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Report of the Panel

TABLE OF CASES CITED IN THIS REPORT

Short TitleFull Case Title and Citation
Australia – Salmon Appellate Body Report, Australia – Measures Affecting Importation of Salmon, WT/DS18/AB/R, adopted 6 November 1998, DSR 1998:VIII, 3327
Argentina – Footwear (EC) Panel Report, Argentina – Safeguard Measures on Imports of Footwear, WT/DS121/R, adopted 12 January 2000, as modified by Appellate Body Report, WT/DS121/AB/R, DSR 2000:II, 575
Brazil – Desiccated Coconut Appellate Body Report, Brazil – Measures Affecting Desiccated Coconut, WT/DS22/AB/R, adopted 20 March 1997, DSR 1997:I, 167
Brazil – Desiccated Coconut Panel Report, Brazil – Measures Affecting Desiccated Coconut, WT/DS22/R, adopted 20 March 1997, upheld by Appellate Body Report, WT/DS22/AB/R, DSR 1997:I, 189
Chile – Price Band System Appellate Body Report, Chile – Price Band System and Safeguard Measures Relating to Certain Agricultural Products, WT/DS207/AB/R, adopted 23 October 2002, DSR 2002:VIII, 3045
EC – Bananas III Appellate Body Report, European Communities – Regime for the Importation, Sale and Distribution of Bananas, WT/DS27/AB/R, adopted 25 September 1997, DSR 1997:II, 591
EC – Bed Linen Appellate Body Report, European Communities – Anti-Dumping Duties on Imports of Cotton-Type Bed Linen from India, WT/DS141/AB/R, adopted 12 March 2001, DSR 2001:V, 2049
EC – Sardines Panel Report, European Communities – Trade Description of Sardines, WT/DS231/R and Corr.1, adopted 23 October 2002, as modified by Appellate Body Report, WT/DS231/AB/R, DSR 2002:VIII, 3451
India – Patents (US) Appellate Body Report, India – Patent Protection for Pharmaceutical and Agricultural Chemical Products, WT/DS50/AB/R, adopted 16 January 1998, DSR 1998:I, 9
Indonesia – Autos Panel Report, Indonesia – Certain Measures Affecting the Automobile Industry, WT/DS54/R, WT/DS55/R, WT/DS59/R, WT/DS64/R and Corr.1, 2, 3 and 4, adopted 23 July 1998, DSR 1998:VI, 2201
Japan – Alcoholic Beverages II Appellate Body Report, Japan – Taxes on Alcoholic Beverages, WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, DSR 1996:I, 97
Korea – Various Measures on Beef Appellate Body Report, Korea – Measures Affecting Imports of Fresh, Chilled and Frozen Beef, WT/DS161/AB/R, WT/DS169/AB/R, adopted 10 January 2001, DSR 2001:I, 5
Mexico – Anti-Dumping Measures on Rice Appellate Body Report, Mexico – Definitive Anti-Dumping Measures on Beef and Rice, Complaint with Respect to Rice, WT/DS295/AB/R, adopted 20 December 2005
Mexico – Anti-Dumping Measures on Rice Panel Report, Mexico – Definitive Anti-Dumping Measures on Beef and Rice, Complaint with Respect to Rice, WT/DS295/R, adopted 20 December 2005, as modified by Appellate Body Report, WT/DS295/AB/R
Mexico – Corn Syrup (Article 21.5 – US) Appellate Body Report, Mexico – Anti-Dumping Investigation of High Fructose Corn Syrup (HFCS) from the United States – Recourse to Article 21.5 of the DSUby the United States, WT/DS132/AB/RW, adopted 21 November 2001, DSR 2001:XIII, 6675
US – 1916 Act Appellate Body Report, United States – Anti-Dumping Act of 1916, WT/DS136/AB/R, WT/DS162/AB/R, adopted 26 September 2000, DSR 2000:X, 4793
US – 1916 Act (EC) Panel Report, United States – Anti-Dumping Act of 1916, Complaint by the European Communities, WT/DS136/R and Corr.1, adopted 26 September 2000, upheld by Appellate Body Report, WT/DS136/AB/R, WT/DS162/AB/R, DSR 2000:X, 4593
US – 1916 Act (Japan) Panel Report, United States – Anti-Dumping Act of 1916, Complaint by Japan , WT/DS162/R and Add.1, adopted 26 September 2000, upheld by Appellate Body Report, WT/DS136/AB/R, WT/DS162/AB/R, DSR 2000:X, 4831
US – Carbon Steel Appellate Body Report, United States – Countervailing Duties on Certain Corrosion-Resistant Carbon Steel Flat Products from Germany, WT/DS213/AB/R and Corr.1, adopted 19 December 2002, DSR 2002:IX, 3779
US – Certain EC Products Appellate Body Report, United States – Import Measures on Certain Products from the European Communities, WT/DS165/AB/R, adopted 10 January 2001, DSR 2001:I, 373
US – Corrosion-Resistant Steel Sunset Review Appellate Body Report, United States – Sunset Review of Anti-Dumping Duties on Corrosion-Resistant Carbon Steel Flat Products from Japan, WT/DS244/AB/R, adopted 9 January 2004, DSR 2004:I, 3
US – DRAMS Panel Report, United States – Anti-Dumping Duty on Dynamic Random Access Memory Semiconductors (DRAMS) of One Megabit or Above from Korea, WT/DS99/R, adopted 19 March 1999, DSR 1999:II, 521
US – FSC (Article 21.5 – EC II) Appellate Body Report, United States – Tax Treatment for "Foreign Sales Corporations" – Second Recourse to Article 21.5 of the DSU by the European Communities, WT/DS108/AB/RW2, adopted 14 March 2006
US – Gasoline Appellate Body Report, United States – Standards for Reformulated and Conventional Gasoline, WT/DS2/AB/R, adopted 20 May 1996, DSR 1996:I, 3
US – Softwood Lumber IV Appellate Body Report, United States – Final Countervailing Duty Determination with Respect to Certain Softwood Lumber from Canada, WT/DS257/AB/R, adopted 17 February 2004, DSR 2004:II, 571
US – Offset Act (Byrd Amendment) Appellate Body Report, United States – Continued Dumping and Subsidy Offset Act of 2000, WT/DS217/AB/R, WT/DS234/AB/R, adopted 27 January 2003, DSR 2003:I, 375
US – Offset Act (Byrd Amendment) Panel Report, United States – Continued Dumping and Subsidy Offset Act of 2000, WT/DS217/R, WT/DS234/R, adopted 27 January 2003, as modified by Appellate Body Report, WT/DS217/AB/R, WT/DS234/AB/R, DSR 2003:II, 489
US – Oil Country Tubular Goods Sunset Reviews Appellate Body Report, United States – Sunset Reviews of Anti-Dumping Measures on Oil Country Tubular Goods from Argentina, WT/DS268/AB/R, adopted 17 December 2004, DSR 2004:VII, 3257
US – Shrimp (Article 21.5 – Malaysia) Appellate Body Report, United States – Import Prohibition of Certain Shrimp and Shrimp Products – Recourse to Article 21.5 of the DSU by Malaysia, WT/DS58/AB/RW, adopted 21 November 2001, DSR 2001:XIII, 6481
US – Shrimp (Ecuador) Panel Report, United States – Anti-Dumping Measure on Shrimp from Ecuador, WT/DS335/R, adopted on 20 February 2007
US – Softwood Lumber V Appellate Body Report, United States – Final Dumping Determination on Softwood Lumber from Canada, WT/DS264/AB/R, adopted 31 August 2004, DSR 2004:V, 1875
US – Softwood Lumber V Panel Report, United States – Final Dumping Determination on Softwood Lumber from Canada, WT/DS264/R, adopted 31 August 2004, as modified by Appellate Body Report, WT/DS264/AB/R, DSR 2004:V, 1937
US – Stainless Steel Panel Report, United States – Anti-Dumping Measures on Stainless Steel Plate in Coils and Stainless Steel Sheet and Strip from Korea, WT/DS179/R, adopted 1 February 2001, DSR 2001:IV, 1295
US – Steel Safeguards Appellate Body Report, United States – Definitive Safeguard Measures on Imports of Certain Steel Products, WT/DS248/AB/R, WT/DS249/AB/R, WT/DS251/AB/R, WT/DS252/AB/R, WT/DS253/AB/R, WT/DS254/AB/R, WT/DS258/AB/R, WT/DS259/AB/R, adopted 10 December 2003, DSR 2003:VII, 3117
US – Steel Safeguards Panel Reports, United States – Definitive Safeguard Measures on Imports of Certain Steel Products, WT/DS248/R, WT/DS249/R, WT/DS251/R, WT/DS252/R, WT/DS253/R, WT/DS254/R, WT/DS258/R, WT/DS259/R, and Corr.1, adopted 10 December 2003, as modified by Appellate Body Report, WT/DS248/AB/R, WT/DS249/AB/R, WT/DS251/AB/R, WT/DS252/AB/R, WT/DS253/AB/R, WT/DS254/AB/R, WT/DS258/AB/R, WT/DS259/AB/R, DSR 2003:VIII, 3273
US – Upland Cotton Appellate Body Report, United States – Subsidies on Upland Cotton, WT/DS267/AB/R, adopted 21 March 2005
US – Wool Shirts and Blouses Appellate Body Report, United States – Measure Affecting Imports of Woven Wool Shirts and Blouses from India, WT/DS33/AB/R and Corr.1, adopted 23 May 1997, DSR 1997:I, 323
US – Zeroing (EC) Appellate Body Report, United States – Laws, Regulations and Methodology for Calculating Dumping Margins ("Zeroing"), WT/DS294/AB/R, adopted 9 May 2006
US – Zeroing (EC) Panel Report, United States – Laws, Regulations and Methodology for Calculating Dumping Margins ("Zeroing"), WT/DS294/R, adopted 9 May 2006, as modified by Appellate Body Report, WT/DS294/AB/R
US – Zeroing (Japan) Appellate Body Report, United States – Measures Relating to Zeroing and Sunset Reviews, WT/DS322/AB/R, adopted 23 January 2007
US – Zeroing (Japan) Panel Report, United States – Measures Relating to Zeroing and Sunset Reviews, WT/DS322/R, adopted 23 January 2007, as modified by Appellate Body Report, WT/DS322/AB/R

I. INTRODUCTION

A. COMPLAINT OF THAILAND

1.1.
On 24 April 2006, Thailand requested consultations with the United States pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (the "DSU"), Article XXII:1 of the General Agreement on Tariffs and Trade 1994 (the "GATT 1994") and Articles 17.2, 17.3 and 17.4 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (the "Anti-Dumping Agreement") with respect to certain issues relating to measures imposed by the United States on imports of certain frozen warmwater shrimp from Thailand.1 Thailand and the United States held consultations, but failed to resolve the dispute.
1.2.
On 15 September 2006, Thailand requested the establishment of a panel pursuant to Article XXIII of the GATT 1994, Articles 4 and 6 of the DSU, and Article 17 of the Anti-Dumping Agreement.2
1.3.
At its meeting on 26 October 2006, the Dispute Settlement Body (DSB) established a Panel pursuant to the request of Thailand in document WT/DS343/7, in accordance with Article 6 of the DSU.
1.4.
The Panel's terms of reference are the following:

"To examine, in the light of the relevant provisions of the covered agreements cited by Thailand in document WT/DS343/7, the matter referred to the DSB by Thailand in that document, and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in those agreements."3

1.5.
At its meeting on 21 November 2006, the DSB also established a Panel pursuant to the request of India in document WT/DS345/6, which dealt substantially with the same matter.
1.6.
On 19 January 2007, Thailand requested the Director-General to determine the composition of the Panel, pursuant to Article 8.7 of the DSU. This paragraph provides:

"If there is no agreement on the panelists within 20 days after the date of the establishment of a panel, at the request of either party, the Director-General, in consultation with the Chairman of the DSB and the Chairman of the relevant Council or Committee, shall determine the composition of the panel by appointing the panelists whom the Director-General considers most appropriate in accordance with any relevant special or additional rules or procedures of the covered agreement or covered agreements which are at issue in the dispute, after consulting with the parties to the dispute. The Chairman of the DSB shall inform the Members of the composition of the panel thus formed no later than 10 days after the date the Chairman receives such a request."

1.7.
Thailand also requested the Director General to select the same persons to serve as panelists for both DS343 and DS345, in accordance with Article 9.3 of the DSU, which provides:

"If more than one panel is established to examine the complaints related to the same matter, to the greatest extent possible the same persons shall serve as panelists on each of the separate panels and the timetable for the panel process in such disputes shall be harmonized."

1.8.
On 26 January 2007, the Director-General composed the Panel as follows:

Chairperson: Mr. Michael Cartland

Members: Mrs. Enie Neri de Ross

Mr. Graham Sampson

1.9.
Brazil, Chile, China, the European Communities, India, Japan, Korea, Mexico and Viet Nam4 reserved their rights to participate in the Panel proceedings as third parties.5
1.10.
The Panel held the first substantive meeting with the parties on 6 and 7 June 2007. The session with the third parties took place on 7 June 2007. The Panel's second substantive meeting with the parties was held on 24 and 25 July 2007.
1.11.
On 4 September 2007, the Panel issued the Descriptive Part of its Panel Report. The Interim Report was issued to the parties on 9 October 2007 and the Final Report was issued to the parties on 13 November 2007.

II. FACTUAL ASPECTS

2.1.
This dispute concerns the use of "zeroing" and the application of the enhanced continuous bond requirement (hereafter the "EBR")6 by the United States on certain frozen warmwater shrimp imported from Thailand.

A. THE ANTI-DUMPING MEASURE

2.2.
The first measure at issue concerns the imposition of anti-dumping duties on imports of shrimp from Thailand. On 27 January 2004, the United States initiated an anti-dumping investigation of certain frozen and canned warmwater shrimp imported from Thailand, Brazil, China, Ecuador, India, and Viet Nam.7 On 28 July 2004, the US Department of Commerce (hereafter "USDOC") preliminarily determined that certain frozen and canned warmwater shrimp from Thailand were being sold at less than fair value to the United States (the "Preliminary Determination").8 On 1 February 2005, USDOC published an amended final determination of sales at less than fair value and an anti-dumping duty order imposing definitive anti-dumping duties only on imports of certain frozen warmwater shrimp from Thailand.9
2.3.
In the anti-dumping order, the USDOC established margins of dumping for eleven individually-investigated Thai exporters ranging from 5.7% to 6.8%, and an "all others" margin of dumping of 6.0%.
2.4.
The United States does not accept nor dispute that the "zeroing" used to calculate the anti-dumping duties at issue in these proceedings is inconsistent with Article 2.4.2 of the Anti-Dumping Agreement, and does not contest Thailand's zeroing claim for purposes of this dispute.10

B. THE ENHANCED CONTINUOUS BOND REQUIREMENT (THE "EBR")

C. IMPOSITION OF CONTINUOUS BONDS AND OTHER SECURITY REQUIREMENTS IN THE CONTEXT OF THE US RETROSPECTIVE ANTI-DUMPING AND COUNTERVAILING DUTY ASSESSMENT SYSTEM

2.6.
According to the United States, the EBR in combination with cash deposits is imposed to ensure payment of anti-dumping or countervailing duties under its retrospective duty assessment system. Unlike the systems employed in many other countries, the US retrospective system determines final liability for anti-dumping and countervailing duties after merchandise is imported into the country at the end of assessment or "administrative" reviews which are conducted 12 months following the anniversary month of the relevant anti-dumping order.18 Certain of the following aspects of the US system discussed below, may prove relevant to an objective assessment of Thailand's claim.

1. Overview of anti-dumping and countervailing duty procedures

2.7.
Under the US retrospective duty assessment system, the United States determines, through an investigation, whether margins of dumping or countervailable subsidisation exist, and whether dumped imports or countervailable subsidisation cause or threaten to cause material injury to a domestic industry. During the preliminary phase of the investigation, the US International Trade Commission (hereafter "USITC") determines whether a reasonable indication exists that an industry in the United States is materially injured, whether a reasonable indication exists that an industry in the United States is threatened with material injury, or whether the establishment of an industry in the United States is materially retarded by reason of subject merchandise investigated. USDOC also preliminarily determines whether a reasonable basis exists to believe that dumping or countervailable subsidisation is occurring. If USDOC makes an affirmative determination, it will issue a preliminary determination, which permits the imposition of provisional measures, historically in the form of a cash deposit, bond, or other security requirement, to ensure collection if anti-dumping or countervailing duties are ultimately imposed. The preliminary determination sets forth ad valorem cash deposit rates for producers/exporters individually investigated, as well as an "all-others" rate applicable to all other producers/exporters. Subsequently, USDOC makes a final determination as to whether dumping or countervailable subsidisation is occurring. If this determination is affirmative and USITC also issues a final determination that imports of subject merchandise in the investigation were causing material injury to the US domestic industry or threatening with material injury, or that the establishment of an industry in the United States is materially retarded by reason of subject merchandise in the investigation, thereafter USDOC issues a public notice, denominated under US law as an anti-dumping or countervailing duty order. In the anti-dumping or countervailing duty order, USDOC sets forth ad valorem cash deposit rates for producers/exporters individually investigated, as well as an "all-others" rate applicable to all other producers/exporters. Pursuant to the order, importers must post a cash deposit of estimated anti-dumping or countervailing duties for each import transaction. This cash deposit is based on the overall margin of dumping or countervailable subsidisation found for the exporter or producer during the investigation phase.
2.8.
During the anniversary month following a final determination in the investigations phase, importers, exporters, producers, and domestic interested parties may request that USDOC conduct an assessment review often referred to as an "administrative review" of the import transactions that occurred in the prior year. During this review, USDOC analyses all of the import transactions for the period of review (i.e., the prior 12 months) to determine the final amount of the anti-dumping or countervailing duty payable on imports from each producer or exporter for which USDOC received a request for review.
2.9.
Upon USDOC's completion of an administrative review, US Customs applies the assessment rate provided by USDOC to the customs value of each entry to determine the amount of final liability. If the amount of the cash deposit is greater than the amount of final liability, US Customs refunds the amount collected in excess of the final liability, together with interest on the excess amount. Alternatively, if the amount of final liability exceeds the amount of the cash deposit, US Customs issues a bill to the importer for payment of the difference in the amounts together with interest on the difference in the amounts. During the administrative review, USDOC may establish a new cash deposit rate for each producer or exporter, on the basis of that producer or exporter's transactions over the period of review. This new ad valorem cash deposit rate will be applied to future imports from the producer or exporter. USDOC analyses the import transactions of each producer or exporter subject to the review to calculate a new cash deposit rate going forward. For those entries not covered by a request for an administrative review, USDOC instructs US Customs to assess anti-dumping or countervailing duties at the cash deposit rate required upon entry.
2.10.
Due to the design of the US retrospective system, the dumping or subsidisation calculations in the administrative review are based on different transactions than those evaluated during the investigation. The investigation evaluates the pricing behaviour of producers and exporters based on transactions completed during a period of time prior to the initiation of the anti-dumping or countervailing duty investigation. In contrast, an administrative review evaluates pricing behaviour during later time periods.19 As a result of this, the dumping or subsidisation margins calculated in the administrative review may be either higher or lower than the margins calculated in the investigation. According to the United States, the EBR attempts to ensure full collection of anti-dumping or countervailing duties by securing against the possibility that the margin will increase from the time of the investigation until calculation of the final duty liability during the administrative review, and that importers will default on payment of increased duties.20

2. Timeline for anti-dumping and countervailing duty procedures

2.11.
Under US law, USDOC has a finite period to complete its anti-dumping or countervailing duty investigation and issue an anti-dumping or countervailing duty order, if any. USDOC may extend the deadlines for the preliminary and final determinations, but cannot extend the investigation beyond 407 days. US law provides that USDOC ordinarily must complete an administrative review within 365 days. USDOC may extend the deadlines for issuing preliminary and final results of the assessment review, but the review may not exceed 545 days. Specifically, the following is an overview of applicable time limits:

· In the petition phase of an anti-dumping or countervailing duty investigation, USDOC has 20 days (which may be extended to 40 days, only in the case of an anti-dumping investigation) to determine whether to initiate an investigation after it receives a petition to investigate dumping or countervailable subsidisation.

· In the preliminary phase of an anti-dumping or countervailing duty investigation, after USDOC initiates the investigation, USITC has 45 days (which may be extended to 65 days) from the date the petition is filed to make a preliminary injury determination. If USITC makes a preliminary affirmative injury determination, then USDOC has 140 days (which may be extended to 190 days) in the case of a dumping investigation, or 65 days (which may be extended to 130 days) in the case of a countervailable subsidisation investigation, from the date it initiated the investigation to make its preliminary determination of the existence of dumping or countervailable subsidisation.

· In the final phase of an anti-dumping or countervailing duty investigation, USDOC has 75 days (which may be extended to 135 days, only in the case of an anti-dumping investigation) from its preliminary determination to make a final determination of the dumping or subsidisation margins of investigated producers and exporters. If USDOC makes an affirmative final determination, USITC has until 45 days (which may be extended to 75 days) after USDOC's final determination to make its final injury determination. If the USITC makes an affirmative final injury determination, USDOC issues an anti-dumping or countervailing duty order.

