Decisions of the Appellate Body of the World Trade Organization

European Communities-Anti-Dumping Duties on Imports of Cotton-Type Bed Linen from India

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Joel P. Trachtman

WTO Appellate Body Report: European Communities-Anti-Dumping Duties on Imports of Cotton-Type Bed Linen from India, AB-2000-13 WT/DS141/AB/R (00-0973), adopted by Dispute Settlement Body, 12 March 2001. European Communities, Appellant/Appellee, India, Appellant/Appellee, Egypt, Japan and United States, Third Participants. Division: Bacchus, Abi-Saab, and Feliciano. Major Topics Addressed by Appellate Body: Calculation of Dumping Margins under Article 2.4.2 of the Anti-Dumping Agreement; Inclusion of Sales Outside the Ordinary Course in Calculation Under Article 2.2.2(ii) of the Anti-Dumping Agreement.

1. Abstract

This case related to the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (the "Anti-Dumping Agreement"). The EC sought to defend its practice of "zeroing"-calculating average dumping margins by including negative dumping margins at zero, instead of at actual negative amounts. This practice results in artificially high average dumping margins. The Appellate Body found that zeroing is inconsistent with the Article 2.4.2 of the Anti-Dumping Agreement. It also found that in calculating the amount for profits and for selling, general and administrative expense under Article 2.2.2(ii), a member may not exclude sales by other exporters or producers outside the ordinary course of trade.

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