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REPERTORY OF APPELLATE BODY REPORTS

Anti-Dumping Agreement


ON THIS PAGE:

Object and purpose
Article 1. See Anti-Dumping Agreement, Article VI of the GATT 1994 — Anti-dumping duties (A.3.65)
Article 2 — Intent and effect of dumping
Article 2 — The concepts of “dumping” and “margins of dumping”
Article 2 — Period of investigation
Article 2.1 — “normal value …in the ordinary course of trade”
Article 2.1 — Sales below cost
Article 2.1 — Calculation of normal value
Article 2.1 — Fair comparison
Article 2.1 — Volume of dumped imports
Article 2.1 — Relationship with other provisions of the Anti-Dumping Agreement. See also Anti-Dumping Agreement, Article 2.4.2 (A.3.14); Anti-Dumping Agreement, Article 11.3 (A.3.45-52)
Article 2.2
Article 2.2.1 — Sales below cost and “ordinary course of trade”
Article 2.2.1.1 — “consider all available evidence on the proper allocation of costs”
Article 2.2.1.1 — “reasonably reflect” the cost of production
Article 2.2.2 — Low volume sales and “ordinary course of trade”
Article 2.2.2(ii) — Calculation of “weighted average”
Article 2.4 — “fair comparison”
Article 2.4 — Calculation of dumping margins — Relationship with Article 11.3. See also Anti-Dumping Agreement, Article 11.3 (A.3.45-52)
Article 2.4 — Third sentence
Article 2.4.2 — Calculation of margins of dumping — “zeroing”. See also Anti-Dumping Agreement, Article 2.2.1.1 — “consider all available evidence on the proper allocation of costs” (A.3.9A); Anti-Dumping Agreement, Article VI of the GATT 1994 (A.3.65)
Article 2.4.2 — Second sentence
Article 3.1 — General
Footnote 9 to Article 3
Article 3.1 — “positive evidence”
Article 3.1 — “objective examination”
Articles 3.1 and 3.2 — Method of calculating the “volume of the dumped imports”
Articles 3.1 and 3.2 — Calculation of the “volume of the dumped imports” without examining each producer or exporter individually. See also Anti-Dumping Agreement, Article 2.1 (A.3.3-8); Anti-Dumping Agreement, Article 3.3 (A.3.21); Anti-Dumping Agreement, Article 6.10 (A.3.37); Anti-Dumping Agreement, Article 9.4 (A.3.41-44)
Article 3.2 — No country-specific analysis of volume and prices of dumped imports
Article 3.3 — Cumulative assessment of dumped imports. See also Anti-Dumping Agreement, Article 3.2 (A.3.20)
Article 3.4 — Evaluation of injury factors
Article 3.4 — Manner of evaluating injury factors
Article 3.5 — Causation
Article 3.5 — Non-attribution of injury caused by other known factors
Article 3.5 — Examination of other known factors
Article 3.5 — Individual vs. Collective effects of other factors. See also Anti-Dumping Agreement, Articles 3.1 and 3.2 (A.3.18-19)
Article 3.7 — Threat of material injury. See also SCM Agreement, Article 15.7 — Threat of material injury (S.2.25B); Safeguards Agreement, Article 4.1(b) — Threat of serious injury (S.1.24)
Article 5.4 — Motives of domestic producers for supporting investigation
Article 5.8 — Termination of the investigation. See also SCM Agreement, Article 11.9 — Termination of an investigation (S.2.21)
Article 5.10 — Time-limit for investigations
Article 6 — Evidentiary rules for anti-dumping investigations. See also Anti-Dumping Agreement, Article 11.3 (A.3.45-52)
Article 6.1. See also Anti-Dumping Agreement, Article 11.4 (A.3.53)
Article 6.2 — Opportunity for interested parties to defend their interests
Article 6.4 — Access to information relevant for interested parties to present their case. See also Anti-Dumping Agreement, Article 6.2 (A.3.31); Anti-Dumping Agreement, Article 11.4 (A.3.53)
Article 6.8 and Annex II — Facts available to investigating authorities
Article 6.8 and Annex II — Timeliness of parties’ submissions
Article 6.8 and Annex II — “reasonable period” for submission of information
Article 6.8 and Annex II — Lack of cooperation by investigated parties. See also Anti-Dumping Agreement, Article 11.4 (A.3.53)
Article 6.10. See also Anti-Dumping Agreement, Articles 3.1 and 3.2 — Method of calculating the “volume of the dumped imports” (A.3.18); Anti-Dumping Agreement, Article 9.3 — Margin of dumping (A.3.40A); Anti-Dumping Agreement, Article 11.4 — Relationship with Article 6 (A.3.53)
Article 6.13 — Cooperation between interested parties and investigation authorities
Article 7 — Provisional measures
Article 9 — Imposition of anti-dumping duties — General, Relationship with Articles 2 and 3
Article 9.2 — Product-specific vs. Company-specific anti-dumping determination. See also Anti-Dumping Agreement, Article 11.3 (A.3.45-52)
Article 9.3 — Margin of dumping. See also Anti-Dumping Agreement, Article 2 (A.3.1-14); Anti-Dumping Agreement, Article 6.10 (A.3.37)
Articles 9.3.1 and 9.3.2 — Prospective and retrospective duty assessment
Footnote 20 to Article 9.3.1 of the Anti-Dumping Agreement
Article 9.4 — Calculation of the “all other” anti-dumping duty rate
Article 9.4(ii) — Prospective normal value systems
Article 9.4 — Relationship with Article 2.4.2
Article 9.4 — Relationship with Article 6.8
Article 9.4 — Relationship with paragraphs 1 and 2 of Article 3
Article 9.5 — New shipper reviews
Articles 11.1 and 11.2 — Duration and review of anti-dumping duties
Article 11.3 — Sunset review — Conditions. See also Anti-Dumping Agreement, Article 6 (A.3.29-38); Anti-Dumping Agreement, Article 9.2 (A.3.40); Anti-Dumping Agreement, Article 11.4 (A.3.53)
Article 11.3 — Likelihood of continuation or recurrence of dumping
Article 11.3 — Standard of review
Article 11.3 — Nature of sunset review investigation
Article 11.3 — Methodology for sunset review investigations
Article 11.3 — Cumulation in sunset reviews. See also Anti-Dumping Agreement, Article 3.3 — Cumulative assessment of dumped imports (A.3.21)
Article 11.3 — Relationship with Article 2. See also Anti-Dumping Agreement, Article 2.1 (A.3.3—8)
Article 11.3 — No duty to investigate each known producer and exporter individually. See also Anti-Dumping Agreement, Article 11.4 (A.3.53)
Article 11.3 — Determination of dumping margins and import volumes
Article 11.3 — Evidence
Article 11.3 — Likelihood determination based on evidence vs. Presumptions
Article 11.3 — Likelihood of continuation or recurrence of injury
Article 11.3 — Relationship with Article 3
Article 11.3 — Timeframe for likelihood of continuation or recurrence of injury
Article 11.4 — Relationship with Article 6. See also Anti-Dumping Agreement — Article 6 (A.3.29-38)
Article 12.1 — Interested parties known to the investigating authorities
Article 13 — Anti-Dumping Agreement
Article 17 — Dispute settlement. See also Special or Additional Rules and Procedures for Dispute Settlement (S.5)
Article 17.3 — Consultations. See also Consultations (C.7); Legislation as such vs. Specific Application (L.1); Terms of Reference of Panels, Specific measure at issue (T.6.3)
Article 17.4 — “matter referred to the DSB”. See also Legislation as such vs. Specific Application (L.1); Terms of Reference of Panels (T.6)
Article 17.5 — Facts made available to the investigating authority. See also Request for the Establishment of a Panel (R.2)
Article 17.6 — Standard of Review under the Anti-Dumping Agreement. See also Standard of Review, Article 11 of the DSU (S.7.2—8)
Article 17.6(i) — “assessment of the facts”. See also Seek Information and Technical Advice (S.4); Standard of Review, Article 11 of the DSU — Objective assessment of the facts (S.7.3)
Article 17.6(ii) — “permissible interpretations”. See also Interpretation, General rules of treaty interpretation — Article 31 of the Vienna Convention (I.3.1); Standard of Review, Article 11 of the DSU — Objective assessment of the facts (S.7.3)
Article 18.1 — Specific action against dumping. See also Anti-Dumping Agreement, Article VI of the GATT 1994 (A.3.65); Anti-Dumping Agreement, the Ad Note to Article VI:2 and 3 of the GATT 1994—Reasonable security (A.3.66A); SCM Agreement, Article 32.1 — Specific action against a subsidy (S.2.36)
Article 18.4 — Obligation to ensure WTO-conformity of domestic anti-dumping laws, regulations and procedures. See also WTO Agreement, Article XVI:4 — WTO-conformity of laws, regulations and administrative procedures (W.4.3)
Relationship between the Anti-Dumping Agreement and the SCM Agreement
Relationship between the Anti-Dumping Agreement and the GATT 1994
Article VI of the GATT 1994 — Anti-dumping duties. See also Anti-Dumping Agreement, Article 18.1 (A.3.61)
The Ad Note to Article VI:2 and 3 of the GATT 1994 — Pending final determination of the facts in any case of suspected dumping
The Ad Note to Article VI:2 and 3 of the GATT 1994 — Reasonable security


A.3.0 Object and purpose     back to top

A.3.0.1 US — Softwood Lumber V (Article 21.5 — Canada), para. 118
(WT/DS264/AB/RW)

 

We turn to examine what guidance is provided by the object and purpose of the Anti-Dumping Agreement for the interpretation of Article 2.4.2. The Anti-Dumping Agreement does not contain a preamble or an explicit indication of its object and purpose. Neither participant referred to the object and purpose in its written submission. At the oral hearing, Canada and certain third participants indicated that the object and purpose of the Anti-Dumping Agreement could be discerned from Article 1 of the Anti-Dumping Agreement. The United States and New Zealand, in contrast, said guidance could be found in Article VI of the GATT 1994. We do not consider it necessary for purposes of resolving the issue before us on appeal to engage in an in-depth analysis of the object and purpose of the Anti-Dumping Agreement.

 

Article 1. See Anti-Dumping Agreement, Article VI of the GATT 1994 — Anti-dumping duties (A.3.65)

 
A.3.1 Article 2 — Intent and effect of dumping     back to top

A.3.1.1 US — 1916 Act, para. 107
(WT/DS136/AB/R, WT/DS162/AB/R)

 

… under Article VI:1 of the GATT 1994 and Article 2 of the Anti-Dumping Agreement, neither the intent of the persons engaging in “dumping” nor the injurious effects that “dumping” may have on a Member’s domestic industry are constituent elements of “dumping”.

 
A.3.1A Article 2 — The concepts of “dumping” and “margins of dumping”     back to top

A.3.1A.1 US — Zeroing (Japan), paras. 108-112
(WT/DS322/AB/R)

 

… dumping is defined in Article VI:1 of the GATT 1994 as occurring when a “product” of one country is introduced into the commerce of another country at less than the normal value of the “product”. Consistent with this definition, Article VI:2 provides for the levying of anti-dumping duties in respect of a “dumped product” in order to offset or prevent the injurious effect of dumping.

 

This definition of dumping is carried over into the Anti-Dumping Agreement by Article 2.1. Furthermore, by virtue of the opening phrase of Article 2.1 — “[f]or the purposes of this Agreement” — this definition applies throughout the Agreement. Thus, the terms “dumping”, as well as “dumped imports”, have the same meaning in all provisions of the Agreement and for all types of anti-dumping proceedings, including original investigations, new shipper reviews, and periodic reviews. In each case, they relate to a product because it is the product that is introduced into the commerce of another country at less than its normal value in that country.

 

Article VI:2 defines “margin of dumping” as the difference between the normal value and the export price and establishes the link between “dumping” and “margin of dumping”. The margin of dumping reflects the magnitude of dumping. It is also one of the factors to be taken into account to determine whether dumping causes or threatens material injury. Article VI:2 lays down that “[i]n order to offset or prevent dumping, a Member may levy on any dumped product an anti-dumping duty not greater in amount than the margin of dumping in respect of such product.” Thus, the margin of dumping also is defined in relation to a “product”.

 

Secondly, the Anti-Dumping Agreement prescribes that dumping determinations be made in respect of each exporter or foreign producer examined. This is because dumping is the result of the pricing behaviour of individual exporters or foreign producers. Margins of dumping are established accordingly for each exporter or foreign producer on the basis of a comparison between normal value and export prices, both of which relate to the pricing behaviour of that exporter or foreign producer. In order to assess properly the pricing behaviour of an individual exporter or foreign producer, and to determine whether the exporter or foreign producer is in fact dumping the product under investigation and, if so, by which margin, it is obviously necessary to take into account the prices of all the export transactions of that exporter or foreign producer.

 

Other provisions of the Anti-Dumping Agreement also make it clear that “dumping” and “margins of dumping” relate to the exporter or foreign producer. Article 6.10 requires, “as a rule”, that investigating authorities determine “an individual margin of dumping for each known exporter or producer”. Similarly, Article 9.4 of the Anti-Dumping Agreement refers to situations where anti-dumping duties are applied to exporters or foreign producers not examined individually in an investigation, and provides that such duties shall not exceed “the weighted average margin of dumping established with respect to the selected exporters”. In addition, Article 9.5 indicates that the purpose of new shipper reviews is to determine “individual margins of dumping for any exporters or producers in the exporting country in question who have not exported the product” and refers to a “determination of dumping in respect of such producers or exporters”.

 

A.3.1A.2 US — Zeroing (Japan), para. 114
(WT/DS322/AB/R)

 

… it is evident from the design and architecture of the Anti-Dumping Agreement that: (a) the concepts of “dumping” and “margins of dumping” pertain to a “product” and to an exporter or foreign producer; (b) “dumping” and “dumping margins” must be determined in respect of each known exporter or foreign producer examined; (c) anti-dumping duties can be levied only if dumped imports cause or threaten to cause material injury to the domestic industry producing like products; and (d) anti-dumping duties can be levied only in an amount not exceeding the margin of dumping established for each exporter or foreign producer. These concepts are interlinked. They do not vary with the methodologies followed for a determination made under the various provisions of the Anti-Dumping Agreement.

 

A.3.1A.3 US — Stainless Steel (Mexico), paras. 83—89
(WT/DS344/AB/R)

 

We begin with an examination of the concepts of “dumping” and “margin of dumping” under Article VI of the GATT 1994 and the Anti-Dumping Agreement. “Dumping” is defined in Article VI:1 of the GATT 1994 as occurring when a product of one country is introduced into the commerce of another country at less than its normal value. Article VI:1 further states that dumping is to be “condemned” if it causes or threatens to cause material injury to the domestic industry producing a like product. In turn, Article VI:2 lays down that, “[i]n order to offset or prevent dumping, a Member may levy on any dumped product an anti-dumping duty not greater in amount than the margin of dumping in respect of such product.” Article VI:6(a) also stipulates that no anti-dumping duty shall be levied unless the importing Member “determines that the effect of the dumping is such as to cause or threaten material injury to an established domestic industry, or is such as to retard materially the establishment of a domestic industry”.

 

This definition of “dumping” is carried over into the Anti-Dumping Agreement by Article 2.1, which states that a product is to be considered as being “dumped” if the “export price” of the product “exported” from one country to another is less than the comparable price for the “like” product when destined for consumption in the “exporting” country. Furthermore, and significantly, the opening phrase of Article 2.1 — “For the purpose of this Agreement” —makes it clear that this definition of “dumping” applies throughout the Anti-Dumping Agreement.

 

The term “margin of dumping” is defined in Article VI:2 of the GATT 1994 as the difference between the “export price” and the “normal value” (that is, “the domestic price” of the like product in the exporting country) determined in accordance with Article VI:1. Article VI:2 further clarifies that the “margin of dumping” is in respect of the dumped “product”. The “margin of dumping” thus measures the “degree” — as used in Article 5.1 of the Anti-Dumping Agreement — or the “magnitude” — as used in Article 3.4 of the Anti-Dumping Agreement — of dumping. As the “margin of dumping” is only a measure of dumping, it also has the same meaning throughout the Anti-Dumping Agreement by virtue of Article 2.1.

 

The elements of the definition of “dumping” contained in Article VI:1 of the GATT 1994 and Article 2.1 of the Anti-Dumping Agreement — namely, that “dumping” occurs when a product is “introduced into the commerce of another country” at an “export price” that is less than the “comparable price for the like product in the exporting country” — suggest to us that Article VI:1 of the GATT 1994 and Article 2.1 of the Anti-Dumping Agreement address the pricing practice of an exporter. Article 2.2 of the Anti-Dumping Agreement as well as Article VI:1(b) of the GATT 1994 also point in the same direction because they indicate that, if sales of the like product in the domestic market of the exporting country do not permit a proper comparison, the comparison may be made with the price at which the product is exported to an appropriate third country. Similarly, Article 2.3 of the Anti-Dumping Agreement allows the “export price” to be constructed in cases where it appears to the authorities that the export price is unreliable.

 

The context found in various other provisions of the Anti-Dumping Agreement confirms that “dumping” and “margin of dumping” are exporter-specific concepts. Articles 5.2(ii), 6.1.1, and 6.7 indicate that the focus of an anti-dumping investigation to determine the existence and degree of dumping is the known exporters of the product under investigation. Furthermore, Article 5.8 provides that there shall be “immediate termination” of an anti-dumping investigation against an exporter where the authorities determine that the margin of dumping of that exporter is de minimis, that is, if the margin is less than 2 per cent, expressed as a percentage of the export price. A plain reading of Article 5.8 indicates that the term “margin of dumping” as used in that provision refers to a single margin established for each exporter by aggregation of its export transactions. The same Article provides that, if the volume of exports originating from an exporting country is “negligible” according to the criteria stated therein, the anti-dumping investigation against that country must be terminated.

 

Articles 6.10 and 9.5 of the Anti-Dumping Agreement also reveal that “dumping” and “margin of dumping” are exporter-specific concepts. Thus, the first sentence of Article 6.10 requires, “as a rule”, that authorities determine “an individual margin of dumping for each known exporter or producer concerned of the product under investigation”. Similar language appears in Article 6.10.2, which provides that, in cases where the authorities have limited their examination in accordance with Article 6.10, “they shall nevertheless determine an individual margin of dumping for any exporter or producer not initially selected who submits the necessary information in time for that information to be considered during the course of the investigation”. Likewise, Article 9.5, dealing with new shipper reviews, requires the authorities to determine an individual margin of dumping for any exporter that had not exported the product during the period of investigation.

 

There is nothing in Articles 5.8, 6.10, and 9.5 of the Anti-Dumping Agreement to suggest that it is permissible to interpret the term “margin of dumping” under those provisions as referring to multiple “dumping margins” occurring at the level of individual importers. Instead, these provisions reinforce the notion that a single margin of dumping is to be established for each individual exporter investigated.

 

A.3.1A.4 US — Stainless Steel (Mexico), paras. 94-95
(WT/DS344/AB/R)

 

… it is clear from Articles VI:1 and VI:2 of the GATT 1994 and the various provisions of the Anti-Dumping Agreement that: (a) “dumping” and “margin of dumping” are exporter-specific concepts; “dumping” is product-related as well, in the sense that an anti-dumping duty is a levy in respect of the product that is investigated and found to be dumped; (b) “dumping” and “margin of dumping” have the same meaning throughout the Anti-Dumping Agreement; (c) an individual margin of dumping is to be established for each investigated exporter, and the amount of anti-dumping duty levied in respect of an exporter shall not exceed its margin of dumping; and (d) the purpose of an anti-dumping duty is to counteract “injurious dumping” and not “dumping” per se. It must be stressed that, under the Anti-Dumping Agreement, the concepts of “dumping”, “injury”, and “margin of dumping” are interlinked and that, therefore, these terms should be considered and interpreted in a coherent and consistent manner for all parts of the Anti-Dumping Agreement.

 

Based on the above analysis, we disagree with the proposition that importers “dump” and can have “margins of dumping”. Dumping arises from the pricing practices of exporters as both normal values and export prices reflect their pricing strategies in home and foreign markets. The fact that “dumping” and “margin of dumping” are exporter-specific concepts under the Anti-Dumping Agreement is not altered by the fact that the export price may be the result of negotiation between the importer and the exporter. Nor is it altered by the fact that it is the importer that incurs the liability to pay anti-dumping duties.

 

A.3.1A.5 US — Continued Zeroing, paras. 280-285
(WT/DS350/AB/R)

 

… By virtue of the opening phrase of Article 2.1 — “[f]or the purpose of this Agreement” — this definition of “dumping” applies throughout the Anti-Dumping Agreement. In the interpretation of the concept of “dumping”, the discipline imposed by the opening phrase of Article 2.1 of the Anti-Dumping Agreement is important because it requires that the definitional content of “dumping” must be capable of application throughout the Anti-Dumping Agreement in a coherent fashion. This definition cannot be of variable content or application.

 

… Article VI:2 speaks of the difference between the normal value and the export price and establishes the link between “dumping” and “margin of dumping”. Article VI:2 further clarifies that the “margin of dumping” is in respect of the dumped “product”. In our view, there must be clarity as to the definition of “dumping” because it becomes a fundamental part of the basic concepts that underlie the Anti-Dumping Agreement, such as the “margin of dumping”.

 

Mere scrutiny of the particular terms — such as “product” and “export price” — in Article 2.1 does not resolve the issue of whether the concept of dumping is concerned with individual transactions or whether it is necessarily an aggregative concept attributable to an exporter. However, as we have indicated above, the interpretative exercise that is mandated under the Vienna Convention is a holistic and integrated one that cannot result in interpretations that are mutually contradictory. We thus turn to examine the context found in various other provisions of the Anti-Dumping Agreement in order to better elucidate what the concept of “dumping” means.

 

One aspect to be considered is that a number of provisions in the Anti-Dumping Agreement require a determination of dumping by reference to an exporter and to a product under consideration. More specifically, Article 5.8 requires that an anti-dumping investigation be terminated if the investigating authority determines that the margin of dumping is de minimis, which is defined as less than two per cent, expressed as a percentage of the export price. A plain reading of Article 5.8 indicates that the term “margin of dumping” as used in that provision refers to a single margin. Moreover, the first sentence of Article 6.10 of the Anti-Dumping Agreement stipulates that authorities “shall, as a rule, determine an individual margin of dumping for each known exporter or producer concerned of the product under investigation”. Likewise, Article 9.5, dealing with new shipper reviews, requires the authorities to determine an individual margin of dumping for any exporter that had not exported the product during the period of investigation. These provisions suggest that a single margin of dumping is to be established for each individual exporter or producer investigated as they do not refer to multiple margins occurring at the level of individual transactions.

 

We further note that the Anti-Dumping Agreement deals with “injurious dumping”, and the very purpose of an anti-dumping duty is to counteract the material injury caused, or threatened to be caused, by “dumped imports” to the domestic industry producing a “like product”. Under the Anti-Dumping Agreement, the concepts of “dumping”, “injury”, and “margin of dumping” are interlinked and should be considered and interpreted in a coherent and consistent manner for all parts of the Anti-Dumping Agreement.

 

We fail to see a textual or contextual basis in the GATT 1994 or the Anti-Dumping Agreement for treating transactions that occur above normal value as “dumped”, for purposes of determining the existence and magnitude of dumping in the original investigation, and as “non-dumped”, for purposes of assessing the final liability for payment of anti-dumping duties in a periodic review. If, as a consequence of zeroing, the results of certain comparisons are disregarded only for purposes of assessing final liability for payment of anti-dumping duties in a periodic review, a mismatch is created between the product considered “dumped” in the original investigation and the product for which anti-dumping duties are collected. This is not consonant with the need for consistent treatment of a product at the various stages of anti-dumping duty proceedings.

 
A.3.2 Article 2 — Period of investigation     back to top

A.3.2.1 EC — Tube or Pipe Fittings, para. 80
(WT/DS219/AB/R)

 

Permitting such discretionary selection of data from a period of time within the POI would defeat the objectives underlying investigating authorities’ reliance on a POI for the purposes of a dumping determination. As the Panel correctly noted, the POI “form[s] the basis for an objective and unbiased determination by the investigating authority”. Like the Panel and the parties to this dispute, we understand a POI to provide data collected over a sustained period of time, which period can allow the investigating authority to make a dumping determination that is less likely to be subject to market fluctuations or other vagaries that may distort a proper evaluation. We agree with the Panel that the standardized reliance on a POI, although not fixed in duration by the Anti-Dumping Agreement, assures the investigating authority and exporters of “a consistent and reasonable methodology for determining present dumping”, which anti-dumping duties are intended to offset. In contrast to this consistency and reliability, Brazil’s approach would introduce a significant level of subjectivity on the part of the investigating authority to determine when data from a subset of the POI may be a reliable indicator of an exporter’s future pricing behaviour. …

 
A.3.3 Article 2.1 — “normal value in the ordinary course of trade”     back to top

A.3.3.1 US — Hot-Rolled Steel, para. 139
(WT/DS184/AB/R)

 

Article 2.1 of the Anti-Dumping Agreement provides that normal value — the price of the like product in the home market of the exporter or producer — must be established on the basis of sales made “in the ordinary course of trade”. Thus, sales which are not made “in the ordinary course of trade” must be excluded, by the investigating authorities, from the calculation of normal value. …

 

A.3.3.2 US — Hot-Rolled Steel, para. 140
(WT/DS184/AB/R)

 

In terms of the above definition, Article 2.1 requires investigating authorities to exclude sales not made “in the ordinary course of trade”, from the calculation of normal value, precisely to ensure that normal value is, indeed, the “normal” price of the like product, in the home market of the exporter. Where a sales transaction is concluded on terms and conditions that are incompatible with “normal” commercial practice for sales of the like product, in the market in question, at the relevant time, the transaction is not an appropriate basis for calculating “normal” value.

 

A.3.3.3 US — Hot-Rolled Steel, para. 142
(WT/DS184/AB/R)

 

We note that determining whether a sales price is higher or lower than the “ordinary course” price is not simply a question of comparing prices. Price is merely one of the terms and conditions of a transaction. To determine whether the price is high or low, the price must be assessed in light of the other terms and conditions of the transaction. Thus, the volume of the sales transaction will affect whether a price is high or low. Or, the seller may undertake additional liability or responsibilities in some transactions, for instance for transport or insurance. These, and a number of other factors, may be expected to affect an assessment of the price.

 

A.3.3.4 US — Hot-Rolled Steel, para. 145
(WT/DS184/AB/R)

 

In our view, the duties of investigating authorities, under Article 2.1 of the Anti-Dumping Agreement, are precisely the same, whether the sales price is higher or lower than the “ordinary course” price, and irrespective of the reason why the transaction is not “in the ordinary course of trade”. Investigating authorities must exclude, from the calculation of normal value, all sales which are not made “in the ordinary course of trade”. To include such sales in the calculation, whether the price is high or low, would distort what is defined as “normal value”.

 

A.3.3.5 US — Hot-Rolled Steel, para. 146
(WT/DS184/AB/R)

 

In view of the many different types of transaction not “in the ordinary course of trade” — some including affiliated parties, others not; some including high prices, others low prices; some including prices below cost, others not — investigating authorities need not, under the Anti-Dumping Agreement, scrutinize, according to identical rules, each and every category of sale that is potentially not “in the ordinary course of trade”.

 
A.3.4 Article 2.1 — Sales below cost     back to top

A.3.4.1 US — Hot-Rolled Steel, para. 147
(WT/DS184/AB/R)

 

We note that Article 2.2.1 of the Anti-Dumping Agreement itself provides for a method for determining whether sales below cost are “in the ordinary course of trade”. However, that provision does not purport to exhaust the range of methods for determining whether sales are “in the ordinary course of trade”, nor even the range of possible methods for determining whether low-priced sales are “in the ordinary course of trade”. Article 2.2.1 sets forth a method for determining whether sales between any two parties are “in the ordinary course of trade”; it does not address the more specific issue of transactions between affiliated parties. In transactions between such parties, the affiliation itself may signal that sales above cost, but below the usual market price, might not be in the ordinary course of trade. Such transactions may, therefore, be the subject of special scrutiny by the investigating authorities.

 

A.3.4.2 US — Hot-Rolled Steel, para. 148
(WT/DS184/AB/R)

 

Although we believe that the Anti-Dumping Agreement affords WTO Members discretion to determine how to ensure that normal value is not distorted through the inclusion of sales that are not “in the ordinary course of trade”, that discretion is not without limits. In particular, the discretion must be exercised in an even-handed way that is fair to all parties affected by an anti-dumping investigation. If a Member elects to adopt general rules to prevent distortion of normal value through sales between affiliates, those rules must reflect, even-handedly, the fact that both high and low priced sales between affiliates might not be “in the ordinary course of trade”.

 
A.3.5 Article 2.1 — Calculation of normal value     back to top

A.3.5.1 US — Hot-Rolled Steel, para. 165
(WT/DS184/AB/R)

 

The text of Article 2.1 expressly imposes four conditions on sales transactions in order that they may be used to calculate normal value: first, the sale must be “in the ordinary course of trade”; second, it must be of the “like product”; third, the product must be “destined for consumption in the exporting country”; and, fourth, the price must be “comparable”.

 

A.3.5.2 US — Hot-Rolled Steel, para. 166
(WT/DS184/AB/R)

 

The text of Article 2.1 is, however, silent as to who the parties to relevant sales transactions should be. Thus, Article 2.1 does not expressly mandate that the sale be made by the exporter for whom a margin of dumping is being calculated. Nor does Article 2.1 expressly preclude that relevant sales transactions might be made downstream, between affiliates of the exporter and independent buyers. In our view, provided that all of the explicit conditions in Article 2.1 of the Anti-Dumping Agreement are satisfied, the identity of the seller of the “like product” is not a ground for precluding the use of a downstream sales transaction when calculating normal value. In short, we see no reason to read into Article 2.1 an additional condition that is not expressed.

 
A.3.6 Article 2.1 — Fair comparison     back to top

A.3.6.1 US — Hot-Rolled Steel, para. 167
(WT/DS184/AB/R)

 

We do not mean to suggest that the identity of the seller is irrelevant in calculating normal value under Article 2.1 of the Anti-Dumping Agreement. However, to ensure that prices are “comparable”, the Anti-Dumping Agreement provides a mechanism, in Article 2.4, which allows investigating authorities to take full account of the fact, as appropriate, that a relevant sale was not made by the exporter or producer itself, but was made by another party. Article 2.4 requires that a “fair comparison” be made between export price and normal value. This comparison “shall be made at the same level of trade, normally at the ex-factory level”. In making a “fair comparison”, Article 2.4 mandates that due account be taken of “differences which affect price comparability”, such as differences in the “levels of trade” at which normal value and export price are calculated.

 
A.3.7 Article 2.1 — Volume of dumped imports     back to top

A.3.7.1 EC — Bed Linen (Article 21.5 — India), para. 143
(WT/DS141/AB/RW)

 

… We see no conflict between the provisions requiring producer-specific determinations and the need to calculate, for purposes of determining injury, the total volume of dumped imports from producers or exporters originating in a particular exporting country as a whole. This can be done, and has to be done, by adding up the volume of imports attributable to producers or exporters that are dumping, whether on the basis of an individual examination or on the basis of an extrapolation. Further, we see nothing in the text of Article 2.1 that permits a derogation from the express requirements in paragraphs 1 and 2 of Article 3 to determine the volume of dumped imports on the basis of “positive evidence” and an “objective examination”.

 
A.3.8 Article 2.1 — Relationship with other provisions of the Anti-Dumping Agreement.
See also Anti-Dumping Agreement, Article 2.4.2 (A.3.14); Anti-Dumping Agreement, Article 11.3 (A.3.45-52)     back to top

A.3.8.1 US — Corrosion-Resistant Steel Sunset Review, para. 109
(WT/DS244/AB/R)

 

We agree with Japan that the words “[f]or the purpose of this Agreement” in Article 2.1 indicate that this provision describes the circumstances in which a product is to be considered as being dumped for purposes of the entire Anti-Dumping Agreement, including Article 11.3. This interpretation is supported by the fact that Article 11.3 does not indicate, either expressly or by implication, that “dumping” has a different meaning in the context of sunset reviews than in the rest of the Anti-Dumping Agreement. Therefore, Article 2.1 of the Anti- Dumping Agreement and Article VI:1 of the GATT 1994 suggest that the question for investigating authorities, in making a likelihood determination in a sunset review pursuant to Article 11.3, is whether the expiry of the duty would be likely to lead to continuation or recurrence of dumping of the product subject to the duty (that is, to the introduction of that product into the commerce of the importing country at less than its normal value). …

 

A.3.8.2 US — Zeroing (EC), para. 126
(WT/DS294/AB/R, WT/DS294/AB/R/Corr.1)

 

… Although, in US — Softwood Lumber V, the Appellate Body dealt with a claim regarding the determination of a margin of dumping in an original investigation when using the weighted-average-to-weighted-average methodology provided for in the first sentence of Article 2.4.2, it stated unambiguously that “the terms ‘dumping’ and ‘margins of dumping’ in Article VI of the GATT 1994 and the Anti- Dumping Agreement apply to the product under investigation as a whole”. This finding was based not only on Article 2.4.2, first sentence, but also on the context found in Article 2.1 of the Anti-Dumping Agreement.

 

A.3.8.3 US — Zeroing (Japan), para. 139
(WT/DS322/AB/R)

 

… we reverse the Panel’s findings, … that “simple zeroing” in original investigations is not inconsistent with Article 2.1 of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the GATT 1994, because these findings are simply based on the Panel’s findings and reasoning relating to Article 2.4.2 of the Anti-Dumping Agreement, which we have reversed. …

 

A.3.8.4 US — Zeroing (Japan), para. 140
(WT/DS322/AB/R)

 

… Article 2.1 of the Anti-Dumping Agreement and Article VI:1 of the GATT 1994 are definitional provisions. They set out a definition of “dumping” for the purposes of the Anti-Dumping Agreement and the GATT 1994. The definitions in Article 2.1 and Article VI:1 are no doubt central to the interpretation of other provisions of the Anti-Dumping Agreement, such as the obligations relating to, inter alia, the calculation of margins of dumping, volume of dumped imports, and levy of antidumping duties to counteract injurious dumping. But, Article 2.1 and Article VI:1, read in isolation, do not impose independent obligations. …

 
A.3.8A Article 2.2     back to top

A.3.8A.1 US — Softwood Lumber V (Article 21.5 — Canada), para. 104
(WT/DS264/AB/RW)

 

… there is nothing in the text of Article 2.2 that prohibits an investigating authority from dividing the product under investigation into product types or models. Under the weighted average-to-weighted average comparison methodology, the prohibition of zeroing in Article 2.4.2 is triggered, not at the stage of determining whether to use a constructed normal value for a specific model or type, but, rather, when the results of the comparisons for each model or type are aggregated for purposes of establishing the margin of dumping for the product under investigation. Therefore, a prohibition of zeroing under the transaction-to-transaction comparison methodology provided in Article 2.4.2 does not limit the ability of an investigating authority, when the conditions are met, to use constructed normal value for one particular model or type, but not for others. We fail to see, therefore, the relevance of Article 2.2 for the interpretation of Article 2.4.2 as regards the permissibility of zeroing under the transaction-to-transaction comparison methodology.

 
A.3.9 Article 2.2.1 — Sales below cost and “ordinary course of trade”     back to top

A.3.9.1 US — Hot-Rolled Steel, para. 147
(WT/DS184/AB/R)

 

We note that Article 2.2.1 of the Anti-Dumping Agreement itself provides for a method for determining whether sales below cost are “in the ordinary course of trade”. However, that provision does not purport to exhaust the range of methods for determining whether sales are “in the ordinary course of trade”, nor even the range of possible methods for determining whether low-priced sales are “in the ordinary course of trade”. Article 2.2.1 sets forth a method for determining whether sales between any two parties are “in the ordinary course of trade”; it does not address the more specific issue of transactions between affiliated parties. In transactions between such parties, the affiliation itself may signal that sales above cost, but below the usual market price, might not be in the ordinary course of trade. Such transactions may, therefore, be the subject of special scrutiny by the investigating authorities.

 
A.3.9A Article 2.2.1.1 — “consider all available evidence on the proper allocation of costs”     back to top

A.3.9A.1 US — Softwood Lumber V, paras. 133-135
(WT/DS264/AB/R)

 

… The ordinary meaning of the term “consider” is, inter alia, to “look at attentively”, “reflect on”, or to “weigh the merits of”. In the context of the second sentence of Article 2.2.1.1, we read the term “consider” to mean that an investigating authority is required, when addressing the question of proper allocation of costs for a producer or exporter, to “reflect on” and to “weigh the merits of” “all available evidence on the proper allocation of costs”. … the requirement to “consider” evidence would not be satisfied by simply “receiving evidence” or merely “tak[ing] notice of evidence”.

 

… The word “proper”, in our view, supports our reading of the word “consider”, because it suggests some degree of deliberation on the part of the investigating authority in “consider[ing] all available evidence”, so as to ensure that there is a proper allocation of costs. The nature of this deliberative process will depend on the facts of a particular case before the investigating authority.

 

We are aware that the term “comparison”, which is derived from the verb “compare”, is used in other provisions of the Anti-Dumping Agreement. For instance, Articles 2.4 and 2.4.2 refer to the “comparison” of export prices and normal value, for purposes of establishing the existence of margins of dumping. As both the word “consider” and the word “comparison” are used in the Anti-Dumping Agreement, it follows, in our view, that the non-inclusion, by the drafters of the Anti-Dumping Agreement, in Article 2.2.1.1 of the word “compare” is not a mere oversight, but rather a purposeful act of drafting. However, as we explain below, we do not believe that this requires an interpretation that the second sentence of Article 2.2.1.1 does not, under any circumstances, require an investigating authority to compare methodologies.

 

A.3.9A.2 US — Softwood Lumber V, paras. 137-138
(WT/DS264/AB/R)

 

The second sentence of Article 2.2.1.1 requires an investigating authority to “consider” all available evidence on the proper allocation of costs, which in certain circumstances may require the investigating authority to consider alternative allocation methodologies. Therefore, the issue before us is not simply whether the word “consider”, in and of itself, entails a requirement to “compare”. Rather, the issue before us is whether a requirement to “consider all available evidence on the proper allocation of costs” does or does not require an investigating authority to “compare” advantages and disadvantages of alternative cost allocation methodologies.

 

In our view, the parameters of the obligation to “consider all available evidence” will vary case-by-case. It may well be that, in the light of the facts of a particular case, the requirement to “consider all available evidence” may be satisfied by the investigating authority without comparing allocation methodologies or aspects thereof. However, in other instances — such as where there is compelling evidence available to the investigating authority that more than one allocation methodology potentially may be appropriate to ensure that there is a proper allocation of costs — the investigating authority may be required to “reflect on” and “weigh the merits of” evidence that relates to such alternative allocation methodologies, in order to satisfy the requirement to “consider all available evidence”. Thus, although the second sentence of Article 2.2.1.1 does not, as a general rule, require investigating authorities to compare allocation methodologies to assess their respective advantages and disadvantages in each and every case, there may be particular instances in which the investigating authority may be required to compare them in order to satisfy the explicit requirement of the second sentence of Article 2.2.1.1 to “consider all available evidence on the proper allocation of costs”.

 
A.3.9B Article 2.2.1.1 — “reasonably reflect” the cost of production     back to top

A.3.9B.1 US — Softwood Lumber V, para. 165
(WT/DS264/AB/R)

 

Canada argues that USDOC, in evaluating whether Tembec’s records “reasonably reflect” the cost of production of the product under consideration (that is, softwood lumber), failed to exercise its discretion in an even-handed manner. …

 

A.3.9B.2 US — Softwood Lumber V, para. 163
(WT/DS264/AB/R)

 

… Whether a particular approach of an investigating authority is, or is not, evenhanded is, ultimately, a matter of the “legal characterization” of facts and, as such, a matter of law. We are thus unable to agree with the United States that the issue raised by Canada with respect to the lack of even-handed treatment on the part of USDOC is beyond the scope of appellate review.

 
A.3.10 Article 2.2.2 — Low volume sales and “ordinary course of trade”     back to top

A.3.10.1 EC — Tube or Pipe Fittings, para. 98
(WT/DS219/AB/R)

 

As the Panel correctly observed, it is meaningful for the interpretation of Article 2.2.2 that Article 2.2 specifically identifies low-volume sales in addition to sales outside the ordinary course of trade. In contrast to Article 2.2, the chapeau of Article 2.2.2 explicitly excludes only sales outside the ordinary course of trade. The absence of any qualifying language related to low volumes in Article 2.2.2 implies that an exception for low-volume sales should not be read into Article 2.2.2. …

 

A.3.10.2 EC — Tube or Pipe Fittings, para. 101
(WT/DS219/AB/R)

 

… In our view, where, as in this investigation, low-volume sales are in the ordinary course of trade, an investigating authority does not act inconsistently with the chapeau of Article 2.2.2 by including actual data from those sales to derive SG&A and profits for the construction of normal value.

 
A.3.11 Article 2.2.2(ii) — Calculation of “weighted average”    back to top

A.3.11.1 EC — Bed Linen, para. 76
(WT/DS141/AB/R)

 

… the use of the phrase “weighted average”, combined with the use of the words “amounts” and “exporters or producers” in the plural in the text of Article 2.2.2(ii), clearly anticipates the use of data from more than one exporter or producer. We conclude that the method for calculating amounts for SG&A and profits set out in this provision can only be used if data relating to more than one other exporter or producer is available.

 

A.3.11.2 EC — Bed Linen, para. 80
(WT/DS141/AB/R)

 

… in the calculation of the “weighted average”, all of “the actual amounts incurred and realized” by other exporters or producers must be included, regardless of whether those amounts are incurred and realized on production and sales made in the ordinary course of trade or not. Thus, in our view, a Member is not allowed to exclude those sales that are not made in the ordinary course of trade from the calculation of the “weighted average” under Article 2.2.2(ii).

 
A.3.12 Article 2.4 — “fair comparison”    back to top

A.3.12.1 US — Hot-Rolled Steel, para. 167
(WT/DS184/AB/R)

 

We do not mean to suggest that the identity of the seller is irrelevant in calculating normal value under Article 2.1 of the Anti-Dumping Agreement. However, to ensure that prices are “comparable”, the Anti-Dumping Agreement provides a mechanism, in Article 2.4, which allows investigating authorities to take full account of the fact, as appropriate, that a relevant sale was not made by the exporter or producer itself, but was made by another party. Article 2.4 requires that a “fair comparison” be made between export price and normal value. This comparison “shall be made at the same level of trade, normally at the ex-factory level”. In making a “fair comparison”, Article 2.4 mandates that due account be taken of “differences which affect price comparability”, such as differences in the “levels of trade” at which normal value and export price are calculated.

 

A.3.12.2 US — Zeroing (EC), para. 146
(WT/DS294/AB/R, WT/DS294/AB/R/Corr.1)

 

… the Panel found, first, that the “fair comparison” language in the first sentence of Article 2.4 creates an independent obligation, and, secondly, that the scope of this obligation is not exhausted by the general subject matter expressly addressed by paragraph 4 (that is to say, the price comparability). The European Communities agrees with these two Panel findings and, accordingly, does not challenge them on appeal. For our part, we see nothing incorrect in the Panel’s reasoning with respect to these two specific findings. On the substantive meaning of the term “fair comparison”, we also agree with the Panel that the legal rule set out in the first sentence of Article 2.4 is expressed in terms of a general and abstract standard. One implication of this is that this requirement is also applicable to proceedings governed by Article 9.3.

 

A.3.12.3 US — Zeroing (EC), para. 147
(WT/DS294/AB/R, WT/DS294/AB/R/Corr.1)

 

We have already found that zeroing, as applied by the USDOC in the administrative reviews at issue, is inconsistent with Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994. Therefore, an additional finding that the use of the same methodology in the administrative reviews at issue is inconsistent with the “fair comparison” requirement contained in the first sentence of Article 2.4 of the Anti-Dumping Agreement does not appear to us necessary for solving this dispute.… the Panel’s reasoning with respect to the first sentence of Article 2.4 depends to a large extent on its findings on Article 2.4.2 and Article 9.3. We recall that we reversed the Panel’s finding on Article 9.3. In these circumstances, we declare moot, and of no legal effect, the finding of the Panel, in paragraphs 7.284 and 8.1(e) of the Panel Report, that zeroing, as applied by the USDOC in the administrative reviews at issue, is not inconsistent with the first sentence of Article 2.4 of the Anti-Dumping Agreement.

 

A.3.12.4 US — Softwood Lumber V (Article 21.5 — Canada), paras. 132, 135, 136
(WT/DS264/AB/RW)

 

… the application of the comparison methodologies set out in Article 2.4.2 of the Anti-Dumping Agreement, including the transaction-to-transaction methodology applied in the investigation underlying this dispute, is expressly made subject to the “fair comparison” requirement set out in Article 2.4.

 

 

Because the Panel’s conclusion under Article 2.4 was premised precisely on its finding that zeroing under the transaction-to-transaction comparison methodology is consistent with Article 2.4.2, which we have reversed, this conclusion can no longer stand.

 

… the Panel’s reasoning essentially makes the “fair comparison” requirement in Article 2.4 dependent on Article 2.4.2. According to the Panel, “[t]he principle of effective treaty interpretation implies that the ‘fair comparison’ obligation in Article 2.4 must not be interpreted in a manner so as to trump the more specific provisions of Article 2.4.2”. Apparently, the Panel considered Article 2.4.2 as lex specialis. This, however, is not a correct representation of the relationship between the two provisions. Rather, the introductory clause to Article 2.4.2 expressly makes it “[s]ubject to the provisions governing fair comparison” in Article 2.4.