· One year after the date the anti-dumping or countervailing duty order is issued, and during the anniversary month of the order every year thereafter, interested parties may request that USDOC conduct an administrative review of individual producers or exporters. After initiating this review, USDOC is required to issue preliminary results of the actual margin of dumping or subsidisation for the entries of the reviewed producer or exporter during the period of review within 245 days (which may be extended to 365 days) after the last day of the anniversary month. USDOC then must issue the final results within 120 days (which may be extended to 180 days) after the preliminary results are published.

D. IMPLEMENTATION OF THE AMENDED CONTINUOUS BOND DIRECTIVE (THE "AMENDED CBD")

2.12.
Following issuance of the anti‑dumping duty order on imports of certain frozen warmwater shrimp on 1 February 2005, US Customs began requiring subject shrimp importers to maintain enhanced bond coverage additional to the cash security required on each entry, in compliance with the Amended CBD.21
2.16.
The Amended CBD authorizes US Customs to use the standard formula or instead make individualised bond determinations for subject Thai shrimp importers to determine bond amounts. The Amended CBD (specifically the August 2005 Clarification and the October 2006 Notice) provides that US Customs may reconsider bond amounts for individual importers on a case-by-case basis to ensure that duties are collected. However, in order to receive a reduction in the overall bond coverage via an individualized bond determination, an importer must so request, and may submit information on its financial condition related to the risk of non-collection for that importer. US Customs will then determine bond amounts based on the financial information supplied by the importer, US Customs records on compliance history of the importer, the importer's or principal's ability to pay, and other relevant information available to US Customs. Thus, the October 2006 Notice provides that, "[a]bsent exceptional circumstances, the above formulas will determine the bond amounts where a submission has not been made by the principal".26 To date, the United States has indicated that it received 27 requests for individualized bond determinations, of which it has reviewed 22 requests, has granted no reductions to three importers, reductions of 25 per cent to eleven importers, 45 per cent to one importer, 75 per cent to two importers, 80 per cent to one importer and 85 per cent to two importers.27
2.17.
The Enhanced continuous bonds provided pursuant to the Amended CBD are released when final liability for anti‑dumping duties on goods covered by the bond is assessed, and upon liquidation of the import entries made in account of the goods.28 As explained in Section II.C.2 above, if an administrative review is requested, final liability for anti‑dumping or countervailing duties will be determined through such a review. If an administrative review is not requested, final liability will equal the margin of dumping or subsidy published in the final determination; however, this liability will not be assessed until the conclusion of the time period for requesting an administrative review.

E. THE IMPACT OF THE ENHANCED CONTINUOUS BOND REQUIREMENT (THE "EBR") ON SUBJECT SHRIMP IMPORTERS

III. PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS

3.1.
Thailand requests the Panel;44

(a) to find that, regarding the application of the EBR to subject shrimp from Thailand, the United States acted inconsistently with:

(i) Article 18.1 of the Anti-Dumping Agreement by taking specific action against dumping that is not in accordance with the provisions of Article VI of the GATT 1994 as interpreted by the Anti-Dumping Agreement;

(ii) subsidiarily, Articles 7 and 945 of the Anti-Dumping Agreement, Article VI:2 of the GATT 1994, and the Ad Note to Article VI:2 and 3 of the GATT 1994 (the "Ad Note").

(iii) Article XI:1 of the GATT 1994 by imposing an impermissible restriction on imports of shrimp from Thailand; or, alternatively, that the United States acted inconsistently with Article II:1(a) and the first and second sentences of Article II:1(b) of the GATT 1994 by imposing impermissible duties or charges on imports of shrimp from Thailand.

(iv) Article X:3(a) of the GATT 1994 by failing to administer its customs laws and regulations relating to bonds in a uniform, impartial and reasonable manner.

(v) Article I of the GATT 1994 by failing to extend to imports of subject shrimp advantages that are provided to imports of shrimp from other countries.

(b) to find that, regarding the Anti‑Dumping Measure, the United States acted inconsistently with:

(i) Article 2.4.2 of the Anti-Dumping Agreement by using the zeroing methodology to calculate margins of dumping.46

(c) to proceed to address Thailand's claims regarding the consistency of the EBR with Articles XI, II, X:3(a), and I of the GATT 1994, even if the Panel were to agree with Thailand on the claim that the application of the Enhanced Bond Requirement constitutes specific action against dumping within the meaning of Article 18.1 of the Anti-Dumping Agreement.

(d) to recommend, in accordance with Article 19.1 of the DSU, that the DSB request the United States to bring the measures at issue into conformity with the Anti-Dumping Agreement and the GATT 1994 within a reasonable period of time.

(e) to suggest, pursuant to its authority under Article 19.1, that the United States bring its measure into conformity by immediately releasing any bonds held by US Customs for imports of subject shrimp from Thailand pursuant to the EBR, so that those imports, like all other US imports subject to anti-dumping duties would be secured by the Basic Bond Requirement.

3.2.
The United States requests that the Panel reject Thailand's claims for the reasons provided in its first written submission.47

IV. ARGUMENTS OF THE PARTIES

4.1.
The arguments of the parties as set forth in their executive summaries submitted to the Panel, are attached to this Report as Annexes (see List of Annexes, page v).

V. ARGUMENTS OF THE THIRD PARTIES

5.1.
The arguments of the third parties as set forth in their executive summaries submitted to the Panel, i.e. Brazil, Chile, China, the European Communities, India, Korea, Japan and Mexico, are attached to this Report as Annexes (see List of Annexes, page v).48

VI. INTERIM REVIEW

6.1.
On 9 October 2007, the Panel issued its Interim Report to the parties. On 23 October 2007, both parties submitted written requests for the review of precise aspects of the Interim Report. The parties also submitted written comments on the other party's comments on 2 November 2007. Neither party requested an interim review meeting.
6.2.
In accordance with Article 15.4 of the DSU, this section of the Panel's Report sets out the Panel's response to the arguments made at the interim review stage, wherever the Panel felt that explanation was necessary. The Panel has also modified certain aspects of its Report in light of the parties' comments wherever the Panel considered it necessary. Due to the factual similarities in the disputes DS343 and DS345, the Panel wherever possible has modified the respective reports of these two disputes in parallel. The Panel has also made a limited number of editorial corrections to the Interim Report for the purposes of clarity and accuracy. References to sections, paragraph numbers and footnotes in this Section VI relate to the Interim Report. Where appropriate, references to paragraphs and footnotes to the Final Report are included.

A. THAILAND'S COMMENTS ON THE INTERIM REPORT

1. The impact of the EBR on subject importers

6.3.
Regarding paragraph 2.18 and collateral requirements, Thailand requests the Panel to modify its statement that at least one or more sureties has required subject importers to provide 100 per cent collateral, based on statements made by the USCIT that sureties "typically" require 100 per cent collateral (see NFI v. U.S., Exhibit THA-9, at 38). Thailand submits that the dictionary definition of "typically" is "representatively, characteristically." (see New Shorter Oxford dictionary, vol. 2 (1993), Brown, L. Ed. (Clarendon Press: Oxford) p. 3442). Further, Thailand requests the Panel to refer to evidence disclosed in email communications between customs brokers and exporters discussing collateral requirements (see Exhibit THA-13). The United States requests the Panel to decline Thailand's suggestions due to the fact that the proceedings in NFI v. US are ongoing, contain a different factual record and involve questions of US law. In particular, the United States notes that the findings in NFI v. US pertain to 8 importers and should not be extrapolated. The United States further notes that evidence on record, such as Exhibit THA-13, does not support the conclusion that all or a majority of sureties require collateral. However, the United States does request the Panel to include evidence submitted by Thailand and the United States on the issue of collateral requirements into the relevant footnotes. Taking both parties' comments into consideration, the Panel has modified paragraph 2.18 in order to reflect both parties' views with respect to the overall effect of the EBR on all subject shrimp importers/exporters from Thailand.
6.4.
Regarding paragraphs 2.18, 6.59 and 6.75, footnote 103 and fees and the stacking effect, Thailand requests the Panel to refer to Exhibit THA-18 as evidence to support a finding that sureties have charged associated fees to secure increased bond amounts. Thailand further requests the Panel to refer to Exhibit THA-18 as discussed in paragraphs 132-134 of Thailand's first written submission, or NFI v. US, Exhibit THA-9 as discussed in paragraphs 59-62 and 113 of Thailand's first written submission to support its explanation of the stacking effect of bonds on imports. The United States does not object to inclusion of citation to Exhibit THA-18, but requests the Panel to retain the existing text in the main body. If the Panel refers to Thailand's arguments regarding stacking, the United States requests the Panel to also refer to US arguments presented in paragraphs 7, 10-11, and 40-44 of its first written submission. In relation to fees, the Panel has added citation to invoices provided in Exhibit THA-18 and the United States' first written submission, in footnotes to paragraph 2.18 of the Interim Report. The Panel has also cited to Exhibits THA-18 and THA-13 in paragraph 2.18 when discussing the stacking of enhanced bonds and its effect on collateral requirements.
6.5.
Regarding paragraph 2.18, Thailand also requests the Panel to modify the phrase "certain importers may have required exporters to export on a DDP basis" to reflect a statement by the USGAO that importers "now require" exporters to export on a DDP basis (see USGAO Report, Exhibit THA-10, p. 6). Thailand also asks the Panel to consider a Thai shrimp industry survey (see Exhibit THA-12) in support of the finding that exporters are required to ship on a DDP basis. The United States requests the Panel to modify the Interim Report to reflect the US position that the use of a DDP basis rather than a Cost, Insurance, and Freight (CIF) basis does not affect the costs faced by the importer of record. The Panel has modified the phrasing of its descriptive section in paragraph 2.18 to reflect statements by the USGAO regarding whether importers of subject shrimp have required exporters to export on a DDP basis, and has included citation to the United States arguments on the impact of a shift to a DDP basis.

2. Findings by the USCIT in NFI v. U.S.

6.6.
Regarding paragraph 2.19, Thailand requests the Panel to additionally refer to findings by the USCIT from section 2(b) of NFI v. U.S. (see Exhibit THA-9, p. 54). Thailand submits that, as pertains to the decision on whether to issue a preliminary injunction, the USCIT concluded that the administrative record supported the conclusion that the plaintiffs are likely to demonstrate that US Customs arbitrarily and capriciously selected the anti-dumping orders on shrimp as the only "covered case" of merchandise. The United States construes the current language in the report as accurately describing the USCIT's decision with respect to the eight complaining importers. The Panel has retained the original language discussing the USCIT holding while also seeking to clarify its description of the US court's holding through the addition of language in paragraph 2.19. The paragraph now reflects the USCIT's findings that plaintiffs are likely to demonstrate that US Customs both arbitrarily and capriciously selected the anti-dumping order as the only covered case, and arbitrarily and capriciously applied the Amended CBD to the eight complaining importers.

3. Parallel panel proceedings

6.7.
Regarding paragraph 6.1, Thailand requests the Panel to consider substituting the word "should" for "would" in the final sentence so that it does not appear that the decision to appoint the same panellists in DS343 and DS345 and to harmonise the timetable for the two cases was made by the representative of the United States. The United States notes that the US representative stated on record that "the same panellists could consider on the same timetable the matters in the two requests". (see WT/DSB/M/222, emphasis added). The Panel has amended paragraph 6.1 (7.1 of the Final Report) to reflect the statement made by the US representative.

4. "Specific action" in response to dumping

6.8.
Regarding paragraphs 6.55 and 6.61, Thailand requests the Panel to refer to additional arguments and evidence provided by Thailand in paragraphs 162 – 176 of its first written submission. Thailand submits that the Panel has only referred selectively to its argumentation regarding whether the application of the EBR constitutes "specific action" in response to dumping. In particular, Thailand submits that paragraph 6.61 contains no reference to Thailand's responses to the United States' arguments, including those presented in paragraphs 19 – 27 of Thailand's first oral statement, and paragraphs 8 – 15 of Thailand's second oral statement. The United States considers the Panel to have adequately represented Thailand's arguments in paragraphs 162 – 176 of the Interim Report, as well as Thailand's responses to US arguments, and doesn't believe further changes are necessary. In the case that the Panel were to refer to argumentation offered by Thailand in subsequent submissions, the United States requests the Panel to refer to US arguments in response to these additions.
6.9.
In making its findings, the Panel has set out the main arguments of the parties. The Panel does not consider that it is required to provide an exhaustive description of all of the parties' arguments, sub-arguments and supporting evidence when making its findings, particularly since the parties' own summaries of their arguments are annexed to the Report. Thailand's main argument regarding the specificity of the relevant action is that the EBR may only be applied to goods subject to US anti-dumping orders. This argument is repeated on numerous occasions in the extracts identified by Thailand in its interim comments, and is properly reflected in para. 6.55 of the Interim Report (7.55 of the Final Report).

5. Specific action "against" dumping

6.10.
Regarding paragraph 6.59, Thailand requests the Panel to refer to additional arguments and evidence provided by Thailand in paragraphs 182 – 190 of its first written submission. Thailand submits that the Panel has only referred selectively to its argumentation regarding whether the application of the EBR constitutes specific action "against dumping". In particular, Thailand submits that paragraphs 6.64, and 6.75 – 6.77 contain no reference to Thailand's submissions or evidence, such as Thailand's argumentation as to why the effects of the collateral requirements and fees charged by sureties are relevant considerations when determining that the measure is "against" dumping (as found by the Panel in footnote 103 of the Interim Report), and argumentation that the EBR does not simply facilitate the collection of anti-dumping duties (as found by the Panel in paragraph 6.76). The United States considers the Panel to have adequately represented Thailand's submissions and evidence in the Interim Report, including arguments regarding collateral and fees in paragraph 6.75 of the Interim Report, and Thailand's argument that the EBR does not solely facilitate the collection of anti-dumping duties. In the case that the Panel were to refer to argumentation offered by Thailand in subsequent submissions, the United States requests the Panel to refer to US arguments in response to these additions.
6.11.
The Panel considers that it has appropriately summarized the main arguments of Thailand regarding the impact of the application of the EBR. The Panel does not consider that it is required to provide an exhaustive description of all of the parties' arguments, sub-arguments and supporting evidence when making its findings, particularly since the parties' own summaries of their arguments are annexed to the Report.

6. Application of the Ad Note

6.12.
Regarding paragraphs 6.81 – 6.87, Thailand submits that the Panel's discussion of Thailand's arguments regarding the application of the Ad Note is incomplete. In particular, Thailand submits that the Panel only discusses arguments regarding the relationship between the Ad Note and the Anti-Dumping Agreement, but not other arguments related to other issues discussed in Section VI.C.4, such as the proper interpretation of the Ad Note (see e.g. Thailand's first oral statement, paras. 9 – 16).
6.13.
Thailand requests the Panel to address the following arguments: (a) Thailand's argument regarding the ordinary meaning of the term "suspected dumping", based on its ordinary meaning and the context of the authority to impose anti-dumping duties in Article VI:2 (see Thailand's responses to the Panel's first set of questions, paras. 47 – 49; Thailand's second written submission, paras. 27, 30 – 31); (b) Thailand's argument that Article VI and the Anti-Dumping Agreement require a simultaneous finding of the existence of dumping and injury (see Thailand's first oral statement, paras. 13 – 14, Thailand's second written submission, paras. 26, 31); (c) Thailand's argument that the term "cash deposit" as used in the Anti-Dumping Agreement refers only to provisional measures (see Thailand's second oral statement, paras. 38 – 42); and (d) Thailand's argument that the purpose of cash deposits of estimated anti-dumping duties collected after the imposition of an anti-dumping order is to protect domestic industries rather than to secure the payment of potential increases in liability (see Thailand's second oral statement, para. 54).
6.14.
In addition, Thailand submits that the Panel has not discussed Thailand's responses to the United States' arguments, such as in paragraph 6.87 of the Interim Report, regarding the United States' contention that Thailand's arguments would mean that security pending final assessment of anti-dumping duties was nowhere permitted by the Anti-Dumping Agreement or the GATT 1994 (see e.g. Thailand's first oral statement, paras. 5 – 7; Thailand's second written submission, paras. 8 – 12; Thailand's response to the Panel's second set of questions, paras. 23 – 25; Thailand's second oral statement, para. 7).
6.15.
The United States considers the Panel to have adequately represented Thailand's arguments regarding the ordinary meaning of "suspected dumping", Article VI, the meaning of "cash deposit" and the alleged "purpose" of cash deposits in the Interim Report. The United States considers unwarranted Thailand's request to respond to arguments regarding what Thailand claims would not prevent the United States from administering its retrospective duty assessment system. The United States, contends that this argument is premised on a claim that "cash deposits" are "duties", which the Panel has discussed and rejected in paragraphs 6,110 – 6,121 of the Interim Report.
6.16.
Thailand's main argument regarding the ordinary meaning of the term "suspected dumping" is that "[t]he ordinary meaning of 'suspected' is 'that one suspects to exist or to be such' " (footnote omitted). Given that an investigation under Article 5.1 of the Anti-Dumping Agreement is to determine the "existence" of dumping, dumping can no longer be said to be merely "suspected" once a final determination in such an investigation has been made.49 This argument is premised on the view that the existence of dumping is established once the anti-dumping order is imposed. The Panel addresses this issue – and therefore the premise of Thailand's argument - at para. 6,102 of the Interim Report. The Panel addresses this issue further – with specific reference to Thailand's argument regarding Article 5.1 of the Anti-Dumping Agreement – in paras 6,107 – 6,109 of the Interim Report.
6.17.
Thailand's argument that Article VI and the Anti-Dumping Agreement require a simultaneous finding of the existence of dumping and injury is necessarily addressed in our view, expressed at para. 6,108 of the Interim Report, that the conditions for imposing anti-dumping measures (including therefore the existence of injury and causation) are established in respect of the "current situation" prevailing at the time of imposition. Our point remains, though, that a finding of dumping (and injury and causation) at the time of imposition does not mean that there will necessarily be dumping in respect of future import entries.
6.18.
Thailand's argument that the term "cash deposit", as used in the Anti-Dumping Agreement, refers only to provisional measures is necessarily addressed by our consideration of the negotiating history of the Ad Note, which makes it clear that the Ad Note is not limited to provisional measures taken prior to the final determination of dumping. This argument is further addressed by our review of the relationship between the Ad Note and the Anti-Dumping Agreement, for it is premised on an assumption that the terms of Article 7.2 of the Anti-Dumping Agreement somehow trump those of the Ad Note.
6.19.
We have included footnote 170 at paragraph 7,122 of our Final Report to address Thailand's argument in respect of the purpose of cash deposits collected after the imposition of an anti-dumping order.
6.20.
To the extent that Thailand's comment in respect of paragraph 6.87 of the Interim Report would suggest that the United States is entitled to continue its current practice of collecting cash deposits, we note Thailand's argument that "the United States is authorised under Article 9 of the Anti-dumping Agreement to maintain its current practice of collecting cash deposits of estimated anti-dumping duties following the imposition of definitive anti-dumping duties."50 This argument is necessarily addressed – and rejected - through our findings on the possible treatment of cash deposits as anti-dumping duties. To the extent that Thailand's comment refers to its argument that the United States could collect security under the Basic Bond Requirement,51 we note that these proceedings concern the WTO-consistency of the specific facts surrounding the application of the EBR. Whether or not the United States might legitimately take action under some other provision of its domestic law does not affect our analysis of the application of the EBR in light of the relevant provisions of the covered agreements, including Article 18.1 of the Anti-Dumping Agreement and the Ad Note. While we examined other forms of security that might potentially be applied under the Ad Note, we did so in order to shed light on the interpretation of that provision. Thailand's arguments regarding possible security under the Basic Bond Requirement would not serve this function, for Thailand has made it clear that the Basic Bond Requirement would not apply under the Ad Note, which it considers to be superseded by the Anti-Dumping Agreement.

7. Ordinary meaning of the text of the Ad Note

6.21.
Regarding paragraphs 6,100 – 6,106, Thailand submits that the Panel has not discussed the ordinary meaning of the term "suspected dumping" in the Ad Note as interpreted in accordance with Article 31 of the Vienna Convention on the Law of Treaties. Thailand contends that the Panel has instead interpreted the term "suspected dumping" solely by reference to the processes of the United States' investigating authority. Thailand therefore requests the Panel to verify that the interpretation of the ordinary meaning of the text of the Ad Note is based on the ordinary meaning of the text, in accordance with Article 31 of the Vienna Convention, and not strictly on US administrative practice. Thailand also requests the Panel to provide reference to the records in paragraphs 6,101 – 6,102 regarding discussion of US administrative processes. The United States disagrees with Thailand's request to modify the discussion of "suspected dumping". The United States does not consider the Panel to suggest that "suspected" dumping should not be interpreted based on its ordinary meaning, nor that the Panel adopted a meaning of "suspected" that is inconsistent with its ordinary meaning. The United States also considers that the Panel's evaluation of the US duty assessment system in this context appears intended not to interpret the term "suspected", but to assess how that term applies to the particular facts of this dispute. Nevertheless, if the Panel chooses to include reference and citations to the record describing duty assessment, the United States suggests the Panel refer to the description of the US retrospective duty assessment system set forth in paragraphs 2.7 – 2.10 of the Interim Report.
6.22.
The Panel had not understood there to be any disagreement between the parties regarding the ordinary meaning of the term "suspected dumping". Rather, the disagreement concerned the question of whether or not there could still be "suspected dumping" after the imposition of an anti-dumping order. Since in this case the relevant anti-dumping order was imposed by the United States, the Panel considered this issue in the context of the US system. The Panel did not refer to the context of the US system to interpret the terms "suspected dumping" per se. We have included paragraph 7,101 in the Final Report to clarify our interpretation of the phrase "suspected dumping".
6.23.
Regarding Thailand's suggestion that we include references for our description of the US administrative processes, we note that this description is based on descriptions of the relevant processes provided by the parties (both orally and in writing) during the course of these proceedings.

