## Facts

- Japan challenged anti-dumping duties imposed by the United States on imports of certain hot-rolled steel products from Japan following determinations by the U.S. Department of Commerce (USDOC) and the U.S. International Trade Commission (USITC).
- The challenged measures included: (i) USDOC preliminary and final dumping determinations and margin calculations; (ii) the USITC injury and causation determination; and (iii) aspects of U.S. law and methodologies governing dumping calculations.
- Japan alleged violations of the GATT 1994 and the Anti-Dumping Agreement (ADA), focusing on (a) the use of “facts available” and adverse inferences, (b) “zeroing” in weighted-average dumping margin calculations, (c) the statutory “all others” rate methodology, and (d) injury and causation analysis requirements.
- A WTO panel rejected many claims but found certain calculation aspects and one aspect of U.S. law inconsistent with the ADA.
- Both the United States and Japan appealed portions of the panel’s legal findings; the Appellate Body affirmed in part and reversed in part, and the reports were adopted on August 23, 2001.

## Issues

1. Under ADA Article 6.8 and Annex II, when may an investigating authority rely on “facts available” and draw adverse inferences, and what procedural and evidentiary constraints apply?
2. Whether “zeroing” negative dumping margins in weighted-average calculations is consistent with the “fair comparison” requirement and the weighted-average methodology in ADA Article 2.4.2.
3. Whether the U.S. statutory rule for calculating the “all others” rate by excluding zero, de minimis, and facts-available margins is consistent with ADA Article 6.10 and with GATT 1994 Article X:3(a) administration requirements.
4. Whether the USITC injury and causation analysis satisfied ADA Articles 3.1–3.5, including the duty to explain causation and avoid attributing injury from other factors to dumped imports.

## Decision

- The Appellate Body affirmed that “facts available” may be used only under the conditions in ADA Article 6.8 and Annex II, requiring notice, opportunities to supply information, and careful treatment of secondary information; it found aspects of USDOC’s application inconsistent where the required circumspection and efforts to address information gaps were not met.
- The Appellate Body held that USDOC’s “zeroing” practice in the investigation was inconsistent with ADA Article 2.4.2 because it excluded non-dumped transactions from the weighted-average comparison and inflated the overall margin, defeating a fair comparison.
- The Appellate Body upheld findings that the U.S. “all others” rate rule (excluding zero and de minimis margins while permitting facts-available margins) was inconsistent with the ADA because it could systematically bias the rate upward rather than reflect non-investigated exporters; related concerns were identified under GATT 1994 Article X:3(a).
- On injury and causation, the Appellate Body required a reasoned and adequate explanation linking evidence to conclusions on causation and non-attribution; it upheld some panel conclusions and reversed others, finding deficiencies where the explanation and separation of other causes were insufficient.

## Legal Principles

- ADA Article 6.8 and Annex II permit reliance on “facts available” only when a party fails to provide necessary information within a reasonable period or significantly impedes the investigation, and only after procedural safeguards and careful evaluation of secondary information.
- An investigating authority must make serious efforts to obtain missing information and may not disregard verifiable information properly submitted within a reasonable period merely because the record is incomplete.
- “Zeroing” in weighted-average dumping margin calculations is incompatible with ADA Article 2.4.2 where it prevents the authority from accounting for all comparable export transactions and yields an unfair overall margin.
- An “all others” rate methodology under ADA Article 6.10 must not be structured to produce systematically inflated results; rules that exclude low/zero margins while allowing facts-available margins can be inconsistent with that requirement and raise concerns about impartial and reasonable administration under GATT 1994 Article X:3(a).
- ADA Articles 3.1–3.5 require injury determinations based on positive evidence and an objective examination, including a supported causal link and a non-attribution analysis ensuring injury from other factors is not attributed to dumped imports.

## Conclusion

The Appellate Body sustained key constraints on anti-dumping methodologies by rejecting weighted-average “zeroing,” tightening conditions for adverse “facts available,” disapproving a biased “all others” rate rule, and requiring injury determinations to provide a reasoned causation and non-attribution explanation grounded in the ADA’s enumerated factors.


United States—Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan, WTO Doc. WT/DS184/AB/R (Aug. 23, 2001)