WT/DS294/R
Page 155
Organization
WT/DS294/R
31 October 2005
(05-4933)
Original: English
UNITED STATES – LAWS, REGULATIONS AND
METHODOLOGY FOR CALCULATING
DUMPING MARGINS ("ZEROING")
Report of the Panel
WT/DS294/R
Page 155
TABLE OF CONTENTS
Page
I. introduction 1
A. Complaint of the European Communities 1
B. Establishment and Composition of the Panel 1
C. Panel Proceedings 1
II. factual aspects 2
III. requests for findings and recommendations 6
A. The European Communities 6
B. United States 7
IV. arguments of the parties 7
A. Burden of Proof and Standard of Review 7
B. "As applied" Claims 9
C. "As such" Claims 35
V. arguments of the THIRD PARTIES 50
A. Argentina 50
B. Brazil 51
C. China 53
D. Hong Kong, China 53
E. India 56
F. Japan 57
G. Republic of Korea 61
H. Mexico 63
I. Norway 64
J. Turkey 66
VI. interim review 68
A. comments by the european communities 68
B. comments by the united states 71
VII. Findings 72
A. Introduction 72
B. Relevant Principles regarding Standard of Review, Treaty Interpretation and Burden of Proof 73
C. Claims of the European Communities in respect of Certain Original Investigations 74
D. claims of the European Communities in respect of "Standard Zeroing Procedures" and Certain Provisions of The Tariff Act in relation to Original Investigations 81
E. claims of the european communities in respect of certain administrative reviews 98
F. Claims of the European Communities in respect of the Standard Zeroing Procedures, The Tariff Act and the USDOC's Regulations in relation to Periodic Administrative Reviews 150
G. Claims of the European Communities in respect of the Standard Zeroing Procedures, The Tariff Act and the USDOC's Regulations in relation to New Shipper Reviews, Changed Circumstances Reviews and Sunset Reviews 151
VIII. conclusions and recommendation 151
IX. Dissenting opinion by one member of the panel with respect to certain claims of the european Communities relating to zeroing 153
LIST OF ANNEXES
ANNEX A
REQUEST FOR CONSULTATIONS AND REQUEST FOR THE
ESTABLISHMENT OF A PANEL
Annex A-1 Request for Consultations by the European Communities / A-2
Annex A-2 Request for the Establishment of a Panel by the European Communities / A-29
TABLE OF CASES CITED IN THIS REPORT
Argentina – Poultry Anti-Dumping Duties / Panel Report, Argentina – Definitive Anti-Dumping Duties on Poultry from Brazil, WT/DS241/R, adopted 19May2003.
Argentina – Textiles and Apparel / Panel Report, Argentina – Measures Affecting Imports of Footwear, Textiles, Apparel and Other Items, WT/DS56/R, adopted 22April1998, as modified by the Appellate Body Report, WT/DS56/AB/R, DSR1998:III,1033.
Canada – Aircraft (Article 21.5 – Brazil) / Panel Report, Canada – Measures Affecting the Export of Civilian Aircraft, Recourse by Brazil to Article 21.5 of the DSU, WT/DS70/RW, adopted 4August2000, as modified by the Appellate Body Report, WT/DS70/AB/RW, DSR2000:IX, 4315.
Canada – Aircraft Credits and Guarantees / Panel Report, Canada – Export Credits and Loan Guarantees for Regional Aircraft, WT/DS222/R and Corr.1, adopted 19February2002.
Canada – Wheat Exports and Grain Imports / Appellate Body Report, Canada – Measures Relating to Exports of Wheat and Treatment of Imported Grain, WT/DS276/AB/R, adopted 27 September 2004.
Canada– Aircraft / Panel Report, Canada– Measures Affecting the Export of Civilian Aircraft, WT/DS70/R, adopted 20August1999, as upheld by the Appellate Body Report, WT/DS70/AB/R, DSR1999:IV,1443.
Dominican Republic – Import and Sale of Cigarettes / Appellate Body Report, Dominican Republic – Measures Affecting the Importation and Sale of Cigarettes, WT/DS302/AB/R, adopted 19May2005.