8. Administrative reviews and exporter-specific assessment rate assignments

6.24.
Regarding paragraph 6,109 and footnote 136, Thailand requests the Panel to clarify through references to the record the finding that the United States in its administrative reviews initially assesses whether the export price for particular exports was below normal value. Thailand submits that evidence before the Panel, including the preliminary determination in the first administrative review of shrimp from Thailand, indicates that the United States' actual determination in assessment reviews is based on an overall calculation of a single dumping margin for each exporter, based on all of the exporters' transactions within the review period (see Exhibits US-5, US-6). The United States considers the discussion of how the United States calculates the anti-dumping margin to be accurate in its current form. Regardless, the United States highlights the Panel's finding that the existence of dumping is established after imports are made.
6.25.
Thailand also requests the Panel to explain the statement that the calculation of an exporter-specific assessment rate in an administrative review is done "for the sake of administrative convenience." Specifically, Thailand requests the Panel to explain the meaning of "administrative convenience" and how this concept differs from a published determination of a margin of dumping within the meaning of the Anti-Dumping Agreement for each exporter. The United States does not consider it necessary for the Panel to elaborate on the meaning of the term "administrative convenience".
6.26.
The Panel has made a number of changes to footnote 155 to its Final Report in order to address the concerns raised by Thailand.

9. Cash deposits

6.27.
Regarding paragraph 6,113, Thailand also requests the Panel to explain the statement that "a cash deposit is not cash and is not a payment to yield public revenue at the time it is provided", and in what sense cash deposits of estimated duties paid on entry of goods subject to US anti-dumping orders are not "cash". Thailand submits that the parties did not dispute that cash deposits of estimated duties are, in fact, "cash" paid to the general fund of the US treasury at the time of importation. Thailand requests the Panel to clarify its position through reference to US law and the record and to clarify what is the process where a cash deposit "is converted from a deposit or security, into a form of payment". The United States disputes Thailand's reading of the Panel's finding, contending the Panel to have meant that cash deposits are not liquidated revenue without the same attributes as cash. However, if the Panel were to include citation to the record on the transformation of cash deposits into a form of payment, the United States suggests referring to the description of the assessment review process in paragraphs 6,110 – 6,121 and 2.8 – 2.9 of the Interim Report.
6.28.
The Panel has made a number of changes to paragraph 6,113 (now 7,114 of its Final Report) and inserted footnote 170 in its Final Report order to address the concerns raised by Thailand.

10. Negotiating history of the Ad Note

6.29.
Regarding paragraph 6,124, Thailand submits that, in its submissions, it referred to the 1959 Report of the Group of Experts as well as the 1948 Report of the Working Party that adopted the Ad Note, when discussing the negotiating history of the Ad Note (see Thailand's first oral statement, para. 15, Thailand's response to the first set of Panel questions, para. 10, and Thailand's response to the second set of Panel questions, para. 42). Accordingly, Thailand requests the Panel to revise paragraphs 6,124 – 6,125 to reflect both of these references to the negotiating history. The United States does not consider changes to this section necessary because it views the Panel's analysis as more than adequate. The United States also notes the Panel's statement that it is not referring to the negotiating history because it does not consider it determinative of the issue before it. The United States considers that Thailand's reference to the 1948 Working Party Report does not detract from the Panel's conclusions concerning the negotiating history, but is instead fully consistent with the Panel's interpretation, under which dumping is suspected until anti-dumping duties are finally assessed and collected.
6.30.
The Panel has inserted paragraphs 7,127 and 7,128 in its Final Report addressing this issue.

11. Likelihood of increase of dumping margin for future imports as a best proxy

6.31.
Regarding paragraphs 6,137 – 6,138, Thailand submits that if a Member may also make a separate prospective determination of the likely dumping margin for future imports, and if the Member properly determines that the rates of dumping found in the final determination of dumping are likely to increase, then the rate of dumping found in the final determination is no longer the "best and only available proxy for duties that ultimately may be assessed". In light of this, Thailand requests the Panel to revise these paragraphs to clarify that, if a Member determines that the rates of dumping provided in the anti-dumping order are likely to decrease, then that determination also constitutes "the best estimate of suspected dumping for which security may be required pursuant to the Ad Note". Thailand submits, in this sense, that a Member could collect security only in this lower amount as "reasonable" under the Ad Note.
6.32.
The United States disagrees with Thailand's assertions but nonetheless requests the Panel to make clarifications to this section. The United States disagrees with the assertion that a Member must also make a separate prospective determination of the likely dumping margin for future imports in addition to determining the margin of dumping for the period of investigation. The United States contends that the Panel did not conclude that the only evidence that a Member may offer to support the establishment of a "reasonable" security would be through a prospective determination of the likely dumping margin. According to the United States, this conclusion is without basis in the Ad Note and would not accord with the Panel's observation in paragraph 6,111 that Members are entitled to operate retrospective duty assessment systems. The United States contends that, in accord with the Panel's conclusion that dumping is suspected until final assessment under the US retrospective assessment system, likelihood needs to be evaluated based on information available to the customs authority at the time the security is imposed, which may or may not include the type identified by Thailand.
6.33.
The Panel declines Thailand's request, since this case does not concern a situation in which a Member determined that the rates of dumping provided in the anti-dumping order are likely to decrease.

12. The phrase "error or fraud on the part of import specialists"

6.34.
Regarding paragraph 6,141, the Panel refers to "error or fraud on the part of import specialists." Thailand submits that the term "import specialists" is generally used to describe US Customs officers responsible for issues relating to specific products, but that Thailand made no allegations of fraud by US Customs officers. Thus, Thailand requests the Panel remove the phrase "on the part of import specialists" to avoid inference of such an allegation. The United States does not object to this change.
6.35.
The Panel has amended its text to address the concern raised by Thailand.

13. Documentation on likelihood of anti-dumping rate increases

6.36.
Regarding paragraphs 6,141 et seq., Thailand contends that the Panel is incorrect in asserting that the United States did not submit any documentary evidence that anti-dumping rates increased 33 per cent of the time. Thailand submits that in response to question 24 from the Panel following the first substantive meeting with the parties, the United States addressed this via Exhibit US-10 (see US response to the second set of Panel questions, para. 38). According to Thailand, Exhibit US-10 consists of the following: (i) 1 page that contains a chart plotting "Number of Cases" against "Percentage Change" with figures ranging from 0% to 2500% (but the X axis does not extend from -1% to -100%) without: (1) a further definition of the term "cases", (2) details of the anti-dumping duty orders, and period of time covered by these "cases", (3) details on each individual "case", including figures for the extent of increase/decrease in the "case", the order concerned, date of entry and value of trade, or, (4) figures for aggregate number of "cases" where margins increased, decreased or remained the same; (ii) 1 page that provides figures for uncollected duties on crawfish for fiscal year 2003 with deposit and final rates; (iii) 5 pages of undefined figures ("FirstOfTotalAmt","ADZCaseNbr","Sum","Rate Increase") that relate only to particular exporters of crawfish from China; and (iv) 3 pages that set out the amount of uncollected duties for fiscal year 2003 on all anti-dumping and countervailing duty orders. Thailand further notes that the United States described Exhibit US-10 as a US Customs analysis of "historical rate fluctuations in individual cases" (see US response to the first set of Panel questions, para. 26). Thailand also asserts that the United States referred to Exhibit US-10 (at para. 38 of its responses to the Panel's Second Set of Questions) in support of its assertion that rates increased approximately 33 per cent of the time. Therefore, Thailand requests the Panel to revise paragraph 6,141 to indicate that the United States submitted documentary evidence in support of the assertion that anti-dumping rates increased 33 per cent of the time, but such evidence is unclear and unreliable.
6.37.
In Thailand's view, however, the analysis in Exhibit US-10 does not have a precise scope and methodology and does not clearly concern 13 anti-dumping cases involving 340 exporters, as claimed by the United States in its responses to the second set of Panel questions, footnote 46. According to Thailand the analysis is also problematic because it appears to be limited to a subset of agriculture/aquaculture cases, does not contain weighting by trade value or volume, and includes cases involving new shipper reviews. Thailand submits that, given that the cash deposit rate was zero in new shipper reviews, all affirmative dumping determinations would have been considered as cases of "increases" in dumping rates, resulting in an exaggerated estimate that cannot be extrapolated to ordinary assessment reviews or a situation where the new shippers bonding privilege has been removed. Accordingly, Thailand requests the Panel to specifically cite portions of Thailand's submissions that set out objections to Exhibit US-10. In light of these changes, nevertheless, even if there were clear and reliable documentary evidence to support the United States' analysis, Thailand submits that this analysis should not change the Panel's conclusion in paragraphs 6,142 – 6,146.
6.38.
Thailand further submits that, in footnote 167 to paragraph 6,141 of the Interim Report, the Panel's statement that the "United States' evidence in respect of rate increases extends beyond the crawfish case and covers each agriculture/aquaculture order" is inaccurate as it is unsupported by evidence on record. Thailand notes that the Panel has based this statement on footnote 45 of the United States' responses to the second set of Panel questions. According to Thailand, however, the United States provided no evidence to support the assertion that all agriculture/aquaculture orders are covered in its analysis. Thailand submits that the United States did not provide a list of the agriculture/aquaculture orders examined by the CBP in Exhibit US-10. Moreover, Thailand submits that the United States instead provided Exhibit US-19 which, according to the United States, updated Exhibit US-10. Thailand asserts, however, that Exhibit US-19 does not cover "each agriculture/aquaculture order" as it excludes, at a minimum, 2 anti-dumping orders on pasta and 1 anti-dumping order on frozen raspberries (see Thailand's responses to the first set of Panel questions, footnote 55). Moreover, Thailand contends that the United States' assertion that the CBP examined 13 anti-dumping orders (see United States' responses to the second set of Panel questions, footnote 46), suggests that US Customs' analysis was incomplete, as there appear to be more than 13 anti-dumping orders in effect on agriculture/aquaculture merchandise (see Thailand's responses to the first set of Panel questions, footnote 55 (listing "at least" 22 orders); Exhibit US-19 (listing 17 orders); and Exhibit US-21 (listing 21 orders)). Accordingly, Thailand requests the Panel to also revise this statement in footnote 167.
6.39.
The United States notes that it has not cited Exhibit US-10 in support of the argument that rates increased 33 per cent of the time. According to the United States, Exhibit US-10 addresses the question of the amount by which rates increase in cases where an increase occurs, leaving this Exhibit irrelevant to the Panel's analysis of the likelihood of a rate increase. The United States asserts that Exhibit US-19 is relevant to the question of the likelihood of increase. The United States contends that this Exhibit examines each assessment for each agriculture/aquaculture order and compares it to the cash deposit rate at the time to determine the likelihood that rates would increase (38 per cent, in that study). However, due to the Exhibit's inclusion in footnote 167, the United States considers the Panel to have only concluded that the United States did not provide documentary evidence in support of its argument that rates increased 33 per cent of the time, not more generally to arguments regarding rate increases.
6.40.
The Panel declines to find that the United States submitted Exhibit US-10 in support of its argument that rates of dumping had increased in 33 per cent of cases. Regarding Thailand's reference to para. 38 of the US Responses to the Panel's Second Set of Questions, we note that the United States merely cited Exhibit US-10 in support of its assertion that "[w]hen rates increased, they increased by, on average, 285%". Since this was not an issue that we were required to examine, we had no need to examine the parties' arguments in respect of the contents of Exhibit US-10. While the United States submitted evidence of rate increases in Exhibit US-19, the United States made no argument that such evidence demonstrated that rates increased in 33 per cent of cases.
6.41.
We have amended footnote 187 of the Final Report in light of the concerns raised by Thailand.

14. The United States defence under Article XX(d) of the GATT 1994

6.42.
Regarding Section VI.6(b), Thailand submits that, to the extent that the Anti-Dumping Agreement constitutes lex specialis with respect to the measure at issue, the panel should only consider defences available within the Anti-Dumping Agreement and not the United States' defence under Article XX(d) of the GATT 1994. Thailand submits that consideration of the United States' Article XX(d) defence is inconsistent with the finding that Article 18.1 of the Anti-Dumping Agreement, read in conjunction with the Ad Note, authorises the taking of reasonable security based on future increases in dumping margins. Accordingly, Thailand requests the Panel to either not exercise judicial economy with respect to Thailand's other claims under the GATT 1994 or to also exercise judicial economy with respect to the United States' defence under Article XX(d). Otherwise, Thailand requests the Panel to explain why it has considered the United States' Article XX(d) defence while exercising judicial economy with respect to Thailand's GATT 1994 claims.
6.43.
The United States considers Thailand's request without basis since, it contends, the Panel found that the application of the EBR to subject Thai shrimp importers breached the Ad Note to Article VI of the GATT 1994. Because Article XX(d) applied to claims under the GATT 1994 and the Ad Note is a provision of the GATT 1994¸ the United States considers it appropriate to reach the United States' Article XX(d) defence. Furthermore, the United States disagrees with Thailand's assertion that the Panel should not consider Article XX(d) in view of its findings regarding lex specialis. The United States notes that the Panel found that "Article VI of the GATT 1994 and the Ad Note" constitute lex specialis, and not the Anti-Dumping Agreement.
6.44.
The Panel is of the view that a respondent in a WTO dispute may simultaneously respond to claims presented by the claimant while also raising an affirmative defence under a relevant provision in Article XX of the GATT 1994. The Panel notes that the text of the chapeau to Article XX of the GATT 1994 reads: "... nothing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures... " (emphasis added). This text does not on its face limit a panel from considering an affirmative defence under Article XX where it has found a violation under a provision of the GATT, including Article VI and/or the Ad Note. In this regard, the Panel recalls its findings that the application of the EBR constitutes specific action against dumping which is not in accordance with the provisions of the GATT 1994 since it is inconsistent with the Ad Note. The Panel also considers it proper to analyse the United States' defence under Article XX notwithstanding the finding presented in paragraph 6,159 that Article VI of the GATT 1994 and the Ad Note to Article VI constitute lex specialis. In the findings, the Panel refers to Article VI and its Ad Note as lex specialis with respect to the other more general provisions of the GATT 1994 cited by Thailand. The Panel's findings with respect to the applicability of the principle of lex specialis do not refer to a defence under Article XX(d) in order to justify a potential violation of Article VI and its Ad Note. Accordingly, the Panel considers additional analysis of the United States' Article XX(d) defence unnecessary and rejects Thailand's request for review of our findings on this issue.

15. Factual findings on risk of default

6.45.
Regarding the Panel's analysis of the meaning of "reasonable" in the Ad Note and "necessary" under Article XX(d) of the GATT 1994, Thailand submits that these concepts should involve consideration of both the likelihood that anti-dumping duties will increase and the risk of default by importers of subject merchandise due to increased duty liability. With respect to its analysis of the Ad Note, Thailand notes that the Panel commented that "there is no additional obligation under the Ad Note to assess the risk of default of individual importers", and made no factual findings regarding the risk of default on increased duty liability. With respect to its analysis of Article XX(d), Thailand notes that the Panel also did not consider the risk of default. Thailand requests the Panel to make factual findings on the relevance of the risk of default, and whether the United States properly determined an increased default risk. The United States does not consider it necessary for the Panel to evaluate evidence regarding risk of default. However, the United States contends that the Panel should clarify its findings by inserting a statement confirming that the Panel is not suggesting that a Member is precluded from requiring security as in "other cases of customs administration", such as when an importer has a significant risk of default.
6.46.
In view of the analytical approach adopted by the Panel in this case, we do not consider that it is appropriate for us to address the parties' evidence regarding the risk of default. In particular, the analytical approach of the Panel does not provide any standard against which to assess that evidence.

B. THE UNITED STATES' COMMENTS ON THE INTERIM REPORT

1. Typographical errors

6.47.
Regarding paragraph 1.10, the United States requests replacing the phrase "24 and 25 July 200" with "24 and 25 July 2007". The Panel has corrected this typographical error.
6.48.
Regarding paragraph 1.11, the United States requests replacing the phrase "9 September 2007" with "9 October 2007". The Panel has corrected this typographical error.

2. Factual aspects to the dispute

6.49.
Regarding paragraph 2.10, the United States requests replacing the phrase "prior to initiation of the anti-dumping or countervailing duty order" with the phrase "prior to initiation of the anti-dumping or countervailing duty investigation." The Panel has corrected this error.
6.50.
Regarding paragraph 2.13, the United States submits that US Customs designates importers of certain merchandise, not importers, as "covered cases", and thus requests the Panel to modify the text to read: "US Customs implemented the EBR and required select importers of merchandise designated as 'covered cases'...". The Panel has corrected this error.

3. Treatment of amendments as part of the measure at issue

6.51.
Regarding paragraph 6.48, the United States construes the Panel's analysis as suggesting that the inclusion of certain language in a panel request concerning amendments to measures, or the need to secure a positive resolution to a dispute could be the basis for treating a measure as part of the measure at issue and within the panel's terms of reference. The United States requests the Panel to remove the third and final sentences from the paragraph and base the analysis on the nature of the measure in question. Thailand disagrees with the United States' suggestion to delete the third and final sentences of paragraph 6.48. Thailand notes that the finding by the Appellate Body in Chile Price Band System considered both the extent to which the new measure amended the existing measure, and the fact that the request for the establishment included language to encompass amendments. Thailand contends it would be misleading to include the October 2006 Notice within the Panel's terms of reference without basing the decision in part on the statement in Thailand's request for establishment that the measure at issue included any amendments. The Panel has made minor modifications to the text in paragraph 6.48 (7.48 of the Final Report) in order to reflect the rationale presented in Chile – Price Band System that an amendment should not change the essence of the original measure into something different than what was in force before its issuance.

4. The EBR formula

6.52.
Regarding paragraph 6.72 (7.72 of the Final Report), the United States requests the Panel to replace the phrase "the formula would be invalid" in the final sentence of this paragraph with "the formula would not apply" to more accurately characterise the status of the EBR formula in relation to the directive.
6.53.
The Panel has made the change requested by the United States.

5. The relationship between Article 9.3.1 of the Anti-Dumping Agreement and retrospective duty assessment

6.54.
Regarding paragraphs 6,108 (7,109 of the Final Report) and 6,111 (7,112 of the Final Report), the United States requests the Panel to modify language to more accurately reflect the relationship between Article 9.3.1 of the Anti-Dumping Agreement and retrospective duty assessment. First, the United States suggests that the Panel replace the parenthetical that the system is "(specifically authorised by Article 9.3.1)" with "(which is specifically contemplated in Article 9.3.1)". Second, the United states suggests replacing the parenthetical "(which Members are entitled to apply by virtue of Article 9.3.1 of the Anti-Dumping Agreement)" with "(which is specifically contemplated by Article 9.3.1 of the Anti-Dumping Agreement)".
6.55.
The Panel has made the changes requested by the United States.

6. Characterisation of the "enhanced" bond requirement

6.56.
Regarding paragraph 6,128 (7,131 of the Final Report), the United Statessuggests replacing the term "extended" with "enhanced" to describe the bonds required under the Amended CBD.
6.57.
The Panel has made the change proposed by the United States.

