This paper addresses the issues that came before the
Appellate Body in the Softwood V dispute, concerning an affirmative antidumping
determination by the U.S. Department of Commerce. The paper addresses both the original Appellate
Body opinion in the dispute, and the later opinion reviewing the compliance
panel findings. We focus primarily on
the “zeroing” issue in “transaction-to-transaction” calculations of dumping,
and briefly on two other cost allocation issues. In general, we are ambivalent
about the Appellate Body’s approach to the zeroing issue. On the one hand, zeroing inflates dumping
margins without any sound economic rationale for doing so. On the other hand, zeroing has been a
standard administrative practice for many years and the ADA does not clearly prohibit it. The Appellate Body’s legal analysis of the
matter in T-T cases, in particular, rests on shaky premises. We also consider the wisdom of addressing the
zeroing issue in piecemeal fashion through what has proven to be a lengthy
sequence of narrow decisions.
Also prepared for American Law Institute
volume on review of the WTO Appellate Body 2004-2005 case-law, edited by Henrik
Horn and Petros C. Mavroidis.