 

A.3.12.5 US — Softwood Lumber V (Article 21.5 — Canada), paras. 138-142
(WT/DS264/AB/RW)

 

The term “fair” is generally understood to connote impartiality, even-handedness, or lack of bias. For the reasons stated below, we consider that the use of zeroing under the transaction-to-transaction comparison methodology is difficult to reconcile with the notions of impartiality, even-handedness, and lack of bias reflected in the “fair comparison” requirement in Article 2.4.

 

First, the use of zeroing under the transaction-to-transaction comparison methodology when aggregating the transaction-specific comparisons for purposes of calculating the “margins of dumping”, distorts the prices of certain export transactions because export transactions made at prices above normal value are not considered at their real value. The prices of these export transactions are artificially reduced when zeroing is applied under the transaction-to-transaction comparison methodology. As the Appellate Body explained in the original dispute, “[z]eroing means, in effect, that at least in the case of some export transactions, the export prices are treated as if they were less than what they actually are.”

 

Secondly, the use of zeroing in the transaction-to-transaction comparison methodology, as in the weighted average-to-weighted average methodology, tends to result in higher margins of dumping. …

 

Moreover, it has been argued in these Article 21.5 proceedings that the effect of zeroing is even more pronounced under the transaction-to-transaction comparison methodology than under the weighted average-to-weighted average methodology. …

 

In sum, the use of zeroing under the transaction-to-transaction comparison methodology artificially inflates the magnitude of dumping, resulting in higher margins of dumping and making a positive determination of dumping more likely. This way of calculating cannot be described as impartial, even-handed, or unbiased. For this reason, we do not consider that the calculation of “margins of dumping”, on the basis of a transaction-to-transaction comparison that uses zeroing, satisfies the “fair comparison” requirement within the meaning of Article 2.4 of the Anti-Dumping Agreement.

 

A.3.12.6 US — Zeroing (Japan), para. 146
(WT/DS322/AB/R)

 

The Appellate Body has previously made it clear that the use of zeroing under the T-T comparison methodology distorts the prices of certain export transactions because the “prices of [certain] export transactions [made] are artificially reduced”. In this way, “the use of zeroing under the [T-T] comparison methodology artificially inflates the magnitude of dumping, resulting in higher margins of dumping and making a positive determination of dumping more likely”. The Appellate Body has further stated that “[t]his way of calculating cannot be described as impartial, even-handed, or unbiased.” As the Appellate Body has previously found, under the first sentence of Article 2.4.2, “an investigating authority must consider the results of all the comparisons and may not disregard the results of comparisons in which export prices are above normal value”. Therefore, we consider that zeroing in T-T comparisons in original investigations is inconsistent with the fair comparison requirement in Article 2.4.

 

A.3.12.7 US — Zeroing (Japan), paras. 167-168
(WT/DS322/AB/R)

 

We turn next to examine whether zeroing in periodic reviews and new shipper reviews is, as such, inconsistent with the “fair comparison” requirement in Article 2.4 of the Anti-Dumping Agreement.

 

If anti-dumping duties are assessed on the basis of a methodology involving comparisons between the export price and the normal value in a manner which results in anti-dumping duties being collected from importers in excess of the amount of the margin of dumping of the exporter or foreign producer, then this methodology cannot be viewed as involving a “fair comparison” within the meaning of the first sentence of Article 2.4. This is so because such an assessment would result in duty collection from importers in excess of the margin of dumping established in accordance with Article 2, as we have explained previously.

 
A.3.13 Article 2.4 — Calculation of dumping margins — Relationship with Article 11.3.
See also Anti-Dumping Agreement, Article 11.3 (A.3.45-52)    back to top

A.3.13.1 US — Corrosion-Resistant Steel Sunset Review, paras. 127-128
(WT/DS244/AB/R)

 

Article 2 sets out the agreed disciplines in the Anti-Dumping Agreement for calculating dumping margins. As observed earlier, we see no obligation under Article 11.3 for investigating authorities to calculate or rely on dumping margins in determining the likelihood of continuation or recurrence of dumping. However, should investigating authorities choose to rely upon dumping margins in making their likelihood determination, the calculation of these margins must conform to the disciplines of Article 2.4. … USDOC chose to base its affirmative likelihood determination on positive dumping margins that had been previously calculated in two particular administrative reviews. If these margins were legally flawed because they were calculated in a manner inconsistent with Article 2.4, this could give rise to an inconsistency not only with Article 2.4, but also with Article 11.3 of the Anti-Dumping Agreement.

 

It follows that we disagree with the Panel’s view that the disciplines in Article 2 regarding the calculation of dumping margins do not apply to the likelihood determination to be made in a sunset review under Article 11.3. …

 
A.3.13A Article 2.4 — Third sentence    back to top

A.3.13A.1 US — Zeroing (EC), para. 156
(WT/DS294/AB/R, WT/DS294/AB/R/Corr.1)

 

… if allowances could be made for differences not affecting price comparability, the purpose of the requirement of the third sentence of Article 2.4 would be undermined. Therefore, we are of the view that the third sentence of Article 2.4 also applies a contrario: this sentence implies that allowances should not be made for differences that do not affect price comparability. Having said that, the principle set out in the third sentence of Article 2.4, including its a contrario application, does not cover all adjustments, but only adjustments made for those differences that fall within the scope of that principle.

 

A.3.13A.2 US — Zeroing (EC), paras. 157-158
(WT/DS294/AB/R, WT/DS294/AB/R/Corr.1)

 

… Article 2.4 specifies that the differences for which due allowance shall be made are those “which affect price comparability”. In our view, this refers to differences in characteristics of the compared transactions that have an impact, or are likely to have an impact, on the price of the transaction. Likewise, the a contrario application of this principle prohibits only those adjustments made in relation to differences in characteristics of the compared transactions that do not affect price comparability. These are differences that do not have an impact, or are unlikely to have an impact, on the price of the transaction. Therefore, adjustments or allowances made in relation to differences in price between export transactions and domestic transactions — such as zeroing — cannot be adjustments or allowances covered by the third sentence of Article 2.4, including its a contrario application. Indeed, whether or not a factor affects the price comparability between export and domestic transactions should be determined before this comparison is made, and not after.

 

… disregarding a result when the export price exceeds the normal value (zeroing) cannot be characterized as an allowance or an adjustment covered by the third sentence of Article 2.4, including its a contrario application. Indeed, this is not undertaken to adjust to a difference relating to a characteristic of the export transaction in comparison with a domestic transaction. Accordingly, we agree with the Panel that, conceptually, zeroing is not an adjustment or an allowance falling within the scope of Article 2.4, third to fifth sentences.

 
A.3.14 Article 2.4.2 — Calculation of margins of dumping — “zeroing”.
See also Anti-Dumping Agreement, Article 2.2.1.1 — “consider all available evidence on the proper allocation of costs” (A.3.9A); Anti-Dumping Agreement, Article VI of the GATT 1994 (A.3.65)    back to top

A.3.14.1 EC — Bed Linen, para. 53
(WT/DS141/AB/R)

 

… We see nothing in Article 2.4.2 or in any other provision of the Anti-Dumping Agreement that provides for the establishment of “the existence of margins of dumping” for types or models of the product under investigation; to the contrary, all references to the establishment of “the existence of margins of dumping” are references to the product that is subject of the investigation. … Whatever the method used to calculate the margins of dumping, in our view, these margins must be, and can only be, established for the product under investigation as a whole. …

 

A.3.14.2 EC — Bed Linen, para. 55
(WT/DS141/AB/R)

 

… the investigating authorities are required to compare the weighted average normal value with the weighted average of prices of all comparable export transactions. Here, we emphasize that Article 2.4.2 speaks of “all” comparable export transactions. As explained above, when “zeroing”, the European Communities counted as zero the “dumping margins” for those models where the “dumping margin” was “negative”. As the Panel correctly noted, for those models, the European Communities counted “the weighted average export price to be equal to the weighted average normal value despite the fact that it was, in reality, higher than the weighted average normal value”. By “zeroing” the “negative dumping margins”, the European Communities, therefore, did not take fully into account the entirety of the prices of some export transactions, namely, those export transactions involving models of cotton-type bed linen where “negative dumping margins” were found. … Thus, the European Communities did not establish “the existence of margins of dumping” for cotton-type bed linen on the basis of a comparison of the weighted average normal value with the weighted average of prices of all comparable export transactions …

 

A.3.14.3 EC — Bed Linen, para. 58
(WT/DS141/AB/R)

 

Having defined the product at issue and the “like product” on the Community market as it did, the European Communities could not, at a subsequent stage of the proceeding, take the position that some types or models of that product had physical characteristics that were so different from each other that these types or models were not “comparable”. All types or models falling within the scope of a “like” product must necessarily be “comparable”, and export transactions involving those types or models must therefore be considered “comparable export transactions” within the meaning of Article 2.4.2.

 

A.3.14.4 US — Corrosion-Resistant Steel Sunset Review, paras. 135-136
(WT/DS244/AB/R)

 

When investigating authorities use a zeroing methodology such as that examined in EC — Bed Linen to calculate a dumping margin, whether in an original investigation or otherwise, that methodology will tend to inflate the margins calculated. Apart from inflating the margins, such a methodology could, in some instances, turn a negative margin of dumping into a positive margin of dumping. As the Panel itself recognized in the present dispute, “zeroing may lead to an affirmative determination that dumping exists where no dumping would have been established in the absence of zeroing”. Thus, the inherent bias in a zeroing methodology of this kind may distort not only the magnitude of a dumping margin, but also a finding of the very existence of dumping.

 

… we note that the United States seemed to accept that USDOC’s methodology in the administrative reviews was “a methodology in which no offset is granted to the respondent for negative differences between the normal value and export price (or constructed export price) of individual transactions”. …

 

A.3.14.5 EC — Tube or Pipe Fittings, para. 76
(WT/DS219/AB/R)

 

… We fail to see how Article VI:2, by stating that the purpose of anti-dumping duties is “to offset or prevent dumping”, imposes upon investigating authorities an obligation to select any particular methodology for comparing normal value and export prices under Article 2.4.2 of the Anti-Dumping Agreement when calculating a dumping margin. …

 

A.3.14.6 US — Softwood Lumber V, paras. 80—81
(WT/DS264/AB/R)

 

We note that there is no disagreement among the participants in this dispute as to the permissibility of “multiple averaging” under Article 2.4.2. All participants agree that an investigating authority may choose to divide the product under investigation into product types or models for purposes of calculating a weighted average normal value and a weighted average export price for the transactions involving each product type or model or sub-group of “comparable” transactions. …

 

We agree with the participants in this dispute that multiple averaging is permitted under Article 2.4.2 to establish the existence of margins of dumping for the product under investigation. We disagree with those who suggest that the Appellate Body Report in EC — Bed Linen is premised on an assumption that multiple averaging is prohibited. The issue of multiple averaging was not before the Appellate Body in EC — Bed Linen and the reasoning of the Appellate Body in that case should therefore not be read as prohibiting that practice. …

 

A.3.14.7 US — Softwood Lumber V, para. 86
(WT/DS264/AB/R)

 

Article 2.4.2 requires that the existence of margins of dumping “shall normally be established on the basis of a comparison of a weighted average normal value with a weighted average of prices of all comparable export transactions” (emphasis added). It is clear from the language of Article 2.4.2 that a weighted average normal value is to be compared with a weighted average of the prices of “comparable” export transactions, and not with prices of “non-comparable” export transactions. At the same time, the word “all” in “all comparable export transactions” makes it clear that Members cannot exclude from a comparison any transaction that is “comparable”. Thus, we agree with the Panel that the term “all comparable export transactions” means that a Member “may only compare those export transactions which are comparable, but it must compare all such transactions”.

 

A.3.14.8 US — Softwood Lumber V, para. 93
(WT/DS264/AB/R)

 

It is clear from the texts of [Article VI:1 of the GATT 1994 and Article 2.1 of the Anti-Dumping Agreement] that dumping is defined in relation to a product as a whole as defined by the investigating authority. Moreover, we note that the opening phrase of Article 2.1 — “[f]or the purpose of this Agreement” — indicates that the definition of “dumping” as contained in Article 2.1 applies to the entire Agreement, which includes, of course, Article 2.4.2. “Dumping”, within the meaning of the Anti-Dumping Agreement, can therefore be found to exist only for the product under investigation as a whole, and cannot be found to exist only for a type, model, or category of that product.

 

A.3.14.9 US — Softwood Lumber V, paras. 96-98
(WT/DS264/AB/R)

 

The Appellate Body found in EC — Bed Linen that “[w]hatever the method used to calculate the margins of dumping these margins must be, and can only be, established for the product under investigation as a whole.” While “dumping” refers to the introduction of a product into the commerce of another country at less than its normal value, the term “margin of dumping” refers to the magnitude of dumping. As with dumping, “margins of dumping” can be found only for the product under investigation as a whole, and cannot be found to exist for a product type, model, or category of that product.

 

It is clear that an investigating authority may undertake multiple averaging to establish margins of dumping for a product under investigation. In our view, the results of the multiple comparisons at the sub-group level are, however, not “margins of dumping” within the meaning of Article 2.4.2. Rather, those results reflect only intermediate calculations made by an investigating authority in the context of establishing margins of dumping for the product under investigation. Thus, it is only on the basis of aggregating all these “intermediate values” that an investigating authority can establish margins of dumping for the product under investigation as a whole.

 

We fail to see how an investigating authority could properly establish margins of dumping for the product under investigation as a whole without aggregating all of the “results” of the multiple comparisons for all product types. There is no textual basis under Article 2.4.2 that would justify taking into account the “results” of only some multiple comparisons in the process of calculating margins of dumping, while disregarding other “results”. If an investigating authority has chosen to undertake multiple comparisons, the investigating authority necessarily has to take into account the results of all those comparisons in order to establish margins of dumping for the product as a whole under Article 2.4.2. …

 

A.3.14.10 US — Softwood Lumber V, para. 100
(WT/DS264/AB/R)

 

… Article 2.4.2 contains no express language that permits an investigating authority to disregard the results of multiple comparisons at the aggregation stage. Other provisions of the Anti-Dumping Agreement are explicit regarding the permissibility of disregarding certain matters. For example, Article 2.2.1 of the Anti-Dumping Agreement, which deals with the calculation of normal value, sets forth the only circumstances under which sales of the like product may be disregarded. Similarly, Article 9.4 of the Anti-Dumping Agreement expressly directs investigating authorities to “disregard” zero and de minimis margins of dumping, under certain circumstances, when calculating the weighted average margin of dumping to be applied to exporters or producers that have not been individually investigated. Thus, when the negotiators sought to permit investigating authorities to disregard certain matters, they did so explicitly.

 

A.3.14.11 US — Softwood Lumber V, paras. 101-104
(WT/DS264/AB/R)

 

We now turn to the implications of zeroing as applied in this case. Zeroing means, in effect, that at least in the case of some export transactions, the export prices are treated as if they were less than what they actually are. Zeroing, therefore, does not take into account the entirety of the prices of some export transactions, namely, the prices of export transactions in those sub-groups in which the weighted average normal value is less than the weighted average export price. Zeroing thus inflates the margin of dumping for the product as a whole.

 

We understand the United States to argue that a prohibition of zeroing would amount to a requirement to compare “dumped” and “non-dumped” transactions at the aggregation stage. The United States contends that results of multiple comparisons in which the weighted average normal value exceeds the weighted average export price may be excluded because they do not involve “dumping”. As we have stated earlier, the terms “dumping” and “margins of dumping” in Article VI of the GATT 1994 and the Anti-Dumping Agreement apply to the product under investigation as a whole and do not apply to sub-group levels. The treatment of comparisons for which the weighted average normal value is less than the weighted average export price as “non-dumped” comparisons is therefore not in accordance with the requirements of Article 2.4.2 of the Anti-Dumping Agreement.

 

For all these reasons, we do not agree with the United States that the results of comparisons at the sub-group level constitute margins of dumping. Nor do we agree with the United States that the results of the comparisons in which the weighted average normal value is less than the weighted average export price could be excluded in calculating a margin of dumping for the product under investigation as a whole.

 

We recall that the issue of whether zeroing is permitted under the transaction-to transaction methodology or the average-to-individual methodology is not before us in this appeal. …

 

A.3.14.12 US — Zeroing (EC), para. 126
(WT/DS294/AB/R, WT/DS294/AB/R/Corr.1)

 

… Although, in US— Softwood Lumber V, the Appellate Body dealt with a claim regarding the determination of a margin of dumping in an original investigation when using the weighted-average-to-weighted-average methodology provided for in the first sentence of Article 2.4.2, it stated unambiguously that “the terms ‘dumping’ and ‘margins of dumping’ in Article VI of the GATT 1994 and the Anti- Dumping Agreement apply to the product under investigation as a whole”. This finding was based not only on Article 2.4.2, first sentence, but also on the context found in Article 2.1 of the Anti-Dumping Agreement.

 

A.3.14.13 US — Zeroing (EC), para. 164
(WT/DS294/AB/R, WT/DS294/AB/R/Corr.1)

 

We recognize that the issue of the applicability of Article 2.4.2 to administrative reviews is an important issue, but we consider that the central focus of this appeal is the issue of zeroing, both as it relates to original investigations and administrative reviews. As our reasoning shows, we did not find it necessary to resolve the issue of zeroing in the administrative reviews at issue in this case through an examination of Article 2.4.2. We wish to emphasize that we are not expressing any view in this appeal as to whether Article 2.4.2 is applicable or not to administrative reviews under Article 9.3. Thus, the Panel’s findings should not be considered to have been endorsed by the Appellate Body.

 

A.3.14.14 US — Softwood Lumber V (Article 21.5— Canada), paras. 87-89
(WT/DS264/AB/RW)

 

Turning to the transaction-to-transaction methodology, [the first sentence of] Article 2.4.2 provides that “margins of dumping” may be established “by a comparison of normal value and export prices on a transaction-to-transaction basis”. The reference to “export prices” in the plural suggests that the comparison will generally involve multiple transactions, as was the case in the anti-dumping investigation before us. At the same time, the reference to “a comparison” in the singular suggests an overall calculation exercise involving aggregation of these multiple transactions. The transaction-specific results are mere steps in the comparison process. This tallies with the term “basis” at the end of the sentence, which suggests that these individual transaction comparisons are not the final results of the calculation, but, rather, are inputs for the overall calculation exercise. Thus, the text of Article 2.4.2 implies that the calculation of a margin of dumping using the transaction-to-transaction methodology is a multi-step exercise in which the results of transaction-specific comparisons are inputs that are aggregated in order to establish the margin of dumping of the product under investigation for each exporter or producer. Contrary to the United States’ submission, the results of the transaction-specific comparisons are not, in themselves, “margins of dumping”.

 

Furthermore, the reference to “export prices” in the plural, without further qualification, suggests that all of the results of the transaction-specific comparisons should be included in the aggregation for purposes of calculating the margins of dumping. In addition, the “export prices” and “normal value” to which Article 2.4.2 refers are real values, unless conditions allowing an investigating authority to use other values are met. Thus, in our view, zeroing in the transaction-to-transaction methodology does not conform to the requirement of Article 2.4.2 in that it results in the real values of certain export transactions being altered or disregarded.

 

This interpretation is consistent with previous Appellate Body statements concerning the other methodology set out in the first sentence of Article 2.4.2, namely, the weighted average-to-weighted average comparison methodology. … Both methodologies set out in the first sentence of Article 2.4.2 fulfil the same function, namely, establishing “the existence of margins of dumping”. … The disjunctive “or”, which is placed between the weighted average-to-weighted average and transaction-to-transaction comparison methodologies, while denoting the existence of alternative means, does not sever the logical relationship between the term “margins of dumping” and the transaction-to-transaction methodology, which is provided precisely to establish those margins. This indicates that the term “margins of dumping” has the same meaning regardless of which of the two methodologies in the first sentence of Article 2.4.2 is used to establish them. In other words, it is a unitary concept and the two methodologies provided in the first sentence of Article 2.4.2 are alternative means to capture it.

 

A.3.14.15 US — Softwood Lumber V (Article 21.5 — Canada), para. 91
(WT/DS264/AB/RW)

 

… The Appellate Body has recognized that under the weighted average-to-weighted average comparison methodology … , transactions may be divided into groups, for instance, according to-model or product type. Because of this possibility, the phrase “all comparable export transactions” implies that two requirements must be met when investigating authorities make the comparison by grouping transactions and averaging them. First, they must include in each group only those export transactions that are “comparable”. Secondly, they must include “all” comparable export transactions corresponding to that group, and none of these export transactions may be left out arbitrarily. Such a scenario does not arise in the same way when comparisons are made under the transaction-to-transaction comparison methodology. As transactions are not divided into groups under the transaction-to-transaction comparison methodology, the phrase “all comparable export transactions” is not pertinent to that methodology and, consequently, no inference may be drawn from the fact that this phrase does not appear in relation to the transaction-to-transaction methodology. …

 

A.3.14.16 US — Softwood Lumber V (Article 21.5 — Canada), paras. 93-94
(WT/DS264/AB/RW)

 

… If zeroing were allowed under the transaction-to-transaction comparison methodology, while being impermissible under the weighted average-to-weighted average methodology, having recourse to one or the other methodology provided in the first sentence of Article 2.4.2 could produce results that are systematically different. … Although the transaction-to-transaction and weighted average-to-weighted average comparison methodologies are distinct, they fulfil the same function. They are also equivalent in the sense that Article 2.4.2 does not establish a hierarchy between the two. An investigating authority may choose between the two depending on which is most suitable for the particular investigation. Given that the two methodologies are alternative means for establishing “margins of dumping” and that there is no hierarchy between them, it would be illogical to interpret the transaction-to-transaction comparison methodology in a manner that would lead to results that are systematically different from those obtained under the weighted average-to-weighted average methodology.

 

In sum, the results of the transaction-specific comparisons cannot be considered “margins of dumping” within the meaning of Article 2.4.2. The “margins of dumping” established under the transaction-to-transaction comparison methodology provided in Article 2.4.2 result from the aggregation of the transaction-specific comparisons. Article 2.4.2 does not permit an investigating authority, when aggregating the results of transaction-specific comparisons, to disregard transactions in which export price exceeds normal value.

 

A.3.14.17 US — Softwood Lumber V (Article 21.5 — Canada), para. 96
(WT/DS264/AB/RW)

 

The Panel placed much emphasis on the results that would obtain if the interpretation of the term “margins of dumping”, developed by the Appellate Body in previous disputes dealing with the weighted average-to-weighted average comparison methodology, were extended to the other methodologies provided in Article 2.4.2. … The Panel was persuaded by the United States’ submission that, if zeroing were prohibited also under the weighted average-to-transaction comparison methodology, that methodology would yield results that would be mathematically equivalent to those obtained by applying the weighted average-to-weighted average methodology, rendering the second sentence of Article 2.4.2 inutile. …

 

A.3.14.18 US — Softwood Lumber V (Article 21.5 — Canada), para. 97
(WT/DS264/AB/RW)

 

We disagree with the Panel’s analysis of the “mathematical equivalence” argument for several reasons. … we note that the methodology in the second sentence of Article 2.4.2 is an exception.… Being an exception, the comparison methodology in the second sentence of Article 2.4.2 (weighted average-to-transaction) alone cannot determine the interpretation of the two methodologies provided in the first sentence, that is, transaction-to-transaction and weighted average-to-weighted average.

 

A.3.14.19 US — Softwood Lumber V (Article 21.5 — Canada), para. 98
(WT/DS264/AB/RW)

 

… The permissibility of zeroing under the weighted average-to-transaction comparison methodology provided in the second sentence of Article 2.4.2 is not before us in this appeal, nor have we examined it in previous cases. We also note that there is considerable uncertainty regarding how precisely the third methodology should be applied. … These uncertainties, which we are not called upon to resolve, undermine the Panel’s reasoning based on the “mathematical equivalence” argument.

 

A.3.14.20 US — Softwood Lumber V (Article 21.5 — Canada), paras. 99-100
(WT/DS264/AB/RW)

 

… One part of a provision setting forth a methodology is not rendered inutile simply because, in a specific set of circumstances, its application would produce results that are equivalent to those obtained from the application of a comparison methodology set out in another part of that provision. In other words, the fact that, under the specific assumptions of the hypothetical scenario provided by the United States, the weighted average-to-transaction comparison methodology could produce results that are equivalent to those obtained from the application of the weighted average-to-weighted average methodology is insufficient to conclude that the second sentence of Article 2.4.2 is thereby rendered ineffective. It has not been proven that in all cases, or at least in most of them, the two methodologies would produce the same results. …

 

In sum, we find the concerns of the Panel and the United States over the third comparison methodology (weighted average-to-transaction) being rendered inutile by a prohibition of zeroing under the transaction-to-transaction methodology to be overstated. It could be argued, on the contrary, that the use of zeroing under the two comparison methodologies set out in the first sentence of Article 2.4.2 would enable investigating authorities to capture pricing patterns constituting “targeted dumping”, thus rendering the third methodology inutile.

 

A.3.14.21 US — Softwood Lumber V (Article 21.5 — Canada), para. 109
(WT/DS264/AB/RW)

 

In our view, interpreting the term “margins of dumping” in Article 2.4.2 as referring to the aggregation of the results of individual transaction-to-transaction comparisons fits well into the context of the other provisions of the Anti-Dumping Agreement, including Articles 5.8, 6.10, and 9.3. … Articles 5.8, 6.10, and 9.3 do not support the United States’ interpretation of Article 2.4.2 that the results of transaction-specific comparisons are “margins of dumping”.

 

A.3.14.22 US — Softwood Lumber V (Article 21.5 — Canada), para. 117 and footnote 192
(WT/DS264/AB/RW)

 

… According to New Zealand, the use of zeroing in the context of the transaction-to-transaction comparison methodology does not raise concerns provided that the treatment of transactions in which the export price exceeds normal value is symmetrical in the dumping determination and in the injury, causation, and non-attribution analyses. The approach advocated by New Zealand is not before us in this appeal.192

 

A.3.14.23 US — Softwood Lumber V (Article 21.5 — Canada), para. 122
(WT/DS264/AB/RW)

 

On the basis of the above analysis, we conclude that zeroing is not permitted under the transaction-to-transaction methodology set out in the first sentence of that provision. The “margins of dumping” established under this methodology are the results of the aggregation of the transaction-specific comparisons of export prices and normal value. In aggregating these results, an investigating authority must consider the results of all of the comparisons and may not disregard the results of comparisons in which export prices are above normal value.

 

A.3.14.24 US — Zeroing (Japan), para. 115
(WT/DS322/AB/R)

 

A product under investigation may be defined by an investigating authority. But “dumping” and “margins of dumping” can be found to exist only in relation to that product as defined by that authority. They cannot be found to exist for only a type, model, or category of that product. Nor, under any comparison methodology, can “dumping” and “margins of dumping” be found to exist at the level of an individual transaction. Thus, when an investigating authority calculates a margin of dumping on the basis of multiple comparisons of normal value and export price, the results of such intermediate comparisons are not, in themselves, margins of dumping. Rather, they are merely “inputs that are [to be] aggregated in order to establish the margin of dumping of the product under investigation for each exporter or producer.

 

A.3.14.25 US — Zeroing (Japan), para. 118
(WT/DS322/AB/R)

 

Article 2.4.2 sets out three comparison methodologies that investigating authorities may use to calculate margins of dumping. The first sentence of Article 2.4.2 provides for two comparison methodologies (W-W and T-T) involving symmetrical comparisons of normal value and export price. Article 2.4.2 stipulates that these two methodologies “shall normally” be used by investigating authorities to establish margins of dumping. As an exception to the two normal methodologies, the second sentence of Article 2.4.2 sets out a third comparison methodology which involves an asymmetrical comparison between weighted average normal value and prices of individual export transactions. This methodology may be used only if the following two conditions are met: (i) that the authorities find a pattern of export prices that differ significantly among different purchasers, regions, or time periods; and (ii) that an explanation is provided as to why such differences cannot be taken into account appropriately by the use of a W-W or T-T comparison.

 

A.3.14.26 US — Zeroing (Japan), paras. 121-123
(WT/DS322/AB/R)

 

We see no reason to depart from the Appellate Body’s reasoning in US — Softwood Lumber V (Article 21.5 — Canada) … The Appellate Body addressed there the issue of model zeroing under the W-W comparison methodology in an original investigation. That methodology involved the division of the product under investigation into sub-groups of identical, or similar, product types. In aggregating the results of the sub-group comparisons to calculate the dumping margin for the product under investigation, the USDOC had treated as zero the results of the sub-groups in which weighted average normal value was equal to or less than the weighted average export price. Thus, zeroing did not occur within the sub-groups but occurred across the sub-groups in the process of aggregating the results of the sub-group comparisons.

 

The Appellate Body held that dumping and margins of dumping can be found to exist only for the product under investigation as a whole, and that they cannot be found to exist for a type, model, or category of that product. The comparisons at the sub-group level are not margins of dumping within the meaning of Article 2.4.2. It is only on the basis of aggregating all these “intermediate values” that an investigating authority can establish margins of dumping for the product under investigation as a whole. The Appellate Body therefore found that the model zeroing was inconsistent with Article 2.4.2 of the Anti-Dumping Agreement.

 

We fail to see why, if, for the purpose of establishing a margin of dumping, such a product is dealt with under the T-T comparison methodology in an original investigation, zeroing would be consistent with Article 2.4.2 of the Anti-Dumping Agreement. If anything, zeroing under the T-T comparison methodology would inflate the margin of dumping to an even greater extent as compared to model zeroing under the W-W comparison methodology. This is because zeroing under the T-T comparison methodology disregards the result of each comparison involving a transaction in which the export price exceeds the normal value, whereas under the W-W comparison methodology, zeroing occurs, as noted above, only across the sub-groups in the process of aggregation.

 

A.3.14.27 US — Zeroing (Japan), para. 124
(WT/DS322/AB/R)

 

We do not consider that the absence of the phrase “all comparable export transactions” in the context of the T-T comparison methodology suggests that zeroing should be permissible under that methodology. Because transactions may be divided into groups under the W-W comparison methodology, the phrase “all comparable export transactions” requires that each group include only transactions that are comparable and that no export transaction may be left out when determining margins of dumping under that methodology. Furthermore, the W-W comparison methodology involves the calculation of a weighted average export price. By contrast, under the T-T comparison methodology, all export transactions are taken into account on an individual basis andmatched with the most appropriate transactions in the domestic market. Therefore, the phrase “all comparable export transactions” is not pertinent to the T-T comparison methodology. Consequently, no inference may be drawn from the fact that these words do not appear in relation to this methodology.

 

A.3.14.28 US — Zeroing (Japan), para. 125
(WT/DS322/AB/R)

 

We acknowledge that the W-W and T-T comparison methodologies are distinct and may not produce identical results. However, as the Appellate Body stated in US — Softwood Lumber V (Article 21.5 — Canada), the W-W and T-T comparison methodologies “fulfil the same function”, they are “alternative means for establishing margins of dumping”, and “there is no hierarchy between them”. It would therefore be “illogical to interpret the [T-T] comparison methodology in a manner that would lead to results that are systematically different from those obtained under the [W-W] methodology”. Indeed, if zeroing is prohibited under the W-W comparison methodology and permitted under the T-T comparison methodology, the application of the T-T methodology would lead to results that are systematically different from those obtained through the application of the W-W methodology. Moreover, by systematically disregarding comparison results involving export transactions occurring at prices above the normal value, the zeroing methodology fails to establish margins of dumping for the product under investigation properly, as required under Article 2.4.2.

 

A.3.14.29 US — Zeroing (Japan), paras. 126-128
(WT/DS322/AB/R)

 

We recall that the Anti-Dumping Agreement requires the determination of an individual margin of dumping for each known exporter or foreign producer. If it is permissible to determine a separate margin of dumping for each transaction, the consequence would be that several margins of dumping could be found to exist for each known exporter or foreign producer. The larger the number of export transactions, the greater the number of such transaction-specific margins of dumping for each exporter or foreign producer. This would create uncertainty and divergences in determinations to be made in original investigations and subsequent stages of anti-dumping proceedings.

 

As we have stated, the Anti-Dumping Agreement does not contemplate the determination of dumping or a margin of dumping at the model- or transaction-specific level. The Anti-Dumping Agreement contemplates the aggregation of all the comparisons made at the transaction-specific level in order to establish an individual margin of dumping for each exporter or foreign producer examined. …

 

… If, as a consequence of zeroing, the results of certain comparisons are disregarded only for purposes of calculating margins of dumping, but taken into consideration for determining injury, this would mean that the same transactions are treated as “non-dumped” for one purpose, and as “dumped” for another purpose. This is not in consonance with the need for consistent treatment of a product in an anti-dumping investigation.

 

A.3.14.30 US — Zeroing (Japan), para. 129
(WT/DS322/AB/R)

 

For these reasons, we disagree with the Panel that dumping may be determined at the level of individual transactions, and that multiple comparison results are margins of dumping in themselves. We also disagree with the Panel that the terms “product” and “products” can apply to individual transactions and do not require an examination of export transactions at an aggregate level. Nor can we agree with the Panel that “a Member may treat transactions in which export prices are less than normal value as being more relevant than transactions in which export prices exceed normal value”. Accordingly, we disagree with the Panel’s finding that, “in the context of the [T-T] methodology in the first sentence of Article 2.4.2, the term ‘margins of dumping’ can be understood to mean the total amount by which transaction-specific export prices are less than transaction-specific normal values”.

 

A.3.14.31 US — Zeroing (Japan), para. 137
(WT/DS322/AB/R)

 

In the light of our analysis of Article 2.4.2 of the Anti-Dumping Agreement, we conclude that, in establishing “margins of dumping” under the T-T comparison methodology, an investigating authority must aggregate the results of all the transaction-specific comparisons and cannot disregard the results of comparisons in which export prices are above normal value.

 

A.3.14.32 US — Stainless Steel (Mexico), para. 106
(WT/DS344/AB/R)

 

We also note that, while investigating authorities may define the scope of a product for an anti-dumping investigation, that definition applies throughout the investigation. “Dumping”, within the meaning of the Anti-Dumping Agreement, can “be found to exist only for the product under investigation as a whole”, by fully taking into account all the transactions pertaining to that product. That definition of the product has implications for subsequent stages of an anti-dumping proceeding as well. In particular, we consider that the application of simple zeroing in periodic reviews may result in certain models of the product under investigation not being fully taken into account at the duty assessment stage.

 
A.3.14A Article 2.4.2 — Second sentence    back to top

A.3.14A.1 US — Zeroing (Japan), paras. 131, 134-136
(WT/DS322/AB/R)

 

… The second sentence of Article 2.4.2 provides an asymmetrical comparison methodology to address a pattern of “targeted” dumping found among certain purchasers, in certain regions, or during certain time periods. By its terms, this methodology may be used if two conditions are met: first, that the investigating authorities “find a pattern of export prices which differ significantly among different purchasers, regions or time periods”; and secondly, that an “explanation” be provided as to why such differences in export prices cannot be taken into account appropriately by the use of either of the two symmetrical comparison methodologies set out in the first sentence of Article 2.4.2. The second requirement thus contemplates that there may be circumstances in which targeted dumping could be adequately addressed through the normal symmetrical comparison methodologies. The asymmetrical methodology in the second sentence is clearly an exception to the comparison methodologies which normally are to be used.

 

 

As regards the relationship between the T-T comparison methodology and the W-T comparison methodology of the second sentence of Article 2.4.2, the Panel’s reasoning appears to assume that the universe of export transactions to which these two comparison methodologies apply is the same, and that these two methodologies differ only in that, under the W-T comparison methodology, a normal value is established on a weighted average basis, while it is established on a transaction-specific basis under the T-T comparison methodology. Thus, according to the Panel, if zeroing is permitted under the W-T comparison methodology in the second sentence of Article 2.4.2, it should logically be permitted under the T-T comparison methodology as well.

 

We disagree with the assumption underlying the Panel’s reasoning. The emphasis in the second sentence of Article 2.4.2 is on a “pattern”, namely a “pattern of export prices which differs significantly among different purchasers, regions or time periods”. The prices of transactions that fall within this pattern must be found to differ significantly from other export prices. We therefore read the phrase “individual export transactions” in that sentence as referring to the transactions that fall within the relevant pricing pattern. This universe of export transactions would necessarily be more limited than the universe of export transactions to which the symmetrical comparison methodologies in the first sentence of Article 2.4.2 would apply. In order to unmask targeted dumping, an investigating authority may limit the application of the W-T comparison methodology to the prices of export transactions falling within the relevant pattern.

 

… We wish to emphasize, however, that our analysis of the second sentence of Article 2.4.2 is confined to addressing the contextual arguments drawn by the Panel from that provision.

 

A.3.14A.2 US — Stainless Steel (Mexico), paras. 122, 126-127
(WT/DS344/AB/R)

 

The Panel relied on the second sentence of Article 2.4.2 as context to justify its decision not to follow the legal interpretation of the Appellate Body in US — Zeroing (Japan). … The second sentence of Article 2.4.2 provides an asymmetrical comparison methodology to address a so-called pattern of “targeted” dumping found among certain purchasers, in certain regions, or during certain time periods.

 

 

We note that the United States did not contest before the Panel Mexico’s assertion that, if the determination of weighted average normal values was based on different time periods, dumping margin calculations under these two methodologies would yield different mathematical results. We further note the Panel’s statement that a methodology based on a comparison of “monthly normal values with individual export transactions is the same methodology prescribed in US Regulations for investigations where targeted dumping is identified and the third comparison methodology is used”, and that the United States did not dispute this statement. In our view, this suggests that the “mathematical equivalence” argument works only under a specific set of assumptions, and that there is uncertainty as to how the W-T comparison methodology would be applied in practice.

 

In any event, the Appellate Body has explained that, “[b]eing an exception, the comparison methodology in the second sentence of Article 2.4.2 (weighted average-to-transaction) alone cannot determine the interpretation of the two methodologies provided in the first sentence”. As the Appellate Body has also said, it could be argued, in reverse, that permitting zeroing under the first sentence of Article 2.4.2 “would enable investigating authorities to capture pricing patterns constituting ‘targeted dumping’, thus rendering the third methodology inutile”. The Appellate Body has also observed, in US — Zeroing (Japan), that, “[i]n order to unmask targeted dumping, an investigating authority may limit the application of the W-T comparison methodology to the prices of export transactions falling within the relevant pattern.” The Appellate Body has so far not ruled on the question of whether or not zeroing is permissible under the comparison methodology in the second sentence of Article 2.4.2. Nor is it an issue before us in this appeal. …

 
A.3.15 Article 3.1 — General    back to top

A.3.15.1 Thailand — H-Beams, para. 106
(WT/DS122/AB/R)

 

Article 3 as a whole deals with obligations of Members with respect to the determination of injury. Article 3.1 is an overarching provision that sets forth a Member’s fundamental, substantive obligation in this respect. Article 3.1 informs the more detailed obligations in succeeding paragraphs. These obligations concern the determination of the volume of dumped imports, and their effect on prices (Article 3.2), investigations of imports from more than one country (Article 3.3), the impact of dumped imports on the domestic industry (Article 3.4), causality between dumped imports and injury (Article 3.5), the assessment of the domestic production of the like product (Article 3.6), and the determination of the threat of material injury (Articles 3.7 and 3.8). The focus of Article 3 is thus on substantive obligations that a Member must fulfil in making an injury determination.

 

A.3.15.2 US — Zeroing (Japan), para. 113
(WT/DS322/AB/R)

 

Thirdly, the Anti-Dumping Agreement and the GATT 1994 are not concerned with dumping per se, but with dumping that causes or threatens to cause material injury to the domestic industry. Article 3.1 stipulates that a determination of injury shall be based on an objective examination of both the volume of the dumped imports and the effect of the dumped imports on prices in the domestic market for like products, and the consequent impact of these imports on domestic producers of such products. …

 
A.3.15A Footnote 9 to Article 3    back to top

A.3.15A.1 US — Oil Country Tubular Goods Sunset Reviews, para. 276
(WT/DS268/AB/R)

 

… we would agree with Argentina that, by virtue of its opening phrase, footnote 9 defines “injury” for the whole of the Anti-Dumping Agreement. … Therefore, when Article 11.3 requires a determination as to the likelihood of continuation or recurrence of “injury”, the investigating authority must consider the continuation or recurrence of “injury” as defined in footnote 9.

 
A.3.16 Article 3.1 — “positive evidence”    back to top

A.3.16.1 Thailand — H-Beams, para. 107
(WT/DS122/AB/R)

 

… the ordinary meaning of [the terms of Article 3.1] does not suggest that an investigating authority is required to base an injury determination only upon evidence disclosed to, or discernible by, the parties to the investigation. An anti-dumping investigation involves the commercial behaviour of firms, and, under the provisions of the Anti-Dumping Agreement, involves the collection and assessment of both confidential and non-confidential information. An injury determination conducted pursuant to the provisions of Article 3 of the Anti-Dumping Agreement must be based on the totality of that evidence. We see nothing in Article 3.1 which limits an investigating authority to base an injury determination only upon non-confidential information.

 

A.3.16.2 Thailand — H-Beams, para. 111
(WT/DS122/AB/R)

 

We consider, therefore, that the requirement in Article 3.1 that an injury determination be based on “positive” evidence and involve an “objective” examination of the required elements of injury does not imply that the determination must be based only on reasoning or facts that were disclosed to, or discernible by, the parties to an anti-dumping investigation. Article 3.1, on the contrary, permits an investigating authority making an injury determination to base its determination on all relevant reasoning and facts before it.

 

A.3.16.3 US — Hot-Rolled Steel, para. 192
(WT/DS184/AB/R)

 

… The thrust of the investigating authorities’ obligation, in Article 3.1, lies in the requirement that they base their determination on “positive evidence” and conduct an “objective examination”. The term “positive evidence” relates, in our view, to the quality of the evidence that authorities may rely upon in making a determination. The word “positive” means, to us, that the evidence must be of an affirmative, objective and verifiable character, and that it must be credible.

 

A.3.16.4 Mexico — Anti-Dumping Measures on Rice, paras. 165-166
(WT/DS295/AB/R)

 

We agree with the Panel that evidence that is not relevant or pertinent to the issue to be decided is not “positive evidence”. We also agree with the Panel that relevance or pertinence must be assessed with respect to the existence of injury caused by dumping at the time the investigation takes place. Under Article VI of the GATT 1994 and its “application” in the Anti-Dumping Agreement, the conditions for imposing an anti-dumping duty — injury caused by dumping — should obtain at that time. Article VI:2 of the GATT 1994 provides that anti-dumping duties are imposed “to offset or prevent” dumping. The term “offset” suggests that the scheme established in Article VI of the GATT 1994, and applied through the provisions of the Anti-Dumping Agreement, fulfils a corrective function: Members are permitted to take corrective measures in order to counter the injurious situation created by dumping. Under the logic of this corrective scheme, the imposition of anti-dumping duties is justified to the extent that they respond to injury caused by dumping. To use the Panel’s terminology, anti-dumping duties “counterbalance ” injury caused by dumping. Because the conditions to impose an anti-dumping duty are to be assessed with respect to the current situation, the determination of whether injury exists should be based on data that provide indications of the situation prevailing when the investigation takes place.

 

This, of course, does not imply that investigating authorities are not allowed to establish a period of investigation that covers a past period.… In order to determine whether injury caused by dumping exists when the investigation takes place, “historical data” may be used. We agree with the Panel, however, that more recent data is likely to provide better indications about current injury.

 

A.3.16.5 Mexico — Anti-Dumping Measures on Rice, paras. 204-205
(WT/DS295/AB/R)

 

… Articles 3.1 and 3.2 do not prescribe a methodology that must be followed by an investigating authority in conducting an injury analysis. Consequently, an investigating authority enjoys a certain discretion in adopting a methodology to guide its injury analysis. Within the bounds of this discretion, it may be expected that an investigating authority might have to rely on reasonable assumptions or draw inferences. In doing so, however, the investigating authority must ensure that its determinations are based on “positive evidence”. Thus, when, in an investigating authority’s methodology, a determination rests upon assumptions, these assumptions should be derived as reasonable inferences from a credible basis of facts, and should be sufficiently explained so that their objectivity and credibility can be verified.

 

… An investigating authority that uses a methodology premised on unsubstantiated assumptions does not conduct an examination based on positive evidence. An assumption is not properly substantiated when the investigating authority does not explain why it would be appropriate to use it in the analysis. …

 
A.3.17 Article 3.1 — “objective examination”    back to top

A.3.17.1 US — Hot-Rolled Steel, para. 193
(WT/DS184/AB/R)

 

The term “objective examination” aims at a different aspect of the investigating authorities’ determination. While the term “positive evidence” focuses on the facts underpinning and justifying the injury determination, the term “objective examination” is concerned with the investigative process itself. The word “examination” relates, in our view, to the way in which the evidence is gathered, inquired into and, subsequently, evaluated; that is, it relates to the conduct of the investigation generally. The word “objective”, which qualifies the word “examination”, indicates essentially that the “examination” process must conform to the dictates of the basic principles of good faith and fundamental fairness. In short, an “objective examination” requires that the domestic industry, and the effects of dumped imports, be investigated in an unbiased manner, without favouring the interests of any interested party, or group of interested parties, in the investigation. The duty of the investigating authorities to conduct an “objective examination” recognizes that the determination will be influenced by the objectivity, or any lack thereof, of the investigative process.

 

A.3.17.2 US — Hot-Rolled Steel, para. 196
(WT/DS184/AB/R)

 

However, the investigating authorities’ evaluation of the relevant factors must respect the fundamental obligation, in Article 3.1, of those authorities to conduct an “objective examination”. If an examination is to be “objective”, the identification, investigation and evaluation of the relevant factors must be even-handed. Thus, investigating authorities are not entitled to conduct their investigation in such a way that it becomes more likely that, as a result of the fact-finding or evaluation process, they will determine that the domestic industry is injured.