7. The legal standard for determining whether or not the application of the EBR resulted in "reasonable" security requirements

6.59.
Thailand disagrees that the standard applied by the Panel requires a showing of substantial certainty. Thailand also disagrees with the US proposal to use the term "likelihood", for Thailand is concerned that reference to "a likelihood" might mean that so long as one possible outcome is that the amount of final liability may increase over the rate of dumping established in the investigation, there would be "a" likelihood that rates may increase.
6.60.
Second, the United States considers that the Panel's use of the term "likely" in the Interim Report’s discussion of increases in margins could be read to contradict its point elsewhere in the report that the information on which security requirements must be evaluated is that available "at the time that the [requirement]" is imposed, and not ex post rationalization.52 The United States recalls the Panel's statement in paragraph 6,102 of its Interim Report that, due to the operation of the U.S. retrospective duty assessment system, "there is no certainty that imports entering the United States following imposition of an anti-dumping order are in fact dumped" and that until assessment "it is not possible to state with certainty whether or not those imports are dumped." Since likelihood would need to be evaluated based on information available to the customs authority at the time the security requirement is imposed, the United States has suggested, for example, changing "determine the amount" to "estimate the amount" in paragraph 6,138.
6.61.
Thailand submits that the textual changes requested by the United States would reduce the objective standard articulated in the Interim Report to a question of what "roughly approximates" potential margins.53 As the Appellate Body has made clear in the context of sunset reviews, the mere fact that a determination requires a prospective analysis does not justify a departure from the standard of an objective, impartial and reasoned determination of probability. Thailand asserts that the Panel should not make any revisions to the Interim Report that would suggest that "reasonable security" can be based on a possibility of rates increasing, rather than the "best estimate" by an "objective and impartial investigating authority" that rates "were likely to increase" and a proper determination of "the likely amount of such increase."
6.62.
Third, the United States asserts that as in "ordinary cases of customs administration", there may be cases in which an importer has a history of defaulting on its obligations such that additional security may be the only means available to the United States to ensure that duties are paid, short of prohibiting that importer from entering goods entirely. The United States claims that the Panel failed to address US arguments regarding risks of default. The United States requests that the Panel consider clarifying its findings to confirm that it is not finding that a Member is precluded from requiring additional security in cases in which principles of ordinary customs administration would so require, such as cases in which importers have a demonstrated history of non-payment of liability owed.
6.63.
Thailand asserts that none of the parties has argued that a risk of default constitutes a basis separate from the amount of liability on which to determine the amount of security. Instead, Thailand considers that any security must be capped at the amount of potential liability and then may be adjusted below the total potential liability based on the default risk of the individual importer. Thailand also asserts that the United States is not correct to state that the Panel does not directly address the United States' arguments regarding risk of default. Thailand asserts that the Panel considered whether it was necessary to consider risk of default and concluded that it was not.54 Furthermore, Thailand notes that the Panel found that security measures such as the EBR constitute specific action against dumping. As specific action against dumping, such measures may be imposed only in response to situations covered by Article VI and the Anti-Dumping Agreement, i.e., injurious dumping. Thailand asserts that the United States' proposal to impose security requirements above the amount of potential liability for dumping duties, however, would impose additional burdens on importers based on their financial wellbeing. Thailand asserts that this is not permitted under the Ad Note, which permits only action against dumping. Accordingly, to permit additional security above the potential liability for dumping duties, or security solely on the basis of a risk of default, would expand the scope of Article VI of the GATT 1994 and the Anti-Dumping Agreement beyond dumping and include within their scope matters such as the financial structure and strength of importers that they were not intended to address or regulate. Thailand submits that any question of additional security relating to the risk of default could arise only under provisions of the GATT unrelated to "specific action against dumping."55
6.64.
The United States also asks the Panel to refer to estimates of the "amount" of final dumping liability rather than estimates of the amount of the final "rate" of dumping. The United States asserts that since security for antidumping duties (whether cash deposit or bond) is a quantity based on the total dumping liability, which depends both on the ad valorem rate and the customs value of imports entered at a given time, using the term "dumping liability" rather than the "rate of dumping" in discussing the amount of security that may be required is more appropriate.
6.65.
Thailand asserts that the United States has failed to clearly articulate any good reason for the Panel to make the suggested changes. Furthermore, Thailand notes the US argument that liability for anti-dumping duties arises on importation following a finding that dumping is occurring and the publication of an anti-dumping order. Since the Panel finds that the order gives rise to a suspicion of dumping, Thailand is concerned that the changes proposed by the United States would imply that liability for anti-dumping duties may be established on the basis of merely a suspicion of dumping.
6.66.
Regarding para. 6,142 of the Interim Report, the United States asks the Panel to delete certain language describing an argument made by the United States early in the proceedings. Thailand did not comment on the change requested by the United States.
6.67.
The Panel has made only a limited number of the changes requested by the United States regarding this first issue. In particular, the Panel has declined the US suggestion to replace its own language with references to "the likelihood of rates increasing", for the United States has failed to properly explain the advantages of its formulation over that of the Panel. Generally, the Panel is concerned that the changes proposed by the United States might weaken the standard that the Panel applied, consistent with the Ad Note, in the present case. In particular, the Panel is not persuaded that it is inappropriate to expect an investigating authority to make determinations of what is likely to happen in the future. The Panel is not persuaded by the US suggestion that the standard articulated in the Interim Report would require ex post rationalization. The Panel considers that an investigating authority is required to comply with the applicable standard by making a prospective determination of the likelihood of rates of dumping increasing on the basis of the information available to it at the relevant time.
6.68.
The Panel declines to make any changes in respect of the US comments on the need to consider the risk of default as in "ordinary cases of customs administration". The Panel considers that it already addressed the principal argument of the United States regarding risk of default in note 164 of the Interim Report. The Panel declines to further confirm that it is not finding that a Member is precluded from requiring additional security in cases in which principles of ordinary customs administration would so require. The Panel's findings are based on its interpretation of the Ad Note. The Panel does not have a mandate to consider whether or not additional security may be imposed under principles of ordinary customs administration. Although the Ad Note contains the phrase "[a]s in many other cases in customs administration", the Panel considers that such phrase is used for introductory purposes only. If such phrase had been intended to dictate the substantive circumstances under which "reasonable security" could be imposed under the Ad Note, details of such other cases of customs administration would have been spelled out in the Ad Note in detail.
6.70.
Regarding paragraph 6,188, the United States requests the Panel to modify the fourth and sixth sentences to incorporate modifications suggested for paragraphs 6,136 – 6,146. Specifically, the United States requests that the Panel replace the phrase "that rates of dumping provided for in the anti-dumping order were likely to increase" with the phrase "that there was a likelihood that rates of dumping provided for in the anti-dumping order would increase"; and the phrase "without adequately establishing that anti-dumping duties are likely to increase" with the phrase" without adequately establishing that there was a likelihood that anti-dumping duties would increase". For the same reasons discussed above, Thailand requests the Panel to reject this change. Thailand does not consider the United States to have explained why this change is appropriate in the context of a review of the standard of "necessary" under Article XX(d). For the reasons set forth above in respect of paragraphs 6,136 – 6,146, the Panel declines to make the changes requested by the United States.
6.71.
In the absence of any objection from Thailand, the Panel sees no reason not to make the deletion requested by the United States in respect of paragraph 6,142 of the Interim Report (7,144 of the Final Report).

VII. FINDINGS

A. PRELIMINARY ISSUES

1. Parallel panel proceedings in DS343 and DS345

7.1.
On 21 November 2006, a month after the establishment of the present Panel, the DSB established a separate Panel in (DS345) US – Customs Bond Directive the terms of reference of which also included the application of the EBR to imports of subject shrimp. At that meeting of the DSB, Thailand stated that it had expected the establishment of a single Panel for both proceedings in accordance with Article 9.1 of the DSU. In the absence of that single Panel, Thailand indicated that, pursuant to Article 9.3 of the DSU, it expected that the same persons would be appointed as panelists in the two disputes and that the timetables would be harmonized. The representative of the United States responded that, although the Panel in DS343 had already been established, the same persons could be appointed to serve as panelists in the two proceedings and the timetables of the separate Panels could be harmonized.
7.2.
The meetings to appoint the same members for this Panel and DS345 were held jointly between the two separate complainants, Thailand and India, and the common defendant, the United States. Since the Parties were unable to agree on panellists to serve for these proceedings, on 19 January 2007, Thailand and India requested, in separate letters, that the Director-General determine the composition of the Panel pursuant to Article 8.7 of the DSU, and select the same persons to serve as panelists for both proceedings, pursuant to Article 9.3 of the DSU. On 26 January 2007, the Director-General composed the two separate Panels consisting of the same members.
7.3.
On 9 February 2007, Thailand and India sent separate letters to the Chairman of the two Panels requesting enhanced third party rights in each other's proceedings. On 15 February 2007, the Chairman met with the parties in a joint organisational meeting to hear comments on the proposed Timetable and Panel Working Procedures. At that meeting, as well as in a letter dated 16 February 2007, the United States argued that granting enhanced third party rights to Thailand and India was not necessary in the instant cases.
7.4.
After having heard the parties' views, the Panel decided not to grant enhanced third party rights to India and Thailand but instead, opted for a practical approach aimed at ensuring that the parties to both disputes enjoyed adequate opportunity to participate in the proceedings where appropriate. Thus, on 23 February 2007, the Panel sent to the parties a joint Timetable as well as separate, albeit similarly worded, Working Procedures. In this joint communication, the Panel informed the parties that it had decided the following:

"[The Panel] intends to conduct both proceedings so as to ensure that the parties who are also third parties in each other's proceedings, have adequate opportunity and ability to participate to the fullest extent in a manner which is compatible with the provisions of the DSU. To this end, after having heard the parties' views, the Panel intends to take the following steps:

(i) holding consolidated substantive meetings with the parties (Thailand, India and US);

(ii) allowing the complainants during the joint meetings to comment on each others' argumentation, provided they limit themselves to those claims they have in common;

(iii) holding separate Third-Party Sessions, starting with DS343 and asking the Members which are not third-parties to DS345 (i.e., Chile, Mexico, Korea and Viet Nam) to leave the meeting room once the Third-Party Session for DS343 is over. Note that since Thailand and India are third parties to each other's cases, and parties in their own, they would be in the room during the entirety of the joint meetings, including third party sessions;

(iv) not allowing submissions in one case to be deemed to be submitted in the other case. The parties could however attach to their third party submissions, their submissions made as parties in the case in which they are complaining party;

(v) issuing separate reports;

(vi) allowing all parties to respond to all questions posed by the Panel in writing."

2. Overview of the Panel's approach to consideration of Thailand's claims

7.5.
Thailand has challenged two measures applied by the United States that affect the import of subject shrimp from Thailand. Thailand has first challenged the United States' use of zeroing to calculate the margin of dumping for importers of Thai shrimp subject to definitive anti-dumping duties. Thailand claims that the United States' use of zeroing in this instance is inconsistent with Article 2.4.2 of the Anti-Dumping Agreement.56
7.6.
Thailand has also challenged the application of the EBR to subject shrimp from Thailand. Specifically, Thailand challenges the consistency of the application of the EBR, which it claims imposes an impermissible restriction on imports of subject shrimp from Thailand, with the provisions of Article 18.1 of the Anti-Dumping Agreement. Subsidiarily and alternatively, Thailand claims that the EBR is also inconsistent with the provisions of Articles 7.1, 7.2, 7.4 and 7.5 of the Anti-Dumping Agreement; Article VI:2 of the GATT 1994 and the Ad Note, which it claims govern the application of provisional anti-dumping measures; and Articles 9.1, 9.2 and 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994, which it claims govern the imposition and collection of anti-dumping duties.
7.7.
In addition, Thailand claims that the EBR is inconsistent with XI:1 of the GATT 1994 by imposing an impermissible restriction on imports of subject shrimp from Thailand; or, alternatively, with Article II:1(a) and the first and second sentences of Article II:1(b) of the GATT 1994 by imposing impermissible duties or charges on imports of subject shrimp from Thailand. Thailand further claims that the United States acted inconsistently with X:3(a) of the GATT 1994 by failing to administer its customs laws and regulations relating to bonds in a uniform, impartial and reasonable manner and with Article I of the GATT 1994 by failing to extend to imports of subject shrimp from Thailand advantages that are provided to imports of shrimp from other countries.

3. Order of analysis

7.8.
The Panel will first address Thailand's claim related to zeroing, and will then proceed to address Thailand's claims challenging the application of the EBR.

B. THAILAND'S CLAIM AGAINST THE USE OF ZEROING IN THE ORIGINAL INVESTIGATION

7.9.
Thailand submits that the United States used zeroing when calculating the dumping margins for Thai exporters on the basis of weighted average-to-weighted average comparisons in the Final Determination that served as a basis for the Anti-dumping order on subject shrimp from Thailand.57 According to Thailand, the "zeroing" in which USDOC engaged in this investigation is the same as the "zeroing" in which USDOC engaged in US – Softwood Lumber V and US – Shrimp (Ecuador). Thailand submits that the use of such zeroing is inconsistent with Article 2.4.2 of the Anti-Dumping Agreement.
7.10.
In response to a Question from the Panel, the United States asserted that it "is not contesting Thailand's zeroing claim for purposes of this dispute".58

1. Main arguments of the parties

7.11.
Thailand asserts that WTO panels and the Appellate Body have repeatedly found that the use of zeroing when calculating dumping margins on the basis of weighted average-to-weighted average comparisons is inconsistent with Article 2.4.2 of the Anti-Dumping Agreement.59 Thailand notes in this regard that the Appellate Body stated in US – Softwood Lumber V that:

"Zeroing means, in effect, that at least in the case of some export transactions, the export prices are treated as if they were less than what they actually are. Zeroing, therefore, does not take into account the entirety of the prices of some export transactions, namely, the prices of export transactions in those sub-groups in which the weighted average normal value is less than the weighted average export price. Zeroing thus inflates the margin of dumping for the product as a whole."60

7.12.
Thailand further notes that the panel in US – Shrimp (Ecuador) recently stated that:

"There is now a consistent line of Appellate Body Reports, from EC – Bed Linen to US – Zeroing (EC) that holds that "zeroing" in the context of the weighted average-to-weighted average methodology in original investigations (first methodology in the first sentence of Article 2.4.2) is inconsistent with Article 2.4.2. We have, as is our duty, carefully considered the Appellate Body's reasoning in US – Softwood Lumber V and taken into consideration the consistent line of Appellate Body Reports as mentioned in the previous paragraph. We find the Appellate Body's reasoning persuasive and adopt it as our own."61

7.13.
Thailand asserts that even the USDOC itself has admitted that it used zeroing in calculating the dumping margins of Thai shrimp exporters on the basis of average-to-average comparisons in the Final Determination and the Anti‑Dumping Measure. According to Thailand, the USDOC Decision Memorandum rejected arguments from the Thai exporters and the Government of Thailand urging it not to use zeroing and explained its use of zeroing in the following terms:

"(i) We disagree with the respondents and the Government of Thailand that we should discontinue our practice of not offsetting dumped sales with non-dumped sales in the calculation of the overall weighted-average dumping margin, and thus we have not changed our calculation of the weighted-average dumping margins for the final determination. Specifically, we made model-specific comparisons of weighted-average export prices with weighted-average normal values of comparable merchandise. See section 773(a) of the Act; see also section 777A(d)(1)(A)(i) of the Act. We then combined the dumping margins found based upon these comparisons, without permitting non-dumped comparisons to reduce the dumping margins found on distinct models of subject merchandise, in order to calculate the weighted-average dumping margin. See section 771(35)(A) and (B) of the Act."62

7.14.
Thailand submits that there can therefore be no dispute that this is exactly the same methodology as was found to be inconsistent with Article 2.4.2 in US – Softwood Lumber V. Thailand also asserts that this is exactly the same methodology as was found to be inconsistent with Article 2.4.2 by the US – Shrimp (Ecuador) panel.
7.15.
Thailand submits that, for the same reasons as articulated by the Appellate Body in US – Softwood Lumber V and the recent panel in US – Shrimp (Ecuador), the use of this zeroing methodology by the USDOC in calculating the dumping margins of Thai shrimp exporters was inconsistent with Article 2.4.2 of the Anti-Dumping Agreement. Accordingly, Thailand requests that the Panel find that the United States acted inconsistently with Article 2.4.2 of the Anti-Dumping Agreement in determining the dumping margins of the Thai exporters in the Final Determination and the Anti‑Dumping Measure.
7.16.
As noted above, the United States is not contesting Thailand's Article 2.4.2 claim. Furthermore, the United States acknowledges that the same type of "zeroing" occurred in the investigation of shrimp from Thailand as in the relevant investigation US – Shrimp (Ecuador). The United States further recognizes that a measure using a similar calculation was the subject of the US - Softwood Lumber V report, and the DSB ruled that the measure was inconsistent with Article 2.4.2, first sentence, because of that calculation.

2. Evaluation by the Panel

7.17.
As is evident from the arguments of the parties, the issue we are confronted with in respect of Thailand's Article 2.4.2 claim is very similar to the issue addressed by the panel in US – Shrimp (Ecuador). Since we agree with the approach adopted by that panel, our findings regarding Thailand's claim closely resemble, and refer extensively to, the findings of that panel. Given that the United States does not contest Thailand's claim, we first consider our role under Article 11 of the DSU, and the burden of proof to be discharged by Thailand if it is to succeed in its claim. We then consider the more substantive issues of whether Thailand has established that the USDOC "zeroed" in the measure at issue, and whether Thailand has established that the methodology used by USDOC is the same in all legally relevant respects as the methodology reviewed by the Appellate Body in US – Softwood Lumber V. Thereafter, we consider whether Thailand has established that the methodology applied by USDOC is inconsistent with Article 2.4.2 of the Anti-Dumping Agreement.

(a) The role of the Panel under Article 11 of the DSU

7.18.
Article 11 of the DSU provides:

"The function of panels is to assist the DSB in discharging its responsibilities under this Understanding and the covered agreements. Accordingly, a panel should make an objective assessment of the matter before it, including an objective assessment of the facts of the case and the applicability of and conformity with the relevant covered agreements, and make such other findings as will assist the DSB in making the recommendations or in giving the rulings provided for in the covered agreements. Panels should consult regularly with the parties to the dispute and give them adequate opportunity to develop a mutually satisfactory solution."63 (emphasis added)

7.19.
Notwithstanding the US decision not to contest Thailand's claim, we are still bound by Article 11 of the DSU to make an "objective assessment of the facts of the case and the applicability of and conformity with the relevant covered agreements, and make such other findings as will assist the DSB in making the recommendations or in giving the rulings provided for in the covered agreements".

(b) Burden of proof

(c) Has Thailand established that the USDOC "zeroed" in the measure at issue?

7.22.
We now consider whether Thailand has established that USDOC "zeroed" in the measure at issue.
7.23.
Thailand has referred to USDOC's Decision Memorandum in support of its factual assertion that USDOC "zeroed" in the measure at issue. Furthermore, the United States acknowledges that USDOC did zero as alleged by Thailand. In these circumstances, we are satisfied that Thailand has provided sufficient evidence that USDOC zeroed in the measure at issue.

(d) Has Thailand established that the methodology used by USDOC is the same in all legally relevant respects as the methodology reviewed by the Appellate Body in US – Softwood Lumber V?

7.24.
We now determine whether the "zeroing" methodology used by the USDOC to calculate the dumping margins at issue here was, as alleged by Thailand, the same in all legally relevant respects as the one the Appellate Body, in US – Softwood Lumber V, found to be inconsistent with Article 2.4.2 of the Anti-Dumping Agreement.
7.25.
The Appellate Body in US – Softwood Lumber V, described "zeroing" as applied by the USDOC in that investigation as follows:

"First, USDOC 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 sub-groups 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)."(emphasis original)65

7.26.
The Appellate Body also added that:

"Thus, as we understand it, by zeroing, the investigating authority treats as zero the difference between the weighted average normal value and the weighted average export price in the case of those sub-groups where the weighted average normal value is less than the weighted average export price. Zeroing occurs only at the stage of aggregation of the results of the sub-groups in order to establish an overall margin of dumping for the product under investigation as a whole."66

7.27.
In order to demonstrate that USDOC engaged in similar weighted average-to-weighted average zeroing in the investigation at issue, Thailand relies on the abovementioned USDOC Decision Memorandum. That document establishes that USDOC "made model-specific comparisons of weighted-average export prices with weighted-average normal values of comparable merchandise (...) [and] then combined the dumping margins found based upon these comparisons, without permitting non-dumped comparisons to reduce the dumping margins found on distinct models of subject merchandise, in order to calculate the weighted-average dumping margin."67
7.28.
Furthermore, we note that the United States acknowledges that the same type of "zeroing" occurred in the investigation of shrimp from Thailand as in the relevant investigation US – Shrimp (Ecuador), and that that panel found that the zeroing methodology at issue in US – Shrimp (Ecuador) was the same methodology as at issue in US – Softwood Lumber V.68
7.29.
Having examined the description of the methodology employed by the USDOC in its Decision Memorandum, we are satisfied that Thailand has demonstrated that the methodology applied by the USDOC in calculating the margins of dumping for subject merchandise from Thailand was the same in all legally relevant respects as the methodology which was found by the Appellate Body in US – Softwood Lumber V to be inconsistent with Article 2.4.2 of the Anti-Dumping Agreement. In our view, the abovementioned acknowledgement by the United States lends support to our conclusion that Thailand has met its burden to make a prima facie case.

(e) Has Thailand established that the methodology applied by USDOC is inconsistent with Article 2.4.2 of the Anti-Dumping Agreement?

7.30.
We now turn to the legal analysis of Thailand's claim, i.e. whether the measure it challenges is inconsistent with Article 2.4.2 of the Anti-Dumping Agreement. Article 2.4.2 provides as follows:

"Article 2

Determination of Dumping

...