EC – Asbestos / Panel Report, European Communities – Measures Affecting Asbestos and Asbestos-Containing Products, WT/DS135/R and Add.1, adopted 5April2001, as modified by the Appellate Body Report, WT/DS135/AB/R, DSR 2001:VIII, 3305.
EC–Bed Linen / Appellate Body Report, European Communities – Anti-Dumping Duties on Imports of Cotton-Type Bed Linen from India, WT/DS141/AB/R, adopted 12March2001, DSR2001:V, 2049.
EC–Bed Linen
(Article21.5 – India) / Panel Report, European Communities – Anti-Dumping Duties on Imports of Cotton-Type Bed Linen from India – Recourse to Article 21.5 of the DSU by India, WT/DS141/RW, adopted 24April2003, as modified by the Appellate Body Report, WT/DS141/AB/RW
EC–Tube or Pipe Fittings / Panel Report, European Communities – Anti-Dumping Duties on Malleable Cast Iron Tube or Pipe Fittings from Brazil, WT/DS219/R, adopted 18August 2003, as modified by the Appellate Body Report, WT/DS219/AB/R.
Egypt – Steel Rebar / Panel Report, Egypt – Definitive Anti-Dumping Measures on Steel Rebar from Turkey, WT/DS211/R, adopted 1October2002
Guatemala – CementI / Appellate Body Report, Guatemala – Anti-Dumping Investigation Regarding Portland Cement from Mexico, WT/DS60/AB/R, adopted 25November1998, DSR1998:IX,3767.
India – Patents(US) / Appellate Body Report, India – Patent Protection for Pharmaceutical and Agricultural Chemical Products, WT/DS50/AB/R, adopted 16January1998, DSR1998:I,9.
Japan – Agricultural ProductsI / GATT Panel Report, Japan – Restrictions on Imports of Certain Agricultural Products, adopted 2March1988, BISD35S/163.
Japan – Film / Panel Report, Japan – Measures Affecting Consumer Photographic Film and Paper, WT/DS44/R, adopted 22April1998, DSR1998:IV,1179.
Japan – Semi-Conductors / GATT Panel Report, Japan – Trade in Semi-Conductors, adopted 4May1988, BISD35S/116.
Korea – Commercial Vessels / Panel Report, Korea – Measures Affecting Trade in Commercial Vessels, WT/DS273/R, adopted 11 April 2005.
Mexico – Anti-Dumping Measures on Rice / Panel Report, Mexico – Definitive Anti-Dumping Measures on Beef and Rice, Complaint with respect to Rice, WT/DS295/R, 6 June 2005.
Turkey – Textiles / Panel Report, Turkey – Restrictions on Imports of Textile and Clothing Products, WT/DS34/R, adopted 19November1999, as modified by the Appellate Body Report, WT/DS34/AB/R, DSR1999:VI,2363.
United States – Anti-Dumping Measures on Oil Country Tubular Goods / Panel Report, United States – Anti-dumping Measures on Oil Tubular Goods (OCTG) from Mexico, WT/DS282/R, 20 June 2005.
US – 1916 Act / Appellate Body Report, United States – Anti-Dumping Act of 1916, WT/DS136/AB/R, WT/DS162/AB/R, adopted 26September2000, DSR2000:X, 4793.
US – 1916 Act (Japan) / Panel Report, United States – Anti-Dumping Act of 1916, Complaint by Japan, WT/DS162/R and Add.1, adopted 26September2000, as upheld by the Appellate Body Report, WT/DS136/AB/R, WT/DS162/AB/R, DSR2000:X, 4831.
US – 1916 Act(EC) / Panel Report, United States – Anti-Dumping Act of 1916, Complaint by the European Communities, WT/DS136/R and Corr.1, adopted 26September2000, as upheld by the Appellate Body Report, WT/DS136/AB/R, WT/DS162/AB/R, DSR2000:X, 4593.
US – Carbon Steel / Appellate Body Report, United States – Countervailing Duties on Certain Corrosion-Resistant Carbon Steel Flat Products from Germany, WT/DS213/AB/R and Corr.1, adopted 19December2002.