 

A.3.17.3 US — Hot-Rolled Steel, paras. 204-205
(WT/DS184/AB/R)

 

We have already stated that it may be highly pertinent for investigating authorities to examine a domestic industry by part, sector or segment. However, as with all other aspects of the evaluation of the domestic industry, Article 3.1 of the Anti-Dumping Agreement requires that such a sectoral examination be conducted in an “objective” manner. In our view, this requirement means that, where investigating authorities undertake an examination of one part of a domestic industry, they should, in principle, examine, in like manner, all of the other parts that make up the industry, as well as examine the industry as a whole. Or, in the alternative, the investigating authorities should provide a satisfactory explanation as to why it is not necessary to examine directly or specifically the other parts of the domestic industry. Different parts of an industry may exhibit quite different economic performance during any given period. …

 

Moreover, by examining only one part of an industry, the investigating authorities may fail properly to appreciate the economic relationship between that part of the industry and the other parts of the industry, or between one or more of those parts and the whole industry. …

 

A.3.17.4 US — Hot-Rolled Steel, para. 206
(WT/DS184/AB/R)

 

Accordingly, an examination of only certain parts of a domestic industry does not ensure a proper evaluation of the state of the domestic industry as a whole, and does not, therefore, satisfy the requirements of “objectiv[ity]” in Article 3.1 of the Anti-Dumping Agreement.

 

A.3.17.5 Mexico — Anti-Dumping Measures on Rice, paras. 180-181
(WT/DS295/AB/R)

 

The Panel expressed the view that, under Article 3.1, an injury analysis can be “objective” only “if it is based on data which provide an accurate and unbiased picture of what it is that one is examining”. This view is consistent with the Appellate Body’s statement [at paragraph 193] in US — Hot-Rolled Steel regarding the requirement to conduct an “objective examination” under Article 3.1 of the Anti-Dumping Agreement

 

We note that the Panel’s finding [that the data used by Economía in the injury analysis, which relate to the same six-month period in 1997, 1998 and 1999, did not provide an “accurate and unbiased picture” of the injury suffered by the domestic industry,] is based not only on Economía’s selective use of the information gathered for the purpose of the injury analysis. Indeed, in reaching the conclusion that the data used by Economía did not provide an “accurate and unbiased picture”, the Panel also relied on another factor: the acceptance by Economía of the period of investigation proposed by the petitioner, knowing that the petitioner proposed that period because it allegedly represented the period of highest import penetration. It appears to us that, in the specific circumstances of this case, these two factors, considered together, were sufficient to make out a prima facie case that the data used by Economía did not provide an “accurate and unbiased picture”.

 
A.3.18 Articles 3.1 and 3.2 — Method of calculating the “volume of the dumped imports”    back to top

A.3.18.1 EC — Bed Linen (Article 21.5 — India), para. 113
(WT/DS141/AB/RW)

 

Although paragraphs 1 and 2 of Article 3 do not set out a specific methodology that investigating authorities are required to follow when calculating the volume of “dumped imports”, this does not mean that paragraphs 1 and 2 of Article 3 confer unfettered discretion on investigating authorities to pick and choose whatever methodology they see fit for determining the volume and effects of the dumped imports. Paragraphs 1 and 2 of Article 3 require investigating authorities to make a determination of injury on the basis of “positive evidence” and to ensure that the injury determination results from an “objective examination” of the volume of dumped imports, the effects of the dumped imports on prices, and, ultimately, the state of the domestic industry. Thus, whatever methodology investigating authorities choose for determining the volume of dumped imports, if that methodology fails to ensure that a determination of injury is made on the basis of “positive evidence” and involves an “objective examination” of dumped imports — rather than imports that are found not to be dumped — it is not consistent with paragraphs 1 and 2 of Article 3.

 

A.3.18.2 EC — Bed Linen (Article 21.5 — India), para. 117
(WT/DS141/AB/RW)

 

Thus, there is a right to conduct a limited examination in the circumstances described in the second sentence of Article 6.10. Paragraphs 1 and 2 of Article 3 must, accordingly, be interpreted in a way that permits investigating authorities to satisfy the requirements of “positive evidence” and an “objective examination” without having to investigate each producer or exporter individually. This does not, however, in any way, absolve investigating authorities from the absolute requirements in paragraphs 1 and 2 of Article 3 that the volume of dumped imports be determined on the basis of “positive evidence” and an “objective examination”.

 

A.3.18.3 EC — Bed Linen (Article 21.5 — India), para. 118
(WT/DS141/AB/RW)

 

… Still, whatever methodology investigating authorities choose for calculating the volume of “dumped imports”, that calculation and, ultimately, the determination of injury under Article 3, clearly must be made on the basis of “positive evidence” and involve an “objective examination”. …

 
A.3.19 Articles 3.1 and 3.2 — Calculation of the “volume of the dumped imports” without examining each producer or exporter individually.
See also Anti-Dumping Agreement, Article 2.1 (A.3.3-8); Anti-Dumping Agreement, Article 3.3 (A.3.21); Anti-Dumping Agreement, Article 6.10 (A.3.37); Anti-Dumping Agreement, Article 9.4 (A.3.41-44)    back to top

A.3.19.1 EC — Bed Linen (Article 21.5 — India), para. 130
(WT/DS141/AB/RW)

 

In this dispute, we agree with the participants that the evidence on dumping margins established for the producers that were examined individually is “positive” in the sense that we defined it in US — Hot-Rolled Steel … We also agree that evidence on dumping margins of more than de minimis for examined producers is relevant as “positive evidence” in this investigation for determining which import volumes may be attributed to non-examined producers that are dumping. In our view, both these qualities of evidence are probative of the existence of dumping in the circumstances of this investigation. Therefore, we conclude that the European Communities met the first requirement of paragraphs 1 and 2 of Article 3 by basing its determination on that “positive evidence”.

 

A.3.19.2 EC — Bed Linen (Article 21.5 — India), para. 132
(WT/DS141/AB/RW)

 

… The approach taken by the European Communities in determining the volume of dumped imports was not based on an “objective examination”. The examination was not “objective” because its result is predetermined by the methodology itself. Under the approach used by the European Communities, whenever the investigating authorities decide to limit the examination to some, but not all, producers — as they are entitled to do under Article 6.10 — all imports from all non-examined producers will necessarily always be included in the volume of dumped imports under Article 3, as long as any of the producers examined individually were found to be dumping. … Moreover, such an approach tends to favour methodologies where small numbers of producers are examined individually. …

 

A.3.19.3 EC — Bed Linen (Article 21.5 — India), para. 133
(WT/DS141/AB/RW)

 

For these reasons, we conclude that the European Communities’ determination that all imports attributable to non-examined producers were dumped — even though the evidence from examined producers showed that producers accounting for 53 per cent of imports attributed to examined producers were not dumping — did not lead to a result that was unbiased, even-handed, and fair. Therefore, the European Communities did not satisfy the requirements of paragraphs 1 and 2 of Article 3 …

 

A.3.19.4 EC — Bed Linen (Article 21.5 — India), para. 137
(WT/DS141/AB/RW)

 

… Article 6.10 does not stipulate that investigating authorities must follow a specific methodology when determining the volume of dumped imports under paragraphs 1 and 2 of Article 3. However, this does not mean that evidence emerging from the determination of margins of dumping for individual producers or exporters pursuant to Article 6.10 is irrelevant for the determination of the volume of dumped imports in paragraphs 1 and 2 of Article 3. To the contrary, such evidence may well form part of the “positive evidence” on which an “objective examination” of the volume of dumped imports for purposes of determining injury may be based. Indeed, in cases where the examination has been limited to a select number of producers under the authority of the second sentence of Article 6.10, it is difficult to conceive of a determination based on “positive evidence” and an “objective examination” that is made other than through some form of extrapolation of the evidence. …

 

A.3.19.5 EC — Bed Linen (Article 21.5 — India), para. 138
(WT/DS141/AB/RW)

 

India’s suggestion that the investigating authorities should consider the same proportion of import volumes attributable to non-examined producers as dumped, as the proportion of import volumes attributed to examined producers that were found to be dumping, may be one way of adducing “positive evidence” from the record of an investigation and of conducting an “objective examination”, especially if producers selected for individual examination constitute a statistically valid sample representative of all producers. Even if the producers selected for individual examination account, instead, for the largest percentage of exports that could reasonably be investigated, we do not exclude the possibility that the evidence from those examined producers could, nonetheless, qualify as part of the “positive evidence” that might serve as a basis for an “objective examination” of import volumes that can be attributed to the remaining non-examined producers. There may, indeed, be other ways of making these calculations that satisfy the requirements of paragraphs 1 and 2 of Article 3.

 

A.3.19.6 EC — Bed Linen (Article 21.5 — India), para. 146
(WT/DS141/AB/RW)

 

… we agree with the Panel “that the [Anti-Dumping] Agreement does not require an investigating authority to determine the volume of imports from producers outside the sample that is properly considered ‘dumped imports’ for purposes of injury analysis on the basis of the proportion of imports from sampled producers that is found to be dumped” according to the specific methodology suggested by India in this appeal. …

 
A.3.20 Article 3.2 — No country-specific analysis of volume and prices of dumped imports    back to top

A.3.20.1 EC — Tube or Pipe Fittings, para. 111 and footnote 114
(WT/DS219/AB/R)

 

… There is no indication in the text of Article 3.2 that the analyses of volume and prices must be performed on a country-by-country basis where an investigation involves imports from several countries.114

 

A.3.20.2 EC — Tube or Pipe Fittings, para. 113
(WT/DS219/AB/R)

 

We also believe that cumulation without a country-specific analysis does not result in a “derog[ation]” of Article 3.2, as Brazil has asserted. We wish to emphasize that Article 3.2 plays a central role in the determination of injury and is a necessary step in any anti-dumping investigation. As the Panel correctly observed, it is possible for the analyses of volume and prices envisaged under Article 3.2 to be done on a cumulative basis, as opposed to an individual country basis, when dumped imports originate from more than one country.

 
A.3.21 Article 3.3 — Cumulative assessment of dumped imports.
See also Anti-Dumping Agreement, Article 3.2 (A.3.20)    back to top

 

A.3.21.1 EC — Bed Linen (Article 21.5 — India), para. 145
(WT/DS141/AB/RW)

 

… The provisions regarding the cumulative assessment of imports pursuant to Article 3.3 must be interpreted consistently with the provisions of the Anti-Dumping Agreement that deal with the determinations of dumping margins or the application of anti-dumping duties with respect to specific producers or groups thereof. Similarly, the right under Article 3.3 to conduct anti-dumping investigations with respect to imports from different exporting countries does not absolve investigating authorities from the requirements of paragraphs 1 and 2 of Article 3 to determine the volume of dumped imports on the basis of “positive evidence” and an “objective examination”.

 

A.3.21.2 EC — Tube or Pipe Fittings, para. 110
(WT/DS219/AB/R)

 

We find no basis in the text of Article 3.3 for Brazil’s assertion that a country-specific analysis of the potential negative effects of volumes and prices of dumped imports is a pre-condition for a cumulative assessment of the effects of all dumped imports. Article 3.3 sets out expressly the conditions that must be fulfilled before the investigating authorities may cumulatively assess the effects of dumped imports from more than one country. There is no reference to the country-by-country volume and price analyses that Brazil contends are pre-conditions to cumulation. In fact, Article 3.3 expressly requires an investigating authority to examine country-specific volumes, not in the manner suggested by Brazil, but for purposes of determining whether the “volume of imports from each country is not negligible”.

 

A.3.21.3 EC — Tube or Pipe Fittings, para. 115
(WT/DS219/AB/R)

 

… Therefore, the text of Article 3 does not support Brazil’s contention that volume and prices are deemed exclusively to be “factors”, and not “effects”, for the purposes of Article 3.3 of the Anti-Dumping Agreement.

 

A.3.21.4 EC — Tube or Pipe Fittings, para. 116
(WT/DS219/AB/R)

 

The apparent rationale behind the practice of cumulation confirms our interpretation that both volume and prices qualify as “effects” that may be cumulatively assessed under Article 3.3. A cumulative analysis logically is premised on a recognition that the domestic industry faces the impact of the “dumped imports” as a whole and that it may be injured by the total impact of the dumped imports, even though those imports originate from various countries. If, for example, the dumped imports from some countries are low in volume or are declining, an exclusively country-specific analysis may not identify the causal relationship between the dumped imports from those countries and the injury suffered by the domestic industry. The outcome may then be that, because imports from such countries could not individually be identified as causing injury, the dumped imports from these countries would not be subject to anti-dumping duties, even though they are in fact causing injury. In our view, therefore, by expressly providing for cumulation in Article 3.3 of the Anti-Dumping Agreement, the negotiators appear to have recognized that a domestic industry confronted with dumped imports originating from several countries may be injured by the cumulated effects of those imports, and that those effects may not be adequately taken into account in a country-specific analysis of the injurious effects of dumped imports. Consistent with the rationale behind cumulation, we consider that changes in import volumes from individual countries, and the effect of those country-specific volumes on prices in the importing country’s market, are of little significance in determining whether injury is being caused to the domestic industry by the dumped imports as a whole.

 

A.3.21.5 US — Oil Country Tubular Goods Sunset Reviews, para. 300
(WT/DS268/AB/R)

 

Given the express intention of Members to permit cumulation in injury determinations in original investigations, and given the rationale behind cumulation in injury determinations, we do not read the Anti-Dumping Agreement as prohibiting cumulation in sunset reviews.

 

A.3.21.6 US — Anti-Dumping Measures on Oil Country Tubular Goods, para. 150
(WT/DS282/AB/R)

 

Mexico offers no textual support for its proposition that the USITC was required, in making its sunset review determination, to set out a “threshold finding” regarding the simultaneous presence of subject imports. On its face, Article 11.3 makes no mention of such a “threshold finding”. The immediate context of Article 11.3, in paragraphs 1, 2, 4, and 5 of Article 11, also does not reveal any such requirement. Even Article 3.3, which is “the only provision in the Anti-Dumping Agreement that specifically addresses the practice of cumulation” in an original investigation, does not require investigating authorities to make a threshold finding regarding cumulation.

 
A.3.22 Article 3.4 — Evaluation of injury factors    back to top

A.3.22.1 Thailand — H-Beams, para. 125
(WT/DS122/AB/R)

 

… The Panel also examined, with respect to this issue, the interpretation by a previous panel of Article 3.4, and an earlier interpretation given by us of an analogous provision, Article 4.2(a) of the Agreement on Safeguards. The Panel concluded its comprehensive analysis by stating that “each of the fifteen individual factors listed in the mandatory list of factors in Article 3.4 must be evaluated by the investigating authorities … ”. We agree with the Panel’s analysis in its entirety, and with the Panel’s interpretation of the mandatory nature of the factors mentioned in Article 3.4 of the Anti-Dumping Agreement.

 

A.3.22.2 Thailand — H-Beams, paras. 127-128
(WT/DS122/AB/R)

 

… Further, the Panel’s interpretation that Article 3.4 requires a mandatory evaluation of all the individual factors listed in that Article clearly left no room for a “permissible” interpretation that all individual factors need not be considered.

 

We conclude that the Panel was correct in its interpretation that Article 3.4 requires a mandatory evaluation of all of the factors listed in that provision, and that, therefore, the Panel did not err in its application of the standard of review under Article 17.6(ii) of the Anti-Dumping Agreement.

 

A.3.22.3 US — Hot-Rolled Steel, para. 195
(WT/DS184/AB/R)

 

We see nothing in the Anti-Dumping Agreement which prevents a Member from requiring that its investigating authorities examine, in every investigation, the potential relevance of a particular “other factor”, not listed in Article 3.4, as part of its overall “examination” of the state of the domestic industry. Similarly, it seems to us perfectly compatible with Article 3.4 for investigating authorities to undertake, or for a Member to require its investigating authorities to undertake, an evaluation of particular parts, sectors or segments within a domestic industry. Such a sectoral analysis may be highly pertinent, from an economic perspective, in assessing the state of an industry as a whole.

 

A.3.22.4 US — Hot-Rolled Steel, para. 196
(WT/DS184/AB/R)

 

However, the investigating authorities’ evaluation of the relevant factors must respect the fundamental obligation, in Article 3.1, of those authorities to conduct an “objective examination”. If an examination is to be “objective”, the identification, investigation and evaluation of the relevant factors must be even-handed. Thus, investigating authorities are not entitled to conduct their investigation in such a way that it becomes more likely that, as a result of the fact-finding or evaluation process, they will determine that the domestic industry is injured.

 

A.3.22.5 US — Hot-Rolled Steel, para. 198
(WT/DS184/AB/R)

 

… In our opinion, nothing in the Anti-Dumping Agreement prevents the United States from directing its investigating authorities to evaluate the potential relevance of the structure of a domestic industry, and, in particular, the importance to that industry, as a whole, of the fact that the production of certain domestic producers is captively consumed, while the production of other domestic producers competes directly with imports in the merchant market. …

 

A.3.22.6 US — Hot-Rolled Steel, para. 206
(WT/DS184/AB/R)

 

Accordingly, an examination of only certain parts of a domestic industry does not ensure a proper evaluation of the state of the domestic industry as a whole, and does not, therefore, satisfy the requirements of “objectiv[ity]” in Article 3.1 of the Anti-Dumping Agreement.

 

A.3.22.7 EC — Tube or Pipe Fittings, para. 131
(WT/DS219/AB/R)

 

[Article 3.4 of the Anti-Dumping Agreement] requires an investigating authority to evaluate all relevant economic factors in its examination of the impact of the dumped imports. By its terms, it does not address the manner in which the results of this evaluation are to be set out, nor the type of evidence that may be produced before a panel for the purpose of demonstrating that this evaluation was indeed conducted. The provision simply requires Members to include an evaluation of all relevant economic factors in its examination of the impact of the dumped imports. …

 

A.3.22.8 EC — Tube or Pipe Fittings, para. 156
(WT/DS219/AB/R)

 

The participants in this appeal do not dispute that it is mandatory for investigating authorities to evaluate all of the fifteen injury factors listed in Article 3.4 of the Anti-Dumping Agreement. One of the fifteen factors expressly listed in Article 3.4 is the “actual and potential negative effects on growth”. The issue raised by Brazil in this appeal is whether the requirements of Article 3.4 were satisfied in this case, even though the factor “growth” was evaluated only “implicitly” and no separate record of its evaluation was made.

 

A.3.22.9 EC — Tube or Pipe Fittings, para. 157
(WT/DS219/AB/R)

 

Looking first to the text of Article 3.4, we find that it calls for “an evaluation of all relevant economic factors and indices having a bearing on the state of the industry”. The text, however, does not address the manner in which the results of the investigating authority’s analysis of each injury factor are to be set out in the published documents.

 
A.3.23 Article 3.4 — Manner of evaluating injury factors    back to top

A.3.23.1 EC — Tube or Pipe Fittings, para. 160
(WT/DS219/AB/R)

 

… The obligation to evaluate all fifteen factors is distinct from the manner in which the evaluation is to be set out in the published documents. As the European Communities contends, that the analysis of a factor is implicit in the analyses of other factors does not necessarily lead to the conclusion that such a factor was not evaluated.

 

A.3.23.2 EC — Tube or Pipe Fittings, para. 161
(WT/DS219/AB/R)

 

Accordingly, because Articles 3.1 and 3.4 do not regulate the manner in which the results of the analysis of each injury factor are to be set out in the published documents, we share the Panel’s conclusion that it is not required that in every antidumping investigation a separate record be made of the evaluation of each of the injury factors listed in Article 3.4. Whether a panel conducting an assessment of an anti-dumping measure is able to find in the record sufficient and credible evidence to satisfy itself that a factor has been evaluated, even though a separate record of the evaluation of that factor has not been made, will depend on the particular facts of each case. …

 

A.3.23.3 EC — Tube or Pipe Fittings, para. 162
(WT/DS219/AB/R)

 

Having regard to the nature of the factor “growth”, we believe that an evaluation of that factor necessarily entails an analysis of certain other factors listed in Article 3.4. Consequently, the evaluation of those factors could cover also the evaluation of the factor “growth”. …

 

A.3.23.4 EC — Tube or Pipe Fittings, para. 165
(WT/DS219/AB/R)

 

… From our perspective, the “declines” and “losses” observed with respect to several of the factors examined in this particular case necessarily relate to the issue of “growth” as well. To put it more precisely, the negative trends in these factors point to a lack of “growth”. This, in turn, supports the conclusion that the European Commission evaluated this injury factor.

 
A.3.23A Article 3.5 — Causation    back to top

A.3.23A.1 US — Softwood Lumber VI (Article 21.5 — Canada), paras. 131-132
(WT/DS277/AB/RW ,WT/DS277/AB/RW/Corr.1)

 

… The Panel seems to have assumed that having found that one fundamental element (injury) of the causal analysis is consistent with the Agreements, the entire causal analysis must also be consistent with the Agreements. This is not the case. The Panel had a duty to examine, first, whether the USITC’s finding, in the Section 129 Determination, of a likely imminent substantial increase in imports, was consistent with the requirements of Article 3.7 of the Anti-Dumping Agreement and Article 15.7 of the SCM Agreement; and, secondly, whether the USITC’s analysis of causation was consistent with the requirements of Article 3.5 of the Anti-Dumping Agreement and Article 15.5 of the SCM Agreement. That the USITC chose to conduct an “integrated” or “unitary” analysis of threat of injury and causation did not relieve the USITC of the need to comply with each of the requirements set out in these provisions, nor did it relieve the Panel of its duty to examine whether the Section 129 Determination demonstrated how compliance with these distinct sets of obligations had been achieved.

 

… this part of the Panel’s analysis makes no mention of the positive requirement, in Article 3.5 of the Anti-Dumping Agreement and Article 15.5 of the SCM Agreement, that an investigating authority demonstrate that further dumped/subsidized imports would cause injury. … In particular, the Panel did not examine whether the USITC identified and explained the positive evidence establishing a genuine and substantial relationship of cause and effect between imports and threat of injury.

 
A.3.24 Article 3.5 — Non-attribution of injury caused by other known factors    back to top

A.3.24.1 US — Hot-Rolled Steel, para. 223
(WT/DS184/AB/R)

 

The non-attribution language in Article 3.5 of the Anti-Dumping Agreement applies solely in situations where dumped imports and other known factors are causing injury to the domestic industry at the same time. In order that investigating authorities, applying Article 3.5, are able to ensure that the injurious effects of the other known factors are not “attributed” to dumped imports, they must appropriately assess the injurious effects of those other factors. Logically, such an assessment must involve separating and distinguishing the injurious effects of the other factors from the injurious effects of the dumped imports. If the injurious effects of the dumped imports are not appropriately separated and distinguished from the injurious effects of the other factors, the authorities will be unable to conclude that the injury they ascribe to dumped imports is actually caused by those imports, rather than by the other factors. Thus, in the absence of such separation and distinction of the different injurious effects, the investigating authorities would have no rational basis to conclude that the dumped imports are indeed causing the injury which, under the Anti-Dumping Agreement, justifies the imposition of anti-dumping duties.

 

A.3.24.2 US — Hot-Rolled Steel, para. 224
(WT/DS184/AB/R)

 

We emphasize that the particular methods and approaches by which WTO Members choose to carry out the process of separating and distinguishing the injurious effects of dumped imports from the injurious effects of the other known causal factors are not prescribed by the Anti-Dumping Agreement. What the Agreement requires is simply that the obligations in Article 3.5 be respected when a determination of injury is made.

 

A.3.24.3 US — Hot-Rolled Steel, para. 226
(WT/DS184/AB/R)

 

It is clear to us that the interpretive approach adopted by the panel in United States — Atlantic Salmon Anti-Dumping Duties is at odds with the interpretive approach for Article 3.5 of the Anti-Dumping Agreement that we have just set forth. As we said, in order to comply with the non-attribution language in that provision, investigating authorities must make an appropriate assessment of the injury caused to the domestic industry by the other known factors, and they must separate and distinguish the injurious effects of the dumped imports from the injurious effects of those other factors. This requires a satisfactory explanation of the nature and extent of the injurious effects of the other factors, as distinguished from the injurious effects of the dumped imports. However, the panel in United States — Atlantic Salmon Anti- Dumping Duties, expressly disavowed any need to “identify” the injury caused by the other factors. According to that panel, such separate identification of the injurious effects of the other causal factors is not required.

 

A.3.24.4 US — Hot-Rolled Steel, para. 227
(WT/DS184/AB/R)

 

By following the panel in United States — Atlantic Salmon Anti-Dumping Duties, the Panel, in effect, took the view that the USITC was not required to separate and distinguish the injurious effects of the other factors from the injurious effects of dumped imports, and that the nature and extent of the injurious effects of the other known factors need not be identified at all. However, in our view, this is precisely what the non-attribution language in Article 3.5 of the Anti-Dumping Agreement requires, in order to ensure that determinations regarding dumped imports are not based on mere assumptions about the effects of those imports, as distinguished from the effects of the other factors.

 

A.3.24.5 US — Hot-Rolled Steel, para. 228
(WT/DS184/AB/R)

 

The United States contends that the panel in United States — Atlantic Salmon Anti-Dumping Duties correctly stated that there is no need to “isolate” the injurious effects of the other factors from the injurious effects of the dumped imports. We are not certain what the panel, in that dispute, intended to imply through the use of the word “isolation”. Nevertheless, we agree with the United States that the different causal factors operating on a domestic industry may interact, and their effects may well be inter-related, such that they produce a combined effect on the domestic industry. We recognize, therefore, that it may not be easy, as a practical matter, to separate and distinguish the injurious effects of different causal factors. However, although this process may not be easy, this is precisely what is envisaged by the non-attribution language. If the injurious effects of the dumped imports and the other known factors remain lumped together and indistinguishable, there is simply no means of knowing whether injury ascribed to dumped imports was, in reality, caused by other factors. Article 3.5, therefore, requires investigating authorities to undertake the process of assessing appropriately, and separating and distinguishing, the injurious effects of dumped imports from those of other known causal factors.

 

A.3.24.6 EC — Bed Linen (Article 21.5 — India), para. 112
(WT/DS141/AB/RW)

 

Article 3.5 continues in the same vein as the initial paragraphs of Article 3 by requiring a demonstration that dumped imports are causing injury to the domestic industry “through the effects of dumping”, which, of course, depends upon there being imports from producers or exporters that are dumped. In addition, Article 3.5 lists “volume and prices of imports not sold at dumping prices” as an example of “known factors other than the dumped imports” that are injuring the domestic industry at the same time as the dumped imports. Article 3.5 requires that this injury not be attributed to the dumped imports.

 

A.3.24.7 EC — Tube or Pipe Fittings, para. 188
(WT/DS219/AB/R)

 

… Non-attribution therefore requires separation and distinguishing of the effects of other causal factors from those of the dumped imports so that injuries caused by the dumped imports and those caused by other factors are not “lumped together” and made “indistinguishable”.

 

A.3.24.8 EC — Tube or Pipe Fittings, para. 189
(WT/DS219/AB/R)

 

… Thus, provided that an investigating authority does not attribute the injuries of other causal factors to dumped imports, it is free to choose the methodology it will use in examining the “causal relationship” between dumped imports and injury.

 
A.3.25 Article 3.5 — Examination of other known factors    back to top

A.3.25.1 EC — Tube or Pipe Fittings, para. 175
(WT/DS219/AB/R)

 

… Critical to the effective operation of the non-attribution obligation, and indeed, the entire causality analysis, is the requirement of Article 3.5 to “examine any known factors other than the dumped imports which at the same time are injuring the domestic industry”, for it is the “injuries” of those “known factors” that must not be attributed to dumped imports. In order for this obligation to be triggered, Article 3.5 requires that the factor at issue:

 

(a) be “known” to the investigating authority;

 

(b) be a factor “other than dumped imports”; and

 

(c) be injuring the domestic industry at the same time as the dumped imports.

 

A.3.25.2 EC — Tube or Pipe Fittings, para. 176
(WT/DS219/AB/R)

 

We are mindful that the Anti-Dumping Agreement does not expressly state how such factors should become “known” to the investigating authority, or if and in what manner they must be raised by interested parties, in order to qualify as “known”. We also recognize that the Anti-Dumping Agreement does not expressly state to what degree a factor must be unrelated to the dumped imports, or whether it must be extrinsic to the exporter and the dumped product, in order to constitute a factor “other than the dumped imports”.

 

A.3.25.3 EC — Tube or Pipe Fittings, para. 177
(WT/DS219/AB/R)

 

We note that Brazil’s claim rests entirely on the assumption that there was a marked difference in the costs of production between the Brazilian exporter and the European Communities producers. Brazil’s factual allegation regarding the difference in costs of production, however, was rejected by the European Commission. Having rejected the Brazilian exporter’s factual premise in the context of one phase of the investigation, the European Commission, in our view, had no reason to undertake an analysis in a subsequent phase of the investigation that would have been predicated upon the very correctness of the same premise. In other words, once the European Commission had determined that the allegation of the difference in cost of production was unfounded, it had no obligation to examine its effects on the domestic industry under Article 3.5.

 

A.3.25.4 EC — Tube or Pipe Fittings, para. 178
(WT/DS219/AB/R)

 

… However, we disagree with the Panel’s apparent understanding of the term “known” in Article 3.5. We understand the Panel, in rejecting this aspect of Brazil’s claim under Article 3.5, to have stated that the alleged causal factor was “known” to the European Commission in the context of its dumping and injury analyses, but that the factor was nevertheless not “known” in the context of its causality analysis. In our view, a factor is either “known” to the investigating authority, or it is not “known”; it cannot be “known” in one stage of the investigation and unknown in a subsequent stage.

 
A.3.26 Article 3.5 — Individual vs. Collective effects of other factors.
See also Anti-Dumping Agreement, Articles 3.1 and 3.2 (A.3.18-19)    back to top

A.3.26.1 EC — Tube or Pipe Fittings, para. 190
(WT/DS219/AB/R)

 

Turning to Brazil’s arguments in this appeal, we do not read Article 3.5 as requiring, in each and every case, an examination of the collective effects of other causal factors in addition to examining those factors’ individual effects. We observed in US — Hot-Rolled Steel that the non-attribution language of the Anti-Dumping Agreement necessarily requires that an investigating authority separate and distinguish the effects of other causal factors from the effects of dumped imports, because only by doing so can an investigating authority “conclude that the injury they ascribe to dumped imports is actually caused by those imports, rather than by the other factors”.

 

A.3.26.2 EC — Tube or Pipe Fittings, para. 191
(WT/DS219/AB/R)

 

In contrast, we do not find that an examination of collective effects is necessarily required by the non-attribution language of the Anti-Dumping Agreement. In particular, we are of the view that Article 3.5 does not compel, in every case, an assessment of the collective effects of other causal factors, because such an assessment is not always necessary to conclude that injuries ascribed to dumped imports are actually caused by those imports and not by other factors.

 

A.3.26.3 EC — Tube or Pipe Fittings, para. 192
(WT/DS219/AB/R)

 

We believe that, depending on the facts at issue, an investigating authority could reasonably conclude, without further inquiry into collective effects, that “the injury ascribe[d] to dumped imports is actually caused by those imports, rather than by the other factors”. At the same time, we recognize that there may be cases where, because of the specific factual circumstances therein, the failure to undertake an examination of the collective impact of other causal factors would result in the investigating authority improperly attributing the effects of other causal factors to dumped imports. We are therefore of the view that an investigating authority is not required to examine the collective impact of other causal factors, provided that, under the specific factual circumstances of the case, it fulfils its obligation not to attribute to dumped imports the injuries caused by other causal factors.

 

A.3.26.4 US — Steel Safeguards, para. 491
(WT/DS248/AB/R, WT/DS249/AB/R, WT/DS251/AB/R, WT/DS252/AB/R, WT/DS253/AB/R, WT/DS254/AB/R, WT/DS258/AB/R, WT/DS259/AB/R)

 

Lastly, it may be useful to refer to our finding in EC — Tube or Pipe Fittings in respect of the relevance of factors that “had effectively been found not to exist”. In that case, the competent authority had found, contrary to the submissions of the exporters, that the difference in costs of production between the imported product and the domestic product was virtually non-existent and thus did not constitute a “factor other than dumped imports” causing injury to the domestic industry under Article 3.5 of the Anti-Dumping Agreement. Consequently, we found that there was no reason for the investigating authority to undertake the analysis of whether the alleged “other factor” had any effect on the domestic industry under Article 3.5 because the alleged “other factor” “had effectively been found not to exist”. In other words, we did not rule that minimal (or not significant) factors need not be considered by the competent authorities in conducting non-attribution analyses. Rather, we ruled that only factors that have been found to exist need be taken into account in the non-attribution analysis.

 

A.3.26.5 US — Softwood Lumber VI (Article 21.5 — Canada), paras. 154-155
(WT/DS277/AB/RW ,WT/DS277/AB/RW/Corr.1)

 

… The Appellate Body has considered the issue of whether the non-attribution requirement of Article 3.5 of the Anti-Dumping Agreement obliges investigating authorities to examine the collective effects of “other known factors”, or whether it is sufficient to look at the individual effects of several different “other known factors”. The Appellate Body held that “Article 3.5 does not compel, in every case, an assessment of the collective effects of other causal factors”. At the same time, the Appellate Body recognized that “there may be cases where, because of the specific factual circumstances therein, the failure to undertake an examination of the collective impact of other causal factors would result in the investigating authority improperly attributing the effects of other causal factors to dumped imports”.

 

Accordingly, answering the question whether the USITC was required to conduct a non-attribution analysis of cumulated third-country imports, or of the collective effect of cumulated third-country imports and United States oversupply, requires an examination of the particular facts of this case. It follows that this argument of Canada is also essentially directed at the appreciation of the evidence on the record.

 
A.3.27 Article 3.7 — Threat of material injury.
See also SCM Agreement, Article 15.7 — Threat of material injury (S.2.25B); Safeguards Agreement, Article 4.1(b) — Threat of serious injury (S.1.24)    back to top

A.3.27.1 Mexico — Corn Syrup (Article 21.5 — US), para. 83
(WT/DS132/AB/RW)

 

… Article 3.7 of the Anti-Dumping Agreement sets forth a number of requirements that must be respected in order to reach a valid determination of a threat of material injury. The third sentence of Article 3.7 explicitly recognizes that it is the investigating authorities who make a determination of threat of material injury, and that such determination — by the investigating authorities — “must be based on facts and not merely on allegation, conjecture or remote possibility”. Consequently, Article 3.7 is not addressed to panels, but to the national investigating authorities which determine the existence of a threat of material injury.

 

A.3.27.2 Mexico — Corn Syrup (Article 21.5 — US), para. 85
(WT/DS132/AB/RW)

 

In our view, the “establishment” of facts by investigating authorities includes both affirmative findings of events that took place during the period of investigation as well as assumptions relating to such events made by those authorities in the course of their analyses. In determining the existence of a threat of material injury, the investigating authorities will necessarily have to make assumptions relating to the “occurrence of future events” since such future events “can never be definitively proven by facts”. Notwithstanding this intrinsic uncertainty, a “proper establishment” of facts in a determination of threat of material injury must be based on events that, although they have not yet occurred, must be “clearly foreseen and imminent”, in accordance with Article 3.7 of the Anti-Dumping Agreement.

 

A.3.27.3 US — Softwood Lumber VI (Article 21.5 — Canada), paras. 107, 109-110
(WT/DS277/AB/RW ,WT/DS277/AB/RW/Corr.1)

 

According to Canada, … the Panel wrongly “held the investigating authority to a lower standard of care and explanation on the grounds that it made a determination of threat rather than a determination of current material injury” and “the Panel’s own review was conducted according to a more deferential standard because it involved a threat of injury determination”.

 

 

… we are not persuaded that the Panel’s statements amount to a denial of the high standard that applies to a threat of injury determination. In particular, the excerpt from the Panel Report relied upon by Canada does not seem, to us, to be inconsistent with the requirement that the reasoning set out by an investigating authority making a determination of threat of injury must clearly disclose the assumptions and extrapolations that were made, on the basis of the record evidence, regarding future occurrences. Nor are the Panel’s statements inconsistent with the requirements that the reasoning of the investigating authority demonstrate that such assumptions and extrapolations were based on positive evidence and not merely on allegation, conjecture, or remote possibility; and show a high degree of likelihood that projected occurrences will occur.

 

At the same time, the Panel’s reasoning does raise two concerns. First, the Panel stated that “predictions based on the observed facts may be less susceptible to being found, on review by a panel, to be outside the range of conclusions that might be reached by an unbiased and objective decision maker on the basis of the facts and in light of the explanations given”. Taken at face value, this could imply a greater likelihood of panels upholding a threat of injury determination, as compared to a determination of current material injury, when those determinations rest on the same level of evidence. Any such implication would be erroneous, but we do not view the Panel’s statement as having such an implication. Of somewhat greater concern, however, is the Panel’s statement that the “possible range of reasonable predictions of the future that may be drawn based on the observed events of the period of investigation may be broader than the range of reasonable conclusions concerning the present that might be drawn based on those same facts”. We are not persuaded that, in making this observation, the Panel intended to express the view that a threat of injury determination must be upheld if the investigating authority’s report discloses the occurrence of injury as one reasonable prediction within the possible range of future occurrences. If this were the Panel’s view, then it would be erroneous.

 

A.3.27.4 US — Softwood Lumber VI (Article 21.5 — Canada), para. 137
(WT/DS277/AB/RW ,WT/DS277/AB/RW/Corr.1)

 

… The Panel examined, separately, the various USITC findings challenged by Canada, but did not undertake any assessment of whether the totality of the factors and evidence considered supported the ultimate finding of a threat of material injury. In neglecting this aspect of its review, the Panel does not seem to have taken account of the express requirement in Article 3.7 of the Anti-Dumping Agreement and Article 15.7 of the SCM Agreement that “the totality of the factors considered must lead to the conclusion that further [dumped/subsidized] exports are imminent and that, unless protective action is taken, material injury would occur” (emphasis added). This neglect is particularly striking given that the original panel recognized the need to undertake such an analysis, and the Panel asked Canada a specific question in this regard.

 

A.3.27.5 US — Softwood Lumber VI (Article 21.5 — Canada), paras. 146-147
(WT/DS277/AB/RW ,WT/DS277/AB/RW/Corr.1)

 

Article 3.7(i) of the Anti-Dumping Agreement and Article 15.7(ii) of the SCM Agreement … lay emphasis on two aspects: first, that there is a “significant” rate of increase in imports; and secondly, that such a rate of increase reveals the likelihood of “substantially” increased importation in the near future. Taken together, they refer to the observed behaviour of the volume of imports.

 

Although the concept of a “rate” of increase implies measuring the increase with reference to some time period, neither of these provisions stipulates any specific time period or any specific methodology for measuring the rate of increase of imports. As for Canada’s argument at the oral hearing regarding market share, we observe that these provisions do not prescribe that the measurement be done with reference to market share of the imports or any other index. We, therefore, agree with the Panel that Article 3.7(i) of the Anti-Dumping Agreement and Article 15.7(ii) of the SCM Agreement do not prescribe a specific methodology for determining the rate of increase in imports. Whatever be the methodology followed by an investigating authority, its determination must show, on the basis of positive evidence and an objective examination, that the rate of increase of dumped/subsidized imports is “significant” so as to indicate the likelihood of “substantially” increased imports in the near future.

 

A.3.27.6 US — Softwood Lumber VI (Article 21.5 — Canada), para. 151
(WT/DS277/AB/RW ,WT/DS277/AB/RW/Corr.1)

 

Article 3.7(iii) of the Anti-Dumping Agreement and Article 15.7(iv) of the SCM Agreement … do not prescribe a particular methodology for the examination of the price effects of dumped/subsidized imports. Regardless of the methodology followed by an investigating authority, it is clear from the plain language of these provisions that the authority must examine: (i) the trends in the prices at which “imports are entering”; (ii) the “effect” of those prices on “domestic prices”; and (iii) the “demand for further imports”. Discerning the “effect” of prices of imports on domestic prices necessarily calls for an analysis of the interaction between the two. Otherwise, the links between the prices of imports and the depressing or suppressing effect on domestic prices, and the consequent likelihood of a “demand for further imports” may not be properly established.

 

A.3.27.7 US — Softwood Lumber VI (Article 21.5 — Canada), footnote 221 to para. 152
(WT/DS277/AB/RW ,WT/DS277/AB/RW/Corr.1)

 

… Canada stated that the “domestic prices” that should be examined under Article 3.7(iii) of the Anti-Dumping Agreement and Article 15.7(iv) of the SCM Agreement are exclusively the prices of domestically produced goods, and do not include the prices of the imported goods. In this case, the USITC relied on indexes of composite prices, and explained that the indexes distinguished between the species of trees used to produce softwood lumber and not by the country of production. In our view, whether an investigating authority may properly rely on a specific index in examining domestic prices will depend on the particular facts of the case.

 
A.3.28 Article 5.4 — Motives of domestic producers for supporting investigation    back to top

A.3.28.1 US — Offset Act (Byrd Amendment), para. 283
(WT/DS217/AB/R, (WT/DS234/AB/R)

 

A textual examination of Article 5.4 of the Anti-Dumping Agreement and Article 11.4 of the SCM Agreement reveals that those provisions contain no requirement that an investigating authority examine the motives of domestic producers that elect to support an investigation. Nor do they contain any explicit requirement that support be based on certain motives, rather than on others. The use of the terms “expressing support” and “expressly supporting” clarify that Articles 5.4 and 11.4 require only that authorities “determine” that support has been “expressed” by a sufficient number of domestic producers. Thus, in our view, an “examination” of the “degree” of support, and not the “nature” of support is required. In other words, it is the “quantity”, rather than the “quality”, of support that is the issue.

 
A.3.28A Article 5.8 — Termination of the investigation.
See also SCM Agreement, Article 11.9 — Termination of an investigation (S.2.21)    back to top

A.3.28A.1 Mexico — Anti-Dumping Measures on Rice, para. 217
(WT/DS295/AB/R)

 

… the second sentence of Article 5.8 requires the immediate termination of the investigation in respect of exporters for which an individual margin of dumping of zero or de minimis is determined.

 

A.3.28A.2 Mexico — Anti-Dumping Measures on Rice, para. 218
(WT/DS295/AB/R)

 

… for the purposes of Article 5.8, there is one investigation and not as many investigations as there are exporters or foreign producers.

 

A.3.28A.3 Mexico — Anti-Dumping Measures on Rice, para. 219
(WT/DS295/AB/R)

 

The second sentence of Article 5.8 provides that there shall be “immediate termination” of the investigation where the authorities determine that the margin of dumping is de minimis. The issuance of the order that establishes anti-dumping duties — or the decision not to issue an order — is the ultimate step of the “investigation” contemplated in Article 5.8; in most cases, an investigation is “terminated” with the issuance of an order or a decision not to issue an order. This ultimate step necessarily follows the final determination. In the present case, the order establishing anti-dumping duties came after the final determination of a margin of dumping of zero per cent was made for Farmers Rice and Riceland, but the order nevertheless covered these exporters. Given that the issuance of the order establishing anti-dumping duties necessarily occurs after the final determination is made, the only way to terminate immediately an investigation, in respect of producers or exporters for which a de minimis margin of dumping is determined, is to exclude them from the scope of the order. Economía failed to do so, and, therefore, it did not terminate immediately the investigation in respect of Farmers Rice and Riceland, as required by Article 5.8 of the Anti-Dumping Agreement.

 

A.3.28A.4 Mexico — Anti-Dumping Measures on Rice, para. 305
(WT/DS295/AB/R)

 

… An investigating authority does not, of course, impose duties — including duties at zero per cent — on exporters excluded from the definitive anti-dumping measure. We therefore agree with the Panel that the “logical consequence” of this approach is that such exporters cannot be subject to administrative and changed circumstances reviews, because such reviews examine, respectively, the “duty paid” and “the need for the continued imposition of the duty”. Were an investigating authority to undertake a review of exporters that were excluded from the anti-dumping measure by virtue of their de minimis margins, those exporters effectively would be made subject to the anti-dumping measure, inconsistent with Article 5.8. The same may be said with respect to Article 11.9 of the SCM Agreement.

 

A.3.28A.5 US — Softwood Lumber V (Article 21.5 — Canada), para. 105
(WT/DS264/AB/RW)

 

Our interpretation that zeroing is not permissible when calculating margins of dumping by comparing normal value and export prices on a transaction-to-transaction basis is consistent with other provisions of the Anti-Dumping Agreement as well. For instance, Article 5.8 requires that an anti-dumping investigation be terminated if the investigating authority determines that the margin of dumping is de minimis, which is then defined as less than two per cent expressed as a percentage of the export price. As the United States recognizes, a determination under Article 5.8 requires aggregation.

 
A.3.28B Article 5.10 — Time-limit for investigations    back to top

A.3.28B.1 Mexico — Anti-Dumping Measures on Rice, para. 282
(WT/DS295/AB/R)

 

… the time-limits [set out in Article 5.10 of the Anti-Dumping Agreement and Article 11.11 of the SCM Agreement] for completing an investigation serve to circumscribe the obligation in Article 6.1.1 to provide all interested parties 30 days to reply to a questionnaire. In our view, the same may be said with respect to the identical obligation in Article 12.1.1 of the SCM Agreement.

 
A.3.29 Article 6 — Evidentiary rules for anti-dumping investigations.
See also Anti-Dumping Agreement, Article 11.3 (A.3.45-52)    back to top

A.3.29.1 EC — Bed Linen (Article 21.5 — India), para. 136
(WT/DS141/AB/RW)

 

Article 6 is entitled “Evidence”, and there is no indication in Article 6 — or elsewhere in the Anti-Dumping Agreement — that Article 6 does not apply generally to matters relating to “evidence” throughout that Agreement. Therefore, it seems to us that the subparagraphs of Article 6 set out evidentiary rules that apply throughout the course of an anti-dumping investigation, and provide also for due process rights that are enjoyed by “interested parties” throughout such an investigation.

