Decisions of the Appellate Body of the World Trade Organization United States – Final Dumping Determination on Softwood Lumber from Canada 2. Facts Following is the Appellate Body’s description of the zeroing process as followed by the U.S. in this case   First, USDOC [the U.S. Department of Commerce] divided the product under investigation (that is, softwood lumber from Canada) into sub-groups of identical, or broadly similar, product types. Within each sub-group, USDOC made certain adjustments to ensure price comparability of the transactions and, thereafter, calculated a weighted average normal value and a weighted average export price per unit of the product type. When the weighted average normal value per unit exceeded the weighted average export price per unit for a sub-group, the difference was regarded as the "dumping margin" for that comparison. When the weighted average normal value per unit was equal to or less than the weighted average export price per unit for a sub-group, USDOC took the view that there was no "dumping margin" for that comparison. USDOC aggregated the results of those sub-group comparisons in which the weighted average normal value exceeded the weighted average export price—those where the USDOC considered there was a "dumping margin"—after multiplying the difference per unit by the volume of export transactions in that sub-group. The results for the subgroups in which the weighted average normal value was equal to or less than the weighted average export price were treated as zero for purposes of this aggregation, because there was, according to USDOC, no "dumping margin" for those sub-groups. Finally, USDOC divided the result of this aggregation by the value of all export transactions of the product under investigation (including the value of export transactions in the sub-groups that were not included in the aggregation). In this way, USDOC obtained an "overall margin of dumping", for each exporter or producer, for the product under investigation (that is, softwood lumber from Canada).   The point is that the group of products under investigation is broken up into sub-groups. For those subgroups in which there is a negative dumping margin, the margin is set at zero. Thus, those subgroups with a negative dumping margin are not permitted to set off subgroups with a positive dumping margin. This method will result in far more frequent findings of dumping. Appellate Body Report, para. 64 (citation omitted).
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