Introduction

This chapter addresses the dispute brought to the World Trade Organization (WTO) by India concerning anti-dumping duties imposed by the European Communities (EC) on cotton-type bed linen. An earlier complaint brought by India challenged the anti-dumping duties on a number of points, including the EC practice of “zeroing” for the computation of dumping margins (which had the effect of assigning a negative dumping margin a weight of zero when computing a weighted average dumping margin). India prevailed in that dispute, and the EC responded with Council Regulation (EC) No. 1644/2001, amending the original anti-dumping measure on bed linen from India. India was of the view that the amended measure did not comply with EC obligations under the WTO Anti-dumping Agreement, and brought the proceeding under Art. 21.5 of the DSU that is the subject of this chapter.

Several issues were raised before the Art. 21.5 Panel, but only three issues reached the Appellate Body. First, India argued that although the EC had corrected the “zeroing” problem, it had failed to ensure that injury attributable to “other factors” had not wrongly been attributed to dumped imports, in violation of Art. 3 of the Anti-dumping Agreement. Second, India argued that in conducting its revised injury analysis, the EC violated Art. 3 when it presumed that all imports from exporters not individually investigated were “dumped,” even though 53% of the imports from exporters that were individually investigated were found not to have been dumped once the “zeroing” method of calculation was abandoned.