 
A.3.30 Article 6.1.
See also Anti-Dumping Agreement, Article 11.4 (A.3.53)    back to top

A.3.30.1 ARTICLE 6.1 — “AMPLE OPPORTUNITY TO PRESENT IN WRITING ALL EVIDENCE”

 

A.3.30.1.1 US — Hot-Rolled Steel, paras. 73-75
(WT/DS184/AB/R)

 

We observe that Article 6.1.1 does not explicitly use the word “deadlines”. However, the first sentence of Article 6.1.1 clearly contemplates that investigating authorities may impose appropriate time-limits on interested parties for responses to questionnaires. That first sentence also prescribes an absolute minimum of 30 days for the initial response to a questionnaire. Article 6.1.1, therefore, recognizes that it is fully consistent with the Anti-Dumping Agreement for investigating authorities to impose time-limits for the submission of questionnaire responses. Investigating authorities must be able to control the conduct of their investigation and to carry out the multiple steps in an investigation required to reach a final determination. Indeed, in the absence of time-limits, authorities would effectively cede control of investigations to the interested parties, and could find themselves unable to complete their investigations within the time-limits mandated under the Anti-Dumping Agreement.

 

… According to the express wording of the second sentence of Article 6.1.1, investigating authorities must extend the time-limit for responses to questionnaires “upon cause shown”, where granting such an extension is “practicable” (emphasis added). This second sentence, therefore, indicates that the time-limits imposed by investigating authorities for responses to questionnaires are not necessarily absolute and immutable.

 

In sum, Article 6.1.1 establishes that investigating authorities may impose time limits for questionnaire responses, and that in appropriate circumstances these time-limits must be extended.

 

A.3.30.1.2 US — Oil Country Tubular Goods Sunset Reviews, para. 242
(WT/DS268/AB/R)

 

… the “ample” and “full” opportunities guaranteed by Articles 6.1 and 6.2, respectively, cannot extend indefinitely and must, at some point, legitimately cease to exist. This point must be determined by reference to the right of investigating authorities to rely on deadlines in the conduct of their investigations and reviews. Where the continued granting of opportunities to present evidence and attend hearings would impinge on an investigating authority’s ability to “control the conduct” of its inquiry and to “carry out the multiple steps” required to reach a timely completion of the sunset review, a respondent will have reached the limit of the “ample” and “full” opportunities provided for in Articles 6.1 and 6.2 of the Anti-Dumping Agreement.

 

A.3.30.1.3 US — Oil Country Tubular Goods Sunset Reviews, para. 245
(WT/DS268/AB/R)

 

We consider, first, whether the due process rights of Articles 6.1 and 6.2 are denied to those respondents who file incomplete submissions in response to the USDOC notice of initiation. We recall that the Panel found that the USDOC considers submissions to be incomplete, for the purposes of Section 351.218(d)(2)(iii) of the USDOC Regulations, where all of the requested information is not contained in the respondent’s submission. An incomplete submission might contain relevant evidence in support of the respondent’s position, yet fall short of the information required by the USDOC Regulations in order to be considered “complete” by the USDOC. The Panel assumed arguendo that, as the United States claimed, the USDOC uses this “incomplete” information in making its order-wide sunset determination. Nevertheless, the Panel found, and the United States agrees on appeal, that “the USDOC is precluded from taking into consideration, in its determination with respect to a given exporter, the facts submitted by that exporter [in an incomplete response]”. As the United States acknowledges, and as discussed above, the company-specific determination is “consider[ed]” by the USDOC when making its subsequent order-wide evaluation and is relevant to, even if not determinative of, the outcome of the sunset review.

 

A.3.30.1.4 US — Oil Country Tubular Goods Sunset Reviews, para. 246
(WT/DS268/AB/R)

 

… with respect to at least one part of the USDOC’s analysis underlying the order-wide determination, evidence “presented” by a respondent is disregarded and an affirmative likelihood determination is made for that respondent. In our view, disregarding a respondent’s evidence in this manner is incompatible with the respondent’s right, under Article 6.1, to present evidence that it considers relevant in respect of the sunset review. The agency is clearly notified of a respondent’s interest in participating in the sunset review by virtue of the respondent having filed a response — albeit an incomplete one.

 

A.3.30.1.5 Mexico — Anti-Dumping Measures on Rice, paras. 262-263
(WT/DS295/AB/R)

 

… we address Mexico’s argument that the Panel made an a priori assumption that the diplomatic authorities of the exporting Member do not have an obligation to make their exporters or producers aware of the investigation. According to Mexico, such an obligation exists and is stated in footnote 15 to Article 6.1.1 of the Anti-Dumping Agreement.

 

Footnote 15 establishes a general rule for counting the time that exporters have for replying to the questionnaires sent to them. Although this general rule refers to the date on which the questionnaire “was sent to the respondent or transmitted to the appropriate diplomatic representative of the exporting Member”, it does not provide any indication as to whether it is incumbent on the government of the exporting country to make the relevant exporters or producers aware of the investigation. Accordingly, we cannot deduce from footnote 15 to Article 6.1.1, alone, an obligation for diplomatic authorities of the exporting Member to make their exporters or producers aware of the investigation.

 

A.3.30.1.6 Mexico — Anti-Dumping Measures on Rice, para. 280
(WT/DS295/AB/R)

 

[Article 6.1.1 of the Anti-Dumping Agreement and Article 12.1.1 of the SCM Agreement] explicitly require that an investigating authority provide at least 30 days for reply to all exporters and foreign producers receiving a questionnaire, to be counted, “[a]s a general rule”, from the date of receipt of the questionnaire. Article 6.1 of the Anti-Dumping Agreement provides for all interested parties in an anti-dumping investigation to receive a questionnaire from the investigating authority. As we observed above, this includes not only those referred to in the petition for antidumping duties, as Mexico argues, but also those that made themselves known to the investigating authority — further to the issuance of a public notice of initiation or otherwise — and those that the investigating authority might identify as a result of some inquiry of its own. We are of the view that the same understanding applies to Article 12.1 of the SCM Agreement. It follows, therefore, that the period of at least 30 days to reply to questionnaires, provided for in Article 6.1.1 of the Anti-Dumping Agreement and Article 12.1.1 of the SCM Agreement, must be extended to all such exporters and foreign producers, whether known to the investigating authority at the outset of the investigation or at some point thereafter.

 

A.3.30.1.7 Mexico — Anti-Dumping Measures on Rice, para. 282
(WT/DS295/AB/R)

 

… the time-limits [set out in Article 5.10 of the Anti-Dumping Agreement and Article 11.11 of the SCM Agreement] for completing an investigation serve to circumscribe the obligation in Article 6.1.1 to provide all interested parties 30 days to reply to a questionnaire. In our view, the same may be said with respect to the identical obligation in Article 12.1.1 of the SCM Agreement.

 

A.3.30.2 ARTICLE 6.1 — EXPORTERS TO BE GIVEN NOTICE

 

A.3.30.2.1 Mexico — Anti-Dumping Measures on Rice, paras. 249-251
(WT/DS295/AB/R)

 

… We see no reason why there should be asymmetry between Articles 6.1 and 6.1.3. In our view, exporters that were given notice of the required information under Article 6.1 should be understood to be the same exporters entitled to receive the text of the application under Article 6.1.3, namely, the “known” exporters.

 

Thus, the explicit reference in Article 6.1.3 to “known exporters” supports the view that the exporters that shall be given notice of the required information under Article 6.1 are the exporters known to the investigating authority. These exporters include not only those referred to in the application, but also the exporters who might have made themselves known to the investigating authority following the issuance of the public notice required by Article 12.1 of the Anti-Dumping Agreement, and those that otherwise might have become known to it subsequent to the notice of initiation.

 

The Panel found that, under Article 6.1, the investigating authority has a duty to give notice of the required information to exporters of which “it can reasonably obtain knowledge”. As we explained above, Article 6.1 requires the investigating authority to give notice to the exporters known to it. Extending the duty to give notice under Article 6.1 to exporters of which the investigating authority does not know, but of which it might have obtained knowledge, would imply that, under Article 6.1, the investigating authority is subject to a duty to undertake an inquiry, which may be extensive, to identify the exporters. We cannot find, in Article 6.1 or anywhere else in the Anti-Dumping Agreement, any legal basis for such an obligation, which in some circumstances could be onerous. Accordingly, in our view, Economía was not obliged under Article 6.1 to give notice of the required information to exporters of which it did not know but of which it could have obtained knowledge.

 
A.3.31 Article 6.2 — Opportunity for interested parties to defend their interests    back to top

A.3.31.1 EC — Tube or Pipe Fittings, para. 149
(WT/DS219/AB/R)

 

The European Communities recognized during the oral hearing that a finding of violation in this case under Article 6.4 would necessarily entail a violation of Article 6.2. We are also of the view that, by failing to meet its legal obligation to disclose Exhibit EC-12, the European Communities did not afford the Brazilian exporter “a full opportunity for the defence of [its] interests” as required under Article 6.2 of the Anti-Dumping Agreement. One of the stated objectives of the disclosure of information required under Article 6.4 is to allow interested parties “to prepare presentations on the basis of this information”. The “presentations” referred to in Article 6.4, whether written or oral, logically are the principal mechanisms through which an exporter subject to an anti-dumping investigation can defend its interests. Thus, by failing to disclose Exhibit EC-12 and thereby depriving the Brazilian exporter of an opportunity to present its defence, the European Communities did not act consistently with Article 6.2.

 

A.3.31.2 US — Oil Country Tubular Goods Sunset Reviews, para. 246
(WT/DS268/AB/R)

 

… the respondent will also be denied any opportunity to confront parties with adverse interests in a hearing, notwithstanding this respondent’s clear expression of interest in participating in the sunset review. As a result, this respondent is denied its rights, pursuant to Article 6.2, to the “full opportunity for the defence of [its] interests”. The United States claims that the USDOC “takes all record evidence into account, including evidence in incomplete submissions, when making the order-wide determination”. This does not alter the fact that evidence in incomplete submissions is disregarded in the course of the USDOC’s analysis, namely, when making company-specific determinations, thereby denying respondents their rights under Articles 6.1 and 6.2.

 

A.3.31.3 US — Oil Country Tubular Goods Sunset Reviews, para. 248
(WT/DS268/AB/R)

 

We now turn to evaluate whether those respondents that do not respond at all to the USDOC notice of initiation are also denied opportunities guaranteed by Articles 6.1 and 6.2. These respondents will also face automatic affirmative company-specific determinations, be precluded from submitting evidence in the remainder of the sunset proceeding, and not be allowed a hearing with adverse parties. Unlike the case of respondents who file incomplete submissions, however, there will be no evidence submitted by that respondent that the USDOC would disregard. Thus, the sole basis on which such respondents may claim a denial of rights under Articles 6.1 and 6.2 is the denial of the opportunity to participate in later stages of the proceeding, including the right to request a hearing and submit evidence subsequent to the filing deadline of the initial submission.

 

A.3.31.4 US — Oil Country Tubular Goods Sunset Reviews, para. 249
(WT/DS268/AB/R)

 

In this case, the claim under Article 6 centres on the initiation stage of the proceeding. In our view, an investigating authority may have at the initiation stage particular concerns about enforcing its deadline for receiving notifications of a respondent’s interest in participating. The submissions filed by respondents and domestic interested parties frame the scope of the sunset review for the investigating authority. These submissions inform the agency as to the extent of the issues and company specific data that may need to be investigated and adjudicated upon in the course of the sunset review.

 

A.3.31.5 US — Oil Country Tubular Goods Sunset Reviews, para. 250
(WT/DS268/AB/R)

 

Respondents’ initial submissions also serve to inform other interested parties of the critical issues in dispute in the sunset review. Particularly where company specific behaviour is relevant to the final likelihood-of-dumping determination — for example, in respect of an individual respondent’s dumping margins and volume and value of exports — respondents’ submissions may provide factual information necessary for other interested parties to defend their interests adequately before the agency. … Because respondents’ initial submissions effectively contribute to establishing the parameters of the sunset review — for the investigating authority as well as for other interested parties — the investigating authority has a significant interest in requiring respondents to comply with the deadline for notification of interest in participating at the initial stage of the proceeding.

 

A.3.31.6 US — Oil Country Tubular Goods Sunset Reviews, para. 252
(WT/DS268/AB/R)

 

… the rights to present evidence and request a hearing cannot be said to be “denied” to a respondent that is given an opportunity to submit an initial response to the notice of initiation simply because it must do so by a deadline that is conceded to be reasonable. We do not see it as an unreasonable burden on respondents to require them to file a timely submission in order to preserve their rights for the remainder of the sunset review. Indeed, even an incomplete submission will serve to preserve those rights. Accordingly, we are of the view that, if a respondent decides not to undertake the necessary initial steps to avail itself of the “ample” and “full” opportunities available for the defence of its interests, the fault lies with the respondent, and not with the deemed waiver provision.

 
A.3.32 Article 6.4 — Access to information relevant for interested parties to present their case.
See also Anti-Dumping Agreement, Article 6.2 (A.3.31); Anti-Dumping Agreement, Article 11.4 (A.3.53)    back to top

A.3.32.1 EC — Tube or Pipe Fittings, para. 145
(WT/DS219/AB/R)

 

We turn first to the requirement that the information be “relevant”. From the Panel’s reasoning, it is apparent that it read this requirement to mean “relevant” from the perspective of the investigating authority. We disagree. Article 6.4 refers to “provid[ing] timely opportunities for all interested parties to see all information that is relevant to the presentation of their cases” (emphasis added). The possessive pronoun “their” clearly refers to the earlier reference in that sentence to “interested parties”. The investigating authorities are not mentioned in Article 6.4 until later in the sentence, when the provision refers to the additional requirement that the information be “used by the authorities”. Thus, whether or not the investigating authorities regarded the information in Exhibit EC-12 to be relevant does not determine whether the information would in fact have been “relevant” for the purposes of Article 6.4.

 

A.3.32.2 EC — Tube or Pipe Fittings, para. 146
(WT/DS219/AB/R)

 

This conclusion is supported by our reasoning in US — Hot Rolled Steel, where we explained that “Article 3.4 lists certain factors which are deemed to be relevant in every investigation and which must always be evaluated by the investigating authorities.” Thus, because Exhibit EC-12 contains information on some of the injury factors listed in Article 3.4, and the injury factors listed in that provision “are deemed to be relevant in every investigation”, Exhibit EC-12 must be considered to contain information that is relevant to the investigation carried out by the European Commission. As such, the information in Exhibit EC-12 was necessarily relevant to the presentation of the interested parties’ cases and is, therefore, “relevant” for purposes of Article 6.4.

 

A.3.32.3 EC — Tube or Pipe Fittings, para. 147
(WT/DS219/AB/R)

 

In our view, however, the Panel’s reasoning overlooks the fact that the European Commission was required to evaluate all the injury factors listed in Article 3.4, and the evaluation of some of these factors is set out exclusively in Exhibit EC-12. In other words, Exhibit EC-12 relates to a required step in the anti-dumping investigation. The European Communities relies on Exhibit EC-12 as the sole evidence that it performed this required step. As we see it, this necessarily leads to the conclusion that the information in Exhibit EC-12 was in fact “used” by the European Commission in the anti-dumping investigation and that, therefore, Exhibit EC-12 also satisfies this criterion of Article 6.4. Thus, the European Communities was not entitled to exclude this information on the basis that it did not consider that it provided “value added” to the investigation.

 
A.3.33 Article 6.8 and Annex II — Facts available to investigating authorities    back to top

A.3.33.1 US — Hot-Rolled Steel, para. 77
(WT/DS184/AB/R)

 

Article 6.8 identifies the circumstances in which investigating authorities may overcome a lack of information, in the responses of the interested parties, by using “facts” which are otherwise “available” to the investigating authorities. According to Article 6.8, where the interested parties do not “significantly impede” the investigation, recourse may be had to facts available only if an interested party fails to submit necessary information “within a reasonable period”. Thus, if information is, in fact, supplied “within a reasonable period”, the investigating authorities cannot use facts available, but must use the information submitted by the interested party.

 

A.3.33.2 US — Hot-Rolled Steel, para. 79
(WT/DS184/AB/R)

 

Although this paragraph [Annex II, para. 1] is specifically concerned with ensuring that respondents receive proper notice of the rights of the investigating authorities to use facts available, it underscores that resort may be had to facts available only “if information is not supplied within a reasonable time”. Like Article 6.8, paragraph 1 of Annex II indicates that determinations may not be based on facts available when information is supplied within a “reasonable time” but should, instead, be based on the information submitted.

 

A.3.33.3 Mexico — Anti-Dumping Measures on Rice, para. 259
(WT/DS295/AB/R)

 

The last sentence of Article 6.8 provides that the provisions of Annex II shall be observed in the application of that paragraph. In particular, under the second sentence of paragraph 1 of Annex II, the investigating authorities should “ensure” that an interested party is “aware” that, if the required information is not supplied within a reasonable time, “the authorities will be free to make determinations on the basis of facts available, including those contained in the application for the initiation of the investigation by the domestic industry” (emphasis added). The second sentence of paragraph 1 of Annex II conditions the use of facts from the petitioner’s application on making the interested party “aware” that, if the information is not supplied by it within a reasonable time, the investigating authority will be free to resort to these facts available. In other words, an exporter shall be given the opportunity to provide the information required by the investigating authority before the latter resorts to facts available that can be adverse to the exporter’s interests. An exporter that is unknown to the investigating authority — and, therefore, is not notified of the information required to be submitted to the investigating authority — is denied such an opportunity. Accordingly, an investigating authority that uses the facts available in the application for the initiation of the investigation against an exporter that was not given notice of the information the investigating authority requires, acts in a manner inconsistent with paragraph 1 of Annex II to the Anti-Dumping Agreement and, therefore, with Article 6.8 of that Agreement.

 

A.3.33.4 Mexico — Anti-Dumping Measures on Rice, paras. 288-289
(WT/DS295/AB/R)

 

From these obligations, we understand that an investigating authority in an antidumping investigation may rely on the facts available to calculate margins for a respondent that failed to provide some or all of the necessary information requested by the agency. In so doing, however, the agency must first have made the respondent aware that it may be subject to a margin calculated on the basis of the facts available because of the respondent’s failure to provide necessary information. Furthermore, assuming a respondent acted to the best of its ability, an agency must generally use, in the first instance, the information the respondent did provide, if any.

 

With respect to the facts that an agency may use when faced with missing information, the agency’s discretion is not unlimited. First, the facts to be employed are expected to be the “best information available”. In this respect, we agree with the Panel’s explanation:

 

The use of the term “best information” means that information has to be not simply correct or useful per se, but the most fitting or “most appropriate” information available in the case at hand. Determining that something is “best” inevitably requires, in our view, an evaluative, comparative assessment as the term “best” can only be properly applied where an unambiguously superlative status obtains. It means that, for the conditions of Article 6.8 of the AD Agreement and Annex II to be complied with, there can be no better information available to be used in the particular circumstances. Clearly, an investigating authority can only be in a position to make that judgement correctly if it has made an inherently comparative evaluation of the “evidence available”. [Panel Report, paragraph 7.166] (original emphasis; footnote omitted)

 

Secondly, when culling necessary information from secondary sources, the agency should ascertain for itself the reliability and accuracy of such information by checking it, where practicable, against information contained in other independent sources at its disposal, including material submitted by interested parties. Such an active approach is compelled by the obligation to treat data obtained from secondary sources “with special circumspection”.

 
A.3.34 Article 6.8 and Annex II — Timeliness of parties’ submissions    back to top

A.3.34.1 US — Hot-Rolled Steel, para. 81
(WT/DS184/AB/R)

 

… according to paragraph 3 of Annex II, investigating authorities are directed to use information if three, and, in some circumstances, four, conditions are satisfied. In our view, it follows that if these conditions are met, investigating authorities are not entitled to reject information submitted, when making a determination. One of these conditions is that information must be submitted “in a timely fashion”.

 

A.3.34.2 US — Hot-Rolled Steel, para. 82
(WT/DS184/AB/R)

 

… In our view, “timeliness” under paragraph 3 of Annex II must be read in light of the collective requirements, in Articles 6.1.1 and 6.8, and in Annex II, relating to the submission of information by interested parties. Taken together, these provisions establish a coherent framework for the treatment, by investigating authorities, of information submitted by interested parties. Article 6.1.1 establishes that investigating authorities may fix time-limits for responses to questionnaires, but indicates that, “upon cause shown”, and if “practicable”, these time-limits are to be extended. Article 6.8 and paragraph 1 of Annex II provide that investigating authorities may use facts available only if information is not submitted within a reasonable period of time, which, in turn, indicates that information which is submitted in a reasonable period of time should be used by the investigating authorities.

 

A.3.34.3 US — Hot-Rolled Steel, para. 83
(WT/DS184/AB/R)

 

That being so, we consider that, under paragraph 3 of Annex II, investigating authorities should not be entitled to reject information as untimely if the information is submitted within a reasonable period of time. In other words, we see, “in a timely fashion”, in paragraph 3 of Annex II as a reference to a “reasonable period” or a “reasonable time”. This reading of “timely” contributes to, and becomes part of, the coherent framework for fact-finding by investigating authorities. Investigating authorities may reject information under paragraph 3 of Annex II only in the same circumstances in which they are entitled to overcome the lack of this information through recourse to facts available, under Article 6.8 and paragraph 1 of Annex II of the Anti-Dumping Agreement. The coherence of this framework is also secured through the second sentence of Article 6.1.1, which requires investigating authorities to extend deadlines “upon cause shown”, if “practicable”. In short, if the investigating authorities determine that information was submitted within a reasonable period of time, Article 6.1.1 calls for the extension of the time-limits for the submission of information.

 
A.3.35 Article 6.8 and Annex II — “reasonable period” for submission of information    back to top

A.3.35.1 US — Hot-Rolled Steel, para. 84
(WT/DS184/AB/R)

 

… The word “reasonable” [in Article 6.8 and paragraph 1 of Annex II] implies a degree of flexibility that involves consideration of all of the circumstances of a particular case. What is “reasonable” in one set of circumstances may prove to be less than “reasonable” in different circumstances. This suggests that what constitutes a reasonable period or a reasonable time, under Article 6.8 and Annex II of the Anti-Dumping Agreement, should be defined on a case-by-case basis, in the light of the specific circumstances of each investigation.

 

A.3.35.2 US — Hot-Rolled Steel, para. 85
(WT/DS184/AB/R)

 

In sum, a “reasonable period” must be interpreted consistently with the notions of flexibility and balance that are inherent in the concept of “reasonableness”, and in a manner that allows for account to be taken of the particular circumstances of each case. In considering whether information is submitted within a reasonable period of time, investigating authorities should consider, in the context of a particular case, factors such as: (i) the nature and quantity of the information submitted; (ii) the difficulties encountered by an investigated exporter in obtaining the information; (iii) the verifiability of the information and the ease with which it can be used by the investigating authorities in making their determination; (iv) whether other interested parties are likely to be prejudiced if the information is used; (v) whether acceptance of the information would compromise the ability of the investigating authorities to conduct the investigation expeditiously; and (vi) the numbers of days by which the investigated exporter missed the applicable time-limit.

 

A.3.35.3 US — Hot-Rolled Steel, para. 86
(WT/DS184/AB/R)

 

In determining whether information is submitted within a reasonable period of time, it is proper for investigating authorities to attach importance to the time-limit fixed for questionnaire responses, and to the need to ensure the conduct of the investigation in an orderly fashion. Article 6.8 and paragraph 1 of Annex II are not a licence for interested parties simply to disregard the time-limits fixed by investigating authorities. Instead, Articles 6.1.1 and 6.8, and Annex II of the Anti-Dumping Agreement, must be read together as striking and requiring a balance between the rights of the investigating authorities to control and expedite the investigating process, and the legitimate interests of the parties to submit information and to have that information taken into account.

 
A.3.36 Article 6.8 and Annex II — Lack of cooperation by investigated parties.
See also Anti-Dumping Agreement, Article 11.4 (A.3.53)    back to top

A.3.36.1 US — Hot-Rolled Steel, paras. 99-100
(WT/DS184/AB/R)

 

Paragraph 7 of Annex II indicates that a lack of “cooperation” by an interested party may, by virtue of the use made of facts available, lead to a result that is “less favourable” to the interested party than would have been the case had that interested party cooperated.… [P]arties may very well “cooperate” to a high degree, even though the requested information is, ultimately, not obtained. This is because the fact of “cooperating” is in itself not determinative of the end result of the cooperation. Thus, investigating authorities should not arrive at a “less favourable” outcome simply because an interested party fails to furnish requested information if, in fact, the interested party has “cooperated” with the investigating authorities, within the meaning of paragraph 7 of Annex II of the Anti-Dumping Agreement.

 

Paragraph 7 of Annex II does not indicate what degree of “cooperation” investigating authorities are entitled to expect from an interested party in order to preclude the possibility of such a “less favourable” outcome. To resolve this question we scrutinize the context found in Annex II.

 

A.3.36.2 US — Hot-Rolled Steel, para. 102
(WT/DS184/AB/R)

 

We, therefore, see paragraphs 2 and 5 of Annex II of the Anti-Dumping Agreement as reflecting a careful balance between the interests of investigating authorities and exporters. In order to complete their investigations, investigating authorities are entitled to expect a very significant degree of effort — to the “best of their abilities” — from investigated exporters. At the same time, however, the investigating authorities are not entitled to insist upon absolute standards or impose unreasonable burdens upon those exporters.

 

A.3.36.3 US — Hot-Rolled Steel, paras. 119-120
(WT/DS184/AB/R)

 

… There is, however, no requirement in Article 6.8 that resort to facts available be limited to situations where there is no information whatsoever which can be used to calculate a margin. Thus, the application of Article 6.8, authorizing the use of facts available, is not confined to cases where the entire margin is established using only facts available. Rather, under Article 6.8, investigating authorities are entitled to have recourse to facts available whenever an interested party does not provide some necessary information within a reasonable period, or significantly impedes the investigation. Whenever such a situation exists, investigating authorities may remedy the lack of any necessary information by drawing appropriately from the “facts available”. As the United States acknowledges, Article 6.8 may apply in situations where recourse to facts available is needed to cure the lack of even a very small amount of information.

 

In consequence, we are of the view that the “circumstances referred to” in Article 6.8 are the circumstances in which the investigating authorities properly have recourse to “facts available” to overcome a lack of necessary information in the record, and that these “circumstances” may, in fact, involve only a small amount of information to be used in the calculation of the individual margin of dumping for an exporter or producer.

 
A.3.37 Article 6.10.
See also Anti-Dumping Agreement, Articles 3.1 and 3.2 — Method of calculating the “volume of the dumped imports” (A.3.18); Anti-Dumping Agreement, Article 9.3 — Margin of dumping (A.3.40A); Anti-Dumping Agreement, Article 11.4 — Relationship with Article 6 (A.3.53)    back to top

A.3.37.1 ARTICLE 6.10 — KNOWN EXPORTER OR PRODUCER

 

A.3.37.1.1 Mexico — Anti-Dumping Measures on Rice, para. 255
(WT/DS295/AB/R)

 

The first sentence of Article 6.10 provides that the investigating authority “shall, as a rule, determine an individual margin of dumping for each known exporter or producer concerned of the product under investigation” (emphasis added). For the Panel, the term “known exporter or producer” refers not only to the exporters or foreign producers of which the investigating authority knows, but also to those with which “an unbiased and objective investigating authority properly establishing the facts would be reasonably expected to have become conversant”. Again, we do not see in the Anti-Dumping Agreement a legal basis for such an interpretation of the term “known exporter or producer”. This interpretation is difficult to reconcile with the ordinary meaning of the term: a known exporter or producer is an exporter or producer known to the investigating authority, not an exporter or producer of which it does not know, but should have known. In our view, the rule set out in the first sentence of Article 6.10 (determining an individual margin of dumping) covers the exporters or foreign producers of which the investigating authority knows at the time the calculation of the margins of dumping is made. Under the first sentence of Article 6.10, the investigating authority is not required to determine an individual margin of dumping for exporters or foreign producers of whose existence it was unaware.

 

A.3.37.1.2 US — Zeroing (EC), para. 128
(WT/DS294/AB/R, WT/DS294/AB/R/Corr.1)

 

… Article 6.10 provides relevant context for the interpretation of the term “margin of dumping” in Article 9.3 under the first sentence of Article 6.10, margins of dumping for a product must be established for exporters or foreign producers. The text of Article 6.10 does not limit the application of this rule to original investigations, and we see no reason why this rule would not be relevant to duty assessment proceedings governed by Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994.

 

A.3.37.1.3 US — Softwood Lumber V (Article 21.5 — Canada), paras. 105, 107
(WT/DS264/AB/RW)

 

Our interpretation that zeroing is not permissible when calculating margins of dumping by comparing normal value and export prices on a transaction-to-transaction basis is consistent with other provisions of the Anti-Dumping Agreement as well.

 

 

We agree with the United States and the Panel that Article 6.10 does not expressly require taking into account both negative and positive comparison results from transactions relating to a given exporter or producer. However, it does not express the reverse proposition either. Rather, the import of Article 6.10 is to reinforce the notion that the “margins of dumping” are the result of an aggregation, in this case, of transaction-specific comparisons.

 

A.3.37.2 ARTICLE 6.10 — NO INDIVIDUAL EXAMINATION OF ALL PRODUCERS

 

A.3.37.2.1 EC — Bed Linen (Article 21.5 — India), para. 116
(WT/DS141/AB/RW)

 

The issue raised in this appeal, however, does not relate to imports from producers or exporters that were examined individually in an investigation. Rather, it relates to the appropriate treatment of imports from producers or exporters that were not examined individually in such an investigation. The appeal before us involves an investigation in which individual margins of dumping have not been determined for each Indian producer exporting to the European Communities. It is, of course, not necessary under the Anti-Dumping Agreement for investigating authorities to examine each producer and exporter. The second sentence of Article 6.10 authorizes investigating authorities, when determining margins of dumping, to limit their examination where the number of producers or exporters of the product under investigation is so large that the determination of an individual margin of dumping for each of them would be impracticable. This limited examination may be conducted in one of two alternative ways identified in Article 6.10.

 
A.3.38 Article 6.13 — Cooperation between interested parties and investigation authorities    back to top

A.3.38.1 US — Hot-Rolled Steel, para. 104
(WT/DS184/AB/R)

 

Article 6.13 thus underscores that “cooperation” is, indeed, a two-way process involving joint effort. This provision requires investigating authorities to make certain allowances for, or take action to assist, interested parties in supplying information. If the investigating authorities fail to “take due account” of genuine “difficulties” experienced by interested parties, and made known to the investigating authorities, they cannot, in our view, fault the interested parties concerned for a lack of cooperation.

 
A.3.38A Article 7 — Provisional measures    back to top

A.3.38A.1 US — Shrimp (Thailand) / US — Customs Bond Directive, para. 233
(WT/DS343/AB/R, WT/DS345/AB/R)

 

We agree with Thailand and India that there is some overlap between the Ad Note and Article 7. The Ad Note allows security in the form of provisional measures during the original investigation period, the disciplines of which are implemented through Article 7. At the same time, in our view, the Ad Note allows the taking of a reasonable security for payment of the final liability of anti-dumping duties after an anti-dumping duty order has been imposed where such security may be needed to ensure that the difference between the duty collected on import entries and the final duty liability is collected. We therefore do not agree with Thailand and India that the Ad Note is completely subsumed under Article 7 so that the taking of a reasonable security is not allowed after a definitive anti-dumping duty is imposed. As the Appellate Body clarified in Brazil — Desiccated Coconut, the Anti-Dumping Agreement does not supersede the provisions of the GATT 1994, including the Notes and Supplementary Provisions of Annex I to the GATT 1994. Rather, Article VI of the GATT 1994 (including the Ad Note) and the Anti-Dumping Agreement represent an inseparable package of rights and disciplines. Our interpretation of the Ad Note is consistent with this approach as it gives meaning and effect to both.

 

A.3.38A.2 US — Continued Zeroing, paras. 207, 210
(WT/DS350/AB/R)

 

… the European Communities listed among the 52 specific proceedings three preliminary results in sunset reviews and one preliminary result in a periodic review. These reviews were conducted by the USDOC, subsequent to the imposition of duties pursuant to the original anti-dumping investigations, to assess the duty liabilities and cash deposit rates (in the case of periodic review), and to determine whether a duty should be revoked or continued (in the case of sunset reviews). In contrast, a provisional measure, within the meaning of Article 7 of the Anti- Dumping Agreement, is an interim measure taken by an investigating authority in the context of an original investigation to prevent further injury to the domestic industry, pending the final outcome of the original investigation. Therefore, we fail to see the Panel’s rationale in excluding these measures from its terms of reference on the grounds that the European Communities did not bring any claims under Article 7.1 concerning the conditions for imposing provisional measures. As a result, the Panel’s finding that the four preliminary determinations were outside its terms of reference, which was made on the basis of the European Communities’ failure to bring claims under Article 7.1, cannot stand.

 

 

… we consider the European Communities’ challenge in relation to these two preliminary results to be premature. Specifically, given that these preliminary results could be modified by the final results, we fail to see how the European Communities could establish that final anti-dumping duty were assessed in excess of the margin of dumping or that the USDOC would have relied on the margin calculated with zeroing in deciding to continue the duty.

 
A.3.39 Article 9 — Imposition of anti-dumping duties — General, Relationship with Articles 2 and 3    back to top

A.3.39.1 EC — Bed Linen (Article 21.5 — India), para. 123
(WT/DS141/AB/RW)

 

… In our view, too, the use by the drafters of the present perfect tense is significant; it indicates that the imposition and collection of anti-dumping duties under Article 9 is a separate and distinct phase of an anti-dumping action that necessarily occurs after the determination of dumping, injury, and causation under Articles 2 and 3 has been made. Members have the right to impose and collect anti-dumping duties only after the completion of an investigation in which it has been established that the requirements of dumping, injury, and causation “have been fulfilled”. In other words, the right to impose anti-dumping duties under Article 9 is a consequence of the prior determination of the existence of dumping margins, injury, and a causal link. The determination, by the investigating authorities of a Member, that there is injury caused by a certain volume of dumping necessarily precedes and gives rise to the consequential right to impose and collect anti-dumping duties.

 

A.3.39.2 US — Zeroing (Japan), paras. 150-151
(WT/DS322/AB/R)

 

… Under the Panel’s rationale, the terms “dumping” and “margins of dumping”, as they appear in Article 9 of the Anti-Dumping Agreement, refer to results of transaction-specific comparisons.

 

As we have stated, “dumping” and “dumping margins” under the Anti-Dumping Agreement are defined in relation to the product under investigation. Thus, “dumping” and “margins of dumping” can be found to exist only at the level of a “product”: they cannot be found to exist at the level of a type, model, or category of a product under consideration; nor can they be found to exist at the level of an individual transaction. Rather, “if a margin of dumping is calculated on the basis of multiple comparisons made at an intermediate stage, it is only on the basis of aggregating all these intermediate results that an investigating authority can establish margins of dumping for the product as a whole”. We therefore disagree with the Panel’s approach, which is premised on the view that the terms “dumping” or “margins of dumping” can have different meanings under different provisions of the Anti-Dumping Agreement.

 

A.3.39.3 US — Shrimp (Thailand) / US — Customs Bond Directive, paras. 234-235, 240-242
(WT/DS343/AB/R, WT/DS345/AB/R)

 

We now turn to the issue of whether the Panel erred in its interpretation that (i) cash deposits required under United States law are not anti-dumping duties falling within the scope of the Anti-Dumping Agreement, and that (ii) these cash deposits are not subject to the requirements of Article 9.1 and the chapeau of Article 9.3 that the amount of anti-dumping duties shall not exceed the margin of dumping established under Article 2 of the Anti-Dumping Agreement.

 

The Panel addressed the question of cash deposits only as a contextual consideration in support of its conclusion that the Ad Note allows security to be taken after the imposition of an anti-dumping duty order.

 

 

We are of the view that, in order to interpret the Ad Note and determine the WTO-consistency of the bonds required under the [enhanced continuous bond requirement], it was not necessary for the Panel to decide whether the cash deposits are duties governed by Article 9 of the Anti-Dumping Agreement. As Thailand and India did not raise any claim regarding the cash deposits, the cash deposits are not a measure at issue in these disputes.

 

… While the description of an instrument under domestic law is not determinative under WTO law, we note that under the United States’ anti-dumping law, once an anti-dumping duty order is issued, importers may no longer post bonds as security, but, instead, must make a cash “deposit of estimated antidumping duties” at the rates established in the anti-dumping duty order or in the most recent assessment review. Thus, a cap on the cash deposits equivalent to the margin of dumping established for an exporter in the anti-dumping duty order, or in the most recent assessment review, exists under United States law.

 

Therefore, we do not consider it necessary to rule on the merits of the appeals by Thailand and India concerning the cash deposits. We do not share the reasoning of the Panel on this issue and declare of no legal effect the interpretation developed by the Panel that the cash deposits required under United States law following the imposition of an anti-dumping duty order are not anti-dumping duties governed by Article 9 of the Anti-Dumping Agreement.

 

A.3.39.4 US — Shrimp (Thailand) / US — Customs Bond Directive, paras. 280-281
(WT/DS343/AB/R, WT/DS345/AB/R)

 

India’s appeal raises the question of whether a bond is a “duty” within the meaning of Article 9 of the Anti-Dumping Agreement (or Article 19 of the SCM Agreement). A bond under the Amended CBD secures the payment of a duty. A bond, by itself, is not a duty as it does not entail any transfer of money from the importer to the government. Therefore, the [enhanced continuous bond requirement] imposed pursuant to the Amended CBD cannot be characterized as a “duty” within the meaning of Article 9 of the Anti-Dumping Agreement and Article 19 of the SCM Agreement.

 

Accordingly, we agree with the Panel that bonds provided under the Amended CBD are not anti-dumping duties or countervailing duties and that, therefore, they fall outside the scope of Articles 9.1, 9.2, 9.3, and 9.3.1 of the Anti-Dumping Agreement, as well as Article 19.2, 19.3, and 19.4 of the SCM Agreement.

 
A.3.40 Article 9.2 — Product-specific vs. Company-specific anti-dumping determination.
See also Anti-Dumping Agreement, Article 11.3 (A.3.45-52)    back to top

A.3.40.1 US — Corrosion-Resistant Steel Sunset Review, para. 150 and footnote 188
(WT/DS244/AB/R)

 

… Article 9.2 refers to the imposition of “an anti-dumping duty in respect of any product”, rather than the imposition of a duty in respect of individual exporters or producers. We agree that this reference in Article 9.2 informs the interpretation of Article 11.3. We also note that Article 9.2 allows investigating authorities, in imposing a duty in respect of a product, to “name the supplier or suppliers of the product concerned” or, in certain circumstances, “the supplying country concerned”. This suggests that authorities may use a single order to impose a “duty”, even though the amount of the duty imposed on each exporter or producer may vary. Therefore, Article 9.2 confirms our initial view that Article 11.3 does not require investigating authorities to make their likelihood determination on a company specific basis. 188

 
A.3.40A Article 9.3 — Margin of dumping.
See also Anti-Dumping Agreement, Article 2 (A.3.1-14); Anti-Dumping Agreement, Article 6.10 (A.3.37)    back to top

A.3.40A.1 Mexico — Anti-Dumping Measures on Rice, para. 311
(WT/DS295/AB/R)

 

… The sub-paragraphs of Article 9.3 — including, of particular relevance here, sub-paragraphs 1 and 2 — specify in greater detail how investigating authorities are to comply with this more general obligation, namely, by providing for refunds to respondents whose duties have exceeded their dumping margins. Article 9.3.1 deals with such refunds for Members employing a retrospective system for the assessment and collection of anti-dumping duties, whereas Article 9.3.2 deals with those Members, such as Mexico, employing a prospective system.

 

A.3.40A.2 US — Zeroing (EC), para. 127
(WT/DS294/AB/R, WT/DS294/AB/R/Corr.1)

 

… Article 9.3 refers to Article 2. It follows that, under Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994, the amount of the assessed anti-dumping duties shall not exceed the margin of dumping as established “for the product as a whole”. Therefore, if the investigating authority establishes the margin of dumping on the basis of multiple comparisons made at an intermediate stage, it is required to aggregate the results of all of the multiple comparisons, including those where the export price exceeds the normal value. If the investigating authority chooses to undertake multiple comparisons at an intermediate stage, it is not allowed to take into account the results of only some multiple comparisons, while disregarding others.

 

A.3.40A.3 US — Zeroing (EC), para. 128
(WT/DS294/AB/R, WT/DS294/AB/R/Corr.1)

 

… Article 6.10 provides relevant context for the interpretation of the term “margin of dumping” in Article 9.3 under the first sentence of Article 6.10, margins of dumping for a product must be established for exporters or foreign producers. The text of Article 6.10 does not limit the application of this rule to original investigations, and we see no reason why this rule would not be relevant to duty assessment proceedings governed by Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994.

 

A.3.40A.4 US — Zeroing (EC), paras. 129-130
(WT/DS294/AB/R, WT/DS294/AB/R/Corr.1)

 

… under Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994, margins of dumping are established for foreign producers or exporters.

 

Thus, pursuant to Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994, investigating authorities are required to ensure that the total amount of anti-dumping duties collected on the entries of a product from a given exporter shall not exceed the margin of dumping established for that exporter. In other words, the margin of dumping established for an exporter or foreign producer operates as a ceiling for the total amount of anti-dumping duties that can be levied on the entries of the subject product (from that exporter) covered by the duty assessment proceeding.

 

A.3.40A.5 US — Zeroing (EC), para. 131
(WT/DS294/AB/R, WT/DS294/AB/R/Corr.1)

 

Although Article 9.3 sets out a requirement regarding the amount of the assessed anti-dumping duties, it does not prescribe a specific methodology according to which the duties should be assessed. In particular, a reading of Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994 does not suggest that final anti-dumping duty liability cannot be assessed on a transaction- or importer specific basis, or that the investigating authorities may not use specific methodologies that reflect the distinct nature and purpose of proceedings governed by these provisions, for purposes of assessing final anti-dumping duty liability, provided that the total amount of anti-dumping duties that are levied does not exceed the exporters’ or foreign producers’ margins of dumping.

 

A.3.40A.6 US — Zeroing (EC), paras. 133-134
(WT/DS294/AB/R, WT/DS294/AB/R/Corr.1)

 

… in the administrative reviews at issue, the USDOC assessed the anti-dumping duties according to a methodology in which, for each individual importer, comparisons were carried out between the export price of each individual transaction made by the importer and a contemporaneous average normal value. The results of these multiple comparisons were then aggregated to calculate the anti-dumping duties owed by each individual importer. If, for a given individual transaction, the export price exceeded the contemporaneous average normal value, the USDOC, at the aggregation stage, disregarded the result of this individual comparison. Because results of this type were systematically disregarded, the methodology applied by the USDOC in the administrative reviews at issue resulted in amounts of assessed anti-dumping duties that exceeded the foreign producers’ or exporters’ margins of dumping with which the anti-dumping duties had to be compared under Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994. Accordingly, the zeroing methodology, as applied by the USDOC in the administrative reviews at issue, is inconsistent with Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994.

 

… Article 9.3 of the Anti-Dumping Agreement, and Article VI:2 of the GATT 1994, when interpreted in accordance with customary rules of interpretation of public international law, as required by Article 17.6(ii), do not, in our view, allow the use of the methodology applied by the United States in the administrative reviews at issue. This is so because, as explained above, the methodology applied by the USDOC in the administrative reviews at issue results in amounts of assessed anti-dumping duties that exceed the foreign producers’ or exporters’ margins of dumping. Yet, Article 9.3 clearly stipulates that “the amount of the anti-dumping duty shall not exceed the margin of dumping as established under Article 2”. Similarly, Article VI:2 of the GATT 1994 provides that “[i]n order to offset or prevent dumping, a Member may levy on any dumped product an antidumping duty not greater in amount than the margin of dumping in respect of such product.”

 

A.3.40A.7 US — Zeroing (EC), para. 164
(WT/DS294/AB/R, WT/DS294/AB/R/Corr.1)

 

We recognize that the issue of the applicability of Article 2.4.2 to administrative reviews is an important issue, but we consider that the central focus of this appeal is the issue of zeroing, both as it relates to original investigations and administrative reviews. As our reasoning shows, we did not find it necessary to resolve the issue of zeroing in the administrative reviews at issue in this case through an examination of Article 2.4.2. We wish to emphasize that we are not expressing any view in this appeal as to whether Article 2.4.2 is applicable or not to administrative reviews under Article 9.3. Thus, the Panel’s findings should not be considered to have been endorsed by the Appellate Body.

 

A.3.40A.8 US — Softwood Lumber V (Article 21.5 — Canada), paras. 105, 108
(WT/DS264/AB/RW)

 

Our interpretation that zeroing is not permissible when calculating margins of dumping by comparing normal value and export prices on a transaction-to transaction basis is consistent with other provisions of the Anti-Dumping Agreement as well.

 

 

… Article 9.3 sets the margins of dumping determined under Article 2 as a ceiling for the total amount of anti-dumping duty that may be imposed on individual exporters or foreign producers. Like Articles 5.8 and 6.10, this provision suggests that the margin of dumping is the result of an overall aggregation and does not refer to the results of the transaction-specific comparisons. Indeed, we do not see how the margin of dumping could operate as a ceiling under Article 9.3 if the result of each transaction-by-transaction comparison is deemed to be a margin of dumping as the United States suggests.