US – Carbon Steel / Panel Report, United States – Countervailing Duties on Certain Corrosion-Resistant Carbon Steel Flat Products from Germany, WT/DS213/R and Corr.1, adopted 19December2002, as modified by the Appellate Body Report, WT/DS213/AB/R.
US – Corrosion-Resistant Steel Sunset Review / Appellate Body Report, United States – Sunset Review of Anti-Dumping Duties on Corrosion-Resistant Carbon Steel Flat Products from Japan, WT/DS244/AB/R, adopted 9 January 2004.
US – Countervailing Measures on Certain EC Products / Appellate Body Report, United States – Countervailing Measures Concerning Certain Products from the European Communities, WT/DS212/AB/R, adopted 8 January 2003.
US – Countervailing Measures on Certain EC Products / Panel Report, United States – Countervailing Measures Concerning Certain Products from the European Communities, WT/DS212/R, adopted 8January 2003, as modified by the Appellate Body Report, WT/DS212/AB/R.
US – DRAMS / Panel Report, United States – Anti-Dumping Duty on Dynamic Random Access Memory Semiconductors (DRAMS) of One Megabit or Above from Korea, WT/DS99/R, adopted 19March1999, DSR1999:II,521.
US – Export Restraints / Panel Report, United States – Measures Treating Exports Restraints as Subsidies, WT/DS194/R and Corr.2, adopted 23August2001, DSR 2001:XI, 5767.
US – Gambling / Appellate Body Report, United States – Measures affecting cross-border supply of gambling and betting services, WT/DS285/AB/R, adopted 20April 2005.
US – Gasoline / Appellate Body Report, United States – Standards for Reformulated and Conventional Gasoline, WT/DS2/AB/R, adopted 20May1996, DSR1996:I,3
US – Hot-Rolled Steel / Panel Report, United States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan, WT/DS184/R, adopted 23August2001 as modified by the Appellate Body Report, WT/DS184/AB/R.
US – Offset Act
(Byrd Amendment) / Appellate Body Report, United States – Continued Dumping and Subsidy Offset Act of 2000, WT/DS217/AB/R, WT/DS234/AB/R, adopted 27January2003.
US – Oil Country Tubular Goods Sunset Reviews / Appellate Body Report, United States – Sunset Reviews of Anti-Dumping Measures on Oil Country Tubular Goods from Argentina, WT/DS268/AB/R, adopted 17 December 2004.
US – Section 129(c)(1) URAA / Panel Report, United States – Section 129(c)(1) of the Uruguay Round Agreements Act, WT/DS221/R, adopted 30August2002.
US – Section211 Appropriations Act / Panel Report, United States – Section211 Omnibus Appropriations Act of 1998, WT/DS176/R, adopted 1February 2002, as modified by the Appellate Body Report, WT/DS176/AB/R.
US – Shrimp / Appellate Body Report, United States – Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R, adopted 6November1998, DSR1998:VII,2755.
US – Shrimp (Article 21.5 – Malaysia) / Appellate Body Report, United States – Import Prohibition of Certain Shrimp and Shrimp Products, Recourse to Article 21.5 of the DSU by Malaysia, WT/DS58/AB/RW, adopted 21November2001, DSR 2001:XIII, 6481.
US – Softwood LumberIII / Panel Report, United States – Preliminary Determinations with Respect to Certain Softwood Lumber from Canada, WT/DS236/R, adopted 1November2002.
US – Softwood LumberIV / Panel Report, United States – Final Countervailing Duty Determination with Respect to Certain Softwood Lumber from Canada, WT/DS257/R and Corr.1, adopted 17February 2004, as modified by the Appellate Body Report, WT/DS257/AB/R.
US – Softwood LumberV / Panel Report, United States – Final Dumping Determination on Softwood Lumber from Canada, WT/DS264/R, adopted 31 August 2004, as modified by the Appellate Body Report, WT/DS264/AB/R.
US – Softwood LumberV / Appellate Body Report, United States – Final Dumping Determination on Softwood Lumber from Canada, WT/DS264/AB/R, adopted 31August2004.
US – Softwood LumberVI / Panel Report, United States – Investigation of the International Trade Commission in Softwood Lumber from Canada, WT/DS277/R, adopted 26April 2004.
