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Complaint by Thailand. (See also DS345)
On 24 April 2006, Thailand requested consultations with the United States concerning anti-dumping measures on imports of frozen warmwater shrimp. Thailand requests consultations on the United States’ application in the Preliminary, Final and Amended Final Determinations of the practice known as “zeroing” negative dumping margins, the effect of which was to artificially create margins of dumping, and the consequent imposition of definitive anti-dumping measures on imports of certain frozen warmwater shrimp from Thailand.
Thailand considers that through its use of “zeroing”, the United States has failed to make a fair comparison between the export price and the normal value, and calculated distorted margins of dumping therefore violating:
- Articles 1, 2.1, 2.4, 2.4.2, 3.1, 3.2, 3.3, 3.4, 3.5, 5.8, 9.2 and 9.3 of the Anti-Dumping Agreement, and
- Articles II, III, VI:1 and VI:2 of the GATT 1994.
In addition, Thailand requests consultations on the United States’ continuous bond requirement as such and on its application to imports of frozen warmwater shrimp from Thailand which it considers may be inconsistent with Articles I:1, II, III, XI:1 and XIII:1 of the GATT 1994 and may not be justified under Article XX(d) of the GATT 1994.
On 1 May 2006, India requested to join the consultations. On 2 May 2006, Japan requested to join the consultations. On 5 May 2006, Brazil requested to join the consultations. On 8 May 2006, China requested to join the consultations. The United States informed the DSB that it had accepted the requests of Brazil, China and India to join the consultations.
On 15 September 2006, Thailand requested the establishment of a panel. At its meeting on 28 September 2006, the DSB deferred the establishment of a panel.
Panel and Appellate Body proceedings
At its meeting on 26 October 2006, the DSB established a panel. Brazil, Chile, China, the European Communities, India, Japan, Korea and Mexico reserved their third-party rights.
On 19 January 2007, Thailand requested the Director-General to compose the Panel. On 26 January 2007, the Director-General composed the Panel. Subsequently, Viet Nam reserved its third-party rights.
On 27 July 2007, the Chairman of the Panel informed the DSB that it would not be possible for the Panel to complete its work within six months of the date of composition, inter alia, due to the nature and scope of the dispute.
On 29 February 2008, the Panel report was circulated to Members. The Panel upheld Thailand's claims that the application of the EBR to subject shrimp from Thailand is inconsistent with Article 18.1 of the Anti-Dumping Agreement, and the Ad Note. It rejected the United States' argument that the application of the EBR is justified under Article XX(d) of the GATT 1994.
The Panel further upheld Thailand's claim that the United States acted inconsistently with Article 2.4.2 of the Anti-Dumping Agreement by using zeroing to calculate margins of dumping in respect of the anti-dumping measure. The Panel declined to rule separately on Thailand's claim that the application of the EBR to subject shrimp from Thailand is inconsistent with Articles I, II:1(a), the first and second sentences of Article II:1(b), X:3(a) and XI:1 of the GATT 1994.
The Panel recommended that the United States bring its measures into conformity with its obligations under the Anti-Dumping Agreement and the GATT 1994.
On 17 April 2008, Thailand notified its decision to request the Appellate Body to review certain issues of law covered in the Panel report and certain legal interpretations developed by the Panel. On 29 April 2008, the United States notified its decision to appeal to the Appellate Body certain issues of law covered in the Panel report and certain legal interpretations developed by the Panel. The Appellate Body examined this appeal with that of WT/DS345.
On 10 June 2008, the Chairman of the Appellate Body informed the DSB that it would not be able to provide its report within 60 days due to the time required for completion and translation of the report. The Appellate Body estimated that the report would be circulated no later than 16 July 2008.
On 16 July 2008, the Appellate Body report was circulated to Members.
The Appellate Body inter alia:
— upheld the Panel's finding that the additional security requirement resulting from the application of the EBR to subject shrimp is not “reasonable” within the meaning of the Ad Note; and
— upheld the Panel's finding that the EBR, as applied to subject shrimp, is not “necessary” within the meaning of Article XX(d) of the GATT 1994.
Consequently, the Appellate Body upheld the Panel's conclusion that the application of the EBR to subject shrimp is inconsistent with Article 18.1 of the Anti-Dumping Agreement because it is inconsistent with the Ad Note to Article VI:2 and 3 of the GATT 1994.
The Appellate Body recommended that the DSB request the United States to bring its measure, found in this Report and in the Panel Report, US — Customs Bond Directive, as modified by this Report, to be inconsistent with the Anti-Dumping Agreement and the GATT 1994, into conformity with its obligations under those Agreements.
At its meeting on 1 August 2008, the DSB adopted the Appellate Body report and the Panel report, as modified by the Appellate Body report.
Implementation of adopted reports
On 31 October 2008, the United States and Thailand notified the DSB that they had agreed that the reasonable period of time for the United States to implement the DSB recommendations and rulings shall be 8 months, expiring on 1 April 2009.
At the DSB meeting on 20 April 2009, the United States informed the DSB that it had taken steps to implement the recommendations and rulings. Thailand, while appreciative of the United States' efforts, was still considering whether the steps taken would be sufficient to bring the United States into compliance.
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