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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
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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
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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
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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
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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
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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)
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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
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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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