2.4.2 Subject to the provisions governing fair comparison in paragraph 4, the existence of margins of dumping during the investigation phase shall normally be established on the basis of a comparison of a weighted average normal value with a weighted average of prices of all comparable export transactions or by a comparison of normal value and export prices on a transaction‑to‑transaction basis. A normal value established on a weighted average basis may be compared to prices of individual export transactions if the authorities find a pattern of export prices which differ significantly among different purchasers, regions or time periods, and if an explanation is provided as to why such differences cannot be taken into account appropriately by the use of a weighted average‑to‑weighted average or transaction‑to‑transaction comparison."

7.31.
Thailand has relied on the Appellate Body Report in US – Softwood Lumber V and the panel report in US – Shrimp (Ecuador) in support of its claim of inconsistency with Article 2.4.2 and, in particular, on the Appellate Body's finding that margins of dumping may only be calculated for a product as a whole under the weighted average-to-weighted average methodology provided for in the first sentence of Article 2.4.2.
7.32.
While we are not bound by the reasoning in prior Appellate Body and/or panel reports, adopted Reports create legitimate expectations among WTO Members,69 and "following the Appellate Body's conclusions in earlier disputes is not only appropriate, but is what would be expected from panels, especially where the issues are the same".70
7.33.
The panel in US – Shrimp (Ecuador) explained its understanding of the Appellate Body's reasoning in US – Softwood Lumber V as follows:

"The Appellate Body began its analysis with the text of Article 2.4.2 and noted that the question before it was the proper interpretation of the terms 'all comparable export transactions' and 'margins of dumping' in Article 2.4.2. In examining the arguments of the parties with respect to these phrases, the Appellate Body concluded that the parties' disagreement centered on whether a Member could take into account 'all' comparable export transactions only at the sub-group level, or whether such transactions also had to be taken into account when the results of the sub-group comparisons are aggregated. To examine that issue, the Appellate Body noted the definition of dumping in Article 2.1 of the Anti-Dumping Agreement. The Appellate Body found that 'it [was] clear from the texts of [Article VI:1 of the GATT 1994 and Article 2.1 of the Anti-Dumping Agreement] that dumping is defined in relation to a product as a whole as defined by the investigating authority'. The Appellate Body further considered that the definition of 'dumping' contained in Article 2.1 applies to the entire Agreement, including Article 2.4.2, and that "'[d]umping', within the meaning of the Anti-Dumping Agreement, can therefore be found to exist only for the product under investigation as a whole, and cannot be found to exist only for a type, model, or category of that product."71 Next, the Appellate Body relied on its Report in EC – Bed Linen, in which it stated that '[w]hatever the method used to calculate the margins of dumping... these margins must be, and can only be, established for the product under investigation as a whole.' Thus, the Appellate Body noted that "[a]s with dumping, 'margins of dumping' can be found only for the product under investigation as a whole, and cannot be found to exist for a product type, model, or category of that product." The Appellate Body therefore rejected the United States' arguments in that case that Article 2.4.2 does not apply to the aggregation of the results of multiple comparisons at the sub-group level; for the Appellate Body, while an investigating authority may undertake multiple averaging to establish margins of dumping for a product under investigation, the results of the multiple comparisons at the sub-group levels are not margins of dumping within the meaning of Article 2.4.2; they merely reflect intermediate calculations made by an investigating authority in the context of establishing margins of dumping for the product under investigation. It is only on the basis of aggregating all such intermediate values that an investigating authority can establish margins of dumping for the product under investigation as a whole. On this basis, the Appellate Body held that zeroing, as applied by the USDOC in US – Softwood Lumber V :

mean[t], in effect, that at least in the case of some export transactions, the export prices are treated as if they were less than what they actually are. Zeroing, therefore, does not take into account the entirety of the prices of some export transactions, namely, the prices of export transactions in those sub-groups in which the weighted average normal value is less than the weighted average export price. Zeroing thus inflates the margin of dumping for the product as a whole.

The Appellate Body on this basis concluded that the treatment of comparisons for which the weighted average normal value is less than the weighted average export price as "non-dumped" comparisons was not in accordance with the requirements of Article 2.4.2 of the Anti-Dumping Agreement. As a result, the Appellate Body upheld the Panel's finding that the United States had acted inconsistently with Article 2.4.2 of the Anti-Dumping Agreement in determining the existence of margins of dumping on the basis of a methodology incorporating the practice of zeroing."72

7.34.
The panel in US – Shrimp (Ecuador) further found that "there is now a consistent line of Appellate Body Reports, from EC – Bed Linen to US – Zeroing (EC) that holds that 'zeroing' in the context of the weighted average-to-weighted average methodology in original investigations (first methodology in the first sentence of Article 2.4.2) is inconsistent with Article 2.4.2."73
7.35.
We have carefully considered the Appellate Body's reasoning in US – Softwood Lumber V and taken into consideration the finding of the panel in US – Shrimp (Ecuador) that there is a consistent line of Appellate Body Reports condemning "zeroing" in the context of the weighted average-to-weighted average methodology in original investigations. Given that the issues raised by Thailand's claim are identical in all material respects to those addressed by the Appellate Body in Softwood Lumber V, we are satisfied that Thailand has established a prima facie case that the use of zeroing by the USDOC in the calculation of the margins of dumping in respect of the measure at issue is inconsistent with the United States' obligations under Article 2.4.2 of the Anti-Dumping Agreement because the USDOC did not calculate these dumping margins on the basis of the "product as a whole" in that it failed to take into account all comparable export transactions in calculating the margins of dumping.
7.36.
In light of our finding that Thailand has made a prima facie case of violation in respect of the measure at issue, and in the absence of arguments from the United States to the contrary, we rule in favour of Thailand. We therefore conclude that the USDOC, by using "zeroing" in the manner described above, has acted inconsistently with the United States' obligations under Article 2.4.2 of the Anti-Dumping Agreement.

C. THAILAND'S CLAIM AGAINST THE APPLICATION OF THE EBR TO SUBJECT SHRIMP FROM THAILAND

1. Scope of the measure concerned

7.37.
Thailand's claims concern the application of the Amended CBD, i.e. the EBR, to imports of subject shrimp from Thailand. Therefore, before entering into an analysis of each of Thailand's claims, the Panel first must identify which are the legal instruments that comprise the Amended CBD.
7.38.
We recall that our terms of reference that govern the present dispute are the following:

"To examine, in the light of the relevant provisions of the covered agreements cited by Thailand in document WT/DS343/7, the matter referred to the DSB by Thailand in that document, and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in those agreements."74

7.39.
In its Request for Establishment, Thailand specified that the measure at issue consists of the following legislative/legal instruments:

(a) the July 2004 Amendment;75

(b) the August 2005 Clarification;76

(c) the document Current Bond Formulas;77 and

(d) "any amendments or extensions to the [EBR], and any related or implementing measures."78

7.40.
In its first written submission, Thailand additionally identified the October 2006 Notice79, which was published on 24 October 2006 following the submission of Thailand's Request for Establishment, as one of the four instruments that amends and clarifies the United States' policy related to continuous customs bonds and the operation and application of the EBR.80 The United States has not contested the inclusion of the October 2006 Notice within this Panel's terms of reference.
7.41.
We recall that the Appellate Body has ruled that panels have a duty to examine issues of a "fundamental nature", issues that go to the root of their jurisdiction, on their own motion if the parties to the dispute remain silent on those issues.81 Whether a measure falls within our terms of reference is clearly an issue that goes to the root of our jurisdiction. Therefore, even though the United States does not contest the inclusion of the October 2006 Notice, we must determine whether this Notice is within our terms of reference.
7.42.
Article 7 of the DSU, governing the Panel's terms of reference, Article 4 of the DSU, governing a complainant's request for consultations, and Article 6 of the DSU, governing a complainant's request for establishment of a panel are relevant to this issue. Article 7.1 of the DSU provides:

"Panels shall have the following terms of reference unless the parties to the dispute agree otherwise within 20 days from the establishment of the panel:

To examine, in the light of the relevant provisions in (name of the covered agreement(s) cited by the parties to the dispute), the matter referred to the DSB by (name of party) in document... and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in that/those agreement(s)."

7.43.
Article 4.4 of the DSU provides:

"All such requests for consultations shall be notified to the DSB and the relevant Councils and Committees by the Member which requests consultations. Any request for consultations shall be submitted in writing and shallgive the reasons for the request,including identification of the measures at issue and an indication of the legal basis for the complaint." (emphasis added)

7.44.
Article 6.2 of the DSU provides:

"The request for the establishment of a panel shall be made in writing. It shall indicate whether consultations were held, identify the specific measures at issue and provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly. In case the applicant requests the establishment of a panel with other than standard terms of reference, the written request shall include the proposed text of special terms of reference." (emphasis added)

7.45.
The Appellate Body affirmed in US – Upland Cotton that, "pursuant to Article 7 of the DSU, a panel's terms of reference are governed by the request for establishment of a panel".82 As evident from the text of Articles 4 and 6 of the DSU, the complainant must identify the measure at issue in both the request for consultations and request for panel establishment.
7.46.
The Appellate Body previously considered in Chile – Price Band System whether an amendment to a measure that was enacted after the Panel had been established should nevertheless be considered as within the Panel's terms of reference.83 In that case, the Appellate Body determined that the amendment at issue should be considered as part of the measure at issue since the amendment served the purpose of clarifying the legislation that established the measure at issue and did not change the original measure into something different than what was in force before the amendment.84 This determination was considered consistent with earlier jurisprudence85 and was also found to be consistent with the object and purpose of the WTO dispute settlement system, as set forth in Article 3.7 of the DSU, to "secure a positive solution to a dispute". The Appellate Body explained:

"If the terms of reference in a dispute are broad enough to include amendments to a measure—as they are in this case—and if it is necessary to consider an amendment in order to secure a positive solution to the dispute—as it is here—then it is appropriate to consider the measure as amended in coming to a decision in a dispute."86

7.47.
In the case before us, we note that the October 2006 Notice further describes the process to determine enhanced continuous bond amounts for importations involving what the United States describes as elevated collection risks, and seeks public comment concerning that process. We also note that the United States describes the 2006 Notice as the "comprehensive and exclusive statement of the policy and processes expressed in the July 2004 Amendment to the Bond Guidelines, the Bond Formulas posted on CBP's Web site, and the August 2005 Clarification".87
7.48.
We agree with and adopt as our own the Appellate Body's rationale as provided in Chile – Price Band System. In the dispute before us, the United States published the October 2006 Notice after this Panel had been established. Moreover, in our view, Thailand's inclusion of the language "any amendments or extensions to the [EBR], and any related or implementing measures" in its Request for Establishment of a Panel88 is broad enough to allow for the inclusion of the 2006 Notice. The October 2006 Notice seeks to clarify the legislation that established the measure at issue and does not change the essence of the original measure into something different than what was in force before its issuance (in this regard, we recall that the October 2006 Notice includes in its text the statement that it is the "comprehensive and exclusive statement of the policy and processes expressed in the July 2004 Amendment to the Bond Guidelines, the Bond Formulas posted on [US Customs'] Web site, and the August 2005 Clarification"). In our view, the inclusion of October 2006 Notice allows the Panel to achieve a positive resolution to the dispute, and additionally, accords with the interests of both parties.
7.49.
The Panel therefore finds that the October 2006 Notice is properly part of the measure at issue and within the Panel's terms of reference.

2. Article 18.1 of the Anti-Dumping Agreement and the Ad Note

7.50.
Thailand submits that the application of the EBR to subject shrimp from Thailand is inconsistent with Article 18.1 of the Anti-Dumping Agreement. Article 18.1 provides that:

"No specific action against dumping of exports from another Member can be taken except in accordance with the provisions of GATT 1994, as interpreted by this Agreement."

7.51.
Thailand submits that the application of the EBR to subject shrimp from Thailand constitutes specific action against dumping in a form other than a permitted response to dumping under the provisions of GATT 1994 as interpreted by the Anti-Dumping Agreement. The United States rejects Thailand's claim.
7.52.
We begin our evaluation of Thailand's claim by considering whether or not the application of the EBR constitutes "specific action against dumping". Thereafter, we turn to the issue of whether or not the EBR is applied "in accordance with the provisions of the GATT 1994, as interpreted by" the Anti-Dumping Agreement.

3. Does the application of the EBR constitute "specific action against dumping"?

(a) Main arguments of Thailand

7.53.
Thailand asserts that the application of the EBR constitutes "specific action against dumping" because it is (i) "specific action" in response to dumping that (ii) also acts "against" dumping.

(i) "Specific action" in response to dumping

7.54.
Thailand notes that in US – Offset Act (Byrd Amendment), the Appellate Bodystated that:

"[A] measure that may be taken only when the constituent elements of dumping … are present, is a 'specific action' in response to dumping within the meaning of Article 18.1 of the Anti-Dumping Agreement … [i]n other words, the measure must be inextricably linked to, or have a strong correlation with, the constituent elements of dumping …"89

7.55.
According to Thailand, the key consideration for the Appellate Body was the "strength of the link between the measure and the elements of dumping" and the "degree of correlation between the scope of application of the measure and the constituent elements of dumping".90 For this reason, the Appellate Body stated that the test "is met not only when the constituent elements of dumping are 'explicitly built into' the action at issue, but also where … they are implicit in the express conditions for taking such action".91 Thailand submits that the constituent elements of dumping are implicit in the express conditions for the application of the EBR since it may be applied onlyto goods subject to a US anti-dumping duty order.

(ii) Specific action "against" dumping

7.56.
According to Thailand, the Appellate Body in US – Offset Act (Byrd Amendment) interpreted the term "against" in Article 18.1 of the Anti-Dumping Agreement as relating to "an idea of opposition, hostility or adverse effect".92 Thailand asserts that the Appellate Body held that for a measure to be "against" dumping:

"[I]t is necessary to assess whether the design and structure of a measure is such that the measure is "opposed to", has an adverse bearing on, or, more specifically, has the effect of dissuading the practice of dumping or the practice of subsidization, or creates an incentive to terminate such practices."93

7.57.
Thailand further asserts that the Appellate Body clarified that action "against" dumping does not require direct contact between the measure and the dumped product or entities responsible for the product. The Appellate Body stated that:

"[T]here is no requirement that the measure must come into direct contact with the imported product, or entities connected to, or responsible for, the imported good such as the importer, exporter, or foreign producer."94

7.58.
Thailand argues that the Appellate Body and panel agreed that "the test should focus on dumping … as practices".95
7.59.
Thailand submits that the application of the EBR to subject shrimp from Thailand has an adverse bearing on, and the effect of dissuading, the practice of dumping. Furthermore, the EBR comes into direct contact with the imported product and entities connected to its import such as the importer, exporter or foreign producer. First, Thailand asserts that the application of the EBR dissuades the practice of dumping by dissuading imports into the United States of subject shrimp. Second, Thailand asserts that the EBR has an adverse bearing on both the practice of dumping and the entities responsible for the dumped goods as it results in enhanced bonds significantly greater than those required of other goods solely because those goods are subject to anti-dumping measures. Thailand asserts that the adverse bearing of the EBR is compounded by the demands of sureties for 100 per cent collateral to secure the enhanced bonds.96 According to Thailand, the adverse bearing of the EBR is further compounded by the "stacking" of bonds, and accompanying collateral, year after year.97 Thailand argues that the adverse effects of the EBR include the tying up of assets and cash that forces companies to forego business opportunities, and the fees charged by surety companies.

(b) Main arguments of the United States

7.60.
The United States denies that the application of the EBR is either "specific action" in response to dumping, or specific action "against" dumping.

(i) "Specific action" in response to dumping

7.61.
Regarding Thailand's argument that the EBR is specific to dumping because it may be and has been applied only to importers of goods subject to a US anti-dumping order98 and the formula it contains uses the anti-dumping rate as one variable in determining the amount of additional security that may be prescribed,99 the United States asserts that these features merely reflect the fact that the directive is, like various measures referred to by the Appellate Body in US – Offset Act (Byrd Amendment), "related to" dumping or subsidies insofar as the unsecured liability it is designed to secure is anti-dumping and countervailing duty liability.100 The United States asserts that, according to the Appellate Body, "an action that is not 'specific' within the meaning of Article 18.1 of the Anti-Dumping Agreement and of Article 32.1 of the SCM Agreement, but is nevertheless related to dumping or subsidization, is not prohibited by Article 18.1 of the Anti-Dumping Agreement or Article 32.1 of the SCM Agreement."101 The United States asserts that the directive is applied in response to noncollection risk – the mere fact that the particular noncollection risk at issue relates to anti-dumping duties is not a sufficient basis to conclude that the directive itself is "taken in response to the constituent elements of dumping or a subsidy." The United States submits that "the constituent elements of ‘dumping'" are not "built into the essential elements" of the additional bond directive,102 since US Customs does not determine anti-dumping or countervailing duty margins, and the directive does not purport to establish margins of dumping or subsidization. The United States also asserts that the additional bond directive does not apply to all entries subject to anti-dumping or countervailing duties – rather it only applies to those for which a specific noncollection risk has been identified. The United States submits that the sole reason the directive is designed to secure anti-dumping liability is because the vast majority of unsecured liability that has resulted in noncollection happens to be anti-dumping duty liability.
7.62.
The United States rejects Thailand's argument that the directive is "not specifically related to matters other than dumping."103 According to the United States, the fact that the additional bond directive is based on noncollection risk, rather than the constituent elements of dumping or subsidization, is evident in the text of the directive itself and associated materials. The United States asserts that none of the information US Customs uses to determine that merchandise should be identified as "special category" merchandise subject to the amended directive – previous collection problems, payment history, indications that the liquidated duty rates may exceed existing security – has any relation to the constituent elements of dumping or subsidization.104 Likewise, none of the information US Customs requests for purposes of establishing individual bond amounts – prior history of paying import duties, the value of the merchandise to be secured, the degree of supervision US Customs exercises over the transaction, the prior record of the importer in honoring bond commitments, and evidence of the importer's ability to pay duties assessed – has any bearing on the constituent elements of dumping or subsidization.105 The United States submits that all of these factors are, however, relevant to establishing noncollection risk.
7.63.
The United States acknowledges that the formulas for determining bond amounts incorporate the anti-dumping rate, but only because from the standpoint of US Customs it is the best and only available baseline proxy of duties that ultimately may be assessed. According to the United States, the inclusion of the anti-dumping rate in the formulas thus does not support the conclusion that the directive itself relies on the constituent elements of dumping or subsidization.

(ii) Specific action "against" dumping

7.64.
The United States further submits that a review of Thailand's assertions demonstrates that the additional bond directive does not meet the second prong of the test set forth by the Appellate Body under Article 18.1: it is not an action taken "against" dumping or subsidization. The United States rejects Thailand's argument that the bond directive is an action "against" dumping because "it results in enhanced bonds significantly greater than those required of other goods solely because those goods are subject to anti-dumping measures."106 The United States asserts that the higher bond is not required "solely because those goods are subject to anti-dumping measures."107 Rather, the directive is applied to importers of certain goods because US Customs has determined that those importers pose a higher risk of default. The United States argues that the fact that this potential liability and risk of default happen to be attributable to certain anti-dumping and countervailing duties does not permit the conclusion that the directive is an action "against" dumping and subsidization.
7.65.
The United States asserts that actions by sureties and other private parties, including sureties' fees and collateral requirements associated with these imports, do not constitute evidence that the directive itself is an action "against" dumping or subsidization. The United States submits that US Customs does not set surety fees, nor does it require importers to post collateral in support of bonds. The United States asserts that US Customs is a third party beneficiary to bond contracts, which are private contracts negotiated between the surety and the importer.
7.66.
Furthermore, the United States asserts that the Appellate Body noted in US – Offset Act (Byrd Amendment) that "a measure cannot be against dumping or a subsidy simply because it facilitates or induces the exercise of rights that are WTO-consistent."108 According to the United States, the GATT 1994 and the Anti-Dumping Agreement do not prohibit the United States from collecting the anti-dumping duties in question, and the bond requirement facilitates its ability to do so.

(c) Evaluation by the Panel

7.67.
In considering the text of Article 18.1 of the Anti-Dumping Agreement, we note that the relevant language was considered in detail by the Appellate Body in US – Offset Act (Byrd Amendment). In that case, the Appellate Body found:

"Looking to the ordinary meaning of the words used in these provisions, we read them as establishing two conditions precedent that must be met in order for a measure to be governed by them. The first is that a measure must be "specific" to dumping or subsidisation. The second is that a measure must be "against" dumping or subsidisation. These two conditions operate together and complement each other. If they are not met, the measure will not be governed by Article 18.1 of the Anti-Dumping Agreement or by Article 32.1 of the SCM Agreement. If, however, it is established that a measure meets these two conditions, and thus falls within the scope of the prohibitions in those provisions, it would then be necessary to move to a further step in the analysis and to determine whether the measure has been "taken in accordance with the provisions of GATT 1994", as interpreted by the Anti-Dumping Agreement or the SCM Agreement. If it is determined that this is not the case, the measure would be inconsistent with Article 18.1 of the Anti-Dumping Agreement or Article 32.1 of the SCM Agreement."109

7.68.
We agree with this analysis by the Appellate Body, and adopt it as our own. Accordingly, in order to establish whether the application of the EBR constitutes "specific action against dumping", we shall first examine whether or not the application of the EBR is "specific" to dumping. If so, we shall then consider whether or not the application of the EBR acts "against dumping".

