## Facts

- Mexico challenged U.S. anti-dumping measures on stainless steel sheet and strip in coils from Mexico administered by the U.S. Department of Commerce.
- The dispute focused on the U.S. use of “zeroing” when calculating dumping margins:
  - “Model zeroing” in the original investigation using average-to-average comparisons.
  - “Simple zeroing” in periodic (administrative) reviews using transaction-specific comparisons.
- “Zeroing” sets negative dumping amounts to zero instead of offsetting positive dumping amounts, increasing the overall dumping margin.
- Mexico asserted both:
  - An “as such” challenge to an alleged U.S. rule or norm of using simple zeroing in reviews; and
  - “As applied” challenges to the use of zeroing in identified proceedings.
- A WTO panel rejected the “as such” challenge and found simple zeroing in periodic reviews not inconsistent with the Anti-Dumping Agreement, while finding limited violations regarding the original investigation.
- Mexico appealed, arguing the panel’s approach conflicted with adopted Appellate Body interpretations in earlier zeroing disputes.

## Issues

1. Whether the U.S. use of simple zeroing in periodic (administrative) reviews is inconsistent with Article VI of GATT 1994 and the Anti-Dumping Agreement.
2. Whether a consistent administrative practice can constitute an “as such” measure as a rule or norm of general and prospective application.
3. What weight panels must give to adopted Appellate Body reports addressing the same legal issues, and whether a panel may depart from those interpretations.
4. Whether Anti-Dumping Agreement Article 17.6(ii) permits sustaining zeroing as a “permissible” interpretation despite prior Appellate Body interpretations.
5. Whether the panel’s departure from prior Appellate Body reasoning required a separate finding of error under DSU Article 11.

## Decision

- The Appellate Body reversed the panel’s core findings that upheld simple zeroing in periodic reviews and that rejected Mexico’s “as such” challenge.
- The Appellate Body found the U.S. use of simple zeroing in periodic reviews inconsistent with the Anti-Dumping Agreement and Article VI of GATT 1994, both:
  - “As applied” in the reviews at issue; and
  - “As such,” based on a rule or norm of general and prospective application shown by administrative practice and supporting materials.
- The Appellate Body stated that dumping and margins of dumping must be established for the product under consideration as a whole for an exporter, requiring aggregation of all comparisons; zeroing inflates margins by excluding non-dumped comparisons from offsetting dumped comparisons.
- On institutional authority, the Appellate Body held that panels generally must follow adopted Appellate Body reports resolving the same legal issues, because such reports create legitimate expectations and support consistency in the dispute settlement system, even without formal stare decisis.
- The Appellate Body rejected reliance on Article 17.6(ii) to preserve zeroing, reasoning that the interpretive question had already been answered through adopted Appellate Body interpretations.
- The Appellate Body corrected the panel’s legal interpretations and reversed its findings without making a separate definitive finding that the panel violated DSU Article 11.

## Legal Principles

- Dumping and the margin of dumping must be determined for the product as a whole for the exporter; authorities must aggregate results of all relevant comparisons, including non-dumped comparisons.
- “Zeroing” is inconsistent with WTO anti-dumping disciplines when it prevents negative comparison results from offsetting positive results, thereby overstating the dumping margin.
- An “as such” challenge may be established by showing a rule or norm of general and prospective application, which can be inferred from consistent administrative practice and related materials, not only from formal legislation.
- Adopted Appellate Body reports, while not binding precedent in a formal sense, have authoritative force in subsequent disputes on the same legal issues; panels are generally not free to disregard their legal interpretations and core reasoning.
- Anti-Dumping Agreement Article 17.6(ii) does not permit a panel to select an alternative “permissible” interpretation where adopted Appellate Body reports have already resolved the interpretive question.

## Conclusion

The Appellate Body ruled that U.S. simple zeroing in anti-dumping administrative reviews violates WTO anti-dumping obligations and clarified that panels should follow adopted Appellate Body interpretations on the same issues to maintain consistency and predictability in WTO dispute settlement.


United States—Final Anti-Dumping Measures on Stainless Steel from Mexico, 47 I.L.M. 475 (WTO App. Body 2008)