 

A.3.40A.9 US — Stainless Steel (Mexico), para. 96
(WT/DS344/AB/R)

 

We also disagree with the proposition that the term “margin of dumping” has a different or special meaning in the context of Article 9.3 of the Anti-Dumping Agreement. As we stated earlier, a margin of dumping measures only the degree or magnitude of dumping. Article 9.3 refers to the margin of dumping as established in Article 2 of the Anti-Dumping Agreement. Article 2.1 of the Anti-Dumping Agreement defines “dumping”, and the opening phrase of that Article makes it clear that the definition applies “[f]or the purpose of this Agreement”. Therefore, “dumping” and “margin of dumping” have the same meaning throughout the Anti-Dumping Agreement. Article 9.3 does not indicate, either expressly or by implication, that “margin of dumping” has a different meaning in the context of duty assessment proceedings than it does under Article 2. Nor does any other provision of the Anti- Dumping Agreement suggest a special or particular meaning for this term for any stated purpose. Although transaction-based multiple comparisons may be necessary in periodic reviews to calculate an importer’s liability for payment of anti-dumping duties, this cannot impart a different or special meaning to the term “margin of dumping” in Article 9.3.

 

A.3.40A.10 US — Stainless Steel (Mexico), paras. 102-103
(WT/DS344/AB/R)

 

Article 9.3.1 of the Anti-Dumping Agreement is subject to the overarching requirement in Article 9.3 that the amount of anti-dumping duty “shall not exceed the margin of dumping as established under Article 2” of that Agreement. We recall that our examination of the context of Article VI:2 of the GATT 1994 and Article 9.3 of the Anti-Dumping Agreement confirmed that the term “margin of dumping”, as used in those provisions, relates to the “exporter” of the “product” under consideration and not to individual “importers” or “import transactions”, and, furthermore, that the concepts of “dumping” and “dumping margin” apply in the same manner throughout the Anti-Dumping Agreement and do not vary under the various provisions of the Agreement. Thus, under Article VI:2 and Article 9.3, the margin of dumping established for an exporter in accordance with Article 2 operates as a ceiling for the total amount of anti-dumping duties that can be levied on the entries of the subject merchandise from that exporter.

 

We see no basis in Article VI:2 of the GATT 1994 or in Articles 2 and 9.3 of the Anti-Dumping Agreement for disregarding the results of comparisons where the export price exceeds the normal value when calculating the margin of dumping for an exporter. The Appellate Body has previously noted that other provisions of the Anti-Dumping Agreement are explicit regarding the permissibility of disregarding certain matters. For example, Article 9.4 of the Anti-Dumping Agreement expressly directs investigating authorities to disregard “any zero and de minimis margins” under certain circumstances, when calculating the weighted average margin of dumping to be applied to exporters that have not been individually investigated. Similarly, Article 2.2.1, which deals with the calculation of normal value, sets forth the only circumstances under which sales of the like product in the exporting country can be disregarded. Thus, when the negotiators sought to permit investigating authorities to disregard certain matters, they did so explicitly.

 

A.3.40A.11 US — Stainless Steel (Mexico), paras. 101, 107-109
(WT/DS344/AB/R)

 

As we understand it, the United States’ position that simple zeroing is permitted in periodic reviews is premised on the argument that individual transactions where the export price exceeds the normal value are “non-dumped” transactions and can be disregarded for the purpose of determining importer-specific duty assessment rates.

 

 

We fail to see a textual or contextual basis in the GATT 1994 or the Anti-Dumping Agreement for treating transactions that occur above normal value as “dumped” for purposes of determining the existence and magnitude of dumping in the original investigation and as “non-dumped” for purposes of assessing the final liability for payment of anti-dumping duties in a periodic review. Such treatment brings about the following inconsistencies. First, as noted above, the transactions that are disregarded may well pertain to a model, type, or class that fell within the definition of the product under investigation and were treated as “dumped” in the original investigation. By excluding these transactions at the duty assessment stage, a mismatch is created between the product considered “dumped” and the product as defined by the investigating authority.

 

Secondly, and more importantly, this treatment is inconsistent with the manner in which injury was determined in the original investigation, where transactions that occurred at above the normal value were taken into account in order to calculate the volume of dumped imports for purposes of injury determination. Obviously, we do not suggest that there need be a fresh injury determination at the duty assessment stage; rather, we wish to point to the contradiction that arises when the same type of transactions are treated as “dumped” for purposes of injury determination in the original investigation and as “non-dumped” in periodic reviews for duty assessment.

 

In addition, as we see it, a reading of Article 9.3 of the Anti-Dumping Agreement that permits simple zeroing in periodic reviews would allow WTO Members to circumvent the prohibition of zeroing in original investigations that applies under the first sentence of Article 2.4.2 of the Anti-Dumping Agreement. This is because, in the first periodic review after an original investigation, the duty assessment rate for each importer will take effect from the date of the original imposition of anti-dumping duties. Consequently, zeroing would be introduced although it is not permissible in original investigations. We further note that, if no periodic review is requested, the final anti-dumping duty liability for all importers will be assessed at the cash deposit rate applicable to the relevant exporter. When the initial cash deposit rate is calculated in the original investigation without using zeroing, this means that the mere act of conducting a periodic review would introduce zeroing following imposition of the anti-dumping duty order.

 

A.3.40A.12 US — Stainless Steel (Mexico), paras. 133, 136
(WT/DS344/AB/R)

 

… when applying “simple zeroing” in periodic reviews, the USDOC compares the prices of individual export transactions against monthly weighted average normal values, and disregards the amounts by which the export prices exceed the monthly weighted average normal values, when aggregating the results of the comparisons to calculate the going-forward cash deposit rate for the exporter and the duty assessment rate for the importer concerned. Simple zeroing thus results in the levy of an amount of anti-dumping duty that exceeds an exporter’s margin of dumping, which, as we have explained above, operates as the ceiling for the amount of anti-dumping duty that can be levied in respect of the sales made by an exporter. Therefore, simple zeroing is, as such, inconsistent with Article VI:2 of the GATT 1994 and Article 9.3 of the Anti-Dumping Agreement.

 

 

… we consider that Article VI:2 of the GATT 1994 and Article 9.3 of the Anti-Dumping Agreement, when interpreted in accordance with the customary rules of interpretation of public international law as required by the first sentence of Article 17.6(ii) of the Anti-Dumping Agreement, do not admit of another interpretation as far as the issue of zeroing raised in this appeal is concerned.

 
A.3.40B Articles 9.3.1 and 9.3.2 — Prospective and retrospective duty assessment    back to top

A.3.40B.1 Mexico — Anti-Dumping Measures on Rice, para. 312
(WT/DS295/AB/R)

 

… this provision mandates a refund where an importer has paid duties in excess of the margin of dumping and the importer requests a refund. The refund of duties is conditioned solely on (i) the request being made by an importer of the product subject to the anti-dumping duty; and (ii) the request having been “duly supported by evidence”. Other than these requirements, we see no basis for an investigating authority to decline to effect the mandated refund. Indeed, failure to do so would result in the importer having paid a duty in excess of the dumping margin, contrary to Article 9.3.

 

A.3.40B.2 Mexico — Anti-Dumping Measures on Rice, paras. 344, 348
(WT/DS295/AB/R)

 

… Articles 9.3.2 and 11.2 of the Anti-Dumping Agreement, and Article 21.2 of the SCM Agreement, place certain conditions — stated in those provisions themselves — on an agency’s granting of refunds requested by importers for duties paid in excess of dumping margins, and on an agency’s review of anti-dumping and countervailing duties when requested by interested parties. If those conditions are met, the investigating authority must undertake a duty assessment review and refund the excess duties paid, or carry out a review on the need for continued imposition of the duty.

 

 

… Articles 9.3.2 and 11.2 of the Anti-Dumping Agreement, and Article 21.2 of the SCM Agreement, permit agencies to require that duties be imposed on a product — in the sense that a final determination be made, following an original investigation, with respect to the anti-dumping/countervailing duty liability for entries of such product — as a condition of the right to a refund or review of duties. This condition is permitted by virtue of the proviso in Article 9.3.2 of the Anti-Dumping Agreement that the product at issue be “subject to [an] anti-dumping duty”, and the proviso in Article 11.2 of the Anti-Dumping Agreement and Article 21.2 of the SCM Agreement that a reasonable period of time elapse since the imposition of the “definitive [anti-dumping or countervailing] duty”. Where duties have been imposed, however, and the remaining conditions of these treaty provisions have been satisfied, an investigating authority is not permitted to decline a request for a duty assessment or changed circumstances review.

 

A.3.40B.3 US — Softwood Lumber V (Article 21.5 — Canada), para. 112
(WT/DS264/AB/RW)

 

… Under a prospective normal-value system, the anti-dumping duty collected at the time of importation is subject to review and importers have the right to request a refund when the duties paid exceed the actual margin of dumping, pursuant to Article 9.3.2 of the Anti-Dumping Agreement. Accordingly, the operation of prospective normal-value systems has no bearing on the permissibility of zeroing under the transaction-to-transaction comparison methodology in Article 2.4.2.

 

A.3.40B.4 US — Zeroing (Japan), para. 156
(WT/DS322/AB/R)

 

Finally, the Panel expresses its concern that, if a Member applies a retrospective duty assessment system, it “may be precluded from collecting anti-dumping duties in respect of particular export transactions at prices less than normal value to a particular importer at a particular point of time because of prices of export transactions to other importers at a different point in time that exceed normal value”. This concern is not well founded. The concept of dumping relates to the pricing behaviour of exporters or foreign producers; it is the exporter, not the importer, that engages in practices that result in situations of dumping. At the time of importation, an administering authority may collect duties, in the form of a cash deposit, on all export sales, including those occurring at above the normal value. However, in a review proceeding under Article 9.3.1, the authority is required to ensure that the total amount of anti-dumping duties collected from all the importers of that product does not exceed the total amount of dumping found in all sales made by the exporter or foreign producer, calculated according to the margin of dumping established for that exporter or foreign producer without zeroing. The same “ceiling” applies in review proceedings under Article 9.3.2, because the introductory clause of Article 9.3 applies equally to prospective and retroactive duty assessment systems.

 

A.3.40B.5 US — Zeroing (Japan), paras. 162-163
(WT/DS322/AB/R)

 

… Under any system of duty collection, the margin of dumping established in accordance with Article 2 operates as a ceiling for the amount of anti-dumping duties that could be collected in respect of the sales made by an exporter. To the extent that duties are paid by an importer, it is open to that importer to claim a refund if such a ceiling is exceeded. Similarly, under its retrospective system of duty collection, the United States is free to assess duty liability on a transaction specific basis, but the total amount of anti-dumping duties that are levied must not exceed the exporters’ or foreign producers’ margins of dumping.

 

The Anti-Dumping Agreement is neutral as between different systems for levy and collection of anti-dumping duties. The Agreement lays down the “margin of dumping” as the ceiling for collection of duties regardless of the duty assessment system adopted by a WTO Member, and provides for a refund if the ceiling is exceeded. It is therefore incorrect to say that the Anti-Dumping Agreement favours one system, or places another system at a disadvantage.

 

A.3.40B.6 US — Stainless Steel (Mexico), paras. 97-99
(WT/DS344/AB/R)

 

We turn next to address the question of whether “dumping” and “margin of dumping” can be found to exist at the transaction- and importer-specific level for the purpose of Article 9.3 of the Anti-Dumping Agreement.

 

First, as we noted earlier, dumping arises from the pricing behaviour of an exporter. A proper determination as to whether an exporter is dumping or not can only be made on the basis of an examination of the exporter’s pricing behaviour as reflected in all of its transactions over a period of time. Contrary to what the Panel indicates, the notion that “a product is introduced into the commerce of another country at less than its normal value” in Article VI:1 of the GATT 1994 suggests to us that the determination of dumping with respect to an exporter is properly made not at the level of individual export transactions, but on the basis of the totality of an exporter’s transactions of the subject merchandise over the period of investigation. Furthermore, as we emphasized earlier, the Anti-Dumping Agreement deals with “injurious dumping”, and the very purpose of an anti-dumping duty is to counteract the injury caused or threatened to be caused by “dumped imports” to the domestic industry. The notion that dumping and margin of dumping can exist at the level of an individual transaction runs counter to these basic principles of the Anti-Dumping Agreement.

 

Secondly, if it were permissible to determine a separate margin of dumping for each individual transaction, several margins of dumping would exist for each exporter and for the product under consideration. However, the existence of “dumping” and several “margins of dumping” at the transaction-specific level cannot be reconciled with a proper interpretation and application of several provisions of the Anti-Dumping Agreement. We do not see how, for example: the determination of injury under Article 3; the establishment of an individual margin of dumping for each exporter under Articles 5.8, 6.10, 6.10.2, 9.4, and 9.5; the acceptance of voluntary undertakings from an exporter under Article 8; and a review under Article 11.2 or 11.3 for continuation or revocation of an anti-dumping duty order, can be done at the transaction- or importer-specific level. The Panel’s interpretation appears to us to be premised on the notion that the concept of transaction- and importer-specific dumping and margin of dumping could be confined to the stage of duty assessment and collection under Article 9.3. However, we find no textual or contextual basis for such an interpretation.

 

A.3.40B.7 US — Stainless Steel (Mexico), paras. 111-114
(WT/DS344/AB/R)

 

The United States and the Panel have expressed certain concerns regarding the implications for importer-specific duty assessment in periodic reviews that flow from the Appellate Body’s interpretation of Article 9.3 of the Anti-Dumping Agreement in previous disputes.

 

It appears to us that the United States and the Panel have not correctly understood the Appellate Body’s interpretation of Article 9.3 in previous disputes. First, the Appellate Body has not recognized the notion of “an importer’s dumping margin” and has not held that “an importer’s dumping margin must be averaged out”. Rather, the Appellate Body has consistently held that “margin of dumping” is an exporter specific concept, and that, whatever methodology is followed for assessment and collection of anti-dumping duties, the total amount of anti-dumping duties assessed and collected from all importers must not exceed the total amount of dumping found in all the sales made by the exporter concerned, calculated according to the margin of dumping established for that exporter without zeroing. Secondly, the Appellate Body has also consistently held that “dumping” and “margin of dumping” do not exist at the level of individual transactions, and that, therefore, the terms “dumping” and “margin of dumping” cannot be interpreted as applying at an individual transaction level, as the United States suggests. Thirdly, with respect to assessment of anti-dumping duty, however, the Appellate Body has recognized that, under Article 9.3, anti-dumping duty liability can be assessed in relation to a specific importer on the basis of its transactions from the relevant exporter.

 

We do not agree that the Appellate Body’s interpretation of Article 9.3 would favour “importers with high margins of dumping at the expense of importers who do not dump or who dump at a lower margin”, as the Panel suggests. In our view, it is not correct to say that, under the Appellate Body’s interpretation, an “offset” is provided for the so-called “non-dumped” transactions. A margin of dumping is properly calculated under the Anti-Dumping Agreement only if all transactions are taken into account, including those where the export prices exceed the normal value. Moreover, our interpretation does not preclude a WTO Member applying a retrospective system from assessing an importer’s final anti-dumping duty liability on the basis of its own transactions, subject, however, to the legal requirement that the prescribed overall margin of dumping for the exporter is respected.

 

In sum, the Appellate Body has ruled on the amount of anti-dumping duty that can be levied in accordance with Article 9.3 of the Anti-Dumping Agreement, and not on how this amount is to be collected from the importers. In addition, the Appellate Body has recognized that WTO Members have flexibility in choosing their duty assessment and collection system within the parameters highlighted above.

 

A.3.40B.8 US — Stainless Steel (Mexico), paras. 115-116
(WT/DS344/AB/R)

 

The Panel stated that a prohibition of zeroing in periodic reviews “would unnecessarily expand the scope of periodic reviews because the exporters would have to submit information pertaining to all of their export transactions rather than those pertaining to the importer requesting the review.” According to the Panel, this would “also cause administrative inconvenience because the investigating authorities would have to analyze all that information and be unable to complete the review in a timely manner”.

 

It appears that the Panel has misunderstood a procedural aspect of the United States’ duty assessment system. As Mexico points out, the USDOC Regulations do not give the USDOC the discretion to limit the scope of a periodic review to only exports pertaining to the importer requesting the review. As we have explained earlier, a periodic review under the United States’ system can be requested by any interested party. However, once a periodic review is conducted, the USDOC examines contemporaneous data pertaining to an exporter’s sales to all of the importers of the subject merchandise and determines simultaneously a going-forward cash deposit rate to be applied to all future entries of that product from that exporter and an individual duty assessment rate for each importer in order to assess the final liability for payment of anti-dumping duties by that importer for the period under review. The Panel’s concern over additional administrative burden or inconvenience is therefore misplaced.

 

A.3.40B.9 US — Continued Zeroing, para. 291
(WT/DS350/AB/R)

 

The Appellate Body has not suggested that individual importers must be assessed [for] anti-dumping duties at the identical rate as that of all other importers and it has not held that “an importer’s anti-dumping margin must be averaged out”. Instead, the Appellate Body has recognized that, under Article 9.3, “anti-dumping duty liability can be assessed in relation to a specific importer on the basis of its transactions from the relevant exporter”. Furthermore, the Appellate Body has reasoned that the possibility that aggregation of multiple comparisons results in a periodic review would yield a negative value for a particular importer “would not mean that the authorities would be required to compensate an importer for the amount of that negative value (that is, when export prices exceed normal value)”.

 
A.3.40C Footnote 20 to Article 9.3.1 of the Anti-Dumping Agreement    back to top

A.3.40C.1 US — Zeroing (Japan) (Article 21.5 — Japan), paras. 166, 168
(WT/DS322/AB/RW)

 

… Like Article 9.3.1, which concerns retrospective anti-dumping systems, Article 9.3.2 provides for strict time-limits on the duration of a refund procedure. Footnote 20, on which the United States relies for its arguments on judicial delay, and which applies to both Articles 9.3.1 and 9.3.2, recognizes that the observance of these time-limits “may not be possible where the product in question is subject to judicial review proceedings”. Therefore, where actions or omissions relating to a refund procedure are challenged both domestically and in WTO dispute settlement, delays in the completion of a refund procedure until after the end of the reasonable period of time cannot be excluded. Should such a refund procedure not be completed before the end of the reasonable period of time, a WTO Member with a prospective anti-dumping system would have compliance obligations in respect of that refund procedure concerning past imports. Such a Member would thus find itself in a situation similar to that of an implementing Member applying a retrospective anti-dumping system.

 

 

We note, finally, that Article 9 of the Anti-Dumping Agreement covers the imposition and collection of anti-dumping duties. Any actions taken to collect antidumping duties based on importer-specific assessment rates determined in a periodic review are also subject to the obligation set out in Article 9, including the obligation in paragraph 3 that “[t]he amount of the anti-dumping duty shall not exceed the margin of dumping as established under Article 2”. Where a WTO Member has been found to have violated the Anti-Dumping Agreement and the GATT 1994 by using zeroing in a periodic review, it fails to comply with the DSB’s recommendations and rulings if it collects, subsequent to the expiration of the reasonable period of time, anti-dumping duties based on rates that were determined in the periodic review using zeroing. If it did so, the obligation in Article 9.3 that “[t]he amount of the anti-dumping duty shall not exceed the margin of dumping as established under Article 2” would not be respected.

 

A.3.40C.2 US — Zeroing (Japan) (Article 21.5 — Japan), para. 177
(WT/DS322/AB/RW)

 

Footnote 20 to Article 9.3.1 of the Anti-Dumping Agreement expressly recognizes that domestic judicial proceedings may result in delays and that this may excuse exceeding the time-limits imposed under Articles 9.3.1 and 9.3.2 for the conduct of periodic reviews and for refund procedures under retrospective and prospective systems. Footnote 20 does not deal with compliance with the DSB’s recommendations and rulings. The fact that the text of footnote 20 expressly limits its application to Articles 9.3.1 and 9.3.2 weighs against invoking footnote 20 to excuse delays in complying with obligations set out in other provisions of the covered agreements, particularly the obligation to comply “promptly” with the DSB’s recommendations and rulings, which is described as “essential” in Article 21.1 of the DSU.

 
A.3.41 Article 9.4 — Calculation of the “all other” anti-dumping duty rate    back to top

A.3.41.1 US — Hot-Rolled Steel, para. 116
(WT/DS184/AB/R)

 

Article 9.4 does not prescribe any method that WTO Members must use to establish the “all others” rate that is actually applied to exporters or producers that are not investigated. Rather, Article 9.4 simply identifies a maximum limit, or ceiling, which investigating authorities “shall not exceed” in establishing an “all others” rate. Sub-paragraph (i) of Article 9.4 states the general rule that the relevant ceiling is to be established by calculating a “weighted average margin of dumping established” with respect to those exporters or producers who were investigated. However, the clause beginning with “provided that”, which follows this sub-paragraph, qualifies this general rule. This qualifying language mandates that, “for the purpose of this paragraph”, investigating authorities “shall disregard”, first, zero and de minimis margins and, second, “margins established under the circumstances referred to in paragraph 8 of Article 6”. Thus, in determining the amount of the ceiling for the “all others” rate, Article 9.4 establishes two prohibitions. The first prevents investigating authorities from calculating the “all others” ceiling using zero or de minimis margins; while the second precludes investigating authorities from calculating that ceiling using “margins established under the circumstances referred to” in Article 6.8.

 
A.3.41A Article 9.4(ii) — Prospective normal value systems    back to top

A.3.41A.1 US — Zeroing (Japan), para. 157 and footnote 367
(WT/DS322/AB/R)

 

Next, we examine the Panel’s reasoning relating to Article 9.4(ii) of the Anti-Dumping Agreement, which deals with the calculation of the liability for payment of anti-dumping duties on the basis of a so-called “prospective normal value”. 367

 

A.3.41A.2 US — Zeroing (Japan), para. 160
(WT/DS322/AB/R)

 

The Panel stated that, “notwithstanding the possibility of a refund, liability for payment of anti-dumping duties is final in a prospective normal value system at the time of importation of a product”. This may be so, but it does not mean that the anti-dumping duty collected at the time of importation represents a “margin of dumping”. Nor does it mean that the total amount of anti-dumping duties that are levied can exceed the exporter’s or foreign producer’s “margin of dumping”. Under a prospective normal value system, exporters may choose to raise their export prices to the level of the prospective normal value in order to avoid liability for payment of anti-dumping duties on each export transaction. However, under Article 9.3.2, the amount of duties collected is subject to review so as to ensure that, pursuant to Article 9.3 of the Anti-Dumping Agreement, the amount of the anti-dumping duty collected does not exceed the margin of dumping as established under Article 2. It is open to an importer to request a refund if the duties collected exceed the exporter’s margin of dumping. Whether a refund is due or not will depend on the margin of dumping established for that exporter.

 

A.3.41A.3 US — Zeroing (Japan), paras. 162-163
(WT/DS322/AB/R)

 

… Under any system of duty collection, the margin of dumping established in accordance with Article 2 operates as a ceiling for the amount of anti-dumping duties that could be collected in respect of the sales made by an exporter. To the extent that duties are paid by an importer, it is open to that importer to claim a refund if such a ceiling is exceeded. Similarly, under its retrospective system of duty collection, the United States is free to assess duty liability on a transaction specific basis, but the total amount of anti-dumping duties that are levied must not exceed the exporters’ or foreign producers’ margins of dumping.

 

The Anti-Dumping Agreement is neutral as between different systems for levy and collection of anti-dumping duties. The Agreement lays down the “margin of dumping” as the ceiling for collection of duties regardless of the duty assessment system adopted by a WTO Member, and provides for a refund if the ceiling is exceeded. It is therefore incorrect to say that the Anti-Dumping Agreement favours one system, or places another system at a disadvantage.

 

A.3.41A.4 US — Stainless Steel (Mexico), paras. 119-121
(WT/DS344/AB/R)

 

… According to the Panel, “[t]he prospective normal value system is based on the notion of transaction-based duty collection.” For the Panel, “[t]he Appellate Body’s reasoning that duties collected under such a system are nevertheless subject to duty assessment proceedings just like other duties assessed on a prospective basis is, therefore, far from being convincing.”

 

As Mexico, the European Communities, and Japan point out, the Panel has failed to distinguish between duty “collection” at the time of importation, on the one hand, and determinations of the final duty liability of an importer and the margin of dumping for an exporter, on the other hand. The anti-dumping duty collected from each importer at the time of importation, under a prospective normal value system, does not represent the “margin of dumping” under Article 9.3, which, as the Appellate Body has found, is the margin of dumping for an exporter for all of its sales of the subject merchandise into the country concerned. As the Panel itself observed, under Article 9.3.2, the amount of duties collected on a prospective basis also is subject to review. Under a prospective normal value system, a review can be triggered as well if the prospective normal value has been improperly determined and thereby the ceiling prescribed under Article 9.3 is breached. Article 9.4(ii) does not exempt prospective normal value systems from the requirement set out in Article 9.3.

 

The Panel stated that, if “liability for anti-dumping duties can be determined on a transaction-specific basis in a prospective normal value system, there is no reason why the same cannot be the case in the context of the retrospective duty assessment system under Article 9.3.2”. It is true that, in a prospective normal value system, anti-dumping duties are “collected” on only the individual export transactions where the prices are less than the prospective normal value, regardless of whether prices of other export transactions are above the prospective normal value. However, as we have stated above, a review can be requested if the prospective normal value has been improperly determined so as to result in collection of anti-dumping duties in excess of the ceiling prescribed in Article 9.3. As the Appellate Body has stated, the Anti-Dumping Agreement is neutral as to the different systems for levy and collection of anti-dumping duties.

 

A.3.41A.5 US — Continued Zeroing, para. 295 and footnote 648
(WT/DS350/AB/R)

 

Thus, Article 9.4(ii) does not mean that the basic disciplines governing the calculation of margins of dumping, contained in Article VI of the GATT 1994 and Article 2 of the Anti-Dumping Agreement, no longer apply. The collection of antidumping duties on the basis of a prospective normal value is only an intermediate stage of collection, since it is subject to final assessment and “a prompt refund, upon request”, under Article 9.3.2. There is nothing in Article 9.4 that exempts prospective normal value systems from the obligations under Article 9.3, including with respect to refund procedures in respect of duties assessed on a prospective basis. 648

 
A.3.42 Article 9.4 — Relationship with Article 2.4.2    back to top

A.3.42.1 US — Hot-Rolled Steel, para. 118
(WT/DS184/AB/R)

 

… we recall that the word “margins”, which appears in Article 2.4.2 of that Agreement, has been interpreted in European Communities — Bed Linen. The Panel found, in that dispute, and we agreed, that “margins” means the individual margin of dumping determined for each of the investigated exporters and producers of the product under investigation, for that particular product. This margin reflects a comparison that is based upon examination of all of the relevant home market and export market transactions. We see no reason, in Article 9.4, to interpret the word “margins” differently from the meaning it has in Article 2.4.2, and the parties have not suggested one.

 
A.3.43 Article 9.4 — Relationship with Article 6.8    back to top

A.3.43.1 US — Hot-Rolled Steel, para. 122
(WT/DS184/AB/R)

 

We have noted that Article 9.4 establishes a prohibition, in calculating the ceiling for the all others rate, on using “margins established under the circumstances referred to” in Article 6.8. Nothing in the text of Article 9.4 supports the United States’ argument that the scope of this prohibition should be narrowed so that it would be limited to excluding only margins established “entirely” on the basis of facts available. As noted earlier, Article 6.8 applies even in situations where only limited use is made of facts available. To read Article 9.4 in the way the United States does is to overlook the many situations where Article 6.8 allows a margin to be calculated, in part, using facts available. Yet, the text of Article 9.4 simply refers, in an openended fashion, to “margins established under the circumstances” in Article 6.8. Accordingly, we see no basis for limiting the scope of this prohibition in Article 9.4, by reading into it the word “entirely” as suggested by the United States. In our view, a margin does not cease to be “established under the circumstances referred to” in Article 6.8 simply because not every aspect of the calculation involved the use of “facts available”.

 

A.3.43.2 US — Hot-Rolled Steel, para. 123
(WT/DS184/AB/R)

 

Our reading of Article 9.4 is consistent with the purpose of the provision. Article 6.8 authorizes investigating authorities to make determinations by remedying gaps in the record which are created, in essence, as a result of deficiencies in, or a lack of, information supplied by the investigated exporters. Indeed, in some circumstances, as set forth in paragraph 7 of Annex II of the Anti-Dumping Agreement, “if an interested party does not cooperate and thus relevant information is being withheld from the authorities, this situation could lead to a result which is less favourable to the party than if the party did cooperate” (emphasis added). Article 9.4 seeks to prevent the exporters, who were not asked to cooperate in the investigation, from being prejudiced by gaps or shortcomings in the information supplied by the investigated exporters. This objective would be compromised if the ceiling for the rate applied to “all others” were, as the United States suggests, calculated — due to the failure of investigated parties to supply certain information — using margins “established” even in part on the basis of the facts available.

 

A.3.43.3 US — Hot-Rolled Steel, para. 126
(WT/DS184/AB/R)

 

This lacuna arises because, while Article 9.4 prohibits the use of certain margins in the calculation of the ceiling for the “all others” rate, it does not expressly address the issue of how that ceiling should be calculated in the event that all margins are to be excluded from the calculation, under the prohibitions. This appeal does not raise the issue of how that lacuna might be overcome on the basis of the present text of the Anti-Dumping Agreement. Accordingly, it is not necessary for us to address that question.

 
A.3.44 Article 9.4 — Relationship with paragraphs 1 and 2 of Article 3    back to top

A.3.44.1 EC — Bed Linen (Article 21.5 — India), para. 124
(WT/DS141/AB/RW)

 

… Similarly, in this implementation dispute, we are of the view that Article 9.4, which specifies what action may be taken only after certain prerequisites have been determined, is of little relevance for interpreting Article 3, which sets out those prerequisites. We do not see how Article 9.4, which authorizes the imposition of a certain maximum anti-dumping duty on imports from non-examined producers, is relevant for interpreting paragraphs 1 and 2 of Article 3, which deal with the determination of injury based on the volume of “dumped imports”. Likewise, Article 9.4 does not mention the term “dumped imports” or the “volume” of such imports. In our view, the right to impose a certain maximum amount of anti-dumping duties on imports attributable to non-examined producers under Article 9.4 cannot be read as permitting a derogation from the express and unambiguous requirements of paragraphs 1 and 2 of Article 3 to determine the volume of dumped imports — including dumped import volumes attributable to non-examined producers — on the basis of “positive evidence” and an “objective examination”.

 

A.3.44.2 EC — Bed Linen (Article 21.5 — India), para. 125
(WT/DS141/AB/RW)

 

Moreover, Article 9.4, which relates to the imposition of anti-dumping duties on imports from non-examined producers, has, by its own terms, a limited purpose as an exception to the rule in Article 9.3.… In such cases, as an exception to the rule in Article 9.3, Article 9.4 permits the imposition of a certain maximum amount of anti-dumping duties on imports attributable to producers that were not examined individually, irrespective of whether those producers would have been found to be dumping had they been examined individually.

 

A.3.44.3 EC — Bed Linen (Article 21.5 — India), para. 126
(WT/DS141/AB/RW)

 

In sum, Article 9.4 provides no guidance for determining the volume of dumped imports from producers that were not individually examined on the basis of “positive evidence” and an “objective examination” under Article 3. we do not see why the volume of imports that has been found to be dumped by non-examined producers, for purposes of determining injury under paragraphs 1 and 2 of Article 3, must be congruent with the volume of imports from those non-examined producers that is subject to the imposition of anti-dumping duties under Article 9.4, as contended by the European Communities and the Panel.

 
A.3.44A Article 9.5 — New shipper reviews    back to top

A.3.44A.1 Mexico — Anti-Dumping Measures on Rice, para. 321
(WT/DS295/AB/R)

 

… Article 9.5 requires that an investigating authority carry out an expedited review of a new shipper for an exporter that (i) did not export the subject merchandise to the importing Member during the period of investigation, and (ii) demonstrated that it was not related to a foreign producer or exporter already subject to anti-dumping duties.

 

A.3.44A.2 US — Zeroing (Japan), para. 112
(WT/DS322/AB/R)

 

… Article 9.5 indicates that the purpose of new shipper reviews is to determine “individual margins of dumping for any exporters or producers in the exporting country in question who have not exported the product” and refers to a “determination of dumping in respect of such producers or exporters”.

 

A.3.44A.3 US — Zeroing (Japan), para. 165
(WT/DS322/AB/R)

 

Article 9.5 of the Anti-Dumping Agreement makes it clear that, upon request, investigating authorities “shall promptly carry out a review for the purpose of determining individual margins of dumping” for exporters or foreign producers that did not ship the subject product during the period of investigation. As noted above, under the Anti-Dumping Agreement, dumping determinations relate to the exporter, and both “dumping” and “margins of dumping” relate to the pricing behaviour of the exporter. Moreover, negative comparison results may not be disregarded when calculating a margin of dumping for an exporter. For the same reasons, we consider that zeroing, in establishing “individual margins of dumping” for new shippers, is also inconsistent with Article 9.5 of the Anti-Dumping Agreement.

 
A.3.44B Articles 11.1 and 11.2 — Duration and review of anti-dumping duties    back to top

A.3.44B.1 Mexico — Anti-Dumping Measures on Rice, para. 314
(WT/DS295/AB/R)

 

Article 11.2 requires an agency to conduct a review, inter alia, at the request of an interested party, and to terminate the anti-dumping duty where the agency determines that the duty “is no longer warranted”. The interested party has the right to request the authority to examine whether the continued imposition of the duty is necessary to offset dumping, whether the injury would be likely to continue or recur if the duty were removed or varied, or both. Article 11.2 conditions this obligation on (i) the passage of a reasonable period of time since imposition of the definitive duty; and (ii) the submission by the interested party of “positive information” substantiating the need for a review. As the Panel correctly observed, this latter condition may be satisfied in a particular case with information not related to export volumes. Where the conditions in Article 11.2 have been met, the plain words of the provision make it clear that the agency has no discretion to refuse to complete a review, including consideration of whether the duty should be terminated in the light of the results of the review. We see no reason why the same understanding does not apply in the context of countervailing duty investigations, in particular given the identical language in Article 21.2 of the SCM Agreement.

 

A.3.44B.2 Mexico — Anti-Dumping Measures on Rice, paras. 344, 348
(WT/DS295/AB/R)

 

… Articles 9.3.2 and 11.2 of the Anti-Dumping Agreement, and Article 21.2 of the SCM Agreement, place certain conditions — stated in those provisions themselves — on an agency’s granting of refunds requested by importers for duties paid in excess of dumping margins, and on an agency’s review of anti-dumping and countervailing duties when requested by interested parties. If those conditions are met, the investigating authority must undertake a duty assessment review and refund the excess duties paid, or carry out a review on the need for continued imposition of the duty.

 

 

… Articles 9.3.2 and 11.2 of the Anti-Dumping Agreement, and Article 21.2 of the SCM Agreement, permit agencies to require that duties be imposed on a product — in the sense that a final determination be made, following an original investigation, with respect to the anti-dumping/countervailing duty liability for entries of such product — as a condition of the right to a refund or review of duties. This condition is permitted by virtue of the proviso in Article 9.3.2 of the Anti-Dumping Agreement that the product at issue be “subject to [an] anti-dumping duty”, and the proviso in Article 11.2 of the Anti-Dumping Agreement and Article 21.2 of the SCM Agreement that a reasonable period of time elapse since the imposition of the “definitive [anti-dumping or countervailing] duty”. Where duties have been imposed, however, and the remaining conditions of these treaty provisions have been satisfied, an investigating authority is not permitted to decline a request for a duty assessment or changed circumstances review.

 

A.3.44B.3 US — Anti-Dumping Measures on Oil Country Tubular Goods, para. 115
(WT/DS282/AB/R)

 

… Article 11.1 of the Agreement establishes an overarching principle for “duration” and “review” of anti-dumping duties in force. It provides that “[a]n anti-dumping duty shall remain in force only as long as and to the extent necessary to counteract dumping which is causing injury.” This principle applies during the entire life of an anti-dumping duty. If, at any point in time, it is demonstrated that no injury is being caused to the domestic industry by the dumped imports, the rationale for the continuation of the duty would cease.

 

A.3.44B.4 US — Zeroing (EC), para. 168
(WT/DS294/AB/R, WT/DS294/AB/R/Corr.1)

 

The European Communities has not, in our view, established that Articles 11.1 and 11.2 of the Anti-Dumping Agreement apply to the reassessment of the cash-deposit rate in the context of administrative reviews. In particular, we fail to see how the reassessment of a cash-deposit rate to be applied to future entries could constitute a review of whether the continued imposition of the anti-dumping duty is necessary to counteract dumping that is causing injury.

 

A.3.44B.5 US — Stainless Steel (Mexico), para. 93
(WT/DS344/AB/R)

 

The review provisions contained under Article 11 of the Anti-Dumping Agreement also reveal the crucial link between dumping and injury. Article 11.1 sets out the overarching principle that “[a]n anti-dumping duty shall remain in force only as long as and to the extent necessary to counteract dumping which is causing injury.” Article 11.2 allows a request for review to examine whether the injury would continue or recur if the duty were removed or varied. Article 11.3 requires an examination as to whether the expiry of the duty would be likely to lead to continuation or recurrence of dumping and injury.

 
A.3.45 Article 11.3 — Sunset review — Conditions.
See also Anti-Dumping Agreement, Article 6 (A.3.29-38); Anti-Dumping Agreement, Article 9.2 (A.3.40); Anti-Dumping Agreement, Article 11.4 (A.3.53)    back to top

A.3.45.1 US — Corrosion-Resistant Steel Sunset Review, para. 104
(WT/DS244/AB/R)

 

Article 11.3 imposes a temporal limitation on the maintenance of anti-dumping duties. It lays down a mandatory rule with an exception. Specifically, Members are required to terminate an anti-dumping duty within five years of its imposition “unless” the following conditions are satisfied: first, that a review be initiated before the expiry of five years from the date of the imposition of the duty; second, that in the review the authorities determine that the expiry of the duty would be likely to lead to continuation or recurrence of dumping; and third, that in the review the authorities determine that the expiry of the duty would be likely to lead to continuation or recurrence of injury. If any one of these conditions is not satisfied, the duty must be terminated.

 

A.3.45.2 US — Anti-Dumping Measures on Oil Country Tubular Goods, para. 186
(WT/DS282/AB/R)

 

… Article 11.3 of the Anti-Dumping Agreement imposes an obligation on Members to terminate anti-dumping duties at the end of five years, except where they choose to conduct a sunset review as envisaged by that provision, or, having conducted such a review, they determine that the expiry of the duty would be likely to lead to continuation or recurrence of dumping and injury.

 

A.3.45.3 US — Anti-Dumping Measures on Oil Country Tubular Goods, para. 187
(WT/DS282/AB/R)

 

The fact that the USDOC acted inconsistently with the requirements of Article 11.3 in its likelihood-of-dumping determination does not necessarily imply that the underlying anti-dumping duties must be terminated immediately. The mere fact that Article 11.3 sets a temporal limit for termination of an anti-dumping duty, in the absence of a review leading to a WTO-consistent determination under that Article for its continuation, does not affect the other provisions of the DSU governing the implementation of the recommendations and rulings of the DSB, including, inter alia, the means of implementation and the reasonable period of time accorded to the implementing Member for implementation.

 

A.3.45.4 US — Oil Country Tubular Goods Sunset Reviews (Article 21.5 — Argentina), para. 163
(WT/DS268/AB/RW)

 

… [Articles 11.3 and 11.4] set out several temporal limitations. Article 11.3 provides that an anti-dumping duty must be terminated “five years from its imposition” unless there is a determination that “the expiry of the duty would be likely to lead to continuation or recurrence of dumping and injury”. According to the Appellate Body, this provision thus operates as “a mandatory rule with an exception”. There is the additional requirement that the sunset review be initiated by the investigating authority on its own initiative or upon a request by the domestic industry “before that date”, that is, before the fifth anniversary of the imposition of the anti-dumping duty order. If the review is requested by the domestic industry, the request must be made “within a reasonable period of time prior to” the fifth anniversary. Article 11.4 requires that a sunset review “be carried out expeditiously” and that it “normally be concluded within 12 months of the date of initiation of the review”. Article 6 of the Anti-Dumping Agreement, which applies to sunset reviews by virtue of the reference made in Article 11.4, also sets out additional temporal requirements relating to opportunities for the parties to the investigation to present evidence.

 

A.3.45.5 US — Oil Country Tubular Goods Sunset Reviews (Article 21.5 — Argentina), para. 173
(WT/DS268/AB/RW)

 

… we note the Appellate Body’s statement in US — Anti-Dumping Measures on Oil Country Tubular Goods [at paragraph 187], that the temporal limitation in Article 11.3 of the Anti-Dumping Agreement “does not affect the other provisions of the DSU governing the implementation of the recommendations and rulings of the DSB, including, inter alia, the means of implementation and the reasonable period of time accorded to the implementing Member for implementation”. We believe also that the provisions of the DSU should not be read as altering the disciplines of Articles 11.3 and 11.4.

 

A.3.45.6 US — Oil Country Tubular Goods Sunset Reviews (Article 21.5 — Argentina), para. 174 and footnote 369
(WT/DS268/AB/RW)

 

Before concluding, we note that the implementation of DSB recommendations and rulings in cases where a sunset review was found to be inconsistent with Articles 11.3 and 11.4 of the Anti-Dumping Agreement raises systemic questions. For example, on what basis may an anti-dumping duty order be maintained after a sunset determination has been found to be inconsistent with Article 11.3 or 11.4 of the Anti-Dumping Agreement? 369 These questions do not fall within the scope of the issue appealed by Argentina that the USDOC was precluded from developing a new evidentiary basis in the Section 129 Determination. Therefore, we do not address them further in this appeal.

 
A.3.46 Article 11.3 — Likelihood of continuation or recurrence of dumping    back to top

A.3.46.1 US — Corrosion-Resistant Steel Sunset Review, para. 105
(WT/DS244/AB/R)

 

This appeal concerns the particular disciplines with which authorities must comply in determining, in accordance with Article 11.3, “that the expiry of the duty would be likely to lead to continuation or recurrence of dumping”. In this Report, we refer to this determination as the “likelihood determination”. The likelihood determination is a prospective determination. In other words, the authorities must undertake a forward-looking analysis and seek to resolve the issue of what would be likely to occur if the duty were terminated.

 

A.3.46.2 US — Corrosion-Resistant Steel Sunset Review, para. 107
(WT/DS244/AB/R)

 

… In an original anti-dumping investigation, investigating authorities must determine whether dumping exists during the period of investigation. In contrast, in a sunset review of an anti-dumping duty, investigating authorities must determine whether the expiry of the duty that was imposed at the conclusion of an original investigation would be likely to lead to continuation or recurrence of dumping.

 

A.3.46.3 US — Oil Country Tubular Goods Sunset Reviews, para. 323
(WT/DS268/AB/R)

 

Under Article 11.3 of the Anti-Dumping Agreement, a decision not to terminate an anti-dumping duty must be based on determinations of likelihood of continuation or recurrence of dumping and likelihood of continuation or recurrence of injury. We agree with the United States that the “likely” standard of Article 11.3 applies to the overall determinations regarding dumping and injury; it need not necessarily apply to each factor considered in rendering the overall determinations on dumping and injury.

 

A.3.46.4 US — Anti-Dumping Measures on Oil Country Tubular Goods, para. 108
(WT/DS282/AB/R)

 

On its face, Article 11.3 does not require investigating authorities to establish the existence of a “causal link” between likely dumping and likely injury. Instead, by its terms, Article 11.3 requires investigating authorities to determine whether the expiry of the duty would be likely to lead to continuation or recurrence of dumping and injury. Thus, in order to continue the duty, there must be a nexus between the “expiry of the duty”, on the one hand, and “continuation or recurrence of dumping and injury”, on the other hand, such that the former “would be likely to lead to” the latter. This nexus must be clearly demonstrated.

 
A.3.47 Article 11.3 — Standard of review     back to top

A.3.47.1 US — Corrosion-Resistant Steel Sunset Review, para. 111
(WT/DS244/AB/R)

 

This language in Article 11.3 makes clear that it envisages a process combining both investigatory and adjudicatory aspects. In other words, Article 11.3 assigns an active rather than a passive decision-making role to the authorities. The words “review” and “determine” in Article 11.3 suggest that authorities conducting a sunset review must act with an appropriate degree of diligence and arrive at a reasoned conclusion on the basis of information gathered as part of a process of reconsideration and examination. In view of the use of the word “likely” in Article 11.3, an affirmative likelihood determination may be made only if the evidence demonstrates that dumping would be probable if the duty were terminated — and not simply if the evidence suggests that such a result might be possible or plausible.

 

A.3.47.2 US — Oil Country Tubular Goods Sunset Reviews, para. 309
(WT/DS268/AB/R)

 

The Panel stated that the standard set out in Article 11.3 is the “likely” standard; this is plain from the text of the provision itself. Although the Panel did not elaborate with respect to the meaning of “likely”, or expressly state that “likely” means “probable”, we see nothing in the Panel Report to suggest that the Panel was of the view that “likely” does not mean “probable”, or that “likely” means “anything less than probable”.