(i) Whether or not the application of the EBR is "specific" to dumping

7.69.
The degree of specificity needed for action to fall within the scope of Article 18.1 was addressed by the Appellate Body in US – 1916 Act and US – Offset Act (Byrd Amendment). In its report in US – 1916 Act, the Appellate Body found that:

"[T]he ordinary meaning of the phrase 'specific action against dumping' of exports within the meaning of Article 18.1 is action that is taken in response to situations presenting the constituent elements of 'dumping'. 'Specific action against dumping' of exports must, at a minimum, encompass action that may be taken only when the constituent elements of 'dumping' are present."110

7.70.
In US – Offset Act (Byrd Amendment), the Appellate Body explained further that:

"[T]he criterion we set out in US – 1916 Act for specific action in response to dumping is not whether the constituent elements of dumping or of a subsidy are explicitly referred to in the measure at issue, nor whether dumping or subsidization triggers the application of the action, nor whether the constituent elements of dumping or of a subsidy form part of the essential components of the measure at issue. Our analysis in US – 1916 Act focused on the strength of the link between the measure and the elements of dumping or a subsidy. In other words, we focused on the degree of correlation between the scope of application of the measure and the constituent elements of dumping or of a subsidy. In noting that the 'wording of the 1916 Act also makes clear that these actions can be taken only with respect to conduct which presents the constituent elements of 'dumping', we did not require that the language of the measure include the constituent elements of dumping or of a subsidy. This is clear from our use of the word "also", which suggests that this aspect of the 1916 Act was a supplementary reason for our finding, and not the basis for it. Indeed, we required that the constituent elements of dumping (or of a subsidy) be "present", which in our view can include cases where the constituent elements of dumping and of a subsidy are implicit in the measure."111

7.71.
We agree with the Appellate Body's interpretation of the phrase "specific action", and adopt it as our own. Accordingly, we shall determine whether or not the application of the EBR is "specific" to dumping by examining whether or not the application of the EBR is inextricably linked to, or has a strong correlation with, the constituent elements of dumping.
7.72.
In our view, the constituent elements of dumping are implicit in the express conditions for the application of the EBR, since the EBR may be applied only to goods subject to a US anti-dumping (or countervailing) duty order.112 If there were no finding that the constituent elements of dumping were present, there would be no anti-dumping order against subject shrimp, and therefore no basis for applying the EBR in respect of subject shrimp imports. For this reason, the existence of the constituent elements of dumping is a legal pre-requisite for the application of the EBR. This is further confirmed by the fact that the formula in the Amended CBD for calculating the EBR includes direct reference to the anti-dumping duty rate, and therefore the constituent elements of dumping. If the constituent elements of dumping were not present, the US would not have found cause to determine an anti-dumping rate, and the formula would not apply.
7.73.
We note the US argument that although the application of the EBR may be related to dumping, the application of the EBR is not "specific" to dumping because it is "based on non-collection risk rather than the constituent elements of dumping",113 in the sense that the EBR does not "apply to all entries subject to antidumping or countervailing duties – but only to those for which a specific non-collection risk has been identified".114 We recall, though, that the Appellate Body has already determined115 that a measure need not be triggered by the constituent elements of dumping in order for that measure to constitute "specific action" in respect of dumping. Nor does the existence of "additional requirements" transform a "specific action against dumping" into something else.116 Even though the application of the EBR might ultimately be triggered by a risk of non-collection, the fact remains that the EBR is only applied in respect of imports subject to anti-dumping (or countervailing duty) orders. There remains, therefore, a significant degree of correlation between the application of the EBR and the constituent elements of dumping. In our view, such a degree of correlation demonstrates that the application of the EBR is "specific", rather than merely related, to dumping.

(ii) Whether or not the application of the EBR acts "against" dumping

7.74.
In our view, a measure will only act "against" dumping if it has some form of adverse bearing on dumping. This is consistent with the approach of the Appellate Body in US – Offset Act (Byrd Amendment), where it found that:

"[T]o determine whether a measure is "against" dumping or a subsidy, [] it is necessary to assess whether the design and structure of a measure is such that the measure is "opposed to", has an adverse bearing on, or, more specifically, has the effect of dissuading the practice of dumping or the practice of subsidization, or creates an incentive to terminate such practices."117

7.75.
In light of the ordinary meaning of the term "against", we consider it appropriate to adopt a similar approach in determining whether or not the application of the EBR acts "against" dumping. In doing so, we note that the Appellate Body concluded that the measure at issue in US – Offset Act (Byrd Amendment) had an adverse bearing on the foreign producers/exporters because it "created an incentive" for those foreign producers/exporters "not to engage in the practice of exporting dumped or subsidized products or to terminate such practices".118 In our view, a similar incentive arises as a result of the application of the EBR on imports of subject shrimp. Ordinarily, the application of the EBR results in additional costs119 that, although initially borne by importers, ultimately impact on foreign producers/exporters of the subject merchandise, just as anti-dumping duties do.120 As a result of the formulas used to calculate the amount of the EBR, the amount of the EBR, like the amount of anti-dumping duty, is directly linked to a given foreign producer's/exporter's margin of dumping.121 The higher the margin of dumping, the higher the amount of the EBR, and the higher the cost of the EBR.122 In order to maintain its level of sales and/or profitability, despite the increased costs for importers as a result of the application of the EBR, foreign producers/exporters have an incentive to reduce, or even eliminate, their margin of dumping (just as they have an incentive to reduce their margin of dumping in order to reduce the amount of anti-dumping duties levied on their goods).123 Furthermore, shrimp importers have an incentive to avoid the costs associated with the application of the EBR by importing shrimp from foreign producers/exporters whose produce has not been found to have been dumped, and is therefore not subject to the shrimp anti-dumping order. As a result of such incentives, which affect the relevant entities in much the same way as anti-dumping duties do, we find that the application of the EBR constitutes specific action "against" dumping.
7.76.
The United States argues that, rather than being specific action "against" dumping, the application of the EBR merely facilitates the collection of anti-dumping duties. In assessing this argument, we note that in US – Offset Act (Byrd Amendment) the Appellate Body disagreed with the panel's finding that the Continued Dumping and Subsidy Offset Act (hereafter the "CDSOA") is a measure against dumping because the CDSOA provides a financial incentive for domestic producers to file or support applications for the initiation of anti-dumping and countervailing duty investigations, and that such an incentive would likely result in a greater number of applications, investigations and orders. In particular, we note that the Appellate Body found that "a measure cannot be against dumping or a subsidy simply because it facilitates or induces the exercise of rights that are WTO-consistent."124 Upon careful refection, we do not consider that the Appellate Body's reasoning should preclude our finding that the application of the EBR constitutes specific action "against" dumping. Instead, the Appellate Body's reasoning means that we would be precluded from concluding that the application of the EBR constitutes specific action "against" dumping simply because it may also facilitate the collection of WTO-consistent anti-dumping duties. However, this does not preclude us from concluding, as the Appellate Body and panel did in US – Offset Act (Byrd Amendment), that the application of the measure at issue constitutes specific action "against" dumping on the basis of other considerations, notwithstanding the fact that the application of that measure might also facilitate the collection of WTO-consistent anti-dumping duties.
7.77.
Our finding that the application of the EBR constitutes "specific action against dumping" is supported by the US view that provisional measures taken in the form of bonds constitute "specific action against dumping".125 If a bond applied as a provisional measure should be treated as a "specific action against dumping", it would appear reasonable to conclude that a bond applied as a definitive measure should be similarly categorized: in both cases, the adverse bearing of the bond on foreign producers/exporters and importers (and the correlation with the constituent elements of dumping) is the same. The United States asserts, though, that unlike a bond required as a provisional measure, the EBR provides for security after the existence of dumping has been established, pending determination of the facts with respect to payment of duties. The United States submits that the application of the EBR "facilitates the exercise of WTO-consistent rights"126i.e., the collection of duties owed following the imposition of an order. The United States asserts that, by contrast, certain bonds required before an antidumping duty order has been imposed may not be viewed as "facilitating" the exercise of WTO-consistent rights, insofar as, before the order is imposed, it has not been established that a Member is entitled to collect duties. We are not persuaded by the United States' argument, however, since we have already concluded that the fact that the application of the EBR may facilitate the exercise of WTO-consistent rights is not determinative of whether or not the application of the EBR constitutes "specific action against dumping" (in the sense that this fact does not preclude a finding that a measure constitutes "specific action against dumping" on the basis of other considerations).

(iii) Conclusion

7.78.
In light of the above, we conclude that the application of the EBR constitutes "specific action against dumping" in the meaning of Article 18.1 of the Anti-Dumping Agreement.
7.79.
Accordingly, we must now consider the remaining elements of Article 18.1, regarding the question of whether or not the EBR was applied "in accordance with the provisions of GATT 1994", as interpreted by the Anti-Dumping Agreement.

4. Was the EBR applied "in accordance with" the provisions of the GATT 1994, as interpreted by the Anti-Dumping Agreement

7.80.
The United States submits that the EBR was applied "in accordance with the provisions of GATT 1994", as interpreted by the Anti-Dumping Agreement, because the application of the EBR is authorised by the Ad Note. Thailand rejects the US reliance on the Ad Note.

(a) Main arguments of Thailand

7.81.
Thailand submits that the Ad Note cannot be read independently of the provisions of the Anti-Dumping Agreement to create a fourth permissible response to dumping not provided for in the Anti-Dumping Agreement. Thailand further asserts that, in any event, the text of the Ad Note expressly limits its application to provisional measures taken while dumping is "suspected", that is, prior to a final determination of dumping.
7.82.
Thailand asserts that Article VI of the GATT 1994, which includes as an "integral part" the Ad Note, cannot be read independently of the Anti-Dumping Agreement. Thailand notes that Article 1 of the Anti-Dumping Agreement provides that the provisions of the Anti-Dumping Agreement "govern the application of Article VI of GATT 1994 in so far as action is taken under anti-dumping legislation or regulations." Thailand argues that the Appellate Body found in US – 1916 Act that "Article 1 states that 'an anti-dumping measure' must be consistent with Article VI of the GATT 1994 and the provisions of the Anti-Dumping Agreement."127 Thailand also states that, similarly, in Brazil – Desiccated Coconut,the Appellate Body emphasised that "Article VI of the GATT 1994" cannot "be applied independently of the SCM Agreement in the context of the WTO" as "[t]he authors of the new WTO regime intended to put an end to the fragmentation that had characterized the previous system".128 According to Thailand, the Appellate Body identified a clear distinction between the previous GATT system, in which Article VI could be invoked separately from the Tokyo Round SCM Code, and the WTO system, in which Article VI cannot be so invoked.129 Thailand asserts that this distinction applies equally to the Anti-Dumping Agreement.
7.83.
Thailand submits that, when read in conjunction with the Anti-Dumping Agreement, Article VI and the Ad Note permit only three responses to dumping. According to Thailand, the Appellate Body has consistently found that "Article VI, and, in particular, Article VI:2, read in conjunction with the Anti-Dumping Agreement, limit the permissible responses to dumping to definitive anti-dumping duties, provisional measures and price undertakings ".130 Thailand asserts that these responses are governed by Articles 7, 8, and 9 of the Anti-Dumping Agreement. Thailand further asserts that the United States has also argued this position in recent panel proceedings.131
7.84.
Thailand understands the United States to argue that the Ad Note permits the imposition of cash deposit and bond amounts in excess of the amount of the margin of dumping currently in effect during the period following the imposition of definitive anti-dumping duties. For Thailand, therefore, the United States argues that Article 9 of the Anti-Dumping Agreement, governing the imposition and collection of anti-dumping duties, does not limit the amounts of cash deposits and bonds that may be imposed. Thailand asserts that, in these circumstances, there is a conflict between the provisions of Article 9 of the Anti-Dumping Agreement, which expressly limits the measures that may be taken following the imposition of definitive anti-dumping duties, and the United States' reading of the Ad Note. Thailand notes that, in cases of conflict between a provision of a multilateral trade agreement, such as the Anti-Dumping Agreement, and the GATT 1994, the General Interpretative Note to Annex 1A of the Marrakesh Agreement Establishing the WTO provides that the provisions of the multilateral trade agreement shall prevail.132 Thailand submits that for this reason also, the Ad Note cannot be read to confer rights to take action against dumping following the imposition of definitive dumping duties that are not found in Article 9 of the Anti-Dumping Agreement.
7.85.
Thailand also asserts that the Ad Note limits the permissible measures to a single security in the form of a " cash deposit or bond", rather than a combination of both cash deposits and bonds.

(b) Main arguments of the United States

7.86.
The United States submits that Thailand offers an interpretation of the Ad Note in relation to the Anti-Dumping Agreement that is inconsistent with the terms of the Anti-Dumping Agreement and fails to give the Ad Note any meaning or legal effect, contrary to the relationship between the GATT 1994 and other WTO Agreements contemplated by the WTO Agreement. The United States asserts that the GATT 1994, including the Ad Note, is an "integral part" of the WTO Agreement.133 The United States argues that past panels and the Appellate Body have noted that Article VI is "part of the same treaty" as the Anti-Dumping Agreement, and "should not be interpreted in a way that would deprive it or the Antidumping Agreement of meaning."134 The United States argues that panels "should give meaning and legal effect to all the relevant provisions," including the Ad Note. According to the United States, the Ad Note permits Members to require "reasonable security (cash deposit or bond)" for the payment of antidumping and countervailing duties. For the United States, no other provision of the Anti-Dumping Agreement or the GATT 1994 specifically addresses security for the payment of duties after the final determination in an investigation, including the collection of cash deposits, and, moreover, no provision prohibits a Member from requiring this security.
7.87.
The United States submits that, instead of "reading Article VI in conjunction with the Antidumping Agreement," as the Appellate Body in US – 1916 Act suggested,135 Thailand, through a misreading of Articles 7 and 9 of the Anti-Dumping Agreement, attempts to read Article VI and the Ad Note out of the covered agreements entirely, depriving both provisions of any meaning. The United States asserts that, if accepted, Thailand's various theories would mean that security pending final assessment of anti-dumping and countervailing duties is nowhere permitted by the Anti-Dumping Agreement, SCM Agreement, or the GATT 1994. The United States asserts that, if Thailand's arguments were accepted, Members would not be permitted to maintain security requirements pending final determination of liability. The United States argues that to preclude a Member with a retrospective system from requiring the posting of security prior to the determination of final liability would create a disparity between retrospective and prospective systems. The United States argues that such a conclusion would compromise Members' ability to maintain retrospective duty assessment systems, despite the fact that these systems are specifically contemplated by the text of the Agreement.

(c) Evaluation by the Panel

7.88.
At this juncture, we are examining the issue of whether or not the EBR was applied "in accordance with the provisions of GATT 1994", as interpreted by the Anti-Dumping Agreement. The parties agree that the relevant provision of the GATT 1994 in this regard is Article VI, and specifically the Ad Note thereto.136 This is also consistent with the view expressed by the Appellate Body in US – 1916 Act.137 The Ad Note provides that:

"As in many other cases in customs administration, a contracting party may require reasonable security (bond or cash deposit) for the payment of anti-dumping or countervailing duty pending final determination of the facts in any case of suspected dumping or subsidization."

7.89.
We first consider the relationship between the Ad Note and the Anti-Dumping Agreement, and the question of whether or not the Ad Note may authorize the imposition of security requirements that are not expressly envisaged by the Anti-Dumping Agreement. If we find that the Ad Note may authorize such security requirements, we consider the temporal scope of the security requirements that Members may impose pursuant to the Ad Note. Thereafter, we consider the question of whether or not Members may require security combining both cash deposits and bonds. Finally, we examine whether the application of the EBR constitutes "reasonable" security.

(i) The relationship between the Ad Note and the Anti-Dumping Agreement

7.90.
Thailand's basic argument is that Article VI of the GATT 1994, including the Ad Note, may not be applied "independently" of the Anti-Dumping Agreement, in the sense that it may not provide an independent basis for taking specific action against dumping outside of the provisions of the Anti-Dumping Agreement. In this regard, Thailand asserts that the Appellate Body found in Brazil – Desiccated Coconut that "Article VI of the GATT 1994" cannot "be applied independently of the SCM Agreement in the context of the WTO" as "[t]he authors of the new WTO regime intended to put an end to the fragmentation that had characterized the previous system".138 In other words, Thailand argues that if Article VI of the GATT 1994 were found to provide an independent basis for taking specific action against dumping, such finding would result in fragmented anti-dumping regimes.
7.91.
In considering Thailand's argument, we note that the Appellate Body findings relied on by Thailand were prefaced by the following observations:

"The relationship between the GATT 1994 and the other goods agreements in Annex 1A is complex and must be examined on a case-by-case basis. Although the provisions of the GATT 1947 were incorporated into, and became a part of the GATT 1994, they are not the sum total of the rights and obligations of WTO Members concerning a particular matter. For example, with respect to subsidies on agricultural products, Articles II, VI and XVI of the GATT 1994 alone do not represent the total rights and obligations of WTO Members. The Agreement on Agriculture and the SCM Agreement reflect the latest statement of WTO Members as to their rights and obligations concerning agricultural subsidies. The general interpretative note to Annex 1A was added to reflect that the other goods agreements in Annex 1A, in many ways, represent a substantial elaboration of the provisions of the GATT 1994, and to the extent that the provisions of the other goods agreements conflict with the provisions of the GATT 1994, the provisions of the other goods agreements prevail. This does not mean, however, that the other goods agreements in Annex 1A, such as the SCM Agreement, supersede the GATT 1994. As the Panel has said:

... the question for consideration is not whether the SCM Agreement supersedes Article VI of GATT 1994. Rather, it is whether Article VI creates rules which are separate and distinct from those of the SCM Agreement, and which can be applied without reference to that Agreement, or whether Article VI of GATT 1994 and the SCM Agreement represent an inseparable package of rights and disciplines that must be considered in conjunction."139

7.92.
It is important to note that, despite the complexity of the issue under consideration, the Appellate Body was abundantly clear in stating that Article VI of the GATT 1994 was not superseded by the SCM Agreement. The findings of the panel, which were upheld by the Appellate Body without modification, similarly excluded the possibility that the SCM Agreement might be superseded by Article VI of the GATT 1994. Thus, neither the panel nor Appellate Body findings in Brazil – Desiccated Coconut provide any basis for concluding that Article VI of the GATT 1994 is superseded by the SCM Agreement.140 We emphasise this point because, in our view, Thailand's position regarding the relationship between the Ad Note and the Anti-Dumping Agreement suggests that the latter supersedes the former.
7.95.
In our view, such an approach to the relationship between the Ad Note and the Anti-Dumping Agreement is entirely consistent with the interpretation set forth by the Appellate Body in Brazil – Desiccated Coconut. Contrary to Thailand's argument, we do not consider that our approach reintroduces "the fragmentation that had characterized the previous system".144 The fragmentation with which the Appellate Body was concerned in Brazil – Desiccated Coconut resulted from the fact that, under the GATT regime, Contracting Parties could take anti-dumping action under Article VI even if they had not signed – and were therefore not bound by – the Tokyo Round Anti‑Dumping Code. Non-signatories of the Code could therefore act (under Article VI) "independently" of, or "without reference" to the Code. Such fragmentation, which is precluded under the "single undertaking" in the WTO regime, would not be re-introduced by our interpretation of the relationship between Article VI and the Anti-Dumping Agreement, since our interpretation is premised on the notion that Article VI may not be applied "independently" of, or "without reference" to, the Anti-Dumping Agreement.
7.96.
Thailand has not identified any provision of the Anti-Dumping Agreement that would prohibit the security requirements resulting from the application of the EBR.145 Nor are we able to identify any. As a matter of law, therefore, such security requirements would be authorized by the Ad Note, provided they are in conformity with the substantive provisions thereof. This is the issue we will turn to shortly.
7.97.
Before concluding on the relationship between the Ad Note and the Anti-Dumping Agreement, though, we must consider Thailand's assertion that the Appellate Body has found that "Article VI, and, in particular, Article VI:2, read in conjunction with the Anti-Dumping Agreement, limit the permissible responses to dumping to 'definitive anti-dumping duties, provisional measures and price undertakings'".146 While we acknowledge that such statements were made by the Appellate Body in US – 1916 Act and US – Offset Act (Byrd Amendment), we note that the Appellate Body was not considering the WTO-consistency of security imposed pursuant to the Ad Note in those cases. By contrast, we have conducted a careful examination of the relationship between the Ad Note and the Anti-Dumping Agreement, and find that the Ad Note may permit responses to dumping in the form of particular security requirements. In doing so, we note that Appellate Body jurisprudence clearly indicates that the Ad Note has not been superseded by the Anti-Dumping Agreement. In such circumstances, we are not prepared to find that the Ad Note has been rendered superfluous by dicta in an Appellate Body Report that does not even refer to the provisions of the Ad Note. Instead, we shall base ourselves on the clear-cut guidance that has been provided by the Appellate Body in Brazil – Desiccated Coconut.
7.98.
For all the above reasons, we find that the relationship between the Ad Note and the Anti-Dumping Agreement is not such as to preclude the Ad Note authorizing certain types of security that are not expressly envisaged by the Anti-Dumping Agreement.

