This summary has been prepared by the Secretariat under its own responsibility. The summary is for general information only and is not intended to affect the rights and obligations of Members.
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(as cited in request for consultations)
|Request for Consultations received:|
|Panel Report circulated:||11 July 2011|
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Summary of the dispute to date
The summary below was up-to-date at
Complaint by Viet Nam.
On 1 February 2010, Viet Nam requested consultations with the United States concerning a number of anti-dumping measures on certain frozen warmwater shrimp from Viet Nam. In addition to several administrative and new shipper reviews, the request for consultations concerns several US laws, regulations, administrative proceedings and practices, including zeroing.
Viet Nam considers that these measures are inconsistent with the United States' obligations under:
- Articles I, II, VI:1 and VI:2 of the GATT 1994;
- several provisions of the Anti-Dumping Agreement;
- Article XVI:4 of the WTO Agreement; and
- Viet Nam's Protocol of Accession.
On 12 February 2010, the European Union and Japan requested to join the consultations. On 15 February 2010, Thailand requested to join the consultations.
On 7 April 2010, Viet Nam requested the establishment of a panel. At its meeting on 20 April 2010, the DSB deferred the establishment of a panel.
Panel and Appellate Body proceedings
At its meeting on 18 May 2010, the DSB established a panel. The European Union, Japan, Korea, Mexico and Thailand reserved their third-party rights. Subsequently, China and India reserved their third-party rights. On 14 July 2010, Viet Nam requested the Director-General to determine the composition of the panel. On 26 July 2010, the Director-General composed the panel.
- In this dispute, Viet Nam challenged certain aspects of the U.S. Department of Commerce (USDOC)'s final determinations in the U.S. anti-dumping proceedings against Certain Frozen Warmwater Shrimp from Viet Nam (“Shrimp”). Specifically, Viet Nam challenged the “continued use”, by the USDOC, of certain practices, as well as their application in the second and third administrative reviews. The practices challenged by Viet Nam were the following:
- The USDOC's use of zeroing in the calculation of dumping margins;
- The USDOC's limitation of the number of exporters or producers selected for individual investigation or review.
- The application of a “Vietnam-wide entity” rate determined on the basis of adverse facts available to certain Vietnamese exporters or producers that could not establish that they act independently from the Vietnamese Government in their commercial and sales operations;
- In addition, Viet Nam made claims with respect to the “all others” rate applied by the USDOC in the second and third administrative reviews.
- Finally, Viet Nam also challenged, “as such”, the U.S. “zeroing methodology”, as it relates to the calculation of margins of dumping in the context of administrative reviews.
US requests for preliminary rulings
- The United States raised preliminary objections regarding the Panel's terms of reference. In particular, the United States argued that the measure described by Viet Nam as the “continued use of challenged practices” in successive proceedings under the Shrimp anti-dumping order: (1) fell outside the Panel's terms of reference because it was not identified in Viet Nam's panel request; and (2) was not subject to WTO dispute settlement because it purported to include future measures. The Panel upheld the United States' request for a preliminary ruling in this respect. The Panel concluded that Viet Nam's panel request did not identify the “continued use of challenged practices” measure as a measure at issue in the dispute, as required by Article 6.2 of the DSU.
Viet Nam's claims with respect to zeroing
- The Panel upheld Viet Nam's claim that the USDOC's use of zeroing to calculate the dumping margins of respondents selected for individual examination in the second and third administrative reviews was inconsistent with Article 2.4 of the Anti-Dumping Agreement. The Panel exercised judicial economy with respect to additional claims of violation under Articles 9.3, 2.1 and 2.4.2 of the Anti-Dumping Agreement.
- The Panel upheld Viet Nam's claims that the United States' “zeroing methodology”, as it relates to the use of simple zeroing in administrative reviews, is inconsistent with Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994. The Panel first concluded that Viet Nam had established the existence of the “zeroing methodology” as a rule or norm of general and prospective application. The Panel then relied on prior Appellate Body rulings to conclude that simple zeroing in administrative reviews is, “as such”, inconsistent with these two provisions.
Viet Nam's claims with respect to the USDOC's decisions to limit the number of selected respondents
- Viet Nam argued that the USDOC had applied the second sentence of Article 6.10 of the Anti-Agreement, which allows under certain circumstances an investigating authority to determine an individual margin of dumping for only some of the respondents, in a manner that deprived Vietnamese respondents of substantive rights under the first sentence of Article 6.10 (establishing the general principle that individual margins are to be assigned to each respondent) as well as under Articles 9.3, 11.1 and 11.3 of the Anti-Dumping Agreement. The Panel rejected these claims. It reasoned that Viet Nam was not claiming that the USDOC's use of limited examinations in the second and third administrative reviews was inconsistent with the second sentence of Article 6.10, and considered that none of the provisions cited by Viet Nam imposed any restrictions on an authority's ability to limit its examination, other than those set forth in that provision.