 

A.3.47.3 US — Oil Country Tubular Goods Sunset Reviews, paras. 321-322
(WT/DS268/AB/R)

 

In US — Corrosion-Resistant Steel Sunset Review, the Appellate Body approved the description set out by the panel in that case of investigating authorities’ obligations in a sunset review:

 

The text of Article 11.3 contains an obligation “to determine” likelihood of continuation or recurrence of dumping and injury. The text of Article 11.3 does not, however, provide explicit guidance regarding the meaning of the term “determine”. The ordinary meaning of the word “determine” is to “find out or establish precisely” or to “decide or settle”. The requirement to make a “determination” concerning likelihood therefore precludes an investigating authority from simply assuming that likelihood exists. In order to continue the imposition of the measure after the expiry of the five-year application period, it is clear that the investigating authority has to determine, on the basis of positive evidence, that termination of the duty is likely to lead to continuation or recurrence of dumping and injury. An investigating authority must have a sufficient factual basis to allow it to draw reasoned and adequate conclusions concerning the likelihood of such continuation or recurrence (emphasis added). [Appellate Body Report, para. 114]

 

These obligations of investigating authorities inform the task of a panel called upon to evaluate the consistency of an investigating authority’s determination with Article 11.3 of the Anti-Dumping Agreement. The task of the panel is to assess whether the investigating authorities properly established the facts and evaluated them in an unbiased and objective manner. We agree with the Panel that “[its] task [was] not to perform a de novo review of the information and evidence on the record of the underlying sunset review, nor to substitute [its] judgment for that of the US authorities”. If the panel is satisfied that an investigating authority’s determination on continuation or recurrence of dumping or injury rests upon a sufficient factual basis to allow it to draw reasoned and adequate conclusions, it should conclude that the determination at issue is not inconsistent with Article 11.3 of the Anti-Dumping Agreement.

 

A.3.47.4 US — Oil Country Tubular Goods Sunset Reviews, paras. 340-341
(WT/DS268/AB/R)

 

We observe that most of the arguments put forward by Argentina on appeal with respect to the application by the USITC of the standard of likelihood is centred on the premise that some of the factors presented by the USITC are speculative. In particular, Argentina seems to assume that positive evidence requires absolute certainty on what is likely to occur in the future. We have some difficulty with this line of reasoning. Of course, we agree with Argentina that the investigating authority’s likelihood determinations under Article 11.3 must be based on “positive evidence”.

 

The requirements of “positive evidence” must, however, be seen in the context that the determinations to be made under Article 11.3 are prospective in nature and that they involve a “forward-looking analysis”. Such an analysis may inevitably entail assumptions about or projections into the future. Unavoidably, therefore, the inferences drawn from the evidence in the record will be, to a certain extent, speculative. In our view, that some of the inferences drawn from the evidence on record are projections into the future does not necessarily suggest that such inferences are not based on “positive evidence”. The Panel considered that the five factors addressed by the USITC were supported by positive evidence in the USITC’s record and, as we have explained, we see no reason to disagree with the Panel.

 

A.3.47.5 US — Oil Country Tubular Goods Sunset Reviews (Article 21.5 — Argentina), para. 104
(WT/DS268/AB/RW)

 

The review conducted by an investigating authority pursuant to Article 11.3 has been described by the Appellate Body as “combining both investigatory and adjudicatory aspects”, requiring investigating authorities to take “an active rather than a passive decision-making role”. The words “review” and “determine” in Article 11.3 have been read by the Appellate Body as indicating that “authorities conducting a sunset review must act with an appropriate degree of diligence and arrive at a reasoned conclusion on the basis of information gathered as part of a process of reconsideration and examination”. The Appellate Body further explained that “[t]he plain meaning of the terms ‘review’ and ‘determine’ in Article 11.3 compel an investigating authority in a sunset review to undertake an examination, on the basis of positive evidence, of the likelihood of continuation or recurrence of dumping and injury” and that, “[i]n drawing conclusions from that examination, the investigating authority must arrive at a reasoned determination resting on a sufficient factual basis; it may not rely on assumptions or conjecture.” The requirements that a determination be based on “positive evidence” and a “sufficient factual basis” “govern all aspects of an investigating authority’s likelihood determination”.

 
A.3.47A Article 11.3 — Nature of sunset review investigation     back to top

A.3.47A.1 US — Corrosion-Resistant Steel Sunset Review, para. 112
(WT/DS244/AB/R)

 

… Thus, even though the rules applicable to sunset reviews may not be identical in all respects to those applicable to original investigations, it is clear that the drafters of the Anti-Dumping Agreement intended a sunset review to include both full opportunity for all interested parties to defend their interests, and the right to receive notice of the process and reasons for the determination.

 

A.3.47A.2 US — Corrosion-Resistant Steel Sunset Review, para. 113
(WT/DS244/AB/R)

 

… the mandatory rule in Article 11.3 applies in addition to, and irrespective of, the obligations set out in the first two paragraphs of Article 11. This also suggests to us that authorities must conduct a rigorous examination in a sunset review before the exception (namely, the continuation of the duty) can apply. In addition, our view of the exacting nature of the obligations imposed on authorities under Article 11.3 is supported by a consideration of the implications of initiating a sunset review. The last sentence of Article 11.3 allows the relevant duty to continue while the review is underway, and Article 11.4 contemplates that the review process may take up to one year. These provisions create an additional exception to the requirement that anti-dumping duties will be terminated after five years, permitting a Member to maintain the duty for the period during which the review is ongoing, regardless of the outcome of that review. This, too, suggests that the drafters of the Anti-Dumping Agreement saw the sunset review as a rigorous process that can take up to one year, involving a number of procedural steps, and requiring an appropriate degree of diligence on the part of the national authorities.

 

A.3.47A.3 US — Anti-Dumping Measures on Oil Country Tubular Goods, para. 123
(WT/DS282/AB/R)

 

… we do not see that the requirement of establishing a causal link between likely dumping and likely injury flows into that Article from other provisions of the GATT 1994 and the Anti-Dumping Agreement. Indeed, adding such a requirement would have the effect of converting the sunset review into an original investigation, which cannot be justified.

 
A.3.48 Article 11.3 — Methodology for sunset review investigations     back to top

A.3.48.1 US — Corrosion-Resistant Steel Sunset Review, para. 123
(WT/DS244/AB/R)

 

In making its findings on this issue, the Panel correctly noted that Article 11.3 does not expressly prescribe any specific methodology for investigating authorities to use in making a likelihood determination in a sunset review. Nor does Article 11.3 identify any particular factors that authorities must take into account in making such a determination. Thus, Article 11.3 neither explicitly requires authorities in a sunset review to calculate fresh dumping margins, nor explicitly prohibits them from relying on dumping margins calculated in the past. This silence in the text of Article 11.3 suggests that no obligation is imposed on investigating authorities to calculate or rely on dumping margins in a sunset review.

 

A.3.48.2 US — Corrosion-Resistant Steel Sunset Review, para. 124
(WT/DS244/AB/R)

 

We consider that it is consistent with the different nature and purpose of original investigations, on the one hand, and sunset reviews, on the other hand, to interpret the Anti-Dumping Agreement as requiring investigating authorities to calculate dumping margins in an original investigation, but not in a sunset review. In an original investigation, if investigating authorities of a Member do not determine a positive dumping margin, the Member may not impose anti-dumping measures based on that investigation. In a sunset review, dumping margins may well be relevant to, but they will not necessarily be conclusive of, whether the expiry of the duty would be likely to lead to continuation or recurrence of dumping.

 

A.3.48.3 US — Anti-Dumping Measures on Oil Country Tubular Goods, paras. 152-153
(WT/DS282/AB/R)

 

Given that Article 11.3 does not prescribe any particular methodology to be followed by an investigating authority in conducting a sunset review, we fail to see why the USITC was required, under that provision, to follow the specific step of making a “threshold finding” on the simultaneous presence of subject imports before resorting to cumulation.

 

This is not to say that it is never necessary for an investigating authority, performing a cumulative analysis of injury caused by imports from all sources, to examine whether imports are “in the market together and competing against each other”. In order to arrive at a reasoned and adequate conclusion, an examination of whether imports are in the market together and competing against each other may, in certain cases, be needed in a likelihood-of-injury determination where an investigating authority chooses to cumulate the imports from several countries. But the need for such an examination flows from the particular facts and circumstances of a given case and not from a legal requirement under Article 11.3.

 

A.3.48.4 US — Oil Country Tubular Goods Sunset Reviews (Article 21.5 — Argentina), para. 105
(WT/DS268/AB/RW)

 

At the same time, the Appellate Body has held that “Article 11.3 does not expressly prescribe any specific methodology for investigating authorities to use in making a likelihood determination in a sunset review”, nor does it “identify any particular factors that authorities must take into account in making such a determination”. The Appellate Body has also indicated that, where an investigating authority chooses to make its likelihood-of-dumping determination on an order-wide basis, the examination of the WTO-consistency of that determination must also be made on an order-wide basis.

 
A.3.48A Article 11.3 — Cumulation in sunset reviews.
See also Anti-Dumping Agreement, Article 3.3 — Cumulative assessment of dumped imports (A.3.21)     back to top

A.3.48A.1 US — Oil Country Tubular Goods Sunset Reviews, paras. 296-297
(WT/DS268/AB/R)

 

Although EC — Tube or Pipe Fittings concerned an original investigation, we are of the view that [the rationale behind the practice of cumulation] is equally applicable to likelihood-of-injury determinations in sunset reviews. Both an original investigation and a sunset review must consider possible sources of injury: in an original investigation, to determine whether to impose anti-dumping duties on products from those sources, and in a sunset review, to determine whether antidumping duties should continue to be imposed on products from those sources. Injury to the domestic industry — whether existing injury or likely future injury — might come from several sources simultaneously, and the cumulative impact of those imports would need to be analysed for an injury determination.

 

Therefore, notwithstanding the differences between original investigations and sunset reviews, cumulation remains a useful tool for investigating authorities in both inquiries to ensure that all sources of injury and their cumulative impact on the domestic industry are taken into account in an investigating authority’s determination as to whether to impose — or continue to impose — anti-dumping duties on products from those sources. Given the rationale for cumulation — a rationale that we consider applies to original investigations as well as to sunset reviews — we are of the view that it would be anomalous for Members to have limited authorization for cumulation in the Anti-Dumping Agreement to original investigations.

 

A.3.48A.2 US — Oil Country Tubular Goods Sunset Reviews, para. 300
(WT/DS268/AB/R)

 

Given the express intention of Members to permit cumulation in injury determinations in original investigations, and given the rationale behind cumulation in injury determinations, we do not read the Anti-Dumping Agreement as prohibiting cumulation in sunset reviews.

 

A.3.48A.3 US — Oil Country Tubular Goods Sunset Reviews, para. 302
(WT/DS268/AB/R)

 

… As the Appellate Body has observed, a sunset review determination under Article 11.3 must be based on a “rigorous examination” leading to a “reasoned conclusion”. Such a determination must be supported by “positive evidence” and a “sufficient factual basis”. These requirements govern all aspects of an investigating authority’s likelihood determination, including the decision to resort to cumulation of the effects of likely dumped imports. As a result, Argentina’s concerns that investigating authorities will be given “carte blanche” to resort to cumulation when making likelihood-of-injury determinations is unfounded. We, therefore, conclude that the conditions of Article 3.3 do not apply to likelihood-of-injury determinations in sunset reviews.

 

A.3.48A.4 US — Oil Country Tubular Goods Sunset Reviews, para. 328
(WT/DS268/AB/R)

 

We disagree with Argentina that the USITC’s references to information gleaned in the original investigation rendered WTO-inconsistent its decision to cumulate the effects of dumped imports. In US — Carbon Steel, the Appellate Body clarified that, in a sunset review, a “fresh determination” on the likelihood of future injury is necessary because “[t]he nature of the determination to be made in a sunset review differs in certain essential respects from the nature of the determination to be made in an original investigation.” Therefore, “[m]ere reliance by the authorities on the injury determination made in the original investigation will not be sufficient.” US — Carbon Steel does not, however, establish a prohibition on investigating authorities from referring in a sunset review to information related to the original investigation. In this case, it seems to us that the information to which the USITC referred was relevant to the decision to cumulate imports and, ultimately, to the task of assessing the likelihood of continuation or recurrence of injury. Moreover, the USITC referred to this information in the context of a fresh determination as to whether the expiry of the orders would be likely to lead to continuation or recurrence of injury.

 

A.3.48A.5 US — Anti-Dumping Measures on Oil Country Tubular Goods, para. 150
(WT/DS282/AB/R)

 

Mexico offers no textual support for its proposition that the USITC was required, in making its sunset review determination, to set out a “threshold finding” regarding the simultaneous presence of subject imports. On its face, Article 11.3 makes no mention of such a “threshold finding”. The immediate context of Article 11.3, in paragraphs 1, 2, 4, and 5 of Article 11, also does not reveal any such requirement. Even Article 3.3, which is “the only provision in the Anti-Dumping Agreement that specifically addresses the practice of cumulation” in an original investigation, does not require investigating authorities to make a threshold finding regarding cumulation.

 

A.3.48A.6 US — Anti-Dumping Measures on Oil Country Tubular Goods, paras. 152-153
(WT/DS282/AB/R)

 

Given that Article 11.3 does not prescribe any particular methodology to be followed by an investigating authority in conducting a sunset review, we fail to see why the USITC was required, under that provision, to follow the specific step of making a “threshold finding” on the simultaneous presence of subject imports before resorting to cumulation.

 

This is not to say that it is never necessary for an investigating authority, performing a cumulative analysis of injury caused by imports from all sources, to examine whether imports are “in the market together and competing against each other”. In order to arrive at a reasoned and adequate conclusion, an examination of whether imports are in the market together and competing against each other may, in certain cases, be needed in a likelihood-of-injury determination where an investigating authority chooses to cumulate the imports from several countries. But the need for such an examination flows from the particular facts and circumstances of a given case and not from a legal requirement under Article 11.3.

 

A.3.48A.7 US — Anti-Dumping Measures on Oil Country Tubular Goods, para. 171
(WT/DS282/AB/R)

 

We do not, however, suggest that, when an authority chooses to cumulate imports in a likelihood-of-injury determination under Article 11.3, it is never necessary for it to determine whether such a cumulative assessment is appropriate in the light of the conditions of competition in the market place. In particular cases, a cumulative assessment of the effects of the imports may be found to be inappropriate and, therefore, inconsistent with the fundamental requirement that a determination rest on a sufficient factual basis and reasoned and adequate conclusions. …

 
A.3.49 Article 11.3 — Relationship with Article 2.
See also Anti-Dumping Agreement, Article 2.1 (A.3.3—8)     back to top

A.3.49.0 US — Corrosion-Resistant Steel Sunset Review, para. 109
(WT/DS244/AB/R)

 

We agree with Japan that the words “[f]or the purpose of this Agreement” in Article 2.1 indicate that this provision describes the circumstances in which a product is to be considered as being dumped for purposes of the entire Anti-Dumping Agreement, including Article 11.3. This interpretation is supported by the fact that Article 11.3 does not indicate, either expressly or by implication, that “dumping” has a different meaning in the context of sunset reviews than in the rest of the Anti-Dumping Agreement. Therefore, Article 2.1 of the Anti- Dumping Agreement and Article VI:1 of the GATT 1994 suggest that the question for investigating authorities, in making a likelihood determination in a sunset review pursuant to Article 11.3, is whether the expiry of the duty would be likely to lead to continuation or recurrence of dumping of the product subject to the duty (that is, to the introduction of that product into the commerce of the importing country at less than its normal value).

 

A.3.49.1 US — Corrosion-Resistant Steel Sunset Review, paras. 126-128
(WT/DS244/AB/R)

 

… the opening words of Article 2.1 (“[f]or the purpose of this Agreement”) go beyond a cross-reference and indicate that Article 2.1 applies to the entire Anti-Dumping Agreement. By virtue of these words, the word “dumping” as used in Article 11.3 has the meaning described in Article 2.1.

 

Article 2 sets out the agreed disciplines in the Anti-Dumping Agreement for calculating dumping margins. As observed earlier, we see no obligation under Article 11.3 for investigating authorities to calculate or rely on dumping margins in determining the likelihood of continuation or recurrence of dumping. However, should investigating authorities choose to rely upon dumping margins in making their likelihood determination, the calculation of these margins must conform to the disciplines of Article 2.4. … USDOC chose to base its affirmative likelihood determination on positive dumping margins that had been previously calculated in two particular administrative reviews. If these margins were legally flawed because they were calculated in a manner inconsistent with Article 2.4, this could give rise to an inconsistency not only with Article 2.4, but also with Article 11.3 of the Anti-Dumping Agreement.

 

It follows that we disagree with the Panel’s view that the disciplines in Article 2 regarding the calculation of dumping margins do not apply to the likelihood determination to be made in a sunset review under Article 11.3.

 

A.3.49.2 US — Corrosion-Resistant Steel Sunset Review, para. 130
(WT/DS244/AB/R)

 

… if a likelihood determination is based on a dumping margin calculated using a methodology inconsistent with Article 2.4, then this defect taints the likelihood determination too. Thus, the consistency with Article 2.4 of the methodology that USDOC used to calculate the dumping margins in the administrative reviews bears on the consistency with Article 11.3 of USDOC’s likelihood determination in the CRS sunset review. In the CRS sunset review, USDOC based its determination that “dumping is likely to continue if the [CRS] order were revoked” on the “existence of dumping margins” calculated in the administrative reviews. If these margins were indeed calculated using a methodology that is inconsistent with Article 2.4 — an issue that we examine below — then USDOC’s likelihood determination could not constitute a proper foundation for the continuation of anti-dumping duties under Article 11.3. Moreover, a legal defect of this kind cannot be cured by NSC’s failure to take issue with it in the CRS sunset review or the administrative reviews.

 

A.3.49.3 US — Anti-Dumping Measures on Oil Country Tubular Goods, para. 181
(WT/DS282/AB/R)

 

… the Appellate Body Report in US — Corrosion-Resistant Steel Sunset Review does not stand for the proposition that a WTO-inconsistent methodology used for the calculation of a dumping margin will, in and of itself, taint a sunset review determination under Article 11.3. The only way the use of such a methodology would render a sunset review determination inconsistent with Article 11.3 is if the investigating authority relied upon that margin of dumping to support its likelihood-of-dumping or likelihood-of-injury determination.

 

A.3.49.4 US — Zeroing (Japan), paras. 183-185
(WT/DS322/AB/R)

 

In US—Corrosion-Resistant Steel Sunset Review, the Appellate Body explained that, “should investigating authorities choose to rely upon dumping margins in making their likelihood determination, the calculation of these margins must conform to the disciplines of Article 2.4.” The Appellate Body added that, “[i]f these margins were legally flawed because they were calculated in a manner inconsistent with Article 2.4, this could give rise to an inconsistency not only with Article 2.4, but also with Article 11.3 of the Anti-Dumping Agreement.” In such circumstances, “the likelihood[-of-dumping] determination could not constitute a proper foundation for the continuation of anti-dumping duties under Article 11.3”.

 

In the present case, the Panel found, as a matter of fact, that, in its likelihood-of-dumping determination, the USDOC relied “on margins of dumping established in prior proceedings”. The Panel further found that these margins were calculated during periodic reviews “on the basis of simple zeroing”.

 

We have previously concluded that zeroing, as it relates to periodic reviews, is inconsistent, as such, with Article 2.4 and Article 9.3. As the likelihood-of-dumping determinations in the sunset reviews at issue in this appeal relied on margins of dumping calculated inconsistently with the Anti-Dumping Agreement, they are inconsistent with Article 11.3 of that Agreement.

 
A.3.50 Article 11.3 — No duty to investigate each known producer and exporter individually.
See also Anti-Dumping Agreement, Article 11.4 (A.3.53)     back to top

A.3.50.1 US — Corrosion-Resistant Steel Sunset Review, para. 149
(WT/DS244/AB/R)

 

… Article 11.3 does not prescribe any particular methodology to be used by investigating authorities in making a likelihood determination in a sunset review. In particular, Article 11.3 does not expressly state that investigating authorities must determine that the expiry of the duty would be likely to lead to dumping by each known exporter or producer concerned. In fact, Article 11.3 contains no express reference to individual exporters, producers, or interested parties. This contrasts with Article 11.2, which does refer to “any interested party” and “[i]nterested parties”. We also note that Article 11.3 does not contain the word “margins”, which might implicitly refer to individual exporters or producers. On its face, Article 11.3 therefore does not oblige investigating authorities in a sunset review to make “company-specific” likelihood determinations in the manner suggested by Japan.

 

A.3.50.2 US — Oil Country Tubular Goods Sunset Reviews, para. 231
(WT/DS268/AB/R)

 

… because the United States has chosen to make order-wide determinations in sunset reviews, an allegation that a measure prevents the United States from making a likelihood determination consistent with Article 11.3 must be evaluated by reference to the relevance of that measure for the order-wide determination.

 

A.3.50.3 US — Oil Country Tubular Goods Sunset Reviews, paras. 232-233
(WT/DS268/AB/R)

 

… As we have observed, the relevant inquiry in this dispute is whether the order-wide likelihood determination would be rendered inconsistent with Article 11.3 by virtue of the operation of the waiver provisions. It appears to us, therefore, that the Panel could not have properly arrived at a finding of consistency or inconsistency with Article 11.3 until it had examined how the operation of the waiver provisions could affect the order-wide determination. Had the Panel ceased its inquiry with the finding that the company-specific determinations are not “supported by reasoned and adequate conclusions based on the facts before an investigating authority”, the Panel would not have had a basis to conclude that the waiver provisions are inconsistent, as such, with Article 11.3.

 

The Panel, however, did not base its ultimate conclusion of inconsistency with Article 11.3 on its assessment of only the company-specific determinations made pursuant to the waiver provisions. Instead, the Panel correctly continued its analysis and examined the impact of the company-specific determinations on the order-wide determination.

 

A.3.50.4 US — Oil Country Tubular Goods Sunset Reviews, para. 234
(WT/DS268/AB/R)

 

… even assuming that the USDOC takes into account the totality of record evidence in making its order-wide determination, it is clear that, as a result of the operation of the waiver provisions, certain order-wide likelihood determinations made by the USDOC will be based, at least in part, on statutorily mandated assumptions about a company’s likelihood of dumping. In our view, this result is inconsistent with the obligation of an investigating authority under Article 11.3 to “arrive at a reasoned conclusion” on the basis of “positive evidence”.

 
A.3.51 Article 11.3 — Determination of dumping margins and import volumes     back to top

A.3.51.1 US — Corrosion-Resistant Steel Sunset Review, para. 158
(WT/DS244/AB/R)

 

Our conclusions regarding the consistency of this aspect of the Sunset Policy Bulletin “as such” with Article 11.3 do not imply that Article 11.3 precludes authorities from making separate likelihood determinations for individual exporters or producers in a sunset review and then continuing or terminating the relevant duty for each company according to the determination for that company. WTO Members are free to structure their anti-dumping systems as they choose, provided that those systems do not conflict with the provisions of the Anti-Dumping Agreement.

 

A.3.51.2 US — Corrosion-Resistant Steel Sunset Review, paras. 175-176
(WT/DS244/AB/R)

 

… We see no problem, in principle, with the United States instructing its investigating authorities to examine, in every sunset review, dumping margins and import volumes. These two factors will often be pertinent to the likelihood determination, and Japan itself does not dispute the relevance of at least one of them, namely dumping margins.

 

At issue, however, is whether Section II.A.3 goes further and instructs USDOC to attach decisive or preponderant weight to these two factors in every case. To us, the significance and probative value of the two factors for a likelihood determination in a sunset review will necessarily vary from case to case. The degree to which import volumes or dumping margins have decreased will be relevant in making an inference that dumping is likely to continue or recur. Whether the historical data is recent or not may affect its probative value, and trends in data over time may be significant for an assessment of likely future behaviour. Similarly, it is possible that in a particular case one of these factors may support an inference of likely future dumping, while the other factor supports a contrary inference.

 

A.3.51.3 US — Corrosion-Resistant Steel Sunset Review, para. 186
(WT/DS244/AB/R)

 

… a broad range of factors other than import volumes and dumping margins is potentially relevant to the authorities’ likelihood determination.

 

A.3.51.4 US — Oil Country Tubular Goods Sunset Reviews, para. 208
(WT/DS268/AB/R)

 

In our view, “volume of dumped imports” and “dumping margins”, before and after the issuance of anti-dumping duty orders, are highly important factors for any determination of likelihood of continuation or recurrence of dumping in sunset reviews, although other factors may also be as important, depending on the circumstances of the case. The three factual scenarios in Section II.A.3 of the SPB, which describe how these two factors will be considered in individual determinations, thus have certain probative value, the degree of which may vary from case to case. For example, if, under scenario (a) of Section II.A.3 of the SPB, dumping continued with substantial margins despite the existence of the anti-dumping duty order, this would be highly probative of the likelihood that dumping would continue if the anti-dumping order were revoked. Conversely, if, under scenarios (b) and (c) of Section II.A.3 of the SPB, imports ceased after issuance of the anti-dumping duty order, or imports continued but without dumping margins, the probative value of the scenarios may be much less, and other relevant factors may have to be examined to determine whether imports with dumping margins would “recur” if the antidumping duty order were revoked. The importance of the two underlying factors (import volumes and dumping margins) for a likelihood-of-dumping determination cannot be questioned; however, our concern here is with the possible mechanistic application of the three scenarios based on these factors, such that other factors that may be of equal importance are disregarded.

 

A.3.51.5 US — Anti-Dumping Measures on Oil Country Tubular Goods, para. 181
(WT/DS282/AB/R)

 

… the Appellate Body Report in US — Corrosion-Resistant Steel Sunset Review does not stand for the proposition that a WTO-inconsistent methodology used for the calculation of a dumping margin will, in and of itself, taint a sunset review determination under Article 11.3. The only way the use of such a methodology would render a sunset review determination inconsistent with Article 11.3 is if the investigating authority relied upon that margin of dumping to support its likelihood-of-dumping or likelihood-of-injury determination.

 
A.3.51A Article 11.3 — Evidence     back to top

A.3.51A.1 US — Oil Country Tubular Goods Sunset Reviews (Article 21.5 — Argentina), paras. 167-168
(WT/DS268/AB/RW)

 

… Therefore, we do not consider that Articles 11.3 and 11.4 address the specific question of whether an investigating authority can develop a new evidentiary basis when implementing DSB recommendations and rulings.

 

Neither do Articles 11.3 and 11.4 provide a basis for drawing a distinction between allowing an investigating authority to clarify information, or provide further explanations, on the one hand, and to develop a new factual basis, on the other hand.

 

A.3.51A.2 US — Oil Country Tubular Goods Sunset Reviews (Article 21.5 — Argentina), para. 171
(WT/DS268/AB/RW)

 

… Argentina’s claim that the USDOC was precluded from developing a new evidentiary basis is premised on the qualitative shortcomings of the fact-finding in the original review. It does not implicate the temporal requirements of Article 11.3, which remain valid even if an investigating authority is allowed to collect additional facts relating to the original review period when making a re-determination of the likelihood of dumping for the purpose of implementing recommendations and rulings of the DSB. Moreover, an investigating authority seeking to comply with an adverse WTO ruling by conducting a sunset re-determination would have to comply with all of the substantive obligations set out in Articles 11.3 and 11.4. This means that any additional factual information relating to the initial review period that is collected for purposes of the re-determination would have to be “sufficient”, and the conclusion reached on the basis of those facts would have to be “reasoned”. It also means that the anti-dumping duties could not remain in place unless the investigating authority concluded in the re-determination that dumping and injury were likely to continue or recur. Furthermore, the due process and evidentiary obligations established in Article 11.4, by virtue of its reference to Article 6, would apply also to the process leading to the re-determination.

 
A.3.52 Article 11.3 — Likelihood determination based on evidence vs. Presumptions     back to top

A.3.52.0 US — Corrosion-Resistant Steel Sunset Review, para. 97
(WT/DS244/AB/R)

 

Japan argued before the Panel that the repeated practice of USDOC, as demonstrated in its conduct of a large number of sunset reviews, serves to establish that the relevant provisions of the Sunset Policy Bulletin have the meaning and effect alleged by Japan, namely, that they unduly limit the factors that USDOC will take into account in making its determination. The Panel, however, did not make any factual findings as to the relevance or cogency of this evidence. Rather, the Panel opined that the Sunset Policy Bulletin, by itself, could not constitute “practice” because it was issued before any sunset review had occurred. The Panel also took the view that a repeated response to a particular set of circumstances could not “transform” the Bulletin into an “administrative procedure”, or indicate that, “merely by repetition, the DOC would somehow become compelled to follow the Bulletin”. In so doing, the Panel does not seem to have allowed for the possibility that Japan was not challenging the Sunset Policy Bulletin as practice, but was, rather, relying on the evidence of the consistent application of the Sunset Policy Bulletin in all sunset reviews so far conducted by USDOC to support its arguments that USDOC treats the “rules” in the Sunset Policy Bulletin as binding.

 

A.3.52.1 US — Corrosion-Resistant Steel Sunset Review, para. 178
(WT/DS244/AB/R)

 

We believe that a firm evidentiary foundation is required in each case for a proper determination under Article 11.3 of the likelihood of continuation or recurrence of dumping. Such a determination cannot be based solely on the mechanistic application of presumptions.

 

A.3.52.2 US — Corrosion-Resistant Steel Sunset Review, para. 191
(WT/DS244/AB/R)

 

We acknowledge that these types of instructions to an executive agency may well serve as a useful tool to the agency as well as for all participants in administrative proceedings. They tend to promote transparency and consistency in decision making, and can help authorities and participants to focus on the relevant issues and evidence. However, these considerations cannot override the obligation of investigating authorities, in a sunset review, to determine, on the basis of all relevant evidence, whether the expiry of the duty would be likely to lead to continuation or recurrence of dumping. As we have found in other situations, the use of presumptions may be inconsistent with an obligation to make a particular determination in each case using positive evidence. Provisions that create “irrebuttable” presumptions, or “predetermine” a particular result, run the risk of being found inconsistent with this type of obligation.

 

A.3.52.3 US — Corrosion-Resistant Steel Sunset Review, para. 199 and footnote 243
(WT/DS244/AB/R)

 

… Article 11.3 makes clear that the role of the authorities in a sunset review includes both investigatory and adjudicatory aspects. These authorities have a duty to seek out relevant information and to evaluate it in an objective manner. 243 At the same time, the Anti-Dumping Agreement assigns a prominent role to interested parties as well and contemplates that they will be a primary source of information in all proceedings conducted under that agreement. Company-specific data relevant to a likelihood determination under Article 11.3 can often be provided only by the companies themselves. For example, as the United States points out, it is the exporters or producers themselves who often possess the best evidence of their likely future pricing behaviour — a key element in the likelihood of future dumping.

 

A.3.52.4 US — Oil Country Tubular Goods Sunset Reviews, para. 180
(WT/DS268/AB/R)

 

The plain meaning of the terms “review” and “determine” in Article 11.3, therefore, compel an investigating authority in a sunset review to undertake an examination, on the basis of positive evidence, of the likelihood of continuation or recurrence of dumping and injury. In drawing conclusions from that examination, the investigating authority must arrive at a reasoned determination resting on a sufficient factual basis; it may not rely on assumptions or conjecture.

 

A.3.52.5 US — Oil Country Tubular Goods Sunset Reviews, paras. 209-210
(WT/DS268/AB/R)

 

In our view, therefore, in order to objectively assess, as required by Article 11 of the DSU, whether the three factual scenarios of Section II.A.3 of the SPB are regarded as determinative/conclusive, it is essential to examine concrete examples of cases where the likelihood determination of continuation or recurrence of dumping was based solely on one of the scenarios of Section II.A.3 of the SPB, even though the probative value of other factors might have outweighed that of the identified scenario. Such an examination requires a qualitative assessment of the likelihood determinations in individual cases.

 

We find that, in reaching its conclusion on the USDOC’s consistent application of the SPB, the Panel relied solely on the overall statistics or aggregate results. The Panel did not undertake a qualitative analysis of at least some of the individual cases in Exhibit ARG-63 in order to see whether the USDOC’s determinations in those cases were objective and rested on a sufficient factual basis.

 

A.3.52.6 US — Oil Country Tubular Goods Sunset Reviews, para. 211
(WT/DS268/AB/R)

 

A qualitative analysis of individual cases in all likelihood would have revealed a variety of circumstances. There could well have been cases where affirmative determinations were made objectively, based on one of the three scenarios. There could have been other cases where the affirmative determinations were flawed because the USDOC made its decisions relying solely on one of the scenarios of the SPB, even though the probative value of other factors outweighed it. There could have been yet other cases where the USDOC summarily rejected or ignored other factors introduced by foreign respondent parties, regardless of their probative value.

 

A.3.52.7 US — Oil Country Tubular Goods Sunset Reviews, para. 215
(WT/DS268/AB/R)

 

… we reverse the Panel’s findings that Section II.A.3 of the SPB is inconsistent, as such, with Article 11.3 of the Anti-Dumping Agreement. We wish to emphasize that we have not thereby concluded that Section II.A.3 of the SPB is consistent, as such, with Article 11.3 of the Anti-Dumping Agreement. Rather, we have found that the Panel’s conclusion to the contrary must be reversed due to its failure to comply with Article 11 of the DSU. Thus, our reasoning here does not exclude the possibility that, in another case, it could be properly concluded that the three scenarios in Section II.A.3 of the SPB are regarded as determinative/conclusive of the likelihood of continuation or recurrence of dumping. However, such a conclusion would need to be supported by a rigorous analysis of the evidence regarding the manner in which Section II.A.3 of the SPB is applied by the USDOC.

 

A.3.52.8 US — Oil Country Tubular Goods Sunset Reviews, para. 234
(WT/DS268/AB/R)

 

We agree with the Panel’s analysis of the impact of the waiver provisions on order-wide determinations. Because the waiver provisions require the USDOC to arrive at affirmative company-specific determinations without regard to any evidence on record, these determinations are merely assumptions made by the agency, rather than findings supported by evidence. The United States contends that respondents waiving the right to participate in a sunset review do so “intentionally”, with full knowledge that, as a result of their failure to submit evidence, the evidence placed on the record by the domestic industry is likely to result in an unfavourable determination on an order-wide basis. In these circumstances, we see no fault in making an unfavourable order-wide determination by taking into account evidence provided by the domestic industry in support thereof. However, the USDOC also takes into account, in such circumstances, statutorily mandated assumptions. Thus, even assuming that the USDOC takes into account the totality of record evidence in making its order-wide determination, it is clear that, as a result of the operation of the waiver provisions, certain order-wide likelihood determinations made by the USDOC will be based, at least in part, on statutorily mandated assumptions about a company’s likelihood of dumping. In our view, this result is inconsistent with the obligation of an investigating authority under Article 11.3 to “arrive at a reasoned conclusion” on the basis of “positive evidence”.

 

A.3.52.9 US — Anti-Dumping Measures on Oil Country Tubular Goods, para. 123
(WT/DS282/AB/R)

 

… Therefore, what is essential for an affirmative determination under Article 11.3 is proof of likelihood of continuation or recurrence of dumping and injury, if the duty expires. The nature and extent of the evidence required for such proof will vary with the facts and circumstances of the case under review. Furthermore, as the Appellate Body has emphasized previously, determinations under Article 11.3 must rest on a “sufficient factual basis” that allows the investigating authority to draw “reasoned and adequate conclusions”.

 

A.3.52.10 US — Anti-Dumping Measures on Oil Country Tubular Goods, para. 171
(WT/DS282/AB/R)

 

We do not, however, suggest that, when an authority chooses to cumulate imports in a likelihood-of-injury determination under Article 11.3, it is never necessary for it to determine whether such a cumulative assessment is appropriate in the light of the conditions of competition in the market place. In particular cases, a cumulative assessment of the effects of the imports may be found to be inappropriate and, therefore, inconsistent with the fundamental requirement that a determination rest on a sufficient factual basis and reasoned and adequate conclusions. However, this fundamental requirement derives from the obligations under Article 11.3 itself, and not from the conditions specified in Article 3.3.

 

A.3.52.11 US — Anti-Dumping Measures on Oil Country Tubular Goods, para. 196
(WT/DS282/AB/R)

 

… the Appellate Body emphasized in US — Oil Country Tubular Goods Sunset Reviews that, in making a “qualitative assessment” of individual determinations, a panel must determine whether the factual scenarios of the SPB are regarded as “determinative/conclusive” and “mechanistically applied” by the USDOC “to the exclusion of other factors”, or “in disregard of other factors”, or “even though the probative value of other factors might have outweighed that of the identified scenario”. The relevance and probative value of other factors, and the USDOC’s treatment of them — whether the USDOC ignored them or did not treat them objectively — are crucial for a “qualitative assessment” of individual determinations.

 

A.3.52.12 US — Anti-Dumping Measures on Oil Country Tubular Goods, para. 199
(WT/DS282/AB/R)

 

… A respondent party may have the responsibility to introduce relevant evidence in its favour, but the investigating authority also has a duty to seek information to ensure that its determination rests on a sufficient evidentiary foundation. An affirmative determination cannot rest merely on a presumption, as envisaged under scenario (b) or (c), that the cessation of dumping or of imports was due solely to the anti-dumping duty order.

 

A.3.52.13 US — Anti-Dumping Measures on Oil Country Tubular Goods, para. 201
(WT/DS282/AB/R)

 

Thus, the factual scenarios of the SPB must not be mechanistically applied. The responding parties do have a responsibility to submit information and evidence in their favour, particularly about their pricing behaviour, import volumes, and dumping margins. But the investigating authority has a duty to seek out information on relevant factors and evaluate their probative value in order to ensure that its determination is based not on presumptions, but on a sufficient factual basis.

 

A.3.52.14 US — Oil Country Tubular Goods Sunset Reviews (Article 21.5 — Argentina), para. 121
(WT/DS268/AB/RW)

 

In sum, on the basis of the evidence on the Panel record, we are not persuaded that the amended waiver provisions preclude the USDOC from making a reasoned determination with a sufficient factual basis, as required by Article 11.3 of the Anti-Dumping Agreement. Under the amended waiver provisions, a company-specific finding is not based on an assumption but, rather, on a statement by the waiving exporter indicating that it is likely to dump if the order were revoked or the investigation terminated. Moreover, the amended waiver provisions do not preclude the USDOC from considering other evidence on the record of the sunset review. Indeed, under Article 11.3 of the Anti-Dumping Agreement, the USDOC would have to consider any other evidence on the record, and assess the statement of waiver in the light of that other evidence, before making the order-wide determination. If it failed to do so, it would not exercise the degree of diligence required of investigating authorities, nor could it make a reasoned determination with a sufficient factual basis, as required by Article 11.3 of the Anti-Dumping Agreement.

 
A.3.52A Article 11.3 — Likelihood of continuation or recurrence of injury     back to top

A.3.52A.1 US — Oil Country Tubular Goods Sunset Reviews, para. 276
(WT/DS268/AB/R)

 

… we would agree with Argentina that, by virtue of its opening phrase, footnote 9 defines “injury” for the whole of the Anti-Dumping Agreement. …Therefore, when Article 11.3 requires a determination as to the likelihood of continuation or recurrence of “injury”, the investigating authority must consider the continuation or recurrence of “injury” as defined in footnote 9.

 

A.3.52A.2 US — Oil Country Tubular Goods Sunset Reviews, para. 281
(WT/DS268/AB/R)

 

… we recall the following statement of the Appellate Body in US — Corrosion-Resistant Steel Sunset Review:

 

Article 11.3 does not expressly prescribe any specific methodology for investigating authorities to use in making a likelihood determination in a sunset review. Nor does Article 11.3 identify any particular factors that authorities must take into account in making such a determination. [Appellate Body Report, para. 123]

 

Although the Appellate Body made this statement in the context of a likelihood-of-dumping determination, it applies equally with respect to a likelihood-of-injury determination.

 

A.3.52A.3 US — Oil Country Tubular Goods Sunset Reviews, para. 323
(WT/DS268/AB/R)

 

Under Article 11.3 of the Anti-Dumping Agreement, a decision not to terminate an anti-dumping duty must be based on determinations of likelihood of continuation or recurrence of dumping and likelihood of continuation or recurrence of injury. We agree with the United States that the “likely” standard of Article 11.3 applies to the overall determinations regarding dumping and injury; it need not necessarily apply to each factor considered in rendering the overall determinations on dumping and injury.

 

A.3.52A.4 US — Oil Country Tubular Goods Sunset Reviews, para. 333
(WT/DS268/AB/R)

 

… the “likelihood” standard set out in Article 11.3 applies to a likelihood-of-injury determination as a whole, not to each and every factor that the investigating authority considers in the course of its analysis.

 

A.3.52A.5 US — Anti-Dumping Measures on Oil Country Tubular Goods, para. 108
(WT/DS282/AB/R)

 

On its face, Article 11.3 does not require investigating authorities to establish the existence of a “causal link” between likely dumping and likely injury. Instead, by its terms, Article 11.3 requires investigating authorities to determine whether the expiry of the duty would be likely to lead to continuation or recurrence of dumping and injury. Thus, in order to continue the duty, there must be a nexus between the “expiry of the duty”, on the one hand, and “continuation or recurrence of dumping and injury”, on the other hand, such that the former “would be likely to lead to” the latter. This nexus must be clearly demonstrated.

 

A.3.52A.6 US — Anti-Dumping Measures on Oil Country Tubular Goods, para. 121
(WT/DS282/AB/R)

 

An anti-dumping duty comes into existence following an original investigation that has established a causal link between dumping and injury to the domestic industry in accordance with the requirements of Article 3 of the Anti-Dumping Agreement, including, in particular, the requirement that the injury caused by any other known factor not be attributed to dumping. In contrast, when a “review” takes place under Article 11.3, and it is determined that the “expiry of the duty” would “likely lead to continuation or recurrence of dumping and injury”, it is reasonable to assume that, where dumping and injury continues or recurs, the causal link between dumping and injury, established in the original investigation, would exist and need not be established anew.

 

A.3.52A.7 US — Anti-Dumping Measures on Oil Country Tubular Goods, para. 124
(WT/DS282/AB/R)

 

Our conclusion that the establishment of a causal link between likely dumping and likely injury is not required in a sunset review determination does not imply that the causal link between dumping and injury envisaged by Article VI of the GATT 1994 and the Anti-Dumping Agreement is severed in a sunset review. It only means that re-establishing such a link is not required, as a matter of legal obligation, in a sunset review.

 

A.3.52A.8 US — Anti-Dumping Measures on Oil Country Tubular Goods, para. 127
(WT/DS282/AB/R)

 

… We recognize that a WTO-consistent likelihood-of-dumping determination and a WTO-consistent determination of likelihood-of-injury are two pillars on which a WTO-consistent sunset review determination under Article 11.3 rests. If either of them is flawed, the sunset review determination would be inconsistent with Article 11.3. But, if the likelihood-of-dumping determination is flawed, it does not follow that the likelihood-of-injury determination is ipso facto flawed as well. The two inquiries are separate, regardless of whether they are carried out by the same or different authorities in a Member’s administrative system. If an affirmative likelihood-of-dumping determination is later found to be flawed, we fail to see why this should lead automatically to the conclusion that the likelihood-of-injury determination must also be regarded as flawed. However, if a likelihood-of-injury determination rests upon a likelihood-of-dumping determination that is later found to be flawed, the former determination may also be found to be WTO-inconsistent, after a proper examination of the facts of that determination.

 

A.3.52A.9 US — Anti-Dumping Measures on Oil Country Tubular Goods, para. 166
(WT/DS282/AB/R)

 

On its face, Article 11.3 does not establish a requirement for an investigating authority to specify the time-frame within which the “simultaneous presence” of subject imports and the corresponding likely injury would occur. As the Appellate Body found in US — Oil Country Tubular Goods Sunset Reviews, “the mere fact that the timeframe of an injury analysis is not presented in a sunset review determination is not sufficient to undermine that determination”. The Appellate Body noted in that case that a determination of likelihood-of-injury “can be properly reasoned and rest on a sufficient factual basis even though the timeframe for the [likelihood-of-injury] determination is not explicitly mentioned”. As long as a likelihood-of-injury determination rests on a sufficient factual basis, the mere fact that an investigating authority does not specify the time-frame within which the “simultaneous presence” of subject imports and the corresponding injury would be likely to occur, does not, in our view, undermine that determination. Therefore, we do not agree with Mexico that the USITC’s likelihood-of-injury determination is inconsistent with Article 11.3 of the Anti-Dumping Agreement because the USITC did not indicate the time period that it considered to be applicable for its likelihood-of-injury determination.

 
A.3.52B Article 11.3 — Relationship with Article 3     back to top

A.3.52B.1 US — Oil Country Tubular Goods Sunset Reviews, paras. 278-280
(WT/DS268/AB/R)

 

… In our view, however, the Anti-Dumping Agreement distinguishes between “determination[s] of injury”, addressed in Article 3, and determinations of likelihood of “continuation or recurrence of injury”, addressed in Article 11.3. In addition, Article 11.3 does not contain any cross-reference to Article 3 to the effect that, in making the likelihood-of-injury determination, all the provisions of Article 3 — or any particular provisions of Article 3 — must be followed by investigating authorities. Nor does any provision of Article 3 indicate that, wherever the term “injury” appears in the Anti-Dumping Agreement, a determination of injury must be made following the provisions of Article 3.

 

The lack of a sufficient textual basis to apply Article 3 to likelihood-of-injury determinations is not surprising given “the different nature and purpose of original investigations, on the one hand, and sunset reviews, on the other hand”, which the Appellate Body emphasized in US — Corrosion-Resistant Steel Sunset Review. Original investigations require an investigating authority, in order to impose an antidumping duty, to make a determination of the existence of dumping in accordance with Article 2, and subsequently to determine, in accordance with Article 3, whether the domestic industry is facing injury or a threat thereof at the time of the original investigation. In contrast, Article 11.3 requires an investigating authority, in order to maintain an anti-dumping duty, to review an anti-dumping duty order that has already been established — following the prerequisite determinations of dumping and injury — so as to determine whether that order should be continued or revoked.

 

Given the absence of textual cross-references, and given the different nature and purpose of these two determinations, we are of the view that, for the “review” of a determination of injury that has already been established in accordance with Article 3, Article 11.3 does not require that injury again be determined in accordance with Article 3. We therefore conclude that investigating authorities are not mandated to follow the provisions of Article 3 when making a likelihood-of-injury determination.

