United States – Certain Methodologies and Their Application to Anti-Dumping Proceedings Involving China: Re-Litigating through the Backdoor?

This paper presents a legal-economic analysis of the World Trade Organization's Article 22.6 arbitration report on the dispute over certain United States’ antidumping methodologies. The Arbitrator sought to quantify the damages suffered by China due to US non-compliance with an earlier ruling. The case covered 25 antidumping duty determinations for which at least one of three methodologies (weighted average-to-transaction; single rate presumption; and zeroing) was incorrectly applied. Damage calculations rely heavily on how the counterfactual is defined – what would have been the duty had it not been for the inconsistent measures? The Arbitrator deemed a zero-duty counterfactual to be appropriate, but the justifications were in our view weak and illustrate the danger of an Arbitrator essentially performing re-litigation of violations that may or may not have occurred in the administrative investigations. We conclude that the Arbitrator may have gone above and beyond its mandate in this determination.