US – Stainless Steel / Panel Report, United States – Anti-Dumping Measures on Stainless Steel Plate in Coils and Stainless Steel Sheet and Strip from Korea, WT/DS179/R, adopted 1February2001, DSR2001:IV, 1295.
US – Steel Plate / Panel Report, United States – Anti-Dumping and Countervailing Measures on Steel Plate from India, WT/DS206/R and Corr.1, adopted 29July2002.
US – Superfund / GATT Panel Report, United States – Taxes on Petroleum and Certain Imported Substances, adopted 17June1987, BISD34S/136.
US – Tobacco / GATT Panel Report, United States Measures Affecting the Importation, Internal Sale and Use of Tobacco, adopted 4October1994, BISD41S/I/131.
US – Upland Cotton / Panel Report, United States – Subsidies on Upland Cotton, WT/DS267/R, Add.1-3, and Corr.1, adopted 21 March 2005, as modified by Appellate Body Report, WT/DS267/AB/R.
US – Wool Shirts and Blouses / Appellate Body Report, United States – Measure Affecting Imports of Woven Wool Shirts and Blouses from India, WT/DS33/AB/R and Corr.1, adopted 23May1997, DSR1997:I,323.
WT/DS294/R
Page 155
I. introduction
A. Complaint of the European Communities
1.1 On 12 June 2003 and 8 September 2003, the European Communities requested consultations with the United States of America (the "United States") under Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (the "DSU"); Article XXII:1 of the General Agreement on Tariffs and Trade 1994 (the "GATT 1994"); and Articles 17.2 and 17.3 of the Agreement on implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (the "AD Agreement") with regard to certain laws, regulations and methodologies for calculating dumping margins including so-called zeroing.[1] Consultations were held on 17 July 2003 and 6 October 2003, but failed to result in a mutually satisfactory resolution of the matter.
1.2 On 5 February 2004, the European Communities requested the establishment of a Panel to examine the matter.[2] This request was revised on 16 February 2004.[3]
B. Establishment and Composition of the Panel
1.3 At its meeting on 19 March 2004, the Dispute Settlement Body ("DSB") established a Panel pursuant to the request of the European Communities in document WT/DS294/7/Rev.1, in accordance with Article 6 of the DSU.
1.4 At that meeting, the parties to the dispute also agreed that the Panel should have standard terms of reference. The terms of reference are, therefore, the following:
"To examine, in the light of the relevant provisions of the covered agreements cited by the European Communities in document WT/DS294/7/Rev.1, the matter referred to the DSB by the European Communities in that document, and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in those agreements."
1.5 On 27 October 2004, the parties agreed to the following composition of the Panel:
Chairman: Mr. Crawford Falconer
Members: Mr. Hans-Friedrich Beseler
Mr. William Davey
1.6 Argentina; Brazil; China; Hong Kong, China; India; Japan; Korea, Rep. of; Mexico; Norway; Chinese Taipei; and Turkey reserved their third-party rights.
C. Panel Proceedings
1.7 On 7 February 2005, the Panel received an amicus curiae brief from the Committee to Support US Trade Laws ("CSUSTL"). Recalling the statement of the Appellate Body that a panel has "the discretionary authority either to accept and consider or to reject information and advice submitted to it, whether requested by a panel or not",[4] the Panel invited the parties and third parties to express their views on how it should handle CSUSTL's brief. After reviewing the comments of the parties and third parties, the Panel decided that it would not further consider the arguments in the CSUSTL brief except to the extent that the parties reflected those arguments in their written submissions and/or oral statements.[5]
1.8 The Panel met with the parties on 16-17 March 2005 and on 26-27 April 2005. The Panel met with the third parties on 17 March 2005.
1.9 The Panel submitted the Interim Report to the parties on 4 August 2005. The Panel submitted the Final Report to the parties on 28 September 2005.
II. factual aspects
2.1 This dispute concerns the application by the United States of the so-called zeroing methodology when determining dumping margins in anti-dumping proceedings, including proceedings resulting in the imposition of anti-dumping measures and proceedings relating to the collection of anti-dumping duties.