 

A.3.52B.2 US — Oil Country Tubular Goods Sunset Reviews, paras. 283-284
(WT/DS268/AB/R)

 

… We are not persuaded by the argument of Argentina that a likelihood-of-injury determination can rest on a “sufficient factual basis” and can be regarded as a “reasoned conclusion” only after undertaking all the analyses detailed in the paragraphs of Article 3.

 

This is not to say, however, that in a sunset review determination, an investigating authority is never required to examine any of the factors listed in the paragraphs of Article 3. Certain of the analyses mandated by Article 3 and necessarily relevant in an original investigation may prove to be probative, or possibly even required, in order for an investigating authority in a sunset review to arrive at a “reasoned conclusion”. In this respect, we are of the view that the fundamental requirement of Article 3.1 that an injury determination be based on “positive evidence” and an “objective examination” would be equally relevant to likelihood determinations under Article 11.3. It seems to us that factors such as the volume, price effects, and the impact on the domestic industry of dumped imports, taking into account the conditions of competition, may be relevant to varying degrees in a given likelihood-of-injury determination. An investigating authority may also, in its own judgement, consider other factors contained in Article 3 when making a likelihood-of-injury determination. But the necessity of conducting such an analysis in a given case results from the requirement imposed by Article 11.3 — not Article 3 — that a likelihood-of-injury determination rest on a “sufficient factual basis” that allows the agency to draw “reasoned and adequate conclusions”.

 

A.3.52B.3 US — Anti-Dumping Measures on Oil Country Tubular Goods, para. 121
(WT/DS282/AB/R)

 

An anti-dumping duty comes into existence following an original investigation that has established a causal link between dumping and injury to the domestic industry in accordance with the requirements of Article 3 of the Anti-Dumping Agreement, including, in particular, the requirement that the injury caused by any other known factor not be attributed to dumping. In contrast, when a “review” takes place under Article 11.3, and it is determined that the “expiry of the duty” would “likely … lead to continuation or recurrence of dumping and injury”, it is reasonable to assume that, where dumping and injury continues or recurs, the causal link between dumping and injury, established in the original investigation, would exist and need not be established anew.

 

A.3.52B.4 US — Anti-Dumping Measures on Oil Country Tubular Goods, para. 172
(WT/DS282/AB/R)

 

… The fact that an investigating authority has not undertaken all the analyses detailed in Article 3.3 is not, by itself, sufficient to undermine a determination under Article 11.3.

 
A.3.52C Article 11.3 — Timeframe for likelihood of continuation or recurrence of injury     back to top

A.3.52C.1 US — Oil Country Tubular Goods Sunset Reviews, para. 356
(WT/DS268/AB/R)

 

The Panel noted that Article 11.3 of the Anti-Dumping Agreement does not prescribe any timeframe for likelihood of continuation or recurrence of injury; nor does it require investigating authorities to specify the timeframe on which their likelihood determination is based. The Panel consequently concluded that the standard of the “reasonably foreseeable time”, set out in Sections 752(a)(1) and 752(a)(5), does not conflict with Article 11.3 of the Anti-Dumping Agreement.

 

A.3.52C.2 US — Oil Country Tubular Goods Sunset Reviews, paras. 359-360
(WT/DS268/AB/R)

 

As to the “impermissible gap” alluded to by Argentina, in our view, this argument is nothing more than a theoretical possibility, which Argentina builds from an abstract comparison between, on the one hand, the “imminent” manifestation of injury in the context of an original anti-dumping investigation and, on the other hand, the manifestation of injury within a “reasonably foreseeable time” in the context of a sunset review. The theoretical possibility of a “gap” would necessarily apply only to the situation of likelihood of “recurrence” of injury in the future, and not to the situation of “continuation” of injury. This mere theoretical possibility cannot justify the importation into Article 11.3 of an “imminent” standard for likelihood of recurrence of injury. Moreover, as the Appellate Body indicated in US — Corrosion-Resistant Steel Sunset Review, original investigations and sunset reviews are distinct processes with different purposes. The disciplines applicable to original investigations cannot, therefore, be automatically imported into review processes.

 

In our view, the Panel correctly analysed the timeframe issue. We agree with the Panel that an assessment regarding whether injury is likely to recur that focuses “too far in the future would be highly speculative”, and that it might be very difficult to justify such an assessment. However, like the Panel, we have no reason to believe that the standard of a “reasonably foreseeable time” set out in the United States statute is inconsistent with the requirements of Article 11.3.

 
A.3.53 Article 11.4 — Relationship with Article 6.
See also Anti-Dumping Agreement — Article 6 (A.3.29-38)     back to top

A.3.53.1 US — Corrosion-Resistant Steel Sunset Review, para. 152
(WT/DS244/AB/R)

 

… several provisions of Article 6 refer expressly or by implication to individual exporters or producers. … [Article 6 and the particular provisions in Articles 6.1, 6.2, 6.4, and 6.9] suggest that, when the drafters of the Anti-Dumping Agreement intended to impose obligations on authorities regarding individual exporters or producers, they did so explicitly. These provisions of Article 6 apply to Article 11.3 by virtue of Article 11.4. They therefore confirm that investigating authorities have certain specific obligations towards each exporter or producer in a sunset review. However, these provisions of Article 6 are silent on whether the authorities must make a separate likelihood determination for each exporter or producer.

 

A.3.53.2 US — Corrosion-Resistant Steel Sunset Review, para. 155
(WT/DS244/AB/R)

 

We have already concluded that investigating authorities are not required to calculate or rely on dumping margins in making a likelihood determination in a sunset review under Article 11.3. This means that the requirement in Article 6.10 that dumping margins, “as a rule”, be calculated “for each known exporter or producer concerned” is not, in principle, relevant to sunset reviews. Therefore, the reference in Article 11.4 to “[t]he provisions of Article 6 regarding evidence and procedure” does not import into Article 11.3 an obligation for investigating authorities to calculate dumping margins (on a company-specific basis or otherwise) in a sunset review. Nor does Article 11.4 import into Article 11.3 an obligation for investigating authorities to make their likelihood determination on a company-specific basis. We therefore agree with the Panel that “[t]he provisions of Article 6.10 concerning the calculation of individual margins of dumping in investigations do not require that the determination of likelihood of continuation or recurrence of dumping under Article 11.3 be made on a company-specific basis.”

 

A.3.53.3 US — Oil Country Tubular Goods Sunset Reviews (Article 21.5 — Argentina), para. 167
(WT/DS268/AB/RW)

 

… Article 11.4 states that the provisions of Article 6 of the Anti-Dumping Agreement regarding evidence and procedure are applicable to sunset reviews. Article 6 contains several provisions relating to the collection of evidence, including several time periods. However, like Articles 11.3 and 11.4, Article 6 does not specifically refer to the collection of evidence for purposes of implementing DSB recommendations and rulings.

 
A.3.53A Article 12.1 — Interested parties known to the investigating authorities     back to top

A.3.53A.1 Mexico — Anti-Dumping Measures on Rice, para. 247
(WT/DS295/AB/R)

 

The Panel found that the term “interested parties known to the investigating authorities” in Article 12.1 covers not only the exporters known to the investigating authority, but also the exporters of which “it can reasonably obtain knowledge”. In our view, the extensive interpretation given by the Panel to this term is incorrect. The text of Article 12.1 is not ambiguous: the investigating authority is under the obligation to notify the initiation of the investigation to the exporters known to it at the time it is satisfied that there is sufficient evidence to justify the initiation of the investigation. Nothing in the text of Article 12.1 suggests that the notification requirement applies to importers other than those of which the investigating authority had actual knowledge at that time.

 
A.3.53B Article 13 — Anti-Dumping Agreement     back to top

A.3.53B.1 US — Zeroing (Japan) (Article 21.5 — Japan), para. 175
(WT/DS322/AB/RW)

 

We note that the obligation in Article 13 is general in nature, requiring the maintenance of tribunals or procedures for the prompt review of administrative antidumping actions. Article 13 does not speak directly to the issue raised in the present appeal, as it contains no mention that judicial review procedures may excuse non-compliance with the DSB’s recommendations and rulings by the end of the reasonable period of time. The United States argues on appeal that “[a] Member that maintains a system that provides for judicial review and judicial remedies for the review of administrative actions should not be subject to findings that it failed to comply based on a delay that is a consequence of judicial review.” As we understand it, the consistency with Article 13 of the United States’ judicial review procedures of anti-dumping actions is not being challenged in these Article 21.5 proceedings. What is being challenged is the United States’ failure to rectify, by the end of the reasonable period of time, the importer-specific assessment rates determined in the periodic reviews with the use of zeroing. The fact that WTO Members are required to maintain independent review procedures for administrative antidumping actions does not exonerate them from the requirement to comply with the DSB’s recommendations and rulings within the reasonable period of time. We see no conflict between the obligation to maintain independent review procedures under Article 13 and the obligation to comply with the DSB’s recommendations and rulings. Accordingly, we do not consider that Article 13 provides support for the proposition that a WTO Member is excused from complying with the DSB’s recommendations and rulings by the end of the reasonable period of time, where a periodic review has been challenged in that Member’s domestic courts and this has resulted in the collection of duties being delayed.

 

A.3.53B.2 US — Zeroing (Japan) (Article 21.5 — Japan), footnote 452 to para. 175
(WT/DS322/AB/RW)

 

There was a debate between the participants at the oral hearing about whether the United States’ executive branch can take actions in connection with a periodic review that is the object of domestic litigation during the pendency of those domestic judicial proceedings. The United States indicated that the USDOC loses jurisdiction over a periodic review while it is under review by the United States courts. Japan asserted that the USDOC can request that the court return (or “remand”) the case back to it. We note that whatever restrictions there are on the United States’ executive branch taking actions during the pendency of domestic judicial proceedings would derive solely from United States law and not from the text of Article 13 of the Anti-Dumping Agreement. Therefore, they would not provide a basis for delaying compliance with the DSB’s recommendations and rulings beyond the end of the reasonable period of time.

 
A.3.54 Article 17 — Dispute settlement.
See also Special or Additional Rules and Procedures for Dispute Settlement (S.5)     back to top

A.3.54.1 US — 1916 Act, para. 62
(WT/DS136/AB/R, WT/DS162/AB/R)

 

Turning to the issue of the legal basis for claims brought under the Anti-Dumping Agreement, we note that Article 17 of the Anti-Dumping Agreement addresses dispute settlement under that Agreement. Just as Articles XXII and XXIII of the GATT 1994 create a legal basis for claims in disputes relating to provisions of the GATT 1994, so also Article 17 establishes the basis for dispute settlement claims relating to provisions of the Anti-Dumping Agreement. In the same way that Article XXIII of the GATT 1994 allows a WTO Member to challenge legislation as such, Article 17 of the Anti-Dumping Agreement is properly to be regarded as allowing a challenge to legislation as such, unless this possibility is excluded. No such express exclusion is found in Article 17 or elsewhere in the Anti-Dumping Agreement.

 
A.3.55 Article 17.3 — Consultations.
See also Consultations (C.7); Legislation as such vs. Specific Application (L.1); Terms of Reference of Panels, Specific measure at issue (T.6.3)     back to top

A.3.55.1 Guatemala — Cement I, para. 64
(WT/DS60/AB/R)

 

… Article 17.3 of the Anti-Dumping Agreement is not listed in Appendix 2 of the DSU as a special or additional rule and procedure. It is not listed precisely because it provides the legal basis for consultations to be requested by a complaining Member under the Anti-Dumping Agreement. Indeed, it is the equivalent provision in the Anti-Dumping Agreement to Articles XXII and XXIII of the GATT 1994, which serve as the basis for consultations and dispute settlement under the GATT 1994, under most of the other agreements in Annex 1A of the Marrakesh Agreement Establishing the World Trade Organization (the “WTO Agreement”), and under the Agreement on Trade-Related Aspects of Intellectual Property Rights (the “TRIPS Agreement”).

 

A.3.55.2 US — 1916 Act, para. 68
(WT/DS136/AB/R, WT/DS162/AB/R)

 

Article 17.3 does not explicitly address challenges to legislation as such. As we have seen above, Articles XXII and XXIII allow challenges to be brought under the GATT 1994 against legislation as such. Since Article 17.3 is the “equivalent provision” to Articles XXII and XXIII of the GATT 1994, Article 17.3 provides further support for our view that challenges may be brought under the Anti-Dumping Agreement against legislation as such, unless such challenges are otherwise excluded.

 

A.3.55.3 US — Corrosion-Resistant Steel Sunset Review, para. 84
(WT/DS244/AB/R)

 

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 pursuant 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.

 

A.3.55.4 US — Corrosion-Resistant Steel Sunset Review, para. 86
(WT/DS244/AB/R)

 

The provisions of the Anti-Dumping Agreement setting forth a legal basis for matters to be referred to consultations and thus to dispute settlement, are also cast broadly. Article 17.3 establishes the principle that when a complaining Member “considers” that its benefits are being nullified or impaired “by another Member or Members”, it may request consultations. This language underlines that a measure attributable to a Member may be submitted to dispute settlement provided only that another Member has taken the view, in good faith, that the measure nullifies or impairs benefits accruing to it under the Anti-Dumping Agreement. There is no threshold requirement, in Article 17.3, that the measure in question be of a certain type.

 
A.3.56 Article 17.4 — “matter referred to the DSB”.
See also Legislation as such vs. Specific Application (L.1); Terms of Reference of Panels (T.6)     back to top

A.3.56.1 Guatemala — Cement I, para. 72
(WT/DS60/AB/R)

 

… Thus, “the matter referred to the DSB” for the purposes of Article 7 of the DSU and Article 17.4 of the Anti-Dumping Agreement must be the “matter” identified in the request for the establishment of a panel under Article 6.2 of the DSU.

 

A.3.56.2 Guatemala — Cement I, para. 79
(WT/DS60/AB/R)

 

Furthermore, Article 17.4 of the Anti-Dumping Agreement specifies the types of “measure” which may be referred as part of a “matter” to the DSB. Three types of anti-dumping measure are specified in Article 17.4: definitive anti-dumping duties, the acceptance of price undertakings, and provisional measures. According to Article 17.4, a “matter” may be referred to the DSB only if one of the relevant three anti-dumping measures is in place. This provision, when read together with Article 6.2 of the DSU, requires a panel request in a dispute brought under the Anti-Dumping Agreement to identify, as the specific measure at issue, either a definitive anti-dumping duty, the acceptance of a price undertaking, or a provisional measure. This requirement to identify a specific anti-dumping measure at issue in a panel request in no way limits the nature of the claims that may be brought concerning alleged nullification or impairment of benefits or the impeding of the achievement of any objective in a dispute under the Anti-Dumping Agreement. As we have observed earlier, there is a difference between the specific measures at issue — in the case of the Anti-Dumping Agreement, one of the three types of anti-dumping measure described in Article 17.4 — and the claims or the legal basis of the complaint referred to the DSB relating to those specific measures. In coming to this conclusion, we note that the language of Article 17.4 of the Anti-Dumping Agreement is unique to that Agreement.

 

A.3.56.3 Guatemala — Cement I, para. 80
(WT/DS60/AB/R)

 

For all of these reasons, we conclude that the Panel erred in finding that Mexico did not need to identify “specific measures at issue” in this dispute. We find that in disputes under the Anti-Dumping Agreement relating to the initiation and conduct of anti-dumping investigations, a definitive anti-dumping duty, the acceptance of a price undertaking or a provisional measure must be identified as part of the matter referred to the DSB pursuant to the provisions of Article 17.4 of the Anti-Dumping Agreement and Article 6.2 of the DSU.

 

A.3.56.4 US — 1916 Act, para. 72
(WT/DS136/AB/R, WT/DS162/AB/R)

 

Nothing in our Report in Guatemala — Cement suggests that Article 17.4 precludes review of anti-dumping legislation as such. Rather, in that case, we simply found that, for Mexico to challenge Guatemala’s initiation and conduct of the anti-dumping investigation, Mexico was required to identify one of the three antidumping measures listed in Article 17.4 in its request for establishment of a panel. Since it did not do so, the panel in that case did not have jurisdiction.

 

A.3.56.5 US — 1916 Act, para. 73
(WT/DS136/AB/R, WT/DS162/AB/R)

 

Important considerations underlie the restriction contained in Article 17.4. In the context of dispute settlement proceedings regarding an anti-dumping investigation, there is tension between, on the one hand, a complaining Member’s right to seek redress when illegal action affects its economic operators and, on the other hand, the risk that a responding Member may be harassed or its resources squandered if dispute settlement proceedings could be initiated against it in respect of each step, however small, taken in the course of an anti-dumping investigation, even before any concrete measure had been adopted. In our view, by limiting the availability of dispute settlement proceedings related to an anti-dumping investigation to cases in which a Member’s request for establishment of a panel identifies a definitive antidumping duty, a price undertaking or a provisional measure, Article 17.4 strikes a balance between these competing considerations.

 

A.3.56.6 US — 1916 Act, para. 74
(WT/DS136/AB/R, WT/DS162/AB/R)

 

Therefore, Article 17.4 sets out certain conditions that must exist before a Member can challenge action taken by a national investigating authority in the context of an anti-dumping investigation. However, Article 17.4 does not address or affect a Member’s right to bring a claim of inconsistency with the Anti-Dumping Agreement against anti-dumping legislation as such.

 

A.3.56.7 US — 1916 Act, para. 75
(WT/DS136/AB/R, WT/DS162/AB/R)

 

Moreover, as we have seen above, the GATT and WTO case law firmly establishes that dispute settlement proceedings may be brought based on the alleged inconsistency of a Member’s legislation as such with that Member’s obligations. We find nothing, and the United States has identified nothing, inherent in the nature of anti-dumping legislation that would rationally distinguish such legislation from other types of legislation for purposes of dispute settlement, or that would remove anti-dumping legislation from the ambit of the generally accepted practice that a panel may examine legislation as such.

 

A.3.56.8 US — Corrosion-Resistant Steel Sunset Review, para. 83
(WT/DS244/AB/R)

 

… 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 context of the initiation and conduct of anti-dumping investigations unless one of the three types of measure listed in Article 17.4 is identified in the request for establishment of a panel. These measures are a definitive anti-dumping duty, the acceptance of a price undertaking, and a provisional 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.

 

A.3.56.9 US — Continued Zeroing, paras. 207, 210
(WT/DS350/AB/R)

 

… the European Communities listed among the 52 specific proceedings three preliminary results in sunset reviews and one preliminary result in a periodic review. These reviews were conducted by the USDOC, subsequent to the imposition of duties pursuant to the original anti-dumping investigations, to assess the duty liabilities and cash deposit rates (in the case of periodic review), and to determine whether a duty should be revoked or continued (in the case of sunset reviews). In contrast, a provisional measure, within the meaning of Article 7 of the Anti- Dumping Agreement, is an interim measure taken by an investigating authority in the context of an original investigation to prevent further injury to the domestic industry, pending the final outcome of the original investigation. Therefore, we fail to see the Panel’s rationale in excluding these measures from its terms of reference on the grounds that the European Communities did not bring any claims under Article 7.1 concerning the conditions for imposing provisional measures. As a result, the Panel’s finding that the four preliminary determinations were outside its terms of reference, which was made on the basis of the European Communities’ failure to bring claims under Article 7.1, cannot stand.

 

 

… we consider the European Communities’ challenge in relation to these two preliminary results to be premature. Specifically, given that these preliminary results could be modified by the final results, we fail to see how the European Communities could establish that final anti-dumping duty were assessed in excess of the margin of dumping or that the USDOC would have relied on the margin calculated with zeroing in deciding to continue the duty.

 

A.3.56.10 US — Zeroing (EC) (Article 21.5 — EC), paras. 374-375
(WT/DS294/AB/RW, (WT/DS294/AB/RW/Corr.1)

 

In US — Continued Zeroing, the Appellate Body found that the European Communities’ challenge of a preliminary determination of likelihood of dumping in a sunset review was premature, considering that such preliminary results could be modified by the final results. The Appellate Body reasoned that, due to the preliminary nature of the USDOC’s determination, it failed to see how the European Communities could establish that “the USDOC would have relied on the margin calculated with zeroing in deciding to continue the duty”.

 

In our view, the evidence before the Panel in these compliance proceedings regarding the sunset review determination in Case 3 does not warrant a conclusion different from the one reached by the Appellate Body in US — Continued Zeroing. In view of the preliminary nature of the determination by the USDOC in Case 3, we consider that the European Communities’ challenge of the USDOC’s preliminary determination was premature. Therefore, we find that the Panel did not err in finding, in paragraph 8.140 of the Panel Report, that the European Communities has not demonstrated that the United States failed to comply with the recommendations and rulings of the DSB in respect of the sunset review in Case 3.

 
A.3.57 Article 17.5 — Facts made available to the investigating authority.
See also Request for the Establishment of a Panel (R.2)     back to top

A.3.57.1 Guatemala — Cement I, para. 75
(WT/DS60/AB/R)

 

… In our view, there is no inconsistency between Article 17.5 of the Anti-Dumping Agreement and the provisions of Article 6.2 of the DSU. On the contrary, they are complementary and should be applied together.

 

A.3.57.2 Thailand — H-Beams, para. 114
(WT/DS122/AB/R)

 

Articles 17.5 and 17.6 clarify the powers of review of a panel established under the Anti-Dumping Agreement. These provisions place limiting obligations on a panel, with respect to the review of the establishment and evaluation of facts by the investigating authority. Unlike Article 3.1, these provisions do not place obligations on WTO Members. Further, while the obligations in Article 3.1 apply to all injury determinations undertaken by Members, those in Articles 17.5 and 17.6 apply only when an injury determination is examined by a WTO panel. The obligations in Articles 17.5 and 17.6 are distinct from those in Article 3.1.

 

A.3.57.3 Thailand — H-Beams, para. 115
(WT/DS122/AB/R)

 

Article 17.5 specifies that a panel’s examination must be based upon the “facts made available” to the domestic authorities. Anti-dumping investigations frequently involve both confidential and non-confidential information. The wording of Article 17.5 does not specifically exclude from panel examination facts made available to domestic authorities, but not disclosed or discernible to interested parties by the time of the final determination. Based on the wording of Article 17.5, we can conclude that a panel must examine the facts before it, whether in confidential documents or non-confidential documents.

 

A.3.57.4 Thailand — H-Beams, para. 118
(WT/DS122/AB/R)

 

Articles 17.5 and 17.6(i) require a panel to examine the facts made available to the investigating authority of the importing Member. These provisions do not prevent a panel from examining facts that were not disclosed to, or discernible by, the interested parties at the time of the final determination.

 
A.3.58 Article 17.6 — Standard of Review under the Anti-Dumping Agreement.
See also Standard of Review, Article 11 of the DSU (S.7.2—8)     back to top

A.3.58.1 US — Lead and Bismuth II, para. 50
(WT/DS138/AB/R)

 

… [the Decision on Review of Article 17.6 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (the “Decision”)] provides for review of the standard of review in Article 17.6 of the Anti-Dumping Agreement to determine if it is “capable of general application” to other covered agreements, including the SCM Agreement. By implication, this Decision supports our conclusion that the Article 17.6 standard applies only to disputes arising under the Anti-Dumping Agreement, and not to disputes arising under other covered agreements, such as the SCM Agreement. To date, the DSB has not conducted the review contemplated in this Decision.

 

A.3.58.2 Thailand — H-Beams, para. 114
(WT/DS122/AB/R)

 

Articles 17.5 and 17.6 clarify the powers of review of a panel established under the Anti-Dumping Agreement. These provisions place limiting obligations on a panel, with respect to the review of the establishment and evaluation of facts by the investigating authority. Unlike Article 3.1, these provisions do not place obligations on WTO Members. Further, while the obligations in Article 3.1 apply to all injury determinations undertaken by Members, those in Articles 17.5 and 17.6 apply only when an injury determination is examined by a WTO panel. The obligations in Articles 17.5 and 17.6 are distinct from those in Article 3.1.

 

A.3.58.3 US — Hot-Rolled Steel, para. 54
(WT/DS184/AB/R)

 

… Article 17.6 is divided into two separate sub-paragraphs, each applying to different aspects of the panel’s examination of the matter. The first sub-paragraph covers the panel’s assessment of the facts of the matter”, whereas the second covers its “interpret[ation of] the relevant provisions” (emphasis added). The structure of Article 17.6, therefore, involves a clear distinction between a panel’s assessment of the facts and its legal interpretation of the Anti-Dumping Agreement.

 

A.3.58.4 Mexico — Corn Syrup (Article 21.5 — US), para. 130
(WT/DS132/AB/RW)

 

… The requirements of the standard of review provided for in Article 17.6(i) and 17.6(ii) are cumulative. In other words, a panel must find a determination made by the investigating authorities to be consistent with relevant provisions of the Anti-Dumping Agreement if it finds that those investigating authorities have properly established the facts and evaluated those facts in an unbiased and objective manner, and that the determination rests upon a “permissible” interpretation of the relevant provisions.

 

A.3.58.5 EC — Bed Linen (Article 21.5 — India), para. 108
(WT/DS141/AB/RW)

 

… It is useful also to recall the specific standard of review under the Anti-Dumping Agreement that the Panel was required to follow in this dispute. This standard of review is set out in Article 17.6 of the Anti-Dumping Agreement. As to the facts, under Article 17.6(i), a panel “shall” determine whether the establishment of the facts by the investigating authorities was “proper” and whether the evaluation of those facts was “unbiased and objective”. If the establishment of the facts was proper and the evaluation was unbiased and objective, then a panel “shall not” overturn that evaluation, even though it might have reached a different conclusion. As to the law, under Article 17.6(ii), first sentence, a panel “shall interpret the relevant provisions of the Agreement in accordance with customary rules of interpretation of public international law”. Under Article 17.6(ii), second sentence, where a panel finds from such an interpretation that a relevant provision of the Anti-Dumping Agreement “admits of more than one permissible interpretation”, the panel “shall find the [investigating] authorities’ measure to be in conformity with the Agreement if it rests upon one of those permissible interpretations”.

 

A.3.58.6 US — Softwood Lumber VI (Article 21.5 — Canada), paras. 91-92
(WT/DS277/AB/RW ,WT/DS277/AB/RW/Corr.1)

 

As regards the standard of review to be applied when a single injury determination is challenged under both the Anti-Dumping Agreement and the SCM Agreement, Canada’s appeal focuses on the standard of review under Article 11 of the DSU. The United States considers that Canada’s appeal deliberately downplays the significance of Article 17.6 of the Anti-Dumping Agreement, but the United States does not request us to give “separate consideration” to the issues on appeal as a result of that provision.

 

We need not, in this appeal, answer the question of whether there may ever be circumstances in which separate consideration of a single injury determination would be required in the light of the standards of review under the Anti-Dumping Agreement and the SCM Agreement. In our view, this is not such a case, and neither of the participants requests such separate consideration. We also wish to add that whether such separate consideration is called for may depend not only on Article 11 of the DSU and Article 17.6 of the Anti-Dumping Agreement, but also on the substantive provisions of the Anti-Dumping Agreement and SCM Agreement that are at issue in the dispute. This is because, as the Appellate Body has previously observed, and as discussed further below, the proper standard of review to be applied by a panel must also be understood in the light of the specific obligations of the relevant agreements that are at issue in the case.

 
A.3.59 Article 17.6(i) — “assessment of the facts”.
See also Seek Information and Technical Advice (S.4); Standard of Review, Article 11 of the DSU — Objective assessment of the facts (S.7.3)     back to top

A.3.59.1 Thailand — H-Beams, para. 116
(WT/DS122/AB/R)

 

Article 17.6(i) requires a panel, in its assessment of the facts of the matter, to determine whether the authorities’ “establishment of the facts” was “proper”. The ordinary meaning of “establishment” suggests an action to “place beyond dispute; ascertain, demonstrate, prove”; the ordinary meaning of “proper” suggests “accurate” or “correct”. Based on the ordinary meaning of these words, the proper establishment of the facts appears to have no logical link to whether those facts are disclosed to, or discernible by, the parties to an anti-dumping investigation prior to the final determination. Article 17.6(i) requires a panel also to examine whether the evaluation of those facts was “unbiased and objective”. The ordinary meaning of the words “unbiased” and “objective” also appears to have no logical link to whether those facts are disclosed to, or discernible by, the parties to an anti-dumping investigation at the time of the final determination.

 

A.3.59.2 Thailand — H-Beams, para. 118
(WT/DS122/AB/R)

 

Articles 17.5 and 17.6(i) require a panel to examine the facts made available to the investigating authority of the importing Member. These provisions do not prevent a panel from examining facts that were not disclosed to, or discernible by, the interested parties at the time of the final determination.

 

A.3.59.3 Thailand — H-Beams, para. 137
(WT/DS122/AB/R)

 

… Article 17.6(i) requires a panel, in its assessment of the facts, to determine “whether the authorities’ establishment of the facts was proper” and to determine “whether their evaluation of those facts was unbiased and objective”. Article 17.6(i) does not prevent a panel from examining whether a Member has complied with its obligations under Article 3.1. In evaluating whether a Member has complied with this obligation, a panel must examine whether the injury determination was based on positive evidence, and whether the injury determination involved an objective evaluation. Thus, to the extent that the Panel examined the facts in assessing whether Thailand’s injury determination was consistent with Article 3.1, we are of the view that the Panel correctly conducted its examination consistently with the applicable standard of review under Article 17.6(i) of the Anti-Dumping Agreement.

 

A.3.59.4 US — Hot-Rolled Steel, para. 55
(WT/DS184/AB/R)

 

In considering Article 17.6(i) of the Anti-Dumping Agreement, it is important to bear in mind the different roles of panels and investigating authorities. Investigating authorities are charged, under the Anti-Dumping Agreement, with making factual determinations relevant to their overall determination of dumping and injury. Under Article 17.6(i), the task of panels is simply to review the investigating authorities’ “establishment” and “evaluation” of the facts. To that end, Article 17.6(i) requires panels to make an “assessment of the facts”. The language of this phrase reflects closely the obligation imposed on panels under Article 11 of the DSU to make an “objective assessment of the facts”. Thus the text of both provisions requires panels to “assess” the facts and this, in our view, clearly necessitates an active review or examination of the pertinent facts. Article 17.6(i) of the Anti-Dumping Agreement does not expressly state that panels are obliged to make an assessment of the facts which is “objective”. However, it is inconceivable that Article 17.6(i) should require anything other than that panels make an objective “assessment of the facts of the matter”. In this respect, we see no “conflict” between Article 17.6(i) of the Anti-Dumping Agreement and Article 11 of the DSU.

 

A.3.59.5 US — Hot-Rolled Steel, para. 56
(WT/DS184/AB/R)

 

Article 17.6(i) of the Anti-Dumping Agreement also states that the panel is to determine, first, whether the investigating authorities’ “establishment of the facts was proper” and, second, whether the authorities’ “evaluation of those facts was unbiased and objective”. (emphasis added) Although the text of Article 17.6(i) is couched in terms of an obligation on panels — panels “shall” make these determinations — the provision, at the same time, in effect defines when investigating authorities can be considered to have acted inconsistently with the Anti-Dumping Agreement in the course of their “establishment” and “evaluation” of the relevant facts. In other words, Article 17.6(i) sets forth the appropriate standard to be applied by panels in examining the WTO-consistency of the investigating authorities’ establishment and evaluation of the facts under other provisions of the Anti-Dumping Agreement. Thus, panels must assess if the establishment of the facts by the investigating authorities was proper and if the evaluation of those facts by those authorities was unbiased and objective. If these broad standards have not been met, a panel must hold the investigating authorities’ establishment or evaluation of the facts to be inconsistent with the Anti-Dumping Agreement.

 

A.3.59.6 Mexico — Corn Syrup (Article 21.5 — US), para. 84
(WT/DS132/AB/RW)

 

The Anti-Dumping Agreement imposes a specific standard of review on panels. With respect to facts, Articles 17.5 and 17.6(i) of the Anti-Dumping Agreement, together with Article 11 of the DSU, set out the standard to be applied by panels when assessing whether a Member’s investigating authorities have “established” and “evaluated” the facts consistently with that Member’s obligations under the covered agreements. These provisions do not authorize panels to engage in a new and independent fact-finding exercise. Rather, in assessing the measure, panels must consider, in the light of the claims and arguments of the parties, whether, inter alia, the “establishment” of the facts by the investigating authorities was “proper”, in accordance with the obligations imposed on such investigating authorities under the Anti-Dumping Agreement.

 

A.3.59.7 Mexico — Corn Syrup (Article 21.5 — US), para. 90
(WT/DS132/AB/RW)

 

… [the investigating authority] chose to assume the existence and effectiveness of the alleged restraint agreement for purposes of its analysis of the likelihood of increased imports. We further note that none of the parties to this dispute challenged, before the Panel, SECOFI’s decision to make such assumptions. In these circumstances, it was logical for the Panel to examine SECOFI’s conclusions using the same premises. Indeed, we consider that it would have been improper for the Panel to have sought, on its own initiative, to go behind the assumptions made by SECOFI.

 

A.3.59.8 EC — Bed Linen (Article 21.5 — India), para. 167
(WT/DS141/AB/RW)

 

… The mere fact that the Panel did not consider it necessary to seek information does not, by itself, imply that the Panel’s exercise of its discretion was not “due”. We, therefore, reject India’s allegation that the Panel failed to comply with the requirements of Article 17.6 of the Anti-Dumping Agreement by not seeking information from the European Communities pursuant to Article 13 of the DSU.

 

A.3.59.9 EC — Bed Linen (Article 21.5 — India), para. 169
(WT/DS141/AB/RW)

 

… in our view, the discretion that panels enjoy as triers of facts under Article 11 of the DSU is equally relevant to cases governed also by Article 17.6(i) of the Anti-Dumping Agreement. Thus, as under Article 11 of the DSU, we “will not interfere lightly with [a] panel’s exercise of its discretion” under Article 17.6(i) of the Anti-Dumping Agreement.

 

A.3.59.10 EC — Tube or Pipe Fittings, para. 128
(WT/DS219/AB/R)

 

… In making such a claim under Article 17.6(i), it is not sufficient for Brazil simply to disagree with the Panel’s weighing of the evidence, without substantiating its claim of error by the Panel.

 
A.3.60 Article 17.6(ii) — “permissible interpretations”.
See also Interpretation, General rules of treaty interpretation — Article 31 of the Vienna Convention (I.3.1); Standard of Review, Article 11 of the DSU — Objective assessment of the facts (S.7.3)     back to top

A.3.60.1 EC — Bed Linen, para. 65
(WT/DS141/AB/R)

 

It appears clear to us from the emphatic and unqualified nature of this finding of inconsistency that the Panel did not view the interpretation given by the European Communities of Article 2.4.2 of the Anti-Dumping Agreement as a “permissible interpretation” within the meaning of Article 17.6(ii) of the Anti-Dumping Agreement. Thus, the Panel was not faced with a choice among multiple “permissible” interpretations which would have required it, under Article 17.6(ii), to give deference to the interpretation relied upon by the European Communities. Rather, the Panel was faced with a situation in which the interpretation relied upon by the European Communities was, to borrow a word from the European Communities, “impermissible”. We do not share the view of the European Communities that the Panel failed to apply the standard of review set out in Article 17.6(ii) of the Anti-Dumping Agreement.

 

A.3.60.2 US — Hot-Rolled Steel, paras. 57, 59-60
(WT/DS184/AB/R)

 

… The first sentence of Article 17.6(ii), echoing closely Article 3.2 of the DSU, states that panels “shall” interpret the provisions of the Anti-Dumping Agreement “in accordance with customary rules of interpretation of public international law”. Such customary rules are embodied in Articles 31 and 32 of the Vienna Convention on the Law of Treaties (“Vienna Convention”). Clearly, this aspect of Article 17.6(ii) involves no “conflict” with the DSU but, rather, confirms that the usual rules of treaty interpretation under the DSU also apply to the Anti-Dumping Agreement.

 

 

The second sentence of Article 17.6(ii) presupposes that application of the rules of treaty interpretation in Articles 31 and 32 of the Vienna Convention could give rise to, at least, two interpretations of some provisions of the Anti-Dumping Agreement, which, under that Convention, would both be “permissible interpretations”. In that event, a measure is deemed to be in conformity with the Anti-Dumping Agreement “if it rests upon one of those permissible interpretations”.

 

It follows that, under Article 17.6(ii) of the Anti-Dumping Agreement, panels are obliged to determine whether a measure rests upon an interpretation of the relevant provisions of the Anti-Dumping Agreement which is permissible under the rules of treaty interpretation in Articles 31 and 32 of the Vienna Convention. In other words, a permissible interpretation is one which is found to be appropriate after application of the pertinent rules of the Vienna Convention. We observe that the rules of treaty interpretation in Articles 31 and 32 of the Vienna Convention apply to any treaty, in any field of public international law, and not just to the WTO agreements. These rules of treaty interpretation impose certain common disciplines upon treaty interpreters, irrespective of the content of the treaty provision being examined and irrespective of the field of international law concerned.

 

A.3.60.3 US — Hot-Rolled Steel, para. 62
(WT/DS184/AB/R)

 

… although the second sentence of Article 17.6(ii) of the Anti-Dumping Agreement imposes obligations on panels which are not found in the DSU, we see Article 17.6(ii) as supplementing, rather than replacing, the DSU, and Article 11 in particular. Article 11 requires panels to make an “objective assessment of the matter” as a whole. Thus, under the DSU, in examining claims, panels must make an “objective assessment” of the legal provisions at issue, their “applicability” to the dispute, and the “conformity” of the measures at issue with the covered agreements. Nothing in Article 17.6(ii) of the Anti-Dumping Agreement suggests that panels examining claims under that Agreement should not conduct an “objective assessment” of the legal provisions of the Agreement, their applicability to the dispute, and the conformity of the measures at issue with the Agreement. Article 17.6(ii) simply adds that a panel shall find that a measure is in conformity with the Anti-Dumping Agreement if it rests upon one permissible interpretation of that Agreement.

 

A.3.60.4 EC — Bed Linen (Article 21.5 — India), para. 118
(WT/DS141/AB/RW)

 

… Still, whatever methodology investigating authorities choose for calculating the volume of “dumped imports”, that calculation and, ultimately, the determination of injury under Article 3, clearly must be made on the basis of “positive evidence” and involve an “objective examination”. These requirements are not ambiguous, and they do not “admit of more than one permissible interpretation” within the meaning of the second sentence of Article 17.6(ii). Therefore, as in US — Hot- Rolled Steel, our interpretation of these requirements is based on customary rules of interpretation of public international law, as required by the first sentence of Article 17.6(ii). This leaves no room, in this appeal, for recourse to the second sentence of Article 17.6(ii) in interpreting paragraphs 1 and 2 of Article 3.

 

A.3.60.5 US — Softwood Lumber V, para. 116
(WT/DS264/AB/R)

 

The United States also claims that its interpretation of Article 2.4.2 is “permissible”, inter alia, on the ground that “margins of dumping” within the meaning of Article 2.4.2 can be established for product types. In our view, the Anti-Dumping Agreement, when interpreted in accordance with customary rules of interpretation of public international law, as required by Article 17.6(ii), does not permit establishing margins of dumping for product types when the product as a whole is under investigation. The United States’ interpretation of Article 2.4.2 is, therefore, not a “permissible interpretation” of that provision within the meaning of Article 17.6(ii). Hence, we see no error on the part of the Panel with respect to the Panel’s obligations under Article 17.6(ii) of the Anti-Dumping Agreement.

 

A.3.60.6 US — Softwood Lumber V (Article 21.5 — Canada), para. 123
(WT/DS264/AB/RW)

 

We have found that Article 2.4.2 does not admit an interpretation that would allow the use of zeroing under the transaction-to-transaction comparison methodology. Therefore, the contrary view is not a permissible interpretation of Article 2.4.2 within the meaning of Article 17.6(ii) of the Anti-Dumping Agreement.

 

A.3.60.7 US — Zeroing (Japan), para. 189
(WT/DS322/AB/R)

 

In our analysis, we have been mindful of the standard of review provided in Article 17.6(ii). However, we consider that there is no room for recourse to the second sentence of Article 17.6(ii) in this appeal. This is because, in our view, Articles 2.4, 2.4.2, 9.3, 9.5, and 11.3 of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the GATT 1994, when interpreted in accordance with customary rules of interpretation of public international law, as required by the first sentence of Article 17.6(ii), do not admit of another interpretation of these provisions as far as the issue of zeroing before us is concerned.

 

A.3.60.8 US — Stainless Steel (Mexico), para. 76
(WT/DS344/AB/R)

 

… the standard of review applicable to disputes under the Anti-Dumping Agreement is set out in both Article 11 of the DSU and Article 17.6 of the Anti-Dumping Agreement. … In our analysis, we bear in mind that there could be more than one permissible interpretation of a provision of the Anti-Dumping Agreement.

 

A.3.60.9 US — Continued Zeroing, para. 268
(WT/DS350/AB/R)

 

The principles of interpretation that are set out in Articles 31 and 32 are to be followed in a holistic fashion. The interpretative exercise is engaged so as to yield an interpretation that is harmonious and coherent and fits comfortably in the treaty as a whole so as to render the treaty provision legally effective. A word or term may have more than one meaning or shade of meaning, but the identification of such meanings in isolation only commences the process of interpretation, it does not conclude it. … a treaty interpreter is required to have recourse to context and object and purpose to elucidate the relevant meaning of the word or term. This logical progression provides a framework for proper interpretative analysis. At the same time, it should be kept in mind that treaty interpretation is an integrated operation, where interpretative rules or principles must be understood and applied as connected and mutually reinforcing components of a holistic exercise.

 

A.3.60.10 US — Continued Zeroing, paras. 271-273
(WT/DS350/AB/R)

 

The second sentence of Article 17.6(ii) must therefore be read and applied in the light of the first sentence. … Article 17.6(ii) contemplates a sequential analysis. The first step requires a panel to apply the customary rules of interpretation to the treaty to see what is yielded by a conscientious application of such rules including those codified in the Vienna Convention. Only after engaging this exercise will a panel be able to determine whether the second sentence of Article 17.6(ii) applies. The structure and logic of Article 17.6(ii) therefore do not permit a panel to determine first whether an interpretation is permissible under the second sentence and then to seek validation of that permissibility by recourse to the first sentence.

 

… the proper interpretation of the second sentence of Article 17.6(ii)must itself be consistent with the rules and principles set out in the Vienna Convention. This means that it cannot be interpreted in a way that would render it redundant, or that derogates from the customary rules of interpretation of public international law. However, the second sentence allows for the possibility that the application of the rules of the Vienna Convention may give rise to an interpretative range and, if it does, an interpretation falling within that range is permissible and must be given effect by holding the measure to be in conformity with the covered agreement. The function of the second sentence is thus to give effect to the interpretative range rather than to require the interpreter to pursue further the interpretative exercise to the point where only one interpretation within that range may prevail.

 

… the rules and principles of the Vienna Convention cannot contemplate interpretations with mutually contradictory results. Instead, the enterprise of interpretation is intended to ascertain the proper meaning of a provision; one that fits harmoniously with the terms, context, and object and purpose of the treaty. The purpose of such an exercise is therefore to narrow the range of interpretations, not to generate conflicting, competing interpretations. Interpretative tools cannot be applied selectively or in isolation from one another. It would be a subversion of the interpretative disciplines of the Vienna Convention if application of those disciplines yielded contradiction instead of coherence and harmony among, and effect to, all relevant treaty provisions. Moreover, a permissible interpretation for purposes of the second sentence of Article 17.6(ii) is not the result of an inquiry that asks whether a provision of domestic law is “necessarily excluded” by the application of the Vienna Convention. Such an approach subverts the hierarchy between the treaty and municipal law. It is the proper interpretation of a covered agreement that is the enterprise with which Article 17.6(ii) is engaged, not whether the treaty can be interpreted consistently with a particular Member’s municipal law or with municipal laws of Members as they existed at the time of the conclusion of the relevant treaty.

 

A.3.60.11 US — Continued Zeroing, para. 317
(WT/DS350/AB/R)

 

In our analysis, we have been mindful of the provisions of Article 17.6(ii) of the Anti-Dumping Agreement. The analysis offered above, applying the customary rules of interpretation of public international law, does not allow for conflicting interpretations. We have found, by the application of those rules, that zeroing is inconsistent with Article 9.3. A holding that zeroing is also consistent with Article 9.3 would be flatly contradictory. Such contradiction would be repugnant to the customary rules of treaty interpretation referred to in the first sentence of Article 17.6(ii). Consequently, it is not a permissible interpretation within the meaning of Article 17.6(ii), second sentence.

 
A.3.61 Article 18.1 — Specific action against dumping.
See also Anti-Dumping Agreement, Article VI of the GATT 1994 (A.3.65); Anti-Dumping Agreement, the Ad Note to Article VI:2 and 3 of the GATT 1994—Reasonable security (A.3.66A); SCM Agreement, Article 32.1 — Specific action against a subsidy (S.2.36)     back to top

A.3.61.1 US — 1916 Act, para. 122
(WT/DS136/AB/R, WT/DS162/AB/R)

 

In our view, the ordinary meaning of the phrase “specific action against dumping” of exports within the meaning of Article 18.1 is action that is taken in response to situations presenting the constituent elements of “dumping”. “Specific action against dumping” of exports must, at a minimum, encompass action that may be taken only when the constituent elements of “dumping” are present. Since intent is not a constituent element of “dumping”, the intent with which action against dumping is taken is not relevant to the determination of whether such action is “specific action against dumping” of exports within the meaning of Article 18.1 of the Anti-Dumping Agreement.

 

A.3.61.2 US — 1916 Act, para. 123
(WT/DS136/AB/R, WT/DS162/AB/R)

 

Footnote 24 to Article 18.1 of the Anti-Dumping Agreement states:

 

This is not intended to preclude action under other relevant provisions of GATT 1994, as appropriate.

