United States – Certain Methodologies and Their Application to Anti-Dumping Proceedings Involving China: Nails in the Coffin of Unfair Dumping Margin Calculation Methodologies

The WTO Appellate Body report United States – Certain Methodologies and Their Application to Anti-Dumping Proceedings Involving China is yet another in a long line of disputes involving US Department of Commerce's dumping margin calculation methodologies. The AB ruled against the United States on three important aspects: (1) the use of the Nails test to rationalize the exceptional method in Article 2.4.2 of the Anti-Dumping Agreement so as to justify using the weighted average-to-transaction methodology in dumping margin calculations; (2) the treatment of multiple companies in a non-market economy as a single NME-wide entity; and (3) the USDOC's policy of using adverse facts available for such an entity. Yet, some aspects of the AB's decision – most notably affirming the use of average prices – significantly weaken Article 2.4.2's pattern requirement and potentially open the door to greater use of the exceptional method.