- In addition, Viet Nam made two distinct claims under Article 6.10.2 of the Anti-Dumping Agreement:
- Viet Nam claimed that the USDOC had violated the first sentence of Article 6.10.2 of the Anti-Dumping Agreement, which provides that an authority which has limited its examination shall nevertheless determine individual margins of dumping for non-selected respondents that submit a “voluntary response”. The Panel rejected Viet Nam's claim under this provision, as it found that Viet Nam had failed to identify any instance in which Vietnamese respondents actually submitted a voluntary response.
- Viet Nam further claimed that the USDOC had acted inconsistently with its obligations under the second sentence of Article 6.10.2, which provides that “[v]oluntary responses shall not be discouraged”. The Panel rejected this claim, concluding that Viet Nam had not demonstrated that the USDOC's actions in the administrative reviews at issue had impermissibly “discouraged” the submission of voluntary responses by Vietnamese respondents.
Viet Nam's claims with respect to the "all others" rate applied to non-selected respondents
- Article 9.4 does not explicitly address the maximum allowable “all others” rate which may be imposed on non-selected respondents in a situation in which all individual dumping margins calculated for selected respondents are zero, de minimis, or based on facts available; in past decisions, the Appellate Body has referred to this as a lacuna in Article 9.4. Faced with a “lacuna situation” in the two administrative reviews at issue, the USDOC had applied an “all others” rate originally determined in the original investigation, which corresponded to the weighted average of the individual margins calculated in that investigation, and which had been calculated with the use of zeroing. Viet Nam claimed that the "all others" rate applied by the USDOC in these administrative reviews was inconsistent with Article 9.4 of the Anti-Dumping Agreement. Specifically, Viet Nam argued that the application of an “all others” rate established on the basis of margins calculated with zeroing is inconsistent with this provision. The Panel upheld Viet Nam's claim on this basis. The Panel did not address a second argument of Viet Nam in support of its Article 9.4 claim, namely that the application of an “all others” rate that fails to consider the results of the individually-investigated respondents in the contemporaneous proceeding and produces an anti-dumping duty prejudicial to companies not selected for individual investigation is inconsistent with this provision. The Panel also exercised judicial economy with respect to additional claims of violation under Articles 9.3, 2.4.2, and 2.4 of the Anti-Dumping Agreement.
Viet Nam's claims with respect to rate assigned to the Vietnam-wide entity
- The Panel upheld a claim by Viet Nam that the USDOC had acted inconsistently with Article 9.4 of the Anti-Dumping Agreement when it failed to apply to the Vietnam-wide entity the “all others” rate applied to respondents not selected for individual examination. The Panel reasoned that Article 9.4 does not entitle the authorities of the importing Member to render application of the “all others” rate conditional on the fulfilment of certain requirements, such as independence from the Government. The Panel also considered that the existence of a lacuna situation did not allow investigating authorities to not assign an “all others” rate to respondents otherwise entitled to receive such a rate.
- In addition, the Panel found that the USDOC's application of a facts available rate to the Vietnam-wide entity in the second administrative review, and a rate that was in substance a facts available rate in the third administrative review, was inconsistent with Article 6.8 of the Anti-Duping Agreement.
Other issues pertaining to the Panel's terms of reference
- Viet Nam made claims of violation under Article 17.6(i) of the Anti-Dumping Agreement with respect to the “all others” rate and to the rate assigned to the Vietnam-wide entity. In each instance, the Panel considered that Viet Nam's claims were outside its terms of reference due to Viet Nam's failure to include a claim under this provision in its request for the establishment of a panel.
- In addition, the Panel found that certain claims by Viet Nam, which Viet Nam referred to as “consequential claims”, were outside its terms of reference because they pertained to a measure not within the Panel's terms of reference.
- Pursuant to Article 19.1 of the DSU, having found that the United States has acted inconsistently with provisions of the Anti-Dumping Agreement and of the GATT, the Panel recommended that the United States bring its measures into conformity with its obligations under those Agreements.
On 2 September 2011, the panel report was adopted.
Reasonable period of time
At the DSB meeting on 27 September 2011, the United States stated that it intended to implement the DSB's recommendations and ruling in a manner that respects its WTO obligations. The United States added that it would need a reasonable period of time to do so. On 31 October 2011, Viet Nam and the United States informed 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 10 months. Accordingly, the reasonable period of time expires on 2 July 2012.
Mutually Agreed Solution
On 18 July 2016, Viet Nam and the United States notified the DSB that they had reached a mutually agreed solution.
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