 

We note that footnote 24 refers generally to “action” and not, as does Article 18.1, to “specific action against dumping” of exports. “Action” within the meaning of footnote 24 is to be distinguished from “specific action against dumping” of exports, which is governed by Article 18.1 itself.

 

A.3.61.3 US — 1916 Act, para. 124
(WT/DS136/AB/R, WT/DS162/AB/R)

 

Article 18.1 of the Anti-Dumping Agreement contains a prohibition on the taking of any “specific action against dumping” of exports when such specific action is not “in accordance with the provisions of GATT 1994, as interpreted by this Agreement”. Since the only provisions of the GATT 1994 “interpreted” by the Anti-Dumping Agreement are those provisions of Article VI concerning dumping, Article 18.1 should be read as requiring that any “specific action against dumping” of exports from another Member be in accordance with the relevant provisions of Article VI of the GATT 1994, as interpreted by the Anti-Dumping Agreement.

 

A.3.61.4 US — 1916 Act, para. 125
(WT/DS136/AB/R, WT/DS162/AB/R)

 

We recall that footnote 24 to Article 18.1 refers to “other relevant provisions of GATT 1994” (emphasis added). These terms can only refer to provisions other than the provisions of Article VI concerning dumping. Footnote 24 thus confirms that the “provisions of GATT 1994” referred to in Article 18.1 are in fact the provisions of Article VI of the GATT 1994 concerning dumping.

 

A.3.61.5 US — Offset Act (Byrd Amendment), para. 236
(WT/DS217/AB/R, (WT/DS234/AB/R)

 

Looking to the ordinary meaning of the words used in these provisions, we read them as establishing two conditions precedent that must be met in order for a measure to be governed by them. The first is that a measure must be “specific” to dumping or subsidization. The second is that a measure must be “against” dumping or subsidization. These two conditions operate together and complement each other. If they are not met, the measure will not be governed by Article 18.1 of the Anti- Dumping Agreement or by Article 32.1 of the SCM Agreement. If, however, it is established that a measure meets these two conditions, and thus falls within the scope of the prohibitions in those provisions, it would then be necessary to move to a further step in the analysis and to determine whether the measure has been “taken in accordance with the provisions of GATT 1994”, as interpreted by the Anti-Dumping Agreement or the SCM Agreement. If it is determined that this is not the case, the measure would be inconsistent with Article 18.1 of the Anti-Dumping Agreement or Article 32.1 of the SCM Agreement.

 

A.3.61.6 US — Offset Act (Byrd Amendment), para. 237
(WT/DS217/AB/R, (WT/DS234/AB/R)

 

… The Panel analysed the terms “specific” and “against” in Article 18.1 in the same manner as it did with respect to their use in Article 32.1. We agree with the Panel’s approach.

 

A.3.61.7 US — Offset Act (Byrd Amendment), para. 239
(WT/DS217/AB/R, (WT/DS234/AB/R)

 

… a measure that may be taken only when the constituent elements of dumping or a subsidy are present, is a “specific action” in response to dumping within the meaning of Article 18.1 of the Anti-Dumping Agreement or a “specific action” in response to subsidization within the meaning of Article 32.1 of the SCM Agreement. In other words, the measure must be inextricably linked to, or have a strong correlation with, the constituent elements of dumping or of a subsidy. Such link or correlation may, as in the 1916 Act, be derived from the text of the measure itself.

 

A.3.61.8 US — Offset Act (Byrd Amendment), para. 240
(WT/DS217/AB/R, (WT/DS234/AB/R)

 

… We recall that, in US — 1916 Act, we said the constituent elements of dumping are found in the definition of dumping in Article VI:1 of the GATT 1994, as elaborated in Article 2 of the Anti-Dumping Agreement. As regards the constituent elements of a subsidy, we are of the view that they are set out in the definition of a subsidy found in Article 1 of the SCM Agreement.

 

A.3.61.9 US — Offset Act (Byrd Amendment), para. 244
(WT/DS217/AB/R, (WT/DS234/AB/R)

 

… the “test” established in US — 1916 Act “is met not only when the constituent elements of dumping are ‘explicitly built into’ the action at issue, but also where they are implicit in the express conditions for taking such action”.

 

A.3.61.10 US — Offset Act (Byrd Amendment), para. 253
(WT/DS217/AB/R, (WT/DS234/AB/R)

 

… in Article 18.1 of the Anti-Dumping Agreement and Article 32.1 of the SCM Agreement, there is no requirement that the measure must come into direct contact with the imported product, or entities connected to, or responsible for, the imported good such as the importer, exporter, or foreign producer.

 

A.3.61.11 US — Offset Act (Byrd Amendment), para. 254
(WT/DS217/AB/R, (WT/DS234/AB/R)

 

… to determine whether a measure is “against” dumping or a subsidy, we believe it is necessary to assess whether the design and structure of a measure is such that the measure is “opposed to”, has an adverse bearing on, or, more specifically, has the effect of dissuading the practice of dumping or the practice of subsidization, or creates an incentive to terminate such practices. In our view, the CDSOA has exactly those effects because of its design and structure.

 

A.3.61.12 US — Offset Act (Byrd Amendment), para. 257
(WT/DS217/AB/R, (WT/DS234/AB/R)

 

… in order to determine whether the CDSOA is “against” dumping or subsidization, it was not necessary, nor relevant, for the Panel to examine the conditions of competition under which domestic products and dumped/subsidized imports compete, and to assess the impact of the measure on the competitive relationship between them. An analysis of the term “against”, in our view, is more appropriately centred on the design and structure of the measure; such an analysis does not mandate an economic assessment of the implications of the measure on the conditions of competition under which domestic product and dumped/subsidized imports compete.

 

A.3.61.13 US — Offset Act (Byrd Amendment), para. 258
(WT/DS217/AB/R, (WT/DS234/AB/R)

 

… a measure cannot be against dumping or a subsidy simply because it facilitates or induces the exercise of rights that are WTO-consistent.

 

A.3.61.14 US — Offset Act (Byrd Amendment), para. 262
(WT/DS217/AB/R, (WT/DS234/AB/R)

 

… Footnotes 24 and 56 are clarifications of the main provisions, added to avoid ambiguity; they confirm what is implicit in Article 18.1 of the Anti-Dumping Agreement and in Article 32.1 of the SCM Agreement, namely, that an action that is not “specific” within the meaning of Article 18.1 of the Anti-Dumping Agreement and of Article 32.1 of the SCM Agreement, but is nevertheless related to dumping or subsidization, is not prohibited by Article 18.1 of the Anti-Dumping Agreement or Article 32.1 of the SCM Agreement.

 

A.3.61.15 US — Shrimp (Thailand) / US — Customs Bond Directive, paras. 230-231
(WT/DS343/AB/R, WT/DS345/AB/R)

 

… we reaffirm the Appellate Body findings in previous reports that the Anti-Dumping Agreement does not allow a fourth category of specific action against dumping. We do not, however, consider that a security taken for guaranteeing the payment of a lawfully established duty liability would necessarily constitute a “specific action against dumping”; rather, whether a particular security constitutes a “specific action against dumping” should be evaluated in the light of the nature and characteristics of the security and the particular circumstances in which it is applied. We wish to emphasize that, in any event, an impermissible specific action against dumping cannot be taken in the guise of a security.

 

Generally speaking, a security is accessory or ancillary to the principal obligation that it guarantees. A security that is taken to guarantee the obligation to pay antidumping or countervailing duties is intrinsically linked to that obligation. Thus, taking security for the full and final payment of duties should be viewed as a component of the imposition and collection of anti-dumping or countervailing duties. Therefore, a reasonable security taken in accordance with the Ad Note for potential additional anti-dumping duty liability does not necessarily, in and of itself, constitute a fourth autonomous category of response to dumping.

 
A.3.62 Article 18.4 — Obligation to ensure WTO-conformity of domestic anti-dumping laws, regulations and procedures.
See also WTO Agreement, Article XVI:4 — WTO-conformity of laws, regulations and administrative procedures (W.4.3)     back to top

A.3.62.1 US — 1916 Act, para. 78
(WT/DS136/AB/R, WT/DS162/AB/R)

 

Article 18.4 imposes an affirmative obligation on each Member to bring its legislation into conformity with the provisions of the Anti-Dumping Agreement not later than the date of entry into force of the WTO Agreement for that Member. Nothing in Article 18.4 or elsewhere in the Anti-Dumping Agreement excludes the obligation set out in Article 18.4 from the scope of matters that may be submitted to dispute settlement.

 

A.3.62.2 US — Corrosion-Resistant Steel Sunset Review, para. 84
(WT/DS244/AB/R)

 

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 pursuant 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.

 

A.3.62.3 US — Corrosion-Resistant Steel Sunset Review, para. 87 and footnote 87
(WT/DS244/AB/R)

 

We also believe that the provisions of Article 18.4 of the Anti-Dumping Agreement are relevant to the question of the type of measures that may, as such, be submitted to dispute settlement under that Agreement. Article 18.4 contains an explicit obligation for Members to “take all necessary steps, of a general or particular character” to ensure that their “laws, regulations and administrative procedures” are in conformity with the obligations set forth in the Anti-Dumping Agreement. Taken as a whole, the phrase “laws, regulations and administrative procedures” seems to us to encompass the entire body of generally applicable rules, norms and standards adopted by Members in connection with the conduct of anti-dumping proceedings.87 If some of these types of measure could not, as such, be subject to dispute settlement under the Anti-Dumping Agreement, it would frustrate the obligation of “conformity” set forth in Article 18.4.

 

A.3.62.4 US — Corrosion-Resistant Steel Sunset Review, para. 98
(WT/DS244/AB/R)

 

… the Panel did not consider the normative nature of the provisions of the Sunset Policy Bulletin, nor compare the type of norms that USDOC is required to publish in formal regulations with the type of norms it may set out in policy statements. These inquiries would have assisted the Panel in determining whether the Sunset Policy Bulletin is, in fact, an “administrative procedure” within the meaning of Article 18.4 of the Anti-Dumping Agreement.

 

A.3.62.5 US — Zeroing (EC), para. 192
(WT/DS294/AB/R, WT/DS294/AB/R/Corr.1)

 

Article 18.4 of the Anti-Dumping Agreement is also relevant to the question of the type of measures that can, as such, be submitted to dispute settlement under the Anti-Dumping Agreement. That provision contains an explicit obligation for Members to ensure that their “laws, regulations and administrative procedures” are in conformity with the obligations set forth in that Agreement. The phrase “laws, regulations and administrative procedures” encompasses, in our view, “the entire body of generally applicable rules, norms and standards adopted by Members in connection with the conduct of anti-dumping proceedings”. As the Appellate Body has previously explained, the determination of the scope of “laws, regulations and administrative procedures” must be based on the “content and substance” of the alleged measure, and “not merely on its form.” Accordingly, the mere fact that a “rule or norm” is not expressed in the form of a written instrument, is not, in our view, determinative of the issue of whether it can be challenged, as such, in dispute settlement proceedings. Rather, as the Appellate Body has stated, “there is no basis, either in the practice of the GATT and the WTO generally or in the provisions of the Anti-Dumping Agreement, for finding that only certain types of measure[s] can, as such, be challenged in dispute settlement proceedings under the Anti-Dumping Agreement”.

 

Aggregate Investigations. See SCM Agreement, Article 19 (S.2.26-28)

 
A.3.63 Relationship between the Anti-Dumping Agreement and the SCM Agreement     back to top

A.3.63.1 US — Lead and Bismuth II, para. 49
(WT/DS138/AB/R)

 

… [the Declaration on Dispute Settlement Pursuant to the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 or Part V of the Agreement on Subsidies and Countervailing Measures (the “Declaration”)] does not impose an obligation to apply the standard of review contained in Article 17.6 of the Anti-Dumping Agreement to disputes involving countervailing duty measures under Part V of the SCM Agreement. The Declaration is couched in hortatory language; it uses the words “Ministers recognize”. Furthermore, the Declaration merely acknowledges “the need for the consistent resolution of disputes arising from anti-dumping and countervailing duty measures”. It does not specify any specific action to be taken. In particular, it does not prescribe a standard of review to be applied.

 

A.3.63.2 US — Lead and Bismuth II, para. 50
(WT/DS138/AB/R)

 

… [the Decision on Review of Article 17.6 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (the “Decision”)] provides for review of the standard of review in Article 17.6 of the Anti-Dumping Agreement to determine if it is “capable of general application” to other covered agreements, including the SCM Agreement. By implication, this Decision supports our conclusion that the Article 17.6 standard applies only to disputes arising under the Anti-Dumping Agreement, and not to disputes arising under other covered agreements, such as the SCM Agreement. To date, the DSB has not conducted the review contemplated in this Decision.

 

A.3.63.3 US — Corrosion-Resistant Steel Sunset Review, footnote 114 to para. 104
(WT/DS244/AB/R)

 

We note that Article 11.3 is textually identical to Article 21.3 of the SCM Agreement, except that, in Article 21.3, the word “countervailing” is used in place of the word “anti-dumping” and the word “subsidization” is used in place of the word “dumping”. Given the parallel wording of these two articles, we believe that the explanation, in our Report in US — Carbon Steel, of the nature of the sunset review provision in the SCM Agreement also serves, mutatis mutandis, as an apt description of Article 11.3 of the Anti-Dumping Agreement.

 

Relationship between the Anti-Dumping Agreement and the Safeguards Agreement. See Safeguards Agreement, Relationship between the Safeguards Agreement and the Anti-Dumping Agreement (S.1.43)

 
A.3.64 Relationship between the Anti-Dumping Agreement and the GATT 1994     back to top

A.3.64.1 US — 1916 Act, para. 114
(WT/DS136/AB/R, WT/DS162/AB/R)

 

… Article VI of the GATT 1994 and the Anti-Dumping Agreement are part of the same treaty, the WTO Agreement. As its full title indicates, the Anti-Dumping Agreement is an “Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994”. Accordingly, Article VI must be read in conjunction with the provisions of the Anti-Dumping Agreement, including Article 9.

 

A.3.64.2 US — 1916 Act, para. 133
(WT/DS136/AB/R, WT/DS162/AB/R)

 

… We also agree with the Panel that, having regard to the relationship between Article VI and the Anti-Dumping Agreement, “the applicability of Article VI to the 1916 Act also implies the applicability of the Anti-Dumping Agreement” to the 1916 Act.

 

A.3.64.3 US — Zeroing (Japan) (Article 21.5 — Japan), para. 209
(WT/DS322/AB/RW)

 

The United States has not challenged the Panel’s interpretation of Article II and we need not engage in an extensive analysis of this provision. We note that, in India — Additional Import Duties, the Appellate Body examined the relationship between paragraphs 1(b) and 2 of Article II. Although that appeal focused on paragraph 2(a) of Article II, the Appellate Body’s remarks provide general guidance on the relationship between paragraphs 1(b) and 2:

 

The chapeau of Article II:2, therefore, connects Articles II:1(b) and II:2(a) and indicates that the two provisions are inter-related. Article II:2(a), subject to the conditions stated therein, exempts a charge from the coverage of Article II:1(b). The participants agree that, if a charge satisfies the conditions of Article II:2(a), it would not result in a violation of Article II:1(b). Thus, we consider that, in the context of this case involving the application of duties that are claimed to correlate to certain internal taxes, Article II:1(b) and Article II:2(a) are closely related and must be interpreted together. (footnote omitted)

 

The Panel understood Article II:2(b) as providing a “safe harbour” to Article II:1 to the extent that the anti-dumping duties are applied consistently with Article VI of the GATT 1994 and the Anti-Dumping Agreement. Thus, the Panel’s approach is coherent with the Appellate Body’s interpretation of the relationship between Articles II:1(b) and II:2(a) quoted above.

 
A.3.65 Article VI of the GATT 1994 — Anti-dumping duties.
See also Anti-Dumping Agreement, Article 18.1 (A.3.61)     back to top

A.3.65.1 US — 1916 Act, para. 107
(WT/DS136/AB/R, WT/DS162/AB/R)

 

… under Article VI:1 of the GATT 1994 and Article 2 of the Anti-Dumping Agreement, neither the intent of the persons engaging in “dumping” nor the injurious effects that “dumping” may have on a Member’s domestic industry are constituent elements of “dumping”.

 

A.3.65.2 US — 1916 Act, para. 116
(WT/DS136/AB/R, WT/DS162/AB/R)

 

… the verb “may” in Article VI:2 of the GATT 1994 is, in our opinion, properly understood as giving Members a choice between imposing an anti-dumping duty or not, as well as a choice between imposing an anti-dumping duty equal to the dumping margin or imposing a lower duty. We find no support in Article VI:2, read in conjunction with Article 9 of the Anti-Dumping Agreement, for the United States’ argument that the verb “may” indicates that Members, to counteract dumping, are permitted to take measures other than the imposition of anti-dumping duties.

 

A.3.65.3 US — 1916 Act, para. 117
(WT/DS136/AB/R, WT/DS162/AB/R)

 

… it appears to us that the text of Article VI is inconclusive as to whether Article VI regulates all possible measures which Members may take to counteract dumping, or whether it regulates only the imposition of anti-dumping duties.

 

A.3.65.4 US — 1916 Act, para. 121
(WT/DS136/AB/R, WT/DS162/AB/R)

 

We consider that the scope of application of Article VI is clarified, in particular, by Article 18.1 of the Anti-Dumping Agreement.

 

A.3.65.5 US — 1916 Act, para. 126
(WT/DS136/AB/R, WT/DS162/AB/R)

 

We have found that Article 18.1 of the Anti-Dumping Agreement requires that any “specific action against dumping” be in accordance with the provisions of Article VI of the GATT 1994 concerning dumping, as those provisions are interpreted by the Anti-Dumping Agreement. It follows that Article VI is applicable to any “specific action against dumping” of exports, i.e., action that is taken in response to situations presenting the constituent elements of “dumping”.

 

A.3.65.6 US — 1916 Act, para. 130
(WT/DS136/AB/R, WT/DS162/AB/R)

 

… The constituent elements of “dumping” are built into the essential elements of civil and criminal liability under the 1916 Act. The wording of the 1916 Act also makes clear that these actions can be taken only with respect to conduct which presents the constituent elements of “dumping”. It follows that the civil and criminal proceedings and penalties provided for in the 1916 Act are “specific action against dumping”. We find, therefore, that Article VI of the GATT 1994 applies to the 1916 Act.

 

A.3.65.7 US — 1916 Act, para. 137
(WT/DS136/AB/R, WT/DS162/AB/R)

 

… Article VI, and, in particular, Article VI:2, read in conjunction with the Anti-Dumping Agreement, limit the permissible responses to dumping to definitive antidumping duties, provisional measures and price undertakings. Therefore, the 1916 Act is inconsistent with Article VI:2 and the Anti-Dumping Agreement to the extent that it provides for “specific action against dumping” in the form of civil and criminal proceedings and penalties.

 

A.3.65.8 EC — Tube or Pipe Fittings, para. 76
(WT/DS219/AB/R)

 

… We fail to see how Article VI:2, by stating that the purpose of anti-dumping duties is “to offset or prevent dumping”, imposes upon investigating authorities an obligation to select any particular methodology for comparing normal value and export prices under Article 2.4.2 of the Anti-Dumping Agreement when calculating a dumping margin. As we see it, the obligation that flows from the purpose of “offset[ting] or prevent[ing] dumping” is clear from the text of Article VI:2 itself, namely, that an anti-dumping duty shall “not [be] greater in amount than the margin of dumping in respect of [the dumped] product”. This limitation of anti-dumping duties to the margin of dumping is the only requirement imposed on investigating authorities by the first sentence of Article VI:2. The precise rules relating to the determination as to whether there is dumping and, if dumping exists, how the dumping margin is to be calculated, are set out, not in Article VI:2 of the GATT 1994, but rather in Article 2 of the Anti-Dumping Agreement, which is the agreement on the implementation of Article VI of the GATT 1994.

 

A.3.65.9 US — Anti-Dumping Measures on Oil Country Tubular Goods, paras. 111-112
(WT/DS282/AB/R)

 

… Thus, Article VI of the GATT 1994 establishes the fundamental principle that there must be a causal link between dumping and injury to a domestic industry, if an anti-dumping duty is to be levied on a dumped product. It further establishes that the purpose of an anti-dumping duty is to counteract dumping that causes injury. Several provisions of the Anti-Dumping Agreement confirm and reinforce this fundamental principle.

 

A.3.65.10 US — Anti-Dumping Measures on Oil Country Tubular Goods, para. 117
(WT/DS282/AB/R)

 

It is clear from Article VI of the GATT 1994 and the above-mentioned provisions of the Anti-Dumping Agreement, and indeed from the design and structure of that Agreement as a whole, that the Anti-Dumping Agreement deals with counteracting injurious dumping and that an anti-dumping duty can be imposed and maintained only if the dumping (as properly established) causes injury to the domestic industry. Absent injury to the domestic industry, the rationale for either imposing the duty in the first place, or maintaining it at any time after its imposition, does not exist. A causal link between dumping and injury to the domestic industry is thus fundamental to the imposition and maintenance of an anti-dumping duty under the Anti-Dumping Agreement.

 

A.3.65.11 US — Anti-Dumping Measures on Oil Country Tubular Goods, para. 124
(WT/DS282/AB/R)

 

Our conclusion that the establishment of a causal link between likely dumping and likely injury is not required in a sunset review determination does not imply that the causal link between dumping and injury envisaged by Article VI of the GATT 1994 and the Anti-Dumping Agreement is severed in a sunset review. It only means that re-establishing such a link is not required, as a matter of legal obligation, in a sunset review.

 

A.3.65.12 US — Zeroing (EC), para. 126
(WT/DS294/AB/R, WT/DS294/AB/R/Corr.1)

 

… Although, in US — Softwood Lumber V, the Appellate Body dealt with a claim regarding the determination of a margin of dumping in an original investigation when using the weighted-average-to-weighted-average methodology provided for in the first sentence of Article 2.4.2, it stated unambiguously that “the terms ‘dumping’ and ‘margins of dumping’ in Article VI of the GATT 1994 and the Anti- Dumping Agreement apply to the product under investigation as a whole”. This finding was based not only on Article 2.4.2, first sentence, but also on the context found in Article 2.1 of the Anti-Dumping Agreement.

 

A.3.65.13 US — Zeroing (EC), paras. 129-130
(WT/DS294/AB/R, WT/DS294/AB/R/Corr.1)

 

… under Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994, margins of dumping are established for foreign producers or exporters.

 

Thus, pursuant to Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994, investigating authorities are required to ensure that the total amount of anti-dumping duties collected on the entries of a product from a given exporter shall not exceed the margin of dumping established for that exporter. In other words, the margin of dumping established for an exporter or foreign producer operates as a ceiling for the total amount of anti-dumping duties that can be levied on the entries of the subject product (from that exporter) covered by the duty assessment proceeding.

 

A.3.65.14 US — Zeroing (EC), para. 131
(WT/DS294/AB/R, WT/DS294/AB/R/Corr.1)

 

Although Article 9.3 sets out a requirement regarding the amount of the assessed anti-dumping duties, it does not prescribe a specific methodology according to which the duties should be assessed. In particular, a reading of Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994 does not suggest that final anti-dumping duty liability cannot be assessed on a transaction- or importer-specific basis, or that the investigating authorities may not use specific methodologies that reflect the distinct nature and purpose of proceedings governed by these provisions, for purposes of assessing final anti-dumping duty liability, provided that the total amount of anti-dumping duties that are levied does not exceed the exporters’ or foreign producers’ margins of dumping.

 

A.3.65.15 US — Zeroing (EC), paras. 133-134
(WT/DS294/AB/R, WT/DS294/AB/R/Corr.1)

 

… in the administrative reviews at issue, the USDOC assessed the anti-dumping duties according to a methodology in which, for each individual importer, comparisons were carried out between the export price of each individual transaction made by the importer and a contemporaneous average normal value. The results of these multiple comparisons were then aggregated to calculate the anti-dumping duties owed by each individual importer. If, for a given individual transaction, the export price exceeded the contemporaneous average normal value, the USDOC, at the aggregation stage, disregarded the result of this individual comparison. Because results of this type were systematically disregarded, the methodology applied by the USDOC in the administrative reviews at issue resulted in amounts of assessed anti-dumping duties that exceeded the foreign producers’ or exporters’ margins of dumping with which the anti-dumping duties had to be compared under Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994. Accordingly, the zeroing methodology, as applied by the USDOC in the administrative reviews at issue, is inconsistent with Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994.

 

… Article 9.3 of the Anti-Dumping Agreement, and Article VI:2 of the GATT 1994, when interpreted in accordance with customary rules of interpretation of public international law, as required by Article 17.6(ii), do not, in our view, allow the use of the methodology applied by the United States in the administrative reviews at issue. This is so because, as explained above, the methodology applied by the USDOC in the administrative reviews at issue results in amounts of assessed anti-dumping duties that exceed the foreign producers’ or exporters’ margins of dumping. Yet, Article 9.3 clearly stipulates that “the amount of the anti-dumping duty shall not exceed the margin of dumping as established under Article 2”. Similarly, Article VI:2 of the GATT 1994 provides that “[i]n order to offset or prevent dumping, a Member may levy on any dumped product an anti-dumping duty not greater in amount than the margin of dumping in respect of such product.”

 

A.3.65.16 US — Softwood Lumber V (Article 21.5 — Canada), para. 113
(WT/DS264/AB/RW)

 

… [In] its Report in US — Softwood Lumber V, the Appellate Body referred to Article VI:1 and 2 of the GATT 1994, together with Article 2.1 of the Anti-Dumping Agreement, to interpret the term “margins of dumping” in Article 2.4.2. The Appellate Body did not address the meaning of “product” in the other paragraphs of Article VI or in other provisions of the GATT 1994.

 

A.3.65.17 US — Zeroing (Japan), paras. 108, 110
(WT/DS322/AB/R)

 

First, we recall that dumping is defined in Article VI:1 of the GATT 1994 as occurring when a “product” of one country is introduced into the commerce of another country at less than the normal value of the “product”. Consistent with this definition, Article VI:2 provides for the levying of anti-dumping duties in respect of a “dumped product” in order to offset or prevent the injurious effect of dumping.

 

 

Article VI:2 defines “margin of dumping” as the difference between the normal value and the export price and establishes the link between “dumping” and “margin of dumping”. The margin of dumping reflects the magnitude of dumping. It is also one of the factors to be taken into account to determine whether dumping causes or threatens material injury. Article VI:2 lays down that “[i]n order to offset or prevent dumping, a Member may levy on any dumped product an anti-dumping duty not greater in amount than the margin of dumping in respect of such product.” Thus, the margin of dumping also is defined in relation to a “product”.

 

A.3.65.18 US — Zeroing (Japan), para. 139
(WT/DS322/AB/R)

 

… we reverse the Panel’s findings that “simple zeroing” in original investigations is not inconsistent with Article 2.1 of the Anti-Dumping Agreement and Articles VI:1 and VI:2 of the GATT 1994, because these findings are simply based on the Panel’s findings and reasoning relating to Article 2.4.2 of the Anti-Dumping Agreement, which we have reversed.

 

A.3.65.19 US — Zeroing (Japan), para. 140
(WT/DS322/AB/R)

 

… Article 2.1 of the Anti-Dumping Agreement and Article VI:1 of the GATT 1994 are definitional provisions. They set out a definition of “dumping” for the purposes of the Anti-Dumping Agreement and the GATT 1994. The definitions in Article 2.1 and Article VI:1 are no doubt central to the interpretation of other provisions of the Anti-Dumping Agreement, such as the obligations relating to, inter alia, the calculation of margins of dumping, volume of dumped imports, and levy of antidumping duties to counteract injurious dumping. But, Article 2.1 and Article VI:1, read in isolation, do not impose independent obligations.

 

A.3.65.20 US — Stainless Steel (Mexico), paras. 133, 136
(WT/DS344/AB/R)

 

… when applying “simple zeroing” in periodic reviews, the USDOC compares the prices of individual export transactions against monthly weighted average normal values, and disregards the amounts by which the export prices exceed the monthly weighted average normal values, when aggregating the results of the comparisons to calculate the going-forward cash deposit rate for the exporter and the duty assessment rate for the importer concerned. Simple zeroing thus results in the levy of an amount of anti-dumping duty that exceeds an exporter’s margin of dumping, which, as we have explained above, operates as the ceiling for the amount of anti-dumping duty that can be levied in respect of the sales made by an exporter. Therefore, simple zeroing is, as such, inconsistent with Article VI:2 of the GATT 1994 and Article 9.3 of the Anti-Dumping Agreement.

 

 

… we consider that Article VI:2 of the GATT 1994 and Article 9.3 of the Anti-Dumping Agreement, when interpreted in accordance with the customary rules of interpretation of public international law as required by the first sentence of Article 17.6(ii) of the Anti-Dumping Agreement, do not admit of another interpretation as far as the issue of zeroing raised in this appeal is concerned.

 
A.3.66 The Ad Note to Article VI:2 and 3 of the GATT 1994 — Pending final determination of the facts in any case of suspected dumping     back to top

A.3.66.1 US — Shrimp (Thailand) / US — Customs Bond Directive, paras. 221-223 and footnote 266
(WT/DS343/AB/R, WT/DS345/AB/R)

 

We find useful guidance for interpreting the terms of [the] phrase [“pending final determination of the facts in any case of suspected dumping”] in the Ad Note in the immediate context in which they appear. The Ad Note refers to “security for the payment of anti-dumping or countervailing duty”. In our view, this reference to the payment of a duty is key to ascertaining the temporal scope of the Ad Note because it reveals the nature of the obligation whose performance the security seeks to guarantee. The obligation that is intended to be secured under the Ad Note is the “payment of anti-dumping or countervailing duty”. In other words, the Ad Note recognizes the right of WTO Members to take reasonable security against the risk of non-payment of an anti-dumping or countervailing duty that is lawfully established. This risk might exist during the period of an original investigation, and a provisional measure in the form of a security may be taken in accordance with Article 7 of the Anti-Dumping Agreement to protect against this risk. In a retrospective duty assessment system, this risk might also exist after the antidumping duty order has been imposed, arising from the difference between the amount collected at the time of import entry and the final liability assessed in an assessment review. The Ad Note also suggests that the reasonable security envisaged by it fulfils the same function as the securities taken “in many other cases in customs administration”. As the United States points out, in most other cases in customs administration, security is required upon entry of merchandise when there is some uncertainty about the actual amount of liability that may be lawfully owed by the importer. Such a security is intended to provide a protection against the non-payment risk that might arise from the differences between the amount collected at the time of importation and the liability that may be finally determined. Accordingly, we are of the view that the term “final determination” in the Ad Note includes the determination that is made to assess the final liability for payment of anti-dumping duties under Article 9.3.1 in a retrospective duty assessment system. The “facts” are those that are necessary to be determined in order to assess properly the amount of final liability of the duty in accordance with the Anti-Dumping Agreement.

 

In the retrospective duty assessment system followed by the United States, the factual determination of the amounts of anti-dumping duties payable by the importers is not complete until an assessment review has been conducted. A factual determination of the amount of anti-dumping duties payable occurs even if an assessment review does not take place. If no interested party requests an assessment review, the USDOC will instruct United States Customs to assess anti-dumping duties and liquidate the import entries at the cash deposit rate required upon import entry. This cash deposit rate is determined for each exporter or producer individually investigated, and is established on the basis of its transactions over the period covered by the original investigation or the latest assessment review, as the case may be. Thus, even in the event that no assessment review has been requested, the final determination of the facts includes a determination regarding amounts of anti-dumping duties finally payable, as the USDOC has to instruct United States Customs to liquidate the import entries on the basis of the cash deposit rates.

 

We are not persuaded that the phrase “final determination of the facts” refers to the determination of injurious dumping made in an original investigation pursuant to Article 5 of the Anti-Dumping Agreement and that there is only one “final determination of the facts” in the life of an anti-dumping duty measure. As we have explained above, determination of the facts is not final within the meaning of the Ad Note in a retrospective duty assessment system until the amount of the liability for payment of anti-dumping duty is determined in the assessment review. 266

 

A.3.66.2 US — Shrimp (Thailand) / US — Customs Bond Directive, paras. 225-227
(WT/DS343/AB/R, WT/DS345/AB/R)

 

… According to the Panel, with respect to the import transactions subsequent to the issuance of an anti-dumping duty order, the existence of dumping is established only when an assessment review is undertaken and the final duty liability is assessed. On this specific point, we disagree with the Panel’s reasoning. Under the United States’ anti-dumping duty system, the existence of dumping, as well as the existence of injury and the causal link between the two, is determined in an original investigation conducted pursuant to Article 5 of the Anti-Dumping Agreement. The legal basis for collection of cash deposits at the anti-dumping duty rate and determination of the final liability for payment of anti-dumping duties in an assessment review under the United States’ retrospective duty assessment system is the fact that these three determinations (dumping, injury, and the causal link between the two) have been made prior to the imposition of the anti-dumping duty order. Therefore, under the United States’ system, the uncertainty subsequent to the original investigation period pertains only to the amount of the final liability for the payment of antidumping duties, and there is no uncertainty with respect to the existence of dumping. This is also clear from the fact that, even where the duty assessment rate of an importer is zero in an assessment review, that importer will continue to make cash deposits for future entries of subject merchandise at the going-forward cash deposit rate of the exporter concerned. Footnote 22 of the Anti-Dumping Agreement also confirms this point as it distinguishes between the existence and the amount of dumping in a retrospective duty assessment system. Furthermore, under United States law, an anti-dumping duty order remains in effect until it is revoked, meaning, thereby, that dumping is considered to “exist” until the order is revoked.

 

Although we do not agree with the Panel that the “existence” of dumping remains “suspected” under the United States’ retrospective duty assessment system even after the imposition of the anti-dumping duty order, we are of the view that the term “dumping” in the Ad Note covers both the existence of dumping and the amount or margin of dumping. Dumping and margin of dumping — which measures the magnitude of dumping — are inter-related concepts. Under the United States’ retrospective duty assessment system, the magnitude of dumping, or, in other words, the amount of final liability for payment of anti-dumping duties, is determined only in an assessment review. Thus, dumping remains “suspected” within the meaning of the Ad Note as regards its magnitude for the import entries occurring after the anti-dumping duty order is imposed. Until an assessment review is conducted and the import entries are liquidated, there remains uncertainty regarding the magnitude of dumping, so that dumping remains in this respect, and until then, “suspected”.

 

For these reasons, we find that the Ad Note authorizes the taking of a reasonable security after the imposition of an anti-dumping duty order, pending the determination of the final liability for payment of the anti-dumping duty. In our view, this finding is neutral as between prospective and retrospective duty assessment systems, because the determination of the final liability for payment of duty takes place in a retrospective system in assessment reviews subsequent to the imposition of the anti-dumping duty order.

 

A.3.66.3 US — Shrimp (Thailand) / US — Customs Bond Directive, para. 233
(WT/DS343/AB/R, WT/DS345/AB/R)

 

We agree with Thailand and India that there is some overlap between the Ad Note and Article 7. The Ad Note allows security in the form of provisional measures during the original investigation period, the disciplines of which are implemented through Article 7. At the same time, in our view, the Ad Note allows the taking of a reasonable security for payment of the final liability of anti-dumping duties after an anti-dumping duty order has been imposed where such security may be needed to ensure that the difference between the duty collected on import entries and the final duty liability is collected. We therefore do not agree with Thailand and India that the Ad Note is completely subsumed under Article 7 so that the taking of a reasonable security is not allowed after a definitive anti-dumping duty is imposed. As the Appellate Body clarified in Brazil — Desiccated Coconut, the Anti-Dumping Agreement does not supersede the provisions of the GATT 1994, including the Notes and Supplementary Provisions of Annex I to the GATT 1994. Rather, Article VI of the GATT 1994 (including the Ad Note) and the Anti-Dumping Agreement represent an inseparable package of rights and disciplines. Our interpretation of the Ad Note is consistent with this approach as it gives meaning and effect to both.

 
A.3.66A The Ad Note to Article VI:2 and 3 of the GATT 1994 — Reasonable security     back to top

A.3.66A.1 US — Shrimp (Thailand) / US — Customs Bond Directive, paras. 230-231
(WT/DS343/AB/R, WT/DS345/AB/R)

 

… we reaffirm the Appellate Body findings in previous reports that the Anti-Dumping Agreement does not allow a fourth category of specific action against dumping. We do not, however, consider that a security taken for guaranteeing the payment of a lawfully established duty liability would necessarily constitute a “specific action against dumping”; rather, whether a particular security constitutes a “specific action against dumping” should be evaluated in the light of the nature and characteristics of the security and the particular circumstances in which it is applied. We wish to emphasize that, in any event, an impermissible specific action against dumping cannot be taken in the guise of a security.

 

Generally speaking, a security is accessory or ancillary to the principal obligation that it guarantees. A security that is taken to guarantee the obligation to pay antidumping or countervailing duties is intrinsically linked to that obligation. Thus, taking security for the full and final payment of duties should be viewed as a component of the imposition and collection of anti-dumping or countervailing duties. Therefore, a reasonable security taken in accordance with the Ad Note for potential additional anti-dumping duty liability does not necessarily, in and of itself, constitute a fourth autonomous category of response to dumping.

 

A.3.66A.2 US — Shrimp (Thailand) / US — Customs Bond Directive, paras. 256, 258-260, 263, 265 and footnote 335
(WT/DS343/AB/R, WT/DS345/AB/R)

 

It is not in dispute that the [enhanced continuous bond requirement] operates in conjunction with cash deposits and the basic bond, and that the [enhanced continuous bond requirement] is applied to secure potential additional liability that might arise from likely increases in the margin of dumping over and above that established for an exporter in the anti-dumping duty order or the most recent assessment review. The [enhanced continuous bond requirement] is applied to all importers who import subject shrimp from certain countries.

 

 

In our view, a two-step approach is necessary to assess the “reasonableness” of a security such as the [enhanced continuous bond requirement]. The first step involves a determination of the “likelihood” of an increase in the margin of dumping of an exporter as a result of which there will be a significant additional liability to be secured. This determination should have a rational basis and be supported by sufficient evidence. The second step involves a determination of the “likelihood of default” on the part of importers in respect of whom such additional liability is likely to arise. It is evident that the second step of the process would become pertinent only if the likelihood of increase in the margin of dumping has been properly established under the first step. If the determination of the likelihood of significant additional liability itself lacks a sufficient evidentiary foundation, the imposition of a security cannot be justified. Furthermore, should the determination of likelihood under the first step be properly made and thereby the second step of the process become relevant, an evaluation of the reasonableness of the amount of security demanded would depend on the magnitude of the likely additional liability and the risk of default by importers. A security must obviously reflect and be commensurate with the likely magnitude of the non-payment or non-collection risk that has been established on a proper basis. Taking security from an importer who may have no additional liability to pay or from an importer who presents no risk of default, as revealed by available and pertinent evidence, would obviously be unreasonable. Finally, security requirements that impose excessive additional costs on the importers may convert the security into an impermissible specific action against dumping.

 

In the light of these considerations, we agree with the Panel that additional security could be taken only:

 

… if a Member properly determined that the rates of dumping provided for in the anti-dumping order were likely to increase (such that the cash deposits provided for in the anti-dumping order would not provide sufficient security for the relevant case of suspected dumping). (footnote omitted)

 

The Member would also need to determine the likely amount of the additional liability arising from such increase in order to ensure that the amount of the security requirement is commensurate with that additional liability.

 

We also agree with the Panel that “it would not be reasonable to require additional security simply because of the possibility of rates of dumping increasing”, since, in our view, a mere possibility is not sufficient to establish likelihood of increase. We also concur with the Panel that:

 

… the possibility of rates increasing beyond a reasonable level of security, and importers defaulting on that excess, is a risk inherent in the retrospective system. The Ad Note does not allow Members to seek to eliminate that risk through the application of unreasonably excessive security requirements.

 

 

As we noted above, in the two-step approach to assess the reasonableness of a security such as the [enhanced continuous bond requirement], the second step of the process involves an evaluation of the risk of default by the importers concerned. The fact that significant additional liability may arise does not in itself establish that there is a risk of default with respect to that liability. The financial condition and creditworthiness of the importer (ability to pay) and its track-record of payment (history of compliance) are important factors in the analysis of risk of default. We disagree with the Panel to the extent that the Panel suggests that risk of default of individual importers need not be assessed. Rather, we believe that the risk of default of individual importers is an important factor in an analysis of the reasonableness of a security. 335

 

 

… the application of a security such as the [enhanced continuous bond requirement] cannot be viewed as reasonable unless, at the time it is applied, a likelihood of an increase in the margin of dumping of an exporter resulting in significant additional liability has been properly determined on a sufficient evidentiary foundation.

 

A.3.66A.3 US — Shrimp (Thailand) / US — Customs Bond Directive, paras. 307, 310, 319
(WT/DS343/AB/R, WT/DS345/AB/R)

 

… the Panel addressed at the interim stage the issue of whether the United States should be permitted to “defend” the [enhanced continuous bond requirement] simultaneously under the Ad Note and under Article XX(d) of the GATT 1994. India had argued, first, that the Panel should have evaluated whether a Member must invoke footnote 24 of the Anti-Dumping Agreement in order to assert an affirmative defence under Article XX; and, secondly, given that the Panel had found that Article VI and the Ad Note and the Anti-Dumping Agreement constitute lex specialis, the Panel should have refused to evaluate the defence of the [enhanced continuous bond requirement] raised by the United States under Article XX(d) of the GATT 1994. The Panel rejected India’s arguments …

 

 

India’s appeal raises systemic issues about the availability of a defence under Article XX(d) to justify a measure found to constitute “specific action against dumping” under Article 18.1 of the Anti-Dumping Agreement, and not to be in accordance with the Ad Note to Article VI:2 and 3 of the GATT 1994, as well as Article 18.1 of the Anti-Dumping Agreement. Assuming, arguendo, that such a defence is available to the United States, we proceed to consider the United States’ appeal of the Panel’s finding that the [enhanced continuous bond requirement], as applied to subject shrimp, is “necessary” to secure compliance with certain United States laws and regulations within the meaning of Article XX(d).

 

 

In view of this conclusion that the [enhanced continuous bond requirement], as applied to subject shrimp, is not “necessary” within the meaning of Article XX(d), we do not express a view on the question of whether a defence under Article XX(d) of the GATT 1994 was available to the United States.

 

192. We therefore express no views on whether such an approach is consistent with the obligations under the Anti-Dumping Agreement.     back to text

114. Brazil’s thesis is further predicated on the assumption that if no significant increase in dumped imports (either in absolute terms or relative to production and consumption in the importing Member) were found originating from a specific country under Article 3.2, then those imports would have to be excluded from cumulative assessment under Article 3.3 (Brazil’s response to questioning at the oral hearing). However, we find no support for this argument in the text of Article 3.2 itself: significant increases in imports have to be “consider[ed]” by investigating authorities under Article 3.2, but the text does not indicate that in the absence of such a significant increase, these imports could not be found to be causing injury.     back to text

188. We have previously held that Article 9.4 is of little relevance for interpreting Articles 2 and 3 of the Anti-Dumping Agreement because “the right to impose anti-dumping duties under Article 9 is a consequence of the prior determination of the existence of dumping margins, injury, and a causal link”. (Appellate Body Report, EC — Bed Linen (Article 21.5 — India), paras. 123-124 (original emphasis), referring to Appellate Body Report, EC — Bed Linen, footnote 30 to para. 62) In contrast, the requirement to terminate an anti-dumping duty under Article 11.3 unless investigating authorities make an affirmative likelihood determination in a sunset review is a consequence of the prior imposition of that duty under Article 9.     back to text

367. In a prospective normal value system, the authorities announce in advance a prospective normal value that applies to future entries of a given product and anti-dumping duties are assessed on the basis of the difference between this “prospective normal value” and the prices of individual export transactions for that product.     back to text

648. It is true that in a prospective normal value system individual export transactions at prices less than normal value can attract liability for payment of anti-dumping duties, regardless of whether prices of other export transactions exceed normal value. Similarly, under its retrospective system of duty collection, the United States is free to assess duty liability on a transaction specific basis, but the total amount of anti-dumping duties that are levied must not exceed the exporters’ or foreign producers’ margins of dumping (see Appellate Body Report, US — Zeroing (Japan), paras. 161 and 162).     back to text

369. This question, in turn, raises other issues, such as: when does a sunset review reach an “outcome” for the purpose of Article 11.3, last sentence; and what is implied by the requirements in Article 11.4 that the review “be carried out expeditiously” and that it “shall normally be concluded within 12 months of the date of initiation”?     back to text

243. We have found a similar duty in the context of an investigation conducted in accordance with the Agreement on Safeguards: Appellate Body Report, US — Wheat Gluten, paras. 53-55.     back to text

87. We observe that the scope of each element in the phrase “laws, regulations and administrative procedures” must be determined for purposes of WTO law and not simply by reference to the label given to various instruments under the domestic law of each WTO Member. This determination must be based on the content and substance of the instrument, and not merely on its form or nomenclature. Otherwise, the obligations set forth in Article 18.4 would vary from Member to Member depending on each Member’s domestic law and practice.     back to text

335. Having said this, we do not express a view on the proper methodology to assess the default risk of importers, and in particular, on whether this could be done based on information from individual importers or on the basis of adequately reasoned inferences from a representative sample of importers of the subject merchandise or from other pertinent factors. …     back to text

266. We find support for our interpretation by referring to the equally authentic French and Spanish versions of the relevant provisions. In the French and Spanish versions of the Ad Note the phrase “final determination of the facts” is, respectively, “la constatation définitive des faits” and “la comprobaciόn definitiva de los hechos”. By contrast, the terms “détermination” (in French) and “determinaciόn” (in Spanish) are used in Article 5 of the Anti-Dumping Agreement, whereas the English version uses the term “determination” in both Article 5 and the Ad Note.     back to text


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