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This article provides a detailed analysis of the World Trade Organisation (“ wto ”) panel report on the   eu  — Biodiesel  dispute which represents the latest development of the  wto  jurisprudence on anti-dumping. The panel’s decision has significant implications for the rising use of Particular Market Situation (“ pms ”) by traditional users of anti-dumping (such as Australia) against economies like China in anti-dumping investigations. The panel correctly established that a finding of  pms  does not provide a sufficient ground for the use of surrogate costs in the determination of constructed normal value (“ cnv ”) and that the use of that methodology would result in the imposition of anti-dumping duties in excess of dumping margins that should have been established consistently with the  wto  Anti-Dumping Agreement, that is, by using actual costs recorded by exporters under investigation. It is argued that both Australia’s anti-dumping laws which essentially authorise the use of surrogate costs in the construction of normal value solely based on a finding of  pms  and Australia’s use of that methodology in practice are contrary to  wto  rules. The panel’s decision, therefore, is a positive step toward the resolution of the issues related to  pms  by imposing constraints on the use of a protectionist methodology in determining  cnv  so as to prevent unjustified inflation of dumping margins and anti-dumping duties.

Panel Report on eu—Biodiesel: A Glass Half Full?—Implications for the Rising Issue of “Particular Market Situation”