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Complaint by China.
On 28 February 2011, China requested consultations with the United States regarding the latter's anti-dumping measures on certain frozen warmwater shrimp from China. China alleged that the US Department of Commerce's (“USDOC”) use of zeroing in the original investigation and several administrative reviews to calculate dumping margins for the subject imports is inconsistent with the United States' obligations under Article VI:1 and VI:2 of the GATT 1994 and Articles 1, 2.1, 2.4, 2.4.2, 5.8, 9.2, 9.3, and 9.4 of the Anti-Dumping Agreement. China further asserted that the USDOC's reliance, in the sunset review, on the dumping margins calculated in the original investigation and administrative reviews is inconsistent with the United States' obligations under Article 11.3 of the Anti-Dumping Agreement.
On 11 March 2011, Japan requested to join the consultations.
On 22 July 2011, China requested complementary consultations with the United States with regard to the zeroing practice by the USDOC in its anti-dumping measures on diamond sawblades and parts thereof from China. China alleged that the USDOC's zeroing practice has artificially created or, at a minimum, inflated dumping margins for the individually investigated respondents. China considered that the zeroing practices in the cited measures are inconsistent with the United States' obligations under Article VI:1 and VI:2 of the GATT 1994 and Articles 1, 2.1, 2.4, 2.4.2, 5.8, 9.2, 9.3, and 9.4 of the Anti-Dumping Agreement.
On 13 October 2011, China requested the establishment of panel. On 13 October 2011, China and the United States informed the DSB of an Agreement on Procedures.
Panel and Appellate Body proceedings
At its meeting on 25 October 2011, the DSB established a panel. The European Union, Honduras, Japan, Korea, Thailand and Viet Nam reserved their third party rights. Following the agreement of the parties, the panel was composed on 21 December 2011.
On 8 June 2012, the panel report was circulated to Members.
Summary of key findings
Before the panel, China restricted its claims to the alleged use, by the USDOC, of zeroing in the anti-dumping investigations at issue. China's claims concerned: (i) the use by the US Department of Commerce of the “zeroing” methodology in the calculation of certain dumping margins in these original investigations; and (ii), the USDOC's reliance upon the same dumping margins, calculated with zeroing, in calculating the separate rate applied to exporters/producers not selected for individual examination but who had established that they act independently from the Chinese government in their export activities.
The United States did not contest the factual assertions made by China regarding the USDOC's use of zeroing in the investigations at issue and the USDOC's reliance upon dumping margins calculated with zeroing to establish the separate rate. Nor did the United States contest the legal relevance, to the facts of the dispute, of the Appellate Body reports cited by China.
The Panel upheld China's claim concerning the USDOC's use of zeroing in the calculation of dumping margins for individually-examined exporters/producers. The Panel found that the “zeroing” methodology used by the USDOC in calculating the margins of dumping in the three anti-dumping investigations at issue was inconsistent with Article 2.4.2 of the Anti-Dumping Agreement, and therefore concluded that the United States had acted inconsistently with its obligations under this provision. The Panel rejected China's claim concerning the separate rate, but noted that the calculation of the separate rate on the basis of individual margins calculated with zeroing necessarily incorporated the WTO-inconsistent zeroing methodology.
At its meeting on 23 July 2012, the DSB adopted the panel report.
Reasonable period of time
On 27 July 2012, China 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 8 months. Accordingly, the reasonable period of time expired on 23 March 2013.
Implementation of adopted reports
At the DSB meeting on 26 March 2013, the United States informed the DSB that it had implemented the DSB recommendations and rulings within the reasonable period of time. China did not share the United States' view that it had fully implemented the DSB recommendations as it had failed to revoke the anti-dumping duty on sawblades. China urged the United States to honour its obligation.
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