(ii) The temporal scope of the Ad Note

Ordinary meaning of the text of the Ad Note

7.100.
By its express terms, the Ad Note is applicable "pending final determination of the facts in any case of suspected dumping or subsidization". The United States argues that the temporal scope of the Ad Note covers the period of application of the anti-dumping order since, in a retrospective system such as the US system, there remains a "case of suspected dumping" pending completion of the assessment review. Thailand agues that the application of the Ad Note is expressly limited to provisional measures taken while dumping is "suspected", that is, prior to a final determination of dumping. Thailand asserts that the existence of dumping is confirmed once a final determination of dumping is made by the USDOC, such that there can no longer be "any case of suspected dumping" as of the imposition of the anti-dumping order.
7.101.
The Ad Note refers to "suspected dumping." We interpret "dumping" in light of Article 2.1 of the Anti-Dumping Agreement. Regarding the term "suspected", the United States asserts that this refers to dumping that is "imagined to be possible or likely."147 Thailand asserts that the ordinary meaning of "suspected" is "that one suspects to exist or to be such".148 Despite the apparent differences between the definitions advanced by the parties, in fact the parties have merely proposed different elements of one of the definitions set forth in The New Shorter Oxford English Dictionary (which defines the word "suspected" in relevant part as "that one suspects to exist or to be such; imagined to be possible or likely"). There is, therefore, no disagreement between the parties in this regard. We understand the term "suspected" to refer to dumping that is suspected to exist, in the sense that its existence may be imagined to be likely.149
7.102.
In order to determine whether or not there remains "a case of suspected dumping" after imposition of a US anti-dumping order, we must carefully consider the analyses of dumping undertaken in the US retrospective system. In order to impose an anti-dumping order, the United States first determines, through an analysis of import entries during a given period of investigation, whether margins of dumping exist, and whether dumped imports cause or threaten to cause material injury to a domestic industry. If a determination of injurious dumping is made, the United States issues an anti-dumping duty order. In its anti-dumping duty order, the United States sets forth ad valorem cash deposit rates for producers/exporters individually investigated, as well as an "all-others" rate applicable to all other subject producers/exporters. Pursuant to the anti-dumping duty order, importers must post a cash deposit of estimated anti-dumping duties for each import transaction. This cash deposit is based on the overall margin of dumping found for the exporter or producer during the investigation phase. Thereafter, the US retrospective duty assessment system provides that, every twelve months, during the anniversary month of the antidumping duty order, importers, exporters, producers, and domestic interested parties have the opportunity to request that USDOC conduct an assessment review of the import entries that occurred in the prior year (but following imposition of the anti-dumping order). During any such review, the United States analyses all of the import entries for the relevant period of review (i.e., the prior 12 months) to determine the final amount of the antidumping duty payable on imports from the relevant producer or exporter. For those entries not covered by a request for an assessment review, USDOC instructs US Customs to assess anti-dumping duties at the cash deposit rate required upon entry.
7.103.
In our view, there is no certainty that imports entering the United States following imposition of an anti-dumping order are in fact dumped. The determination of dumping made during the initial investigation underlying the anti-dumping order does not apply to these imports, since that determination was made on the basis of imports occurring during an earlier period of investigation. Rather, the final determination (of the existence and amount) of dumping is only made in respect of imports entering the United States following imposition of the anti-dumping order when an assessment review is undertaken. Until that time, it is not possible to state with certainty whether or not those imports are dumped. Indeed, the assessment review may demonstrate that those import entries were not dumped, such that no anti-dumping duties may be collected.
7.105.
Thailand asserts that there is no longer any suspicion of dumping once there is a determination of dumping giving rise to the imposition of an anti-dumping order. That determination, however, relates to imports during the period of investigation underlying the initial investigation. It does not relate to imports entering the United States after the anti-dumping order is imposed.151 Accordingly, the initial determination does not remove the suspicion of dumping in respect of those later imports. In fact, as noted above, that initial determination is actually the basis for the suspicion of dumping in respect of those later imports.
7.107.
Irrespective of whether or not the final assessment in cases where no interested party requests a review may be deemed to be "automatic", there remains no means of knowing whether or not an assessment review will be conducted at the time that the import entry is made. This will only be known once either the assessment review is requested, or the deadline for requesting such review has passed without any such request having been made. Thus, even though imports may ultimately be liquidated at the cash deposit rate in the anti-dumping order, there remains the possibility that an assessment review may be requested, and that such review may indicate that those imports are not dumped (i.e., that no anti-dumping duties are to be assessed). At the time of entry, therefore, such imports may only be suspected of being dumped.

Contextual considerations regarding Articles 5.1 and 9.3.1 of the Anti-Dumping Agreement

7.108.
Turning to broader contextual considerations regarding Articles 5.1 and 9.3.1 of the Anti-Dumping Agreement, Thailand asserts that there is a fundamental difference between the determination in an original investigation of whether dumping exists – and thus is not merely "suspected" – and the determination in a retrospective assessment review of the amount of duties to be collected on particular entries. According to Thailand, this difference is reflected in the text of the Anti-Dumping Agreement, with Article 5.1 referring to an investigation to determine the "existence... of dumping", and Article 9.3.1 referring only to the "determination of the final liability for payment of anti-dumping duties." Thailand argues that the reference in Article 9.3.1 to the determination of final liability for payment of anti-dumping duties necessarily implies that there has previously been a determination that dumping (and injury) exist and that the imposition of anti-dumping duties is merited. Thailand argues that if dumping is merely "suspected" after the conclusion of the original investigation and until the final liability for duties on particular imports is determined, all US anti-dumping orders are inconsistent with the basic requirement of Article VI of the GATT 1994 and the Anti-Dumping Agreement that anti-dumping measures may only be imposed when imports are found to be dumped and to be causing, or threatening to cause, material injury to the domestic industry.
7.110.
Regarding Article 9.3.1, we note that this provision refers to "the determination of the final liability for payment of anti-dumping duties". In a retrospective system, this determination necessarily takes place after the relevant import entries have been made. In our view, part of the process of determining "final liability for payment of anti-dumping duties" is to determine whether or not those entries were dumped.155 If they were not dumped, there is no "final liability for payment of anti-dumping duties". Conversely, if they were dumped, there is "final liability for payment of anti-dumping duties" (commensurate with the amount of dumping found to exist). Accordingly, we do not accept Thailand's argument that the reference in Article 9.3.1 to the determination of final liability for payment of anti-dumping duties necessarily implies that there has previously been a determination that dumping exists in respect of subsequent imports, and that the levying of anti-dumping duties is merited. Rather, it simply means that there is a case of suspected dumping, and that the levying of anti-dumping duties may be merited.

Contextual considerations regarding the WTO-conformity of cash deposits

Negotiating history

7.123.
Thailand also submits that the negotiating history of the Ad Note and Article VI makes clear that the reference in the Ad Note to "suspected dumping" referred to the period "before anti-dumping duties are actually brought into operation."171 Thailand refers in this regard to the 1959 Report of the Group of Experts on Anti-dumping and Countervailing Duties, wherein "[t]he Group agreed that it was desirable that such provisional measures should not be of retroactive application and that they should preferably take the form of bond or cash deposits as mentioned in Interpretative Note 1 to paragraphs 2 and 3 of Article VI."172 According to Thailand, the Ad Note was, in effect, superseded by the adoption of Article 10 of the 1967 Agreement on Implementation of Article VI, the forerunner of Article 7 of the current Anti-Dumping Agreement, which provided a more comprehensive regulation of the use of provisional measures.
7.124.
The United States rejects Thailand's reliance on negotiating history, arguing that neither Article 7 nor the concept of "provisional measures" existed at the time the Ad Note was negotiated. The United States asserts that the Group of Experts relied on by Thailand stated explicitly that "Article VI made no mention of them [provisional measures]".
7.126.
In the second sentence of the above extract from their Report, therefore, the Group of Experts "noted that Article VI made no mention of [provisional measures]". Since the Ad Note was introduced into the GATT 1947 in 1948,173 and was therefore an integral part of Article VI of the GATT 1947 at the time that the Group of Experts issued its Report, this statement by the Group of Experts is therefore fundamentally at odds with Thailand's argument that the Ad Note is expressly limited to provisional measures taken prior to a final determination of dumping.
7.127.
Regarding Thailand's argument that the 1948 Report of the Working Party that actually adopted the Ad Note understood the term "suspected dumping" to refer to the period "before anti-dumping duties are actually brought into operation", we note that the language cited by Thailand actually arises in paragraph 10 of that Report, which concerns a proposal (item (viii)) from the Netherlands regarding the inclusion of a consultation mechanism. The language is not used in respect of Brazil's proposal (item (vii)) regarding the inclusion of the Ad Note. In particular, the Report reads:

"10. Item (viii)

In connection with the new paragraph proposed by him in the paper submitted to the Sub-Committee on 9 January the representative of the Netherlands pointed out that the proposal was intended to:

(a) provide facilities for consultation between Members in cases of suspected dumping before anti-dumping duties are actually brought into operation."

7.128.
Since the language of the Report relied on by Thailand did not relate to the Ad Note, its relevance in the present dispute is questionable. In addition, it is by no means clear that the phrase "before anti-dumping duties are actually brought into action" necessarily refers to the period prior to the imposition of an anti-dumping order, since it might equally refer to the period prior to assessment of the anti-dumping duties. Furthermore, that language is in any event not sufficient to contradict the very clear statement of the abovementioned Group of Experts.
7.129.
We are considering the relevant negotiating history because Thailand referred to it in support of its claim under Article 18.1 of the Anti-Dumping Agreement. We are not referring to the negotiating history pursuant to Article 32 of the Vienna Convention, i.e., because we find that our interpretation of the relevant provisions "leaves the meaning ambiguous or obscure; or leads to a result which is manifestly absurd or unreasonable." Nor are we referring to the negotiating history because we find it determinative of the issues before us. However, if the Ad Note was not introduced to provide for reasonable security in the form of provisional measures, one might legitimately ask what it introduced for. Since the United States appears to have been applying a form of retrospective assessment system at the time the Ad Note was introduced,174 one might reasonably speculate that the Ad Note may have been intended to provide for reasonable security for definitive anti-dumping duties, pending final assessment.

(iii) The combined use of bonds and cash deposits

7.131.
We recall that the EBR was applied in conjunction with cash deposits, in the sense that importers had to provide both enhanced bonds and cash deposits covering the same subject import entries. We next consider whether the Ad Note allows the imposition of security requirements combining both cash deposits and bonds, or whether the Ad Note requires Members to choose between either (i) cash deposits or (ii) bonds.
7.132.
Thailand asserts that the word "or" in the phrase "cash deposit or bond" in the Ad Note can only be read in the exclusive sense rather than the inclusive sense, so that only a single security in the form of either (i) a cash deposit or (ii) a bond may be applied. Thailand further argues that the question of whether a measure is "reasonable" within the meaning of the Ad Note cannot be resolved simply by reference to the amount of the security. According to Thailand, the manner in which any security is imposed must also be "reasonable". Thailand submits that by mandating that security required specifically for the collection of anti-dumping duties should take the form of either a bond or a cash deposit, the drafters of the Ad Note sought to limit the burdens placed on importers by ensuring that importers would not be required to provide specific anti-dumping security in two different forms at the same time.
7.133.
The United States submits that nothing in the text or context supports this reading of the term. According to the United States, the phrase "bond or cash deposit" is a parenthetical that appears after the term "reasonable security" and that term provides relevant context for interpretation. The United States asserts that Thailand fails to explain how requiring two types of security instead of one is relevant to determining what constitutes "reasonable security". The United States also argues that Thailand fails to explain why the Agreement should be read to proscribe Customs from, for example, replacing a portion of the existing cash deposit requirement with a bond requirement. The United States argues that the Appellate Body has interpreted other uses of "or" in the WTO Agreements as covering one or the other item, as well as both items, in a phrase. The United States notes that, in its report in US – FSC (Article 21.5 – EC II), the Appellate Body interpreted Article 21.5 of the DSU in this manner. Article 21.5 states:

"Where there is disagreement as to the existence or consistency with a covered agreement of measures taken to comply with the recommendations and rulings such dispute shall be decided through recourse to these dispute settlement procedures, including wherever possible resort to the original panel."175

7.134.
The United States argues that the Appellate Body interpreted this provision to mean that "an Article 21.5 panel may be called upon to examine either the ‘existence' of ‘measures taken to comply' with DSB recommendations and rulings, or, when such measures exist, the ‘consistency' of those measures with the covered agreements, or a combination of both, in situations where the measures taken to comply, through omissions or otherwise, may achieve only partial compliance."176 The United States submits that, like the language interpreted by the Appellate Body in US – FSC (Article 21.5 – ECII), based on the text and context, the "or" in the Ad Note encompasses a cash deposit, a bond, or a combination of both.
7.135.
We agree with Thailand's argument that the reasonableness of the security is to be assessed by reference to both the form and the amount thereof. In terms of form, the purpose of the phrase "(cash deposit or bond)" in the Ad Note is to clarify that both cash deposits and bonds constitute reasonable forms of security. Since that is the case, we see nothing in the text of the Ad Note to suggest that the combination of both (otherwise reasonable) forms of security necessarily results in a measure that is unreasonable. In particular, the text of the Ad Note does not provide that the form of security will only be reasonable if either (i) cash deposits or (ii) bonds are required.
7.136.
We consider that an interpretation of the word "or" to permit the combined use of bonds and cash deposits is consistent with the Appellate Body's interpretation of the word "or" in US – FSC (Article 21.5 – EC II). In that case, the Appellate Body found177 that the word "or" in respect of the phrase "existence or consistency" in Article 21.5 of the DSU should be interpreted to permit Article 21.5 proceedings addressing both the "existence" and the "consistency" of implementation measures, not only one or the other. Since the Appellate Body was interpreting a similar use of the word "or" in US – FSC (Article 21.5 – EC II), the Appellate Body's findings regarding that matter offer useful guidance that we consider it appropriate to follow in these proceedings.
7.137.
In light of the above, we find that the application of the EBR is consistent with the temporal scope of the Ad Note, and that the United States is entitled to impose security requirements combining both cash deposits and bonds. The final substantive issue for us to examine is whether or not the security requirements established by the EBR in this case were "reasonable" in the meaning of the Ad Note.

(iv) Whether the application of the EBR resulted in "reasonable" security requirements

7.138.
The Ad Note only permits the imposition of "reasonable" security requirements. Thus, the application of the EBR may only be found to be in accordance with the Ad Note to the extent that it provides for "reasonable" security. The United States asserts that the application of the EBR provided for reasonable security, whereas Thailand contends that the resultant security requirements were not reasonable. As noted in the preceding section, the reasonableness of the security is to be assessed by reference to both the form and the amount thereof. Having already dealt with Thailand's claim regarding the form of the security required by the United States, in this section we consider the reasonableness of the amount thereof.
7.140.
In this regard, we recall that the EBR is applied in conjunction with cash deposits. While the cash deposits are designed to secure the duty liability established as a result of the anti-dumping order (or most recent assessment review), the EBR is applied to secure against liability resulting from increases in the rate of dumping over and above that established in the order (or most recent assessment review).181 Since the amount of cash deposits is limited to the rate of dumping established in the anti-dumping order (or most recent assessment review), such security corresponds to the given case of suspected dumping, and is therefore in principle "reasonable" within the meaning of the Ad Note. The same reasoning does not cover the application of the EBR, however, since the application of the EBR increases the level of security beyond the dumping liability established as a result of the anti-dumping order. By virtue of the reasonableness requirement in the Ad Note, such increased security would only be permitted if there were some other basis which renders it reasonable in a particular case.
7.144.
We note that the United States has not submitted any documentary evidence in support of its assertion that anti-dumping rates increased 33 per cent of the time. It is, therefore, impossible to assess the rigour of the United States' analysis. In particular, it is impossible to verify how the United States treated cases where the rate may have increased as a result of error on the part of Customs, or error or fraud on the part of other parties.186187 In our view, apparent rate increases resulting from error or fraud should not be confused with genuine increases in exporters' actual rates of dumping.
7.145.
Leaving aside the lack of supporting documentary evidence, we are in any event not persuaded that an objective and impartial investigating authority could properly conclude that rates of dumping for subject shrimp were likely to increase on the basis of a finding that, historically, rates only increased in one third of agriculture/aquaculture cases generally.188 Furthermore, the United States has provided no explanation as to how any alleged historical trend in respect of dumping rates for agriculture/aquaculture cases generally might justify conclusions regarding the likelihood of dumping rates for subject shrimp specifically. In addition, we recall that the EBR is applied on all imports of subject shrimp. A finding that, historically, rates have increased 33 per cent of the time in respect of agriculture/aquaculture cases generally is not sufficient, in our view, to demonstrate that all rates for subject shrimp (in respect of all imports, from all sources) are likely to increase.
7.146.
The United States seeks to support its conclusion that rates of dumping would likely increase by asserting that "USDOC's preliminary results from the first administrative review of the antidumping order with respect to shrimp indicate that several Thai companies that had been making cash deposits at the 6% rate established in the investigation may be subject to an assessment rate in excess of 57%."189 Thailand retorts that USDOC's preliminary results from the first administrative review of the anti-dumping order with respect to shrimp actually indicate that "[f]or 17 out of the 18 exporters for whom actual margins (rather than punitive facts-available margins) were determined, the assessment rates were actually lower than the cash deposit rates. In other words, for 94 per cent of exporters for whom actual margins were calculated, the "unsecured liability" that the United States refers to did not even arise."190 Thailand also asserts that, even including exporters for whom actual margins were not determined, assessment rates increased for only eight exporters. According to Thailand, Thai "export statistics indicate that exporters whose assessment rates increased accounted for only 1.92 per cent of the value of trade for the period covered by the administrative review."191 Thai asserts that rates of dumping have therefore declined or remained the same for approximately 98 per cent of the value of entries of Thai shrimp.192
7.148.
For these reasons, we do not consider that an objective and impartial investigating authority could properly have found, on the basis of the evidence relied on by the United States at the relevant time, that the rates of dumping established in the shrimp order were likely to increase.
7.149.
In light of our conclusion in the preceding sub-section, we see no need to consider whether or not the United States properly determined the amount by which rates of dumping were likely to increase.

(d) Summary

(i) Finding on whether or not the application of the EBR was "in accordance with" the Ad Note

7.151.
In light of our finding that the application of the EBR was not "reasonable" within the meaning of the Ad Note, we further find that the application of the EBR was not "in accordance with the provisions of the GATT 1994, as interpreted by" the Anti-Dumping Agreement.

5. Conclusion in respect of Thailand's Article 18.1 claim

7.152.
Since we have found that the application of the EBR constitutes "specific action against dumping" that is not "in accordance with the provisions of the GATT 1994, as interpreted by" the Anti-Dumping Agreement, we conclude that the application of the EBR is inconsistent with Article 18.1 of the Anti-Dumping Agreement.

6. Other claims by Thailand

(a) Articles 7 and 9 of the Anti-Dumping Agreement, Article VI:2 of the GATT 1994, and the Ad Note

7.153.
Thailand has made separate claims that the EBR is inconsistent with the provisions of Articles 7.1, 7.2, 7.4 and 7.5 of the Anti-Dumping Agreement; Articles 9.1, 9.2 and 9.3 of the Anti-Dumping Agreement; Article VI:2 of the GATT 1994; and the Ad Note. In note 266 to its first written submission, Thailand has explained that "these claims are subsidiary and alternative to Thailand's Article 18.1 claim and, to the extent that the Panel finds in Thailand's favour on the Article 18.1 claim, the Panel need not further address Thailand's separate claims" under the abovementioned provisions.
7.154.
In light of Thailand's characterisation of these additional claims as "subsidiary and alternative" to its claim under Article 18.1 of the Anti-Dumping Agreement, and in view of our finding in respect of Thailand's Article 18.1 claim, we do not consider it necessary to address Thailand's claims under Articles 7 and 9 of the Anti-Dumping Agreement, Article VI:2 of the GATT 1994, and the Ad Note.

(b) Articles I:1, II:1(a), II:1(b), X:3(a) and XI:1 of the GATT 1994.

