement;  (b) the USDOC acted inconsistently with Article 2.4.2 of the Anti-Dumping Agreement in the investigation on Stainless Steel Sheet and Strips in Coils from Mexico by using model zeroing;  (c) simple zeroing in periodic reviews is as such not inconsistent with Article VI:1 and VI:2 of the GATT 1994 and Articles 2.1, 9.3 and 2.4 of the Anti-Dumping Agreement;  and (d) the USDOC did not act inconsistently with Article VI:1 and VI:2 of the GATT 1994 and Articles 2.1, 9.3 and 2.4 of the Anti-Dumping Agreement by using simple zeroing in the five periodic reviews on Stainless Steel Sheet and Strip in Coils from Mexico.

The Panel applied judicial economy with regard to Mexico's claims under: Article VI:1 and VI:2 of the GATT 1994 and Articles 2.1, 2.4 and 18.4 of the Anti-Dumping Agreement and Article XVI:4 of the WTO Agreement regarding model zeroing in investigations;  and (b) Article XVI:4 of the WTO Agreement and Article 18.4 of the Anti-Dumping Agreement regarding simple zeroing in periodic reviews.

On 31 January 2008, Mexico notified its decision to appeal to the Appellate Body certain issues of law covered in the Panel report and certain legal interpretations developed by the Panel. On 26 March 2008, the Chairman of the Appellate Body informed the DSB that it would not be able to provide its report within 60 days due to the time required for completion and translation. It was estimated that the report will be circulated no later than 30 April 2008.

On 30 April 2008, the Appellate Body report was circulated to Members. The Appellate Body:

1. reversed the Panel's finding that simple zeroing in periodic review is not, as such, inconsistent with Articles VI:1 and VI:2 of the GATT 1994 and Articles 2.1, 2.4 and 9.3 of the Anti-Dumping Agreement;  and found, instead, that simple zeroing in periodic reviews is, as such, inconsistent with Article VI:2 of the GATT 1994 and Article 9.3 of the Anti-Dumping Agreement;
    
2. reversed the Panel's finding that the United States did not act inconsistently with Articles VI:1 and VI:2 of the GATT 1994 and Articles 2.1, 2.4 and 9.3 of the Anti-Dumping Agreement;  and found, instead, that the United States acted inconsistently with Article VI:2 of the GATT 1994 and Article 9.3 of the Anti-Dumping Agreement by applying simple zeroing in the five periodic reviews at issue in this dispute;
     
3. found it unnecessary, for purposes of resolving this dispute, to make an additional finding on Mexico's claim that simple zeroing in periodic reviews is, as such, and as applied in the five periodic reviews at issue in this dispute, inconsistent with Article 2.4 of the Anti-Dumping Agreement, and on Mexico's related claim under Article 11 of the DSU;  and
     
4. did not make an additional finding that the Panel failed to discharge its duties under Article 11 of the DSU by making findings that contradict those in previous Appellate Body reports adopted by the DSB.

The Appellate Body recommended that the DSB request the United States to bring its measures, found in the Appellate Body report, and in the Panel report as modified by the Appellate Body report, to be inconsistent with the GATT 1994 and with the Anti-Dumping Agreement, into conformity with its obligations under those Agreements.

On 20 May 2008, the DSB adopted the Appellate Body report and the Panel report, as modified by the Appellate Body report. 

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