This paper reviews the WTO Appellate Body Reports on United States–Zeroing (EC) (Article 21.5 DSU – EC) (WT/DS294/AB/RW, 14 May 2009) and United States–Zeroing (Japan) (Article 21.5 DSU – Japan) (WT/DS322/AB/RW, 18 August 2009). The Appellate Body found that the United States had not brought its anti-dumping measures into compliance with the WTO Anti-Dumping Agreement as it continued to use zeroing in annual reviews of anti-dumping orders. We argue that this conclusion – based on a complicated discussion of what constitutes a ‘measure taken to comply’ – could have been reached through a much simpler and direct argument. Continued noncompliance by the United States generates costs to traders targeting the United States and the trading system more generally. We argue that from a broader WTO compliance perspective consideration should be given to stronger multilateral surveillance of anti-dumping practice by all WTO members and to more analysis and effective communication by economists regarding the costs of zeroing and anti-dumping practices more generally.

This is the eighth Appellate Body Report in which some aspect of zeroing was adjudicated. As in the prior cases, the AB again found the US practice inconsistent with several aspects of the Anti-Dumping Agreement. The novelty in this dispute was the EC attempt to broaden the concept of what constitutes an appealable measure. The EC challenged whether a WTO decision regarding zeroing could apply to subsequent proceedings that might modify duty levels and asked the AB to decide whether the United States' continued use of zeroing in the context of a given case was consistent with WTO obligations. The AB stated that in its attempt to bring an effective resolution to the zeroing issue, the EC is entitled to frame the subject of its challenge in such a way as to bring the ongoing use of the zeroing methodology in these cases, under the scrutiny of WTO dispute settlement. The AB then cautiously applied the new perspective to US zeroing practice.

In China – Measures Affecting the Protection and Enforcement of Intellectual Property Rights, the Panel addressed three main issues:

1. 1. the relationship between China's censorship laws and its obligations to protect copyright under the WTO Agreement on Trade Related Intellectual Property Rights (‘TRIPS’);

2. 2. China's obligations under TRIPS to ensure that its customs authorities be empowered to dispose properly of confiscated goods that infringe intellectual property rights;

3. 3. whether China's volume and value of goods thresholds for application of criminal procedures and penalties with respect to trademark counterfeiting or copyright piracy comply with TRIPS requirements for application of criminal procedures and penalties.

In China–Audiovisuals, a series of Chinese restrictions on the importation and distribution of certain ‘cultural’ or ‘content’ goods and services were found to violate GATT, GATS, and China's Accession Protocol. This paper reviews the definition of what is a ‘good’ (is a ‘film’ a good or a service?) and the extent to which GATT Article XX exceptions can justify violations under WTO instruments other than the GATT itself. We argue that trade volumes are unlikely to significantly rise as a result of this ruling as it does not affect China's right to keep out foreign films and publications if China finds them objectionable. However, foreign producers of audiovisuals can now gain potentially large economic rents, by being able to export and distribute their products into the Chinese market. Finally, we discuss the issue of the protection of cultural goods and review the recent literature on trade and culture that has put forward economic arguments to justify, under some conditions, the protection of cultural goods.

I would like to add to the analyses of the authors comments on two questions: First, how should measures falling under the GATT be distinguished from those falling under the GATS? Second, could a measure inconsistent with one WTO agreement be justified by an exception contained in another?

The Upland Cotton case raises a range of interesting issues regarding the rationale for retaliation in the WTO system and the proper approach to its calibration. These include: Should the approach to retaliation differ in cases involving prohibited or actionable subsidies? When should cross-retaliation be allowed? Should retaliation be based only on the harm to the complaining nation, or to other nations as well? And, most importantly, what economic content can be given to the standard of countermeasures ‘equivalent to the level of nullification or impairment’? We address these and other issues from both a legal and economic perspective, with particular attention to the question of what level of retaliation will restore the lost welfare of the complaining nation.