7.156.
The Panel, after careful consideration, on the basis of judicial economy, refrains from ruling on Thailand's claims under Articles XI, II, X:3(a), and I of the GATT 1994. The Panel recalls that the principle of judicial economy is recognized in WTO law. The Appellate Body has consistently ruled that panels are not required to address all the claims made by a complaining party. In fact, a panel has discretion to determine which claims it must address in order to resolve the dispute between the parties, provided that those claims are within its terms of reference.194 The Appellate Body has relied on the explicit aim of the dispute settlement mechanism, which is to secure a positive solution to a dispute, as provided in Article 3.7 of the DSU or a satisfactory settlement of the matter as per Article 3.4 of the DSU. The Appellate Body has stressed that the basic aim of dispute settlement in the WTO is to settle disputes and not to "make law" by clarifying existing provisions of the WTO Agreement that fall outside the context of resolving a particular dispute:

"[G]iven the explicit aim of dispute settlement that permeates the DSU, we do not consider that Article 3.2 of the DSU is meant to encourage either panels or the Appellate Body to 'make law' by clarifying existing provisions of the WTO Agreement outside the context of resolving a particular dispute. A panel need only address those claims which must be addressed in order to resolve the matter in issue in the dispute.195"196

7.157.
We bear in mind that, in Australia – Salmon, the Appellate Body cautioned panels against false judicial economy arguing that the right to exercise judicial economy could not be exercised where only a partial resolution of a dispute would result:

"The principle of judicial economy has to be applied keeping in mind the aim of the dispute settlement system. This aim is to resolve the matter at issue and 'to secure a positive solution to a dispute'. To provide only a partial resolution of the matter at issue would be false judicial economy. A panel has to address those claims on which a finding is necessary in order to enable the DSB to make sufficiently precise recommendations and rulings so as to allow for prompt compliance by a Member with those recommendations and rulings 'in order to ensure effective resolution of disputes to the benefit of all Members.'"197

7.158.
The Panel believes that this is not the case in the current proceedings. In making findings under Article 18.1 of the Anti-Dumping Agreement and the Ad Note,the Panel believes that it has effectively resolved this aspect of the dispute. The Panel finds support for its exercise of judicial economy in the practice of panels and the Appellate Body in previous dispute settlement proceedings. For example, as regards Thailand's claim under Article XI:1 of the GATT 1994, the Panel in US – 1916 Act (Japan), after finding a violation of Article VI, held that in the case before it, Article VI addressed the "basic feature" of the measure at issue more directly than Article XI, although this did not mean that Article VI applied to the exclusion of Article XI:1. On that occasion, the Panel found that it was entitled to exercise judicial economy and decided not to review the claims of Japan under Article XI.198 Precedent also exists as regards Thailand's claim under Article X:3(a) of the GATT 1994. In previous disputes, after having found violations of, inter alia, Article I of the GATT 1994199, Article 11.2 of the Anti-Dumping Agreement200 and Article 2.4.1 of the Anti-Dumping Agreement201, the respective Panels did not consider it necessary to examine the Article X:3(a) claims.
7.159.
Even if the Panel would have found that the application of the EBR is not inconsistent with Article 18.1 of the Anti-Dumping Agreement, the Panel is of the view that it would not be appropriate to proceed and rule on Thailand's additional GATT 1994 claims. We note that the text of Article 18.1 of the Anti-Dumping Agreement provides that "[n]o specific action against dumping of exports from another Member can be taken except in accordance with the provisions of the GATT 1994, as interpreted by this Agreement." We recall that this reference to the provisions of the GATT 1994 has been interpreted by the Appellate Body as referring to Article VI of the GATT 1994. We further recall that the Ad Note is an integral part of Article VI of the GATT 1994. We therefore interpret these provisions to mean that the WTO Agreements allow for the imposition of measures which are considered to be specific action against dumping provided they are in accordance with Article VI of the GATT 1994, including its Ad Note.202 Accordingly, we are unable to accept that a measure which constitutes specific action against dumping in accordance with the provisions of the Ad Note, can nevertheless be found inconsistent with other provisions of the GATT 1994. For example, if we were to find that the Amended CBD violates the MFN provision of Article I of the GATT 1994, such a finding would, as a consequence, render inutile the provision in Article 18.1 of the Anti-Dumping Agreement, and by reference, Article VI of the GATT 1994 and the Ad Note.
7.160.
We find additional support for our conclusion in the General Interpretative Note to Annex 1A of the WTO Agreement, which provides that in the event of conflict between a provision of the GATT 1994 and another Agreement of Annex 1A, the provision of the other Agreement prevails. We have found that the Amended CBD constitutes specific action against dumping in accordance with Article VI of the GATT 1994, as interpreted by the Anti‑Dumping Agreement,and thus, is consistent with Article 18.1 of the Anti-Dumping Agreement. Therefore, our findings under the Anti-Dumping Agreement must prevail over any potential finding of violation under Articles XI, II, X:3(a), and I of the GATT 1994.
7.161.
Finally, we consider the Panel's discussion in US – 1916 Act (Japan) furtherrelevant to this issue. After finding a violation of Article VI of the GATT 1994, the Panel considered whether it must also analyse a claim under Article III:4 of the GATT 1994. It held that, in the case before it, Article VI addressed the "basic feature" of the measure at issue more directly than Article III:4. In doing so, the Panel referred to the international law principle lex specialis derogat legi generali in support of its reasoning.203 The Panel did so by virtue of the Appellate Body's finding in EC – Bananas III that:

"Although Article X:3(a) of the GATT 1994 and Article 1.3 of the Licensing Agreement both apply, the Panel, in our view, should have applied the Licensing Agreement first, since this agreement deals specifically, and in detail, with the administration of import licensing procedures. If the Panel had done so, then there would have been no need for it to address the alleged inconsistency with Article X:3(a) of the GATT 1994."204

7.162.
We agree that the principle of lex specialis should apply in such circumstances. Since Article VI of the GATT 1994, including the Ad Note, "deals specifically, and in detail", with the issue of security for definitive anti-dumping duties, those provisions address the "basic feature" of the measure at issue more directly than the other GATT 1994 provisions cited by Thailand. Article VI and the Ad Note therefore constitute lex specialis that should prevail over the more general GATT 1994 provisions cited by Thailand.
7.163.
For the above reasons, we conclude that it would not be appropriate for us to proceed and rule on Thailand's claims under Articles I, II:1(a), the first and second sentences of Article II:1(b), X:3(a), and XI:1 of the GATT 1994, and we decline to do so.

7. United States' defence under Article XX(d) of the GATT 1994

7.164.
Having found that the EBR constitutes "specific action against dumping" and that it is not a "reasonable security" under the Ad Note, and thus it is not "in accordance with the provisions of the GATT 1994, as interpreted by the Anti-Dumping Agreement", the Panel will proceed to examine the United States' defence under Article XX(d) of the GATT 1994.

(a) Main arguments of the United States

7.165.
The United States argues that the Amended CBD is justified under Article XX(d) of the GATT 1994 as a measure necessary to secure compliance with United States anti-dumping and countervailing duty assessment laws. According to the United States, the Amended CBD is necessary to secure compliance with 19 U.S.C. 1673e(1), which governs the assessment of anti-dumping duties, as well as general customs regulations related to the payment of duties. Specifically, according to the United States' argument, the Amended CBD is necessary to secure compliance with US laws governing revenue collection because it secures unsecured liability arising from additional anti-dumping or countervailing duties owed in excess of cash deposits. The United States has stated that it considers that problems of "significant potential unsecured liability" and "significant risk of default" exist with respect to subject shrimp entries.205 The United States submits that 19 U.S.C. 1673e(1) and the other relevant laws and regulations that authorise the Amended CBD are not themselves WTO-inconsistent. The United States also argues that no reasonable alternative is available to ensure revenue collection.206
7.166.
The United States further argues that the Amended CBD is consistent with the chapeau to Article XX. In this regard, the United States submits that the Amended CBD does not constitute a disguised restriction on international trade or a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail. In support of this position, the United States submits that the measure applies to designated merchandise subject to anti-dumping or countervailing duties regardless of origin, and applies to all countries subject to the anti-dumping order on subject shrimp. In addition, the United States submits that bond amounts may be determined based on individualised risk assessments which are available to all importers/principals. Finally, the United States emphasizes that the Amended CBD was published on US Customs' web site when initially introduced. The October 2006 Notice, which was later published in the Federal Register, is described by the United States as a complete statement of the measure's contents and how it would be applied, which allows importers to comment formally on the EBR and its administration, and presents the directive's objective as addressing revenue collection problems.

(b) Main arguments of Thailand

7.167.
Thailand argues that the United States has not met its burden under Article XX(d) of the GATT 1994 to demonstrate that the application of the EBR is necessary to secure compliance with US laws and regulations imposing anti-dumping duties. Thailand notes in general that the United States has relied exclusively on the Basic Bond Requirement as sufficient to secure compliance with its laws and regulations imposing anti-dumping duties in the overwhelming majority of antidumping duty cases (specifically, in 242 out of 248 cases, representing 98 per cent of anti-dumping orders according to Thailand).207 Thailand also argues, based on the facts on record, that the United States cannot demonstrate that assessment rates for subject shrimp are likely to significantly exceed the cash deposit rate established in the final determination of the original dumping investigation. Thailand also disputes the United States' assumption that subject Thai importers are more likely to default on payment of anti-dumping duties than other products subject to anti-dumping duties. Accordingly, Thailand argues that the Basic Bond Requirement in conjunction with cash deposit system and civil recovery proceedings constitutes both a sufficient and less restrictive alternative measure, thereby rendering ineffective the United States' argument that EBR is necessary to secure compliance.
7.168.
Thailand also argues that the EBR does not meet the conditions set out in the chapeau to Article XX(d) because its application constitutes "arbitrary" or "unjustifiable" discrimination and a "disguised restriction on trade". Thailand argues that the actual objective of the EBR is to burden the shrimp import industry in order to restrict the import of foreign shrimp products into the United States. Thailand seeks support for its position by the fact that the EBR has only been applied to subject shrimp imports, and that the United States has not demonstrated that subject shrimp importers from Thailand present a comparatively greater risk of default or non-payment than importers from other countries. Thailand also argues that the lack of any nexus between the objective of collection of United States revenue and the manner in which it was applied constitutes a disguised restriction on international trade in subject shrimp. In this regard, Thailand reiterates that the EBR has not been applied to entries of other products with established histories of revenue collection problems.

(c) Evaluation by the Panel

7.169.
Before examining whether the EBR is justified by Article XX(d) of the GATT 1994, we recall that it is the United States who has the burden to prove to the Panel that this is the case.208
7.170.
We will now look at the text of Article XX(d) and the chapeau of Article XX which provide:

"Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures:

(d) necessary to secure compliance with laws or regulations which are not inconsistent with the provisions of this Agreement, including those relating to customs enforcement of monopolies operated under paragraph 4 of Article II and Article XVII, the protection of patents, trade marks and copyrights, and the prevention of deceptive practices[.]"

7.171.
We note that, in US – Gasoline, the Appellate Body concluded that the analysis of a measure under one of the paragraphs of Article XX is a "two-tiered" approach:

"In order that the justifying protection of Article XX may be extended to it, the measure at issue must not only come under one or another of the particular exceptions -- paragraphs (a) to (j) – listed under Article XX; it must also satisfy the requirements imposed by the opening clauses of Article XX. The analysis is, in other words, two-tiered: first, provisional justification by reason of characterisation of the measure under [in that case] XX(g); second, further appraisal of the same measure under the introductory clauses of Article XX..."209

7.172.
We agree and adopt as our own the Appellate Body's reasoning. Therefore, the Panel shall first look at whether the EBR is necessary to secure compliance with the relevant provisions of US law that direct US Customs to assess and collect anti-dumping duties. We will only proceed to analyse whether the EBR meets the requirements of the chapeau to Article XX, i.e whether the EBR allows for "arbitrary or unjustifiable discrimination between countries where the same conditions prevail", or constitutes a "disguised restriction on international trade", if we have first determined that the EBR has met the requirements under paragraph (d).

(i) Whether the EBR is necessary to secure compliance with US laws and regulations as provided in Article XX(d) of the GATT 1994

7.173.
The Appellate Body has indicated that two elements should be satisfied in order for a measure to be provisionally justified under paragraph (d) of Article XX:

"For a measure... to be justified provisionally under paragraph (d) of Article XX, two elements must be shown. First, the measure must be one designed to 'secure compliance' with laws or regulations that are not themselves inconsistent with some provision of the GATT 1994. Second, the measure must be 'necessary' to secure such compliance. A Member who invokes Article XX(d) as a justification has the burden of demonstrating that these two requirements are met."210

First element: Whether the EBR has been "designed" to secure compliance with US laws and regulations that are not in themselves WTO-inconsistent

7.175.
The United States claims that the Amended CBD secures compliance with 19 U.S.C. § 1673e(a)(1), which governs assessment of anti-dumping duties and reads as follows:

"Within 7 days after being notified by the Commission of an affirmative determination under section 1673d (b) of this title, the administering authority shall publish an antidumping duty order which—

(1) directs customs officers to assess an antidumping duty equal to the amount by which the normal value of the merchandise exceeds the export price (or the constructed export price) of the merchandise, within 6 months after the date on which the administering authority receives satisfactory information upon which the assessment may be based, but in no event later than—

(A) 12 months after the end of the annual accounting period of the manufacturer or exporter within which the merchandise is entered, or withdrawn from warehouse, for consumption, or

(B) in the case of merchandise not sold prior to its importation into the United States, 12 months after the end of the annual accounting period of the manufacturer or exporter within which it is sold in the United States to a person who is not the exporter of that merchandise."

7.176.
The United States further submits that the Amended CBD is necessary to ensure compliance with 19 C.F.R. § 113.13(c), which requires port directors to obtain bonds "adequate to protect the revenue and insure compliance with the law and regulations."211
7.178.
Taking the parties' views into consideration, in our view, 19 U.S.C. § 1673e(a)(1) in combination with 19 U.S.C. § 1673e(b)(1), 19 U.S.C. § 1673, 19 C.F.R. § 351,212(b)(1), and 19 C.F.R. § 351,211(c)(1) encompass the United States' obligation to collect anti-dumping duties. Whereas 19 U.S.C. § 1673e(a)(1) directs customs officers to "assess" an antidumping duty, the obligations under 19 U.S.C. § 1673e(b)(1), 19 U.S.C. § 1673, 19 C.F.R. § 351,212(b)(1), and 19 C.F.R. § 351,211(c)(1) require that entries of merchandise subject to an anti-dumping order be subject to the imposition of antidumping duties. As we mentioned, 19 U.S.C. § 1673 requires that USDOC "impose[] upon such merchandise an antidumping duty, in addition to any other duty imposed in an amount equal to the amount by which the normal value exceeds the export price (or the constructed export price) for the merchandise" 19 C.F.R. § 351,212(b)(1) requires that "the Secretary will instruct the Customs Service to assess antidumping duties by applying the assessment rate to the entered value of the merchandise". Alternatively, 19 C.F.R. § 351,211(c)(1) provides that the cash deposit rate will be assessed as the rate of final liability if an administrative review is not requested. We note that 19 U.S.C. § 1673e(a)(3) requires the deposit of "... estimated anti-dumping duties pending liquidation... ".
7.180.
The Panel must next consider for the purpose of examining the United States' arguments under Article XX(d) whether 19 U.S.C. § 1673e(a)(1) read together with 19 U.S.C. § 1673e(b)(1), 19 U.S.C. § 1673, 19 C.F.R. § 351,212(b)(1), and 19 C.F.R. § 351,211(c)(1) are in themselves not inconsistent with any provision of the GATT 1994. When considering the relevant provisions of the GATT 1994 governing anti-dumping duties, the Panel recognizes that Article VI:2 expressly recognizes Members' ability to levy anti-dumping duties where lawfully owed. As we have established in Section VII.C.4, the Ad Note permits Members to require reasonable security in a case of suspected dumping until a final determination of dumping is made in the assessment review. The Panel further notes that Thailand has not expressly challenged any of these laws as inconsistent with any provision of the GATT 1994. Moreover, regardless of Thailand's expansion of what constitutes the relevant law enforced by the Amended CBD, the Panel does not interpret Thailand's commentary as a challenge to the right of the United States to collect anti-dumping or countervailing duties. Accordingly, the Panel concludes that, for the purpose of its analysis of the US defence under Article XX(d) of GATT 1994, 19 U.S.C. § 1673e(a)(1) read together with 19 U.S.C. § 1673e(b)(1), 19 U.S.C. § 1673, 19 C.F.R. § 351,212(b)(1), and 19 C.F.R. § 351,211(c)(1) are not in themselves inconsistent with any provision of the GATT 1994.
7.181.
As a final preliminary matter, the Panel will next consider whether the Amended CBD, which authorises application of the EBR, has indeed been designed to secure compliance with 19 U.S.C. § 1673e(a)(1), 19 U.S.C. § 1673e(b)(1), 19 U.S.C. § 1673, 19 C.F.R. § 351,212(b)(1), and 19 C.F.R. § 351,211(c)(1). We note that the August 2004 Amendment indicates that one of the goals of amending the bond directive is "ensuring [US Customs'] ability to collect the antidumping and countervailing duties at liquidation and ensuring that the revenue is protected".212 The August 2005 Clarification states that the continuous bond guidelines were modified as "necessary in order to ensure the revenue is adequately protected".213 The October 2006 Notice explains:

"Congress has provided [US Customs] authority to require security in order to ensure the payment of all duties determined to be due to the United States, including revenue collection gaps between estimated duty deposits and final assessed duties that the importer fails to satisfy."214

7.182.
We note that the stated goal of collecting "antidumping and countervailing duties at liquidation" or "final assessed duties" potentially includes both the collection of the amount of duties established during the final determination in the original investigation as well as any increases in anti-dumping duties that may arise in the period following a final determination but prior to assessment of final liability.
7.183.
In our view, the text of the instruments comprising the Amended CBD clearly indicates that the stated goals of the measure at issue align with the objectives that 19 U.S.C. § 1673e(a)(1), 19 U.S.C. § 1673e(b)(1), 19 U.S.C. § 1673, 19 C.F.R. § 351,212(b)(1), and 19 C.F.R. § 351,211(c)(1) are designed to secure the final collection of anti-dumping or countervailing duties equal to the amount by which normal value of subject merchandise exceeds to export price of that merchandise. Thus, for the purpose of examining the United States' arguments under Article XX(d), it is sufficient for the Panel to conclude that the Amended CBD which authorises the imposition of the EBR has indeed been designed to secure compliance with 19 U.S.C. § 1673e(a)(1), 19 U.S.C. § 1673e(b)(1), 19 U.S.C. § 1673, 19 C.F.R. § 351,212(b)(1), and 19 C.F.R. § 351,211(c)(1).

Second element: Whether the EBR is "necessary to secure compliance with" 19 U.S.C. § 1673e(a)(1), 19 U.S.C. § 1673e(b)(1), 19 U.S.C. § 1673, 19 C.F.R. § 351.212(b)(1), and 19 C.F.R. § 351.211(c)(1)

7.184.
Once we have established that the EBR has been designed to secure compliance with 19 U.S.C. § 1673e(a)(1), 19 U.S.C. § 1673e(b)(1), 19 U.S.C. § 1673, 19 C.F.R. § 351,212(b)(1), and 19 C.F.R. § 351,211(c)(1), the WTO-compatibility of which is not being contested, we will next examine whether the EBR is "necessary" to ensure such a compliance.
7.186.
Thailand disputes the US' determination that subject shrimp importers' dumping margins are likely to increase and that subject shrimp importers present a heightened risk of default in comparison to importers of other products subject to anti-dumping orders. Thailand submits that evidence does not support a finding that substantial increases in the assessment rate were more likely to occur for subject shrimp than other products. Thailand argues that the problems of the United States with collecting anti-dumping duties correlate almost exclusively to non-market economy cases, (in particular crawfish and garlic cases) as a result of how dumping margins are calculated in non-market economies, surety bankruptcies, and exemptions from cash deposit requirements for new shippers of products subject to anti-dumping duties.220 According to Thailand, these factors were determinative in the finding that assessment rates would increase in excess of cash deposit rates and that a higher incidence of default in payments would occur for agriculture/aquaculture products. In support of its position, Thailand cites to findings by the USCIT in NFI v. US that the United States did not offer sufficient evidence to establish that cash deposits would be insufficient to cover final rates of liquidation,221 or that significant numbers of subject shrimp importers are defaulting or have defaulted on any obligation to pay anti-dumping duties on their imports of shrimp.222 Thailand also cites to evidence on record which it claims demonstrates that non-Chinese agriculture/aquaculture cases accounted for only 4 per cent of total uncollected duties while Chinese agriculture/aquaculture cases accounted for 69 per cent of total uncollected duties.223 Finally, Thailand claims that no basis for comparison exists that shrimp and other agriculture/aquaculture merchandise share similar characteristics related to capitalization rates, history of customs duties payments, reliance on asset-based financing, and levels of cash flow that would indicate a high risk of going out of business and/or being unable to pay final anti-dumping duty liability. Thailand submits that United States has only cited to one page in the Agency Record to support its conclusion that agriculture/aquaculture importers which defaulted "were not heavily capitalized", and this statement applies to crawfish and not subject shrimp224
7.187.
We first look at the ordinary meaning of the word "necessary":

"[t]hat which is indispensable; an essential...;...[that] which is required for a given situation;...[t]hat cannot be dispensed with or done without; requisite, essential, needful...; [d]etermined by predestination or natural processes, and not by free will;... resulting inevitably from the nature of things or of the mind itself...; [i]nevitably determined or produced by a previous state of things...".225

7.188.
The Appellate Body has already examined the concept of "necessary" in the context of Article XX(d) of the GATT 1994 in Korea – Various Measures on Beef. In this case, the Appe